transcript

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

Speaker 2:
[00:12] Normal is broke, and the common sense is weird, so we're here to help you transform your life from the Ramsey Network in the Fair One's Credit Union studio. This is The Ramsey Show, I'm Jade Warshaw. Next to me, Dr. John Delony, we are taking calls from you all hour long. We're headed out to Seattle, Washington, where we have Shelby on the line. Hey Shelby, what's going on? How can we help today?

Speaker 3:
[00:32] Hi, yes, I'm just calling and wondering if the way my fiance is splitting the finances with me is the right way.

Speaker 2:
[00:43] Okay.

Speaker 4:
[00:44] I can already tell this is going to be a fun call, Shelby.

Speaker 2:
[00:47] Yeah, tell us about the right way that he has it split now.

Speaker 4:
[00:52] Have you listened to our show before?

Speaker 3:
[00:54] Yes, I have and I actually listen to you guys always. And John, like Jane, I follow you guys religiously, so yes.

Speaker 4:
[01:02] Okay, so whatever answer we give you, same team, right?

Speaker 3:
[01:05] Yes.

Speaker 4:
[01:05] Okay, all right, good. All right, let it rip.

Speaker 3:
[01:09] So long story short, my fiance and I are a blended family. We do own a home together. I have three kids, he has one. My ex, who passed away years ago, left me in a financial situation where I did have to file bankruptcy before I got to my fiance. I then built myself back up, got myself a very six-figure paying job, moved throughout. Now we have one joint checking, but the mortgage is the only thing that comes out of that, and then everything else, Venmo is still.

Speaker 2:
[01:48] Interesting. Okay, your phone's breaking up a bit. Make sure you're somewhere where your phone's not breaking up.

Speaker 4:
[01:53] You said you Venmo each other?

Speaker 3:
[01:55] Yes.

Speaker 4:
[01:56] All hot relationships stay hot through Venmo.

Speaker 2:
[02:03] So here's, there's some things going on here that might be outside of your belief system, but I'm just going to say it because I try to give the advice that I would do in my own life, and that I think is something that would really help you. So you've got the one account, all the money goes into it because both of you are paying for the mortgage, and then who pays for the other stuff?

Speaker 3:
[02:31] Well, so only the mortgage-paying money goes into that one account.

Speaker 2:
[02:36] Right. But that comes a little bit from both of you, right?

Speaker 3:
[02:38] Yes, it does.

Speaker 2:
[02:39] Okay. Is it half and half or?

Speaker 3:
[02:42] Yep, it's half and half.

Speaker 2:
[02:43] Okay. Then tell me how the rest of the bills and kid stuff and how that's divvied up.

Speaker 3:
[02:49] So things like Internet, power, garbage are half and half. Groceries, we go back and forth on, well, you have two more kids than I do, so maybe you should pay for a little bit more. I'm like, well, you know how many kids I had coming into the picture.

Speaker 2:
[03:07] How do you think it should be?

Speaker 3:
[03:10] I think we should each have our own accounts for spending and fun and leisure, and then we should combine the rest of our finances and majority of our finances and pay all the bills from one account. He is the father figure in my children's life because our father is no longer around.

Speaker 2:
[03:26] How long has he been around? How long have you guys been in this relationship together?

Speaker 3:
[03:30] Three years.

Speaker 2:
[03:31] Okay, and when's the wedding?

Speaker 3:
[03:34] That's a good question. He wants to wait until we've been engaged for two years before we get married.

Speaker 4:
[03:39] Why?

Speaker 2:
[03:40] Oh, wow.

Speaker 3:
[03:41] I don't know.

Speaker 4:
[03:43] Is this level two in his test?

Speaker 3:
[03:47] I feel like it. I mean, and I've watched your show many times before, and I'm just like, you proposed. Why? And he's like, well, I just, I want to make sure that you're the one. You don't change. And that's what I said. I was like, uh.

Speaker 4:
[03:58] You don't change? Here's the 100% guarantee. Both of you will change. A million. My wife's on version like 41 of the idiot 24 year old she married. Thank God, right? I'm glad I changed.

Speaker 2:
[04:10] The ring doesn't mean, and now I'm considering you for marriage. That's not what the ring means. The ring is, we're going to get married. I have decided you are the one I'm going to marry. The engagement is just simply a planning period to have the party. That's really all it is.

Speaker 4:
[04:25] All right.

Speaker 3:
[04:25] So I agree.

Speaker 4:
[04:27] Let me ask you this. How much of, because I want to honor this. How much of your concern about, um, I need to have my own on the side here. How much of that stems from the absolute mess you were left when your first husband passed away?

Speaker 3:
[04:48] Um, in the beginning, I was terrified to join any type of finances with him because my late husband did significantly put me in a bind where I like could barely feed my kids. But now that I've gotten to know this man and I see him and he runs his own business. Um, you know, I see the dedication of work that he puts in every day and that I am like, okay, yes, I am now comfortable with this. However, I would feel like my own account for, like getting my hair done or my nails, you know.

Speaker 4:
[05:20] I'll still tell you, I think the nerd work, the research data on this confirms it. What we've been teaching for more than three decades, all of it goes into the same boat. And together, you'll have the conversation about hair and nails and haircuts and shampoo, like all of that stuff. I have to tell you, like, just as a husband of a wife of almost a quarter century, you're worth more than you're getting right now.

Speaker 3:
[05:52] Yeah.

Speaker 4:
[05:53] You're worth more than being in trial period number two. You're worth more than, no marriage I've ever heard of. I'm sure they exist. And I get a sample size of the ones that are in crisis. I've never heard of a successful marriage where they're venmo-ing and bickering over who... You like it colder, so you have to pay more of the electric bill. You know who does that? Nineteen-year-old roommates who share an apartment. Yes. Not people who are ride or die till death do us part, like making a life together that they both want to be awesome.

Speaker 2:
[06:30] And I think that's part of the... I think exactly what John said is part of the problem. There is a very shallow commitment here, and because of that, I think you're experiencing that. It's like, I'm only going to go so far in. And you have your reservations as well, that you're only going to go so far in. And I actually think it's a wonderful thing that you're not combining money right now, because you're not married. And this thing, even if you were the most solid engaged couple ever, I would still say, hey, right now, you don't need to have your money combined because the deal is not done. But I don't hear like a super solid engaged couple. And so the reasoning still applies. Now is not the stage to combine money. I understand that you guys are all living in the same household. And probably while you're in that scenario, yeah, having a fund where you both kick in your parts for the rent or for the mortgage, that probably makes sense for how you're choosing to live at this moment. But I wouldn't, I wouldn't combine money until you are married and I would push for marriage. Yeah. Because, well, let me, let me caveat that. I would not push for marriage if you don't think this is the guy. But if you're like, this is my guy, I believe in him, I trust him, I trust that we're going to grow together and change together, and we're going to be able to get on the same page. Yes, get married. But if you're having reservations, and I want to say this because you said I got burned before, the calls that John and I get where people have been burned before, there were red flags. There were red flags and there were little behaviors that was like, ugh, that doesn't feel right. And there was just this more and more of a separation that occurred. And so I want to tell you, if you can create a relationship that from the beginning, there is transparency, everybody's involved, everybody. We may not think about things exactly the same or have exactly the same values, but we're both very, very interested. It's our priority to show up for one another. So if he values something, I have to show up and show, hey, I care about it too, just because you care about it and vice versa. If you don't sense that or feel that or see proof of life in that area, you need to consider that deeply because John, these are the things. Red flags are red for a reason. Yeah.

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Speaker 2:
[10:03] Attorney advertising.

Speaker 5:
[10:04] Results may vary and no specific outcome is guaranteed.

Speaker 2:
[10:18] All righty, back to the phone lines where we have Jonathan, who's in Fort Campbell, Kentucky. Hey, Jonathan, how are you doing today?

Speaker 6:
[10:25] Hey, Jade, hey, John, thanks for the call. I appreciate it.

Speaker 2:
[10:27] You bet. How can we help?

Speaker 6:
[10:30] Yeah, so my question today is just, how do my wife and I buy a house with a mortgage payment being around 25% of your take-home pay and the situation that we're in? I'll give you like a little quick details to hear if that's cool with you.

Speaker 2:
[10:44] Yeah, the more the merrier.

Speaker 6:
[10:46] Awesome, awesome. So we've been written for seven years, we're debt-free. We got debt-free last May, actually. And then we do have our three to six months of expenses. So we follow y'all's plan. And the dilemma is, I get paid 46,280 a year. Last year, I burned like 55 with overtime. My wife makes 8,000 a year, just because she's a take-home mom and she has like a side gig with the church because she does like to lead worship and stuff. So combined like 55, just day salary, I could get more with overtime. But the limit is, I mean, like a job where I like, it's kind of a dream job. So it's kind of like, I could leave and go find something making more.

Speaker 2:
[11:27] But you like it.

Speaker 6:
[11:28] I want to. I like it. And so in my wife, I don't want her to get a job because again, we like it. And so we don't know what to do. But we want to own a home. And it's like we're stuck.

Speaker 4:
[11:40] So brother, you are running right up against one of our culture's greatest lies. That we could have it all at the same time, just how we wanted it. And every one of us runs up against that at some point.

Speaker 6:
[11:57] That's true. Very true.

Speaker 4:
[11:58] I want to have these great values. I want to follow my faith convictions. I want to follow my educational convictions. I want to follow my passion, working at a place that I believe in, that I like, but only pays me this much money. And it runs up against this awful thing called math.

Speaker 6:
[12:17] Yes, exactly. That's what we are.

Speaker 4:
[12:19] Yeah. And so y'all are going to have to ask yourselves, what do we value more, home ownership or me working at a place where I feel valued? They're paying me as good as they can. I trust that's happening. I love my work environment. Or a value of my wife stays at home and takes care of our kids because that's a value for us. And if those two values are immovable, then that means we're going to be renters because those two values are that important to us. Or if we value home ownership above all things, then I'm going to work a job that may not be my favorite work environment or I may not love, but it's going to provide this kind of life for us. Or my wife is going to, in one year when the kids are old enough to go to school, where she's going to go work full time. And you get what I'm saying?

Speaker 6:
[13:06] Yeah, no, I'm definitely following you.

Speaker 4:
[13:08] And I hate it for you, man. All of us face it. I hate it for you.

Speaker 2:
[13:12] Yeah.

Speaker 6:
[13:13] Yeah, it's the dilemma. Yeah, what you said.

Speaker 2:
[13:17] It's something to think about. And I like what John said. Just because you make a choice now, it doesn't mean it has to stay that way forever. Because to his point, when you say yes to one thing, it's an opportunity cost. You're automatically saying no to something else, even if you hadn't stopped in the moment to consider what that is, that you've said no to by saying yes to stay at home mom and yes to the career. But yeah, there's a future that maybe that doesn't work for you guys anymore. And then you look up and you go, you know what, I am ready to move on into a different career or see how I can expand. And she might think, you know what, I've been staying at home for X amount of years. I'm ready to get out there. So there's no permanence in any of these decisions. And home ownership is always there waiting for you. It's not, if you say to me, Jade, I really want to buy a house. I'm not going to say to you, great, that's impossible. I'm going to say, okay, with the choices that you've determined, your timeline is just a lot further out than other people's. And you're going to have to be very intentional about getting there and just know, hey, what might have taken somebody else three or four years could take you a decade. And if you're fine with, I don't know how old are you are in your 20s?

Speaker 6:
[14:27] So I'm 30, my wife is 27.

Speaker 2:
[14:30] Okay. So if you think, hey, we're not buying our first house till we're in our 40s, that's your choice to make and that's your road if you want to walk it. Folks call in here all the time and they love their careers and there's not a strong upside financially. And I just go, okay, you're going to be in that Camry life. You're going to be that used Camry life. And that's okay if that's what you love and you get most of your joy out of the work that you do.

Speaker 4:
[14:55] Here's the thing I want to make sure you hold though, okay? I don't want you to feel like this world that you and your wife live in is happening to you. I want y'all to—and it might be you call and get a babysitter and y'all go out for a half morning, right? I want y'all to take full ownership of the choices you're making. Because if you walk through life feeling like this is happening to us, then chances are your wife is going to end up in the guilt factory. She can't do anything right. And you're going to feel like you're going to live in the failure factory. I don't make enough— Yeah, I think we both live in the failure. That's right. I'm not providing enough for fill in the blank. And the problem is that finish line of the guilt factory and the failure factory, it just moves on you. It just keeps moving and moving until you opt out of both of those factories and you just say, Hey, we're choosing this. That's great. We're choosing stay at home. We're choosing a job where I can clock out and come be present at home. And that means we're choosing this financial situation. And that means we're choosing to rent for a while. But the more you feel like a victim to your circumstance, the more you both are going to end up in pathological responses. That's a nerd way of saying you're going to be reacting to your life and nobody makes loving, intimate connection while they're reacting.

Speaker 6:
[16:21] That makes sense. That makes sense. If we choose it, find a way to enjoy it and be kind about it.

Speaker 4:
[16:28] And if you make coming together once every six months, once a year, hey, what life do we want to choose this time? We've never been married and had a three-year-old and you're pregnant again. We've never been married and had a four-year-old. We've never been married and had a kind of... Your marriage changes every year. And so to Jade's point, this particular year, what do we want to choose? Actually, I want to choose to go back to work. All right, well, let's navigate that. And that's going to come with guilt and what... And let's choose to buy a house. Okay, then what must be true for us to do that? But it's you owning this thing, not you responding to this thing.

Speaker 2:
[17:03] That's so good. And that's a great question. And I actually think the way that you explain that, John, is really the crux mindset that you have to have around everything that we teach. Because all of it is... I'm giving up something here to get something I want over here, right? And so even something as simple as a budget, when we say, hey, make a budget, because when you make a budget, you have control over it. You're choosing and saying, this is how I'm going to spend my money. It's not, oh, somebody's making me spend my money on groceries and my car. No, I chose this. I chose. I said, I'm going to put this much of a line item towards entertainment. I'm going to put this much of a line, right? And already you feel way better about the things that maybe you're going to say no to, or maybe that you're not going to be able to do in this season because you made the choice of making the budget. Same thing with getting out of debt. You chose, okay, this is the season where I grind. No, the IRS didn't do it to me. Student loans didn't do it to me. I chose that I would like to be free. I would like to get out of debt. Therefore, now I can feel really good about and just kind of almost set my expectations to know, hey, this is the season where it feels like a grind.

Speaker 4:
[18:09] Because I'm choosing. I chose it. I chose to walk into the gym this morning or not. I chose to stay up way, way too late last night. And I then made a choice to cost myself this morning.

Speaker 2:
[18:24] That's right.

Speaker 4:
[18:25] And so even going all the way back to something like student loans, the number of times I blamed this amorphous they.

Speaker 2:
[18:33] We've all done it.

Speaker 4:
[18:34] They told me I had to go to college. Who? Well, they did. And it's a combo of parents and culture and teachers. Right? And they didn't tell me how bad this was going to be after college. And at some point, I had to say, you're right. But I signed my name on that paper.

Speaker 2:
[18:51] I chose to believe it.

Speaker 4:
[18:52] I got to pay that back.

Speaker 2:
[18:53] Yes.

Speaker 4:
[18:53] I signed the paper. I'm going to pay that back. And that means I'm going to choose to have a pretty crummy car for a while. I'm going to choose to move into a dorm for a while. I'm going to choose to sleep on air mattress for life. I'm going to make these choices. And man, that's the shift out of, here's the thing. I spent my whole career sitting with people, assault victims, people who have loved ones pass away, people who made choices to sell or use drugs. We always end on one question. What are you going to do now? And that's a choice. Like, if this happened, it did. And it's for real. What are you going to do now? And I think that's the most empowering question somebody can ask somebody else.

Speaker 2:
[19:31] I think so too, because then you know, hey, no matter where things end up, I didn't, somebody didn't put me there. I put, there's more peace in knowing.

Speaker 4:
[19:38] I got in the driver's seat of my life.

Speaker 2:
[19:39] Yes. That's one of the reasons I almost will never, ever, ever, you'll never hear me suggest bankruptcy on this show, because you lose control. The government steps in and now they are telling you to sell this and do that. Control, guys. It is a wonderful feeling. Even if things aren't going specifically your way, to be able to say, I chose this, it's everything.

Speaker 7:
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Speaker 1:
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Speaker 7:
[20:50] 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.

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Speaker 1:
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Speaker 2:
[22:00] Kyle is in Boston, Massachusetts. Hey, Kyle, how can we help today?

Speaker 8:
[22:05] Hey, dude, how are you? Thanks for taking my call today. Yeah, you bet. I had a question around student loans. So I'll give a quick background before I ask my question, but I went to a private college, got a small scholarship, but still took on some debt, sitting at around 25,000 in student loans debt. That's the only debt I have. I'm a very diligent spender, very good with my money. If I invest in the market, standard return puts it above my interest rate. I have a hard time struggling with, should I pay off my student loan debt or should I take that minimum pay or the money and invest it into the market instead?

Speaker 4:
[22:44] Dude, I love talking to smart guys. Like for real, thoughtful. You thought this through and that's awesome.

Speaker 8:
[22:51] Yes, definitely.

Speaker 2:
[22:52] Yeah. I mean, there's a mathematical side of that that you can play out. I'm more on the emotional side of it. Over here, we believe that the borrower is slave to the lender. You do feel that that's a sole tax that you pay. It's a sleep tax that you pay. It's a relational tax that you pay. It's clearly bothering you because you're also calling into a show about the student loan debt. You're not thinking, I'm just going to go over here and invest. You're thinking about it in relation to the student loan debt. That student loan debt is weighing on you and weighing on your body in some way. I would challenge you that there's a world where you get to do both. You just need to do one first and the other one second. I don't think in the long run, you're going to go back and go, man, if only I had invested that money instead of paying off my student loan, I think you're going to go, let me just clear out the student loan. It's a private student loan. It's a private loan, right?

Speaker 8:
[23:48] Yes. No, no, it's a federal loan. It's a federal loan.

Speaker 2:
[23:51] I thought you said private. It's federal loan. How quickly could you do it? Because something tells me that you make a fine income.

Speaker 8:
[24:00] Honestly, the reason I'm calling today is I hit the breaking point where my brokerage account meets the debt. I could do it today.

Speaker 2:
[24:09] I bet.

Speaker 4:
[24:10] Done. Do it right now. Right now.

Speaker 9:
[24:13] Hey, hey.

Speaker 4:
[24:16] Here's a bet I'll make you, okay? Cancel the debt today. Live debt-free for two pay periods, two months. If you hate not owing anybody any money, go down to the local credit union, take a $25,000 loan and put it back in the market.

Speaker 2:
[24:34] Money-back guarantee.

Speaker 8:
[24:37] Yeah. Yeah, I mean, I...

Speaker 4:
[24:39] Just call our bluff. Two months.

Speaker 8:
[24:42] Yeah, and, John, that's part of the reason I'm calling right. I just don't think I'd do that. Like, I...

Speaker 4:
[24:48] Of course you would.

Speaker 8:
[24:49] If I make fine money, it would... I could probably get that back in another year, maybe two. I mean, I've only been out of school for a couple of years now, so...

Speaker 2:
[24:59] But do you see the point he's making?

Speaker 8:
[25:00] That's a dilemma I'm facing.

Speaker 2:
[25:01] It's not a dilemma.

Speaker 4:
[25:02] There's no dilemma. You have never been 100% in the driver's seat of your own life. You were at your parents' house.

Speaker 8:
[25:10] Financially, no.

Speaker 4:
[25:10] You went to a college where they told you what to do and when to do it. You got a job and they're telling you what to do every day. And you got a bank telling you, I don't care if you're sick. I don't care if COVID's here. You owe me that money. You've never sat in the car of your life completely autonomously with agency, as the nerds say. And I'm telling you on the other side of where you are, bro, it's pretty sweet.

Speaker 2:
[25:37] That's such a good point. Anything that's in your life, you're saying yes to, right? So you should look at the things in your life intentionally and say, do I want to say yes to that? Do I want to say yes to $25,000 of debt now that I know what it is and what it costs me? And John made such a great point. Obviously, the answer is no, you don't want to say yes to that because if we said, hey, why don't you go and take out $25,000 of debt and you don't have any, you say, no, I don't want to do that.

Speaker 4:
[26:05] That's dumb, right? That's stupid.

Speaker 2:
[26:07] You ended up with this debt, probably like all of us did. You weren't thinking straight. You didn't understand that that's what you were choosing. You got it. But now that you have the choice, exercise that and say, I don't really want that in my life. And I love what John said. If you paid off, you decide, I actually miss it.

Speaker 4:
[26:24] I miss it.

Speaker 2:
[26:25] I miss it. I need it back.

Speaker 4:
[26:27] I love having to look every third night because you're a guy who looks. I look at my balance to see what the interest is and how much it's grown.

Speaker 2:
[26:33] Just to make sure it's still there.

Speaker 4:
[26:34] I just miss it. Yeah, dude. How old are you?

Speaker 8:
[26:38] So I'm 23 years old.

Speaker 4:
[26:39] Homie.

Speaker 2:
[26:40] Wait a minute now.

Speaker 4:
[26:41] You could be free before you're 25.

Speaker 8:
[26:46] Yeah.

Speaker 4:
[26:47] 25, freedom, homie.

Speaker 2:
[26:49] He could be free today. He said he has the money today.

Speaker 8:
[26:51] Before you're 24.

Speaker 10:
[26:54] What's the payment on his student loans?

Speaker 2:
[26:55] What's the payment on them?

Speaker 8:
[26:57] So my minimum payment is $207. And that would rope me in for, I think, another seven or eight years, maybe at this point.

Speaker 2:
[27:11] Have you done the math on just, if you said, you know what, today, I'm going to bite the bullet. I'm going to take this $25,000. I'm going to go ahead and pay it off. And then starting next month, you have more cash laying around. I just know it. Starting next month, I'm going to invest 15% plus the 207. And I'm going to do that from age 24 to age 64. Have you just done that math?

Speaker 8:
[27:34] So, and I have, and I've done the math on what, if I was, in my mind, I have X amount that I'm putting towards the market and student loans combined, right? So if I just put, if I take that minimum payment out and take that number that I have in mind and just put it towards the market, it's, there is a little bit of a higher number in keeping the student loan around because that interest rate is below standard return on the market.

Speaker 4:
[28:01] I know, but you're-

Speaker 8:
[28:03] That's the question.

Speaker 2:
[28:04] My point is, let me tell you my point. My point is, if you pay this off today, yes, you're breaking down your brokerage by 25,000, but you're also becoming $25,000 freer. You become a completely free individual. Then, if you do what I said, the point is you're going to have a bazillion dollars. Maybe if you kept a student loan, you'd have a bazillion and one. But do you see what I'm saying? There's going to be something that you pay. Everything is an exchange. We've been into this heavily today. Everything is an exchange. It's like, well, what do you want to exchange for your freedom? It's a short sacrifice. There's always a sacrifice to win. Winning isn't just in dollars and cents. It's in peace. It's in deciding who you want to be. John and I are people where, hey, we don't borrow money. We just don't like having that sense of attachment.

Speaker 4:
[28:53] I don't want another grown man telling me what I have to do. I have enough of that already. They tell me when to be at work. They tell me how fast I can drive. I don't like it. So I don't want to give anybody else an opportunity to tell me what to do with my life.

Speaker 2:
[29:05] And it just sets the... It's a test for how we treat other things in our life.

Speaker 4:
[29:12] And hey, since you're a guy who runs data, can I challenge you with yet another calculation?

Speaker 8:
[29:17] Sure.

Speaker 4:
[29:18] Are you dating anybody?

Speaker 8:
[29:21] I am.

Speaker 4:
[29:21] Seriously?

Speaker 8:
[29:24] Yes.

Speaker 4:
[29:25] Okay. I just finished a two-year project studying marriage, okay?

Speaker 8:
[29:31] Okay.

Speaker 4:
[29:32] I would recommend, and this is gonna sound crazy to you in the short term, maybe don't even put that $200 into the market right away, but go take this date of yours and y'all go have fun. Go laugh. Go have joy. You're debt-free at 23. You make a great salary. You're on your path to be a multi, multi, multi-millionaire. And the ROI on a married couple who's locked in with their money is the highest ROI. Two people who get to combine time, energy and financial resources over a long period of time, their net worth outpaces anybody.

Speaker 8:
[30:14] Right.

Speaker 4:
[30:15] So if you want to do the ultimate ROI, get married and do marriage really, really well.

Speaker 8:
[30:22] Yeah. Yeah. And that's the plan. I mean, I guess just start a tune.

Speaker 4:
[30:26] Bro, dude, I'm smiling because I like talking to young men like you, because you're the guys that I want leading the next generation of human beings, that my kids are going to walk on the sidewalks that you're pouring.

Speaker 8:
[30:42] Yeah. And I appreciate that. And the reason for my call is because of that, right? Like I have that question of what do I want? Do I want peace? Do I want logic? And it goes back to also the point that I think Jade was making is like it's between plus one or peace of mind early and focus on life earlier on, right?

Speaker 2:
[31:03] That's right. That's right.

Speaker 4:
[31:04] Bro, if you unshackle yourself from people telling you what to do at 23, how fast you can run will astonish you. You'll get so far, so much further ahead of your peers, your neighbors, the people around you. You're in a pretty amazing spot. Choose freedom today, brother. We're free today.

Speaker 1:
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Speaker 2:
[33:16] Here's the deal, buying or selling a home is actually a very, very big deal. And with all the clickbait headlines and conflicting data out there, it's very hard to know what's really happening in the housing market. But we're here to help make the latest trends easy to understand. For instance, last month, the average 15-year fixed rate mortgage, that rate, it ticked up to about 5.56%, but at least it's still below 6%. And if you're financially ready, a small rate increase really shouldn't hold you back, especially since waiting could mean facing higher home prices as the busy season continues to ramp up. Also, median home prices went up to $415,000 last month, which is typical for the spring market. With more homes available and more buyers entering the market, it's still a great time to buy or sell. Now, to learn more about the housing market trends and to get free tools to help you buy or sell with confidence, go to ramsysolutions.com/market or click the link in the show notes if you're listening on podcast or YouTube. All right, we got Richard, who's in Austin, Texas. Hey, Richard, how can we help today?

Speaker 6:
[34:20] Yo, what's up, you guys? It's great to be on your show.

Speaker 2:
[34:22] Yeah, how can we help?

Speaker 9:
[34:24] So here's what's going on.

Speaker 6:
[34:26] I moved to Austin from Florida about four years ago, and I think I have the golden handcuffs of the 3% interest rate. So I kept my home in Florida, and it's been a rental property since. And I just had it appraised at $350, and I owe $190 on it. Now I've done a ton of work in renovations to this home because it's 100 years old. So right now I don't have a high amount of cash set aside. And so it's kind of a lifestyle thing as we're right now in Austin, I'm living in a one-bedroom apartment, but the house does have a 3% interest rate. The mortgage is just under $1,500 a month and it's rented for $2,200 a month. And so I'm curious if I should hold onto that house because a 3% interest rate isn't coming back or if I should sell it and look at maybe getting a place out here where I'm looking to stay for a few more years.

Speaker 4:
[35:15] I have a great idea for you. I want you to get on a computer, OG style, use clip art, don't use any of the AI tools, use clip art and make a sign that says 3% and print it in color. I want you to frame it and I want you to put it right in the middle of your teeny tiny one-bedroom apartment kitchen. Every time you have to turn sideways to get by your stool so you can get into your fridge, I want you to look up and be like, yeah, 3%, this one's for you.

Speaker 6:
[35:53] Yeah, and when I go on dates, I'll say, hey, but I do own a house. It's just on the other side of the country.

Speaker 4:
[35:58] Yeah, but in the meantime, why don't you come back to my place and we can both squeeze into the futon I have in my combined kitchen slash breakfast nook slash living room. Oh, gosh.

Speaker 2:
[36:12] Yeah, why are you doing this to yourself?

Speaker 6:
[36:14] It's a whole 650 square feet.

Speaker 4:
[36:17] Do what?

Speaker 6:
[36:18] I said, it's a whole 650 square feet.

Speaker 4:
[36:20] Oh, man.

Speaker 2:
[36:21] You know, I'm gonna tell you what, I'll give you one worse. That's like when you have like a really, and I know you're a man, but like if you have a pair of jeans you love and you gain a couple pounds and they don't fit anymore, and you just keep them in there and it's just taunting you. Every time you see them, it's like just a reminder, like you're fatter than you were.

Speaker 4:
[36:40] Yeah, yeah. Bro, today, call today. Here's a good question to ask you. If you had 150 grand right now, would you take out a mortgage, even at 3% and buy a house in nowhere Florida? No.

Speaker 2:
[36:59] No.

Speaker 4:
[36:59] You wouldn't do that.

Speaker 2:
[37:00] Just by default, man.

Speaker 4:
[37:01] You're a long distance landlord. Sell the place, get that money, buy yourself a place in Austin, and enjoy your life, dude.

Speaker 6:
[37:08] I guess just looking into the future, my thought is it'll be paid off in just under 20 years.

Speaker 2:
[37:14] What are you saying?

Speaker 4:
[37:15] Homie, have you been alive the last 10 years?

Speaker 6:
[37:20] Yes, sir. I think so.

Speaker 4:
[37:21] Could you have predicted any of what's happened?

Speaker 6:
[37:26] No.

Speaker 4:
[37:26] Okay. So trying to read 20 years into the future, that is this madhouse, man, best of luck to you. I would solve.

Speaker 6:
[37:39] I figured you all would go down that road, but you don't think it's worth keeping it just for the low end.

Speaker 2:
[37:43] No, you don't live there anymore. You don't live there. You don't live there. To John's point, you can call it a rental house, but it's really not that because if you were on the hunt for a rental house, you would not have chosen that house. So it's just a house that you lived in, and now you don't live there anymore, so you sold it. There's no loss there. There's no failure. It's almost like you're viewing it as a failure to sell this house and let it go, and it's not. You moved on, and that's okay. It's a natural part-

Speaker 4:
[38:11] You're not winning.

Speaker 2:
[38:12] Of life.

Speaker 4:
[38:14] I'll go one step further, brother. This is me in my house. I had a 3.1% interest rate, and I paid my house off. My wife and I scratched and clawed, and worked like crazy to pay our house off. And I could have made more money in the years since. I could have if I took the gap and put it in the market, I would have made money. But dude, I wouldn't trade that arbitrage for anything because I put my head down on my pillow, and that house is mine, and nobody can take it from me.

Speaker 8:
[38:44] So, probably shoot books.

Speaker 6:
[38:45] The way I set up the lease is that it will be vacated not this spring, but a year from now in the spring.

Speaker 4:
[38:51] No, too long. Tell them you're selling the house. Tell them you're selling the house. Really? Yes. Are you going to keep it for another year?

Speaker 6:
[39:01] Yeah, I guess that's a good point.

Speaker 4:
[39:04] At some point, I want you to start considering what you want your life to feel like right now. You're over-indexing on an imaginary future, and you're under-indexing on the life you live right this second.

Speaker 6:
[39:20] Yeah, and that's the thing, is the ego hit of living in an apartment for the time with the thought of, well, when I retire, I'll have a paid-off home in there, something like that.

Speaker 4:
[39:30] Yeah, maybe. Or maybe a hurricane takes it. Like, who knows, dude?

Speaker 2:
[39:34] Yeah, you change what you want. I mean, you could change what you want. And that's not even in your purview when you get that age.

Speaker 4:
[39:39] Yeah.

Speaker 6:
[39:41] Well, all right, well, then dang, Daniel, I guess I'll get on the phone with one of y'all, the Doris real estate providers.

Speaker 2:
[39:47] That's right.

Speaker 4:
[39:48] I would before the day's over. And dude, you'll be smiling so big when this thing's, I'm just telling you, man, when that money deposits in your account and you're free, we'll be able to feel that smile all the way here in Nashville from Austin.

Speaker 2:
[40:03] Yeah, that's a good thing. Yeah, we get that call all the time. A lot of times it's military folks who are moving around a lot and they end up with a handful of houses in different states. And it's almost like, well, someone's in them, someone's renting it, so it must be a good idea. And the truth is, being a long-distance landlord, the places are getting tore up, you're probably not as involved as you need to be, or you're paying somebody to manage the property. And it's just like, if you reverse it, you never would have selected, you never would have chosen that place.

Speaker 4:
[40:32] We have recency amnesia. We just went through a global issue where in many markets, they said we're freezing rents or your people don't have to pay for an undisclosed amount of time. It's like, we've just all forgotten, man.

Speaker 2:
[40:47] Well, I mean, I do think like COVID obviously was an isolated incident, but-

Speaker 4:
[40:51] But it happened.

Speaker 2:
[40:52] But the whole point is-

Speaker 4:
[40:52] In 2008, 2009 was an isolated incident.

Speaker 2:
[40:54] That's true, that's true.

Speaker 4:
[40:55] And it's always another isolated incident, but-

Speaker 2:
[40:57] But I would say like the biggest part is what we've been saying for the last several calls, which is not letting life happen to you, but being so intentional about what you're choosing and knowing that if you say yes to one thing, you're likely saying no to other things, and that's okay. It's not a negative thing. It's a choice that you're making and being really intentional that the things that are in your life, you have said, you have looked at it and given it a once over and said, yes, I like that the way it is. I would choose that again tomorrow. I would choose that again the next day. And if you can't say that about things in your life, it's time to cut it loose. That's that on that. All right, a little question here from the social media. Peyton from Facebook says, my wife wants to upgrade rooms in our house, but I feel like it doesn't make sense since we will still have a mortgage on it. Should we use those funds to pay off the current mortgage and then renovate it when we fully own it?

Speaker 4:
[41:53] I have a bias there, so that's me.

Speaker 2:
[41:56] Tell me.

Speaker 4:
[41:58] I'm not on Ramsey principles, I'm on his principle like, that's what I would want to do in my house. And I also know-

Speaker 2:
[42:05] Keep the current one and upgrade it?

Speaker 4:
[42:06] I want to pay it off when it's mine, then I'll start tinkering with it. But I also know that question doesn't tell me what the state of the house is in.

Speaker 2:
[42:13] It doesn't tell us what baby step they're on. Listen, if you're in baby step two, now's not the time to upgrade the mortgage, I can tell you that right now.

Speaker 4:
[42:20] Upgrade the bedroom.

Speaker 2:
[42:21] Yeah, well, it sounds like...

Speaker 4:
[42:24] Sounds like she wants to remodel a room.

Speaker 2:
[42:26] Oh, okay, I read that a little bit differently.

Speaker 4:
[42:30] And he still has a mortgage, and he says, hey, should we pay off the mortgage? I'm assuming they're in baby step four, five and six.

Speaker 2:
[42:36] You know, okay, I'll reframe my answer. If you're in baby steps four, five and six, there is no wrong answer there.

Speaker 4:
[42:41] I'll fix it up, man, if you want to, or pay it off.

Speaker 2:
[42:44] Yeah, and if you're in baby step two, well, you already know what to do.

Speaker 4:
[42:47] And I'll just say, if mama wants to change up a room, probably change up that room.

Speaker 2:
[42:52] Unless you're on baby step two.

Speaker 7:
[43:07] Most people don't struggle with money because they can't do math. They struggle because they don't stick to a plan. And when your bank makes your money feel confusing or hard to track, plans fall apart fast. And that's why I love Fairwinds Credit Union and their mobile app. Because let's face it, most banks build systems that make it easy to swipe and hard to stay organized. But with the Fairwinds app, you open it and you know exactly what to do. No clicking through 11 menus just to move your own money. Just tap, transfer, and done. You can deposit a check from your couch by taking a picture. You can get real-time alerts so you're not guessing what's in your account. And you can add your Ramsey BeWear debit card to Apple Pay and tap to check out. See, a lot of banks leverage convenience to make it easier to go into debt, but Fairwinds offers convenience to help you stay in control. It's a huge difference. That's banking that actually supports the baby steps instead of working against them. So if you want to bank someplace that's both faster and wiser, check out Fairwinds. Go to fairwinds.org/ramsey. That's fairwinds.org/ramsey. Insured by the NCUA.

Speaker 2:
[44:14] All right, welcome back to The Ramsey Show here in the Fair Ones Credit Union Studio. I'm Jade, this is John, and we're going to Beth, who's in Denver, Colorado. We were just there hosting The Ramsey Show live. Beth, how are you doing?

Speaker 9:
[44:27] We're doing all right today. How are you?

Speaker 2:
[44:28] Doing good. How can we help you today?

Speaker 9:
[44:32] My mom is 67 and currently living on social security. She is married to my stepfather, and they both had pretty major surgeries this year. My mom had a back surgery and my stepdad had open-heart surgery, and they can't really work right now. They bring home about $4,400 a month. But I recently, she started being short on things, and finally, I asked to look at her finances, and she has $51,000 in credit card debt. She has zero savings, literally zero. She has never really been really good at money. She's lost two houses and filed bankruptcy before. I'm currently debt free after falling baby steps, but I'm with my husband about $1.8 million. And she knows that I have money, and so she keeps calling me and expecting me to help. And I've kind of put all of her stuff into a budget for her, and she keeps overspending. She'll order a door bash or something, and then wonder why she's short every month. And so I'm trying to figure out how to kind of get it through to her that she has to stop. And I've talked to my husband, and we just don't feel like helping her is what's being an addict.

Speaker 2:
[45:53] What about your stepdad? What's his role? What's his role in all this?

Speaker 9:
[45:57] I mean, they're both equally terrible at money, just generally speaking. And so, you know, she's asked me to buy her a house, and she's asked me to do like all of these things. And I'm like, we can't do that.

Speaker 2:
[46:10] Oh, this is extreme. This is far worse than I had thought.

Speaker 4:
[46:13] I asked my buddies for nachos, not a house.

Speaker 2:
[46:15] Oh, boy. And how long have they been married?

Speaker 9:
[46:20] They've been married since I was five, about a full year.

Speaker 2:
[46:22] So this is not like, oh, this is kind of new. They've been a mess for a while. A long, long while.

Speaker 9:
[46:30] And they had money when I was in high school and kind of just spent it and leaned into that lifestyle. And then they tried the downside and so bought another house, ended up losing both houses, and they've lived in rentals ever since then. And I thought that they were kind of getting back on their feet, but I just think that they're terrible budgets and they feel very entitled coming from living a lifestyle that was above their means for so long.

Speaker 2:
[46:59] Yeah, I mean, they made choices. They made choices the same way you made choices, right? They were dealt a hand and they said, here's what I'm going to do. You were dealt your hand and you said, here's what I'm going to do. If you spend too much time, and John, this is your area, but if you spend too much time trying to sort through why other people made and make the choices that they're making, it is just-

Speaker 4:
[47:19] You're gonna go insane.

Speaker 2:
[47:20] Right, yeah, you will go insane, especially if you're using that framework to determine what you're gonna do. It's like, you just gotta look at you and just- Hey, I see what's going on. It's very apparent. I don't need to do a bunch of mental gymnastics here. It's very apparent what's going on. And the fact that- Here's what did it in for me. When you said she was literally coming to you saying, hey, will you buy me a house? That's when I knew we don't even need to go through a whole lot of the rigmarole of what they're doing. This is ridiculousness. And I'm wondering, have you just gone to her and said, Mom, here are the ways I can help you. I can help you with the budget. I can help you as accountability to stick with the budget. I can help show you the things that I've done. I can provide a plan for you. But one thing I cannot do because you guys actually do have money, is I am not going to give you monetary help because you have money coming in, that if you manage it properly will be enough for you. And I think when you say that very clearly, that's all you can say. And then when your mom oversteps the boundary because she's going to, you can just say, hey, just remember what I said before. But let's, I'm happy to sit down with you and do the budget.

Speaker 9:
[48:29] Yeah. I think the tricky part right now is that like about half of these things are already in collections. Like the credit cards are in collections. She doesn't even have enough room in her budget to pay these crazy minimums. And so I kind of told her to start with one credit card and like not pay the rest right now. And I like I set up a budget for her.

Speaker 4:
[48:49] I know Beth. Hold on Beth. Beth.

Speaker 9:
[48:50] Beth. Beth.

Speaker 4:
[48:52] Beth. She's lost two houses before.

Speaker 9:
[48:57] Yeah.

Speaker 4:
[48:58] She she's had the worst thing that can happen to somebody. She lost her home. And then she had it happen again. And then she's about to have it happen again. What does that tell you? What does that tell you?

Speaker 9:
[49:13] I mean, I just feel like they just don't learn from them.

Speaker 4:
[49:16] Okay. So so you here's the thing. You're right. And like they they blow by natural consequences. The rules of the world of reality don't apply to them when they have money and when they don't. And no no amount. Let me free you from this. There's not a thing you haven't said in just the right way that would solve this for them. They're really fortunate to have you as their daughter. The fact that you care this much, because I know in a family with finances like this, you've been through a lot also, right?

Speaker 9:
[49:53] Yeah. I mean, yeah.

Speaker 4:
[49:56] Yeah.

Speaker 9:
[49:56] Listen.

Speaker 4:
[49:57] Listen.

Speaker 9:
[49:57] We went to food banks when I was little.

Speaker 4:
[49:59] Yes.

Speaker 9:
[49:59] For the same reason, probably.

Speaker 4:
[50:01] Yes. I want you to hear me say, you have changed your family tree. You didn't take the baton from them. You picked it up off the track, and you decided to run as fast as you could with it. You're going to hand it off to your kids in a much better position than you were given it, right?

Speaker 9:
[50:19] Yeah. I mean, that was my huge motivator for not ending up like that.

Speaker 4:
[50:24] That's right.

Speaker 9:
[50:25] I promised I would never leave my kids in this position.

Speaker 4:
[50:29] Yeah. You've done that. I want you to hear me and Jade say, we're so proud of you because what you've done is really hard. It's harder than just doing the baby steps. You also had to take care of that seven-year-old little girl that was dealing with chaos and divorce and new boyfriends and food insecurity growing up.

Speaker 2:
[50:47] Now it continues to be hard because here you are doing well and you have to sit and see.

Speaker 4:
[50:52] You got survivor's guilt. That's right. Yeah. So let me say, here's what I know about you. I can tell it by the way you told the story. If your mom and stepdad were doing really well, and suddenly their house got hit by a giant limb, you would be there with a checkbook on day one. That's who you are.

Speaker 2:
[51:10] Yep.

Speaker 4:
[51:12] But you can't keep showing up to the bar of a friend who's struggling with an alcohol addiction and saying, all right, I'm going to buy this round and you got to go.

Speaker 2:
[51:21] Yeah. And into that same analogy, you've been kind. But you've been kind. You said, I'll pay for therapy. I'll pay for rehab. I'll pay for it. And if they say, I don't want to go. They don't want it.

Speaker 9:
[51:32] Yeah, I offered to pay for financial peace. I don't even want to do it because I don't think she'll do it.

Speaker 4:
[51:39] Yeah, and they won't. And they don't. They don't want your help. I mean, they don't want your advice. They want your money. And that means it's not a relationship. It's transactional. And that breaks my heart for you because everyone needs their mom.

Speaker 9:
[51:55] Yeah.

Speaker 4:
[51:55] Yeah.

Speaker 9:
[51:56] Yeah, I feel like the adult.

Speaker 4:
[51:58] Yeah, you 100 percent are the adult. And that means you have to act like the adult. And when our toddlers, I never, it never ceases to amaze me when people are like, man, my 10 year old only wants ice cream. I'm like, yes, they're 10 and ice cream is awesome. Then you need adults in their lives to say, hey, we can't do that all the time. And similarly, you are, you're the adult now. And you have to say, hey, I'm not giving you any more money. And then you're going to have to go home with your husband and be real sad that your mom put you in this position. I hate it for you.

Speaker 2:
[52:30] Yeah, and if you give her more money, she's going to be wasteful with it. And that's just going to add to any resentment or any feelings of, you know, any negative feelings that you already have towards her.

Speaker 11:
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Speaker 2:
[54:23] All right, back to the phone lines we go, where we have Dakota, who's in Memphis, Tennessee. What's going on, Dakota?

Speaker 6:
[54:30] How are y'all doing today?

Speaker 2:
[54:32] Doing pretty good. How can we help?

Speaker 6:
[54:35] I have about 30,000 in debt, roughly.

Speaker 12:
[54:41] It's really just my truck payment. I have all my credit cards paid off.

Speaker 6:
[54:45] I have a couple other vehicles, everything's paid off, but I wanna pay off my truck, and I wanna start saving for a house. I need to know what to do to do that.

Speaker 2:
[54:54] Okay. I love that you're interested in paying off your vehicle. Why do you have multiples? What other vehicles do you have?

Speaker 6:
[55:02] I have a 1993 7.3 Adi diesel truck.

Speaker 12:
[55:06] I have a motorcycle and a couple of four-wheelers.

Speaker 2:
[55:09] Oh, boy.

Speaker 4:
[55:11] You like them wheels, don't you?

Speaker 12:
[55:13] Yes, sir.

Speaker 2:
[55:15] What's your income to have all these?

Speaker 4:
[55:17] You better be making a million bucks, homie.

Speaker 12:
[55:21] No, just terrible with money.

Speaker 2:
[55:25] Well, at least you're honest.

Speaker 4:
[55:26] Hey, dude. Admission is the first step.

Speaker 2:
[55:30] Tell me again, what are you earning?

Speaker 12:
[55:34] I'm making about $3,200 a month after taxes.

Speaker 2:
[55:39] Okay. I'm just going to put you on blast. My screen says that this truck has a 30% interest rate. Is that true?

Speaker 6:
[55:48] Yes, ma'am.

Speaker 2:
[55:49] You left that little part out.

Speaker 4:
[55:50] Did you buy it from the mob? What did you do?

Speaker 12:
[55:55] I'm not really for sure why they gave it to me.

Speaker 6:
[55:57] It's such a high interest rate. I didn't have a co-signer. It was a year ago. So I was right. I just turned 21.

Speaker 2:
[56:03] No, no, no.

Speaker 6:
[56:03] Wait, wait, wait.

Speaker 2:
[56:04] You said, I'm not sure why they gave it to me. I want to know why did you take it? Why did you receive?

Speaker 6:
[56:11] I was going to travel on the road and be a welder out on the road. Well, my dad got cancer, so I came up the road.

Speaker 12:
[56:19] So I come back to making regular people money.

Speaker 2:
[56:21] Got you.

Speaker 4:
[56:22] But you just walked into a truck dealership and they sold you a truck. Was it like a payday lot or is this like a dealership?

Speaker 6:
[56:36] It was an actual dealership out in Mississippi.

Speaker 4:
[56:39] They rolled you up for 30 percent?

Speaker 6:
[56:42] Yes, sir.

Speaker 4:
[56:44] Wow. Okay. Whoever did that is a terrible, terrible person taking advantage of a 21-year-old kid who's trying to take care of his dad with cancer. I won't say what I'm thinking in my head because I'm on the radio right now, but that's a terrible, terrible person who took advantage of you like that.

Speaker 6:
[57:03] Yes, sir.

Speaker 4:
[57:03] Sorry.

Speaker 6:
[57:03] Well, you live in 100, hopefully, you'll do better in town.

Speaker 4:
[57:06] Hey, you know what? That's right. The path forward is, okay, you took advantage of me, you got wind in on me, but I stepped in the ring. I signed that paper, you're right. Now what am I going to do next? So good on you, brother. That's the right way to handle it. Now you got a mess, let's just go walk through it and clean it up.

Speaker 6:
[57:23] Yes, sir.

Speaker 2:
[57:24] So when you pay your, how much is your payment?

Speaker 6:
[57:28] $800 a month.

Speaker 2:
[57:29] Okay. Man. All right. The only way you're going to get out of this is to just quickly blast through this. That's the only way or you can turn around and sell it. But-

Speaker 4:
[57:41] How upside down are you?

Speaker 2:
[57:42] Yeah. I know that you are.

Speaker 6:
[57:44] I'm not upside down at all right now. I mean, I make enough to pay my truck payment, pay my insurance and have a little bit of phone with the money and everything else.

Speaker 4:
[57:53] Upside down meaning, how much is that truck, if you went and sold it today, how much would you get for that minus what you owe on it?

Speaker 6:
[58:02] I'd be upside down by 10,000.

Speaker 4:
[58:04] Okay.

Speaker 2:
[58:05] Okay. So here's the plan. I want you quickly, today, tomorrow, I want you to go to your local credit union and I want you to say, can you please, somehow I got into this crazy loan, I want to sell the vehicle, can you please give me a loan for $10,000? That way, when you go and you sell this car for what it's worth, you can close that gap and be able to get the title. You can be able to pay it off and have a clear title on it. So that's what you need. You need $10,000. Then in the meantime, you've got another truck, you've got four-wheelers, you've got motor, you've got other ways to get yourself around town until you can use your income to save up, I don't know, $6,000. Something tells me you're good at working on vehicles. So get yourself like a $6,000 or $7,000 truck or car and let that be your beater that you drive around town until you can save up and kind of get yourself on track.

Speaker 4:
[58:58] Does your dad, is he feeling better? Is he doing well?

Speaker 6:
[59:01] He's got a cancer appointment this coming Monday.

Speaker 12:
[59:04] He's got another surgery. This will be his fourth one.

Speaker 4:
[59:07] Does he have a car you can use in the meantime?

Speaker 6:
[59:11] He does, but he's disabled and he's always at the house, so I'd hate to leave him at the house with nothing.

Speaker 4:
[59:16] Yeah, but if he's not going anywhere, I'm trying to give you options, and you wouldn't be the only person cruising Memphis on a four-wheeler. I'm in Nashville, so that was my Memphis dig. But yeah, man, you're going to have to just swallow all of your ego and all your pride and all of the things that you think had made you a man at 21, a big truck, four-wheelers, toys, and you're going to have to say the thing that makes me a man at 21 is absolute freedom. Right, right.

Speaker 2:
[59:43] And you know, like we don't, I don't think we're going to have to convince you to do this, because you know 30% is just astronomical. And for your income that you're bringing in, I mean, it's just going to eat your lunch. And you're going to hate driving it. You probably already do hate driving it, because it's just, it's so detrimental to anything you're trying to build right now.

Speaker 12:
[60:03] Right. I go for about 250 bucks a week in diesel.

Speaker 4:
[60:09] Do you use your truck for work?

Speaker 12:
[60:12] Yes, sir.

Speaker 6:
[60:12] It's my daily driver.

Speaker 4:
[60:13] I know. But do you, does it have like a welding rig on the back? Or is this, could you do the same job with a Prius?

Speaker 6:
[60:20] I could do the same job with a Prius.

Speaker 4:
[60:22] All right, brother, it's Prius tax time. You got to drive a Prius for a year. That's your, that's your tax on what, on your, that's your stupid tax. I'm just playing. You don't got to do that.

Speaker 2:
[60:30] But you do need to get that loan. Will you do it?

Speaker 6:
[60:34] I can try. My credit is $650 or $660 right now.

Speaker 2:
[60:39] Listen, dude, here's the thing. I don't care how you need to get this loan. You're not, nothing's going to be worse than 30%.

Speaker 4:
[60:46] No.

Speaker 2:
[60:46] Right?

Speaker 4:
[60:47] And you're not, you're not close to a house right now, man. So set that dream aside for a second.

Speaker 2:
[60:50] Yeah. You could put the, you could put the 10,000 anywhere else and it's going to be better than what you're paying right now on this car loan.

Speaker 4:
[60:57] Or could you sell both those four wheelers and come up with 10 grand on the sale of those?

Speaker 2:
[61:00] Oh yeah, that's a great idea. That's an even better idea, John.

Speaker 6:
[61:04] Not a chance I could probably sell my motorcycle for seven. Yes, today.

Speaker 4:
[61:08] Today, today. Put it on the market.

Speaker 6:
[61:11] Okay.

Speaker 4:
[61:11] And here's the thing. If you think about buying a house right now, that's like you are out in the ocean and the ship had a hole in it and you're treading water and you're trying to get online on your phone and buy curtains for a beach house. Like your thing you should be worrying about now is swimming to shore.

Speaker 2:
[61:28] What about your other diesel truck? What's that worth?

Speaker 6:
[61:33] About $4,000. It's an old truck. It's got a lot of high miles.

Speaker 4:
[61:36] That's your new daily driver, dude.

Speaker 2:
[61:38] Yeah, that's your new daily driver. So yeah, this is even better. We sell the motorcycle. I would still put the four-wheelers up because who knows? Maybe you can close that gap and get the $3,000. I don't know what a four-wheeler is worth, but you need $3,000 to go with the $7,000. Then you sell the $30,000 truck and you've got your diesel truck, your older one sitting there ready for you to drive. This is what's called a clean slate. That gives you a completely fresh start. It's not what you were envisioning, but man.

Speaker 4:
[62:08] What's your trade, brother?

Speaker 6:
[62:11] I'm a welder slash heavy machine operator.

Speaker 4:
[62:15] Can I tell you right now in our current world, a 21-year-old who is a licensed welder and heavy machine operator that has no debt, you know what you can do? Anything. Anything you want. You're one of the freest men on the planet.

Speaker 12:
[62:32] That sounds real nice.

Speaker 4:
[62:33] But right now, you got a dad who's struggling with cancer, and you have a four-wheeler dealership saying, I don't care what's going on, you owe us money, you go to work. You have a diesel truck, evil people who just sold you a diesel truck over your head, and they're like, I don't care if your old man is getting sick, is about to pass away, you have to go to work because you owe us money. And we're cutting all those chains today.

Speaker 12:
[62:56] Right, that sounds like a plan to me.

Speaker 4:
[62:59] Dude, welcome to your freedom, good man.

Speaker 2:
[63:02] Yeah, I'm proud of you. Listen, John, here's the thing, whenever we get calls like this, and the solution is so sweeping, and it's just so extreme, it's like, sell the car, sell the motorcycle, drive the old truck, get rid of the four-wheelers. I'm always so proud of the people. Now, don't get me wrong, when we say that, I know they're gonna get off the phone, and they're going to sit in their car, or they're gonna sit in their break room and be like, okay. Like, the true test happens now, where he has the next 30 minutes to an hour to really think about what we said, and am I actually gonna do it?

Speaker 4:
[63:41] Don't think, just go. Just go, just go, just go.

Speaker 2:
[63:44] Just do it, just do it. The people who, and we're not saying just listen to us and don't think, but you know what we're saying is right. You know it's the right move. Don't talk yourself out of it. Strike while the iron is hot. Change your life today. Just go ahead and do it. You won't regret it.

Speaker 7:
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Speaker 5:
[65:10] Based on average annual payment of AT&T, Verizon and T-Mobile customers compared to 12 months on the Boost Mobile Unlimited Plan as of January 2026. See website for full details.

Speaker 2:
[65:31] All righty, let's go back to the phone lines where we have Leanne, who's in Oklahoma City, Oklahoma. What's going on, Leanne? How can we help today?

Speaker 10:
[65:40] Well, I need to find out if profit potential is worth the liability and worry. My husband's father had a recent illness, quickly put him in a nursing home. The siblings, there's four of them, decided they wanted to do a Lady Bird deed to protect the only asset which is his house from creditors. He has $30,000 in credit card debt, no savings. There's $140,000 loan on this house, and it's probably worth $350,000. The siblings are going to have to split the cost to keep this house running. If it's sold, the creditors or Medicare can take it. That's who's going to be paying for his nursing home. And so that's telling that we've been told that that will be $400 a piece per month to take care of this house. It's 15 hours away. The profit might be $20,000 to $30,000 when he passes away. One of the siblings has had over $30,000 in gambling debt. There's also two children from a deceased sibling, so it will be divided six ways.

Speaker 2:
[67:22] After it's divided six ways, that's the $20,000 profit?

Speaker 10:
[67:27] Right.

Speaker 2:
[67:27] Okay.

Speaker 10:
[67:28] Who knows how long we're going to have to pay this $400 a month. I'm the only one that works. My husband had an injury. He'll be getting retirement soon, but he can't work, so it's me paying the $400. If something does happen to my husband before his father passes away, his proceeds will go to his children.

Speaker 2:
[67:52] It won't go to you?

Speaker 10:
[67:53] I will be, no, it'll go to the children. I guess that's the way that works.

Speaker 2:
[68:01] Are you expecting your husband not to make it?

Speaker 10:
[68:05] In the next two to three years? Well, he has some significant health problems, so there is a risk for that.

Speaker 2:
[68:14] When I look at the nursing home situation, most people, it's a two and a half to three year stay. That's the maximum that you can usually count on. That's just average time. So if I were going to do the math on this, I would calculate it at, okay, if I pay 400 bucks a month for two to three years, that puts me in this X amount of dollars, what, $12,000, and then I stand to make at that point, I don't know, $10,000, $8,000 off this entire deal and off this entire headache if I get the $20,000. So that's where my brain immediately goes.

Speaker 4:
[68:54] Let me dig it. Do you have $400 a month?

Speaker 10:
[68:59] Yes. But there's a lot of resentment on my part because he didn't take care of his finances.

Speaker 4:
[69:06] Sure. I get that.

Speaker 2:
[69:12] I don't think-

Speaker 10:
[69:13] I just don't want to be on the deed.

Speaker 4:
[69:16] You don't have to. I would not do this as an investment. I would do this as a way for me, like, in service to my husband who feels like he needs to take care of his dad at the tune of $400 a month for the next 18 to 24 months. If you get some money back, yippee-doo-dah-day, I wouldn't count on it. I would look at it that way.

Speaker 10:
[69:38] The only thing is, his dad's going to be taken care of. The siblings are using this as a savings, a way of savings to keep the house.

Speaker 4:
[69:49] I know.

Speaker 10:
[69:50] Hold on.

Speaker 2:
[69:50] They can do that. They can do that.

Speaker 4:
[69:51] Get out of their heads and out of their minds. Resentment is baggage you're carrying, right? You've heard the old AA saying, you're drinking poison hoping that they will get sick. I'm going to choose to send $400 to my father-in-law. Me and my husband are together, and we're going to send $400 to take care of him. His siblings have had their struggles. They've always had struggles. They're always going to have struggles. I'm not getting in their mess. I'm not doing business deals with them, yada, yada, yada. That's all wise and good. I'm not looking at this as a... And by the way, he technically is getting taken care of, but he's getting taken care of with your tax dollar. You're paying for this in any way, right?

Speaker 10:
[70:33] Correct. That's another thing that's...

Speaker 2:
[70:36] If you don't want to be part of this, you don't have to be part of it. And you asked a very clear question, like is there basically a return on investment for me if I do this? Yeah, maybe you come out with $8,000, but I don't think that's worth it for you. You don't know that you're going to get this money. You don't even want to be a part of this.

Speaker 4:
[70:54] Can your husband just say, we want out of this deal, you all split it and do your thing with it?

Speaker 10:
[71:00] Yes, but like, is there a liability with this house? Can someone come back on us? On you?

Speaker 2:
[71:07] You're not on the deed.

Speaker 4:
[71:08] You're not on the deed.

Speaker 10:
[71:10] Right, if they're not on the deed. But the husband would be put on the deed.

Speaker 4:
[71:14] No, no, no, he can go in and say, I don't want anything to do with this deal. I'm forgoing my piece of this, my potential piece of this. Best of luck to you all.

Speaker 10:
[71:23] Mm-hmm, yes.

Speaker 4:
[71:24] That's exactly what I would do.

Speaker 2:
[71:25] Because to your point, he's not, and I don't know what you guys have going on with your personal finances, but he's not the one paying for it. You would be the one paying for it. And you're saying, I don't want to do it.

Speaker 10:
[71:33] We only owe for our house and our vehicle.

Speaker 2:
[71:37] Yeah, please, yeah. If you can convince him, I don't know if he's like dead set on this, but if you can convince him, I don't want to be a part of this, I think that's the answer.

Speaker 4:
[71:46] And y'all will come out looking like the good guys. Tell his siblings, hey, you know what, we're doing well. We want y'all to split it amongst yourselves.

Speaker 2:
[71:54] Yeah, there you go. That's even better. That's even better.

Speaker 4:
[71:57] And this ends up, by the way, this ends up in multiple lawsuits because somebody's cousin of one of these stepkids is going to be like, well, I want a piece and they're going to have a friend who knows a guy who will write a legal brief, I mean, not a brief, but a legal letter. Just, yeah, stay away. Stay away from the whole thing.

Speaker 2:
[72:13] Absolutely, absolutely. Well, John, another social question I have here in my hand. Let's see here.

Speaker 4:
[72:21] You love them social media.

Speaker 2:
[72:23] I do. I like them because people sometimes they don't want to call in. They just want to talk to us here. All right. Joni from TikTok says, is hiring a credit repair company a smart move?

Speaker 4:
[72:33] No.

Speaker 2:
[72:34] I don't have a lot of current debt. I just have some really old things on my credit that I want to get rid of.

Speaker 4:
[72:41] There's that old Seinfeld exchange when Kramer comes in. He's like, they write it off. And Seinfeld's like, they write it off of what? He's like, I don't know. They just write it like it doesn't just go away. Just pay it.

Speaker 2:
[72:54] Yeah, I would say pay it. And you can probably, if it's really, really old, you can probably settle it. Settle it.

Speaker 4:
[72:58] Call it yourself.

Speaker 2:
[72:58] Because that's what they're going to do.

Speaker 4:
[73:00] Yeah.

Speaker 2:
[73:00] By the way, let's talk about that a minute, because we get a lot of credit, credit repair, debt settlement companies, like that whole thing. And just a reminder, they do what you can do. They just make deals. They hold the money for a long time so that you are in default, basically. It wrecks your credit. And then they go in and make deals, which is exactly what you can do. And you're already in the position to do that because the thing's been sitting around for however long, old on your credit, just call them up. And however much you owe, let's say you owe $1,000 on something, save up 400 bucks cash and say, this is what I'll give you. They weren't expecting to get your money anyway at this point.

Speaker 4:
[73:38] A credit repair agency is like this. Let's say you were driving down the highway and you had a flat tire and you pulled over. You can call a tow truck and negotiate with a tow truck. Or you can call a credit repair company. They'll get back in your car and they'll drive it down the highway into a brick wall. And then they will call the tow truck company for you. That's what they'll do.

Speaker 2:
[74:01] Like, just wreck it for me.

Speaker 4:
[74:02] They'll take your credit and they'll hold your money. They'll destroy your financial picture. And then they'll get the same deal you were going to get anyway. Just get $400 in cash, call them.

Speaker 2:
[74:14] Yeah, that's right. You can do this. I believe in you. Again, John, there is such a theme on this show about being in control. This is like the fourth one that we talked about of, just take control of your destiny. You don't need anybody to do it for you.

Speaker 4:
[74:27] No, and if you call your creditor, an old creditor, and they say, hey, this thousand dollar debt is now worth $8,000 in fees and whatever, say, I got $400 in cash, I'll pay it right now. And they'll say, well, I'm not authorized. Hang up. Just hang up the phone.

Speaker 2:
[74:40] Hang up and call somebody else back.

Speaker 4:
[74:41] Call the number right back.

Speaker 2:
[74:42] Be as annoying to them as they are to you.

Speaker 4:
[74:44] Yeah.

Speaker 2:
[74:45] And pretty soon they'll settle it. And when they do, just get it in writing, laminate that bad boy and keep it for life in the folder marked, you know, open in case of emergency. And it's there for you. You know, we wish we could get to every single call here on The Ramsey Show, every single question, but it's just not possible. So if you do have a money question and you want an answer for your situation, head over to our website and use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. You'll get an answer the same way we'd answer it right here on the show. Ask your question today at ramsysolutions.com or just click the link in the description if you're listening on podcast or YouTube. All right, Erin in Minneapolis, Minnesota is on line three. What's up, Erin? How can we help?

Speaker 12:
[76:09] Hey, how you guys doing today?

Speaker 2:
[76:11] Chilling. How can we help?

Speaker 12:
[76:13] So I just recently turned 19. I am working full-time. I have been dating this girl for almost two years now, and we are about to fully move in together. She's full-time going to college, she's at a university and what not, and I live very close to her campus. And so usually most of pretty much throughout the entire time of her being a freshman, she's pretty much just stayed on my place all the time. Even though she's technically lived at the dorm, but now she's for sure like coming up soon on the next lease. She's fully going to be moving in with me and my roommates. And we just have some financial disagreements.

Speaker 2:
[76:56] With you and your roommates?

Speaker 12:
[76:57] That I don't really know how to resolve.

Speaker 2:
[76:58] How many roommates do you already have, dude?

Speaker 12:
[77:02] So I currently have three roommates.

Speaker 2:
[77:04] Oh my gosh. She loves you. She's about to live with four. Wow. This is different.

Speaker 12:
[77:11] Yeah. I got really lucky. My rent is very cheap, obviously, having to do with the fact that I do have roommates.

Speaker 2:
[77:17] How many bedrooms is this place?

Speaker 12:
[77:20] Four bedrooms.

Speaker 2:
[77:22] Wow.

Speaker 4:
[77:22] Hey, if you actually see a future with you and this girl, don't do this.

Speaker 2:
[77:26] Please don't do this. She's going to see too much. She can't unsee the things that she's going to see and experience.

Speaker 12:
[77:33] Yeah. So just a little bit. Go ahead.

Speaker 4:
[77:36] Just listen, dude. I was 19 too. I was head over heels in love when I was 19 too. Please don't do this.

Speaker 2:
[77:42] What's her name?

Speaker 12:
[77:45] Her name is Madeleine.

Speaker 2:
[77:47] Okay. I know you just made that up.

Speaker 4:
[77:50] I'm proud of you for protecting her.

Speaker 2:
[77:51] Madeleine, wherever you are, please don't do this on behalf of women everywhere. I'm scared for you. I'm making jokes, but seriously, I'm with John. Please don't do this. There's no way that this is good. There's no good parts to this in many, many ways.

Speaker 12:
[78:12] Yeah. So here's where I stand on it. So the main reason for this, and then again, I've gotten really lucky. One of my friends is Super Chief, and we have gotten along, not just me, but me and her, because like I said, she's been over in my house constantly.

Speaker 2:
[78:25] She's your girlfriend. Of course, you get along.

Speaker 12:
[78:27] Oh, yeah. Of course, of course. But yeah, and so we get along very well with my roommates. We always hang out together.

Speaker 2:
[78:33] That's different from living together.

Speaker 4:
[78:34] It's so different.

Speaker 12:
[78:36] Very true. Very true. But again, it's kind of been like she's been living with us.

Speaker 2:
[78:41] Hey, you tell me why it has to be this way. Give me three good reasons why it has to be this way.

Speaker 4:
[78:48] Give me one.

Speaker 12:
[78:50] So I am currently, like I said, I work a full-time job. I'm not in school or anything like that. She has a part-time job, but she does not save her money. She, like I said, we're kind of on two ends of the spectrum when it comes to money and finance.

Speaker 2:
[79:05] So you'd be rescuing her?

Speaker 4:
[79:08] Pretty much. And she would be using you? Go ahead.

Speaker 12:
[79:16] Yeah, and it's just, obviously, like you mentioned, you know, young and in love. I'm 19, you know, I want a future with her, and I'm trying to overcome some of these things. I'm trying to work things out the best way possible. You know, we're from about an hour and a half away from where we currently live. We're both in the same hometown, and she got the opportunity to go to school up at this place. And I didn't want, if I didn't move out, I was just going to be living with my parents and I didn't want that. I want to get out and kind of figure things out on my own.

Speaker 2:
[79:50] So you moved there because she was there?

Speaker 12:
[79:53] Pretty much.

Speaker 4:
[79:53] Okay, that's all good.

Speaker 2:
[79:55] Listen, I'm going to repeat back to you what you said, and I want you to really think about each one of these, because my job here is to make you think, I'm not going to be able to convince you by giving you my opinion. I just want you to think about the things that you said. First off, you told me, when I said, hey, give me three good reasons why this is a great idea. You told me, and I'm going to say them in reverse order. You said, well, she was moving there, so I just moved there too. She had a plan for her life. I didn't really have much of a plan, so I just went where she was. That was the last thing you told me. Then you said, well, it's kind of convenient because her lease is up, and so since her lease is up, that's kind of like a convenient thing, so I'll just roll with that. Then the next thing you told me was, well, she doesn't really work much, so whatever she's doing now, she's probably not going to be over to afford it, so I can afford it, so I'll just do that too. And I'll just rescue her and she can use me. So when you give me those types of reasons, John, all of those are just kind of like, A, I'm just letting life, I'm just rolling. I'm just letting anything happen that I want to happen, right?

Speaker 4:
[81:08] Yeah. And here's the thing, dude, we want y'all to be successful long term. I want this to work out for you. I like the idea of moving to go be with the person you want to be with. I love that. And you're working your full time job. But A, you're bringing her, a 19 year old, young woman into a house with three dudes not who aren't going to school, who live very different lives. You are not aligned on how you'll spend money, how you'll earn money. You're not aligned on core values. And you're not aligned on who's going to pay for what, how are we going to pay. I'm just telling you because I want this to work for you all, dude. I'm such a romantic at heart.

Speaker 2:
[81:51] And I know, listen, and try to think, this is a horrible thing for me to say because at 19, your brain is just not there. But if at all, you can muster up the thought of, if your daughter said, I'm going to go live in a house with four dudes who are 19.

Speaker 4:
[82:08] One of which is my lover.

Speaker 2:
[82:10] You would do the Fred Sanford and have a heart attack and fall out. That's what would happen. Now, we dropped your call on accident. I think the call dropped. You're not here to respond to this, but just know we love you, dude. We're rooting for you. We're on your side. And don't do this.

Speaker 4:
[82:26] Please don't do this.

Speaker 2:
[82:27] He's not going to do it. Let's go to April. She's in Cleveland, Ohio. April, how can we help today?

Speaker 6:
[82:34] Hi. Well, my son is 22 years old. He just received a settlement in February. So we are discussing things that he should do, and he already has done some stuff, but we're not sure what to do with the rest that he has from that we already put in investment and he opened a growth savings, he did investment, and then he did pay off some things that he had to pay off and he got a car. But we don't know what to do with the rest.

Speaker 4:
[83:03] How old is your son?

Speaker 6:
[83:05] 22.

Speaker 4:
[83:05] Okay. And how much money are we talking from the settlement?

Speaker 6:
[83:09] He got $250,000.

Speaker 4:
[83:11] What happened?

Speaker 6:
[83:13] He received a Tdap shot when he was 10, and he got a blood disorder and he had to get his spoon removed.

Speaker 3:
[83:23] He's good now, but it came back that it was from the shot.

Speaker 2:
[83:28] I'm so sorry you got that.

Speaker 4:
[83:30] Okay, will you do me the... You're asking a money question, and we'll get to that right here real quick, but I want you to do me a huge favor.

Speaker 6:
[83:37] Yes.

Speaker 4:
[83:39] You've been taking care of this boy since he was young, because you're a good mom, especially through medical stuff. I want you to put your son in the driver's seat of this situation. He's a 22-year-old young man. And so I want you to... In your home, I want you to tell your son, hey, you know what? I've been saying, what are we going to do with this money? This is your money. And I will sit by you. I'll help you make wise choices. But you're 22 years old. And a 22-year-old man needs his mommy to sit in the back seat or in the driver's seat, I mean, in the passenger seat at best, preferably not in the car at all.

Speaker 6:
[84:17] Okay?

Speaker 4:
[84:18] And I know this is hard, but that's my two cents there.

Speaker 2:
[84:21] Jade, what do you think with the money? I get the sense that he's responsible.

Speaker 6:
[84:25] He is. He is responsible. He wants to make, he wants to grow.

Speaker 2:
[84:29] Yeah, I believe that. And if I were in your shoes, it sounds like he's paid off his debt. He doesn't have any more debt. It sounds like he has a reasonable emergency fund set aside, yes?

Speaker 6:
[84:40] Yeah. So he's a barber.

Speaker 3:
[84:43] My husband and dad had been a barber for 28 years.

Speaker 4:
[84:46] Amazing.

Speaker 6:
[84:47] So now he's a barber and they're at the same shop.

Speaker 2:
[84:50] So he's making a reasonable income. As long as he's making a reasonable income, he's set aside some savings. I would take this money and honestly, the next big goal for me, and if I were him, I'd be like, I want to buy a house. And I want to buy, I want to put as much down on that house as possible. Maybe I can even buy it completely in cash. And if that is a shorter than five-year horizon, which I think it will be, I'd park it in an HYSA until that day comes. Welcome back to The Ramsey Show here in the Fair Winds Credit Union Studio. We're going back to the phone lines where we have Susan, who's in Huntsville, Alabama. All right, Susan, you're on the line. How can we help?

Speaker 9:
[85:44] Hi, how are y'all?

Speaker 2:
[85:45] Doing great, what's up?

Speaker 9:
[85:47] Good, I'm excited. Y'all are my favorite hosts, so.

Speaker 4:
[85:50] Yes, we're gonna clip that and send it to our colleagues.

Speaker 3:
[85:54] Don't tell Dave.

Speaker 9:
[85:58] We're just needing some help navigating our debt. We have about $37,000 in debt, and that's including like car debt and credit cards. And we started in January listening to y'all and trying to attack those debts, and we're down $5,000 in the credit cards already that we've paid.

Speaker 2:
[86:17] Great.

Speaker 9:
[86:18] But every time, it just seems like every time we have that $1,000, like life is happening, and somebody, we've both needed new tires, and like our fridge went out last weekend, and we didn't have the $1,000 saved back up. So it felt like a stand, but I had to go put it on a Lowe's credit card. So now it just feels like we're adding to, it feels like we're just taking two steps backwards. So anyways, I just feel sick knowing we're further into debt now than we were. And yeah, it just makes me nervous, not feeling prepared when things come up. So I just wondered if y'all could help me navigate that.

Speaker 2:
[87:02] Yeah. So here's what I want to say. You know, part of, and we can do a better job of saying this, but when you decide, hey, you know what, I'm going to work the baby steps. I'm going to do this thing. I'm going to pay off the debt. I'm going to, I'm going to, I'm going hard into this. Almost the number one thing that you need to do next to budgeting, the number one thing you have to do is you have to look yourself in the mirror and say, I draw a line in the sand, I don't borrow money anymore. I just, I do not borrow money anymore. Unless I'm like John Q and my son is in the, you know, remember that movie with Denzel Washington? Oh, yeah, yeah, yeah. But you see what I'm saying? I draw a line in the sand and I just don't borrow money. And the way the baby steps are, especially baby step one, it's very unique because it's $1,000 saved. And I get it in today's world, people are going, you're off your rocker, Jade and John, if you think that $1,000 is going to get it. But the way I explain it, Susan, is $1,000 is exactly the amount that it takes to turn on the creative part of your brain. To go, okay, if something happens, I actually don't have the money to do this, what else can I do? And so when you take debt off the table, suddenly go, well, I don't have to go to Lowe's and buy a brand new fridge. I could go, I don't even know if Craig's List exists anymore, I could go on Facebook Marketplace and I could buy a slightly used one for the meantime that is maybe $800, but I can scrape together that cash. Or $300 and scrape together that cash. Do you see what I'm saying? That is the gritty challenge of the baby steps. It causes you to just turn on that brain and go, okay, what can I do? What can I do? Where can I go? And that's what I want to challenge you from here going forward. I'm not telling you that to beat you up. I'm letting you know that's the way it feels and that's the way it's going to feel. Everything is going to feel inconvenient. Most things are going to feel like a challenge and that's good. Like that's how you know it's working. So from here on out, that's got to be the line, that's got to be the feeling. Otherwise, to your point, it will be two steps forward, one step back or one step forward, two steps back if you don't make that call. So going forward, we got to do that. So the $37,000 that you quoted me, is that including the new fridge?

Speaker 9:
[89:19] Yes.

Speaker 2:
[89:20] Okay, great. So now we've got a car. How much of the $37,000 is the car?

Speaker 9:
[89:25] So we have two car payments. One of them is $339 a month. We have about $7,000 left on it. Then we have a minivan for $630 a month with about $27,000 left.

Speaker 2:
[89:41] Okay.

Speaker 9:
[89:42] Last time I checked, we're about $9,000 underwater on it.

Speaker 2:
[89:45] Oh boy. Okay. Then the credit cards are how much the rest of it?

Speaker 9:
[89:51] So the Nilo's card is $2,000. Okay. Then we have about $1,000 on another credit card left.

Speaker 2:
[90:00] Okay. So the number one place I'm looking is at this $27,000 car. Because it's $630 a month. You desperately need that money. Yeah.

Speaker 3:
[90:12] It's hurting you bad.

Speaker 2:
[90:13] It's hurting you bad. And because what's your income every month?

Speaker 9:
[90:18] So my husband does work a lot of overtime or he does work overtime here and there throughout the month. So it does vary. But we're bringing in about $4,500 to $5,500 a month.

Speaker 2:
[90:33] Yeah. I mean, to have that $630 back, that would be like breathing again. So what my goal would be, and it's up to you how you guys do this, but I would be trying to get out of that $27,000 car. And you could, you're going to have to play this just right. Otherwise, it's not going to be worth it. But you could say, okay, I'm 9,000 underwater. Can I get a loan for the difference? And can I find something that's, I don't know, while I'm at it, can I ask for another maybe 4,000? So I'm 13 in and I just kind of buy a junker or I ask for 5,000 more. And now I'm 14,000 in and I get a junker. And now instead of owing $27,000 to a bank, I owe 14 or 15,000 to a bank. I would do that.

Speaker 9:
[91:23] Okay.

Speaker 4:
[91:23] And you start driving husband's car and he drives the junker.

Speaker 2:
[91:25] Yeah, he drives the junker.

Speaker 9:
[91:28] I don't know, his is like in the rough.

Speaker 2:
[91:30] Then you're both driving junkers for a while.

Speaker 4:
[91:34] Listen to what Jade is saying. I want you to paint the picture of your life right now. You have two cars that you can't afford with brand new tires on them.

Speaker 9:
[91:42] Yeah.

Speaker 4:
[91:43] You went and bought a $2,000, which is a pretty nice fridge. The other side of this thing, if you have like Stranger Things, if you go to the upside down version of this, you have one car with all the same tires on it, you just know, man, we are six months away. You have one tire that you got replaced, and it doesn't match the other three. You have a $500 fridge that you got off Facebook Marketplace, and you shook hands, and that guy said it worked. You sell this minivan, and you're driving two clunkers. A, you don't owe anybody anything. B, you look around and say, hey, husband, you and I, we want a different life than this. Let's start being intentional and saving money so we can get another car here, a nicer fridge there. And you start taking control of your life back. Like part of the thousand bucks, part of having one new tire on a car instead of all four new tires, is you don't want to stay like that forever.

Speaker 2:
[92:42] It's a reminder.

Speaker 4:
[92:43] It's more gasoline in the tank to keep going down this route of freedom, not this route of let's just solve for today and let all these other people speak in to our life, all these other banks, all these other lending agencies. You get what I'm saying? Right, yeah. It's not cool for the first year. It's just not. It's miserable.

Speaker 2:
[93:02] And for you guys, the good news is you're not going to stay there for long.

Speaker 4:
[93:05] No.

Speaker 2:
[93:05] You're not there long at all because once you do this car deal and instead of paying $630 a month, maybe you're paying $230 a month or $330 a month, you get half that money back and now you're able to use that money along with your other margin and you can knock out a $1,000 credit card in one month and then the next month, maybe you're able to knock out the $2,000. You're going to be done with this. I'm saying, I think you can knock this out in a year, but this is with you guys working so hard, him taking all the overtime he can get, you picking up extra work, you guys selling everything you can think of. Go through the garage, go through the attic, go through the basement, look at the kids' old clothes. Can I take this? Can I put it on Poshmark? Can I put it on one of those consignments? Everything you can do, anything you can do to sell something and get this money. This is a 12-month play for you guys if you go hard in the paint.

Speaker 1:
[94:21] Dave Ramsey here, most people stay stuck with their money because they're not paying attention to it. Most people are living paycheck to paycheck, stressed out and broke. Don't be most people. You work way too hard to be broke and feel broke, and you deserve to have something to show for it. That's why we built the Every Dollar Budget app. It gives you a personalized plan for your money that shows you how to free up extra money every month and use it to beat debt and build lasting wealth. Plus, you get real coaches guiding you through your plan step by step. Look, most people hearing this will just keep hoping something changes, but not you. You're ready to make change happen starting now. Go download Every Dollar in the App Store or Google Play and start for free today.

Speaker 2:
[95:24] All right, The Ramsey Show Question of the Day is brought to you by YREFY. Defaulted private student loans can leave you feeling stuck and overwhelmed, but YREFY helps you explore refinancing options with a low fixed rate and a payment based on what you can actually afford. Visit yrefy.com/ramsey. That's the letter Y, refy.com/ramsey. Remember, it may not be available in all states.

Speaker 4:
[95:50] Today's question comes from Greg in Arkansas. How do we determine the best car insurance coverage for our two teenagers? We provided each of them with a used car to get them through high school and college. We own the cars and they each have a value of under $5,000. We're currently paying for full coverage on them, but I'm not sure if that makes sense. What's your recommendations on how to cover them adequately and not spend an arm and a leg for insurance? Well, having two teenagers, I just added a teenager to my car insurance. I'm just adding two, that's tough.

Speaker 2:
[96:25] It made you feel some type of way, John?

Speaker 4:
[96:26] Yeah, my rule of thumb here is my son's driving a used truck and it has liability insurance on it. And so I've got enough cash in my emergency fund that if he wrecks that car, I can replace a similar cheap car. A couple thousand bucks. Yeah, you got two $5,000 cars. I would personally, in my house, I put liability coverage on them. I wouldn't carry comprehensive coverage. And the difference is liability pays for the car that your teenager might hit, but not for your car that just got wrecked. Comprehensive pays for both. And so, yeah, that's what I would do in this situation. If you have a car with payments on it, usually they force you to have comprehensive because they want to make sure they get their money back on their car if you wreck it. I have comprehensive on me and my wife's cars. They're nicer cars. And so, if something happened to them, I'm going to be able to go get them repaired. But for a couple of cheapo beater cars, like you're going to give your high school kid, like, yeah, I'd put liability on it and roll with it.

Speaker 2:
[97:28] Yeah, and I go through Xander to...

Speaker 4:
[97:30] Yeah, Xander does all my... They do all of our insurance, our term life insurance, our car insurance, everything.

Speaker 2:
[97:36] Yeah, they'll find you the best rates. Very, very good. Let's go to Casey in Dallas, Texas. Hi, Casey, how can we help?

Speaker 8:
[97:44] Hey, so... Well, hi, first off. Hi.

Speaker 4:
[97:47] Hi, Casey.

Speaker 8:
[97:49] So me, wife, two toddlers moved in with her grandmother to pay off debt exponentially fast and start saving. And now we have an expecting third in the middle of July and looking for some advice on a reliable family car. We just paid off all of our credit card debt. Still some student loans left.

Speaker 2:
[98:12] How much student loans left? How much debt total left?

Speaker 8:
[98:16] 12.2.

Speaker 2:
[98:17] Thousand?

Speaker 8:
[98:19] Yep.

Speaker 2:
[98:20] Okay.

Speaker 4:
[98:21] $12,200?

Speaker 8:
[98:23] School. Yes, my wife's school is on.

Speaker 4:
[98:25] Okay, cool.

Speaker 2:
[98:25] Okay.

Speaker 4:
[98:26] And how's the arrangement with grandma going?

Speaker 8:
[98:29] Great. I mean, we had to swallow the humble pill, lose some personal space, had to get a storage unit to throw some stuff in, but it's honestly been a huge blessing.

Speaker 2:
[98:39] How long are you going to do it?

Speaker 8:
[98:41] Well, that's the question of the day for me, but for now, it's to finish paying off the school loans, hopefully save up enough for a family car, then start saving for a house.

Speaker 2:
[98:52] Oh, that's a long timeline.

Speaker 4:
[98:53] That could be a minute. How much money do y'all bring in?

Speaker 8:
[98:56] So I bring in about, so I have a day job and I do freelance photo and video work, and I bring in about $4,500 a month.

Speaker 2:
[99:05] And is mom home with kids or is she out working in the workforce?

Speaker 8:
[99:08] Mom's home with kids. She caretakes us on the side and she brings in about an extra $400 a month.

Speaker 2:
[99:16] Okay. So if your initial question is how long should we continue to do this? I think that I would aim to, because how much have you paid off so far? You've got 12,000 to go. How much have you done before, up until this point? How long did it take?

Speaker 8:
[99:34] So we moved in December 1st as of two or three weeks ago, we paid off 13,000 credit card debt.

Speaker 2:
[99:41] Okay. I'm going to tell you what I would do. I admire when people are willing to sacrifice to win. I think this is an imposition on you as a family and as a married couple. It's just really tough to stay in a position like this for long. And so I would really try to cut it short. When do you think you'll have the 12,000 paid off?

Speaker 8:
[100:12] Crunching numbers, I can do that in about four months.

Speaker 2:
[100:15] Okay.

Speaker 8:
[100:15] I guess more freelance work to come in. For sure, I can expedite that.

Speaker 2:
[100:19] I would not extend this to buying a new car, saving for a down payment. I would not extend this that far because what this means is, we've gotten a couple of these calls today, so this is nothing on you. Everything is a series of choices. For you guys, your careers are a series of choices, starting a family and the amount of children is a series of choices. How that affects your financial timeline is a result of that choice, and thereby you're choosing that as well. What I would hate is for you to pass that off onto grandma because it's part of you guys' choices. Do you see what I'm saying? Even though she's probably like, oh, I'm so glad to have them. I get to be by my grandkids. If you flip the script for a moment and you go, well, if I had a buddy or if I had a family member who was like, hey, let me move in with you for a little while. I want to pay off my debt. I want to save up for a car. I want to get a downfall. You'd be like, hold on, wait a second. There's a thin line between, do you see what I'm saying?

Speaker 8:
[101:21] Yeah, absolutely. I'd be more willing to push the loan, pay the monthly maybe a little bit, get the family car out of the way, and then save for the house, or at least for a good size down payment.

Speaker 4:
[101:33] You've mentioned the family car by having a third kid here in a few months. Is that going to exceed the cars you all have?

Speaker 8:
[101:42] Yeah. That's the problem is we only have a two little four seater sedans. So we got to get a bigger vehicle, which we want to sell one of them anyway, so it works out.

Speaker 4:
[101:51] I would say, yeah, I would save up the cash, and the discipline you and your wife are going to have to put on the table here is 100% you're going to want to go get a brand new Tahoe or a brand new Suburban or a brand new minivan. You just can't afford that. And so we're going to have to find a minivan with 150,000 miles on it, that's a good car, a good Toyota Sienna or something, and it's going to have other kids' stains on the carpet or whatever, but that's what we can afford, and we're going to pay cash for it, and then we're not going to get ourselves further behind.

Speaker 8:
[102:21] Yeah.

Speaker 4:
[102:23] And by the way, that's all good. It'll be good. Like, you know what I mean? It's a choice y'all are making, so this isn't a thing that's happening to y'all. It's like, no, we picked up minivan because we choose freedom as a family over shiny things that go down in value, right?

Speaker 2:
[102:37] And can I ask a question, Casey? I just want to make sure I'm understanding. You're living, when you say grandma, is it your kid's grandma, so like her mother, or is it your mother's grandmother?

Speaker 8:
[102:47] It's my wife's grandma, so it'd be my kid's great-grandma.

Speaker 2:
[102:51] Oh, wow.

Speaker 4:
[102:52] So are you all doing caretaking too?

Speaker 2:
[102:53] Yeah. Is that the arrangement?

Speaker 8:
[102:55] Yeah. It's kind of the win-win where she became a widow in 2020. The house, she can't keep up with. There's an upstairs, she can't even walk up the stairs. She's been lonely, depressed.

Speaker 4:
[103:05] So it's not a bad deal.

Speaker 2:
[103:06] It's not bad. Yeah. Okay. That does make it a little different. How old is she?

Speaker 8:
[103:12] She'll be 80 this year.

Speaker 2:
[103:14] Are you expecting to inherit this house?

Speaker 8:
[103:17] No, we do not want it. No, absolutely not. There's a whole, no, no.

Speaker 2:
[103:21] I was just trying to see if there's any other parts to this.

Speaker 4:
[103:23] Jade, I could see a world where, with the caretaker, you could do this for three or four years. If it works out for your family, you'll get the whole upstairs. You kind of have your own separate life, but you all get to...

Speaker 2:
[103:32] That feels different. I won't lie.

Speaker 8:
[103:34] Yeah, and she's brightened up once she gets to live with her great grandkids. They greet her every morning.

Speaker 12:
[103:39] So she's definitely livened up more.

Speaker 4:
[103:40] Yeah, it's cool.

Speaker 8:
[103:41] It's been a great win-win.

Speaker 4:
[103:42] And that can be a really remarkable experience for young kids if there's just no toxicity and... You know what I mean? It's not a gross arrangement. Y'all aren't living in a 3-2 and like... Everybody's got some space, but also everybody's involved in the caretaker. So that can be pretty amazing.

Speaker 2:
[103:59] Yeah, I think that is good. You know, I'm going to go back on my ruling here and I'm going to say that I'm okay with this. As long as you guys are okay with this, it sounds like she's being served. It sounds like it's a good thing for your family. And for that reason, yeah, I would write it out and I'd go back to your original plan of saving for a down payment. You know, it's funny, John, financially, multi-generational households, a lot of times were kind of like, yeah, get out of that. But that used to be the way.

Speaker 4:
[104:28] That was the only way.

Speaker 2:
[104:29] That was the only way. Is you group up with your folks and you're right, it's so good for kids.

Speaker 4:
[104:33] It's good for kids, good for grandparents. But you just gotta structure it and do it the right way.

Speaker 2:
[104:38] Yeah, no enabling.

Speaker 1:
[105:14] 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:
[106:02] So if you're working the baby steps, the best and fastest way to do it is by using EveryDollar. Trust me, it's more than just our budgeting app. Now, the plan is built right in, baked right in. I love that you can track your progress, plus get personalized recommendations and coaching for your situation that'll help you free up more money and work the plan even faster. It's truly like having one of us in your pocket, walking with you every day, showing you the next step and holding you accountable. So start EveryDollar for free today by downloading it in the App Store or Google Play. All right, we got Julian in El Paso, Texas on the line. What's up, Julian?

Speaker 6:
[106:41] Yes, I'm calling because I had a house fire in November of last year, and the insurance company is going to pay me some money to repair, but it's pretty severe. So I'm wondering if I should use that check to just rebuild and do with the process and keep my normal monthly payment, or if I should take that check, pay off that mortgage for that home and you, the difference to put me and my son into a new place.

Speaker 4:
[107:09] They're not paying you to rebuild the house?

Speaker 6:
[107:13] Yes, that's the check is for rebuilding the house. It's about $310,000. But with the war and all materials increasing rapidly, they cut the check in November and December. Excuse me. So I don't know if it'll still continue to cover the cost of the construction, honestly. I'm kind of in panic mode after the fire, so I don't want to make any decisions emotionally.

Speaker 4:
[107:40] Yeah. So did everybody get out safe?

Speaker 6:
[107:44] Yes.

Speaker 4:
[107:45] Can I just tell you?

Speaker 6:
[107:45] I got out safe. Got the two dogs out.

Speaker 4:
[107:48] Good. You got everybody out safe?

Speaker 6:
[107:52] Yes.

Speaker 4:
[107:53] Can I just shout you out? Good on you, dad. I hate to gender this, but that's what dads do, man. You run back in and you get everybody out. I'm proud of you.

Speaker 6:
[108:04] Sure did.

Speaker 4:
[108:05] That's good, man. And I appreciate you recognizing inside your own chest, hey, I'm still in fight or flight from that deal and I'm not making rational choices. I need to get some wisdom. And I want to shout you out too.

Speaker 6:
[108:18] I'm not sure I noticed that, but I was watching one of your guys' videos the other day and I think Jade said, don't make the decisions emotionally charged.

Speaker 8:
[108:27] And I was like, you know what? That's it.

Speaker 6:
[108:29] I have to call.

Speaker 4:
[108:30] All right. Well, I'm glad you did. So here's my, anytime I feel a certain way about a thing, I've got real big feelings about a thing that I think the first place I want to do is write down that feeling I have or the feelings. I got a bunch of them. I'm kind of dramatic. And the second thing I want to do is I want to go get real on the ground information. I don't want to scroll the news sites who are screaming and yelling, trying to get headlines, trying to capture my eyeballs because they are selling me, my attention as a product. I want to go talk to an actual contractor and get an actual bid or two or three or four on my actual home and get a cost estimate. And once you are looking at the paper in front of you, my guess is your next right step will be pretty clear. And you are going to have to pay off the mortgage anyway, right?

Speaker 6:
[109:27] Yeah, yeah, eventually it was just in the loan process. So I had been doing the 13 payments a year thing.

Speaker 2:
[109:36] Okay, what did you owe?

Speaker 4:
[109:37] Yeah, what do you owe on the house?

Speaker 6:
[109:40] I have about, I sent her 100,000. I've gotten it under 100,000.

Speaker 4:
[109:45] So where are y'all living right now?

Speaker 6:
[109:49] The insurance company gets you like a temporary rental. OK, but they only do it for like a year is what they're telling me. So I'm like, OK, so I'm six months into my year. My construction hasn't started because your contractors haven't done a lot of the packout of my belongings and things that they're supposed to do. And I'm getting into panic mode again that since there's no actions being taken, I'm going to.

Speaker 4:
[110:16] But is the action to be taken something you should be doing or is it something they're supposed to be doing?

Speaker 6:
[110:22] No, it's one of their contractors that they're supposed to be sending in to pack out my house. So it isn't ready for a bid and stuff like that.

Speaker 4:
[110:30] Okay, so you need to contract it. Their clock should not start until the house is ready to be worked on.

Speaker 6:
[110:39] Is that how that works?

Speaker 2:
[110:41] That makes sense.

Speaker 4:
[110:41] I don't know how that works, but that would be my legal argument is I want you to have a bid in hand ready to rock and roll the day that this stuff is done. But I don't think your clock should start until they have finished their work. But yeah, they're not just going to pay for you to have a house indefinitely while you sit around and decide what you're going to do or not do or whatever.

Speaker 6:
[111:05] Yeah, they gave me a one year lease in this temporary housing, so that's why I'm in a panic mode.

Speaker 4:
[111:10] Yeah, let's feel the panic and then you're not going to solve panic by thinking about panic. You're going to solve panic by going right through it. Action. Okay, and if you hate this house, you're scared of this house, I would rather you, this may not be the wisest thing to do, I'd rather you fix this house up, get it rebuilt, get it redone, get it clean as a whistle and then choose to sell it then, because you're going to pay this thing off, you're going to have a burned down house on a lot that you own, you're going to have to do something with it, right? At some point, the HOA is going to come sue you, somebody's going to come.

Speaker 2:
[111:46] Yeah, it's going to have to be rebuilt regardless.

Speaker 4:
[111:48] You have to do something with it. And so what I would hate for you to do is to take this money, go buy something else, be responsible for two mortgages and then get a bill from the city that says, hey, you got to go deal with this burned up home. You can't just have a burned out house in the middle of the neighborhood, right?

Speaker 6:
[112:05] And the reason it seemed okay to me is because I would only have one mortgage and it'd be substantially less because I would use that construction money instead to pay.

Speaker 4:
[112:14] I know, but what we're saying is you can't just...

Speaker 2:
[112:17] You can't just leave the lot burnt there. So what you're saying is out of the 310, you'd pay off the 100,000 and take the other 200 and buy something else. Is that what you were saying?

Speaker 6:
[112:26] Yes. And then what I would do with that is I would eventually, you know, go back to the house. They're pretty close to each other, the one that I'm eyeballing, and I would still continuously be working on it. But I hate trusting contractors, mechanics.

Speaker 2:
[112:41] Oh, what money would you use?

Speaker 6:
[112:43] I'd like to get my own contractors' license, honestly.

Speaker 4:
[112:46] Yeah, but you're talking years.

Speaker 2:
[112:50] Yeah, and how would you fund it if you've already spent the money on a different home?

Speaker 6:
[112:56] With my mortgage payment, pretty much, that I wouldn't have. Got it.

Speaker 2:
[113:01] Okay. Yeah, I'm with John. I think you're going to cause yourself more headache if you do it, if you don't do it this way, because now you're going to have to figure out, well, how long can this lot sit like this in my neighborhood? What does the HOA say? What does the city say? Right? You've got some, you've got...

Speaker 4:
[113:22] I'm afraid the city is going to come do it for you, and they're going to send you a bill for $75,000.

Speaker 2:
[113:26] Yeah, you've got your work cut out for you now. I don't even know if this is possible. So this is something you could research, but if you're like, hey, I'll clean off the lot and I'll get it fresh, can we sell the lot and not rebuild?

Speaker 4:
[113:38] So to a developer, yeah.

Speaker 2:
[113:40] And then if they give you, I don't know, $100,000 for the lot, you take that and that makes you clear with the mortgage company. You see what I'm saying? And now you can take...

Speaker 6:
[113:47] I hadn't considered that.

Speaker 2:
[113:49] That's where my mind is going. But again, you're going to have to research and make sure that you have the ability to do that. I don't see why you wouldn't, but just do some due diligence on that. But it seems like you don't want to live there anymore. And I totally understand that. Let's just get creative on how to do that and you're not be stuck with a problem later. Does that make sense?

Speaker 4:
[114:10] But you're not, the meta of what we're saying is, you're not working with real information. And I want you to go get, I want you to do the work to go get real information. And you can say, I don't trust contractors and whatever. You're going to have to deal with contractors. So call a couple of friends that you respect and find a guy that or a company that you trust or that they trust, right? And find out how much it will cost to raise the bill, like this house to the ground. Call a couple of real estate developers and ask them how much they would pay you just to walk away from the thing.

Speaker 6:
[114:48] Okay. Right? I only felt like I was locked into like those two options. And then this is opening up a lot of ideas for me.

Speaker 2:
[114:56] Good.

Speaker 4:
[114:56] But I want you to listen, stop thinking about ideas and start getting after it. I think when you get some real data and some real information in front of you, you might find that you can re like fix this house. And by the way, get it all back up to code, the wiring, everything, get it all perfect how you want it. And it might cost 150 grand and you might still have a bunch of extra money. Who knows? Who knows what the deal is?

Speaker 2:
[115:23] The point is you've got lots of options.

Speaker 4:
[115:25] And I'd be on the phone with my insurance company about them following through with their responsibilities.

Speaker 7:
[115:55] 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:
[116:42] All right, our Ramsey Show scripture and quote. 2 Timothy 2, 1, 5, also known as 2, 15, says, do your best to present yourself to God as one approved, a worker who does not need to be ashamed and who correctly handles the word of truth. John Carmack said, focus is a matter of deciding what things you're not going to do. I know that's right, John.

Speaker 4:
[117:05] And I'm sitting by my friend, JADE. Otherwise known as JADE.

Speaker 2:
[117:10] Listen, when I said it, it gave me two Corinthians vibes. And so I needed to say it back the right way.

Speaker 4:
[117:18] I'm thinking to read the Bible. I need to stop.

Speaker 2:
[117:20] I do read it. I promise. And I also know how to say numbers.

Speaker 4:
[117:23] I love two Corinthians.

Speaker 2:
[117:25] All right. Sean is in Spokane, Washington. Sean, please get us back on track. How can we help?

Speaker 12:
[117:32] Hey, JADE. John. Pleasure to be talking with you.

Speaker 4:
[117:35] You too, man.

Speaker 12:
[117:38] The crux of my question is trying to really understand stork mode.

Speaker 4:
[117:44] You got a kid coming?

Speaker 12:
[117:46] Yeah, I do. Yeah, we are expecting.

Speaker 2:
[117:48] Congrats. That's exciting.

Speaker 12:
[117:51] Yeah. Baby is due in October.

Speaker 2:
[117:54] Are you doing all right?

Speaker 4:
[117:55] Is the baby number one?

Speaker 12:
[117:58] For me, yes.

Speaker 2:
[117:59] Okay.

Speaker 4:
[118:00] You're feeling it.

Speaker 12:
[118:00] It's going to be baby one.

Speaker 4:
[118:02] Hey, can I just tell you?

Speaker 12:
[118:04] Yeah.

Speaker 4:
[118:05] Your panic is real, your fear is real, and I'm telling you, on the other side of this thing, like another chamber opened up in my heart that I didn't know existed. I did not know love like I thought I knew it. So buckle up, man. It's about to be the ride of your life. I'm excited for you.

Speaker 2:
[118:22] Yeah, it's all good.

Speaker 12:
[118:24] Thank you. I'm super excited too. My wife is healthy, baby's healthy, so all those good checkboxes are there. Perfect.

Speaker 2:
[118:31] That's all you can ask for. Good. So how can we help? You want to explain stork mode, huh? So that means you guys, what do you have going on? You've got some debt?

Speaker 12:
[118:39] So backstory is two years ago, we got debt-free, and then last year we were all one income. My wife was working, she finished school. And so now we're back to two incomes. And then now we're expecting. So in terms of saving for the emergency fund, we're about two months in terms of that savings total.

Speaker 2:
[119:03] Baby step one or baby step two? Or baby step three? Okay, great.

Speaker 12:
[119:09] Yeah, so we're in three with almost two months saved.

Speaker 2:
[119:13] Great.

Speaker 12:
[119:17] Her desire, it's been a grind for over two years now, would be to go on a trip to Italy, go go explore your own place that she's lived there previously. And it would just be a joy for her to show me her stomping grounds. And we take the whole family.

Speaker 2:
[119:37] What's that cost?

Speaker 12:
[119:37] It would be, I'm estimating between 15 to 18 thousand.

Speaker 2:
[119:43] Okay. And when would you do that?

Speaker 12:
[119:47] That would be mid to late July.

Speaker 2:
[119:51] Do you have time to save up that money by then?

Speaker 6:
[119:55] We could cash flow it.

Speaker 11:
[119:57] And then that means we're not really saving in stork mode. So I kind of wanted to get an idea of where this whole stork mode is.

Speaker 1:
[120:07] Stork mode is something we tell folks, and I would tell you, especially as a first time parent, if you're paying off debt and you have a baby coming in six months, you can pause paying off debt and just put cash aside just to make sure if something happens, there's a NICU stay or there's an emergency C-section or something, I'm not going to get us out of debt six months and then have to go all the way back six months. So this cash is on the side just to make sure everybody gets home from the hospital and we didn't have to spend any extra money. That's the point of that.

Speaker 2:
[120:39] Does the money that you have saved, does that cover your out-of-pocket max for your family, like for wife and baby?

Speaker 11:
[120:47] Yes.

Speaker 2:
[120:48] And is there anything left over after that with what you have saved now?

Speaker 11:
[120:54] Maybe 10,000.

Speaker 2:
[120:56] Okay. That's a pretty sweet spot. So.

Speaker 1:
[120:59] And is mom going to stay at home with the kiddo after, or is she going to go back to work?

Speaker 11:
[121:05] She'll be going back to work.

Speaker 1:
[121:06] Okay. So it's not like you're going from one income down to two. I mean, I'm sorry, for two incomes down to one.

Speaker 11:
[121:13] Correct. Yeah, we both go back to work. Okay.

Speaker 2:
[121:16] What's your living situation? Are you renting, owning?

Speaker 11:
[121:21] We're currently renting. We'd love to own a home, maybe just time next year.

Speaker 2:
[121:26] Okay. I think that you have the emergency fund that you need. I'd love for you to get at least to three months before you consider this, because then you can officially kind of tick the box and say, all right, we got through the three hardest steps, and then if you want to move a little bit slower getting the six months, because again, whether you have three to six months, and this is for anybody listening, you throw several things into the equation, right? It's are both spouses working. If you're single and you're the only one working, yeah, you need six months. But if you have two working folks, you could opt for three or four months if you wanted to. Is everybody healthy? That's the one part where for you guys, it's not that your wife is unhealthy, but she's in pregnancy mode, which means there's a lot of variables there. So I personally, I'm not going to lie to you, I love the idea of if you had six months saved, that would just personally make me feel great. Next on the list is, well, let me at least make sure I have out of pocket maximums covered and some extra money on the side just because when you go through pregnancy, hospital stays, there's extra meals that you need and there's, oh my gosh, I can't believe we didn't buy this one item that we really, really need. There's going to be things that pop up.

Speaker 1:
[122:35] I was stunned. I thought baby went to the bathroom once a day like a regular person. I didn't know they went 400 times, like diapers. Whatever you have budgeted, quadruple it, right? So things like that, it just, expenses come out of nowhere.

Speaker 2:
[122:48] Yeah, I'm all for trips too. What's you guys' income? What do you make?

Speaker 11:
[122:54] Combined, about 240.

Speaker 2:
[122:57] 240. I think that in the parameter of your income, like I said, I'd love for you to get to three months of expenses and I think you probably can cash flow that and I think that you can cash flow this trip. My thing for you would be, it's got to be, you can't touch the emergency fund for this whatsoever. It's got to be completely cash flowed and yeah, and with reasonable spending, I think that that's totally fine.

Speaker 1:
[123:21] Can I ask you one more question, brother?

Speaker 11:
[123:23] Please.

Speaker 1:
[123:25] Do you want to go on this trip? It's just you and me and a couple of million people listening.

Speaker 11:
[123:32] I've never been and it seems dreamy. I am a spreadsheet guy so I'm like, I don't know.

Speaker 2:
[123:42] You're thinking about this is down payment money, right?

Speaker 11:
[123:46] Well, that's just it, right? You look forward in the next year and it's like, that's 5 percent of what we're trying to put down on a home, maybe even 10 depending on where we land.

Speaker 1:
[123:57] Is there a conversation to be had that you sit down and say, I want to go to Italy too? Sounds dreamy to use your words. Is there a possibility that we wait to the little one is 18 months old? And at that point, here's a map. We have a home and we cash flow this thing. We got an emergency fund and we're just going to postpone this trip from trying to cram it in right now to, I want to do this thing up right. Is that a possibility?

Speaker 11:
[124:28] I mean, yeah, I think about like I'm over six foot. So I'm like, I'm going to be crammed in that airline for 10 hours.

Speaker 1:
[124:36] Yeah. I mean, I've done that. Like I've gone to Italy, but I've flown international and I'm a big guy. Like it just kind of is, right?

Speaker 2:
[124:43] I mean, I don't know. I'm going to play on the other side of this coin because this is your first baby. This is, I think she's viewing this as, this is our last shot. This is our last, because listen, with an 18 month old, I wouldn't want to go, I mean, life changes in so many ways.

Speaker 1:
[124:57] But she's got other kids, right?

Speaker 11:
[125:00] Correct, yeah.

Speaker 1:
[125:01] How many does she have?

Speaker 11:
[125:04] One, I have a stepson.

Speaker 1:
[125:05] How old is he?

Speaker 11:
[125:07] Nine.

Speaker 2:
[125:07] Okay. So there's like, at nine years old, they can go off with the grandparents or with the aunt, whatever.

Speaker 1:
[125:12] Or go with you.

Speaker 2:
[125:13] Yeah. But I just think she's seeing this as, she knows that independence changes greatly when you have a baby on your hip. So I would try to figure out a way that you can do a trip. Maybe the compromise is we don't spend as much or we don't go for as long. But I think there's a way you can meet in the middle, because the truth is you guys have a great income. You do have time to do the house. There's no rush for either of these. I wouldn't want you to miss out on experiences too, as you're getting financially stable and as you're, does that make sense? Because you're on track, you're doing the things, you've paid off the debt, you've got the emergency fund, you've got all these other things in place. I just think that there is a level of enjoyment that you can have. I would probably say, yeah, 15,000, not 18,000. But other than that, I think you guys are on the right track. All right, guys, thanks for hanging out with us this hour. And remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.