Transcript of Your Money Habits Matter More Than Math

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 Dave Ramsey, your host. Thanks for hanging out with us. Rachel Cruze, Ramsey personality, number one bestselling author, co-host of Smart Money Happy My daughter is my co-host today. The phone number here is 888-825-5225. The call is free, and some say the advice is worth what you pay for it. All right, Renee is in Knoxville. Hi Renee, how are you?

I'm doing well, how are you?

Better than I deserve. What's up?

Thank you for taking my call. Um, I am very concerned about my parents. Um, they are both retired.

Their income that they bring in is roughly around $4,000 a month.

And they, um, their debt has surmounted greatly since they have retired. And I'm very concerned at where that's going to lead, um, because I look, I feel like it's going to be directed toward me and my husband to help them. And I just don't think that's fair.

I agree. Okay.

How old are they?

Uh, let's see, 73 and 76.

Okay. And how old are you guys?

53. Okay. And, um, but they, um, they own 3 homes, um, one of which my cousin lives in and my brother lives in the other one, and neither of them pay rent. My parents pay the insurance, they pay the taxes, and I don't think that's right, and I don't know how to address it. Um, you know, especially when my mom tells me that she is trying to scrounge for coins to go get a 5-for-$14.99 from the grocery store. And she, she was asking my advice about consolidating her credit cards, um, because that debt has gotten so much that she can't keep up with it. They need new tires on their van.

And didn't you say to her, why don't you have my lame brother and my lame cousin pay you rent? And then we wouldn't be having this discussion.

I've tried.

No, I mean, that's the answer to her question. If she says, I'm trying to scrounge coins, well, you know, the reason is, is because you give house away to lame-o over here who needs to get a job and pay you rent.

Exactly. And she—

Don't call me whiny.

Listen, right. And, you know, I don't know how to have a deeper conversation with her. Um, you know, when they're in this situation and, uh, they had a friend that gave them $400. Um, and, you know, I just, I don't think that's fair because he's on a fixed income too.

Are they looking to change, Renee? I know she's calling and complaining to you, but do you, do you have hope that truly if you laid out some kind of plan that they would want to follow it, or are they going to be just stuck in their ways? Because there's a point that they can just complain, right? And then there's other attitudes that are desperate and really wanting change. It doesn't sound like they're gonna They want to change.

I, I don't see a change. Um, she tells me that she's actually trying to go back to work full-time.

Where's your father? Why are you having all this discussion with your mother? Where's he?

He, he won't go back to work for sure.

No, I said, where is he? Why isn't he in this discussion?

Because she's, she wears the pants in that family.

Oh, okay.

All right.

Yeah.

And his advice doesn't work. And so it's all her, and everything falls on her.

And she's the only one that—

Well, my grandmother used to say, those convinced against their will are of the same opinion still. So I doubt you're going to fix this. You're just going to have to watch it burn to the ground, it sounds like. The only option you've got is to just sit down with your mom and your dad, in the room, in person, and turn off the television and say, we need to have a real serious discussion. You people are screwing up your lives, and I love you, and I don't want to watch you burn this to the ground. And you haven't been that direct. You've kind of just patted her on the hand and just kind of said, well, Mom, I'm sorry. It's kind of dumb what you're doing. But you haven't really gone, you people are screwing up here.

Well, and what's Full stop.

Yeah.

Right. And I doubt you're going to get their attention though.

Well, I was going to say, and the hard thing is, Renee, you almost have to go, because I would have one last sit down of like, here it is. And then beyond that, Renee, I think it's the hard reality that you're not going to be able to change them. And they may get to a point where they can't pay their bills. And I would say it's not up to you and your husband. At that point, they're going to be selling houses. You know what I mean? They're going to have to get equity.

Oh darn.

They will have to have problem solved. So I'm curious, is your fear and even the reason you call, is it more out of concern genuinely for you and your husband looking forward, or is it out of annoyance and what feels unfair with how they're treating other people in their lives and they haven't given you that same sentiment? Because it's probably hurtful too, right? Where you're watching them and what they're doing.

Yeah.

Because you've said that a few times in the call already. So there's probably a level of Of hurt, of, golly, look what they're doing for everybody else. They can't even do it for themselves.

Right.

And it is genuine concern for us because I don't want all of our hard work to come to it.

It won't unless you voluntarily hand it over.

Yeah.

Your hard work is not in jeopardy at all unless you can't say no, unless you're your mother's daughter. I mean, if you want to follow in her path and go, oh, well, yeah, I'm going to be the next family enabler. Um, then yeah, you could burn your own thing to the ground trying to keep these people afloat, but you can also stand back and watch them and go, hmm, well, that's interesting.

Right.

You know what I mean?

Because we're trying to focus on our future.

Yeah.

Just go build your thing. I think I would sit down with mom and dad. And I think you've got, maybe part of the discussion is, Look, I've talked to— and I wouldn't even have your husband in the room. I would just— you sit down with your mom and dad and you need to go full throttle in their face. Very blunt. To be unclear is to be unkind. No Southern sugarcoating. No bless your heart.

I can do that.

No bless your heart. Bust them. Okay? For their own good. And then part of that conversation is, I've discussed it with your husband's name, And we will not be supporting you because you have given away free rent to these 2 lame-os instead of taking care of your own self and calling me up and whining about credit card debt when you got equity in a house over here and Junior won't pay the rent because you're enabling him. So don't be calling me.

I was going to say, stop that. Yes, put it that way.

Go ahead and lay it down now. And then you walk away and you are not at risk unless you have the inability to say no also.

Mm-hmm.

But debt is not inherited.

Right.

So you don't get— I mean, if they go to the— if they go to— if they die with a negative net worth, it only affects the bank, not you.

Mm-hmm.

And so it's just, it's just harsh. It's so hard to watch people you love be stupid. It's more entertaining to watch stupid people when they're not yours.

Right.

You know, but when they're yours, when you're— when they're yours, it's hard. You know, when it's like your family, you're, my God, I'm kin to you. You know, I mean, it's just like, you know, it's, it's hard.

Yeah. And, and there's, and there's an innate level within a family, and, and I get your concern, Renee, of, you know, your parents take care of you for 18, 21 years, you know what I mean? And it's that feeling of, what's going to happen? Am I literally going to let them starve? And they won't. I think your mind's probably gone extreme of, oh my gosh, we're going to have to save the day. You're not. They have equity in probably 2 of these houses, I pray, right, that they're gonna end up selling. They're gonna eat and be fine. But man, it's a pull on your heart of like, here are my parents and I don't know what to do. So—

Ouch.

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Jared is in Providence, Rhode Island. Hi Jared, how are you?

Hey, how's it going guys? Thank you for taking my call, I really appreciate it. I just started actually listening into your show after my younger brother has been trying to help me get out of some credit card debt. I just had a question here, man. I'm kind of here with my hands tied and, you know, I'm sick of living the way that I do, but I'm about $23K in credit card And I have about 2 credit cards that I'm currently using with about 30% use in each, with monthly payments of one being $600 and the other being $200. I haven't missed a payment. I make the minimum payments, but what I find is that when I make the payments, it's just the interest is what's killing me here. And I just kind of, you know, needed some advice to, you know, maybe, you know, guide me in the right direction to get out of this debt.

Is this the only consumer debt you have, Jared? Are the 2 credit cards?

Yes, it's the 2 credit cards. Um, I'm with my partner of 5 years, and I was just honestly honest with her the other day about the debt that I was in. And, you know, she's still willing to help me and stick around, and I have a really good strong support system around me. Um, you know, it's just my little brother, he's actually going to school for business and marketing. You know, he recommended listening to your guys' show, and he knows a little bit about credit cards and credit debt. He just, you know, figured he Start with you guys, you know, maybe some, uh, quite helpful tips here, you know.

How much, how much do you make a year?

Uh, so right now I have it jotted down. I'm still getting comfortable with, you know, just the other day was honestly my first years of 28 years of living. I sat down and finally put the numbers in my face and made a budget with my little brother. He helped me make a whole spreadsheet on Microsoft and everything. Um, so we cracked some numbers down. Um, we're going to reconvene in another couple of days, um, just cause it was kind of a lot to put in his face. But, uh, right now I make about $3,000 a month.

That's what I know.

I have 2 jobs right now, and I make $3,000 a month, and it's costing me around $2,700 to live, and that includes my monthly payments to those credit cards.

And do you have a car payment?

I do not.

I actually own my vehicle, thank God.

Good.

Do you have any student loans?

I do not have any student loans.

Good, good. Okay.

What are you doing for work? What are the 2 jobs?

So honestly, I work in the cannabis industry over here in Rhode Island. It's a very booming industry, especially with Massachusetts being close. I work in both markets, both Rhode Island and Massachusetts. I work retail in one and then I work in cultivation in the other.

And they're making a lot of money and you're not.

Uh, yeah, yeah, you could say, you could say that.

Yeah, from one, one spot I work, uh, inventory in the other spot, and I see the numbers at one place.

Yeah, they make a lot of money and you're not.

Oh yes it is, mister.

Yes it is, Mr. Baker. And so the, um, Uh, I mean, your issue is that your income is low and the answer to your credit card interest rate is to increase your income dramatically. And so what you're gonna have to do is shift a career, make some career shifts that are pretty dramatic. And, and your number of hours are going to increase because your income, if you doubled your income, obviously That's $3,000 more a month. And you put that on $23,000, in 8 months you're out of debt. And we don't worry about interest rates anymore. But you're— there is not a hack for paying off $23,000 a month or $23,000 of credit card debt at $300 a month. There's no hack. There's nothing. Even if the interest rate was zero, you're going to be dead before you get these things paid off at zero. At $300 a month, that's $3,600 a year against $23,000. So you don't have an interest rate problem. You've got an income problem.

Yeah.

So I'm wondering, Jared, though, for real, from a career standpoint, you're 28. Is that right? Is that what you said?

Yes.

Yes. I mean, it's kind of the point in life where, okay, what do I want to be? What do I want to do with my life where I have a sustaining career where you are making $60,000 a year.

Yep.

Or $160,000. I don't care.

Or $160,000. But just at least, you know, getting to that point. So the income is gonna be, yeah, it is gonna be, cuz it's $800 a month. Is that what you said that you're paying?

Yeah.

Uh, yeah. Between, yeah, one's $600 and the other one's $200.

$200.

Yeah. Yeah. So, uh, and also you're still using the 2, correct?

Uh, yes.

And I'm at the point where like I don't want to, but I have to dip into 'em to cover some like expenses to cover Like a bill or something of that nature. I'm done with putting random expenses on it like I have been all these years going like a crazy cool again and having fun.

But yeah.

Yeah.

Yeah.

Yeah. This is a, it's a, it's a harsh reality that you started facing. And the good news is all having done what we do, listening to you, we know that personal finance is 80% behavior. And I will tell you that you are using the proper language, the words you're using, the way you're forming your sentences to talk to us. tells us that you are ready to change. You are sick and tired of being sick and tired, and you feel stuck and you need a way out. And so this is grown-up time. Like you said, the party's over. And so we may have to, you know, you're gonna have to do something different for income. You don't have to do it in the next 20 minutes, but by Christmas— You need a different job.

Okay.

Because this one sucks. And you probably just need to get away from cannabis altogether. Hello?

Yes.

Yeah.

He said the party's over. I was like, maybe not for Jared.

No, no, no, no. I know, I know.

But there's a great book by Ken Coleman that says, find the work you're wired to do. And there's an assessment in the back. But I do, I think that—

We're going to give it to you as a gift.

Yes. So yeah, yeah. Hang on the line.

Christian will pick up and we'll get you—

We'll also sign you up for our budgeting app, which is really easier to use than a spreadsheet, much easier to use. It's called EveryDollar, and we're going to give them both to you as a gift because we think you've got what it takes to do this. I think you can do this, sir.

Wow.

I—

not hearing that from you guys, and then the support system I have at home, and you guys don't understand, like, this is just a big sigh of relief, you know. It's just one thing that's been bugging me my whole life, and it's been this damn debt, and I'm just ready to change. I really appreciate it.

Thank you. You can do all this. It is going to require that you change your And cutting up those credit cards. And it's hard to cut them up and quit using them and you change jobs, get your income up. So I would pick up 6 part-time jobs right now, drop one of those bad ones, and then go look for a new full-time job that pays me double. I mean, crap, you can make more loading boxes at FedEx at Christmas than you're making right now, like double what you're making. Okay, so I mean, UPS and FedEx is getting ready to start hiring for Christmas. I know, people, it's not even Halloween, but get ready. I mean, here we are. So And so you just got to start thinking differently. Like, I need money from a legal and moral source. I need money. And so I'm not suggesting Breaking Bad here, but I am just saying, I am saying, you know, you need money and you need to go get you some. And that's where I was. And it makes— I was your age when I had this exact discussion with myself. I mean, I made a list of stuff I was working on that week that would bring in money.

that week. I didn't work on any 9-month strategies. I was just filed bankruptcy when I was 28. Rachel was a baby, and I'm trying to feed this— these children. And my wife's looking at me like I've lost my mind because apparently I had. And I— things had to change. And I went to making— I made a list of stuff on a yellow pad, and the things at the top of the list to do were things that brought in money that week. And it was just like my theme was not greed. It was desperation and need, but it was, I need money. And so don't talk to me unless you're talking about bringing some money by Friday. And that was my whole thing. And that was our first step to getting the devil away from the door. And you got to get the devil away from the door and it's income for you, sir.

And it's not continuing to go deeper in credit card debt, even for bills and like making it a challenge to say, okay, next month I may have to call some companies and shift Yeah. When I have to pay this bill and that bill, but I'm going to have the cash going forward. Because as you continue to go back on that, that's just adding to the problem.

So you gotta stop it.

You have to stop it, which is gonna be a painful 30 to 60 days. But that's where the desperation of the weekend jobs, the night shifts, all that.

You know, you're exactly right. All the extra jobs. But also, if you're gonna prioritize and not pay something, you pay food first, lights and water second. Transportation third. So food, shelter, clothing, transportation, and utilities are before you pay master, before you pay your master card.

Card.

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Results may vary and no specific outcome is guaranteed. Jeremiah is in Atlantic City. Hi Jeremiah, how are you?

Hi, how you doing, Dave? Uh, thanks for having me on.

Sure. What's up?

Hey, just in a situation right now where I'm making $85,000 base, but commuting around, uh, 2 to 2.5 hours, so like 4 to 5 hours round trip for a job 3 days a week. My dad recently got sick and he's okay now though, but I want to find something closer to home. It's just been kind of tough and wearing me out, just kind of reaching a point of burnout.

Yeah. You spend 5 hours a day in the car. Unless the car is your job, Yeah. So why don't you just move over where the job is?

Um, my dad got sick, uh, and they used to do, uh, pretty well in the corporate world, but they don't have, uh, much of a retirement. So, you know, just as a young per— uh, my parents.

So you have to take care of your parents?

Um, they've, they've taken care of me. We're You know, we're kind of like a close family unit. As of now, I'm an only child, so it's, uh—

How old are you?

We all work together.

28.

So why can't you move out and move to your job? I'm sorry, I don't understand.

Uh, I could. It's just, uh, I've been in some sales roles where I've found that it's been, uh, a little bit unstable, uh, no matter if you push pretty hard and Unless you get a roommate, it's just a little bit risky with ultimately the cost of living nowadays. I have been getting a hotel one night a week, but I know that that can eat up a pretty good amount. But I hear the path of what you're saying.

Okay.

Well, I mean, Is the job that you currently have— what are you selling where you currently work? You make $85,000 base plus commission.

Uh, so I'm in, uh, commercial insurance.

But how long have you been— how long have you been doing that?

Uh, about 6 months. Okay.

And is it— I mean, do you have a quota that you're supposed to be hitting and you're not hitting?

Is there some kind of Um, I haven't been selling yet. I pulled a couple policies for $120,000, but nothing's guaranteed in the sales world, or just kind of what I've experienced in the past. Um, you know, I, I should keep pushing with it. Uh—

No, that's not— you're not understanding what I'm asking. I'm asking why you don't think this is stable, and you've been there 6 months and you've made 2 sales.

No, no sales yet.

So what are you—

what are you doing?

I'm trying to make sales. I'm making calls. But, you know, when you pull the policy, it's just a little bit of a longer sales process.

So did you take this job, Jeremiah, knowing about the commute in the first place?

Yeah, sure I did. I was getting low on funds after a layoff from a tech company. And my dad got sick. So I just kind of, you know, took the first thing I had and, and kind of jumped into it, uh, after, you know, a 3-month hospital stint.

Okay. Are you, are you healed now? Are you okay physically?

I'm, I'm okay. I'm just, you know, just pushing.

But your job, you have a job that's not going to survive is what you're telling me, because they're not going to keep paying you $85,000 a year to pull 2 policies over 6 months. I can promise you.

Yeah, that's what I'm thinking.

They're going to fire your butt.

Well, yeah, and some other sales roles I've pushed pretty hard, like just tried to make the most money I could. And I've done well but overextended myself at times. There's local jobs near me though, they just don't pay nearly enough. The plan was to move to the city. Ultimately, where it's a little more feasible to earn more.

Okay. So there are no jobs, there are no careers that don't involve stress unless you make $20 an hour and somebody tells you what to do every day. Pick that up, set that down. But if you're going to go make $100,000 a year. That involves stress and involves risk. It involves you getting up, leaving the cave, killing something, and dragging it home. And welcome to the world of adulthood. There's anxiety involved.

Okay?

Yes, sir.

You got to get a callus and you got to get out there and bust it. And I'm not sure this job is going to last because I'm not—

there's—

I can't hear what is going on that's— that if I'm your employer, why I would keep you. Um, because you're going to have to produce more than you're producing. And every time I talk about that, you just talk about stress and risk and all these things instead of— and I can just push harder. Well, yeah, that's— welcome to selling. You knock doors and you sell stuff. So I think you just took this job because you fell backwards into it and you were desperate. You had nothing to do with you wanting to be in the insurance business, had nothing to do with you wanting to work for that company. There was nothing exciting about this except they gave you a check on Friday and you took a J-O-B. That's what it sounds like to me. That's how you've described it. And so you need a new job. And that the new job needs to involve something you care about and something that you're willing to push for because you care about it. And, you know, you're selling ads to advertisers on the Ramsey Show and you believe in the Ramsey Show and it's your job to go get some advertisers on this.

And if you don't, then you don't get to work here because that's your job. And, you know, that kind of thing. But you care about it and you can go get it done. And it's not a matter of being pushy. It's a matter of having a good product that you love, that you can represent with integrity, and then you serve people by giving it to them. them and letting them give you money for it. And that's selling. Selling is serving. It's not pushing. It's pulling.

Yeah. And the family dynamic is something I'm thinking about too, Jeremiah.

You've got to get out of there.

Yeah.

And I, um, and I— you feel the weight of being an only child. And I don't know what the family dynamic— if there's pressure from them to you to stay close, to take care of, or if they're really needing help. I don't know. I, I would be Questioning and pushing on that scenario too, to allow you then to move if you need to, and to be a 28-year-old guy who's trying to make it. And that may not always be the case if you have one foot somewhere that you have to be.

I desperately, after talking to you for a few minutes, love you. And I want you to build some muscles. I want you to build some muscles from doing some lifting. And the muscles are to operate in the marketplace and to operate as a standalone 28-year-old man. And you take care of your parents when they are in trouble. You run over from your place and stop by and make sure mom and dad are okay, but you're not hanging out there from some emotionally needy situation. Instead, you're like a man with square shoulders and you're out there in the marketplace doing stuff.

Well, and I'll tell you, now's the time to do it.

Yeah, it's a good time.

Because you're single, you're young, this is it. When you start to enter into a relationship, a marriage, you got kids, you got 1,000 things pulling at you. Right now it's you, Jeremiah. It's the simplest it's going to be right now in life.

So we'll give you another copy of that book that—

Find the Work You're Wired to Do.

Find the Work You're Wired to Do and take that assessment. And I want you to stop and think about, okay, what does the 48-year-old version of Jeremiah look like in his career? And what are the steps to get there? Who do I want to be when I'm 48? When the 48-year-old version that has some emotional muscle and character, that man Jeremiah is standing over there 20 years from today, looking back at this 28-year-old, what's going to make that guy smile at you right now? Who do you want to be? And you're starting to set goals. And you're saying, I'm going to step into a career with intentionality that's in my giftings, and I'm not going to fall backwards into it, and Mommy's not going to fold my underwear anymore. Now I'm going to have my own place, and I'm going to be a man, and I'm going to go out here and do stuff. And that's, that's what I want for you. I mean, you've had some stuff that's knocked you down. You've got a few scars and a few hurt places, a few bruised places emotionally. Me too. When I was your age, I was bankrupt with 2 kids, so I get it.

I understand it's scary, but, um, but I want you to get a healthy level of desperation and go kill something and drag it home.

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Okay, you've worked hard to get out of debt. You're out of debt everything but the house. That's Baby Step 2. You built your emergency fund of 3 to 6 months of expenses. That's Baby Step 3, which means you are now on Baby Step 4, 5, and 6. If you are on Baby Step 4, 5, and 6 or beyond, we want to invite you to come hang out with us and celebrate on the Ramsey Cruise. Hear the ship horn? That's the best ship horn I got, y'all. I'm sorry.

Pretty good.

Yeah, we're working on it. But yeah, the Live Like No One Else cruise. Now we tell you not to go on vacations and cruises and stuff like that when you're in the first 3 baby steps, right? But 4 and beyond, we want you to come with us on the Live Like No One Else cruise. I'm gonna be doing a bunch of teaching on what to do now that you've gotten to 4, 5, 6, and 7. What do you do when you finally get rid of the debt monster? Yeah, we're gonna talk about it a lot. And George is gonna be doing some nerd teaching because George is the nerd. And Rachel and John are going to be doing marriage and money stuff, and we're going to be doing some EntreLeadership stuff. And we've got great guests. Natalie Grant is going to be with us. It's going to be an incredible cruise.

Jade Warshaw, she's going to be doing teaching as well.

Who?

Jade Warshaw.

Oh, of course, Jade.

I left off. I'm sorry. I'm looking at all the faces on the ad here.

Yeah.

Wow.

So Western Caribbean. And so that means like Jamaica and all that kind of stuff, right? It's going to be an incredible cruise. And this is not like one of the Walmart on the Seas cheapos. This is a nice one. Okay. I don't do the cheapos. This is like Holland America, which is freaking cool. Okay.

Nice. Beautiful ship. Well, and this is the same ship we did. Yes. Last time when it was the Western Caribbean. We're doing the Eastern Caribbean this time.

Oh, the other way around.

Yeah. No, no. But this was the same ship.

We're really back on it. It's the same ship, but this time it's Western.

Yeah. But the ship itself, the restaurants are incredible. the coffee shops, the bars, the lounge. I mean, all of it. It's really, really nice. And the good thing about a cruise is it's all-inclusive. You get right in, there's pickleball courts. I mean, all of it. And it's all, it's all there once you board the ship. Uh, your food, you know, everything is included, which is so nice.

It's real primo. And you know what we ended up doing too, because we were all on there, if one of us wasn't doing something on stage and we were just walking through and one of the stages was empty, we just jump up and start answering questions and people Yeah. Do that. And so we taped a bunch of the shows there. We did the largest debt-free scream. It's March 14th through 21st, and it is not yet sold out, but it is approaching it. You can still get a cabin, but you need to do it. Quit messing around. You're not gonna get to go, okay? And so you need to get this done. So click— go to ramseysolutions.com/events, click the link in the show notes, all that kind of stuff. Live Like No One Else Cruise, baby. Come on, let's do it. This is— you, you need to celebrate when you hit some of these milestones. That's what this is about. All right, uh, Daniela is in New York. Hi, Daniela, how are you?

Hi, I'm so glad I got to call in for the father-daughter duo. Um, I started listening to you guys 2 weeks ago.

Wow.

And on Friday, I actually was able to talk to George and John, and now I'm glad to talk to you guys today. Um, I discovered an even bigger issue that I have, and I'm in my 20s, and I just want some advice before this just gets worse.

Okay.

Um, so I got a UIL insurance policy at the time. I thought what I thought was what I now know as a money market and a high-yield savings account. That is what I thought that I was getting with this additional bonus of life insurance and a death, uh, death benefit. Um, so I put in $10,000 right away. I first started my payments at $500. and eventually lower them to $200. This was March of 2025. I currently— I've had $15,300 as the total premium. The accumulated value now is $13,281, and that's because I had to borrow $2,900 against myself, which I didn't really know this at the time.

I—

my transmission went out for my car. I wanted to take the full $15,000, and the agent, who was actually someone that that's close to me in my circle told me, oh, the only thing available is $2,900 right now. And he was like, but you can pay this back whenever you want. Like, there's, there's no, there's no rush. So I'm like, okay, great, I'm taking $2,900. I'll just have to use that for the down payment then. I can no longer pay the car mostly in full. I'm going to take it for the down payment. So my loan balance—

All right, stop, just stop. Okay, so it's real simple, honey. You bought a piece of crap.

Right.

And you've been screwed.

Yeah.

And you've realized that now. That's the end of the story.

Yeah, after listening to you guys.

Yeah.

I mean, you turned $15,000 into $13,000, you know, and they talked you into borrowing your own money and act like they did you a favor. If I go down to the bank and I take money out of my savings account, I don't have to talk the banker into that.

Right.

That's what you did. Okay, you just took money out of your own savings account. So what you should do, what you should do is you should cancel the whole thing and tell them to send you a check.

End it now. So what they told— so what I did was I stopped the autopay because they told me you have enough in the account, stop the autopay, and I lowered the death benefit.

Would you please just cancel the stupid crap that you bought and quit giving them money? You've been screwed.

Mm-hmm.

Um, I just figured if I did that, the 2 steps that I took, that would at least give me something to walk away with whenever the surrender policies are gone, because right now I would have nothing and I would probably owe.

No, no, you don't get nothing. You get your $13,000 back.

I wouldn't get that because of the surrender policy The surrender fees aren't up until 2035, but they're not 100% surrender fees. So the surrender value was $1,060. Yeah. $1,060.

You put in $15,000 and they're telling you that you're sure after surrender fees, you're going to get $1,000. What is the name of this company?

I wouldn't get anything actually, because I took $2,900.

I know. What's the name of this company?

National Life Insurance. And I actually heard someone call about this last week, this exact company, which is why I decided to look into it.

Yeah.

Um, I had no idea. So if it wasn't for someone else calling last week, I wouldn't have even known. And I did some research and it says the best way—

And anything else that this person that's in your circle ever wants you to do, you smack them and then you run away.

Yeah, I'm never going to.

Good.

Um, I do feel—

Wait, so, but for real though, for real, this is— this, this is a real thing that if she— the surrender is—

It doesn't sound right. I, I'm probably going to go to the Insurance Commission of the State of New York and file a complaint because I've never seen surrender charges that are 90%.

So it's because the policy's so new, I guess?

No, honey, it's because it's so bad.

Yeah.

It's the worst.

I'm, I'm dealing with the guilt of not knowing what I didn't know, right? Essentially what I'm looking for—

I'm not picking on you. I just want you to not play footsie with rattlesnakes anymore.

Well, and we call it stupid tax, Daniel. Everyone's done stupid stuff, right, with money. Everybody has.

Including me.

Yes. And so that's going to be This is it if that's the case, but continuing to be in it, because you don't want to be in it till 2035.

I'm not contributing anymore.

Yeah, let's do this. Wait a minute, let's do this. I can't unpack your horrible policy that National Life screwed you with, with your friend in air quotes. God, this makes me so angry for you. Oh, so I can't unpack all of it right now, but here's the bottom line. I need you to get out of this as fast as possible and never give these people another The best way to unpack it is go to ramseysolutions.com and find a SmartVestor Pro that does actual real investing in your area. Contact them. Tell them we talked on the air and you need some help looking at this policy. Because it sounds to me like that they may have violated some stuff and you may need to file a complaint with the Insurance Commission of the State of New York. I'm not sure.

Hmm.

But for sure, for sure, you've been misled.

Right.

And for sure you've been screwed. Okay, so I just don't know if— I don't know if it's breached the legal lines or not and whether the Insurance Commission will be interested in taking these guys down or not, but somebody needs to take them down. We just told 32 million people that National Life sucks just now, so that helps. That makes me feel a little bit better. But, um, but still, it doesn't help Daniella. So I want you to sit down with somebody that can unpack this policy and verify the information, because I think your agent's lying to you about your surrender amounts. They're unreasonable. It doesn't— I mean, usually you get hit hard, but not 90%.

It could be 40% or something, but not the whole thing.

Yeah, I've never seen that. And so if it costs you $3,000 or $4,000 to get out of this, get out. If it costs you $15,000 and you can wait a year and not pay $15,000, well, we'll talk about that. But, you know, the last thing we want to do is do business with national National Life's IUL. Let's just make sure everyone hears that real clearly. Did I say that clearly? Okay, good, because we're consumer advocates here.

We—

you don't have a problem with Ramsey unless you're screwing people we love, which are people. That's the people we love.

Hey guys, George Campbell here. There are a lot of things you probably shouldn't ignore. Your check engine light, that weird smell in your fridge, the smoke detector that's been beeping for 6 days, and maybe most importantly, your phone bill. The things we ignore have a funny way of costing us the most, and your phone carrier is counting on you ignoring that overpriced bill month after month so they can keep charging you more and more. But that's not the case with Boost Mobile. You don't need to keep overpaying when you can pay just $25 a month for Boost Mobile's unlimited plan. And the best part is you can bring your phone, keep your number, and pay just $25 a month forever. That price will not go up. It is inflation-proof. There's no contracts, there's no hidden fees, there's no catch. And since most smartphones have an eSIM these days, you can switch from the comfort of your home just like I did. So it's okay to notice when you're paying more than you should, but you shouldn't keep doing that. Stop overpaying for your phone service. Go to boostmobile.com/ramsey and make the switch today. That's boostmobile.com/ramsey.

$25 forever requires customers to remain active on Boost Mobile Unlimited Plan. Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey. Rachel Cruze, Ramsey personality, my daughter, is my co-host today. Austin is in Montgomery, Alabama. Hey, Austin, how are you?

I'm well. How are you, sir?

Better than I deserve. What's up?

So me and my wife invested in expanding our business back in March, bought an F-250 and a fleet washing trailer, and the F-250 motor went down about 3 weeks ago. Bought an extended warranty on it. However, not sure if the warranty is going to cover it or not, and it's about $16,400 to fix. We don't have the cash to pay for it. So I'm curious, do we save up for it or due to the revenue it brings in, do we take out a loan for it?

Okay. This is a side hustle?

This is— no, this is a branch of our full-time business. We have a detailing business that does about $15,000 to $25,000 a month in revenue. And this section of the business does between Uh, $9,000 and $12,000 a month in revenue.

Is that in addition to the $25,000 or is that part of the $25,000?

Correct.

In addition to.

Okay.

Okay.

So you're bringing $25,000 gross on a detailing business, which ought to be about 90% margin. Uh, so why do you not have any money?

So we, we, we've got a lot of overhead. We're about $18,000 a month in overhead.

What is your overhead?

Uh, we've got about a 4,000 square foot shop and we've got about—

Oh, you're not doing mobile detailing. You're bringing them into your place.

No. Yes.

Yes. We do higher end work.

Not that mobile's not nice, but—

I know. I know. I'm just—

okay.

Um, I get it. I, it just, it, I, for some reason I had it in my head one way. Okay. Now, so yeah, you got a 4,000 square foot shop. How much is the shop?

Now, okay, so the shop's only $1,300 a month. We've got about a $500 a month power bill. And then from there, it's just— we've got $2,000 a week in payroll. I mean, I could— I don't have all of the things right in front of me. I've got an office manager that does all of that, but it all comes out to be about $18,000 a month for us to handle everything that we need to handle. Yeah, we need to hit $25,000 a month between the 2 businesses. That pays my wife, it pays me, um, which obviously pays all of our home bills.

And we just started— Let's stop a second. Okay, so I kind of got enough of it, I think, to start working on it with you. I love what you're doing, by the way. You're a great entrepreneur, and, and you're a classic entrepreneur. You suck at bookkeeping. And you're going to have to get better at it or you're going to go out of business. I went through the same stage myself. I'm going to send you a copy of our book, Building a Business You Love. And you're in the second stage of the 5 stages of business and your lack of processes and systems are killing you because you don't know what the flip's going on. You are a guy that works really, really hard and there's a lot of chaos in your life.

Well, he delegates to the business manager.

Yeah, but you have a lot of chaos in your life and you don't— Yeah. So you've got— I know I've been right there and you're a classic and you're going to be okay. But Larry Burkett used to say, the guy that trained me on biblical finance, used to say that financial problems are not the problem. They're the symptoms of something else going on. So the fact that you don't have any money to fix this truck is not a problem. It's a symptom. And that's why I was digging into the rest of it, why you don't have any money. That's what I was trying to figure out. So I'm going to go all the way back to the source at the beginning of this creek, long before it became a river.

Okay.

And let's get this business, the core business profitable. And let's change our mentality of we're going to borrow our way into prosperity. So next time you get ready to fix something, grow something, add another element to your business, you do it with paid-for equipment or paid for, period. And you're going to have to cut your payroll down and go back to running, running some of the equipment yourself, probably for a little while, because I think you're payroll heavy.

Yeah.

You've delegated the crap out of this, and, um, you've made— and so everybody else is making your profit, not you. You're— you got lousy margins for your business.

Yeah, I feel the same.

Yeah, and I'm not being— I'm not picking on you. I'm just loving— I love what you're doing.

Is it around $7,000, Austin, that you guys have? Because you said $25,000 and it takes $18,000 to do everything, right?

And it's a labor-intensive business. There's no cost of goods sold other than labor.

Yeah, that's what I'm wondering, because in 2 months you'll have $14,000, which is that to be able to fix the truck, or—

And hopefully stupid extended warranty will cover it. We hadn't gone there.

Yeah, that's what we're hoping.

Yeah. If it does, if it doesn't, I'm going to set the truck down till I save up the money, to answer your question.

Okay.

And that's going to force me to fix the problems in the business because the business will make me more cash when I fix the problems inside of it.

Right.

And I'm going to hook you up with our EntreLeadership guys, and I'm going to send you a copy of those, of the books around that and show you exactly what we did because we went through the exact same thing. Uh, uh, 25 years ago. All right, we're a $300 million business now, but we were doing about what you're doing. You know, you're gonna, you're gonna do about $1.5 million in gross revs if you keep it up. And, and you've done it from nothing because you just, you're just a guy that just picked up, started washing cars, man. And you're, you're the American dream. I'm so proud of you.

Thank you, sir. Thank you.

Yeah, but now you're gonna have to calm down and concentrate. So here's the thing. What we got a saying on our wall around here: what got us here won't take us there.

Right.

That's where you are. What got you to this point won't take you to the next point. So you've got to get down in these systems and processes and bookkeeping, and you've got to become a master operator of a business from a business acumen standpoint. You got to grow you and your skills about running a business. And when you do that, man, you're gonna double your profits in this business, and you're gonna pay cash for the next truck And you're gonna pay cash for the next thing you try that does or doesn't work. I've paid cash for a lot of all my mistakes over the years, and I made plenty of them, but they're not haunting me. I'm not looking for an extended warranty to bail me out. And I can just think of about 3 right now that they haunt me in terms of how much money we lost trying stuff, but it was all cash, and so it doesn't hurt quite as bad. So I just— I think you got all the right stuff. I think this truck is God's signal to you. to learn something, and what got us here won't take us there.

And you need to— so we got to get down in the current core business, clean it up, shine it up, and let's double the profit margin in that, roughly. I mean, I think there's, I think there's another $5,000 or $6,000 that's going out the door just because we're pissing it away with no systems and processes. And we do it here at Ramsey. We fight it. It's a constant fight. This overhead monster will take you out of business. But you're the guy that makes it, that proves that capitalism works. You're doing a good job for people. You're charging them a fair amount. You're covered up in business. You've not got a marketing problem. You've not got a work ethic problem. You guys are— and you love doing stuff and trying something new. You're gonna be the kind of guy that makes more money than people with a PhD in something. Because you just know how to leave the cave, kill something, and drag it home. So we'll help you, and you call us back anytime we can help you. But if the—

Well, I was gonna say, it's just the desperation of these moments.

It wakes you up though.

Well, and it's what plugs the entrepreneur back into the details of it all. Because for so long it's been okay. And not saying the business manager's lazy or doing a bad job, not saying that, but they're probably not gonna be as tightened up and back to that, you know what I mean, as you are. And so There's a, there's a gift in that, Austin, of what you can bring to that.

Yeah.

And have that and retained earnings in that business. So when stuff does break, because it will, you cash flow it and, and you just keep on moving.

Amen. Good stuff. Hang on, we're gonna send you a couple books, brother. When it comes to your health insurance, one of the biggest mistakes you can make is believing you're stuck in a one-size-fits-all plan that costs too much and covers too little. That's why I recommend HealthTrust Financial. They're the only Ramsey Trusted health insurance partner because their advisors take the time to understand your situation and help you explore the coverage options that are available to you. Whether you've changed jobs, welcomed a new baby, or had some other life event, HealthTrust Financial shops multiple top-rated insurance carriers for you. Then they help you understand your options so you can make a smart decision instead of guessing. I've recommended HealthTrust Financial for more than 20 years because they work for you, not the insurance companies, so they offer unbiased advice. Visit healthtrustfinancial.com to connect with an advisor today. That's healthtrustfinancial.com. Hey, if you're working the Baby Steps, the fastest way to do that is by using every dollar. And the Baby Steps, by the way, are the fastest way to go from deeply in debt, broke, and scared to being a millionaire. It's hard though. We don't teach you easy.

We just teach you stuff that works. I mean, there is no good microwave barbecue. If you want good barbecue, you gotta cook it, man. Like 2 days and the dog next door is howling, right? That's good barbecue. That's the way money works. And you will either learn to tell your money what to do or you will always wonder where it went. You don't have a choice. And that's what EveryDollar does. It tells you, it gives you the tools to make your money behave instead of you being, uh, the slave to your money problems.

Right.

You track your progress, you get personalized recommendations from us, coaching from us. It shows you exactly how to not only manage your month, but also hit your long-term net worth goals and get rid of your debt the Ramsey way. You can start EveryDollar for free by downloading it in the App Store or Google Play. Kimberly is in New Orleans. Hi Kimberly, how are you?

I'm well, how are you?

Better than I deserve. What's up?

Okay, so I have about $28,000 in credit card debt. And $28,000 in student loans.

What'd you buy?

I have, I don't know. It just built up over the last few years. I did, um, borrow $7,000 last year, um, to pay back into my retirement.

Okay.

That's all I—

that's $28,000.

How much you make, hon?

About $60,000 a year.

Ouch, that's scary, isn't it?

It's a little— yeah, yeah, yeah. Um, I have an investment property, um, the balance is $60,000, and I was thinking about taking out a cash-out, doing a cash-out refinance to pay off the credit cards so I can start paying down the student loans.

What's the, what's the investment property worth?

Uh, about $160,000.

How'd you get it?

That was my, it was my first home.

Oh, okay.

So you got about $100,000 in equity in that, Kimberly, is that right?

Yes.

And what's your, what's your primary home worth?

Um, it's, I think it's about $280,000 and we have about $132,000 left to pay on that.

We?

Okay.

What does he make?

About $80,000.

Oh, so we have $140,000 income.

Well, I don't— I, I view our finances separate because he does not save. I have $25,000.

Neither do you.

Well, she's got $25,000 saved.

I have $25,000. I will have $20,000.

You borrowed it on credit cards.

No, this is my savings.

I know, but I mean, you're $28,000 in credit card debt. Don't you see the correlation?

I do.

Yeah, that's a mess. We don't want to act like you're somehow successful and he's not.

Well, he has zero saved, so—

Well, you got zero saved after you pay off your credit cards.

Yeah.

Does he have debt, Kimberly?

He does.

What is he— how much does he have?

Um, I think it's about $11,000 in credit card debt. He has, um, a motorcycle thing that I'm really not sure What the balance is, but I know his note is about $700,000, and he also has a vehicle with about $350,000 for that note.

Yeah.

And how long y'all been married?

10 years.

Okay. So here's what I'm going to teach you.

All right.

We did the largest study of millionaires ever done in North America. We interviewed in detail 10,167 millionaires. Not broke people with an opinion. Millionaires.

Okay.

Okay?

89% of them say one of the key reasons they became a millionaire is because they worked together and combined forces with their spouse. They didn't treat their spouse like a roommate. They treated them like a husband and a wife. And so they combined all of their problems and all of their incomes and all of their savings and got in attack mode. And it's you and me against the world, babe. And we're gonna lock arms and we're gonna both be smart. We found almost none of the millionaires became millionaires while dragging a spouse along who sucked at money. It almost never happened.

How do I get him to—

You're never going to have peace in your house until you guys learn to work together and aim together at something. I know that's a big ask from where you are.

She said, how do I get him to—

Yeah, I know. No, it's hard. It's hard. But I'm just telling you, that's where we've got to start, is we got to go way back on this thing. And because you have been spending more than you're saving, so your net-net for you is really close to zero. You saved $25,000 while you went $28,000 in debt. That's a negative 3.

Okay?

Yeah. And he's over here borrowing motorcycles and car payments and And y'all are starving to death making $140,000 a year in New Orleans. And you should be able to be rich on that. Yeah. And so I want a better life for you, hon.

What do you think, Kimberly?

Okay, so what did he suggest?

I would sit down with him tonight and you guys have a relational conversation of how— where you want this marriage to go in general, right? Right? Because I mean, a healthy marriage has a level of unity, a level of sacrifice together. And to say, I want to do this life with you and I'm scared to death to combine. The answer, you know, you would say is, or what we would say is, yeah, you combine your money and you guys work on your household together. But you could absolutely vocalize your fear and to say, I'm so scared to do this.

Because you're misbehaving.

Yes. And I want to together reach some goals so that we can get out of this mess so that we can, we can live a prosperous life. What if we had no payments, right? And sit there and, and dream and talk about it. What if we made $140,000, we had no payments? How much is going out of your household in just debt payments? And what if that was just sitting in your account, right? You start to actually have hope for the future when you see what a reality could be.

If you cut up your credit cards and said, I'm never going to use them again, And he promised, raised his right hand and promised he's never going to borrow money on anything with wheels or motors again, because he's got a bad thing about motors. He likes them. And I know because I'm one of those guys. I like motors too. So, um, you know, he, he— but that'll make you broke because those stupid things all go down in value. So we're going to pay cash for everything from today forward. And if you had zero payments, how much do you owe on your house again?

Um, primary about $130,000. $130,000.

Okay.

All right.

I mean, let me, let me paint a picture for you. Only though, if both of you were firmly in agreement and completely leaned in, which you're a long way from that today, okay? But if you could get there, if the two of you could get there and you said, okay, both of us are gonna do the Ramsey Plan, we're both gonna walk the Baby Steps, we're not borrowing money, we're gonna be on a budget that we both agree to, And we're gonna lean in and we're gonna take $140,000. Let me show you what could happen.

Okay?

You could sell that rental house and be 100% debt-free except your house, and you could pay off your house, the rest of your house, in about 3 years. 3 years from today, you could be 100% debt-free and on your way to be a millionaire about 4 years later.

Wow.

But you'd have to be tied into this.

How old are you guys, Kimberly?

Um, 42 and 46.

Do y'all have anything in retirement right now?

Well, I have a 401.

401. Okay, how much is in there?

I have no idea.

Okay. I mean, because if you look and you guys— if you did and you guys paid off everything and you invested, I mean, 14, 20, you know, Doing quick math here.

Mm-hmm.

Man, that would be—

Well, you got a car payment, you got a motorcycle payment, you got a house payment.

Yeah, but I'm— yeah, yeah, yeah.

Credit card.

I mean, what are you talking about?

I'm thinking of, um, it'd be $2,000 a month. I'm just thinking of what you would invest in retirement. If you guys just did your income, it'd be $1.7 million. Okay, if you guys invested $2,000 a month, that's it, in 20 years.

Yeah.

In 20 years. But that you retire with almost $2 million and a paid-off house, that's what's possible.

Yeah.

That you start actually working towards something.

Do it faster than that. Hang on, I'm gonna give you a copy of Baby Steps— I'm sorry, yeah, Baby Steps Millionaires and Total Money Makeover. You guys read those 2 books. Gonna try to talk you into doing it. It's a long way from where you are, but if I can talk you into it, it's gonna change your life.

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Jack is in Cedar Rapids, Iowa. Hi, Jack. How are you?

Hey, I'm doing good. How are you, Dave and Rachel?

Better than we deserve. What's up?

I'm coming at you with a more morally focused financial question. Um, just jumping right into it. My fiancée and I are 24, been together going on 5 years, and have been living together since middle of last year. We were due to get married last Sunday, but on her way to work about 2 weeks before, She got in a pretty devastating car accident and she's very lucky to survive the hit itself.

Oh my gosh, Jack.

I'm sorry.

That's awful.

To stay brief, she got flown out of the local hospital where she was transported to, to be in intensive care where she's been for now going on 3 weeks in the top trauma hospital in our state.

Oh my gosh.

So a set date for getting out of the hospital, starting rehab and getting back to work and just getting back to life as normal has yet to be mentioned. And as far as living life normally, she's going to have to live with her parents due to mobility restrictions and the ease of living in that house compared to the apartment we live in because it's on the second floor. The biggest thing that's been on my mind and the thing that I want the advice with has been the magnitude of the bills that are probably going to come in and what that means for me and my future. Because legally speaking, We weren't ever married. And so to the state's eyes, I wouldn't have any responsibility for these bills. And I personally am just not okay with the thought of not having anything to do with the burden that would be dropped onto her and her family because of the pending invoice that's coming. Am I being too nice and willing to take too much of this worry on myself? And am I wrong for thinking that I could possibly move back home To save up faster for these bills.

Oh man.

What a horrible thing. I'm sorry.

Um, are you guys going to get married eventually?

Yeah, we, we will still get married, but it, you know, we just got through with canceling and delaying honeymoons and flights as far as we can. So nothing, nothing set in stone as far as rescheduling it.

Okay.

I assume she had health insurance.

Yeah, we're on our parents' health insurance yet.

Yeah. And, um, and so typical health insurance has a couple things. You've got a deductible, uh, and then you have a copay portion, like an 80/20, and you're responsible for 20, they're responsible for 80. And then there's another number called a stop loss or a max out-of-pocket.

Okay.

And that, that number, depending on what type of health insurance it is, is usually Somewhere less than $20,000, which means the total out-of-pocket is probably somewhere less than $20,000. So she's not going to get saddled with a $1.2 million NICU bill.

Yeah.

And that's what I was scared of. I didn't know if we were going to be looking at $10,000, $20,000, or a million.

Yeah.

A little different.

Yeah.

But it's not different.

It's still very expensive. You're right.

You're right. So yeah. So, so, I mean, you're going through a tragedy, a drama, and it's harsh and scary and all of that. And so in the middle of all those emotions, the insurance emotions or the medical bill emotion are coming up, and they're bigger in your mind right now than they actually are, probably, is my point.

Yeah, I know. conscious and like to think of the big picture and also focus on the small details. So pretty much anything that their parents are thinking of, that her parents are thinking of, I'm thinking of as well. Like, yeah, the stress on insurance and, you know, liability. And, you know, if anybody were to sue anybody because of the accident.

Well, that again is, um, on the insurance company, the car insurance first. So was the accident a single-car accident or what?

It had 2 cars involved.

Okay.

And was it her fault or do we know?

It was hers.

Okay.

All right. So, uh, her car insurance comes into play then.

Yeah.

And how much liability coverage she had. And, um, and so was anyone else, uh, seriously hurt like she was?

I don't know the extent of the other injuries. I know when I got to the hospital where she was initially transported to, The law enforcement officers in the room at that time said that they were already discharged, so they probably couldn't have been in the hospital more than 3 hours.

Okay.

All right.

So most likely, if there's any liability to the other party, her liability limits would be unusual for them not to be at least $500,000 on her car insurance. So, uh, again, car insurance is probably going to cover all of that. Most likely. Okay, I'm not sure. We don't know where we are yet. It's very early in all of this. It's also early to worry about it, not think about it, but to worry about it. It's okay to think about it, but I don't want to worry about it at this stage. In other words, because we don't know what it is until the monster comes out of the closet and we figure out he's 3 inches tall, then we don't have to worry about him. But if he comes out of the closet and he's 30 feet tall, then he's a problem. Yeah.

How, how are you financially, Jack? Do you have savings?

Yeah, I have my savings. I've been listening to you guys and following your steps religiously for years. So she was on autopay for the rent and chipping in with the bills. I completely stepped in and disabled all the autopay just to make sure that she doesn't drain her account.

How much do you have saved?

Total in savings right now, I got about $11,000.

Okay.

All right.

So yeah, right now I'm paying, I'm paying for all of living and I can get by.

Yeah.

Yeah, I can, I can do it.

Because I think from a relational standpoint, I mean, you are 2 weeks, 14 days away from saying in sickness and in health, you know what I mean? Like, I'm about to commit my life. So the fact that you're wanting to step in and, and help care and take care of her I would be worried if you wouldn't be desiring that. Do you know what I mean? Like, this is your wife. You're 14 days from your— this is your wife, you know? So I would say that is totally understandable.

And yes, and yes, I would.

And I would. I think I would take care of her.

But I don't think you need to cancel the apartment, move in with your parents, because we don't know the size of the problem yet.

Okay?

But the answer to your question, not morally or ethically, but more relationally, is Rachel's point is yes, I want I want you to treat her like she's your wife in terms of making sure she's okay, but not necessarily signing up legally for all these bills. But we're going to walk through this together, and if I need to throw some of my $11,000 on the table, I can.

To help her.

But I want to see what we're dealing with and what it is there for long term. So my prediction is that the medical recovery that she— because she's obviously got hurt really bad, is going to be 90% of what you guys face. The financial problem is only going to be about 10%. I think the health insurance and the car insurance are going to cover the vast majority of the incident.

But there could be ongoing therapies and things that you guys may as a couple pay out of pocket, right? And that would be—

Or you may help with the deductibles or the copays later. But they're not even kicked in yet. They're not there yet.

Yeah, but I'm just saying for him, for them to be thinking if they end up getting married in 6 months, you know what I mean? She could have another 2 years of therapies and rehab. You know what I mean? Yeah.

Part of what we're signing up for. Yeah. Now let's go worst case scenario. Something crazy happens. The other party sues for $500 million for harm and wins. Okay, then your fiancée is probably going to file bankruptcy before you get married, right? Okay, and you're not going to sign up for $500 million.

Okay, that's not going to happen, but I'm just saying that's the worst case scenario.

She files bankruptcy on the other end of it, and then, then you guys move forward together and you walk, but you walk through it together because the car wreck and her, if she's got piss-poor insurance or something If her insurance policies are weak or her insurance company's horrible on paying out the claims, then she could get in a pinch here that you can't help her out of.

Yeah.

And her parents can't help her out of. And so it's just a horrible part of this tragic story. You said mobility issues. Are the mobility issues permanent, do you think?

It's not permanent. Okay.

All right.

Right.

It's just part of recovery from a horrible accident.

Yeah. Part of recovery. No broken legs or anything like that, but just she's needing assistance to just stand up out of bed, out of the chair right now.

Just walking with her through this is your relational responsibility. Not taking on all the bills and bankrupting yourself to prove it, but walking with her, making the decisions together. is your responsibility. Yes, you're a good man and you will do that. If your business is making 7 figures or more, you should be proud of that. But that growth probably brought a mess with it. 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 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.

Our question of the day is brought to you by Ask Ramsey, your free AI money tool that provides personalized Ramsey money answers based on Ramsey principles. That's why we call it Ask Ramsey. You can get it at ramseysolutions.com/askramsey.

Today's question comes from Dean in Virginia. My home escrow keeps going up due to rising insurance rates and property taxes. Some people recommend paying for those items once a year of, instead of with your house payment, which allows you to keep the funds in a high-yield savings account to gain interest in the process. I am debt-free other than the mortgage. Is this a good idea?

Hmm.

Man. Well, that's the rising insurance rates and property taxes. Yeah, Yeah, it's a real thing. And my only fear would be if it's the once a year, because you do that once the house is paid off, you pay everything, is to make sure that you actually do it and don't get behind. Because a little bit of escrow for me is a built-in savings. It's forced almost, you know what I mean? That it's going to get done.

So Dean, I guess I'm with you, Rachel. I would ask the question of myself if I'm you.

Do I have enough?

Am I disciplined enough Mm-hmm. To set aside 1/12 of the actual insurance cost and the actual— even if it's rising, you have to change it because it has to be paid— 1/12 per month of taxes and insurance and set it in a savings account, high-yield savings account, and pay it. I would not do that unless 2 things occurred. I would not do it for the interest rate. The interest is not spit. Okay? 3% on nothing is nothing. Okay? So you're not gonna get rich on the high-yield savings account on the interest. That's— I wouldn't screw with it for that. Your labor is worth more than that. I would do it if your mortgage company keeps screwing up your escrow account and they're taking more than they need to because they keep a shortage or an overage and they can't seem to add up and divide by 12. Which honestly, I think probably over half the escrow accounts out there suck and are out of balance because these mortgage companies have 8th graders doing the math that are functioning on a 2nd grade level. And so it's just, it's horrendously incompetent. I would do it to keep from having to screw with the irregularities of a poorly run escrow account, but not for the 3% that you're making on the HYSF.

Now, and I would only do it if you can be super disciplined and make sure that you're setting the money aside. Don't get yourself in trouble.

And keep up with the property taxes and insurance. I mean, all of that.

Yeah, yeah. This does not fix rising insurance rates or property taxes. It doesn't change it a bit. You still got to pay them either way. And if you don't pay your homeowner's insurance, your mortgage company will put what's called— and prove it to them that it's paid— they'll put forced place insurance on your house, which is about 10x the cost, and then try getting that money back.

Mm-hmm.

Man, that's a pain. So you don't want to mess with not paying one of these things. So if you're super disciplined and if your mortgage company is horrendously incompetent on managing the escrow, I might do it separate. But otherwise, I would just run with it because it doesn't doesn't— the increase in cost doesn't change whether you pay it or they pay it with your money. Doesn't change. Selena is with us in Tampa. Hi, Selena, how are you?

Hi, good, how are you?

Better than I deserve. How can we help?

Good.

So, um, just a few questions. I am 43 years old and I'm a registered nurse. I recently sold my house in California And moved to Florida. So, I made $160,000 off the sale of the house, which currently is sitting in my savings account. I also have a $30,000 CD, which isn't earning much, and $20,000 in my Roth, excluding my emergency fund through the same bank. So, I currently don't have a mortgage. I have no car payment, no credit card debt, no student loans. I paid those off and my retirement situation is fairly good. I have been putting away about 18% to 20% of my earnings into 403s and 401s through various hospitals I've worked over the years. And I was recently told by the financial advisor at my bank that the projected value of my retirement will be about $4 million by the time I'm 60 if I keep You're killing it.

Way to go.

Thank you. Thank you. Um, so my question is, should I roll these all over into one account as he suggested, and with what kind of company? And in addition, how much moving forward should I be putting into a Roth versus traditional pre-tax 401? Um, I'm currently doing 18% into my Roth. At my current hospital, Tampa General, and, um, which I think is probably better than doing the pre-tax. And lastly, what should I do with the money in my savings and my CD?

Way to go. You got such good problems.

Yes.

Yeah, I know. It's, it's, it's nice. I was taught at a very young age.

Yeah.

Yeah.

So you have multiple 401s and 403s from previous employers, correct?

Yes.

Okay, so I would just do a direct rollover and just into a traditional IRA to have it all so that way you can control what's going on and they're not stuck at these other companies. I would also actually ramp down a little bit of what you said. You're contributing up to 20% into retirement, and I would take it to 15%, and I would favor Do you have a 401 right now with the hospital you're working at?

I do.

Do they do a match?

Yes.

How much? What percentage?

I believe it's 3%.

3%. Okay. So what we teach is to take the 3%, so go up to the 3% in the 401, and then—

She's got a Roth 401 at the new hospital.

Is it a Roth 401?

Yeah.

I'm doing both.

So they offer, um, I'm doing the 401, um, and the Roth through the same hospital?

Well, no, it is— it's— you can do a traditional 401 or a Roth 401.

Oh, okay. Yeah, okay, then I'm doing the Roth.

Okay. Yeah, we would tell you to do the Roth 401 with the match and stop at 15%, throw the rest of it at your house. Do you own a home?

No, so I sold the house in California, and I—

so the one currently—

look, Yeah, that's the $160,000 sitting in my savings. And I am looking to buy another, but I'm not ready just yet.

I'm a little scared of the market.

I would honestly put that, yeah, well, I would put that into just a high-yield savings account, 'cause you'll probably be, you'll buy a house in the next probably 4 years, would you say?

Yes. Oh yeah, absolutely.

Yeah, so I wouldn't put that in the market and I would just keep that in a high-yield savings. You'll earn 3%, you know, in there versus a traditional savings account. And I would just let that sit there. And above that 15%, if you have extra cash, honestly, I would throw it in that high yield and save up a huge down payment. So when it comes down to buy, oh my gosh. I mean, even if you had 50%, right, to put down on a house, like that already speeds up paying off the house in that process.

So our next goal, in other words, is pay off the house.

Yeah.

While putting 15% away in retirement and do all your rollovers. And I'm going to advise you to get away from a bank. financial advisor. I don't like banks.

Yeah, I actually started looking on your list at local SmartVestor firms.

Yeah, good. That's what I would do. Sit down with them and they'll help you do those rollovers and help you get everything kind of smoothed up and piled up in one pile to watch it. But the good news is the projections you were given are probably pretty accurate. I think you're probably going to have $4 million or more. And you're gonna pay for a house also. So that's probably gonna be another couple million by the time we get there. And so you've, you've just chosen a wonderful career field. Your move to Tampa was a brilliant move. Um, all, everything about this whole story is so smart from you. Yeah, you've just, you've just really done some very wise things. So I'd get a SmartVestor Pro. And like Rachel said, I'd do those rollovers and do the Roth 401 with the match up to 15%. Everything else goes on your house till your house is paid off. And then keep your emergency fund set aside of 3 to 6 months. Every other thing you got, throw it at the house. That other account that you've got, I'd throw it at the house too.

The CD.

Make sure, yeah, make sure you have a good emergency fund. I think you said you had that, but—

Yeah, there were 2 accounts. Yeah, yeah, that's perfect. Very, very well done.

Well done.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Rachel Cruze is my co-host today.

Hey, Dave.

Number one bestselling author, Ramsey personality, and my daughter. Alex is in Virginia Beach. Hi, Alex, how are you?

Hey, Dave, I'm doing well. How are you doing?

Better than I deserve. What's up?

So, um, I have quite a bit of a mess on my hands and I've made a few poor financial decisions. So I'm just calling to get your opinion on what I should do next. Um, so I'm a single mom who's been working full-time, um, and I've been in school full-time Full time for the past two and a half years, I've been receiving minimal help or inconsistent support from my child's father. So I was primarily taking on all the financial responsibilities, including childcare. So now I have two questions. I received a lump sum of about seven thousand of back pay child support. I was wondering if it ethical for me to use that money toward my household income and toward the baby. And then my next question is, um, you know, I've been listening to your show for a little bit, and before I attended school, I made sure to apply to 1,000 scholarships and pretend like that's my second job. Um, I attended an affordable state school, and so I actually have a refund coming back because I applied to so many scholarships and received so many funds. I'll be getting $8,000 back.

Oh girl, I love it.

Way to go. What are you studying?

Thank you. Uh, psychiatric nurse practitioner.

Excellent. And how old are you?

Yeah, I'm 31.

And how many babies?

Just one.

Just one.

She's 3 years old.

2 years old.

3.

3.

3.

She's 3.

And how much are you making a year?

Um, so that varies because I've been doing contract work to maximize my income. Uh, the caveat to that is that I don't have insurance. However, I've been doing insurance through my school since I've been in school full-time.

Okay.

So how much do you make?

So about $65 an hour.

And how many hours are you working?

About 36 hours a week. I'm a nurse.

Oh, okay. Wow. Good for you. Okay. So you're making, what's that come out a month?

Um, so that's about Well, each paycheck is about $3,800 after tax, roughly.

Yeah, and you got 4 of those?

2.

2 of those.

Okay, so you're making about $8,000 a month. Okay, $7,000, $8,000 a month. Way to go.

Cool.

Good for you.

Well done. And how much debt do you have?

And that's the thing. I know y'all are gonna yell at me. No, not yet, but we might.

No.

Okay, um, so I have $7,000 that's in a private student loan from getting my bachelor's. Um, I have $5K that was pretty much a hospital bill from when I delivered 2 years, 2 or 3 years ago. Um, I have $30K in federal student loans and this is where Dave is gonna get at me. Uh, but I have $10,000 in a car loan at Sakia and then the $28,000 in a Tesla.

You got 2 cars?

I do.

I do.

Why?

Because I made very poor financial decisions and I'm ready to clean it up.

Yeah. Can you sell one of them?

I could. So that was one of my questions with that $7K and the $8K coming in. Should I—

Okay. So let's, let's stop a second. We had some fun with this. Let's think a minute.

We got $80,000 in debt.

The, um, you said when you said the $28,000 Tesla and that's your second car and I made a poor financial decision and Dave's going to yell at me. Dave would never yell at you just for the fun or the entertainment value. I want you to win, right? And you know that, right?

Yes.

So really, really—

Dear God, yes, I think so.

Yeah, what you're saying— no, but I mean, what you're saying is, is that I know I messed up. That's all you're saying. And we've all messed up, right?

Yes.

Okay, so how do you fix— how do you fix the mess up? You sell the Tesla.

Okay.

30 seconds takes to make that decision, because there's nothing about this that's a blessing from God. This has brought you nothing but pain.

And what's crazy is—

Every time you look at the car, you feel dumb.

Yes.

Yeah. And it takes your debt down to $50,000. Then you put the other money towards it.

Yeah. You're going to be cleaned up fast.

Yes. I was going to say, you're down to $35,000 just in this one call.

You got $7,000 in child support check. You got $8,000 coming back in the other stuff. And so yeah, you sell the Tesla and you start applying the principles because you're doing so many smart things in this story until we got to the end of the story. You know, and you just gotta, you gotta stop that last little part and, you know, get you back on track, kiddo. You're doing good.

Why are you emotional, Alex?

Thank you. Um, I'm emotional because I kind of had my intuition. I knew that it wasn't smart. I knew that, um, I knew about you guys. Um, My mom did introduce me to Dave Ramsey, and I still kind of knowingly went in, but at the same time, she was there with me and she took the class. So I'm thinking it's a smart move because I got a good deal on it, but it's not. And so I beat myself up because I—

Yeah.

And Alex, can I tell you this too? You're working full-time, you're in full-time school, and you're a single mom on your own. It doesn't sound like he's helping at all. You're on— I mean, you're exhausted. You're exhausted. And exhaustion can, if you're not careful, bring on some desperation and what feels good in the moment. It feels good to have a new Tesla, right? Like that, it felt like a, you know, a medicator for a hot second. 'Cause it's like, okay, that would feel really good. Like I'm, you know what I mean? Like I can totally see how it occurred. And then once the newness wears off and you look at the bill every month, then you're—

Oh, you get the hangover.

Have the regrets, which is fine.

You know what I mean?

You know, you woke up from the party with a hangover.

Yeah. So you can reverse some of this.

That's the beautiful thing.

This isn't permanent.

Yeah, thank goodness. Yeah, I think, I think you're a warrior princess.

I'm proud of you.

I think you've done so many things right in this whole discussion. And the other answer to your other question is it is not immoral to use child support money to live on because you are paying more to raise that child. Yes, the child costs more than the child support money coming in.

Okay.

And so if you, you're, you're already in the hole, the hole. Even if he pays, you're in the hole. And when he does finally pay the back child support, you're still— the child still costs more to raise than he's giving you. So, you know, you use that money. It's just part of your budget, period. And the same thing's true if you're out there and a spouse passed away and you get Social Security checks from your spouse that passed away for your minor children. That does not need to go into a mutual fund. It needs to go to pay for food and lights and water and raise your— run your household and raise your children. That's what that money's for. And so it's not— it's actually unethical to not use the money as part of your household. So do that and sell the Tesla, and then let's use this money and let's start working these baby steps.

Yeah.

Get you cleaned up and let's finish this plan, finish the schooling, Because I mean, nurse practitioner, strong kiddo. That's strong.

Thank you.

Yeah, you're gonna, you're gonna do it. You're gonna look up in, in a year, 18 months, and it's going to be a totally different financial situation for you, Alex. Really.

And let me tell you what, you need to teach this child as they grow up what you've done and how you lived, because they, they have a warrior princess right in front of them. And if they can learn to work like you've worked and sacrifice like you've sacrificed for a noble cause, you will have raised a great kid.

Amen.

You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at ramseysolutions.com/insurance. Well, we wish we could get to every call and every question here on the show. We can't. If you have a money question and you want an answer for your situation, head on over to our website, use our free AI tool called Ask Ramsey. It's free and it was trained on only Ramsey principles. If you don't know how AI works, it can only— it's artificial intelligence, it's not real. And so it can only spit back out what you feed it. And so that's like the problem with Google, because Google's artificial intelligence is like reading through Reddit, which is a sewage pit. And so it's getting all this crap in it to give you an answer.

answer.

But if you go to an AI tool that's only been fed a steady good diet, like only Ramsey stuff, then it's only going to give you Ramsey answers. And that's what Ask Ramsey is. Okay? So like 3 years' worth of answers off this show dumped into it. All the books we've read and all the books we've written dumped into it. Not all the books we've read. All the articles we've written, like 2,000 articles on our website on different financial issues, all dumped into it. That's a lot of articles. it. And so it's gonna give you an answer. And we've even been working on the snark. It's starting to be pretty snarky like we are, because we're a little smart aleck here. And so we kind of like that. It's part of our brand and a little sassy, right? And so Ask Ramsey's got all of those things. It won't yell at you, and I don't yell at you as often as some of you think I'm going to.

But anyway, I don't know, half the calls today have been like, Dave, don't yell at me.

I know Dave's gonna yell at me, but then Dave just says, hey, I love you.

Sometimes we get empathetic Dave. We've had empathetic Dave today. You're very, very caring.

Okay, there we go. All right. We don't know which Dave's gonna show up.

You don't know which Dave is gonna show up.

But with Ask Ramsey, you know. Okay, so there you go. It's true.

All right.

Not enough coffee. That's all it is. All right. Check it out. ramseysolutions.com. Click the link in the description if you're listening on podcast or YouTube. It's free. Check out Ask Ramsey and ask it a question. See what it does for you. You'll like it. Juan is in— no, Jesus is in Los Angeles. I got, got it all covered here. What's up, Jesus? How can we help?

Uh, yes. Um, me and my wife, we've been watching your show for a while and, uh, we've been following your steps of getting out of debt and stuff. Uh, we don't have any debt and, um, we have, uh, 6 months worth of expenses.

Way to go.

And, um, and And after all expenses and everything, we have $4,500 left over a month.

Wow.

Good for you guys.

And we would like to see, because we're like a little bit naive when it comes to that, where can we invest that money?

Good for you. Very well done. What do you do for a living?

Uh, I work in housekeeping, like public area.

Yeah, you work hard. Good for you, man.

Yes. How much do you guys— I know you have $4,000 left over, you said, Jesus, but how much do you guys make, um, make a year, household income?

Uh, she makes, uh, $87,000 and I make $67,000.

Okay, well done, y'all.

Way to go, man. Excellent. Well, I, I think the biggest thing I learned about money is, is if you don't give it a name, meaning a goal and each of those dollars need an assignment, it will just disappear. And so you say, I got $4,500. Now what am I gonna do with that? And you need to say, all right, out of that, we're gonna invest a certain amount, and, and we're gonna put a certain amount aside to buy our first house.

Okay?

Or whatever it is you're gonna do. I don't care. But it needs to have a goal, not just stacking cash.

Right.

And if you give it a name, it won't disappear because it'll go to the name. You speak a name over it. That's why we call our, our budgeting app EveryDollar, because you give every dollar an assignment. Every dollar has a name. And I want you to do that with your saving and your investing. So probably you've got your emergency fund in place. Probably you're gonna start putting some money aside for retirement, wealth building, and you're probably gonna put the rest of it aside to buy a house. Does that sound right?

Uh, she said a house is not a good investment.

Who did?

My wife. She's wrong.

Okay, who said a house is not a good investment? Of course a house is a good investment.

I mean, in LA, in Southern California, it'll take you guys a while to save up the down payment for sure, but, but overall it's gonna, it's gonna go up in value.

Yeah, investments go up in value, so by definition a house is a good investment. They go up in value.

So our plan, according to us, right, we're planning to just, um, invest money and retire if it's possible, maybe at 50 or 48 or something like that.

Yeah, but where are you gonna live? In a rental house? You gonna be a renter?

No, we're living in an apartment right now.

I know you're— but I mean, I mean, you're gonna retire with a big pile of money, but still have rent.

Jesus, how old are you guys?

I'm 35 and she's 31.

Okay.

Okay.

All right.

You guys do what you want to do. The first thing I would tell you to do is to give every dollar an assignment, like I said. And, uh, I would sit down with a SmartVestor Pro, click on Ramsey Solutions, and Click on the SmartVestors. It'll drop down a list of the ones in your area. Sit down with them and they'll help you guys set some goals with this money. And if all you want to do is invest it and be a renter, then they can help you do that. Well, because I don't recommend that though.

Right. And where you guys are at salary-wise, it's about $2,000 a month that you can be investing for retirement. And if you guys don't retire early and you retire at, say, 60 years old, And you do this every single month, this was crazy. And again, this means that you haven't gotten a raise or anything, which is not gonna happen. You'll continue to grow your income and be investing more, but it sits at right about $5.6 million.

Yeah, why $2,000? He had $4,500.

$2,000 a month?

He had $4,500 a month.

Yeah, but he didn't invest all of that. He needs to invest 15% of his income into retirement.

I know.

And take the other $2,000 and save for a house.

That's for buying a house, yeah.

But I'm just saying, if he invested 15% of his income—

Yeah, I got you. What we teach.

Yes, every year. Yeah, it's called the Baby Steps. You know, Baby Step 4. Oh, Baby Step 4.

Uh-huh.

That's cool.

I slipped away from it.

Baby Step 4, invest 15%. Yeah.

Okay. But then the other $2,500 a month, which is $30,000 a year.

You can save that for a house payment or for a down payment on a house.

Yeah, $30,000 a year and let that grow in a, you know, a high-yield savings account.

Yeah, for sure.

Or sit down with a SmartVestor Pro. You can put the whole $4,500 in there. And for a season, you'd have that $5 million a lot faster.

Yep.

And buy a house later and be a renter for a while. That's not what we recommend though. Yeah, yeah, exactly. I would get in the housing market because they're going up all the time and they always have. Juan is with us in Fresno. Hi, Juan, what's up?

Hey, thank you, um, Dave. Thank you for talking to me. Uh, in a nutshell, I'll get right to it. I have one, uh, 2 mortgages, or a mortgage and an equity line, so to speak. And then a 401. I don't understand the difference between an A and a K mechanics, but I'm going to read them straight off my latest statements to you. Every month I pay $1,515.58 for my primary loan, which is conventional, and the balance payoff, outstanding principal balance is $44,000. 09581, and, uh, it's, it's a good rate. It's 1.875%.

How old are you?

Uh, 61. I'm retired out of the trade. Okay.

What's the total balance on your, on your, uh, retirement? If we just— your total nest egg, what's the total nest egg worth?

Uh, my total nest egg, uh, uh, Dave, tell me, what, what do you mean? My 401?

Yeah, your 401, anything you got in your retirement funds. How much?

Total.

Okay.

Uh, I have, uh, $100,000 in the 401. I want to believe there's at least, you know, $300,000 in equity on this house because the payoff is about $100,000.

So the only money you have in retirement is $100,000?

Yes, but I have a lifetime pension.

Okay. But the only money you have in retirement is $100,000?

Yes, sir.

Okay.

And you owe $44,000 on your first and how much on your second?

Uh, I owe, I think, uh, I have it right here in front of me, $49,401.

Okay.

So $100,000 pays it off, but you'd be broke other than your pension.

Correct.

Don't do that. No, no. Let these pay on out. You just work them on through. You're going to be done with them in a few years anyway, but I don't want you sitting there with no money and only a pension.

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.

You're welcome to stop by and see the show. We do the show on the glass in the lobby at Ramsey Solutions from 1 to 4 Central Time every day. The amount we charge for tickets is zero, and the coffee that we provide is free, and the homemade cookies— oh, yummy. Yeah, we had the calories removed. move to. Not, but yeah, you come in there free to come hang out with us. Also in the lobby of Ramsey Solutions is the Debt-Free Stage. On the stage is Sean and Angela. Hey guys, how are you?

Hello.

Hi, thanks for having us. Welcome, welcome. Where do you guys live?

We are from Wyoming.

All right, what part?

Uh, central Wyoming, about around Casper.

Okay. All right, cool. Welcome all the way to Nashville. That's a bit of all Excellent. And so you're here to do a debt-free scream. How much have you paid off?

$336,000.

Wow!

Oh my gosh!

How long did that take?

6 years.

Oh wow. Okay, and your range of income during that time?

We started about $180,000 and we ended about $300,000.

Wow. What do y'all do for a living?

I am an attorney.

Mm-hmm.

And I'm a pharmacist.

Oh, good for you guys.

Okay, wow. Okay, cool. Good for you guys. Great careers and $336,000. I was gonna guess paying off the house, but then I hear those 2 careers, I'm thinking student loans.

We did the student loans first. This is round 2, and it was the house this time.

Okay. All right. Well done. All right, looking at weird people. Yep, 100% debt-free, house and everything. What's the house worth?

Probably about $650,000.

Excellent. And how much in your retirement nest egg?

About $300,000 to $350,000.

Okay, so you're hitting the million-dollar net worth range.

Yep.

Excellent, way to go. And you're not that old. How old are you two?

38.

42.

All right, and you're Baby Steps millionaires.

Yes, sir.

So how long ago did you start following Ramsey stuff?

About 14 years ago.

Wow. Okay, so there we go.

Wow.

Right when we got out of, out of college with our debts.

How much student loan debt did you guys have with the, with all the degrees We had about $145,000.

Yes. Oh, that's lower than I would've guessed. I mean, a pharmacy and an attorney.

Yep. Yep. We cash flowed his last year of law school.

Amazing.

Yeah.

So great, you guys. Incredible. So what made you go all the way and say, hey, you know what? We are going to pay off the house. We're going to take 6 years of our lives and throw extra income at it and just knock it out. What was the motivation to do that?

We were intentional for about the first 5 years. And then, about a year ago, almost today, actually, we decided— we just felt that God told us we needed to get out of debt completely. And we calculated we need an extra $15,000 to be able to— if we throw everything at the house, we can pay this off in a year. And so, we ended up doing DoorDash.

No way!

Got it done in 9 months.

Oh my gosh, you guys!

We were made fun of for being a lawyer and a pharmacist DoorDashing.

Yeah, but for the big goal.

But how do you like me now, huh? Yeah, yeah, that's right, I'm a millionaire and I'm 40. Shut up. Yeah, yeah, it turns out that, uh, there's a surefire way to making money. It's called work.

Yep.

Yeah, way to go, guys.

So great.

Pretty incredible. I'm so proud of you. So what was the hardest part of this whole thing for you guys?

That's a good question. The hardest part, I think, has just been delaying what we want. We want to, we want to buy that new car. We want to move on with something. We want to go on trips like we are right now.

So you're like normal people?

Exactly.

You want some stuff.

Okay.

And so delaying that, and this trip right here is even actually one of the first trips we've done as a family that wasn't just to go visit family, but we are actually going to take money and spend it and go enjoy ourselves.

That's cool.

That's good. I like it.

I like that.

Have you guys had, um, a month or two— I'm sure you have— where you've had no mortgage payment?

We have. We paid it off in June. Um, and then as soon as we paid it off, he went into the hospital twice, and our son broke his leg. And so there was a reason that we needed to pay that off because we were just able to cash flow anything that was thrown at us, and it was wonderful.

Oh my gosh. Yeah, so you're kind of celebrating.

So now you've had a couple months without anything.

So I was I was in the hospital, but we were grateful that I was in the hospital that month and not the month before.

Yeah, right.

Oh my gosh, you guys. God, life just keeps going. And you guys have kids, right? 3 kids?

Yep.

How old are they?

13, 11, and 8.

Okay. What did they think about the process? How are they?

They're a big help. They're cheering us on the whole way.

And we actually, we'd bring them along with us whenever we would try and get a little bit of work done. They would come and, and, and wait in the car with us or help us as much as they could.

Oh, I love it. Oh my gosh, you guys, that's awesome. Well done.

Well, and they have that memory that, that, you know, when I was 12, and when they're a grandmother and they go, you know, back in '26, Mom and Dad was doing a thing called DoorDashing, and that's how we became multi-bazillionaires in our family. You know, that's what they'll be doing when they're grandmother, right? That's perfect because they got that memory. I, I'd carry that stuff up to the front door for people. Yeah, I mean, I can hear it, you know. It's the stories we all tell when we get old. This is how it happened, right?

Yep.

Way to go. I'm so proud of y'all. So you, you did change your family tree because they got involved and they helped. They know what happened, and you know, that, that's a big deal.

Absolutely. They helped. And actually, this is kind of a special trip for us because we're here with my wife's parents, and they are just retiring, uh, having followed Dave Ramsey. And then we are on this journey ourselves, and then now we actually even— our oldest is is taking your Foundations in Personal Finance class. And so she's starting her own journey with Dave Ramsey.

So love it.

It's been great.

So great. So generational, right? 3 generations sitting right there. That's awesome, you guys.

Well, so when someone asks what's the most important thing you're going to do if you want to get out of debt, what do you tell them the trick is? No trick, but yeah.

Persevere. You just have to keep going no matter what comes at you. Just keep persevering.

Stick to that budget, even though it's hard.

Were y'all working together before you started all this as a team pretty good, and then this just was one more thing you did, or did you start working together even more intensely? Unity between the two of you?

We've always had unity. I think this created intentionality. We had to actually choose. Every dollar went somewhere, and we had a choice to make with every dollar. And that's what really changed for us.

Yeah, that aligns your value system in a very, very, very real way.

Yeah, for sure.

Okay, so—

Well, and hitting a big goal together as a married couple. I feel like that's one thing we talk on the show a lot with couples where I'm like, when you do it and then it's done, you look back and you're like, we walked through that together. Like, we did that together. You know, there's something so bonding about going through something that's pretty much impossible is what it feels like. Having a paid-off house in today's world feels impossible. $360,000 paid. I mean, that's a lot of money, you guys, right? I mean, it's amazing what you've done. Absolutely incredible.

Yeah, very proud of you. Okay, the kiddos' names and ages again?

We have Brianna, who's 13, Allie, who's 11, and Kylan, who's 8.

Okay, and one is gonna join you, or all, or whoever, huh?

One of them is gonna come up and join us.

Okay, anybody that wants to is welcome. All right, but here we go.

Oh, we got them. Is that the middle one?

This is our oldest.

Oh, okay, so great.

Very cool.

So good.

Yeah, she did most of the DoorDash work. Yeah, she did indeed.

No question.

Brianna's like, listen, I deserve to be up here.

That's right, you're part of the team, kiddo. So, well done.

So great.

All right, Sean and Angela, Brianna, Allie, and Kylan?

Kylan.

Kylan. Good, good. From Casper, Wyoming area. $336,000, paid off house and everything in 6 years, making $180,000 to $300,000. And of course, they also along the way became Baby Steps millionaires. So proud of you guys. Count it down. Let's hear a great debt-free scream!

3, 2, 1.

We're debt-free! That's how it's done.

So great.

Oh my gosh.

Well, I mean, in today's world, this can be done, but they said it 14 times in that thing. He kept using the word over and over and over, intentionality. No one wins at anything by accident. Winning Mm-hmm. Saving is not an accidental act. Having a great marriage for 45 years is not an accidental act. Raising great kids is not an accidental act. Succeeding and pushing through in your career and increasing your earning power is not an accidental act. Building wealth and becoming a millionaire at 40 years old with a paid-for house is not an accidental act. These are intentional acts. These are things you control.

Exactly.

Trump doesn't control them. Biden doesn't control them. Thank God you're in control.

You've heard from me and the Ramsey Personalities for years, but nothing beats actually getting together in person. That's why we created the Live Like No One Else Cruise. For 7 days, We're vacationing with you and 2,500 Ramsey people in the Western Caribbean with live shows, us, new content, us, and more. If you're on Baby Step 4 or beyond, come spend the week with us next March. Choose your cabin at ramseysolutions.com/events or click the link in the show notes. Our scripture of the day, Philippians 4:12. I know what it is to be in need, and I know what it is to have plenty. I've learned the secret of being content in any and every situation, whether well-fed or hungry, Whether living in plenty or in want. C.S. Lewis said, the task of the modern educator is not to cut down jungles, but to irrigate deserts. Ooh, C.S. Lewis.

Hmm.

What would a jungle be?

Wow.

No, what? I don't get it. Cut down jungles? Don't cut down jungles?

It's not to tear down, it's to build up.

Oh, to bring life, irrigation, water.

Okay.

I was like, slaughter the rainforest.

What would that— yeah, yeah, what does that entail? What does that entail? Don't tear down. That's good though.

Yeah.

All right, Linda is in Grand Rapids. Hey Linda, what's up?

Hi, I am—

I'm recently widowed.

Oh no.

And pardon me.

It's okay.

My, my husband provided for me, but now I don't know how best to steward the insurance money. Then he left for me.

Wow.

How long ago did he pass away, Linda?

August 4th.

Wow, just the other day. How long were you married?

We had just celebrated our 21st anniversary.

Was it unexpected, Linda?

No, no, he's been failing the last few years, so we knew it was coming. And it was, it was a blessing because it allowed us to put a lot of things in place Yeah. And to have a lot of hard discussions, but it made the final days much easier.

Yeah.

What was his name?

Raymond.

Raymond.

Okay.

Oh, I'm so sorry.

I'm sorry.

Thank you so much.

How much is your— the life insurance proceeds?

Um, $300,000, and then we had, um, $81,000 in savings.

Okay.

And, um, how old are you?

69.

Okay. And, uh, is everything paid off or what kind of situation are you in?

Um, we still have a mortgage. There's about $129,000 left on the mortgage. Um, and the house, according to Zillow estimates, is in the $250,000 to $280,000 range as far as current resale value. Um, not sure how much I trust that. Um, Yeah.

But I mean, it's a, it's a guess right now. I mean, Zillow's not accurate, but yeah.

Okay, cool.

And, um, so what is your— I know, I know it's still real early in this process. Do you have a plan as far as whether you're going to stay or not in the house? What do you want to do?

Uh, he encouraged me to move, to get a smaller place that was less upkeep and less work. But right now, and from all the wise advice I've heard over the decades, Don't make any quick decisions for at least a year. So I'm trying to abide by that. And all of our memories are here in this house. We've lived here since we married. It'll be hard to leave that.

That will be hard.

Yeah.

Yeah.

Yeah. I, um, I want to make big decisions that I can't undo, right? Very slowly. And after some of the fog of grief has started to lift. Because it takes about— I mean, you're still in the stage where you're just trying to breathe.

Yes.

I mean, just starting to talk about it already brings the tears up, and that's normal. And that's a good thing. That's right where you should be. I'm sorry you're going through this.

Thank you so much.

But yeah, I'm real good with you doing nothing. Have you got an income coming in of some kind that you eat on?

Yes, fortunately.

What is that?

Um, current monthly income is just over $4,800.

Okay.

What does that come— is that from you working or did he have a pension or anything?

That's— he had a, he had a pension and, um, Social Security, of course. And I had a very small pension, so that, that's enough. I'm just like $200 short each month to cover all of my expenses. But with this so new, I know some of those expenses may be less than what I've budgeted for just because I'm not sure, like groceries, those kinds of things that fluctuate.

How much is the mortgage payment?

The mortgage right now is $671.

Oh, good. Okay.

Yeah, we have a really low interest rate. We got in at 2.75%, I think.

That's great.

Okay.

Yeah, I'm gonna, I'm gonna stick with what you've heard and go slow. because you can eat and you're fine, you're taken care of, and just let you have time to breathe and hurt for a little while and cry for a little while. And then as some of the fog starts to lift, then you'll make better decisions and decisions that you'll feel more confident in. I would if I were in your shoes.

Okay.

I mean, Sharon and I've been together 45 years, and if something happened to her in August, I wouldn't be on the show right now. I mean, I'm still trying to figure out how to make a sandwich. You know, I mean, it's just unbelievable. So, um, I, I wouldn't be able to breathe. And so, uh, you know, it takes a little while. It just does. And that's, that's good.

But probably some advice though, for after— nothing rushed right now at all, Linda, but for that $300,000—

I would just park it in an HS, in a high-yield savings. Get with— go ahead and sit down with a SmartVestor Pro and tell them you want to park everything on hold until you can Okay. And then decide next spring what you're going to do.

May invest some of it, right? To let it grow. Keep some in cash, just in a high yield that you can get to if you needed it, right? So you can, um, you'll definitely be able to do maybe 1 or 2 things with that $300,000.

I would pay off next spring, if you're going to stay in the house, I'd pay it off.

Okay.

And, uh, invest the rest. That's, you know, invest the rest and you're gonna be just fine. You're gonna be in great You're gonna have a great life. And if you're gonna sell the house and move into a different property, just make sure that the numbers still are somewhere around the same numbers when you do that.

Okay.

That you're not, you know, you're not moving up to a half-million-dollar property. Okay?

Right.

You don't have that kind of money. All right, so, but that's next spring, and by then you can say, okay, this house has served its purpose. I'm— he was trying to be practical. And put you in something that's less maintenance, but you're still being romantic, and this is where all the memories are.

Yeah.

And so the practical versus the romantic can decide next spring.

Okay. Okay. I just was so concerned about not making that, that money work for me.

It's okay.

You're fine for now.

You don't need it. If you needed it, I'd get a little more panicked about it, but you're in good shape. And if you sit down with SmartVestor Pro and tell them to send you $1,000 a month out of it, and you can add that to what you've got. That— you're $200,000 short, you said, so that gives you a little wiggle room. You're not just— you're not living on pinched, and you got a little room to breathe. And then next spring, make a decision. That's a $12,000 play, not a big deal. And you got— you got $89,000. Um, I mean, you get— yeah, you got $81,000 and $300,000, so you got almost $400,000 to deal with. So you're in good shape, you're fine.

Okay.

And you're right, he did provide for you. And just give yourself some room here. A, to go through a normal, healthy grieving process when you've had this kind of a loss, and B, make better decisions at the end of it. And I think you already had decided all that. You just wanted somebody to tell you that, right?

Yes. I wasn't sure I was doing the smart thing.

Yep.

Yep.

That's it.

Yeah. You're doing a good job, Linda. I'm so sorry.

Thank you so much.

Thank you.

you.

That's so hard. Thank you for trusting us with your call and in the middle of your situation. Yeah, that, that, that honors us. Thank you.

That's one of the, the toughest things when something traumatic happens, especially a loss, right, of, of any kind. Um, having to learn to function in a new way in general, not just with money, but it's your life, you know, especially your partner.

And it's And it just illustrates though, guys, that, you know, it sounds very crass in a way, but get life insurance.

Dear Lord, yes.

Go to Zander Insurance and get your term life insurance in place.

Because if she didn't have that $300,000—

It changes her whole world.

Oh my gosh. Oh my gosh.

Now we got to make decisions in the middle of this mess.

Yep.

Because she's pinched.

Yep.

You know, but the $300,000 gave her the luxury of grief.

Of time. Of time.

Yeah.

Yes.

And so, and it doesn't cost that much. Yeah, go to Zander Insurance and get this stuff. I mean, really.

And term life, and depending on age and health, it's very inexpensive. And you can get a good policy. And especially parents, if you have kids in the house and something happens to one of the spouses, I mean, take care, take care of your family.

Been doing this a long time. The number of times I've talked to a 30-year-old that lost her husband, she's got 2 babies, And she gets $1 million, or a 30-year-old that lost her husband and she gets nothing. It's a big difference. It's a big difference. That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.