transcript

Speaker 1:
[00:05] Brought to you by the EveryDollar app. Start budgeting for free today.

Speaker 2:
[00:12] Normal is broken, common sense is weird. So we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union Studio. This is The Ramsey Show. And I'm Rachel Cruze, hosting this hour with my good friend and co-host, the Smart Money Happy Hour, George Kamel. And we are answering your questions, so give us a call at 888-825-5225. All right, starting us off is Ann in Bend, Oregon. Hi, Ann.

Speaker 3:
[00:43] Hi, I'm calling because, so I've been very blessed with my family and how much they support me. And so my dad and I have been building this house day by day, and we're hoping to have it finished by fall. But to do this, my parents have a HELOC on our house where we've been using it to kind of cash for the build. And so I'm at this point where I went to the baby steps, I started $1,000, paid off the debts that I had, closed my credit cards, have a $23,000 six months emergency fund.

Speaker 2:
[01:18] Oh, good for you.

Speaker 3:
[01:20] So now I'm sitting at this point where I was getting closer to finishing the build. My mom and I are trying to decide what is a better option. I've been paying on the HELOC as like, because if I have a mortgage, right? But we're deciding if we should be, if I should refinance it and just have a mortgage, that way they don't have a HELOC, and they're good on their play, with their play, right?

Speaker 2:
[01:45] Right.

Speaker 3:
[01:46] But refinancing means that I'm adding the cost of insurance. I'm adding closing costs and all these other costs. And so we're trying to decide, is it worth it if I do that at a benefit to save like half a percent on the fixed rate versus the current adjustable rate that's on the HELOC right now?

Speaker 2:
[02:08] Well, it's a great question. So how much would, how much did they take out in the HELOC that would become the mortgage for you?

Speaker 3:
[02:17] It's sitting at 100, like about 130, 140,000 right now.

Speaker 4:
[02:20] Okay.

Speaker 2:
[02:21] And that'll be the total mortgage for you, right? There's nothing else? Or is there another loan that you would?

Speaker 3:
[02:27] The total is going to be about 155.

Speaker 4:
[02:30] We're finishing building an apartment, and so there's some stuff that I still have to buy.

Speaker 2:
[02:34] Okay, gotcha.

Speaker 3:
[02:35] To finish walls and stuff like that.

Speaker 2:
[02:37] And question, do your parents, are they going to own this home or is this going to be yours?

Speaker 3:
[02:42] No, it's under my name already.

Speaker 2:
[02:44] Okay. So they're just helping pay. Okay. Well, I know what I would do, Anne, if I was in your case, George, I'd be curious if we're on the same team or not. But I would move it to a mortgage. First and foremost, for me, it's the relational aspect. I wouldn't want any level of risk from my parents, from a financial aspect considering it's equity and their permanent, their residence, and so separating it out. I would push to say if you can't afford the closing costs and all associated with getting a mortgage, then that makes me nervous to be like, okay, can you even afford this house? Is this too much? But you have a great emergency fund that you maybe pull some from to cash flow it. But I would do it out of more of the relational aspect of keeping this separate and that, yep, this is yours. This isn't theirs anymore. What would you say, George?

Speaker 5:
[03:32] This is a gift that is wrapped in a liability, so it just feels itchy, like I want to get out of it as soon as possible. So what was the balance on the HELOC remaining?

Speaker 3:
[03:42] Currently, it's 140, but I can't refinance until I've final occupancy.

Speaker 2:
[03:46] Yes, right, right.

Speaker 3:
[03:47] We're looking at a couple of months.

Speaker 5:
[03:49] Have you actually looked into the math to see if you can afford this mortgage on your own?

Speaker 3:
[03:55] Yes, I can.

Speaker 5:
[03:55] Once it's refinanced? Okay. What is your TACOM pay every month?

Speaker 3:
[04:00] TACOM is $3,000, but I have a partner who has an additional $2,500.

Speaker 2:
[04:06] And are they going to be paying into this as well, the mortgage?

Speaker 3:
[04:10] Yeah, we're going to be getting married.

Speaker 2:
[04:12] Okay, okay, okay. Perfect. Yeah, so together, it'll end up being what? Probably $1,200 a month? Do you know what the payment will be?

Speaker 3:
[04:25] I'm thinking it's going to be, end up being probably about that, somewhere between $1,000 and $1,200. Currently, right now, with the key lock, I'm paying $860.

Speaker 2:
[04:32] Okay, but it has the adjustable rate attached to it too. Yeah. Yes, yeah.

Speaker 5:
[04:38] I would contact our friends at Church Hill Mortgage Hand, and they can walk you through all the scenarios, the numbers, the refinance, and walk you through. There might be a third option we're not even thinking of that they can help you with, but I would just get out of this weird relational quagmire, first and foremost, before any of the math comes into play. Whether it's a half percent or I'm going to pay closing costs, this is sort of the cost of salvaging this relationship before anything happens. You're sort of getting ahead of it because it is putting them at risk.

Speaker 2:
[05:08] Yeah, and there's something so true about when scripture says, the borrower or slave to the lender, there's something about when you owe money to someone and you're having Thanksgiving dinner together. There's just this money piece in the middle of it that is there.

Speaker 5:
[05:24] You go on a honeymoon after you get married and they go, wow, look at that nice vacation they took while they owe us $140,000.

Speaker 2:
[05:31] That they could have put toward the key lock. Yeah, and even if it's all goodwill, there's still a new label on your parents, whether you like it or not, that they are your bank. There's the separation of that. Let them just be your parents. Don't rope them in with all this. It's very generous of them. I probably wouldn't have even, we wouldn't suggest a key lock to do this.

Speaker 5:
[05:52] That's love.

Speaker 2:
[05:53] But it sounds like you guys have a great relationship. You've worked really well, but I would. I would have my parents be my parents and not my lender.

Speaker 4:
[06:02] All right.

Speaker 2:
[06:02] Let's go to, is it Parisa in Tampa? Did I say that correctly?

Speaker 4:
[06:08] Yes, you did.

Speaker 2:
[06:09] Wonderful. Welcome to the show. How can we help?

Speaker 4:
[06:12] Yeah. My husband and I just paid off about 70,000 in debt. Awesome.

Speaker 2:
[06:18] Congratulations. In the past seven months. Amazing. In seven months? Is that what you said?

Speaker 3:
[06:23] Yeah, seven months.

Speaker 2:
[06:24] Oh my gosh. That's impressive. Did y'all sell something or how did you get the 7K per month?

Speaker 3:
[06:30] He has a good job in finance. He does mortgages.

Speaker 2:
[06:33] Oh, good. Okay. Good for you guys. That's awesome. Great.

Speaker 3:
[06:38] So all thanks to him. And so we want to know when we can go on vacation. We haven't been since we've been together for four years.

Speaker 2:
[06:49] Okay.

Speaker 5:
[06:50] How much more debt do you have?

Speaker 6:
[06:51] Like we have two cars, but other than that, that's...

Speaker 2:
[06:55] How much is it?

Speaker 3:
[06:55] That's about it. Together probably about $70,000.

Speaker 2:
[06:59] Okay. So another seven months, then yeah, you would get the green light from us. Ideally, you would have some money saved in an emergency fund before you do the vacation. So it may be one more year for you all, you know, if you're doing the Ramsey plan, that's what we would recommend. No vacations or anything while on baby step two, while you're paying off debt. Everything goes to get out of debt.

Speaker 3:
[07:24] Okay, including the cars.

Speaker 2:
[07:25] Yep, including the cars, everything but the house. And then ideally, again, having some emergency funds, you know, we say three to six months, but that three month, but what you guys may be able to do in, you know, I don't know.

Speaker 5:
[07:39] Yeah, if you can sock away 10 grand a month, once all those payments are gone, even the car payments, you'll save that emergency fund a couple of months max.

Speaker 2:
[07:48] So, I would plan for next summer.

Speaker 5:
[07:52] It's a 2027 trip. Make it a big one.

Speaker 2:
[07:54] A May, go in May.

Speaker 5:
[07:56] What's your household income?

Speaker 3:
[07:59] Well, I mean, it's obviously varies because it's sales, but before taxes, like 25 to 30K a month.

Speaker 5:
[08:06] Fantastic.

Speaker 2:
[08:07] Yep, that's great.

Speaker 5:
[08:08] Making a couple hundred grand, you can go on a real nice trip. And so use that. Dangle this carrot of freedom for that. I mean, if you pay cash, you're not spending 50 grand and you got other financial goals. So let's make it reasonable. But also you guys make 360 grand. It's okay to go on a trip that cost five or 10 grand.

Speaker 2:
[08:26] Yeah. Oh, easily. Yeah, for sure. Just save up and pay cash for it. And it's kind of the mentality of if that if you put that money, you know, on a table and burned it and it was just all gone, like, would it emotionally affect you with your income? You guys would be able to save that quickly and it shouldn't overly affect you to go on a nice vacation.

Speaker 7:
[09:00] It's said everything happens for a reason, but maybe everything happens for a reasons. Take noise-canceling headphones. Do they block hearing to heighten taste? Mm, that sound seems to show everything happens for a reasons.

Speaker 2:
[09:16] Hey, you guys, did you know that there are thousands of data brokers whose entire business is collecting and selling personal information? Things like your home address, your phone number, and even your relatives' names. You guys, that is just crazy, but that is why I use Delete Me, because those companies pull information from public records, social media, and all kinds of other places. Then suddenly, all that information shows up on random websites, and removing it yourself means going site by site, filling out forms, and hoping they actually take it down. It takes hours, and then it can even pop up somewhere else again. But Delete Me's team of privacy experts removes your personal information from hundreds of those data broker sites. And within a week, you'll get a report showing what they have found and what they have removed. And they keep scanning and cleaning up your data year round. So take back control of your privacy. Go to joindeleteme.com/ramsey and get 20% off your annual plan. That's joindeleteme.com/ramsey. Up next is Brad in Atlanta. Hi, Brad, welcome to the show.

Speaker 8:
[10:48] Hello, thanks for taking my call.

Speaker 2:
[10:51] Absolutely, how can we help today?

Speaker 8:
[10:53] Well, I, of course, me and my wife and daughter, we live in our home and whatnot. We have a mortgage. We also have 33,000 in secured and unsecured debt. Let's see, I think my wife is, looks like this. She had a lawsuit, unfortunately, over some medical bills.

Speaker 5:
[11:17] Is the lawsuit already happening?

Speaker 8:
[11:20] No, not yet. It's under the collections. You know, it's under the phone calls and that kind of thing.

Speaker 5:
[11:26] Okay, when you're done with this call, would you please reach out to our friends at Guardian Litigation because they help with exact situations like this and fight for you. They know your consumer rights. They'll help you settle the debts. So please go to guardianlit.com after this. Reach out to them. I think they can help you through this process.

Speaker 8:
[11:43] Oh, okay. Thank you so much. Appreciate that.

Speaker 5:
[11:46] Okay, so walk us through this. You got 33K in debt and you guys can't make the payments?

Speaker 8:
[11:53] We are, everything, you know, between the light bill, the mortgage, we have a second mortgage as well. And then all of the other debt, everything comes, you know, at different times. And it's just, they're all scattered. So we're not able to save a dime, basically. It's like we're paycheck to paycheck. But in 13, I was diagnosed with cancer. And so between, I've survived cancer four different types, believe it or not. And so actually I'm having my wife's kidney with me. Nevertheless, that's where the secured and unsecured debt, because my wife takes care of the bills every month, blah, blah, blah. But then through 13 through 16, on work, off work, on work, back at work, you know, that kind of thing.

Speaker 5:
[12:46] A very variable income.

Speaker 2:
[12:48] So Brad, right now, what are you guys bringing in a month?

Speaker 8:
[12:51] Let's see. A month is for me, roughly $4,000.

Speaker 2:
[12:57] Okay.

Speaker 8:
[12:59] And hers, in a month, is roughly, let's just go with $2,000, maybe $2,100 a month.

Speaker 2:
[13:06] Okay. And did you say you have a son or a child living with you all?

Speaker 8:
[13:10] I have an 18-year-old daughter.

Speaker 2:
[13:12] A daughter. Okay. And she's 18, living there too. Okay. Okay. Gotcha.

Speaker 8:
[13:15] Yes. And of course, she's wanting to move out so bad, she can't stand it.

Speaker 2:
[13:21] Oh, yes. Well, so one thing that you can possibly do, Brad, is when these bills hit, depending on which part of the month, you may be able to call the companies, even utilities, like that kind of thing, and see if you can get a restructured schedule to at least get to this point where when a paycheck hits, you have enough in the account to pay, right? Because if you have nothing, all the bills hit and one paycheck doesn't cover all the bills, then you're stuck, right? So there's one option, yes, to kind of reschedule when those payments hit and see if they can help you do that. And then the other option is for a few months, even just taking a side hustle, you or your wife, and putting some money aside, even three, four thousand, if you can, and letting that be the bucket at which you pull money, just to get you guys afloat, because we don't want you to get behind on anything, obviously. And so there either has to be a pull back on expenses, and or an up on income, if you're not able to kind of get to this point of scheduling. But even if they're scheduled the right way, the fact you guys can't save in general tells me when end of the equation has to change.

Speaker 5:
[14:37] It's a good band-aid to get your head above water, but there may be some deeper issues here with these payments. So what is the mortgage payment?

Speaker 8:
[14:44] The mortgage payment is $850,000. I think it's $850,000 a month. Then you have the second mortgage, which is another $250,000 or so, $250,000 to $275,000.

Speaker 5:
[14:56] Okay. And then on top of that, you've got the $33,000 in consumer debt?

Speaker 8:
[15:02] That is unsecured and unsecured. My truck's on it and so forth.

Speaker 5:
[15:06] What's the truck worth and what do you owe?

Speaker 8:
[15:09] Oh, shoot. Well, I haven't really looked to see what the truck is worth. It's probably around $5,000, I guess.

Speaker 5:
[15:17] Okay. So it's not worth much. What do you owe on it?

Speaker 8:
[15:21] Nothing. It's just unsecured debt. I mean, I did have the title until we had to get a loan to spare for a purpose.

Speaker 5:
[15:27] Oh, you did like a title loan against it?

Speaker 8:
[15:30] Yeah, almost. It's like a security finance, which they take titles and things like that for a loan.

Speaker 5:
[15:36] I've seen those. They look like old pizza huts. They'll give you a check and they'll still hang on to your title until you pay it back, right?

Speaker 8:
[15:43] Right, right.

Speaker 2:
[15:44] How much is on that debt? Because I don't want you to lose your truck.

Speaker 8:
[15:48] That one is 19,000. That's actually the bulk of the secured debt is 19 grand. Man. I'm not sure what the payoff is. It's probably a little less, but yeah.

Speaker 2:
[15:59] Yeah. What's the interest rate on that? Do you know?

Speaker 8:
[16:02] I don't. I'm assuming it's very high. Yeah. Yeah.

Speaker 2:
[16:06] Usually those, yeah.

Speaker 5:
[16:08] Okay. So what are the total payments, just to make the minimum payments on all of the debts in your life right now? What does that cost you a month?

Speaker 8:
[16:18] I'm sorry. That one went over my head.

Speaker 5:
[16:20] That's okay. I'm trying to figure out your $6,000 coming in. You got a little over about 1,100 going towards these mortgages. And that should still leave a good chunk to pay the minimums on the debts, cover your bills, put food on the table. So we're trying to figure out where the rest of the money is going to see if there's room or not.

Speaker 2:
[16:36] Yeah, $4,900. Where is that going, do you think, throughout the month?

Speaker 8:
[16:42] Right. Yeah, you would think so. I mean, that's what I would think too. But like I say, it's like paycheque comes and then it's got to go out. It's got to go out to, say, one of the debts and then maybe car insurance or something. I'm just using some, you know, some examples.

Speaker 2:
[17:04] For sure. Yeah. Life is going to happen. Are you guys on a pretty detailed budget, Brad? Do you know exactly where your money is going for?

Speaker 8:
[17:10] No, no, unfortunately not.

Speaker 2:
[17:12] So I think that may really help you, Brad. If you hang on the line, Christian is going to pick up because I think the budget could be the silver bullet in this whole situation because you got $4,900 left. And yes, you will get payments that hit. But also, it's amazing how much money can leave if you don't have a plan for it. And so I do wonder if you guys are tightened up and actually say, hey, let's be on a really strict budget and we're like not going out to eat. We're not spending anything on anything we don't need. It is just going to go to these things. And I wonder how much will be left in margin at the bottom of that every dollar budget.

Speaker 5:
[17:47] Yeah, because I see on the screen here, it says, should I sell my house to pay off the debt? I would not do that until we've tried everything else. We've solved the behaviors. We tried to get out of this debt. Selling the house is like a last-ditch effort. The house isn't the problem mortgage-wise. If your mortgage was three grand out of your six, I'd say, yeah, this thing probably needs to get sold. So your homework is to create that budget, sit down with your wife tonight, put down the next paychecks, that's the income, write down all of the expenses. Each one should have a line item so you fully understand. And then every dollar will tell you, hey, you're above, you're below, you're in the red, you're in the clear. That should show you if you did things this way, here's what would happen. So there's your homework. There's also a paycheck planning tool that's really helpful for what Rachel talked about. You can actually see where the bills fall, when you're going to run out of money. And your second piece of homework is to get in touch with Guardian Litigation. You can go to guardianlit.com/ramsey and they will fight for you because they are huge fans of Ramsey. They want to see our fans win and they hate seeing people get hassled and harassed by creditors and lawsuits.

Speaker 2:
[18:50] Well, and being in litigation, yeah, I mean, and not knowing, you know, your rights and everything.

Speaker 5:
[18:54] So it is really when you're already overwhelmed and so stressed and then you get served from a credit card company.

Speaker 2:
[19:00] Totally.

Speaker 5:
[19:01] Yeah, and medical, your medical bills. So it's super stressful. We're hoping the best for you guys to climb out of this thing and keep the house. That's the goal if we can for sure.

Speaker 2:
[19:09] Yeah, because again, the house payment is is well within that 25% of your take home pay. So you're you're good there and you don't want to lose such a big asset, you know, to $33,000 of basically consumer debt. But you guys, the budget is everything like it is. It's amazing to me and Brad's not the only one, but how many people call in and they just don't really know. And you don't feel like you're necessarily being terrible with money, but you don't realize how much money is leaving, that you don't even.

Speaker 5:
[19:36] It's actually encouraging. At first, you think it's scary to put it all down and then you look at it and go, oh, there's the actual facts.

Speaker 2:
[19:41] Yes.

Speaker 5:
[19:41] We make $6,000. Let's get control of this thing.

Speaker 2:
[19:44] Yeah, and if you're not doing a budget, just go back to your bank statement last month. You know, use March as an example and add up how much you spend on restaurants. Right, just take a category.

Speaker 5:
[19:55] Say how much you think you spend on restaurants and then actually check the math.

Speaker 2:
[19:58] And then be like, oh wow.

Speaker 5:
[19:59] You will be shooketh.

Speaker 2:
[20:01] Shooketh.

Speaker 5:
[20:01] That's what the kids say, I think.

Speaker 2:
[20:28] Refreshing Wild Cherry Cola meets Smooth Cream.

Speaker 6:
[20:34] The treat you deserve. Pepsi Wild Cherry and Cream.

Speaker 9:
[20:40] Treat yourself.

Speaker 2:
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Speaker 10:
[22:40] Yeah, just looking for some advice. So for the past 12 months or so, my wife and I, we've kind of had a 24-month plan of moving out of our house here and closer to some family. And we would be, we would be buying a house, it's probably about twice as expensive as the one we currently have. My, what has just become an issue with this decision is, I'm pretty sure in two to three years after we make the move, we will not be able to afford it. I don't think we're going to have the income for it in that amount of time.

Speaker 2:
[23:23] Okay. Is it the area you're moving that's making it more expensive or the type of house that you guys are wanting to move into?

Speaker 10:
[23:32] It's a little bit of both. We're looking for, under normal circumstances, it would be okay. But the reason I don't think we're going to be able to afford it is, the doctors are saying if things continue with her, she should probably be dead in three years.

Speaker 1:
[23:48] Oh my goodness.

Speaker 10:
[23:50] She's the sole income earner.

Speaker 2:
[23:52] Oh my gosh, your wife. So she's sick.

Speaker 10:
[23:56] She's an alcoholic. Oh, wow.

Speaker 2:
[23:58] Wow, Gary. I'm so sorry.

Speaker 5:
[24:02] So what's causing the urgency here? It sounds like we shouldn't be making any big life plans, financial decisions.

Speaker 2:
[24:08] Well, you're wanting to move close to family because of her?

Speaker 10:
[24:11] Yeah. We live in the middle of the country. We have no family within about 1,500 miles. I need my son near some stability and some family. I mean, honestly, I got to get him out of the house sometimes, away from her.

Speaker 2:
[24:27] Wow.

Speaker 5:
[24:27] Can you guys rent out there for a while?

Speaker 10:
[24:31] Yeah, we could.

Speaker 5:
[24:33] That solves this problem temporarily until we figure out what's going on with the finances.

Speaker 2:
[24:39] Gary, it's really hard to make financial decisions and big moves when you have someone who has a level of addiction that it sounds like she has. I'm assuming I know the answer to this, but I'm just wondering, has she been in any level of recovery? Has she gone to any kind of treatment?

Speaker 10:
[25:07] Years ago that she escaped from as a 20-year-old, we've had multiple interventions. She's been hospitalized for alcohol three times since we met. There's been some, we just got done with cancer treatment that was caused from the drinking. And two months after treatment ended, we're already back to lying and hiding alcohol.

Speaker 8:
[25:30] And I mean, I'm not stupid.

Speaker 10:
[25:33] I know what's going on.

Speaker 8:
[25:33] I see it.

Speaker 2:
[25:34] Right. And you're staying in the marriage, correct? I mean, this is-

Speaker 10:
[25:40] Oh yeah, yeah, a hundred percent, I agree.

Speaker 2:
[25:42] Yeah. And your son, you guys are in from like a physical safety, okay?

Speaker 10:
[25:48] Right. Oh yeah.

Speaker 2:
[25:49] Okay. But it's just the instability that she brings. When you say that he needs to get out of the house some, because I would understand wanting to have a support system, which I think is wise for you guys. So we'll try to kind of talk through it to balance, not making any unwise big decisions with money that could be, to your point, disastrous in the future, let alone having to deal with what could be coming for the next couple of years for you all if she can't stop. So the area you guys would be moving to, it is more expensive, because you said you guys are in the country. So it will be, on average, do you know how much, from a housing perspective, you can sell your home for, for where you guys are now?

Speaker 10:
[26:38] Yeah, you know, we owe $280 on something and we could probably get $375 for.

Speaker 2:
[26:43] Okay. So you'll have, you know, yeah.

Speaker 5:
[26:47] You'll walk away with probably $80 grand or so from that?

Speaker 2:
[26:49] $700. Okay. And the homes in the area that you guys would be wanting to be, do you know on average what those are costing?

Speaker 10:
[26:59] The stuff that we've been looking at for the past 12 months, and we've been out there twice viewing homes. We actually had made two offers before the cancer diagnosis and we put everything on hold to deal with that. I'm sorry, we're looking at stuff in the 700s. My wife makes about $250,000, $300,000 a year.

Speaker 2:
[27:22] How is she able to keep a job?

Speaker 10:
[27:24] She works from home.

Speaker 2:
[27:26] Okay. And you're not working?

Speaker 10:
[27:29] Correct. I've never made more than $50,000 in my life.

Speaker 2:
[27:34] Okay.

Speaker 5:
[27:34] What are you doing for work?

Speaker 2:
[27:36] He's not working.

Speaker 5:
[27:37] What were you doing?

Speaker 10:
[27:37] I'm a stay-home father right now.

Speaker 5:
[27:39] What were you doing before that making around $50,000?

Speaker 10:
[27:43] I was in management position with a non-profit.

Speaker 2:
[27:46] How old is your son?

Speaker 10:
[27:48] Three.

Speaker 2:
[27:49] Okay. Because what I'm worried about, Gary, just in general, not only the housing situation, but if the doctors are correct and everything stays course, you are going to have to find work and obviously support you and your son. And I'm just wondering getting some level of experience under your belt before that happens. Yes. And it may not be obviously tomorrow, in the next probably 12 months, I would be looking and saying, hey, what could I be doing just to be getting some experience to move into a position if you need to.

Speaker 10:
[28:27] I have been looking at some jobs just to get something on my resume. I've worked in five years.

Speaker 2:
[28:33] Right.

Speaker 10:
[28:33] Now, the problem is I have to work around. I don't feel comfortable leading my son alone with my wife.

Speaker 2:
[28:41] Sure, sure. Well, I wonder if there's level of family support when you guys make this move.

Speaker 10:
[28:49] I mean, incredible support. My parents will be an hour away. My sister, three sets of cousins, three sets of aunts and uncles.

Speaker 2:
[28:56] Now, why are you all moving an hour from your parents? I thought you were moving close to family.

Speaker 10:
[29:00] They live in the mountains in the area that we're looking at, you know, pretty far away from the metropolitan area.

Speaker 5:
[29:07] So it doesn't really solve the problem then, does it? If they're still far away, you're not going to have...

Speaker 8:
[29:13] An hour is better than 22.

Speaker 5:
[29:14] Yeah.

Speaker 10:
[29:16] You know, I mean, I have zero problem making an hour dry, you know, not nor do they.

Speaker 2:
[29:21] Right. I know I hear you, totally. I have a lot of family there. I'm a little bit with George. I don't know if I would make a financial move, a big purchase like a home right now. There's a lot of instability going on. You guys are moving to a new area and you may get into this, Gary, and there may be a chance you're like, holy crap, I need to be 10 minutes from mom and dad. Whatever that looks like, I want the housing not to be a permanent situation for you guys right now. I would find a place to be renting. Then you guys could look up in a year, year and a half and see where you're at with her health, and your job situation, family situation, all of it. But I wouldn't tie myself down to a big purchase like a home right now if I were you guys. I think the move is smart and I would want that probably. If I was in your case.

Speaker 5:
[30:10] Yeah, personally, I would not buy a home until she is sober. Because there's too much risk that her income is floating this entire thing. If one thing happens, you got a $600,000 mortgage with no income or even a $50,000 income, and now you're going to be facing foreclosure or a short sale. And so it's too much stress with the stress you guys already have.

Speaker 10:
[30:34] I mean, it's, yeah, I mean, to be clear, you know, my parents, they are going to be putting either $100,000 to $150,000 towards the down payment. Is that a gift? Yeah, it's a gift.

Speaker 5:
[30:48] And would they just cover rent for a year in the meantime, as you guys kind of find your footing?

Speaker 8:
[30:54] If I asked, they certainly would.

Speaker 5:
[30:56] I might use part of that to say, hey, cover rent, we just got to figure out our life. And then you'll know a whole lot more a year from now, if things are going to get better or if they're going to get worse.

Speaker 10:
[31:05] Yeah, I think the challenge is going to be convincing her to rent as opposed to buy.

Speaker 2:
[31:10] Well, I don't think she's she's created that option for her. I mean, I think this is where you really have to step in, Gary. And I hate to say it, she kind of loses a vote when she chooses not to be well for her, her husband and her son. And so I don't know what that conversation looks like in the midst of your marriage. But I would not, you're putting a boundary up with someone that doesn't have boundaries, but I would not purchase a home if I were you, Gary.

Speaker 1:
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Speaker 2:
[33:16] Up next, we have Peter in Greenville, South Carolina. Hi, Peter.

Speaker 10:
[33:21] Hey, Rachel.

Speaker 2:
[33:22] Thanks for taking my call. Yeah, absolutely. How are you doing today?

Speaker 10:
[33:26] Fantastic, and I hope you are too.

Speaker 2:
[33:28] Great. We are. We're doing good. How can we help?

Speaker 10:
[33:32] So I'm wanting to purchase my first luxury watch, and financially, I believe we're in a position to do it, but I grew up with a scarcity mindset, and it's really hard for me, even though I have the money allocated in my budget to pull the trigger on it, I just can't get over actually doing it even though I actually want it, and I wanted to kind of get an objective opinion, you know, to see if I'm really am in a good place to do it.

Speaker 2:
[33:54] All right.

Speaker 5:
[33:55] Any guy who used the word allocated would have a hard time pulling the trigger on a big spend.

Speaker 2:
[34:00] Yeah.

Speaker 5:
[34:01] I love it.

Speaker 2:
[34:02] Well, George loves a good watch, and I'm a spender, so you called it a good time.

Speaker 5:
[34:06] I want to know what watch this is. People want to know.

Speaker 2:
[34:08] Yeah, what's the watch and how much are you going to spend on it?

Speaker 10:
[34:11] It's going to be an Omega Planet Ocean, and I'm looking to spend right around 9,000 on it after tax.

Speaker 5:
[34:17] Okay.

Speaker 2:
[34:17] All right. Peter, how much do you make a year?

Speaker 10:
[34:21] I make my base is 102, but I normally make closer to 140, and my wife makes 85.

Speaker 2:
[34:28] Oh, nice. Okay. Do you guys have any debt?

Speaker 10:
[34:31] No debt, baby step six.

Speaker 2:
[34:33] Nice. Okay. You guys have been talking about this purchase, and you have the money for it.

Speaker 5:
[34:40] It's sitting there on the watch savings fund, which is what you're telling me.

Speaker 10:
[34:44] Correct. It's in a separate pile. It is ready to go. We've been saving for about six months for it. My wife is 100% on board, wanted me to get it. And it's just, I struggle with the emotional, you know, I know I could use that money. I could pay my mortgage off quicker.

Speaker 2:
[34:58] Boo. Boo.

Speaker 10:
[35:00] Not a whole lot, so I want to-

Speaker 5:
[35:01] Well, let's play this out. Peter, let's say you got off this call, and you hit add to cart, and you purchased this watch, and it shows up. How are you going to feel?

Speaker 11:
[35:10] Amazing.

Speaker 5:
[35:12] Okay. Will you feel guilty at all when it shows up, and you go, oh gosh, what did I do?

Speaker 11:
[35:18] Probably not.

Speaker 10:
[35:18] I think once I put it on, it's all going to go away, but it's getting to pulling the trigger on it. Yeah.

Speaker 2:
[35:23] Can I ask, why do you want the watch? Why 9,000 this versus a car or something? I'm just curious.

Speaker 10:
[35:31] I've been scuba diving for about a decade now, and it's a watch that's been famous in the dive community for a long time. I think it looks great in the boardroom. It looks great when you're diving.

Speaker 5:
[35:40] You're talking to a lady who is scuba certified.

Speaker 2:
[35:43] I am a certified scuba diver, Peter.

Speaker 5:
[35:45] So she understands that.

Speaker 2:
[35:47] I understand the luxury watch market.

Speaker 5:
[35:49] I need floaties when I go in the pool.

Speaker 12:
[35:51] I'm going to have an eyeball for forever, and it's not like it's an impulse overnight.

Speaker 10:
[35:55] I probably wanted this watch for probably solid eight years. It's just been dreaming, but I know that I haven't been there yet.

Speaker 2:
[36:01] Okay. Okay. So here's like my categories. Financial, it's a check. And then you go over to the emotional side, and that's why I asked, why the watch? What is it? And there were some green lights for me, Peter, honestly. The fact that there is a reason for it, like in his mind, right? Like he's been in a...

Speaker 5:
[36:21] The motive is not, I want to impress my friends.

Speaker 2:
[36:24] Yes.

Speaker 5:
[36:24] Or I need to like prove to myself that I made it.

Speaker 2:
[36:27] Yes. It's been this thing in this niche part of life that you love. You've been thinking about it for eight years. It's not an impulse purchase. Like all of those things, because you can have the money and then the motivation behind buying a nice purchase, that could be a purse for a woman, a watch for a guy, whatever it is, could come out of a place that you're like trying to scratch this itch inside of you and then you get it and then you're not satisfied because it came from the wrong motive and then you're chasing the next thing, the next thing and it just becomes like this whole world is just consumerism so that's what we don't want to happen. But I don't feel like that's you, Peter. I feel like there's a reason for it and yeah, and you've had this and the fact that it's been eight years since he's been wanting it.

Speaker 5:
[37:09] It's time. I think your wife is sick of you talking about it, honestly. That's why she's like, go for it.

Speaker 10:
[37:15] I can guarantee you're right.

Speaker 4:
[37:17] She's tired of hearing about it.

Speaker 5:
[37:18] And then play it out. Is Peter 10 years from now going to go, well, that watch did us in, shouldn't have done that. What a dumb idea. Or is it going to be something you want to hand down to your kids and grandkids?

Speaker 2:
[37:28] Wow, you're going legacy piece, George.

Speaker 5:
[37:30] Legacy will help me justify anything. Boom. It'll be a legacy piece. And I'll tell you this, Peter, I am not a watch guy, but Rachel's saying that because I'm wearing a nice watch. And it was handed down to me from my wife's now deceased grandfather. And so truly it is legacy.

Speaker 2:
[37:44] And it's a Rolex.

Speaker 5:
[37:46] Yeah, it's a nice night from the 90s. It's an Oyster Datejust Oysterquartz from the 90s. And it makes me feel closer to something bigger than myself, if that makes sense.

Speaker 2:
[37:58] Wow.

Speaker 5:
[37:58] And I don't feel like it's a flex, because if you know me, you know I'm like Mr. Frugal. So no one's like, whoa, look at smooth talking Kamel over there.

Speaker 2:
[38:06] Doing well there, George.

Speaker 5:
[38:08] Peter, what's your net worth?

Speaker 10:
[38:11] So we've got, we still have 140 on our house. Our house is worth probably 350-ish. And then we've got 83,000 between our retirement accounts.

Speaker 5:
[38:23] Okay.

Speaker 10:
[38:24] And I'm 28, my, or 29, my wife is 28. So we're towards the beginning of saving, but I think we'll be just fine.

Speaker 5:
[38:30] Yeah. I mean, you're on your way to Baby Steps Millionaire. I think you'll get there in your 30s without any issue. And this watch is not going to be the make or break.

Speaker 2:
[38:37] I would love for you, like right now, just to get online and buy it, you know? That'd be fun.

Speaker 5:
[38:41] It's always the people who we want to give green lights to have the hardest time. It's the people who should not do it, who are like, I'm going to do it anyways.

Speaker 2:
[38:48] I'm going to do it anyways. We're excited for you, Peter. Enjoy the watch. Enjoy the watch. All right. Let's go to John in Springfield. Hi, John. Welcome to the show.

Speaker 11:
[38:57] Hi there. Thanks for taking my call.

Speaker 2:
[38:59] Absolutely. How can we help?

Speaker 11:
[39:01] Real quick. I got an unpaid medical debt and I wanted your opinion. So in the summer of 2023, they had the necessity to take a trip in an ambulance to the ER. I'm single, I live alone, so I'd rather cut off my leg than do that, but that's where I was. And so time passes, I get the bill for the ER and that's not cheap. I pay it. A little while later, I get a bill for the ambulance and it's $1,695. It would take me to two miles over there and I get that. So what caught my attention is my health insurer paid nothing. They paid $0 of that and I was confused. So when I called them, what they told me is that the ambulance service is out of my network. And so I think that's ridiculous. I think what am I supposed to do when I call 911 is I'm going to talk to them about the process.

Speaker 5:
[40:13] It should have taken an hour, Google for the options that are in network and then hopefully you're still alive.

Speaker 2:
[40:18] So do you owe the $1,600 then still, John?

Speaker 11:
[40:21] Oh, yeah. So I have the money. I've never had a bad debt. I'm being big headed about this one. So this was two years ago, almost three now. It went to collections. It's not a very aggressive collection agency. They sent me a couple of letters. They called me twice and left voicemails.

Speaker 2:
[40:42] So you're not paying out of...

Speaker 11:
[40:43] I haven't heard from them in eight months, probably.

Speaker 2:
[40:46] But you're not paying out of just... You're out of strife. You're just like, I just don't think that this is fair.

Speaker 11:
[40:53] Exactly. I don't know what to do if I should just try to settle with them and then come up with a number that makes sense to me. If I should just pay them and get it over with and forget about it.

Speaker 2:
[41:03] Well, I think there's an emotional tax that you have been paying because it's been in your mind and even though it feels unfair or it's like taking advantage of a situation. There's a lot of feelings about insurance and how all this works, which there's parts of it. I'm like, absolutely. But the amount of emotions that you've put into this may not be worth $1,600. And so there is a part of me that says, yes, see if they'll settle just for the game of it. The fact that it's in collections now, you may be able to pay half of it and just say, thanks for the ambulance ride and we're done. You know what I mean? But I would look to move on with my life, especially since you have the money and it's $1,600.

Speaker 11:
[41:48] Right.

Speaker 5:
[41:48] Have you fought the insurance company already? Did you play that game?

Speaker 11:
[41:51] I mean, I talked to the insurance company and they said, well, talk to the ambulance service because maybe they can do something. And I talked to the ambulance service and they're like, oh, well, you need to talk to the insurance people.

Speaker 9:
[42:03] Yeah, the ambulance service is not going to help.

Speaker 2:
[42:05] It's the run around. Yeah.

Speaker 5:
[42:06] Because it was dispatched by 911, right?

Speaker 11:
[42:09] I'm sorry?

Speaker 5:
[42:09] It was dispatched by 911 when you called?

Speaker 11:
[42:12] Yes, sir.

Speaker 5:
[42:12] Okay. It wasn't like you reached out to this specific servicer. And so I would use that, pull your explanation of benefits and you can try one more time to fight it and have them verify that they processed the claim correctly. There was no billing errors, all of that stuff. But you got to become an expert, because a lot of incompetent people out there who are just not really wanting to do the most when it comes to solving your problem.

Speaker 2:
[42:33] For sure. And $1,600 bucks. Sometimes it's just worth having the peace.

Speaker 5:
[42:37] What's your peace cost at this point?

Speaker 2:
[42:38] That's it. That's it. And so you got to kind of put a price on that too, John. So I'm glad you're okay. That you made it through and everything. But I understand how frustrating some of that stuff is for sure.

Speaker 5:
[43:03] Dave, we got a lot of calls on this show where life happens. One day, someone's healthy, they're working, providing for their family, and then a curveball hits.

Speaker 1:
[43:10] You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

Speaker 5:
[43:18] Yeah, and that's why you've always said that having term life insurance from Zander is essential, because it protects your family if the worst happens.

Speaker 1:
[43:25] Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance.

Speaker 5:
[43:42] Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work, so it replaces a large part of your income so the bills still get paid while you get back on your feet.

Speaker 1:
[43:56] Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Xander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the money's still showing up.

Speaker 5:
[44:13] And that's why Xander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling.

Speaker 1:
[44:20] I've trusted Jeff Xander and Xander Insurance for over 25 years, and so has my family.

Speaker 5:
[44:26] So don't wait. It's fast, it's easy, and it could make all the difference. Go to xander.com or call 800-356-4282.

Speaker 1:
[44:35] Protect yourself, protect your income, protect your family.

Speaker 2:
[44:47] Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I am Rachel Cruze with George Kamel, and we are taking your calls at 888-825-5225. All right. Up next, we have Adrienne in Mesa, Arizona. Hey, welcome to the show.

Speaker 3:
[45:07] Hello.

Speaker 2:
[45:08] Hello. How can we help today?

Speaker 3:
[45:11] So, I'm a little nervous. Sorry. I've been debating to call. I'm not used to this.

Speaker 5:
[45:16] So, we won the debate. That's good.

Speaker 3:
[45:20] Yeah. So, I've been pretty good about my finances for a while. I'm not saying I'm the greatest. Obviously, I made bad choices. I have been bankrupt twice, and I made a bad choice. I got a G in position, and I run a restaurant, and I just came upon some money, and I was making really good money during COVID, and I was bought a house, I got an inheritance, I did some, you know, I had money in the bank about, you know, and so forth, and then I went and wanted to upgrade my truck, which during the time, I was okay. And then, you know, I bought this truck at $52,000, and I make about $65,000 before bonuses. Now, before I was making $75,000, it was a little more higher. My husband, he makes about $40,000, but we keep our finances separate. I know that's, you know, but we just don't do it that way. The question I have, the main question is, is I don't know what to do with the truck because I am living paycheck to paycheck. I literally pay $9.45 for a car payment. I pay $310 for car insurance and probably around in about $200 every four days for gas. I was living a life before my truck. I was not struggling as much. We were able to have food on there and now I'm just don't know what to do. But I'm upside down in my truck about the car. They told me it was a whole mess up deal. They sold it to me for $50 with a rollover from a previous car they gave me that had a bunch of problems. They're like, Oh, no, we'll get you out of this. We'll put you in this and so rollover that truck onto this truck. Before I know it, I'm $51,000 and they're only going to give me like $30, $31 for the car. And I had to know if they're only offering me $22. For a trade in value, that's correct. On the streets, it will not sell because it is a linen truck.

Speaker 5:
[47:17] But they'll take it for $31?

Speaker 3:
[47:19] I don't know how hard it was. They'll take it for, if someone will. But I can't get a loan because I don't have no credit. I'm not good. My credit is great. I mean, but I can't seem to get anyone to qualify me for even a small loan to cover the difference because I've tried that with you guys I've mentioned before. But no one will take me to cover the difference. And I got to come up with like at least probably like $20,000, I would say. Yeah.

Speaker 5:
[47:44] What other debt do you have?

Speaker 3:
[47:45] You know, I have $4,500 and just, you know, a credit card and a personal loan to put some concrete down in my backyard. And that's it.

Speaker 4:
[47:56] That's all I owe.

Speaker 3:
[47:56] You know, I don't owe nothing else.

Speaker 5:
[47:58] No, that's plenty. I don't think we need any more. You're right. That is plenty enough. What is your does your husband have debt as well?

Speaker 3:
[48:05] Yes, that's why we're separate. He has back child support that he owes. We've been current, you know, we've been up to date on it. He pays every month. We just, he did not grow up financially smart. His train of thought is we're going to die owing people. I don't know. His train of thought is completely different than mine. On that, I just, he just thinks that, you know, let's not stress about it. You know, what happens happens. And I'm like, I don't know what to do. You know, like we're not going to have groceries. Like I'm literally, I do the thousand dollars in a month and I at least take $200 out of it each time we get paid. To do what? To live on to the groceries in the house, you know, because I don't have it.

Speaker 2:
[48:46] Does he contribute to the household?

Speaker 3:
[48:49] Yeah, he does. We pretty much split, but he got kind of hooked on for a while. He was hooked on gambling. I got him off of that, thank God. And then he turned around and he got hooked on these payday things. Like, oh, let's pay in advance. You know, let's buy groceries on advance. Let's do this on advance. And at first I was like, okay, because at least you're helping me because I'm not the only one contributing and now he can't even do keep up with those and I'm like, oh my God.

Speaker 2:
[49:12] Yeah, I hear you. I hear you. Okay. So yeah, right now I would not recommend putting your money together. I think from a from a marriage standpoint, you guys are on not only different pages with money, but it sounds like how you view life and so much. So I would just have in the back of your head like, hey, we need to be doing some marriage work. We need to be learning how to create goals together, have a level of synchronization of what we want life to be and all of that, because he shouldn't be a deterrent for you in your life, right? He should be a helpful person and same with you to him. And so healing that ends, I think will help with some of the money stuff. But you called for the car. So yeah, if you said your credit's great, I would check a local credit union. Don't go to a big bank and see if anyone local can help you with this. And if not, Adrienne, then you're gonna have to work extra. You're gonna have to work nights and weekends to save up to get, yeah, to get the difference of this truck if you can't get the loan. But getting out of this is one part of the equation. But honestly, you just, it all sounds a little chaotic. And so I think having some direction is gonna be huge. So doing a monthly budget, stop going into debt, cut up the credit cards, have this no more debt for the rest of my life, policy in your mind, and start working your way out of credit card debt and then attack the card next. And hopefully once you've been paying off this credit cards, you know, that could, I don't know, get you in a different place.

Speaker 5:
[50:46] Yeah, I don't wanna see you go to a third bankruptcy. The third time is not the charm in this case. And so you gotta go, this is it. I'm not gonna go through this again. And you know, even with your husband, the way he is, you're gonna have to climb out of this and get your own income at this point. And that is gonna take, let's get every bonus we can get. Let's take all the overtime we can get working our tail off to never be in this position again.

Speaker 2:
[51:09] Yeah, that's what's sometimes difficult about a chaotic situation, George, is that when there's such high emotion and high fear and seeing like, oh my gosh, I don't wanna fall off this cliff. Sometimes even in that desperation, we make bad money decisions, right?

Speaker 5:
[51:25] You're not thinking clearly.

Speaker 2:
[51:26] That's right, that's right. Yep, so yeah, so if you hold on the line, Adrienne, Christian's gonna pick up and let's get you George's book, Breaking Free from Broke. It's a great title for the situation. You know what I mean?

Speaker 5:
[51:38] Yeah, that's why we did it. Very clear, here's what's gonna happen.

Speaker 2:
[51:42] For sure.

Speaker 5:
[51:42] And we can get you the audiobook version as well, if you're busy, you know, managing a restaurant, hard to find time to, a quiet place to read.

Speaker 2:
[51:49] Yes, but yeah, listen to that. And then we'll even throw in every dollar for a year. So we'll get you a code to that.

Speaker 5:
[51:54] Love that.

Speaker 2:
[51:54] To start budgeting your income. And again, I want, I would love to see some, some synergy with your husband. And I know his mindset is one way, and you can't control him. And I would say, I don't think you're the one that got him out of the gambling, you know what I mean? Situation, I think he did it. Like there's something in him that could be changing too, which is wonderful. Yeah.

Speaker 5:
[52:15] I mean, looking at these numbers, a thousand dollar car payment, over 300 for the insurance. I did the math, she's spending over 1500 bucks a month just in gas for that truck. So you've got to think through this. She said, honestly, well, at the time, I could handle it. And so the whole point of the show is that there's going to be a time where life's going to happen and you need to get all of the risk out of your life and all of the peace you can get. And that's why we tell people, be debt free, even though it's conservative and not a cool thing to say, to save up and pay for the car you can afford. But it's because you don't know what's going to happen. You don't know what's going to happen to your income and to your health and to your spouse. And so living without debt is just going to create a more peaceful environment.

Speaker 13:
[53:34] This show is sponsored by BetterHelp. Financial stress does not just damage our bank accounts, it can also take a toll on our mental and emotional health and our relationships. Money worries cause anxiety, and they are one of the leading sources of conflict for all types of couples. I know this. My wife and I have struggled with money conflicts for years. Listen, therapy can help even with money conversations. Therapy is not about financial advice, but it can help you build healthier ways of coping, give you strategies to communicate about money, and give you a plan moving forward. I want you to consider talking to my friends at BetterHelp. BetterHelp is an online therapy platform that matches you with a licensed therapist based on your goals and preferences. BetterHelp therapists work according to a strict code of conduct, and they are fully licensed in the United States. You can message your therapist and schedule sessions right in the platform. And if the first therapist isn't a great fit, you can switch at any time for no additional cost. When life feels overwhelming, therapy can help. Visit betterhelp.com/ramsey to get 10% off your first month. That's BetterHelp, help.com/ramsey.

Speaker 2:
[54:58] All right, let's go to New York City, and we have Jake on the line. Hi, welcome to the show.

Speaker 10:
[55:04] Hi, thanks for taking my call, guys.

Speaker 2:
[55:06] Absolutely.

Speaker 10:
[55:09] So I'm just calling because I'm in a situation where I make about $50,000 a year after taxes, but I took a 401k loan for about $25,000 that I defaulted on when I got laid off. And I currently owe about $12,000 in taxes. So my question is, is how I go about if I should tackle the 401k loan off because that has interest occurring or tackle the IRS debt? And I owe about $2,000 in credit card debt as well.

Speaker 2:
[55:50] Okay, so the taxes are $12,000. How much did you say the 401k loan was for?

Speaker 10:
[55:56] $25,000.

Speaker 2:
[55:57] $25,000, okay.

Speaker 5:
[55:59] What did you take out the 401k loan for?

Speaker 10:
[56:04] I was currently moving out when I took it out. So I was just doing it as like a buffer. But I did that when I was about 22 or 23. So I just made bad choices with the money. I spent some of it on a vacation, gambling with friends, and the rest I just spent on bills, sadly. Okay.

Speaker 5:
[56:30] Did you just stop making payments on the 401k loan?

Speaker 10:
[56:35] When I got laid off, that's what happened. I'm in a union, but I was only in the union for about one to two years when I took out the loan. And I didn't realize that if I, how short of a time they were going to default me on the loan.

Speaker 5:
[56:54] Got it. So you were laid off, and then it came due within 30 days or something, and you couldn't pay it in time?

Speaker 10:
[57:00] Yeah, about like 90 days, like a couple months.

Speaker 5:
[57:04] Okay. So that became likely an early distribution. So you don't owe money on that now? It's just going to be taxed heavily?

Speaker 10:
[57:13] Yes, that's what increased my tax bill from about like $6,000 up to the $12,000 now when I just filed my tax.

Speaker 5:
[57:23] So really we're dealing with two grand in credit card debt and another 12 in IRS debt?

Speaker 10:
[57:30] Yes.

Speaker 5:
[57:30] Okay. So you would tackle the IRS debt first. You want to get them off your back because they can actually destroy your life versus this cute little credit card company who can just be like, pay us. So I would work on knocking that out first. The bigger issue to me is getting out of the cycle because I don't know that you have the money to pay this off in a reasonable amount of time.

Speaker 10:
[57:52] Yes, no. I would have to call the IRS to make a payment plan.

Speaker 5:
[57:58] Yeah. And I would just pay it off as aggressively as possible. Can you work extra?

Speaker 10:
[58:07] My union doesn't really offer that much overtime, but I could pick up like another job or side jobs.

Speaker 2:
[58:12] And you may, Jake, another option with this kind of thing, since it's 12 grand, is you may be able to go get a loan for it, for 12 grand, and just pay off the IRS and then deal with the credit union or bank that you get the loan from. Honestly, it sounds crazy, but sometimes they're better to deal with the IRS than having a payment plan. So there's just a lot of power the IRS can have. And so kind of getting them out of your life.

Speaker 5:
[58:35] Basically, unlimited power.

Speaker 2:
[58:36] Yes. So getting them out of your life, I think, feels more peaceful to me. So that is an option, depending on how your credit is, to go get a loan and just pay it off and then tackle that loan.

Speaker 10:
[58:49] Okay. And you guys would say don't focus on paying back the $25,000 to my 401k?

Speaker 5:
[58:55] Well, that's what I'm saying is there's no longer payback. It's over. It was counted as an early distribution.

Speaker 2:
[59:02] So you took it out and now it just won't be back in your 401k?

Speaker 10:
[59:06] Well, the only reason is if I was to pay back the $25,000 and cure the defaulted loan, they would give me the rights to access capital again. But if I don't ever pay that back, let's say for the next 30 years in my career, I'll never be able to access using my 401k as a loan option again.

Speaker 2:
[59:30] Yeah, we don't want to go back into debt though. So considering it's not an option, it's fine. And you're not with that company anymore, correct?

Speaker 10:
[59:40] I'm just laid off from that specific shop, but the union is all five boroughs of New York City.

Speaker 2:
[59:49] Okay, so you could get back once you're completely debt free and you want to go back and start funding that 401k. It would be the same 401k as what you're saying.

Speaker 10:
[59:58] Okay.

Speaker 2:
[59:59] No, I'm asking, is that right with the union and how it works with the five boroughs that you mentioned?

Speaker 10:
[60:05] What was your question? I'm sorry.

Speaker 2:
[60:06] Sorry, will that be the same 401k? You're laid off now from a certain shop, but you said you will get back in and start working again within the union. So will that mean that that's the same 401k?

Speaker 10:
[60:18] Yes, ma'am.

Speaker 2:
[60:19] Okay, perfect. Okay, because I was going to say, usually when you leave a job or you quit or are laid off, you would roll your 401k just into a traditional IRA and then you move on with your life. But since you'll be plugging back in to it, eventually you'll keep it.

Speaker 5:
[60:31] You're saying you can't unlock the ability to invest until it's paid back.

Speaker 10:
[60:36] I can invest. I was just thinking, like you guys said, maybe it's a bad habit to even consider borrowing against my 401k for cash.

Speaker 2:
[60:44] It is, because look where we got you, Jake. Look where we are right now.

Speaker 5:
[60:47] Never, ever, ever, ever do this again.

Speaker 2:
[60:50] You don't sound happy about it. Do you want to be back in this position again?

Speaker 10:
[60:55] No, you guys are right.

Speaker 2:
[60:56] Yeah. Yeah. Debt is not a tool, Jake. It's not a tool. Solving for peace, our friend Dr. John Delony says, this is so key with money. You can try to play the games, do X, Y, and Z. But honestly, Jake, to become wealthy and to actually have options in your life that money can provide, it's going to be you. It's going to be you working hard, you staying out of debt and instead of paying payments, you're investing, you're saving, you're being wise with your money. That's how you build wealth over time. If you keep trying to play this debt game by I'm going to loan money here and loan money there, you're going to be broke your whole life and you're going to be paying $12,000 in freaking taxes. So, no.

Speaker 5:
[61:33] Think about it, you got $14K in debt to pay. If you can scrape together a little over $1,000 a month, you're done in a year. And then decide, I'm never going to go back in debt again. And the way you do that is with an emergency fund and a budget, because that becomes you're never going to debt again, you're never going to have an emergency account, so that you're not needing to borrow from other people.

Speaker 2:
[61:51] Yeah, that's right. Yeah, Jake, what kind of work do you do?

Speaker 10:
[61:57] I'm in the electrician's union, but I'm not an electrician yet. I'm just pretty much, yeah.

Speaker 2:
[62:04] Have you looked in the private sector in that? Because a lot of electricians are making a ton of money. And you might be making more at the union, I'm not sure. But have you looked into that?

Speaker 10:
[62:16] Well, right now I'm, yes, I have thought about that. But right now I'm just trying to stay with the union until I get my Journeyman card. Okay. Yeah, right. Yeah, that's the main reason I'm paying with that.

Speaker 5:
[62:31] Will you get a pay bump at that point?

Speaker 10:
[62:34] Yes, I would get a pay bump.

Speaker 5:
[62:35] To what?

Speaker 10:
[62:38] They make about $56 an hour here in New York City.

Speaker 5:
[62:42] Oh, that's great. All right, so you'd be clearing six figures a year. That's great. And how long will that take to get the German card?

Speaker 10:
[62:51] It takes about five years. Right now, I make about $40 an hour, but I haven't started the apprenticeship. I'm just, I was just promised that like, hey, you stay in the job and we'll upgrade you without the five years of the apprenticeship because that's about making minimum wage in New York City.

Speaker 5:
[63:12] But you're making over 80 grand right now, so you should be able to clear 14 grand real quick if you just get really focused, which means no spending, no vacations. You're basically like, that was old Jake. New Jake spends nothing on anything unless it's food, shelter, utilities, transportation, insurance, and his debt payments.

Speaker 10:
[63:31] Yes.

Speaker 5:
[63:32] If you get laser focused, you will be in a very different place a year from now, even six months from now.

Speaker 2:
[63:37] Yep, that's right. Yeah. It's amazing what can happen when you don't give debt an option in your mind. Like if you really do go as hardcore as we talk about, and make it a black or white issue for your money and just say, I'm not borrowing money. What that forces you to do is forces you to look at other options, forces you to take a different route. It's amazing when you actually start to see that debt as the enemy. A villain in your life. You want this out. The sacrifice that you will do to finally just be done with it is...

Speaker 5:
[64:06] Your brain gets creative or gets real patient or gets real sacrificial. That's what happens when you take debt off the table. And I think it's the only way to create a great life.

Speaker 1:
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Speaker 4:
[65:48] Attorney advertising, results may vary, and no specific outcome is guaranteed.

Speaker 2:
[66:10] All right, let's go to Stacey in Billings, Montana. Hi, Stacey, welcome to the show.

Speaker 4:
[66:15] Hi.

Speaker 2:
[66:16] Hello. How come you're up today?

Speaker 4:
[66:19] So, hopefully I'm not too long-winded for you guys, but I'm calling for kind of some relationship help as long as financial advice. My husband, five years, unfortunately has a history of infidelity where he talks to other women online. Well, I've caught him with his ex-girlfriend, things like that, talking to them inappropriately.

Speaker 2:
[66:41] Oh, sorry.

Speaker 4:
[66:43] Yeah. And so, things are going well, though. And then, sorry, he also has a little bit of a history of alcohol, but that has gotten better. Sorry. But things are going well, and we're expecting a baby at the end of the summer.

Speaker 2:
[67:02] Oh, wow.

Speaker 4:
[67:03] And because we're expecting a baby, we bought a bigger home, and we literally just moved into it a couple of weeks ago. And I still have the old home that's under my name and my dad's name because I got that prior to marrying my husband. But unfortunately, on Friday, I found an explicit photo on my husband's computer like that he recently received from his ex-girlfriend.

Speaker 2:
[67:36] Oh, Stacey, I'm so sorry. Yeah.

Speaker 4:
[67:39] So, it opens up old wounds.

Speaker 2:
[67:43] Oh, of course it does. And did y'all go to marriage? Did y'all go to therapy at all for all of this? Has he done any work on himself?

Speaker 4:
[67:51] We did some therapy in the past, but it's all online. It's so hard to get someone a couple of therapy together. And he kind of just says, I'm going to get better, I'm going to get better, but unfortunately...

Speaker 2:
[68:08] Yeah, no, there's something off going on that he needs healing from, and only he can do that because it's a repeated pattern and it will continue. Self-will doesn't just get you out of stuff like this. I mean, he has some deep work that he has to do if he chooses to.

Speaker 5:
[68:28] Has this become physical in person in any way?

Speaker 4:
[68:32] No, I don't think so. Like, and I believe him and I don't think he would ever physically cheat on me. It's just the emotional cheating over time.

Speaker 2:
[68:42] Yeah. I mean, it's still the same pain. The infidelity still feels very real. Okay. So how can we help? What's your main question?

Speaker 4:
[68:51] So sorry. So then going to financial advice, we just moved into this new home, higher interest rate, bigger home, bigger loan. The next day after finding out about this, sorry, this is all kind of new.

Speaker 2:
[69:05] No, you're fine.

Speaker 4:
[69:06] We'll be talking about it.

Speaker 2:
[69:07] Take your time. You're good.

Speaker 4:
[69:09] The next day, I got all cash offer on the old home. But I was sitting there in the big home alone, by myself, and I was like, there's no way I could stay in this house if things don't go well. I'm a single mom, like this home is more expensive, bigger lot to take care of, things like that. So I kind of had like a conference call with my parents because they kind of know about the history and my real attorney. I said, but I don't want to sell the old home. I guess my question is, I hope I'm making the right decision, go back into the old home, less interest rate, less monthly payment, less loan, sell the new home. I just have a lot of guilt.

Speaker 2:
[69:56] Okay.

Speaker 4:
[69:57] Yes. I obviously spent all this money, and I'm going to have realtor fees and things like that.

Speaker 2:
[70:05] Sure. Okay, tell me this, Stacey, how much is the new mortgage payment?

Speaker 4:
[70:12] The new mortgage payment is probably going to be around like $2,500 a month.

Speaker 2:
[70:15] The new. Okay. How much do you guys bring home a month as a household?

Speaker 4:
[70:21] Well, with my husband would be around like $200 or so.

Speaker 2:
[70:26] $200,000 a year?

Speaker 4:
[70:28] Yeah.

Speaker 2:
[70:28] Okay. Then what would you be making down the line?

Speaker 4:
[70:35] If I ended up being on my own, I'd make around $140.

Speaker 2:
[70:39] $140. Okay.

Speaker 4:
[70:42] And on the old home is like $1,500 a month with half the interest rate.

Speaker 2:
[70:50] $1,500. Okay. But you probably clear what? Close to $10,000 ish, a little less a month?

Speaker 4:
[70:58] Yeah. Yeah.

Speaker 2:
[70:59] Okay.

Speaker 4:
[71:00] Maybe. Yep.

Speaker 2:
[71:01] Because the mortgage isn't completely.

Speaker 5:
[71:04] Yeah. Worse comes to worse. You could afford this new house mortgage on your own and still have cushion.

Speaker 2:
[71:09] Yeah. How much would the, would your other home sell for? How much was the cash offer?

Speaker 4:
[71:15] $420.

Speaker 2:
[71:16] $420.

Speaker 4:
[71:16] Okay.

Speaker 5:
[71:16] And what do you owe on that one?

Speaker 4:
[71:17] Oh, sorry. Sorry. $410. $410. And I owe probably around $140 left on it.

Speaker 2:
[71:24] Okay. And what other debt do you guys have?

Speaker 4:
[71:28] I probably have $15,000 I could easily pay off, but I...

Speaker 2:
[71:34] Okay.

Speaker 4:
[71:34] It's old student loans that I should just pay off. Sorry, a little guilty. I listen to you guys. No, you're good. You're good.

Speaker 5:
[71:41] No guilt, no shame, no condemnation.

Speaker 4:
[71:42] Yeah. Well, yeah, I can pay that off.

Speaker 5:
[71:45] I'm trying to figure out a way. Do you love the new house? Like, would you want to stay there if it made sense financially?

Speaker 4:
[71:50] Um, with the baby, it's a big house, and I guess I'm still like, I'm still like, do I want to do this on my own? I think it would be harder to do that big house on my own. Like, it's just such a bigger home. It's double the house.

Speaker 2:
[72:09] You're talking, Stacey, very like, you sound finalized in your conversation with us about him.

Speaker 5:
[72:15] That your new chapter is solo.

Speaker 2:
[72:17] Yeah, is that where are you? I mean, I can't imagine the heartbreak is.

Speaker 4:
[72:23] Yeah, solo for now, for sure. I need some time to separate because obviously, whatever I've done in the past has not worked out.

Speaker 2:
[72:31] Okay.

Speaker 4:
[72:32] So I need to, I obviously like, sorry, there's so many things, emotions and it's kind of all new, but I obviously want to have a family. I want to raise our son in a good environment with a good dad. But right now, I think just I need to take some time. And so I don't have like 100% what will happen in the future, but I like to be serious and make sure he focuses on himself and gets help.

Speaker 2:
[72:59] Yes. A hundred percent. And I, yep, I get that. It's not a healthy situation. And to live with broken trust, your whole marriage is not a great marriage. And so the work, yeah, we always, I mean, our prayer for situations always, you know, is that redemption and reconciliation. And the prayer is that, you know, two people find healing and it stays intact. Like we want that. But also, we know the reality and also know that you have to take care of yourself and this new baby too. So.

Speaker 5:
[73:33] I have an option that maybe we haven't thought about. What is the mortgage on the new house?

Speaker 4:
[73:41] Sorry, the mortgage on the new house would probably be around 2,500.

Speaker 5:
[73:45] No, I mean the balance of the mortgage.

Speaker 4:
[73:47] Oh, sorry, the balance of the mortgage would probably be like around 300. So if I sell my old house, sorry, depending on equity and things like that, then I'd be probably around 300.

Speaker 5:
[73:59] Oh, got it. So this is all.

Speaker 4:
[74:01] For the loan. Sorry, for the loan.

Speaker 5:
[74:03] So you haven't taken out a mortgage yet on the new house?

Speaker 4:
[74:07] Oh, no. Sorry. Sorry. I'm bad with these finance. 560,000.

Speaker 5:
[74:12] That's the current balance.

Speaker 4:
[74:14] Is that. But no, we put 200 down. That kind of was a big black loan with my parents.

Speaker 5:
[74:22] Oh, so you owe them that money back?

Speaker 4:
[74:25] No, because I have equity in the other house with my dad.

Speaker 5:
[74:28] But I'm saying, if you sold it, you can't use that money toward the new mortgage. You'd use that money to pay back your parents.

Speaker 4:
[74:37] Probably the difference. My plan was just to pay them back.

Speaker 5:
[74:41] The 200 grand?

Speaker 4:
[74:43] Yeah, because of the equity. I know I for sure have at least 200 in equity in the old house.

Speaker 5:
[74:47] Yeah, you probably walk away with like 250. That's why I'm trying to get at, if you use that 250 to put on to your new mortgage and then did something called a recast, it would drastically lower your payment. You basically throw a lump sum at the new mortgage and they can take it down.

Speaker 2:
[75:00] So you're saying sell the smaller home, pay off the parents, take the remaining, pay on this new house.

Speaker 5:
[75:07] It might take your payment down to 2,100, for example, just to give you a little more cushion. But again, it doesn't solve all the problems. I thought you could throw all 250 at it. That would really lower the mortgage and make you sleep better at night. But that feels like the least of your worries at this point.

Speaker 2:
[75:21] I honestly, Stacey, I would probably just stay put. I don't think I would make any big decisions right now. And if you need the separation, do the separation. I wouldn't do much right now.

Speaker 5:
[75:30] And if a year from now you need to sell?

Speaker 2:
[75:31] Yes. I probably would wait a little bit. So we wish we could get to every call and question here on this show, but if you do have a money question and you want an answer for your situation, head over to ramsysolutions.com and use Ask Ramsey. So this is our free AI tool that is trained on Ramsey principles. We have dumped every show over the last couple of years, articles, books, everything that we put out into this tool. And so it will answer you like we would if you had called the show. So it's actually pretty amazing, and it's getting some traction, George. We're seeing a lot of people use it.

Speaker 5:
[76:41] Oh yeah, because it's conversation. It's great, yes. If you sign in, you can go back to your old chats and keep going with the conversation.

Speaker 2:
[76:49] You can put in specific numbers and all of it. Like it really is amazing. And so, yep, if you have a question, go to ramsysolutions.com, or if you're listening on podcasts and YouTube, you can click the link in the description. All right, let's head to Knoxville, Go Vols. We love to see it. Hey Michelle, welcome to the show.

Speaker 3:
[77:08] Hi guys, thank you for taking my call.

Speaker 2:
[77:11] You are welcome. How can we help?

Speaker 3:
[77:13] Well, I would like to know if I can afford this $25,000 vacation.

Speaker 2:
[77:19] Ooh, that sounds fun. Where's the vacation to?

Speaker 3:
[77:24] Okay, I don't know if I'm allowed to say names or anything, but there is a certain cruise line putting out these big huge ships with tin poles and water slides and I want to go on one.

Speaker 2:
[77:37] Royal Caribbean, I bet it is. I thought you were about to say, I'm going to go get a suite on the Live Like No One Else cruise.

Speaker 5:
[77:44] I know, you can name drop that.

Speaker 2:
[77:45] I thought, are you going to come cruise with us, Michelle? Because we have a cruise in March.

Speaker 3:
[77:48] I didn't even know that was a thing, but I'm going to look into that.

Speaker 5:
[77:51] Ramsey Cruze.

Speaker 2:
[77:53] And I think it's probably cheaper than this.

Speaker 5:
[77:55] Yeah, how many people are going?

Speaker 3:
[77:57] It's just me and my longtime boyfriend of eight years, and he is side-eyeing me like crazy for the last three weeks since I mentioned this. He thinks I'm nuts.

Speaker 5:
[78:07] Well, the main question, do you have $25,000 to spare?

Speaker 3:
[78:13] I think I do.

Speaker 5:
[78:15] I mean, it's a yes or no question. It's not a thought. You don't need to think. Is it sitting in savings earmarked as Michelle Vacation Fund?

Speaker 3:
[78:23] Not necessarily as a vacation fund. I do have an emergency savings, and then I have a separate savings in case I need anything for my house or cars. But just in my checking account, I have $85,000. Woo!

Speaker 2:
[78:37] Nice. Do you have any debt?

Speaker 6:
[78:39] I have no debt.

Speaker 3:
[78:41] My mortgage is paid off. I have no credit cards, and I have two really old Toyotas.

Speaker 2:
[78:46] Okay. So Michelle, if $25,000 left your account in like a week or two, would you feel that at all emotionally?

Speaker 3:
[78:55] No, not for this or for the Ramsey Cruze.

Speaker 5:
[78:59] I think you should do both at this point. I mean, the Ramsey Cruze is a fraction of the cost of this one, so I think you can afford both, honestly, but we'd love to have it either way. You can afford this, Michelle.

Speaker 3:
[79:08] I love your answer. And he said that if I can get you guys to say that I can afford this, he will stop side-eyeing me. And now I have another cruise.

Speaker 5:
[79:17] Wait, are you paying his tab or is he chipping into this?

Speaker 3:
[79:21] I am willing to pay every bit of this. I am a semi-successful small business owner and he is a huge, huge reason why. He works with me two days a week. He does have his own full-time job going on, but he works with me his two days off and he takes no payment at all.

Speaker 2:
[79:40] Oh, wow. For the last eight years.

Speaker 5:
[79:42] So this is you repaying him for the unpaid labor.

Speaker 3:
[79:45] This is a big, huge thank you. And I wanna do this and I wanna get out of here for the winter. Our jobs are very seasonal. So we really slowed down in December and January. So it wouldn't even be affecting our work. Like, we already have the time. Sure.

Speaker 5:
[80:00] You got downtime.

Speaker 2:
[80:01] And you're able to, if you have to put a little bit of money away, too, between now and then, you could. I mean, I know you probably have to put a deposit down on the trip, but in general... I do. Yeah.

Speaker 3:
[80:11] Yes. I could actually just go pay it all right now on what's in my checking account. And I wouldn't miss it. I would be so looking forward to it.

Speaker 5:
[80:20] Yeah. Trade that number for an experience. Let's go. Now, I'm curious, eight years you've been dating him, are there plans to get married? Is there a reason you guys don't want to or one of you doesn't want to?

Speaker 6:
[80:31] Well, we have discussed it.

Speaker 3:
[80:34] We're both in our late 40s, and we both own our own home. And I think we're just kind of neither of us are ready to give up our own homes yet.

Speaker 5:
[80:44] Got it. So you don't... He doesn't want to move in with you. You don't want to move in with him.

Speaker 2:
[80:47] Versus an eternal relationship, you know?

Speaker 3:
[80:50] This is just an eternal relationship of helping and love.

Speaker 5:
[80:53] He's married to his house.

Speaker 3:
[80:55] He's married to his house.

Speaker 2:
[80:56] Yeah, he values the house. Y'all value the house more than each other.

Speaker 5:
[80:59] I'm just saying. I'm kidding. What better place to propose than this fancy cruise or on the Ramsey cruise? We'd love a proposal.

Speaker 2:
[81:05] I know.

Speaker 3:
[81:06] I think he's actually more into the idea of getting married than I am, but I don't know. He would have to ask with something really good. Not necessarily jewelry, maybe a nice handbag.

Speaker 5:
[81:18] Oh, you know what? That's the new proposal in 2026. We propose with a Louie.

Speaker 2:
[81:23] Oh my gosh.

Speaker 3:
[81:24] I'm happy with that.

Speaker 2:
[81:26] Michelle, you're funny.

Speaker 5:
[81:26] This is so fun. I love her spirit. You've done so well, Michelle. You've got green lights from us. This is the way to do it. Your baby step seven, it's your time to live like no one else because you've lived like no one else. You got no debt. You saved up. This is a drop in the bucket for you.

Speaker 2:
[81:40] I think you can afford it, Michelle. And go to ramsysolutions.com and check out the Live Like No One Else Cruise, March of 2027. We're going to be set in sale. So come hang out with us too, because you're on Baby Steps 4 and beyond.

Speaker 5:
[81:51] And you don't have to go with him. If he's going to side eye you, you come alone. We'll be your plus one.

Speaker 2:
[81:56] Amen. All right. Let's go to Greenville and we have Jenny on the line. Hi, Jenny.

Speaker 3:
[82:00] Hey, how are you guys?

Speaker 2:
[82:02] We're doing great. How can we help?

Speaker 3:
[82:04] Oh my gosh. I'm so excited. Well, my husband and I got married like a month ago and we're so excited but we just went to the bank and joined all our finances because I kind of made them. But we knew it going into our marriage that we were coming from two different places. And I'm hoping you guys can help me kind of get him on the same wavelengths as me. He came in with a little more debt than I have. And I came in with more savings than he has.

Speaker 4:
[82:40] And I'm hoping that we can pay off all the debt. Yeah.

Speaker 3:
[82:43] But I think he sees it as like me coming in and taking over control. So I want him to be on my page. But I wanted to think it was his idea.

Speaker 13:
[82:55] Oh, wow.

Speaker 2:
[82:57] Welcome to welcome to marriage George.

Speaker 5:
[82:59] So how do we manipulate your husband to being okay with this?

Speaker 3:
[83:04] No, it's not manipulation. It's just taking away guilt. Cause he's kind of apologized.

Speaker 13:
[83:09] Oh, yeah.

Speaker 2:
[83:11] And he feels guilty about it. You know, and I- Right.

Speaker 3:
[83:13] And I don't want to like start paying things off yet if he's not on board, but-

Speaker 2:
[83:17] Sure. Well, I think the value system needs to be aligned. And I think you guys can talk about that. And you can speak from your experience, Jenny, what- how you want to see money going forward. You're creating a life together. You guys are starting, you know, starting off. And just to say, you know, I want a life that is- that I have lots of margin and lots of peace with money. I don't need to live up to the edge and above and beyond what we make. And so I don't want debt to be part of the picture. And what- and just paint a picture, Jenny, of what that does for you. And then he- you need to be able to talk to him and he needs to be able to communicate what he sees, what he thinks. Yeah, it may not happen in the first conversation, but hopefully you guys can get to a point where the goal is to pay off the debt. And realistically, yes, you will be using some of your savings for that. But if he has guilt over that, number one, you can't fix that. That's going to be his issues to work in. But also I see that as marriage. I'm like, you take on the other person's stuff. Like when you get married, you're choosing to combine lives, the good and the bad, the past mistakes, you know what I mean? Like all of it, like you are choosing to combine the life together.

Speaker 5:
[84:24] Past, present, future.

Speaker 2:
[84:24] Yeah, and money is part of that. And so it's kind of this entry into marriage, if you will. But it's there with numbers instead of emotions, I guess.

Speaker 3:
[84:35] Right, right. I just don't want to like put a damper on his confidence, you know?

Speaker 5:
[84:39] Yeah, well, as a man, he has this like bow up, I want to provide, I want to give my wife security. And so this makes him feel a little bit small for him to be in the weaker position and for him to be in the place of strength. And your entire vibe here is not giving guilt. Like, I don't know how you could share any of this with him, the way you're sharing it. And he goes, man, you made me feel so bad.

Speaker 2:
[84:59] Yeah, because it's all on him. It's his stuff. And it's a thing too, like, there's going to be weakness in life. And so, yeah, his ego may be bruised a little bit, but that actually shows a level of humility to say, hey, I'm like surrendering all of this. And like, I hate, there's some guilt behind this and some shame and I hate this. And like, this is what it's doing to me. You know what I mean? Like, and you guys talk through it. And it's amazing what can happen when you just say those things out loud. And so it is not, it's not weakness, in my opinion, at all, because it is what it is. And the goal is to move forward and to build wealth as quickly as possible. And so we want to do this together.

Speaker 5:
[85:37] Don't focus on the debt, focus on the future. And part of that is becoming debt free. What's the fastest way to get there? Let's look at our resources. Great, we can knock out this debt.

Speaker 2:
[85:45] We're all one, let's move forward. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I am Rachel Cruze with George Kamel, and we are taking your calls at 888-825-5225. All right, let's go to Ken in Little Rock. Hi, Ken, welcome to the show.

Speaker 12:
[86:21] Hi guys, how's it going?

Speaker 2:
[86:22] Hi, we're doing great. How can we help?

Speaker 12:
[86:25] I just recently learned about money, and I continue to try to learn about it. And I'm trying to figure out how I want to position my income to pay off the debt that I have.

Speaker 2:
[86:40] All right, sounds good. Well, how much debt do you have?

Speaker 12:
[86:44] I have about 140-ish.

Speaker 2:
[86:47] Is that consumer debt or does that include your mortgage?

Speaker 12:
[86:51] It's consumer debt. I don't have a mortgage or rent or anything like that. The job I have, I pretty much just live in my truck.

Speaker 2:
[86:59] Okay, are you a truck driver?

Speaker 12:
[87:01] Yes.

Speaker 2:
[87:01] Okay. What's the $140,000 of debt? What does that consist of?

Speaker 12:
[87:07] I have a car that I keep at my dad's house.

Speaker 2:
[87:10] How much is that?

Speaker 12:
[87:11] Not really. I owe $35,000, $7,000 on it. It digs into my income, but I don't feel it as much as if I was to have all these other bills, which was the thought process that freaked me out. Like, if I had these other bills, this would be a problem. Yeah.

Speaker 5:
[87:33] If you actually had to pay a rent, you'd be screwed.

Speaker 12:
[87:36] Yeah.

Speaker 5:
[87:36] All right. So $35,000 on that car, what else?

Speaker 12:
[87:40] I have about $65,000 on a solar loan that I put on my dad's house that I'm going to inherit when his time comes. Then I have about $40,000 in college loans that I've just been slowly tinkering with to try and get off of them for the last couple months or so. Yeah.

Speaker 5:
[88:06] Is that one big loan or is that separated out into like 10 or 11 different ones?

Speaker 12:
[88:11] It's like 16 different loans. It's crazy.

Speaker 5:
[88:14] Good. And the solar is one big loan?

Speaker 12:
[88:16] Yes.

Speaker 5:
[88:17] All right. And then the car loan is one loan. All right. That's what we're working with here. Is there anything else?

Speaker 12:
[88:23] No, but it feels like there should be as much money as I feel is going out the door.

Speaker 5:
[88:29] Yeah. What do you make?

Speaker 12:
[88:31] Sometimes on a short month, it could be around 4,000. On a bigger, on a good month, it could be somewhere upwards around 5,500.

Speaker 5:
[88:43] Okay.

Speaker 12:
[88:43] Take home.

Speaker 5:
[88:45] That's your take home. It's about 50 to 60 is your take home pay. I mean, it's bad when you have $140,000 in debt.

Speaker 12:
[88:54] Yeah, that's true.

Speaker 5:
[88:55] That would have been a great income if you were debt free. So let's walk through this as how we're going to tackle this. Can you work extra? How does that work? When you say a low month, a higher month, what is stopping you from making more?

Speaker 12:
[89:07] A low month is when I have to go home.

Speaker 5:
[89:10] Okay.

Speaker 12:
[89:11] Because I can stay out for a month or two at a time, and I'd probably take home almost 600 grand for those months. And then if I need to go recharge at the house, I miss out on a week of income. Yeah. Okay.

Speaker 5:
[89:29] So when you're home, you're essentially taking time off.

Speaker 12:
[89:32] Right.

Speaker 5:
[89:33] Got it. So we need you on the road constantly, it sounds like.

Speaker 2:
[89:37] Yeah, to get out of this debt, for sure. Yeah. I mean, for the car, Ken, the car makes no sense. Number one of just how much it is compared to your income.

Speaker 5:
[89:45] And how little you're using it.

Speaker 2:
[89:45] And you're not using it a lot. So if you sold it, do you know how much you could get for it?

Speaker 12:
[89:52] Probably somewhere between 17 and 20.

Speaker 2:
[89:57] Has it gone down that much? Or was there negative equity?

Speaker 12:
[90:01] It's an EV. It went down immediately. I was like, the second I got the loan, I was looking at it like, this sucks.

Speaker 5:
[90:10] Oh, man.

Speaker 2:
[90:12] Well, I'd rather have...

Speaker 5:
[90:15] 15 in debt than 35. Even if you... The difference you're underwater on, you're going to either need to save up the difference or get a loan from a credit union to cover the difference.

Speaker 2:
[90:25] Yeah, and then go get a crappy car that just sits at your dad's house that you drive when you come home. You know what I mean? Which isn't even all the time. So I think justifying getting rid of the car I think is going to give you a little bit of breathing room. And then start knocking out these college loans, smallest to largest. And considering there's 16 of them, you know, staying on top of that and making sure they all get paid, obviously, but that you start, you know, chipping...

Speaker 5:
[90:49] You knock one out every couple months.

Speaker 2:
[90:50] Yep, chipping those away. So it'll take you, it's going to take you about probably a good three, maybe three to four years.

Speaker 5:
[90:58] If your income doesn't change, it will take years. And so the hope is we can get you making more. If you are home, I want you doing side hustles.

Speaker 2:
[91:05] Yes.

Speaker 5:
[91:06] Doing something else to create another $1,500 or $2,000 a month to get out of this thing faster. Because just the napkin math says, I can do it for you here, $140,000 over four years. You need to be throwing $35,000 a year at your debt, which is, you know, not far off from how much you're making total.

Speaker 2:
[91:24] Yeah.

Speaker 5:
[91:24] So that's, you know, almost $3,000 a month you need to be throwing just to do it in four years. So this is a mountain of debt. I feel like you don't have the urgency that I would have. And partially it's because you don't have rent and a lot of bills that the average person has.

Speaker 2:
[91:38] Yeah. So, I mean, I would have some sacrifices, Ken. So the car would be my first one. I would get rid of it, get a small loan for the difference and start tackling this. Cause that car payment that you're paying every month could be going towards paying off this debt. All right. Let's go to Milwaukee and we have Helen on the line. Hi, Helen. Welcome to the show.

Speaker 3:
[91:57] Hi, there.

Speaker 8:
[91:58] Hello.

Speaker 2:
[92:00] How can we help?

Speaker 5:
[92:00] Aren't you a ray of sunshine?

Speaker 3:
[92:03] I am right now, at least.

Speaker 5:
[92:05] Good, good, good. What's going on?

Speaker 3:
[92:06] So my husband and I are currently expecting baby number four. Baby number four was not planned. However, it's a pleasant surprise.

Speaker 5:
[92:17] Fun.

Speaker 3:
[92:17] And I'm doing July. And what baby number four means is we now have to get a larger car. Yes. Our cars currently only fit five.

Speaker 6:
[92:28] We are going to be a family of six.

Speaker 3:
[92:30] And as I'm doing July, we have a timeline of 15 more weeks. And we haven't had a car payment in 10 years. We don't want a car payment, but we're exhausting our options to save up in the next 15 weeks to avoid a car loan. We actually went shopping with the $5,000 we had to see if we could find anything. Because we have $5,000 saved up for a car currently. And we were actually turned away by a new dealership saying that they couldn't get us a family-friendly car that they're comfortable putting us in for $5,000. And that they'd only take us if we took out the loan.

Speaker 2:
[93:11] No, yeah. At that price point, it's probably going to be coming from an individual somewhere that you'd have to find.

Speaker 5:
[93:16] It's a Facebook marketplace situation.

Speaker 2:
[93:18] How much would your car sell for? Because you have $5,000 saved, how much could you get for the other car?

Speaker 3:
[93:24] So, when I looked on Kelly Blue Book's trade-in, it's around $900 per private sale. It's about $2,000 at the highest.

Speaker 2:
[93:35] Okay, perfect.

Speaker 3:
[93:36] $1,000 lowest, $2,000 highest.

Speaker 2:
[93:38] Okay, great. And how much could you save in the next two to three months per month? Like, could you put 1,000 bucks away?

Speaker 3:
[93:48] Probably not. That's kind of like the issue we're facing with it. We could see a saving up if we had six months for it, but not the next 15 weeks.

Speaker 2:
[93:56] How much can you save per month?

Speaker 3:
[93:59] Right now, we're living paycheck to paycheck because I am a full-time student at UWM.

Speaker 2:
[94:05] Okay.

Speaker 3:
[94:05] I gave my degree in biochemistry and come May, our budget opens up a whole bunch more.

Speaker 2:
[94:11] Oh, good.

Speaker 3:
[94:11] That's where we can put away like maybe 700 a month, but-

Speaker 2:
[94:15] That's great. What I would say is number one, the expectation of a super nice car is not really there because you'd sell yours for 2,000. That's great. We're not looking for anything bougie. You're not bougie. It's great. I would put that in the 7,000. You guys could survive with two separate cars. If you got to go somewhere, you both get into two cars for six months.

Speaker 5:
[94:32] I just wouldn't leave the house with everybody. That's the goal here. No vacations, no trips.

Speaker 2:
[94:36] Says a dad of two.

Speaker 5:
[94:37] We're not going to go see grandma.

Speaker 14:
[94:52] When people hear my story of paying off debt, they say things like, dang, that must have been so hard. I could never do that. And I tell them, sure you can. It's a short-term sacrifice for a long-term gain. But do you know what's really hard? Working your whole life and never having anything to show for it. Never having the long-term gain. Just feeling broke and stressed and maxed all the time. And sadly, that's the hard that most people choose. Listen, you're capable of transforming your situation and living a life of freedom. But you need the right tools to do it. Like our Every Dollar Budget app. In minutes, it'll build you a step-by-step plan that's tailored to your money situation. And every day, it finds ways you can free up extra money in your budget, so you can get rid of your debt and actually build wealth. So make the choice today. Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the Every Dollar app and start for free today.

Speaker 2:
[96:01] So we were just talking to Helen about buying a new car. We had to jump off because we had a hard break we had to get to, but George and I were talking in the break, and you know, that there are options, you guys. If Helen hopes, hopefully she'll listen to our advice, because we get the call of people that get in a dire situation, and they're like, well, you know, I couldn't get this, the car dealer told me this, and so we just went and got a $35,000 van just to like make us feel good about it, and then they're trying to pay it off and they're back in debt. And so, hopefully, it's not what's going to happen to her, but here's the way you have to think about it. When you take debt off the table and you say, okay, we are not going into debt at all, what does life look like? And so for them specifically, they had $5,000 saved. They could sell theirs for 2,000. It's a $7,000 car. And then she said, our income's going to open back up. I think she said May or June-ish. And so-

Speaker 5:
[96:54] Once she's done with school.

Speaker 2:
[96:55] Yeah, and so they can save 700. And if you do that for five months, you think through, maybe it will be three months at that point, October. That's some cash, 3,500 bucks that you could easily save on top of that. And you can go get a $10,000 used car. Like that's a big upgrade from the $2,000 car she's driving now. And that's just in five, six, seven months. And so, yeah, will there be three months of it being inconvenient that you all...

Speaker 5:
[97:21] If we need all travel, we take two cars.

Speaker 2:
[97:23] Yeah, we take two cars. But again, the reality of how much you are probably... Well, you got three other kids. I know that you're toting around too. But there is a way to look at this. And it sounds extreme. But I'm like, if you just are patient for five more months, discomfort for five more months, and go get a great $10,000 car. And you were looking up vans online.

Speaker 5:
[97:44] And so, yeah, I like to just go, all right, you walked into, she said, I went to the dealership and they laughed me out of there. And I went, well, don't go to the dealership. Of course, they're going to try to get you in a brand new 2026 Honda Odyssey. And most people go, well, I can't afford a $7,000 car, so I'll take on a car payment on a $50,000 car. Or it had some issues, so we had to get a brand new car. Or I was worried about my family's safety. So I'm like, all right, go Honda Odyssey, because you know that thing's going to outlive you. And so I looked up, I went to just cars.com, filtered, she's in the Milwaukee area. So I just looked up a random zip code. I went 50 miles out. I'm willing to travel to get a deal. And I sorted from lowest to highest. And I found multiple Honda Odysseys. Now, are they the prettiest thing in the block? No, it's got one has 160,000 miles for four grand. The one that I like, 137,000 miles on it, eight grand for a 2010 Honda Odyssey EX. And that's fine. I said no accidents, clean title.

Speaker 2:
[98:44] Yeah.

Speaker 5:
[98:44] So just don't go out there buying a lemon, get a pre-purchase inspection from an independent mechanic of your choosing before you go buy a thing. But don't tell me that $7,000 cars don't exist.

Speaker 2:
[98:55] Right. That's right. And what's wild about that is that's what, 8,000. And if you did our plan, they could almost cashflow that right now with what they could sell their car for and that. And then you save up over time and let's say you save, you know, for another, you know, year, right? And if you're able to put, you know, I don't know.

Speaker 5:
[99:14] 500 bucks a month is 6 grand a year.

Speaker 2:
[99:16] Six grand.

Speaker 5:
[99:17] You can get a 16 grand car by then selling that one and upgrading.

Speaker 2:
[99:20] Yes.

Speaker 5:
[99:20] And the next year, a $22,000 car.

Speaker 2:
[99:22] In one year. Like that's what's wild. It's like you just have to have some patience with it and think through the math and the reality and it's doable. It really is, you guys. So, Helen, we're excited for you and baby number four, but don't go get the car alone. You guys can do this. All right. We have our question of the day, George, and it is brought to you by Wi-Refi and defaulted private student loans can leave you feeling stuck and overwhelmed, but Wi-Refi helps you explore refinancing options with a low fixed rate and payment based on what you can actually afford. So visit wirefi.com/ramsey. That's yrefy.com/ramseymay not be available in all states.

Speaker 5:
[100:06] Today's question comes from Austin in Washington, DC. He says, where are baby steps four, five and six contributing the full 15 percent to mutual funds? Despite these contributions, we have lost over $6,000 this year. Our contributions aren't even keeping up with the losses. Any advice or encouragement for us? Well, lots, lots, so much.

Speaker 2:
[100:28] Welcome to the market today.

Speaker 5:
[100:30] By the way, it recovered already. Did you know that the S&P 500 is back?

Speaker 2:
[100:35] Back to what it was what? 60 days ago?

Speaker 5:
[100:37] Yeah, it was like a few months. Everyone got spooked. We took a dip, which felt like a crash if you zoom in on one day or one week.

Speaker 2:
[100:44] 100%.

Speaker 5:
[100:44] And we're already back. So, no, you didn't experience $6,000 in losses because you didn't cash out. So you're riding the roller coaster and right now you're at a dip, and now we're back to level, and soon we'll be climbing back up, my friend. So you got to have a long-term perspective when it comes to investing. Investing is for the long haul.

Speaker 2:
[101:01] Yes.

Speaker 5:
[101:01] So keep your savings in a high-yield savings account for short-term goals and know that your investments are 5, 10, 15, 20, 30, 40-year game. And then, you know, he never checks it when it's up. Whenever he's 6,000 up, he's not going to go, hey, I'm 6,000 up, am I doing this right?

Speaker 2:
[101:17] Yeah. How well the market did the last two years. We didn't really hear much people talking about it. Like every now and then it'd be like, be good.

Speaker 5:
[101:24] It was 18% in 2025. Plus 18% the year prior was like 23%, and 25%. These are unheard of numbers.

Speaker 2:
[101:31] Wild, wild. And yeah, it's just, it's kind of like, oh, that's good, good. I'm glad, I'm glad. And then it goes down a little bit, and everyone's like, everything's crashing.

Speaker 5:
[101:38] And you have a flat year, even a negative year, and that's a normal part of the process. If you go look at the S&P 500 returns over the last 50 years, you're gonna see some down years, you're gonna see a whole lot more up years. The market is up way more than it's down, and it has always recovered.

Speaker 2:
[101:51] Absolutely. All right, let's go to Ashley in Houston. Hi, Ashley, welcome to the show.

Speaker 3:
[101:59] Hi, how are you guys?

Speaker 2:
[102:01] We're doing great. How can we help?

Speaker 4:
[102:04] So, my husband and I are new parents and we're trying to make a wise financial decision for our family.

Speaker 2:
[102:09] All right.

Speaker 4:
[102:10] We'd really love for me to be able to stay home with our baby, but on one income we feel like it's gonna be a little tight. We would be decreasing our income if I stay home by 55%. So we have a couple options, but we're not sure which path would be the wisest long-term decision for us financially.

Speaker 2:
[102:27] Okay, what are your options?

Speaker 4:
[102:30] So one option would be me staying home with her then working evenings and weekends just to keep our house and our, like, fixed expenses afloat. Another option would be me just continuing to work and not staying home with her until my husband increases his income. And then the third option would be that we sell our house and we move into a camper on my parents' land until he increases his income.

Speaker 5:
[102:59] Woof. Okay. I don't like that option. Can we take that one off the table?

Speaker 2:
[103:02] We'll take three off the table just because of for a long, you mentioned the word long term, long term financially. That is not wise because you're selling an asset and you're taking one that's going down in value. So let's take that one off. Okay. Have you run a mock budget, Ashley, on if you guys just lived on his income, where what expenses would not get paid? Like, where does the line cut off? Like, are you able to pay mortgage, utilities, insurance? Like, where down the line are you like, okay, we're having to draw this line? Is it in the middle? Is it up with the expenses? Like, where is that at?

Speaker 4:
[103:39] Most of our fixed expenses would be covered. It would be more so groceries and gas and then taxes that are up in the air.

Speaker 2:
[103:48] Okay, well, those are important.

Speaker 5:
[103:51] Non-negotiable to eat.

Speaker 2:
[103:52] Yeah, food, shelter, utilities and transportation. So you're saying your mortgage would get paid and utilities would get paid, but you may not have enough for gas and food?

Speaker 4:
[104:04] Yes, so that would be where I would be picking up additional.

Speaker 2:
[104:07] I hear you.

Speaker 5:
[104:08] What is the mortgage?

Speaker 4:
[104:10] Our mortgage is $18,000, but we put $2,000 at it.

Speaker 5:
[104:14] All right, what is his take home pay?

Speaker 4:
[104:17] He makes $43,000 a year.

Speaker 5:
[104:21] $43,000 a year? This is take home? Okay, so we're talking $3,500 a month and your mortgage is $1,800.

Speaker 4:
[104:30] Yes.

Speaker 5:
[104:31] That's tight.

Speaker 2:
[104:34] Yeah, you may not be able to.

Speaker 5:
[104:38] I do think he needs to make more. I don't think this is like on fire. You could try the route of working nights and weekends. I think it's going to be exhausting real quick and get old. So we need a clear path that he's going to make more. Otherwise, this mortgage is too much, or you're going to need to continue working until we have a different financial scenario.

Speaker 2:
[104:57] Yeah. Yeah. You know, I don't mind the idea of moving, Ashley. Maybe it's you guys moving to a smaller condo, maybe in a different part of town. Like, I don't know what that looks like because you could change your housing situation maybe a little bit. I mean, $1,800 isn't like crazy. But if you could find something for like $1,000, right? $1,200 even for a small mortgage, that would be ideal. So you're almost shifting your lifestyle, downgrading it so that you can have the value of staying home. Or you value staying where you guys are. And yes, you probably would have to contribute financially a bit until his income comes up.

Speaker 5:
[105:51] Hey, George Kamel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramsesolutions.com/realestate. That's ramsesolutions.com/realestate.

Speaker 2:
[106:43] Buying or selling your home is a big deal. And with all the clickbait headlines out there and conflicting data, it's really hard to know what's happening in the housing market. So we're here to make the latest trends easy to understand. So median home prices stayed steady last month at about $439,450. And the number of homes on sale hit $1 million for the third month in a row. So buyers have more options and negotiating power while sellers face more competition. So the average 15-year fixed rate dipped a bit to 5.86% last month. And if you are debt-free, you have a fully funded emergency fund and a solid down payment. Now is a great time to sell your home, to buy a new home. Wherever you are in the process, that's where you want to be in the baby steps. So if you want to learn more about housing market trends and get free tools to help you when you buy or sell your home with confidence, go to ramsesolutions.com/market or click the link in the show notes if you're listening on podcast or YouTube. All right, let's go to Blake in Panama City, Florida. Hi, Blake. Welcome to the show.

Speaker 9:
[107:54] Hi.

Speaker 2:
[107:55] Hello. How can we help today? Hey, look.

Speaker 9:
[107:57] Okay. So my question is, so me and my wife have our house paid off at 34.

Speaker 2:
[108:01] Whoa.

Speaker 9:
[108:04] I went back to school and got a degree at 30, you know. So we were struggling before and I say, I ain't gonna keep doing this. But the thing is now her family is under pressure and she's fallen for it to go out and buy a bigger and better house and new vehicles. But they're all paid for houses paid for and she's fallen for it.

Speaker 5:
[108:19] What do you mean fallen for it? You guys haven't done anything yet, right? You're just saying she's in on it. She's like, yeah, I'm ready. Let's go into debt.

Speaker 9:
[108:26] That's right.

Speaker 5:
[108:27] Do you guys have the money to upgrade cars and you want to?

Speaker 9:
[108:30] No, I don't want to.

Speaker 5:
[108:32] But do you have the money to?

Speaker 9:
[108:34] Yes, I do.

Speaker 5:
[108:35] Okay. But you're just like, that's not a priority for you. Is there any merit to what she's saying in that you could use an upgrade on the cars or the house or is it totally fine?

Speaker 9:
[108:45] Well, with the house, it's about 1,600 square feet. And we do have three children. So they're becoming teenagers. So it is getting cramped in there. But in another hand, about 290,000.

Speaker 5:
[108:59] And how much money do you have outside of that?

Speaker 9:
[109:02] And our bank accounts combined, we have about 15,000.

Speaker 5:
[109:06] OK. So that's kind of your emergency fund?

Speaker 9:
[109:08] That's right.

Speaker 2:
[109:09] OK. Anything above that savings?

Speaker 9:
[109:13] No, that's all of our savings combined is with that.

Speaker 2:
[109:16] OK. And what do you guys make a year?

Speaker 9:
[109:20] I make right out of 170 and she does insurance and she makes 70.

Speaker 2:
[109:25] You make 170 and she makes 70?

Speaker 9:
[109:28] That's right.

Speaker 2:
[109:28] OK. So you guys make $240,000 and you have no more savings, just 15,000?

Speaker 9:
[109:33] Well, I just started making this about four years ago and that's when I started paying our vehicles and our house debt.

Speaker 5:
[109:39] So you've been real focused on the house and therefore haven't been adding anything to savings. Is that right?

Speaker 9:
[109:43] That's correct. And our vehicles are 2018 and I paid them off to focus on them.

Speaker 5:
[109:49] OK, gotcha. So you've been on a debt payment journey and now you're at a good spot and she's already gone, let's go back in. And you're like, dude, we just played this game.

Speaker 9:
[109:56] That's right. Yeah, we were in debt, you know, since we're 20 years old. I can't do it no more. For sure. I went to school, got a degree and started paying it off.

Speaker 2:
[110:04] What you guys are making, say you lived on 100 grand a year, you could bank 140, right, and go get two nice cars if you wanted. You don't care about it, but maybe she wants a nice car. You guys make good money. She should get a nice car.

Speaker 5:
[110:17] What cars are you driving right now?

Speaker 9:
[110:19] So she has a 2018 Durango, and mine's a 2018 Ram 1500.

Speaker 2:
[110:23] Okay, but you're fine. You're content. But she's like, hey, I want to upgrade cars. And I think that's-

Speaker 9:
[110:28] All the time looking.

Speaker 5:
[110:29] What does she want? Give me like a ballpark. What kind of car, what price point is she looking at?

Speaker 9:
[110:34] Well, she was looking at the Wagoneers and their $90,000-

Speaker 5:
[110:36] Goodness gracious.

Speaker 9:
[110:38] Two grand a year, I mean, two grand a month.

Speaker 2:
[110:41] Yeah, no payments here. We're not gonna be going down that road with her, but you guys could save up, get a used one if you want to look. I feel like they don't have great resets. Why don't I feel like-

Speaker 5:
[110:52] No, because here's the thing. Nobody wants to deal with the maintenance because it's in the shop half the time.

Speaker 2:
[110:56] Yeah, I don't think those are great cars, but it would be okay, Blake, if she went and bought a- You make $240,000, no debt, no house payments.

Speaker 5:
[111:04] You could get a $30,000, $40,000, $50,000 SUV and it's not a big part of your world.

Speaker 2:
[111:08] You make $70,000 too much?

Speaker 5:
[111:10] I mean, just based on your lifestyle right now, it feels like a big jump, but-

Speaker 2:
[111:14] Probably.

Speaker 5:
[111:15] We say no more than half of your income tied up with things with wheels and motors. So technically, if you guys kept up this income, you could have about 100 grand in total vehicles.

Speaker 2:
[111:25] Yeah, that's fair. So maybe a $50,000 and it needs to be used. You guys don't need to go get a brand new car. You're not at that point yet.

Speaker 5:
[111:32] Let someone else take the hit on depreciation.

Speaker 2:
[111:34] She could go get a $50,000 car, but you guys need to save-

Speaker 5:
[111:36] It's a nice car.

Speaker 2:
[111:37] Yeah, that is a great car.

Speaker 5:
[111:38] That's pretty much any vehicle used that she wants.

Speaker 2:
[111:41] Yes, but y'all need to save up and pay cash for it, okay?

Speaker 9:
[111:45] That's right. My thing with the house is that the kids are teenagers and it is cramped, but they'll be out the house in five years. I don't just see the point of getting something bigger and then just me and her.

Speaker 2:
[111:55] Okay, well, true. All of this is wants at this point. Our needs are taken care of, but Blake, you can spend some money, okay? I'm not saying go upgrade the house right now, but I don't think she's- I don't feel like she's completely out of control for wanting to up a lifestyle a little bit, especially since you guys are making good money now.

Speaker 5:
[112:16] What's your household expenses every month? Everything that comes out of your checking account, what would that add up to in a given month?

Speaker 9:
[112:22] I would say about $2,000.

Speaker 5:
[112:24] Goodness gracious. And you guys are clearing what, $15,000, $16,000 a month?

Speaker 9:
[112:28] Yes, sir. Like I said, it just started because we just got the house and everything paid off in January.

Speaker 5:
[112:34] Okay, well, let's play it out. That means you could bank $14,000 a month, $168,000 a year, which means you could go buy our $50,000 car and then save up another $100,000 and upgrade to a $400,000 house all within the next 12 months. Do you hear me?

Speaker 9:
[112:49] Right. Yes, I just don't know how to, because we came from nothing. That was so hard to save because I didn't have a good job and then I finally did. And I'm so scared to go back to what it was.

Speaker 5:
[113:00] You won't go back if you don't go into debt.

Speaker 2:
[113:02] Yeah, that's the thing is you're moving forward with no risk.

Speaker 5:
[113:05] So you're purchasing the next house in cash. I just told you save $100,000 up, sell yours, make that $300,000, boom $400,000 house paid.

Speaker 9:
[113:13] I got you. That makes sense.

Speaker 5:
[113:14] Save a $50,000, sell her car, cash.

Speaker 2:
[113:16] So Blake, y'all need to have a little dreaming because you are holding back, which I get why. I totally understand. And I know this is all so new because you're like, we've just paid everything off. And like, oh my gosh, now we want to go upgrade because we just paid everything off. So she's been in a season of sacrifice and she's been a great teammate, I'm assuming, for you guys to hit these goals, which is awesome. So now you guys need to dream in the future and just say, okay, in the next 18 months, what do we want our life to look like? And Blake, you may be like, I'm great driving my truck and that's great. And she may say, I would love a newer car. Okay, great. Let's put that on the table. And I would love some more space. All right, let's go look. Let's just see. And you can just pull up Zillow for the heck of it at dinner, just for fun, just for fun. And just see what's out there.

Speaker 5:
[113:59] In your budget.

Speaker 2:
[114:00] Yes, but you guys start kind of dreaming and in your budget, yeah.

Speaker 5:
[114:03] Don't go look at million dollar homes because then she's going to only see million dollar homes.

Speaker 2:
[114:07] Yeah, but you guys need to have an agreement. We're not going into debt, but we can spend some money and enjoy some of this too, right?

Speaker 5:
[114:14] Because otherwise, what's the point of you working so hard and being this successful if your family can't enjoy it and reap the benefits while they're alive?

Speaker 9:
[114:21] Well, that was another thing. My daughter is about to be 16. She's going to need a vehicle. And I know you don't go out and buy a young kid something super expensive, but then my two boys are right behind her. I'm just scared.

Speaker 2:
[114:31] So that goes on the list, Blake, when you guys sit down for dinner, OK? Wife wants a new car. The dream would be to upgrade the house. We got three cars we got to pay for. We're going to give each, you know, maybe the kid pays for some. We put some in. I don't know. I'm just making up a number.

Speaker 5:
[114:44] Maybe you guys set aside 10 or 15. Anything they save up goes on top of that. Yeah, yeah, yeah. That's the limit.

Speaker 2:
[114:49] Yep. So for each kid? Yeah. Is that what you're thinking?

Speaker 5:
[114:53] Yeah, that sounds reasonable.

Speaker 2:
[114:53] I was going to go a little cheaper. But yeah, so 10 grand per kid we got to have. So that's 30,000.

Speaker 5:
[114:58] This is rare that Rachel goes cheaper than me. I feel like I should get an award for that.

Speaker 2:
[115:03] You should.

Speaker 9:
[115:03] Yeah, I think it's a statistic where most young kids wreck their first car anyway, so I didn't want to go so expensive.

Speaker 5:
[115:09] Yeah, I get mad when I see kids in my neighborhood driving nicer cars than me. I go, that's bad parenting.

Speaker 2:
[115:15] Get off my lawn.

Speaker 5:
[115:16] Kids are a brand new Jeep Wrangler.

Speaker 2:
[115:18] What a way to be so non-judgmental, George.

Speaker 5:
[115:21] I'm just saying.

Speaker 2:
[115:22] Yeah, have that freedom. No, but so Blake, you guys need to sit down and make a priority list of the goals that you guys have in the next 12 to 24 months. Put dollar amounts next to them. Look at your income and you guys map it out. And this is going to be fun. Don't stress. Don't, please don't squish her dreams, Blake, okay?

Speaker 5:
[115:40] You're dreaming too small. She's dreaming too big. Let her dream.

Speaker 2:
[115:42] Let's meet in the middle. But let her dream. This is part of it. It's fun. And she may not get everything you want. That's not the point. But the point is like, here is what I'm thinking and wanting and seeing and whatever. Let it just happen. Let it be a fun conversation.

Speaker 5:
[115:54] You guys aren't broke anymore and you're not going to be broke again as long as you do this slowly in cash.

Speaker 2:
[115:59] Avoid debt.

Speaker 5:
[116:00] Let me free you from that scarcity mentality, my friend.

Speaker 1:
[116:31] Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com.

Speaker 2:
[117:27] Our scripture of the day comes from Proverbs 13-4. The soul of the sluggard craves and gets nothing, while the soul of the diligent is richly supplied. Leslie Nielsen said, doing nothing is hard to do. You never know when you're finished. Huh.

Speaker 5:
[117:46] Something to chew on there.

Speaker 2:
[117:50] Did I get it? Doing nothing, doing nothing is hard to do. You never know when you're finished.

Speaker 5:
[117:56] I don't think anyone's waiting for it to be done.

Speaker 2:
[117:57] Is that what she means? Just don't do nothing regardless.

Speaker 5:
[118:00] I think it's Leslie Nielsen, the famed actor, RIP.

Speaker 2:
[118:03] Yeah. So just keep doing something.

Speaker 5:
[118:06] Don't think too hard on that one. I think it was meant to be...

Speaker 2:
[118:09] It felt like a riddle or something.

Speaker 5:
[118:11] Humor. He was a comedian, an actor, so you know, that makes more sense.

Speaker 2:
[118:15] Shouldn't have done the reference for that.

Speaker 5:
[118:16] Airplane, The Naked Gun. It's before your time, Rachel.

Speaker 2:
[118:19] Oh, airplane. No, I got that one. All right. I see. I see. When did he pass?

Speaker 5:
[118:24] 2010.

Speaker 2:
[118:24] Okay. All right. Let's head to-

Speaker 5:
[118:28] Not recent.

Speaker 2:
[118:29] Not recent. To Raleigh, and we have Mary Rose on the line. Hi, Mary Rose.

Speaker 6:
[118:35] Hello.

Speaker 2:
[118:36] Hello. How can we help today?

Speaker 6:
[118:38] So we, kind of a little bit of a longer story. We moved from Washington State to North Carolina in October of last year, and we wasted all of our resources doing so. It was a bad situation in Washington. We weren't making it. We were making good money, but we still weren't making it. So the Lord made a way for us to get to North Carolina. And we had an idea of two years to buy a house. Well, we are in process of buying a house right now. The Lord made that happen as well. We don't have to put anything down at all. The mortgage is going to be less than our rent payment. We do have some debt in cars and some credit cards and stuff that we were planning on paying off. And my question really is, am I thinking about it correctly in, I'd rather pay a mortgage, build equity, than pay someone else's mortgage by renting?

Speaker 5:
[119:45] I think that's a short-sighted approach because you're not thinking about the full picture. Because we don't know what the mortgage is compared to your income and what these debt payments have to do with it.

Speaker 7:
[119:55] So I don't know that the Lord is in charge of zero down mortgages. But you're here, I mean, you already did it, right?

Speaker 1:
[120:03] Yeah, I mean, we close May 1st.

Speaker 7:
[120:04] So what's the mortgage payment?

Speaker 1:
[120:06] Mortgage payment is going to be right around $15.50. And we pay $16.15 a month in rent.

Speaker 7:
[120:14] And what's your income every month? What comes into your bank account?

Speaker 1:
[120:18] Well, so we make about $98,000 a year.

Speaker 7:
[120:23] Okay, is that your gross income?

Speaker 1:
[120:25] Yeah, that's our gross income.

Speaker 7:
[120:26] Okay, so, but you don't know what's coming in every month?

Speaker 1:
[120:30] Well, every month...

Speaker 7:
[120:31] Mike, I can give you a guess. Is it around $6,000 a month?

Speaker 1:
[120:36] No. So I'm actually, I just got a new job in the town that we're moving to, which is about $5 more an hour and I'm making plus $300 extra in bonuses a month.

Speaker 7:
[120:49] Okay, so what's your new hourly wage?

Speaker 1:
[120:52] My new hourly wage is 20 and he makes 27.

Speaker 7:
[120:57] Okay. Yeah, that makes sense. You're making about 100 grand gross, but my guess is your take home pay will be about 6 grand. So $1,500 on a mortgage, that's about a quarter of your take home pay. So you're in line there. Now, how much debt do you have?

Speaker 1:
[121:12] Well, we pay probably $800 a month in car payments, and then probably $400 in credit card payments, because we, like I said, we exhausted all of our resources getting out of Washington State.

Speaker 7:
[121:26] What's the balance of the loans? The credit card debt, the car loan?

Speaker 1:
[121:31] I think the credit cards we've got about 15. Our truck is 16, my car is 9, and Harley's 3-something. But my husband has listed his truck for sale. Oh, good. So we're trying to get the truck out so that we can save some money that way. And then we can really start building a saving so that he can get something that... The truck in Washington made sense. It doesn't really make sense down here. His job actually provides transportation for him to get back and forth from work.

Speaker 2:
[122:09] Plus he can drive his Harley there. And his is the 16,000?

Speaker 1:
[122:13] Yeah.

Speaker 2:
[122:14] Okay.

Speaker 1:
[122:14] Perfect. So he can possibly sell it... I told him to list it for 27 and maybe get 25 for it.

Speaker 7:
[122:22] Oh, great. So you could walk away with some cash.

Speaker 1:
[122:24] Yeah.

Speaker 7:
[122:25] Which could knock out the Harley and maybe close to paying off your car.

Speaker 1:
[122:30] Right. And what he wants to do is pay the credit cards off because it's a higher interest rate. And then we just cut the credit cards up and we're done with the credit cards. Because that was kind of just a...

Speaker 7:
[122:40] You can cut the credit cards up now. You don't need to wait till it's paid off. And I would do that.

Speaker 1:
[122:45] Right.

Speaker 7:
[122:45] We recommend the debt snowball method because it's the method that actually causes people to get out of debt. And it's all about momentum and psychology. So it's smallest balance first instead of the highest interest first. What you're talking about is debt avalanche method on paper, you could maybe save some interest. But right now, we're not trying to save interest, right? If we were playing math, we wouldn't be in all this debt.

Speaker 2:
[123:06] But Mary Rose, I do want to say, though, when we look at the order at which we buy a home, even if it's a great deal...

Speaker 7:
[123:16] Even if it's cheaper than rent on paper.

Speaker 2:
[123:18] Yes, on paper, I still would not have bought a home until I had this cleared out. Because you guys have no money. You have $43,000 in debt. If the heating and air goes out, you're $20,000. What are you going to do? You know what I mean? But I'm saying, the rent, listen though, the rent, even though you're paying $1,000 less, that's $12,000 a year you're saving, which is great. And I get building equity and all that. But if something goes wrong, when you rent, things are taken care of. So just know the expense of home ownership, even though you don't see it in the mortgage, you're keeping up with the yard, all of it. So just know that it's still going to feel... It may still feel tight.

Speaker 1:
[123:58] So really for the last 15 years, we've lived in situations where we take care of everything in the house anyway. Like if the heating or air goes out, my husband takes care... He does everything.

Speaker 2:
[124:10] As a traditional renter, though, that would not usually be the case. The landlord should be paying for it, though.

Speaker 1:
[124:16] Right, right.

Speaker 2:
[124:17] Okay, so just saying...

Speaker 1:
[124:19] So we understand the taking care of those types of things. You know, like my husband is a master of all. He does everything. So we haven't... I mean, this is the first time we've rented from a property management company in 15 years. And so...

Speaker 7:
[124:39] So when is the lease over? And have you actually closed on the house?

Speaker 1:
[124:43] So we closed on the house May 1st. The lease is over in August, but the sellers agreed to buy us out of our lease.

Speaker 7:
[124:52] Okay, as part of a concession.

Speaker 2:
[124:53] What kind of mortgage did you guys get with nothing down?

Speaker 1:
[124:55] It's a USDA loan. So I know that you guys don't recommend USDA loans, but my husband got curious. He got on his phone and he put a request out. They approved us up to 250,000. Yeah, they approved us up to 250,000. And by some chance, you know, we took a left and there was a house on the right hand side that was a two bedroom. And we've only been looking at three bedroom. It was 215,000 for, I mean, you can make it five bedrooms. And three parcels and a huge woodworking shop on the back, so.

Speaker 2:
[125:36] I'm sure, yeah. Yeah, I bet it's great. I bet it's great.

Speaker 7:
[125:39] But the issue is if that house goes down in value, you're now underwater in a house because you have no equity. And USDA loans, they include an additional premium. There's an initial fee of 1% and a 0.35% annual fee after that. So it's not as great of a deal as it sounds. It's like saying, I got zero down on a car. Great. You just took on the full loan instead of having anything down. So I want to tell you that you can do this house. I wouldn't personally, if you can back out, I would to kind of clear the deck a little bit more and step into this from a place of strength. Right now, you're stepping into it out of more desperation from getting it out of a bad situation, but it's not going to tank you if you guys can keep up this income.

Speaker 1:
[126:19] Yeah.

Speaker 7:
[126:20] But I would focus heavily on knocking out these debts. Yeah.

Speaker 1:
[126:23] Yeah. And he's been in his job since December. I will move into my job actually next Tuesday. And that's great. We're just...

Speaker 2:
[126:33] Yeah, I'm excited for you guys. Yeah, I think it's great. I think whatever you're choosing to do, but you guys have to knock out this debt. And yeah, there's a lot of deals and a banker giving you a loan at 0% down. Is that Jesus? Is that God or not? I don't know. I don't know. But George, thanks for a great show. Thank you. Thanks to everyone in the booth. And remember, there's ultimately one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.