Building Wealth Is Simple (But Not Easy)

14:53Rachel Cruze:Yeah, you should have. But you can't, yeah.

14:55Dave Ramsey:Before you move in with your mother.

14:58Rachel Cruze:Okay, and then would I just be Ubering, or do I get like a cheaper car? I thought you had a job. Yeah, yeah, but I have to get to work.

15:07Dave Ramsey:Yeah, but you get a$2 ,000 car.

15:09Rachel Cruze:You said, yeah, you said plural cars. How many cars do you have, Kevin? I have two cars. Okay, and they're both on payments? Yes. How much do you owe on them? One of them I owe about$30 ,000. The other one I owe about$20 ,000.

15:26Dave Ramsey:Okay. So you have$50 ,000 in car debt. And what is your income, sir?

15:31Rachel Cruze:About$60 ,000 after tax.

15:33Dave Ramsey:Okay. Does your wife work outside the home?

15:37Rachel Cruze:No. Why? It's complicated. I think that she, I kind of am a big believer of the whole nuclear house, you know, so she takes care of the house.

15:49Dave Ramsey:Debbie, you don't live in your mother's house if you're a believer in the nuclear house.

15:54Rachel Cruze:I think my mentality was that she could just help out. Do y 'all have kids, Kevin? If we have to make that sacrifice. Kevin, you guys got to work. How old are y 'all? 30. I'm 30 years old. You have children. We got to start working. We got to start. I do not have children

16:12Dave Ramsey:both of you get a job and both of you sell these dumb butt crazy cars and go get you a one bedroom apartment get you two$5 ,000 cars and then you have$10 ,000 in car debt instead of$50 ,000 in car debt that is your problem and you do not penny stock that's what's causing you to be in the lower class living in your mother's basement not penny stocks

16:35Rachel Cruze:okay that definitely makes sense you lost$50 ,000

16:38Dave Ramsey:on these cars, you lost$30 ,000 on the penny stocks.

16:43Rachel Cruze:Yes, absolutely. For reference, I had seen it work, but I'm definitely not going to mess it anymore. I did have a question as someone with all your experience. If I'm not investing in the riskier, the penny stocks or call options or anything like that, do you have an investment recommendation for when I build up? Yes, he does.

17:05Dave Ramsey:So the number one wealth building tool that you have is your income. You have given that away to the car companies. And so in order to be able to be a real investor and become wealthy, like the wealthy do it, you have to put your income into investments. And it's not speculative and it's not high risk. And I put mine in basic growth stock mutual funds. Okay? I'm going to send you a copy of the book, The Total Money Makeover. 20 million people have read this book, and it's helped them work the baby steps to get out of debt, because when you're out of debt, then you're freed up to start doing long-term investing.

17:48Rachel Cruze:Kevin, how much do you guys pay in car payments each month? I think about$1 ,200. $1 ,200. Okay, so here's what's crazy. Here's the mindset, okay? Instead of paying the car companies, you pay yourself that$1 ,200. From age 30, ready for this? from age 30 to where you are now to 67 years old at a 12 % rate of return, if you just put this in good gross stock mutual funds and did nothing,

18:12Dave Ramsey:not risky,

18:12Rachel Cruze:paid yourself these car payments instead of the cards, you would have$9.8 million at 67.

18:18Dave Ramsey:And that's not speculative and it's not risky.

18:21Rachel Cruze:So that's it.

18:22Dave Ramsey:It's what basic people do in a 401k.

18:24Rachel Cruze:Yes. And the lie, Kevin, that you're, that you have in the back of your head. That's why you do these penny stocks is a get rich quick mentality to build true wealth is actually very simple. You live on less than you make. You don't go borrow money. You pay yourself. So you are investing. You are saving. You have an emergency fund. So when something comes up, you're not running to debt. You have the money saved. You invest. You're generous. So there's a plan, which, yeah, the book TMMO, Total Money Makeover, will help with that.

18:51Dave Ramsey:I'll send you that to try to help you. So the summation of the overall call is this. You're feeling 90 % of your shame over the penny stocks and 10 % of it on the cars. I want you to flip that I want 90 percent of your guilt or shame to be on the cars so you never do that again because that's doing more damage to you than the penny stocks did and then the lesson you learn from the penny stocks is you you know Abraham Lincoln said everything on the internet's not true okay so just read that on the internet yeah I read that on the internet so I mean this is you know so just got to know that most of the stuff on tiktok is a lie most of this stuff and

19:30Rachel Cruze:And if you're too, can I just say this too? Sorry. If you're too well, well-bodied adults.

19:35Dave Ramsey:Both of you should be working.

19:36Rachel Cruze:You should be working, especially if you don't have kids, right? And to get yourselves out of this mess and to get yourself on a financial playing field that you actually then have stability. And then you can make choices of, hey, I want someone home. I don't. But right now you guys don't have that luxury. That's a luxury to keep one spouse at home.

19:52Dave Ramsey:You're living like you're making$200 ,000 a year and you're not. And so you're going to have to adjust your expectations of how this whole thing works.

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21:56Dave Ramsey:Ken is with us in Mobile, Alabama. Hi, Ken. How are you?

22:00Rachel Cruze:Doing great, Dave. How are you?

22:02Dave Ramsey:Better than I deserve. What's up?

22:04Rachel Cruze:Hey, so I've got a quick question. I want to get your thoughts on trust. I'm retired. I followed your plan that I actually learned from my mother. But I've been listening to you for years, and it works.

22:18Dave Ramsey:Well, thank you.

22:18Rachel Cruze:So now I have a really good net worth. I have one child, and he just graduated from college. And I just want to make sure that as my wife and I pass this on to him, that it's set up, you know, protected from lawsuits and other type things. And I've had friends say, well, you need to set up a trust. And I just want to get your thoughts on that.

22:40Dave Ramsey:What's your net worth?

22:42Rachel Cruze:About$3.5 million, including the house.

22:45Dave Ramsey:Good for you. Okay. All right. We have our items mainly in LLCs and a few of them in trusts, okay, particularly real estate. Each of our real estate properties that has substantial value, we put it in an individual LLC so that at worst case, you would lose that piece of property then, okay, if it was sued, okay. That's your worst case with that property. And so if you had a piece of property worth a million dollars and you got a$50 million lawsuit on it, you hand them the keys and you walk away, right? Right. But they don't get everything else. And that's kind of your point. Ultimately, the thing that protects you much, much more than that is to teach your son how to behave.

23:37Dave Ramsey:You started with nothing and you've acquired enough wisdom to run all of this. so he could learn to do that unless he's got a mental disability of some kind, does he?

23:48Rachel Cruze:No, no. But no, he doesn't.

23:51Dave Ramsey:Okay. If he's just irresponsible and immature, you can't do enough to protect him from that. He's going to screw it up no matter what you do.

24:00Rachel Cruze:Is he, Ken? What's his status? No, no, he's not. But he's a very kind-hearted person, and his thoughts are more in the social work history side of the house versus my background in accounting and finance.

24:16Dave Ramsey:Well, I think you can have some real frank discussions with him and say, in order for me to leave this in your care, you have to have a level of wisdom on how to handle it because that's your job as the steward of this because this is God's property and I'm managing it for God now. You're going to be managing it for him later and you're going to have to do that with wisdom. I mean, really, that's going to be 90 % of your safeguard. 10 % is your structure. Okay? So it kind of falls in the heading. You probably have heard this before. I teach small business people this all the time in contract law.

24:51Dave Ramsey:If there is no contract in the world that is strong enough to keep you from getting screwed by somebody who's a crook, they're going to find a way. Okay? Okay. And you can't just say, oh, but I had a contract. Oh, but I had a trust. You know, and no, I mean, he gave it all away. He screwed up and he was kind hearted and he got exploited and he got conned because he had a lack of wisdom. That's going to happen.

25:19Rachel Cruze:Whether you have a trust or not.

25:21Dave Ramsey:Whether you have a trust or whether you have LLCs or no matter how you structure your risk management process, unless you remove all control from him and you put the control of all your assets in someone else's control called a trustee. and your son's not allowed to do anything or make any decisions, and that's just not a very good life for him.

25:43Rachel Cruze:Yeah, right. I've heard people mention that before, but, yeah, I just don't go. I agree with you. That's not a good life for him, and it doesn't give him any responsibility.

25:54Dave Ramsey:Yeah, yeah. And how old is he now? 20. Okay, good. Yeah, so I sat down with ours when they were about that age, And that's the first time they understood that we had built a net worth from having gone broke. And we said, look, first thing is, you know, we're Christians. And so as for me and my house, we serve the Lord. This is not yours. It's not mine. I'm managing it for God. And if you don't leave this conversation with a sense of responsibility and heaviness instead of a woohoo, I hit the lottery. when you start to see what our net worth is that someday is going to be yours, then I didn't do my job as your parent to this point, and I didn't do my job in this conversation.

26:34Dave Ramsey:And we had that conversation very clearly, and to their credit, they all accepted it as a responsibility, as a privilege, to get to manage this wealth for the good of the family and the good of people in the community.

26:46Rachel Cruze:And one of the best elements of that is learning to manage just our life. We're not managing any of that right now, right? I mean, it's learning to live within our own means of the jobs that, you know, we've chosen to take on the lifestyle. They don't get any of that until I'm gone. So, yeah, there's a level of him that's going to be managing his life after college. And you get to kind of be there with him in those conversations. And that's kind of his practice run, honestly, Ken, before he gets handed all of this that you've built.

27:17Dave Ramsey:No, the answer to your overall question is I would not put it all in a trust because I don't think it's going to accomplish exactly what you're trying to accomplish for the reasons I said. Now, is a trust for part of it possibly a good place? Yeah, probably. Just from general risk management. And depending on how your wealth is structured, maybe some LLCs and so forth. That's true because I'm a very poor man right now. I own absolutely nothing. Even my cars are not in my name. I don't have anything in my name anymore. It's all in the name of something else. And my wife is in charge of all that.

27:49Dave Ramsey:So if she leaves, I'm going with her because she's got all the keys. So, you know, I mean, that's, you know, it's just you really can't get to. We've insulated our stuff in a lawsuit happy world.

28:00Rachel Cruze:Give a high level of like what a trust is, a living trust, all the different kinds of people that structure. Because we get this question a lot about wills. Should I, you know, I mean, everything from that to.

28:10Dave Ramsey:Well, a lot of times people want to do a trust for different reasons than can. OK, they want to do a trust to avoid probate and probate is the tax that your state has. Our state has a three percent probate. It's not much. So it's not that big a deal. And you do avoid probate by putting this stuff into a trust. But you have to move the title of everything into a trust. That's a living trust. OK. And so you move everything in the name of a trust and you manage everything out of a trust. And you do that if you got a two million dollar net worth. So you don't pay, you know, 40 ,000 bucks in taxes, which is just dumb.

28:43Rachel Cruze:Because of the effort is what you're saying. It's too much effort.

28:45Dave Ramsey:And most people don't, they don't ever fund the trust, meaning they don't ever move the title to their house. They don't move the title to their - Open the trust, but they don't - You have to put all the, redo all the titles to everything in the name of the trust. Yeah. And if you don't do that, the trust is something they're empty. It doesn't have anything in it. And so you paid 5 ,000 bucks to some lawyer that talked you into doing this for nothing. So get a will is what you need to do. Yes. And then at death, you can form a trust. Or if you're doing like a massive piece of property or something, like we've got a couple pieces of property.

29:14Dave Ramsey:There are hundreds of millions.

29:15Rachel Cruze:Well, there was a guy he called in last week and it was a Southern California property that his grandfather left them. And it was like a 10 million, it was something, it was millions and millions and millions of dollars. And that was in a trust. Okay. And that's fine.

29:28Dave Ramsey:If you want to do that, that's fine. But the problem is it's the stuff that we have in a trust in the Ramseys, it's trapped. You guys aren't going to be able to sell it. So the things that we're not sure you're going to want after I'm gone, we've left that and just LLCs because y 'all may deal some of that stuff. But there's like this property is in a trust where our offices are, the campus, because you can't sell that. You got to run the office out of it. So run the Ramsey out of it. But there's a few things like that. But the rest of them, you just don't want to handcuff people from the grave in an effort to force them to do weird stuff.

30:03Dave Ramsey:So teach them while you're alive what you want them to be. And that's your fix for most things. and if you're trying to manage risk and while you're alive you know moving some stuff we don't put more than about five million dollars or a single piece of property depending on the size of what's going on into an llc and so like we've got enough houses in an llc gets to five million and then we quit you know and you know we don't have that we've only got about 25 houses now we don't have many we used to but um we would not let the llcs get too big because they don't have too big a target on them then.

30:38Dave Ramsey:But that's not a death after death thing. That's a while you're alive risk management thing. Right, right. Yeah. And so, but as far as after death goes, a trust is freaking forever unless you put a termination date on it or a methodology for terminating it as part of the terms of the trust. That's part of the deal, yeah. So it's, and most people don't think that through when they do this. So I would go to the source and fix the source first which is training up your boy and then go from there

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33:21Dave Ramsey:Melinda is in Phoenix. Hi, Melinda. How are you?

33:26Rachel Cruze:Hi, how are you doing? Can you hear me okay?

33:29Dave Ramsey:Absolutely. What's up?

33:32Rachel Cruze:Oh, awesome. Yay. Thank you so much. I just love what you do. And we just started Financial Peace University like two weeks ago, so we're very into this.

33:40Dave Ramsey:Very cool. Well, welcome. We're glad you're here. How can we help you on your journey?

33:45Rachel Cruze:Well, I'm hoping you can help put out a fire with me and my husband, because we've been going back and forth of this. Oh, we love to settle a debate, Melinda. We are here for it. Oh, that would be great. So we are going through the steps. He is on baby step number one, which is putting$1 ,000 in his starter fund. I already have baby step number one covered. I have about$6 ,000 in my personal savings. However, we have a joint savings account that has$2 ,500 in it. Now, I have asked my husband to not touch our joint savings because it just gives me, like, a little bit of peace of mind of being able to cover, like, one month's mortgage.

34:24Rachel Cruze:and some bills if something happened. He has said, well, wait a minute, Melinda. If we just take our joint savings and we reach 50-50 put into it, you take 12-50, I take 12-50, then I have baby step number one box checked, and then I can go on to paying my debt off. He has a lot more debt than I do. I don't have that much, but he has a bit more, so he's kind of eager to start paying it off. And I'm pushing back on him saying, no, I want to keep our joint savings. pretend that's not there and you figure baby step number one out.

34:58Dave Ramsey:Okay. Um, in 30 years, Melinda, in 30, almost 40 years of doing this, the couples that do it the way you're trying to do it fail.

35:12Rachel Cruze:Oh, they do. He said, ask Dave. He's like, why don't you ask Dave if we can touch our joint savings?

35:16Dave Ramsey:So what, what, what the couples that actually win and go all the way to being millionaires. When we did an actual study of millionaires, we ask them the same thing, work 100 % joint. They don't have any yours and mine, only ours. And so I would take all the debts and put them in one list, all the savings and put it in one list. It's not your roommate, it's your husband. And that's what we've seen to be very, very successful. It has the added benefit of creating synergy and the other added benefit of creating massive amounts of communication and values alignment because you really have to force yourself to work together because everything's together.

36:02Dave Ramsey:And then there's this unity that comes in the relationship that you didn't even see coming. So consequently, what we end up hearing, and I first heard this, I don't know, decades ago, I'd be teaching Financial Peace University in a live setting and people would say, oh, this saved our marriage. And I'm like, what? or made our marriage way better. And I'm like, what? Sex class was down the hall. I mean, come on. And they're like, no, you forced us to work together and align our values and have one account and one list of debts and one life. And it forced us to create a unity in our relationship and a communication level in our relationship.

36:37Dave Ramsey:I didn't do it for that reason. I did it because it was practical. But I've learned later now, in retrospect, all these years later, that it has all these additive benefits to the marriage as well as really increases the probability of you winning. Rachel, you get a lot of criticism when you tell people to join accounts.

36:54Rachel Cruze:Yeah, some people hate that. They love having their separate thing. But that's it, Melinda. I mean, there's a logistical piece to this, and then there's the actual benefit to the marriage that you guys are together. And how much faster you guys can win. Okay, so you just threw out some numbers. I just want to use it as an example. You have how much saved? $6 ,000, did you say? I have$6 ,000 saved. And then you have the$2 ,500. You got the$2 ,500 over on the other end, right? And then does he have any money saved? He doesn't have it, right? He's working on his$1 ,000. $25. Okay, perfect. Okay. How much debt do you have, Melinda?

37:29Rachel Cruze:I have$5 ,000. Perfect. Okay. And then how much does he have? $19 ,000. Perfect. Okay, great. So the beautiful thing is if you do the baby steps the way we've said, okay, you're going to have your emergency fund done tonight. Your debt's going to be paid off. And then you guys are going to have$1 ,000 or$2 ,000 left to hit his debt. So it'll be down to$17 ,000. And you guys working together.

37:55Dave Ramsey:What's your household income?

37:58Rachel Cruze:Well, that's why I'm not taking my savings and paying off that credit card. Because I literally, I make more money than him. No, no, we have an income.

38:06Dave Ramsey:You don't, we have an income.

38:08Rachel Cruze:Oh, well, I literally just lost my job. Oh, that's okay. What did you used to make? I got$12 ,000 a month.

38:16Dave Ramsey:Okay. And what did your husband make?

38:20Rachel Cruze:He doesn't make that. He makes$4 ,000 a month.

38:22Dave Ramsey:Okay. And what were you doing?

38:26Rachel Cruze:I'm freelance, so I'm a consultant, and I'm not worried about getting clients. I'll get back up to$10 ,000,$12 ,000 in a month. Okay. Then there's nothing to worry about. Do you have an issue of his work ethic, Melinda? He works Monday through Friday really hard. Okay. But he's kind of like he works in the, you know, he works, he works also with his best friends. So it's kind of like fun and play and they're building something big, but they keep saying they're going to have this big return. And it's been like two years. So I think you don't have that yet. So this is exhibit A. No, it's no, I get it.

38:59Rachel Cruze:No, listen, this is this is exactly why we say pull your money together and work together, because what ends up coming out of that is life. and what ends up coming out of that is your questioning, holding your breath, fear around what he's doing over here. And if you guys haven't even been aligned on that or had dates of, hey, if it doesn't hit this, then we need to move on. Nothing is aligned within the family unit, right? He's kind of off doing his thing. You're doing your thing. And that's how you guys are living. And when you actually force yourselves to work together, some of these conversations that can be really hard, but actually very beneficial to your life and your marriage end up coming up that you have to hit head on.

39:40Dave Ramsey:Okay. I would suggest that you guys begin talking about this idea of combining all of our savings, combining all of our income, and combining all of our debts list. I would not start your total money makeover today. Keep going through Financial Peace University, but I would not take you down to$1 ,000. When you get$5 ,000 worth of clients back up, which is probably two or three weeks from now, right? Mm-hmm. Okay. When you get that, then push play on this. And I want you to clean out all of the savings except retirement down to$1 ,000 and pay off your debt and start paying on his 19, which are both now our debts and our savings and our income and our house and our car.

40:28Rachel Cruze:And our goals. And our goals for the future. Career goals and all of that.

40:32Dave Ramsey:And your business that you're running is our business. And I'm uncomfortable. I don't mind you having fun over there, but I do mind you having fun over there while you're not hitting good income goals. That's starting to bother me. And we need to talk about that out loud. Resentment starts to build. And, you know, I need to talk about the fact I'm a little bit scared right now. I just lost my biggest client and I'm down to zero. And I don't like being there.

40:55Rachel Cruze:And I feel like I'm doing a lot of the work and putting a lot of the effort. I don't feel the same from you. And that's scary to me. I mean, all of it. It all starts to like. You just say it.

41:02Dave Ramsey:It doesn't mean that it's the end of the world or anything. No. We're not ending anything. But what this forces is this, like Rachel said, this tremendous level of communication and depth.

41:11Rachel Cruze:Because.

41:12Dave Ramsey:But it's going to be, you're going to have a painful three or four weeks here.

41:14Rachel Cruze:Because if not, the resentment. So people that just push things under the rug and they compartmentalize and say, well, that stuff's over here, here. The resentment starts to build up. And then you look up 10 years from now and you're like, we've never even talked about this of how I've been feeling because I haven't had to because I've kept all my stuff over here. So it just kind of forces kind of the junk up, which is not fun.

41:36Dave Ramsey:You're going to have a hard three weeks.

41:37Rachel Cruze:But you're going to look back on all of this and you're going to have a, yes, a deeper, more cohesive marriage because of it, because of it. Yeah.

41:47Dave Ramsey:And as you get further into financial peace, you're going to hear this language a lot, that you change your pronouns, not in a woke way, but in a way that says it's we. We do this. We do that. My wife, Sharon, has not worked outside of our home earning an income since our oldest daughter was born, who's 40. But we have an excellent income. We have a lot of assets. We have done very well. And I would not have been able to do it were she not keeping the home fires burning, were she not a low-maintenance, low-drama person. I would not have been able to work as hard as I've been able to work. So it is a we.

42:24Dave Ramsey:It's a we. Absolutely. And I have zero resentment that she did not do an income during that time. It was our decision for her to do that.

42:31Rachel Cruze:Melinda, I'm excited for you all, though. I know you're new to all this, but honestly, I'm pumped to see where you guys are going to be. You're going to do amazing. Here's the thing. You're a hard worker. You're a charger. I can hear it. and you guys are going to be awesome. So call us back if you have any other questions.

42:43Dave Ramsey:And here's the thing. Try it. You can always go back to the old way. Try something different.

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44:30Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey, your host, Rachel Cruz, Ramsey personality, number one best-selling author, and my daughter is my co-host today. Mike is in Boston. Hey, Mike, how are you? Hey, doing good, Dave. How are you? Better than I deserve. What's up? Thanks for taking my call. Hey, I've got a situation with a solar system that I wanted to get your feedback on.

44:54Rachel Cruze:I bought a home last summer. I had a solar system installed that was financed and warrantied through a company called Sunova. So part of the pricing was originally inclusive of a long-term roof penetration leak warranty and a power production guarantee. Long story short, a couple months into my home, the purchase has started leaking. So I had to have the system removed and ultimately have the whole roof replaced. To make matters worse, during that time, Sonova went bankrupt and a company called SunStrong took over the lease. but unfortunately they claim that they are not responsible for any of the warranties or guarantees going forward.

45:31Rachel Cruze:So currently I've got about$50 ,000 balance on the loan and all of the solar panels are in my backyard. So I'm trying to get your feedback on what the best next steps would be. Should I just take it as a dumb tax and pay it off? Or would you personally have them reinstalled and just know that any future roof leak risk is something that I'd be taking on personally?

45:54Dave Ramsey:Wow. What a mess. Well, a couple things. I would probably gather some information from an attorney to be sure exactly where you stand on this. But I think you've assessed this correctly because I think the warranty was probably offered by the company that went bankrupt. And so the warranty is worth nothing. The lease, which is where you financed the solar panels, is a separate contract. and that money stands separate of that warrantied guarantee, although morally it shouldn't, but I think that's probably the way this is structured legally. And so, now I will say that the people that did buy the paper, the people that you owe the money to on this lease, they are probably having all kinds of problems collecting on a whole bunch of this paper.

46:49Dave Ramsey:In other words, this is a bad deal for them because they probably have a whole bunch of you out there. You know what I'm saying? Not necessarily roof leaks, but everything else because they bought paper or they financed for a company that in turn went bankrupt. And now you've got a whole bunch of dissatisfied customers don't want to pay this bill. So I suspect you're not the lone ranger on this. I bet you they got this every day in mass they're dealing with. So having said that, do you have any money? Yeah, I mean, in the payments, like... No, do you have any money? Yes. How much money do you have?

47:28Dave Ramsey:I have enough to pay it off. Okay. So you have over$50 ,000 in cash that you could use? Yes. Okay. I would call them and tell them I'm going to sue them because they're the only one left standing in a bad situation where my roof leaked and the solar panels are laying in the backyard. They can come pick them up if they want them. Or we can try to settle this, and I'll give you$10 ,000 to pay it off. And start there. And buy this note out at a discount. Yeah. Because the note is— It's interesting because it's a loan. I know it is a loan.

48:07Rachel Cruze:Yeah, the original contract for the loan, the pricing was solar plus warranty. So to the original buyer, the people that owned the property before me, and when it was transferred to me for that matter, it was packaged as a package deal, and this is the pricing.

48:21Dave Ramsey:So I would just say this whole thing's a piece of crap. You bought crappy paper. You know that. You know you're not going to get paid out on it. So I'll give you$10 ,000, and we'll call it a day. You're not going to get out of that and law your fees cheaper than that. and then you're going to own the solar panels and you can either throw them in the dump or you can put them back on your house your choice but uh for sure but right now what you've got is not a solar problem you have a fifty thousand dollar problem and i want to get rid of that i think they're going to take a discount i don't know if they're going to take 10 they may come back and say 20 if they do get it in writing and write them a check and be done with them okay yeah i've got

49:01Rachel Cruze:kind of conversations ongoing the last time i spoke with them about that they said the price was$50 ,000 even today, even though it's financed at less than 1%.

49:08Dave Ramsey:Well, and let me help you with this. I'm going to sue you. Yeah. I'm going to sue you, and you're never going to get any of this because you people screwed me, and you're one of the ones that screwed me, and I'm not going to tolerate it. So if you think you're getting$50 ,000 out of me, you're confused. Sure. Because they screwed you.

49:29Rachel Cruze:All right. For sure. I mean, that's what it feels like. Yeah.

49:32Dave Ramsey:And you need to go see a lawyer and talk to a lawyer and find out exactly what your rights are in the state of Massachusetts. I am not a legal expert. But this is how I would handle the business part of it and the relational part of it. And, you know, you're being moral. You're being honorable because you got screwed. Giving them a dime for trash that's laying in your backyard is more than you should have to give them.

49:55Rachel Cruze:Oh, with the damage, too.

49:56Dave Ramsey:They should just pick up the trash and call the note off. But they're not going to. and it's going to cost you more than 10 grand to get in a lawsuit. Promise you.

50:06Rachel Cruze:Yeah, I can't imagine.

50:08Dave Ramsey:Yeah, so I don't want you to go there, but I really want them to believe you're going to go there. Yeah, okay.

50:14Rachel Cruze:All right, well, I'll just have to...

50:16Dave Ramsey:Yeah, double up your fist and bust them in the nose. Get back from the call. Yeah, just bust them in the nose. Just hit them hard. I'm serious. Don't be nice about it.

50:22Rachel Cruze:Do they hold the loan, the company? Yeah. They're the ones.

50:25Dave Ramsey:What happened was the paper was sold and then they went bankrupt.

50:29Rachel Cruze:Yeah, but the new company holds the paper. Yeah. But I'm saying, yeah.

50:32Dave Ramsey:But they bought paper that they knew was bad.

50:34Rachel Cruze:Yeah, yeah.

50:35Dave Ramsey:Because they bought it from a company that was going bankrupt and it screwed a bunch of other people. Sonovus is, I mean, it's like a case study in screwing people. It's not. Sorry, Mike. I'm sorry you got taken. It's a mess. And then you've got to decide if you want solar on the house and whether you want the roof to leak and all that other bull stuff. That's a whole other discussion as to whether or not it's going to be worth screwing with. But might be, might not be. But that's where we get to. Wow, what a mess. Wow. All right. Up next is Michael in Minneapolis. Hey, Michael, what's up? Hey, Dave.

51:09Dave Ramsey:Hey, Rachel. How are you guys doing? Great. How can we help? Good. Just to say first, we have no consumer debt, and the only thing we have is our mortgage. It's$155 ,000. It's about$1 ,273 a month. And to start off, I have an opportunity where I can go back to school to be an electrician. I wanted to do that back in 2019. I left it for some dumb reason, and I got put on a wait list. I now have this sales job. I'm making$65 ,000 a year plus commission. I've been doing that for about a year now. And we just got done with this debt, all of our little debts, and it just feels like... How much does it cost you to go to school?

51:50Dave Ramsey:uh 15 the max 15 000 okay and can you work while you're doing that i'm gonna work part-time yeah

51:57Rachel Cruze:uh my wife works full-time right now what does she make dollars an hour uh 23 an hour

52:03Dave Ramsey:she just got the job i don't know what that that's not much and so um you what are you

52:09Rachel Cruze:going to be making part-time that i i haven't looked into that i just got this email about

52:15Dave Ramsey:a week ago and we've just been boggling our minds on this. What would happen if you went to work for an electrician's company and they paid for you to go to school while you worked for them? There is an opportunity for that, but they're on a wait list too. I don't know how long that would be. I don't know where all these wait lists come from. We have a shortage of trades everywhere in America, so I don't know whether you're trying to do a union deal and that's where your wait list is coming from. If you do, then bypass the union and just go become an electrician, son, and let somebody pay you while you're doing it.

52:47Dave Ramsey:But I think you need to pursue it, but in a smarter way than you're outlining right now.

52:52Rachel Cruze:Yeah, as long as you can cash flow and you guys can keep your head above water financially for two years to the school and you're going to be making more than what you're making now, probably consider it.

53:16Rachel Cruze:Hey guys, George here. Listen, 99 times out of 100, when people say, I don't know where my money goes, it's not a math problem. It's a behavior problem. They're not budgeting. Then they're shocked when their bank account hits triple zeros. Well, here's the deal. Winning with money is about doing the boring stuff consistently. And that includes banking someplace that helps you stop guessing with your money, like Fairwinds Credit Union. They're not going to fix your habits. That part's on you. But they do support people who are ready to take control of their money. At Fairwinds, you get a high-yield savings account with a great rate to help grow your emergency fund, a checking account that won't nickel and dime you, and up to 10 free savings accounts so you can organize your money on purpose.

53:55Dave Ramsey:Because when you stay disciplined, your money gets predictable, manageable, and boring in the best way. So if you're ready for a bank that helps you be intentional, open your smart bundle today at fairwinds.org slash Ramsey

54:07Rachel Cruze:and get the Ramsey Be Weird debit card to go along with it. That's fairwinds.org slash Ramsey, insured by the NCUA.

54:31Dave Ramsey:One of the best things you can do for your money is to have a really good tax pro in your corner that you can trust. They'll help advise you on the best moves to make for your tax situation or your small business, especially if you had some big life changes in the last year. Go to RamseySolutions.com slash TaxPro to find the CPAs, the enrolled agents who have been vetted by the Ramsey team, and are Ramsey trusted. Claire is in Salt Lake City. Hi, Claire. What's up?

55:00Rachel Cruze:Hi. Thank you for accepting my call. So me and my husband kind of got ourselves into a situation with a vehicle. We bought it when we were living with my mom, and we thought we could afford it. And now the payment's ridiculous, and we just don't know what to do about it. How much is the payment? It's$1 ,300 a month.

55:22Dave Ramsey:How long have you been married?

55:26Rachel Cruze:A year.

55:27Dave Ramsey:Okay. $1 ,300 a month.

55:32Rachel Cruze:Yeah. Every time it pulls, I want to cry.

55:36Dave Ramsey:And what's the truck owed on it in total?

55:41Rachel Cruze:We owe, I want to say, 52 or 58, somewhere around there.

55:48Dave Ramsey:First thing you need to do is call. Who's the truck financed with?

55:54Rachel Cruze:I honestly, I don't remember.

55:56Dave Ramsey:Okay. Call them today and find out what the payoff is if you pay it off this month. Okay.

56:04Rachel Cruze:I think we checked it the other day, and I think they said it was like$56 ,000.

56:08Dave Ramsey:Okay. That's what I was asking you, what you owed on the truck.

56:11Rachel Cruze:Oh, yeah.

56:12Dave Ramsey:And you weren't sure. So you're sure you checked it the other day? Yeah. I checked it this month. Okay. $56 ,000. Before we paid the payment. Do you have any idea what the truck is worth?

56:22Rachel Cruze:Yeah. I checked today. It's worth like$34 ,000.

56:25Dave Ramsey:According to who?

56:27Rachel Cruze:Kelly Blue Book.

56:28Dave Ramsey:On private sale, trade-in, or what?

56:31Rachel Cruze:Private sale.

56:32Dave Ramsey:Whoa.

56:33Rachel Cruze:Golly, when did he get the truck? How long ago? We bought the truck two years ago, I want to say.

56:41Dave Ramsey:Did you have a car that was upside down and you rolled the upside down amount into this deal?

56:47Rachel Cruze:No, we bought when it was really high. We bought the truck for like, I don't even remember. What's your infrastructure? Ridiculous. I think it's 17%. Oh, my gosh.

56:58Dave Ramsey:Okay, your 56 is not your payoff. That's not the right number. That's the balance. That's not the payoff. Because you have a subprime loan, and they're giving you the total of all your payments left. You're not that far upside down on this truck. Okay.

57:13Rachel Cruze:Be more what?

57:14Dave Ramsey:What I want to know is what the payoff is today, not what the balance is today. When you have a ripoff subprime loan, they book the loan as the total of all remaining payments. That is not your payoff. Your payoff is not the total of all the payments because it doesn't include all that interest. So your payoff is probably going to be$45. You're probably$10 in the hole, give or take. Now, what's your household income? Our household income is, I'm sorry, I'm trying to think, like$56 a month. Okay. And what do you make? I make, I'm at$19 an hour. And what does he make?

58:02Rachel Cruze:He's at$26.70.

58:04Dave Ramsey:Okay.

58:05Rachel Cruze:So you guys bring home$5 ,600 that hits your account after taxes? Yes. Okay.

58:12Dave Ramsey:All right. And you're working 40 hours? Yeah.

58:17Rachel Cruze:He works overtime, though.

58:18Dave Ramsey:Okay. In addition to that. Okay.

58:21Rachel Cruze:Yeah.

58:21Dave Ramsey:All right. Okay, and I'm assuming you have no money saved.

58:27Rachel Cruze:So we've been working on the baby steps. We have$1 ,000 saved.

58:30Dave Ramsey:That's good. And we've been paying off. Oh, the debts.

58:33Rachel Cruze:He just got a big bonus, so we paid off a bunch of our credit cards.

58:37Dave Ramsey:How much was that bonus?

58:41Rachel Cruze:It was like$3 ,000.

58:43Dave Ramsey:Good, okay. Do you have a tax return coming, or do you know?

58:48Rachel Cruze:I don't have a very big tax. I have like$100 coming for my tax return, and he has maybe$1 ,000.

58:53Dave Ramsey:Okay. All right. Because you desperately need to get rid of this truck, completely get rid of it, and you're going to have to pay the difference to do that. There's a couple of ways to do that. One is save up. Let's say you're$10 ,000 in the hole as an example. You'd have to have the$10 ,000 to put with the$34 ,000 to get the thing paid off and get rid of it. The second thing you can do is you could finance that$10 ,000.

59:16Rachel Cruze:Okay. I'm worried, though, because we live in a camp trailer, and so we need the truck to pull the camp trailer. Sell it all and move into an apartment.

59:26Dave Ramsey:This is killing you. You can't keep this ridiculous butt truck and have some irrationalized reason for doing it and live in a camper. You're dying over here. Sell the camper, too. What's the camper worth? The camper's worth, I just looked at it, It's worth$54 ,000. And what do you owe on it? We just bought it. Oh, Jesus. To get out of an apartment. Oh, my God. And so you financed it, of course. Yes. And you owe$54 ,000 on a camper.

1:00:05Rachel Cruze:Yeah.

1:00:05Dave Ramsey:Yeah, we owe$54 ,000. Okay.

1:00:08Rachel Cruze:We're going to sell everything, Claire.

1:00:09Dave Ramsey:Yeah, if I woke up in your shoes, I would sell everything in sight, and I would clean up this mess, and it's going to take you a year to clean up this mess, renting a little one-bedroom apartment, and you're going to work like crazy people all the time, and you're going to have no life, and it's going to take you a while because you've made some really, really bad financial decisions. This truck and this camper are the top of the list, and you've got to get this off of you. Five years from now, you're going to have two pieces of junk and still owe$40 ,000. Okay. And you'll still be living in a dadgum camper.

1:00:43this is not a good long-term life plan so no so the plan was we bought the camper because we're

1:00:50Rachel Cruze:fixing up my dad's old house that he gave to us and then you're going to sell the camper at a loss

1:00:56Dave Ramsey:yeah so you should have moved in an apartment while you're fixing up the old house instead of buying fifty four thousand dollars or something that's going down in value like the toilet yeah yeah so that's the plan that yeah so and now you're fixing up the house with money you have.

1:01:14Rachel Cruze:Yeah.

1:01:15Dave Ramsey:Yeah. How much are you putting into this house?

1:01:18Rachel Cruze:Well, so my dad said he would pay for most of it. We haven't put anything into it yet.

1:01:24Dave Ramsey:Good. Is he living there now?

1:01:26Rachel Cruze:My husband's doing, no, he has his own house. Okay. My husband's doing all the work on the house himself.

1:01:32Dave Ramsey:Is the house going to be put in your name or is it in your name?

1:01:35Rachel Cruze:Yes.

1:01:37Dave Ramsey:Already?

1:01:38Rachel Cruze:It's not in our name yet, which is why we haven't put any money in it.

1:01:41Dave Ramsey:Okay. And don't, don't put money and effort into it until it's in your name. And you've got to, you've got to start undoing some of these things. So you got, y 'all got a mess and I'm scared for you. So, um, but you've got to re back up and rethink how these stories end before you enter into the story. And so we need to begin with the end in mind, as Stephen Covey said, in the seven habits of highly effective people. and you don't buy a$54 ,000 camper to sleep in that's going to be worth 30 by the time you have get ready to sell it a year from now in order to fix up a house you could have used that money to fix up the house and so um you you don't you got to quit buying things that go backward on big payments and um it sounds like you're sacrificing in your head but you're not sacrificing you made a mistake is what you did.

1:02:32Dave Ramsey:So you guys have got to get rid of this crap. And, you know, if you can get that house barely habitable and move into it.

1:02:41Rachel Cruze:That's what I was going to say. That's a bright spot in the story.

1:02:44Dave Ramsey:Yeah. You know, even if it's not nice, even if the, you know, if the bathrooms on one end don't work or something, I don't care. If you can get it where it's legal to live in it and the plumbing is functioning and you have a, you know, a basic kitchen to operate out of and you can fix it up later and get rid of the payments here and start dumping all this stuff, this crap that you've got with wheels on it that's going down in value. Okay, folks, a general rule of thumb is this, not just for her, but for all of us. If you want to be poor, here's the formula. buy a lot of stuff that has wheels and motors on payments.

1:03:28Dave Ramsey:Boats, sea-doos, four-wheelers, motorcycles, cars, trucks, trucks, trucks, lawnmowers. Buy a lot of stuff with motors and wheels and put payments on it, and you will be poor. Thank you.

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1:05:44Dave Ramsey:Today's question of the day is brought to you by Y-Refi. If defaulted private student loans are wrecking your budget, it's time to deal with them. Y-Refi helps you refinance defaulted private student loans with a low fixed rate payment based on your ability to pay so you can stick to a budget and work the plan. Go to YRefy.com slash Ramsey. That's Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

1:06:11Rachel Cruze:Today's question comes from Lauren in Maryland. She said, I'm a married woman in my 50s with$25 ,000 in debt that my husband doesn't know about. I started a part-time job and I'm slowly paying it off. I grew up in a middle-class family and my mother was always trying to save a dollar, which drove me crazy. My husband is a good man who makes about$175 ,000 a year. We don't have a mortgage and have about$1.5 million in retirement. We have healthy retirement investments, and our parents have set up 529s for our children, so college is set. I like to buy nice things for myself, but I feel terrible about the way I've handled my finances.

1:06:49Rachel Cruze:Should I continue to pay this off myself or come clean and tell him about the debt? Whew, Lauren. well to answer your question bluntly yeah I would come clean and tell him about the debt not only can you guys get this cleaned up together but also carrying around a secret like that and functioning at that level in your marriage is going to erode not only your marriage but also you you can't carry that stuff secrets is what erodes trust in a marriage and so you carrying that is not being a person of integrity being fully honest. And so that's going to be a very hard conversation. People that deal with financial infidelity, and thankfully you guys have the, it sounds like the margin that you're gonna be able to take care of it.

1:07:38Rachel Cruze:But man, people that get stuck with this stuff, it does feel like a level of betrayal, sometimes at the same level of actual infidelity going on in a marriage. So I'm not saying it's gonna be easy, Lauren. Yeah, I kind of expect your husband to be pish.

1:07:53Dave Ramsey:because you lied to him. So I think that, you know, I like nice things, so I lied to you. I don't think that's okay. No, it's not. And it's not okay. And I think you expect him to be pissed, and he should be. Not because of the money, but because of the deception and the lying. And that's some serious stuff in your relationship. So, yeah, you need to come clean yesterday, deal with whatever the consequences are. It may put you on the marriage counselor's office, which would be okay with me. Um, then the second thing is, is that you can afford nice things. Yeah. But you can't afford to do it on, on, under the table.

1:08:34Dave Ramsey:Hide the target bags under the bed. That's not, that's not funny. This is a grown woman and you're 50 freaking years old. It's time to act like it. So yeah, you got, you need to, um, you and your husband need to sit down and have an adequate budget for you to buy some nice things. And part of it was you grew up in a tight household where they didn't have any money. And so your husband makes$175 ,000 a year. You want to have a nice dress. That's okay. I want 14 nice dresses. No, then that's something wrong with you.

1:09:07Rachel Cruze:Well, that's what I was going to say. At that point, yes, where she is, I'm like, there's stuff inside of you, Lauren, that's coming out sideways in the form of money. For some people, it's other things that they sit there and medicate with. But some people, it is. It's the spending. It's the money. And so figuring out what that is for you, for yourself to get healthy, is going to be a gift later on to your marriage. But, yeah.

1:09:28Dave Ramsey:So we can afford to do a lot of things that we choose not to do because in our minds they're ridiculous. But she and I, Sharon and I, choose to do that together. And then there's some things that we choose to do that other people think are ridiculous. I don't care what they think. It's not their money. And so we just buy that because we want to and we have the money shut up. and so you can do that but you're in agreement on that amount and so my wife wants to do such and such in the redecorating which is a constant budget line item and so uh you know that but at least we know what it is and we're doing it together and it's a reasonable percentage of our world and it doesn't mess up everything else and she gets to enjoy that thing that i don't even understand and so um that's okay i can do that as a husband she can do that as a wife but we can be on the same page and it's a line item in our overall plan and there's room for it.

1:10:23Dave Ramsey:And I think that's the case here. There's room for you to have some nice things and, uh, but, but not by hiding them. So yeah, you need to come clean today. Uh, you need to expect him to be not about the money, but about the lying for him to be really pissed. I don't know of anybody that wouldn't be. um and and so uh you know and you've broken trust and it may take a little while to rebuild that trust and it may take some time in a marriage counselor's office and that's okay i wouldn't mind that for y 'all at all because there's a lot of stuff going on here that needs to be fixed but yeah but the way you all have been handling money as a couple has not allowed you the freedom right To speak up and say, I want to buy something.

1:11:10Rachel Cruze:Yeah. And it's either that you have an issue, Lauren, that you have to live below your means and you don't like that. And so you go off and do whatever you want and go charge it on credit cards. That's your issue. But then on the flip side, he could be kind of a jerk and like shaming you over every purchase. You're like, I don't want to deal with that. I'll just come over here and do my own thing too. Right. Which is an issue too.

1:11:29Dave Ramsey:So we don't know what it is. But the way you're handling money as a couple has partly led to this. Either you're not speaking up or him putting his thumb on it or some of both. somewhere in there. Taylor is in New York City. Hi, Taylor. How are you?

1:11:44Rachel Cruze:I'm good. How are you?

1:11:45Dave Ramsey:Better than I deserve. What's up?

1:11:48Rachel Cruze:Thanks for taking my call. I have a quick question that I've gotten a lot of differing opinions on. But basically, should I stop contributing to my 401k while I'm paying off my debt?

1:12:00Dave Ramsey:If you're working the Ramsey baby steps, there's not varying opinions. There's only one. there's only one way to work the ramsey baby steps and baby step one is save a thousand dollars two is temporarily stop all investing and completely focus on your debt snowball paying minimum payments on everything but the little one and attacking the little one with a vengeance that is blasphemy for those of us that know how to do math and we see that we're losing that compound interest and maybe missing out on a company match even for a short period of time It's very hard for those of us like me that are nerds to do that.

1:12:37Dave Ramsey:But we have found that the power of focus and complete commitment to becoming debt free by both of you, you and your husband, to the point that we're stopping the 401k completely. We're stopping saving completely temporarily. That focus, that level of intensity is what causes people to complete their get out of debt journey. Those that play footsie with it and try to do three things at once, don't pull it off. Ish is a wish.

1:13:06Rachel Cruze:All right. Thank you.

1:13:09Dave Ramsey:Okay. So I don't know where you're getting varying opinions, but they're not from our materials.

1:13:15Rachel Cruze:No, no. Just people in my life who I'm like trying to figure it out. Yeah.

1:13:20Dave Ramsey:Broke people have a lot of opinions about money.

1:13:24Rachel Cruze:Yeah. Oh, thank you. I appreciate it.

1:13:28Dave Ramsey:Thank you for calling.

1:13:32Rachel Cruze:It's hard. I think that's probably...

1:13:33Dave Ramsey:If your broke friends are making fun of your financial plan, you're right on track. You're doing good. If your fat friends are making fun of your diet, you're right on track. I mean, come on. You've got to think about where you're getting your information. If you're getting your financial information off a TikTok, you're screwed.

1:13:52Rachel Cruze:Yeah, but I will say the investing side, there are a lot of smart people that just say, hey, invest, they wouldn't say to stop it like we do. Yeah, nobody does.

1:14:01Dave Ramsey:We're the only one.

1:14:02Rachel Cruze:Yes, that's right. I know. And I do think that's one of the hardest parts of Baby Step 2 for people is to go in and actually pause the 401k. But there's a part of that desperation that's so emotional that actually drives getting through it.

1:14:17Dave Ramsey:Yep.

1:14:18Rachel Cruze:And so that's for a lot of people, the motivation.

1:14:20Dave Ramsey:I'm pissed that I'm missing out on the match.

1:14:21Rachel Cruze:Yes.

1:14:21Dave Ramsey:I'm pissed that I'm missing out on some compound interest. So I'm going to drive through this debt that much faster. But here's the deal. What little bit you lose during that time you make up for because you've now gotten muscular in the amount that you can put towards your wealth building because your most powerful wealth building tool is not compound interest. It's your income. And your income drives the engine of compound interest. And when you give all your income to camper payments, you can't win. I know.

1:14:50Rachel Cruze:And the 15 % maybe step four makes up for all of that, what you're saying. A lot of people just go up to their company match, and that's all they do for retirement.

1:14:56Dave Ramsey:Well, they do 3 % their whole life. That's right.

1:14:58Rachel Cruze:That's right. So the 15, you'll be fine. You'll be fine, Taylor. I promise.

1:15:01Dave Ramsey:You're going to be a multimillionaire if you follow these steps exactly.

1:15:34We'll be right back.

1:15:53Dave Ramsey:Mandy is in Texas. Hi, Mandy. How are you?

1:15:56Rachel Cruze:I'm doing well, thank you. I'm excited I get to talk to you today.

1:16:00Dave Ramsey:You too. How can we help?

1:16:01Rachel Cruze:I'm 63 and my husband is almost 66. I retired from teaching two years ago and my husband is semi-retired in the cattle business. We both chose to start social security at 62 and we have been debt-free for many years. But over the years we have always avoided investing money in the stock market we thought it was too risky. So we put it in CDs instead. And currently we have about$765 ,000 in CDs, ranging from 4 % to 5%. And then two years ago, I ran across your show and learned a lot that I wish I knew a long time ago. And so a year and a half ago, I decided to take a chance, and with the help of a financial advisor, I had$51 ,000 in a deferred retirement account, and I invested that in a growth stock mutual fund.

1:17:03Rachel Cruze:And at the end of last month, the rate of return was about 13%.

1:17:08Dave Ramsey:13 % from when?

1:17:10Rachel Cruze:From a year and a half. It grew.

1:17:14Dave Ramsey:In 2025, it grew 13 %?

1:17:18Rachel Cruze:That's what it had on the piece of paper.

1:17:20Dave Ramsey:Okay. Well, the market went up 24%, so I think you picked a bad fund.

1:17:26Rachel Cruze:Okay. But either way, Mandy, you're doing great.

1:17:28Dave Ramsey:Either way, you're doing way better than 4%.

1:17:31Rachel Cruze:On the right track. Yes. So here we are. I can see that even though that might not have been the best thing for a financial advisor to do for us, I can see that growth stock mutual funds can't earn more than CDs because 13 % is more than 5%.

1:17:49Dave Ramsey:Exactly.

1:17:51Rachel Cruze:But here's my dilemma. But with us being in our 60s and having this being in it for the long haul, we are just hesitant to move every cent that we have in those CDs into mutual funds. And so we want to move some.

1:18:07Dave Ramsey:Because you like making$40 ,000 instead of$140 ,000.

1:18:11Rachel Cruze:I would just...

1:18:13Dave Ramsey:Why are you hesitant?

1:18:17Rachel Cruze:Because it's all we have.

1:18:19Dave Ramsey:I know, but I mean, because you think you're going to lose it all.

1:18:26Rachel Cruze:I think I might need some of it.

1:18:28Dave Ramsey:Well, you can just get it out.

1:18:30Rachel Cruze:Okay.

1:18:31Dave Ramsey:If you take it out of a CD, you can take it out of a mutual fund.

1:18:35Rachel Cruze:Okay. All right.

1:18:37Dave Ramsey:It's not trapped. Deferred comp is trapped, but mutual funds are not trapped.

1:18:41Rachel Cruze:Okay. So in this stage of the game, you would suggest that we take it all out of our CDs?

1:18:48Dave Ramsey:Are you living off of the money from the CDs?

1:18:51Rachel Cruze:No, we're not.

1:18:52Dave Ramsey:You're not touching it?

1:18:54Rachel Cruze:No, I haven't touched it.

1:18:55Dave Ramsey:So what would you want to take it out for?

1:18:59Rachel Cruze:Well, just in case with HealthWise, we...

1:19:02Dave Ramsey:So if we had a health event, we might need$100 ,000. in?

1:19:06Rachel Cruze:Well, for maybe for nursing home or I don't know where my kids might put me. It's like I need some money.

1:19:14Dave Ramsey:Okay. Well, I mean, so what you need to do is you're dealing with the emotion, but what we need to do is put the reality of how a mutual fund works against that emotion and say, how does this keep me from touch scratching that itch? Okay. So, so for instance, If the emotion is I'm going to lose everything, the only way a mutual fund would go completely broke is if 90 to 200 of America's top companies all became worth zero, which means that America is over. That's never happened in the history of America. The entire economy has collapsed to zero, if that happens. Because what we're saying here is General Motors, Alcoa, all the banks, all the Home Depots, Apple, Tesla, everything is worth zero.

1:20:09Dave Ramsey:And then your 700 would be worth zero. So that's illogical. Okay. Okay. Now, do they go down sometimes? Yes, it goes down sometimes. But it goes up more than it goes down. Right. And so let me just make you cry. Are you ready? Sure. In 2024, the market went up 26%. In 2025, it went up 23%. That means in those two years alone, you lost$400 ,000.

1:20:43Rachel Cruze:That's a lot.

1:20:44Dave Ramsey:$700 ,000 would be$1.1 ,000. Okay? That's what this fear has cost you. So I'm saying that not to say you need to go do this because I said do it, but to say you need to go learn about this. You and your husband need to sit down with a smart investor pro. Go to RamseySolutions.com. They have the heart of a teacher. Tell them I don't understand anything. You're going to have to use words that I understand, and you're going to have to teach me how these mutual funds work, or I'm not putting a dime in them, and you're going to have to make me feel okay. If I need the money, I can get it, and you're going to have to make me feel okay by showing me charts and graphs of the last hundred years that I'm not going to lose my money.

1:21:28Dave Ramsey:Right. You've got to learn. This is learning. This is knowledge. Right. I've never ridden a bike, so riding a bike is scary. But now once I've learned to ride a bike, then riding a bike is not scary anymore. You've done a lot of things in your life that were scary before you learned how to do them, but you learned how to do them anyway, the time you learned to drive a car. The time you married that man and didn't know what that was going to be like. All that stuff, right?

1:21:55Rachel Cruze:You're right.

1:21:56Dave Ramsey:But you've learned about it, and you've got past the fear, and it's been a blessing with the knowledge. And so sit down with a Smart Investor Pro and learn, learn, learn, learn, learn. And he needs to go, too. Don't do it because some financial advisor said do it, or Dave Ramsey said do it. Right. Okay. I appreciate your – Yeah, that's the numbers you're missing out on. And if you decide, hey, we're going to put$100 a year in for the next seven years. We're going to wade in. Okay. Instead of jump in. That's okay. Yeah. You put$50 in already, and you don't regret that.

1:22:33Rachel Cruze:No, I don't regret that at all. Okay. And you guys are young enough, Mandy, that you're going to have years, decades still.

1:22:40Dave Ramsey:Yeah, there's a lot.

1:22:41Rachel Cruze:A lot of time.

1:22:41Dave Ramsey:There's a million and a half dollars on the line.

1:22:43Rachel Cruze:You're not 92 calling us, and you're scared of the market. And at that point, we'd say sleep well, have peace and enjoy your life. But you're young, you know, 60, 60, 63, 63. You're younger than me. 63.

1:22:54Dave Ramsey:Yeah. Yeah. So, Rachel, the thing about investing for anybody, including me, including you, is you have to learn about it. And then that keeps you from freaking out. So when.

1:23:11Rachel Cruze:Like yesterday. Right.

1:23:13Dave Ramsey:The market dove. Yep. When they bombed Iran, the market's back three days later. Okay. Those that get hurt on a roller coaster are those that jump off in the middle of the ride. So, you know, and then there's going to be something else that happens. And this year probably won't be as good as the last two years. I don't, I am not projecting, nor am I saying that mutual funds are going to produce 23 and 26%. I don't, that is not realistic. Those are two unusually good years. Okay. But I think we're going to make more than CD rates, and you have almost every year since the stock market's been there.

1:23:52Dave Ramsey:It's almost always done better than CD rates. I do remember 1982, CDs were 12 % in the stock market because interest rates were 17 % on houses.

1:24:05Rachel Cruze:Oh, yeah.

1:24:06Dave Ramsey:And CDs were 12%. And I remember my grandpa having 12 % CD money market rates. and I'm like, oh my gosh. But that was 1982 in a highly unusual Jimmy Carter mess of the economy that we were in.

1:24:21Rachel Cruze:With interest rates of real estate being, we complained at our 6%. Yeah, yeah, yeah.

1:24:26Dave Ramsey:But most of my life, most of my working life, 50 years, CD rates have been 2 % to 5 % right in there. And the stock market has been 10 % to 15 % on your rates of return. but I don't get a guarantee. No, you have a guarantee you're going to make less money. That's your guarantee. When you're in a CD, you got two guarantees. You're not going to lose your money and you're going to make less money. I'm guaranteeing you that's going to happen.

1:24:54Rachel Cruze:Barely keeps up with inflation at that point.

1:24:56Dave Ramsey:Just barely, barely, if at all.

1:25:14Thank you.

1:25:42Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Rachel Cruz, Ramsey personality, number one best-selling author. My daughter is my co-host today. Michael is in Seattle. Hey, Michael, how are you?

1:25:56Rachel Cruze:Hello, how are we doing? It's a blessing to be here.

1:25:58Dave Ramsey:Honored to have you. How can we help, sir? Yeah, so I'm kind of at a force in my life here,

1:26:06Rachel Cruze:and I'm looking for some advice on what you guys would do if you're in my situation. Currently, I'm on a day-to-day layoff with my company. They're currently trying to get rid of about 40 ,000 of their workers, so they're offering severance packages. And where I'm stuck is, do I wait the four to five years for potentially get full-time work, or do I take the severance package and attempt to start an entrepreneurship as far as either buying a house outright and collecting that cash flow and starting my own company, or should I invest that into stock markets, dividends, that kind of bear mutual fund.

1:26:47Rachel Cruze:So I'm just looking for some advice on what you guys would do in my shoes and where you would go.

1:26:53Dave Ramsey:Okay, so it's fair to say the company you work for is not financially healthy if they're laying off 40 ,000 people, right? So the future there is not very bright.

1:27:05Rachel Cruze:yeah yeah i've been there since for eight years since i was 18 a single father of four so it's it's hard to kind of step out onto that limb yeah i don't care they're pushing you out on the limb because they're not doing well so four to five years from now it's not looking bright i'm doing about a day or two per week um are you hearing me stop stop stop i don't feel like

1:27:29Dave Ramsey:you're listening to me okay i'm saying your company sucks so the future there sucks do you

1:27:35Rachel Cruze:agree with that i agree it's hard to patent you know give up on that hundred thousand a year

1:27:41Dave Ramsey:well i know but you're gonna have to give up on it because they don't want you there anymore

1:27:49Rachel Cruze:right i hear yeah there's a few guys that are getting ready to retire so so you're not laid off michael you're just saying there's layoffs happening but they're offering you a severance package to leave that's correct how much it's$150 ,000 after Uncle Sam takes his percentage it'll probably be around$100 ,000

1:28:13Dave Ramsey:and you make$100 ,000

1:28:17Rachel Cruze:potentially yes

1:28:18Dave Ramsey:so potentially do you make$100 ,000 or not

1:28:22Rachel Cruze:I'm at$70 ,000 a year okay you make$70 ,000

1:28:25Dave Ramsey:and they're offering you$100 ,000 to go away

1:28:30Rachel Cruze:Correct, yeah

1:28:30Dave Ramsey:That's our reality Let's deal with reality And$100 ,000 is not enough to buy real estate Realistically You're going to end up with a bunch of real estate debt So we're not going to do that with it So if you leave this company Making$70 ,000 a year And you put$100 ,000 in your pocket What would you go do for a living?

1:28:56Rachel Cruze:As of right now We've got a family business going, so I'd probably push into that for a little bit, just kind of weighing my options. Out of necessity of getting an income or because you enjoy the family business and you want to make that a part of your next career step? Yeah, I enjoy it, but as of right now, it is kind of a necessity. What are you doing right now? What's your job? I deliver. so I drive in the commerce. I'm a full-time package driver. Oh, great.

1:29:30Dave Ramsey:Okay, so who's the family business? Your parents?

1:29:36Rachel Cruze:Yeah, I'm co-owner. So my parents, my sister, and I are both the owners of the company. Do you make an income from that? I do, yeah. How much do you make of that? I'm only going and helping them about once a week, So roughly just a couple hundred bucks a month. Oh, just for what you're being paid, not as you're not getting the bottom line or anything? No, we started at about a year and a half ago. How old are you, sir?

1:30:04Dave Ramsey:Okay.

1:30:06Rachel Cruze:26.

1:30:06Dave Ramsey:Okay. Let's pretend that you were 26 and could do anything you wanted to do in this world. And you weren't allowed to do the family business and you weren't allowed to stay in the job you're in. And you could be whoever you wanted to be. what would you go do?

1:30:27Rachel Cruze:That's a fair question, sir.

1:30:29Dave Ramsey:That's what you need to hear about.

1:30:31Rachel Cruze:All I've known is being a father and providing.

1:30:34Dave Ramsey:All you've known is landing in things by default rather than by plan. Oh, there's a job over there I can throw packages and I can make 70 a year. Well, you did it for eight years. And I can feed my family. Yeah. But you did not sign up for that because it was the joy of your life. You signed up for that as a provider as a father as a husband and a good man and a hard-working guy But you didn't sign up for that and say this is the this is going to give my life meaning I'm going to make it big. I'm going to go make 700 ,000 a year doing this. You didn't have a A set out to live a dream You backed into something because you had to have a job to eat and you're a good man and you're not afraid to work Okay, so i'm challenging you to take a step up from that.

1:31:14Dave Ramsey:This is your opportunity to reset and land in something that makes 200 grand a year. And maybe you have to take three classes to learn how to do it. I don't know what it is. Or you start your own thing with some of that 100 grand. Or you take a class with some of that 100 grand. But this is your opportunity to say, not just because something's convenient. I'm not going to do it because it's convenient. The family business is just convenient. It's you backing into something else instead of walking headfirst into something else.

1:31:42Rachel Cruze:Yeah, hold on the line, Michael. Christian will pick up and we'll give you Ken's book, Find the Work You're Wired to Do. Because there's a great assessment in there just to kind of get those wheels turning for you.

1:31:51Dave Ramsey:Yeah. But this probably is a great opportunity. You're a good guy. I want you to dream, though.

1:31:55Rachel Cruze:And I would not invest or do anything with this$100 ,000 right now. I would just put it in a high-yield savings account.

1:32:00Dave Ramsey:I wouldn't even take the package right now. I'd figure out what I'm going to do first and then I'd take the package. Oh, before you go. Because they're letting him stay. And they're going to keep offering the package for a while. So I'm going to take the next six months and do Ken's assessment. I'm going to decide what I'm going to be, and I'm going to start taking steps into that thing that I have always wanted to do X. And now I'm going to go be one of those. And what must be true for me to do that, as Henry Cloud says? And we're going to walk right into that. And then take the severance package and then use the severance package to go live your dream.

1:32:35Dave Ramsey:But, no, I would not work at the family business. and know I would not stay at this company that wants you to leave. But I would for a little while while I get reset and figure out what my dream is and what it has to happen for me to live that dream. You looking at buying real estate or dividend stock, that's just you looking at crap on the internet looking for something to do.

1:32:55Rachel Cruze:Well, and to earn some money. I mean, you get your year's worth of salary or more handed in your lap to someone like him, and he's like, holy crap, how could I make this money work for me?

1:33:04Dave Ramsey:Yeah.

1:33:04Rachel Cruze:Which is a fair question, but that's the wrong way to go about it right now. Until you have a steady income, then you could take that and invest that later. Exactly. But I would be having a monthly income first.

1:33:15Dave Ramsey:This$100 ,000 is not going to make your life. You're going to make your life. You're the secret sauce for your life. That's the thing. So hang on. Christian will pick up. We'll get you a copy of that, Finding the Work You're Wired to Do. Take that assessment. Read that book carefully. Read or listen to anything Ken Coleman says, and he'll get you on the right track doing all this stuff. He's one of the Ramsey personalities, for those of you that don't know. And specializes in this area of living your dreams and doing this stuff. Okay, well, here's a question.

1:33:42Rachel Cruze:They haven't let him go yet.

1:33:43Dave Ramsey:No, sit there for a little while.

1:33:45Rachel Cruze:But what if he's loving it and he starts making more? Would you not stay at a company that's laying off$40 ,000?

1:33:50Dave Ramsey:No.

1:33:50Rachel Cruze:Regardless?

1:33:51Dave Ramsey:Because there's no future.

1:33:52Rachel Cruze:Yeah, but what if laying off the$40 ,000 props him up for a little bit longer?

1:33:57Dave Ramsey:It props him up for a little while longer. But I'm not hanging around the place that's going down the toilet.

1:34:31Rachel Cruze:Hey, George Camel 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 ramsaysolutions.com slash real estate.

1:35:03Rachel Cruze:That's ramsaysolutions.com slash real estate.

1:35:19Dave Ramsey:If you're working the baby steps, the best and fastest way to do it is by using EveryDollar, because EveryDollar will guide you not only in a budget, but right through the baby steps, doing this the Ramsey way. The plan is built into it. You track your progress. You get personalized recommendations, coaching for your particular situation. You free up more money. You work the plan even faster. You're working it together with your spouse. It's like having one of us walking with you every day, showing you the next right step, do this, do this, do this, and then holding you accountable. Why didn't you do it?

1:35:51Dave Ramsey:Start every dollar for free by downloading it in the App Store or Google Play. Alyssa is in Montana. Hi, Alyssa. How are you?

1:36:01Rachel Cruze:Hi. Thanks for taking my call. It's an honor to talk with you guys.

1:36:05Dave Ramsey:You too.

1:36:06Rachel Cruze:Yeah. So my husband and I are Big Day Ramsey followers. I'm not sure what step we are in, maybe step five. And we're trying to make the decision if I can be a stay-at-home mom. Cool. I love it. Yeah, it's really an emotional decision, and we're both analytical. So let's do some analytics on the emotions.

1:36:31Dave Ramsey:What do you make?

1:36:34Rachel Cruze:So I'm working right now. We have one kiddo that goes to daycare. I make$85 a year.

1:36:41Dave Ramsey:What does your husband make a year?

1:36:44Rachel Cruze:$116.

1:36:45Dave Ramsey:$160?

1:36:47Rachel Cruze:$116.

1:36:48Dave Ramsey:$116. Okay.

1:36:50Rachel Cruze:Yes.

1:36:51Dave Ramsey:All right. And so what is your take-home pay? Yours on the 85?

1:36:58Rachel Cruze:$46.

1:36:59Dave Ramsey:Okay. $100 a month. Is that right? Like$4 ,600 a month, yes. Okay. You got a lot coming out of that. Yeah. So what's coming out of that?

1:37:16Rachel Cruze:Retirement and just other taxes. I don't have a lot coming out of mine.

1:37:20Dave Ramsey:Yeah, you do. $4 ,600 is only$48 ,000. You said you make$85 ,000.

1:37:27Rachel Cruze:Yeah.

1:37:27Dave Ramsey:There's a bunch coming out. Something's coming out of that check. What's coming out of it?

1:37:32Rachel Cruze:I don't know. Maybe federal taxes.

1:37:34Dave Ramsey:No, it's not federal taxes. It's too much for that. How much are you putting in your retirement?

1:37:40Rachel Cruze:Just up to the match, which is like 5%.

1:37:42Dave Ramsey:Okay, 5%. Are you paying that family's health care out of yours?

1:37:47Rachel Cruze:No, it's out of his. Are you getting a tax refund, Alyssa? No, we're not getting a refund for$25 ,000.

1:37:57Dave Ramsey:Okay. Well, I'm trying to help with this, but so, okay, let's use the$4 ,600, even though it's wrong, and something's wrong with it. But anyway, your daycare is how much?

1:38:10Rachel Cruze:$800.

1:38:11Dave Ramsey:Okay. All right. So after daycare, which you would not have if you were at home, right?

1:38:17Rachel Cruze:Yeah.

1:38:17Dave Ramsey:Okay. So$46 minus$800 puts me at$3 ,800. Does that sound right? Yeah. Okay. If you take$3 ,800 and put it in the bank out of your budget for the next three months, that would mean you are living on your husband's income. Mm-hmm.

1:38:40Rachel Cruze:We're about there. We typically have about$4 ,000 in excess each month.

1:38:46Dave Ramsey:Okay.

1:38:46Rachel Cruze:Oh, good.

1:38:47Dave Ramsey:Then you can do it. You won't have any access, though.

1:38:52Rachel Cruze:Right. And that's kind of the scary part. We just bought a house, and it's our first home, and it's like$3 ,000 a month in all expenses for the house. And so it just feels like that's... Did you guys do the math on both incomes when you bought the home? I mean, obviously. No, we tried to make it on just one. Oh, you did? Okay. Yeah. Yeah. Because he brings home how much? Seven.

1:39:19Dave Ramsey:Eight. Yeah, and it's 40%. Your house is an awful, your house is a big chunk of his income. Really big.

1:39:26Rachel Cruze:Right. Yeah, it is.

1:39:28Dave Ramsey:And so that's going to be a, you're going to be tight on the house. So what is the prognosis on him getting raises?

1:39:36Rachel Cruze:I think really good. He just started there and it's, he kind of had to take a step down when he started there. But I think as soon as he gets like a year under his belt there, he can move up. So I don't think we're like in this situation for a long time, but it feels like we're going to go back to beans and rice.

1:39:55Dave Ramsey:How much? You probably are. You probably are for a year until his income comes up. You don't have any. Do you have an emergency fund in place? Yeah, you said you're on Baby Step 5. I'm going to do it. if i'm you i'm coming home that's your desire i'm taking it or you wouldn't ask the question right

1:40:15Rachel Cruze:well we have our second is coming in the summer oh yeah i just would you would you work would you work till the summer work for the next few months okay well i would do that a listen i would just stack some some extra cash in another fund yeah just to have on the side just to give you some peace of mind.

1:40:33Dave Ramsey:Because it's going to be tight.

1:40:35Rachel Cruze:Yeah.

1:40:35Dave Ramsey:The first year of you being at home is going to be tight. But you're analytical enough, you know your numbers. We can tell because we do budgets for a living. We're asking people their numbers. They don't know their numbers. That tells me they're going to be in trouble. But you know every number. You've got it all dialed in. The only number you didn't know is why your take-home pay is so low. But other than that, you know every number I've asked you for. And it sounds like the two of you are talking about this together. He knows the numbers. And so if you guys do a written detail budget that makes you live on his income minus daycare and you stack all that cash, you have proven that we can live on his income because we won't have the daycare.

1:41:16Yeah.

1:41:17Dave Ramsey:And you're going to have other savings being at home, car gas, dry cleaning on the clothing that you don't wear to work anymore. Or, you know, you're now cooking from scratch, which is less expensive than a convenience-based food because you're working and tired. And you're not going to eat out as much because you're not working and tired. And so there's going to be a lot of other potential places you save in the budget when you're at home.

1:41:42Rachel Cruze:Two babies. You'll be tired.

1:41:44Dave Ramsey:But Crock-Pot will be your friend. Yes. But being at home, being at home is what you're after. And, you know, this is the cost of being at home. We're going to be a home economist, make the economy of the home, be more functional than it is today. And...

1:41:59Rachel Cruze:Yeah. And here's the thing, Alyssa, you guys made such great decisions up until this point, doing the baby steps, that you're able, you know what I mean? That you even have the choice, which is just wonderful. And so when John Deloney always talks about solving for peace, like as a mom, as I hear you and your desire to do that, you're going to have peace. It's where you want to be. You want to be home with those babies. And so there's something that you can't put a price on that, right? And for a season, it's going to be tight. It's not going to, you know, you're not going to have flexibility financially in a major way.

1:42:28Dave Ramsey:Sometimes people, when people hear you say don't put a price on it, it means you can do whatever you want to do. No, you can't do whatever you want to do, but you guys can afford to do this.

1:42:35Rachel Cruze:Yeah, no. Well, no, I would say the other way, if you can't do it and you still choose to, then you are going to be stressed and there is not going to be peace. So no, there is a real peace that you have created to be able to step into.

1:42:46Dave Ramsey:Right, but you're going to have to be grownups with the money. You can't just say, oh, I just choose to be at home and we're going to be irresponsible. Well, no, that doesn't create peace. But you're not that girl. You're not that girl.

1:42:55Rachel Cruze:And it does not create peace.

1:42:56Dave Ramsey:Yeah. And she's not that person. No. She's there very detail. Awesome, Alyssa.

1:43:01Rachel Cruze:Congratulations. Because you can do great.

1:43:02Dave Ramsey:Yeah, I would quit after the new baby comes. I agree with you. I'm in. And because it's your goal and you've earned the right to do your goal, to Rachel's point. Yes. Yes, yes, yes, yes. Very well done. That's cool. You know, I remember the first time distinctly that I took a call and the lady, we figured out that with daycare and she wasn't making a lot of money. Alyssa was making a lot of money. But with daycare and whatever else, it came down to they had a$400 payment on their van. And that was actually what she was netting. so she was working to pay for the van and it was like this light bulb comes on yeah while we're talking to her sell the van and quit your job don't work for a van when you want to be there with your kids yeah and we've we've made that trade subconsciously accidentally

1:44:03Rachel Cruze:americans have for decades now and well daycare with two kids right is going to be, you can just double it. You know what I mean? It's stinking expensive. So it does start to dwindle to your point of the margin that's actually happening.

1:44:15Dave Ramsey:It's crazy. Yeah. And so it makes it more and more and more reasonable to be at home the more expensive that stuff gets. And then go, what is it we're net, net, net working for? Well, get rid of that debt. You can do it. And that's what they have done before today. They got rid of the debt before she made the call because they're at Baby Step 5.

1:44:41Thank you.

1:45:10Rachel Cruze:When people hear my story of paying off debt, they say things like, dang, that must have been so hard. I can never do that. And I tell them, sure you can. It's a short-term sacrifice for a long-term gain. But do you know what's really hard? Working your whole life and never having anything to show for it. Never having the long-term gain. Just feeling broke and stressed and maxed all the time. And sadly, that's the hard that most people choose. Listen, you're capable of transforming your situation and living a life of freedom, but you need the right tools to do it, like our EveryDollar budget app.

1:45:44Rachel Cruze:In minutes, it'll build you a step-by-step plan that's tailored to your money situation. And every day, it finds ways you can free up extra money in your budget so you can get rid of your debt and actually build wealth. So make the choice today. Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the EveryDollar app and start for free. today.

1:46:18Dave Ramsey:In the lobby of Ramsey Solutions on the debt-free stage, Steve and Kathy are with us. Hey guys, how are you? Hi. We are better than we deserve. I love it. Where do y 'all live? We are in Boise, Idaho. Oh, I love it. That's a great town. Well, welcome to Nashville, all the way across the continent to do a debt-free scream. All right. And how much have you guys paid off? We paid$580 ,000. Yay! How long did that take? 12 years. Good for you.

1:46:46Rachel Cruze:Oh, my gosh.

1:46:47Dave Ramsey:And your range of income during that time? We started at about$100 ,000, and last year we made$450 ,000. Whoa! What do you all do for a living? I'm an engineering manager. Good for you. Yeah.

1:46:58Rachel Cruze:Awesome. And I do music at my church.

1:47:01Dave Ramsey:Oh, so good. Very good. Amazing. Very good.

1:47:03Rachel Cruze:What was the$580 ,000? What kind of debt?

1:47:06Dave Ramsey:It was our mortgage.

1:47:07Rachel Cruze:Yay!

1:47:08Dave Ramsey:Look at you, weird people!

1:47:10Rachel Cruze:Paid off the house. Yeah.

1:47:12Dave Ramsey:So what's this house in Boise worth? It's worth about$1.2 million. All right. So we're millionaires on the house alone. Look at it. Look at you. What a great house. Amazing.

1:47:23Rachel Cruze:Oh, you guys, congratulations. Way to go, man.

1:47:26Dave Ramsey:That's got to feel amazing. It does. It feels amazing. It's been a long road, diligence, and a lot of patience. But yeah, we made it. It sounds like the majority of those years, the income was at the lower end of that range. Yeah. And then it just swooped up lately. It actually slowly went up. Oh, slowly, steadily. It was steadily.

1:47:44Rachel Cruze:Did y 'all have consumer debt 12 years ago that you paid off first? No. Or was it really just working at the house? No, we started in 2010. We actually took FPU for the first time. So what happened was in 2007, we bought a new house. We had kids. And then we took FPU in 2010. We paid off all of our consumer debt in 2010. really quickly. You know what happened in 2008? We were way underwater in our house. Terribly. In 2013, we refinanced. And then my dad passed away in 2018. And then my grandparents passed away in 2019, over the course of the next year. So my mom moved up to the Boise area with us, and that's when we built that new house in 2020.

1:48:23Rachel Cruze:And that's, you know, we have a mother-in-law quarters where my mom lives with us. So we steadily, you know, we had made decent money throughout the years. You just worked on land. We worked the plan. We were very diligent. You know, we went through the baby steps, four, five, and six. That's awesome. We put three kids. We have three adult children. Put them through school. One of them was in the Air Force. Wow. So six grandchildren. Oh, look at your family.

1:48:45Dave Ramsey:You guys don't look old enough to have six grandkids. I know.

1:48:48Rachel Cruze:Oh, my gosh. Wow.

1:48:49Dave Ramsey:So that's our why right there. It's that group. Change the family tree. Exactly. Yes.

1:48:54Rachel Cruze:Oh, I love it. And these two sitting over here are the ones that started all this for us. Our mentors came with us. They met us out here. They joined us because they put us through FPU. Jim and Debbie, our friends Jim and Debbie, they did the first FPU at our church. They've been kind of inspirational for us. I want to be Jim when I grow up. Yeah. Amen. It's amazing.

1:49:15Dave Ramsey:Well, I'm glad they got to come with you. That's so neat. That's a lot of fun. And they get to celebrate your success, too. And so how much have you guys got in your nest egg these days? About 1.6, 1.7 million. All right. So you're bumping 3 million now. Way to go. I'm so proud of y 'all.

1:49:29Rachel Cruze:Well done, you guys.

1:49:30Dave Ramsey:It sounds weird to say it out loud, doesn't it? It does. It doesn't feel like it. It doesn't. It was actually kind of strange. I was laughing.

1:49:36Rachel Cruze:When we went to the bank to pay off the house, it was a little bit surreal. I was expecting streamers and balloons. The bank was not that happy. You know, people say that a lot. Isn't that funny? It's such a milestone. I walked out of it.

1:49:48Dave Ramsey:I was kind of a downer. It's kind of anticlimactic. It was a lot of fun. If we ever get a bank that celebrates when you pay off your house, we have a new bank. Right. That's so cool, y 'all. Way to go. Yeah. How does it feel to be completely free after all these years?

1:50:03Rachel Cruze:Yeah, it's amazing. It does feel amazing. We know we can be more generous. We really want to be able to exercise that generosity muscle and help as many people as we can. That's kind of been a big part of our lives throughout the years, so we can continue to do more. And also helping our grandkids go to school. Amen. Oh, yeah. Absolutely. Yeah, what have your grown kids said as you guys have been doing this journey? They're proud of us. I mean, all three of our adult children, they're debt-free. Yeah, we made them take the classes. They took FPU as they were growing up through high school. And he's coordinating it.

1:50:34Rachel Cruze:Yeah, I've been coordinating FPU since 2013. Wow. Thank you. Oh, my gosh. It's a pleasure.

1:50:39Dave Ramsey:We actually just started. I do it every spring, and we just started this last week. Oh, wow. That's awesome. Okay, so the class will get to see your debt-free screen. I guess so. I guess so. That's good. Yeah, it's kind of surreal. Hey, my FPU coordinator, you paid off his house. I don't know about you, but I'm just saying. So way back in the day, when you first went in the class, do you remember those emotions of like, I wonder if this whole thing's a con? I wonder if somebody didn't want to go? No, we both wanted to go. I'm the free spirit. Oh, yeah. Oh, we are the prototypical nerd free spirit couple.

1:51:13Rachel Cruze:I'm really nerdy. I got you. I am super nerdy. You know, the whole spreadsheet thing. So I was into it. I like the plan. I like the process. Yeah. You know, it tells me what to do. You know, so. We had to take it a couple times from them. I was not willing to cut up my Costco. That was the only one I was not willing to cut up. The Costco credit card. Yes. That was going to save you.

1:51:35Dave Ramsey:Yeah, right. I felt like it. I did.

1:51:37Rachel Cruze:But once we tracked it a whole year, I realized I was spending about 30 % more just swiping. Oh, wow. And so I thought, okay, it's on paper. I can see it. So that was it. It's not theory.

1:51:48Dave Ramsey:This is, I'm really doing this. Yeah. Wow. Yeah. That's an interesting thing.

1:51:52Rachel Cruze:And save 30 % at Costco. George Campbell would be proud of you. Or Kirkland King. He loves it. It's awesome.

1:52:00Dave Ramsey:All right. So now you're coordinating classes for over a decade, almost 15 years. You accumulated a nice net worth, a good income. You're debt free. Your kids are debt free. Your family tree has changed. This is a massive transformation. I mean, because when you started, I assume you didn't have anything.

1:52:18Rachel Cruze:Oh, nothing. We were living paycheck to paycheck for the longest time. For years and years. The budget was huge. We weren't paying attention, really. I mean, it was just kind of, oh, money comes in, it goes out. You were normal. You were normal.

1:52:28Dave Ramsey:Exactly. And I'm so proud of you. Yeah. What a great transformation. Thank you. God has done a work. Oh, absolutely. So what do you tell people the key is, that couple that comes in that first night, and they're kind of looking side-eyed at you, and they're like, what is this, some kind of cult, or what is this deal? It's this Ramsey guy. And what do you tell people the key to getting out of debt is? Because you guys are, I mean, you're like poster child.

1:52:51Rachel Cruze:Yeah, for me, it's really simple. First is the budget. Getting it on paper, seeing it. You're telling your money what to do each month. I've heard you guys say it a million times. You do the budget, and you feel like you get a raise immediately. So we immediately had more money because we were paying attention to where it was going. And then just intentionality and discipline. Always being on the same page. Always, yes. We talk about our money a lot. Every two weeks, I'm a nerd. We send a picture. I have this massive spreadsheet that I do, a budget spreadsheet. I'm an engineer, so every two weeks when we get paid, I go and I do our budget.

1:53:26Rachel Cruze:I have it laid out for the next six weeks exactly what's going to happen. Even with the house paid off, I know Saturday morning he's going to be up there doing it. I actually enjoy it. He does. It's good. Oh, I love it. He likes to save. I like to spend.

1:53:40Dave Ramsey:So, Kathy, along this way, he's obviously a nerd, a detail guy. But along this way, how did you manage to keep your voice speaking into that budget?

1:53:51Rachel Cruze:I'm the one. He just, I like to have fun. So he makes the money. I make sure that we enjoy it. Right? Like, that was my thing. I always wanted to take the kids camping or I just wanted to do one trip. So you want to look at the budget and see that in the budget? Yes. I needed it in the budget. And he respected that. Yes. Absolutely. Absolutely. We would go through the numbers and I would, you know, if we would go, Line by line, I had line items for cash and things that would auto pay

1:54:19Dave Ramsey:for how much cash we're going to pull out every two weeks. And she's yawning until she gets to the camping line. Here's the camping and the Costco line. Yes. How much have I got for camping? How much have I got for Costco?

1:54:31Rachel Cruze:But I know for me, the biggest thing is keeping God at the center. And this is why we have what we have because of his blessings. And so we got to do right by it. I love it.

1:54:42Dave Ramsey:It's a responsibility. It's great. You're being a blessing by being here today and sharing your story. It's inspiring. We appreciate it. You're very, very proud of you. Thank you for teaching the class. Thank you for your mentors, for getting you guys in this. They've completely, I mean, all those grandkids, all those people are changed. Sweet. Because God's ways of doing things got inserted into your life. We really appreciate you guys and all your personality. I mean, you don't know us from Adam.

1:55:05Rachel Cruze:I see you guys around. I feel like I know everybody. I see John Deloney, and I feel like we're brothers, and you guys know who I am. You are. You are. And we are going to see you on the cruise next year. All four of us. We're all going. We'll high five.

1:55:22Dave Ramsey:Steve and Kathy, Boise, Idaho. $580 ,000 paid off in the last 12 years. That's the last step. Their house and everything. Baby steps millionaires. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah. Yeah. Woo-hoo-hoo-hoo. Way to go, you guys. What an awesome couple. It's amazing. Very neat.

1:56:10Dave Ramsey: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.

1:56:57Dave Ramsey:Our scripture of the day, 2 Timothy 2.6. It is the hardworking farmer who ought to have the first share of the crops. Sandra Day O 'Connor says, do the best you can in every task, no matter how unimportant it may seem at the time. No one learns more about a problem than the person at the bottom. Woo. This is true. Stephanie is in Tampa, Florida. Hi, Stephanie. How are you?

1:57:23Rachel Cruze:Hey, I'm good. How are you?

1:57:25Dave Ramsey:Better than I deserve. What's up?

1:57:27Rachel Cruze:Thank you for taking my call. Well, my husband and I recently had a baby. The last few years I've worked as a travel nurse. And because we just had the baby, I took a position as a staff, making three times less than I was making before. So we're just trying to figure out how to pay off$150 ,000 without me going back to traveling.

1:57:47Dave Ramsey:What are you making as staff?

1:57:51Rachel Cruze:I make about$80 ,000 a year.

1:57:53Dave Ramsey:What does he make?

1:57:55Rachel Cruze:He makes$82 ,000.

1:57:57Dave Ramsey:$82 ,000. So we have$162. And you were making bank as a travel nurse, but that's not a good idea with a brand new baby. I agree.

1:58:07Rachel Cruze:Right. So we decided to come back home, but it's taken a huge hit on us financially because I'm so – I don't want to say I'm used to the money, but – But you're used to the money. Yeah. Yeah.

1:58:19Dave Ramsey:That's okay. That's a normal thing. I mean –

1:58:21Rachel Cruze:$240 versus$80 is different. That's okay to say. Yeah. For sure. Big difference.

1:58:26Dave Ramsey:Yep. So were you making huge progress when you had the 240?

1:58:32Rachel Cruze:We did make some progress, but not as much as we wanted to. What did you do?

1:58:37Dave Ramsey:What were you doing? Where were you screwing off?

1:58:41Rachel Cruze:Well, I mean, we purchased a house that was a, I don't want to say it was a complete picture-upper, but we put about$150.

1:58:47Dave Ramsey:You bought a house while you were trying to get out of debt. Well, that doesn't work.

1:58:51Rachel Cruze:Yeah. At least we have a house now, though, and we wanted to have the house before we had the baby. So that's kind of what happened. Okay.

1:59:00Dave Ramsey:Well, the reason you haven't gotten out of debt is you put paying off the debt further down your list of priorities. Yeah. That's going to have to change. And so your priorities don't include eating out anymore. Your priorities don't include going on vacation anymore. Your priorities don't include spending$80 ,000 fixing up the nursery for a newborn who doesn't even know that stuff's there.

1:59:27Rachel Cruze:Right.

1:59:28Dave Ramsey:Gotcha.

1:59:30Rachel Cruze:So the thing is, is my husband and I are actually pretty frugal. No, you're not. I would say we are.

1:59:37Dave Ramsey:You're making$240 ,000 a year, and you didn't pay off hardly any debt. You're not frugal.

1:59:43Rachel Cruze:Well, we're trying to be.

1:59:45Dave Ramsey:In your mind, you are, but the reality is you spent the money. That's the opposite of frugal. So you're going to have to get frugal, though, if you want to make progress.

1:59:57Rachel Cruze:Could y 'all live on one income for two years?

2:00:01Dave Ramsey:Like$80 ,000?

2:00:02Rachel Cruze:Yeah. I mean, that's what we're trying to figure out. We consolidate our loan into$1 ,000 payment, and then our mortgage is about$2 ,400. So that is our debt, period. We have it all together and focused into two bills. So one is our mortgage and two is our personal debt.

2:00:24Dave Ramsey:Okay. Well, if you can buy food, lights, and water and throw money at this debt, $75 a year gets you out of debt in two years, right?

2:00:36Rachel Cruze:How? Hmm? I said how?

2:00:40Dave Ramsey:Well, you make$160.

2:00:43Rachel Cruze:Yeah, but how do we do that? How do we live on one income when we pay like$2 ,000 for one debt and then$2 ,400 for another?

2:00:56Dave Ramsey:Well, I thought you said it was$1 ,000, but the$2 ,000 going towards the debt is part of the$75.

2:01:02Rachel Cruze:Okay. We need to get more focused. Yeah, are you guys on a budget, Stephanie?

2:01:07Dave Ramsey:All right, 162. 162 minus 75.

2:01:13Rachel Cruze:I got you, Dave. Here, you cough. Turn off your mic and cough. Stephanie, are you guys doing a budget, a written budget? We are, and I have it in front of me. You do. Okay. So where are things that, well, what is left? After you pay your mortgage, like all the necessities that you have to have, what is left? How much is left?

2:01:36um i'm looking at the monthly total um not very much um we're putting 1900 into child care alone

2:01:49Rachel Cruze:into child care 19. wait a minute why are you i thought you're oh oh yeah for one baby For one baby. We pay$20 an hour. Is it daycare? No, it's a babysitter. We couldn't find any openings for daycare around us. That's what we wanted to do, but we're paying for a babysitter, so it's$20 an hour. Okay. That's average around here. So, I mean, the reality is, Stephanie, that you guys, it may take you three years. I don't know the plan, but to have a level of intensity that you guys have never had before is what this is going to require to get out of this. And is the 150, was that student loans? What was it?

2:02:33Rachel Cruze:So 150 total. So we have about 60 in student loans and then 100 ,000 in personal loans. And personal loans. Is that car debt too? No, we paid off all our cars. What did you use the personal loan for? So it was a combination of a roof, plumbing on our house. Oh, for the house. Yeah. So it was a combination of our roof, plumbing on our house, and then we had some credit card debt. Okay.

2:03:03Dave Ramsey:What do you owe on your home?

2:03:06Rachel Cruze:Currently, we owe$281 ,000.

2:03:09Dave Ramsey:What is it worth? I would say about$500 ,000. Yeah. Okay. Well, some of what you're paying off is not consumer debt. It was part of purchasing the home. so um you know if you rolled some of that into a refinance that wouldn't be the end of the world but i wouldn't do that i think you guys make enough to plow through this but you're gonna have to just look at this budget and go scorched earth beans and rice rice and beans nothing

2:03:39Rachel Cruze:spending nothing yeah so that that's what's i mean yeah it is it's just it's it's the mindset of having to the deeper you sacrifice the faster you're going to get out and that may mean him working extra at night too, Stephanie, working weekends, bringing in even more income over time. But again, the deeper and faster you sacrifice, the faster you're going to get out. And the less you sacrifice, the less you kind of make everything a little bit more comfortable, the longer it's going to be of that process. So it really, it comes down to families. I mean, honestly, looking at each other and just choosing like, okay, are we going to -

2:04:12Dave Ramsey:Have you stopped all your contribution to retirement?

2:04:15Rachel Cruze:we're paying into that we're paying about seven thousand dollars each year to both of us oh you are okay so if you stop that that's seven thousand dollars freed up so pause retirement 14 yeah pause retirement temporarily we have a lot of money in our retirement but we want to make sure that we're stuck you're going to be fine stephanie you're yeah but this 150 is hanging over your head stephanie if every time we bring up something

2:04:39Dave Ramsey:on how you can get out of debt you tell me why you can't do it i can't help you

2:04:43Rachel Cruze:Oh, no, I don't mean to be like that.

2:04:45Dave Ramsey:I'm just thinking of...

2:04:47Rachel Cruze:Well, you are.

2:04:47Dave Ramsey:So, I mean, you got to stop doing that. Okay, you need to stop retirement. You need to go through this budget with a scorched earth idea and burn the place down. You make a tenth of, I mean, you make a third of what you used to make, and you weren't even making it on that. And you were calling yourself frugal. So, you've got to sit down and start looking at this and going, okay, we have got to treat this like our hair is on fire. We've got to treat this like the future of our family is dependent on getting rid of this stupid debt. Regardless of how we got into it, this is how we get out. We stop all retirement.

2:05:24Dave Ramsey:We stop eating out. We stop going on vacations. We stop anything that looks like a luxury. And we plow into this debt like our life depended on it. And in two years, you can be done. Maybe three. But two, you should be done. You can pick up shifts at the ER. He can pick up shifts here and there. The good news about nursing is you can always up your income temporarily without destroying the family, without going back on the road. I agree with your decision to come off the road with a baby. I agree with that. But then we went and hired a nanny, basically. And when you have$150 ,000 in debt and you make$162 ,000, you don't live in nanny land.

2:06:05Dave Ramsey:That's not nanny land. Nanny land is more income than you make and less debt than you've got. So that's where you are.

2:06:13Rachel Cruze:And for a period of time, for a period of time.

2:06:16Dave Ramsey:Just for a short period of time. What have we got to do to go crazy to clean up this mess we've made? And no excuses, no rationalizations. You got to end it. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:47you