Choose Lasting Wealth Over Temporary Comfort

10:27Rachel Cruze:So I'm just starting to get into the Dave Ramsey stuff,

10:31Dave Ramsey:and I'm starting to do my baby stuff because I'm getting married in November. I'm starting to baby steps. Well, congratulations. Thank you. My question is, is a high-yield savings better than a money market account? Because I'm trying to get it where, like, my daddy has worked his whole life. He got into me this. You got to work until you're 55, then you enjoy your life. And I don't want to do that. I want to enjoy life as I go on, get older. What? Because I'm 24 years old, and I love to go out and do stuff and enjoy life as I go on, go through life.

11:05Rachel Cruze:I can appreciate that, Jeb. As long as you pay cash for it, we're all about that.

11:10Dave Ramsey:As long as you get out of debt and stay out of debt, you'll have the money to do that. That's right. Yeah. But if you're financing that idea that you just laid out, then it would be a bad idea.

11:20Rachel Cruze:But you're going to follow the baby steps, you said. But to answer your question, I prefer a high-yield savings account, Jeb, and this would be more for your emergency fund. So that$1 ,000 on baby step one, and then once you are debt-free, all of your consumer debt is paid off, then you bump that up to three to six months of expenses. So, yeah, we have a high-yield savings account.

11:41Dave Ramsey:At Fairwinds Credit Union.

11:42Rachel Cruze:Yeah, at Fairwinds. Yeah, and I like it because you usually can get a higher rate of return slightly, not significant, but it's there. And now it does not have, most of them do not have the ability to have a debit card or write checks out of. So sometimes transferring money, you'd have to transfer it to a checking account if you needed to get to it. But if it's all within one system, like Fairwinds, and you have a checking account with them, it's fine. You can just move money from account to account. But yeah, we used to have a money market account back probably 15 years ago, but we moved everything over to a high-yield savings account a few years ago.

12:18Dave Ramsey:The biggest difference is not the rate. The biggest difference is usually your high-yield savings is going to be with the bank, and you've got those transfer capabilities. It's just easier to manage. But the rate might be not different at all. It's not that significant.

12:30Rachel Cruze:It's usually a little bit higher with high-yield.

12:32Dave Ramsey:A high-yield savings account is probably a 5 - or a 10-year-old product. Money market accounts have been around for 50 years. And so, you know, when we first started teaching this stuff, we're like, you know, don't put it in a stupid 1 % or half a percent savings account. passbook savings they call it at your bank don't do that and don't put it in a cd because you get penalties if you withdraw it because your engine blew on your car so use a money market account and at that time banks were starting to open these accounts they called money market accounts but they were kind of mirroring the actual money markets is what they were doing most of those have been rebranded to high yield savings accounts now and so it's basically cd rates that are fully accessible.

13:17Dave Ramsey:And, you know, that's the reason Rachel's saying that, and she's exactly right.

13:21Rachel Cruze:Yeah, but, Jeb, seriously, go to fairwinds.org slash Ramsey, and there's the smart bundle, and so you can get that all, you know, taken care of. And you can, you know, you're engaged. You'll have your wedding soon, so you guys open up one for a high-yield savings account for the wedding, and put your names on it, and start budgeting out of that, so you pay cash for the wedding.

13:38Dave Ramsey:Megan is in Nashville. Hi, Megan. How are you?

13:42Rachel Cruze:Hi, I'm good. How are you doing?

13:43Dave Ramsey:Better than I deserve. How can we help?

13:48Rachel Cruze:So I guess we'll start with debt. Obviously, that's what I'm calling. I'm 50 years old. I've been going through a divorce for about four years now. It was finalized two years ago, but I'm still kind of knee-deep in it with financial stuff.

14:08Dave Ramsey:Why are you still deep in it after it's finalized?

14:12Rachel Cruze:um because in the basically in the decree i was to refinance or sell the house um i tried to assume the loan twice we have a loan at 2.25 that's in his name only you can't he would not allow me to do that well they won't they won't allow you to do that

14:35Dave Ramsey:loans are not assumable.

14:38Rachel Cruze:Right. So I didn't qualify to refinance because the money that he's actually supposed to be paying me, he's$40 ,000 in arrears. So what's court-ordered and what's actually going into my wallet are two different things. So I didn't qualify to refinance. So here we are a year and a half later. I'm still in the house trying to figure out like if we leave this house I don't know where me and the kids are going to go

15:10Dave Ramsey:How many kids have you got? I have three

15:14Rachel Cruze:they're 13, 17 and 20 And what's the house worth? Well without the problems probably$500 ,000 What problems? $70 ,000 in foundation work

15:30Dave Ramsey:um who said that's the main problem who said uh i've had a um well there's cracks all over the

15:39Rachel Cruze:house i've had an inspection report i've had a structural engineer come out i've had an appraisal who uh he my appraisal was about 120 000 less than their his appraisal because they didn't take into account the fix on the house so if it does have to be sold it's either going to be sold as is.

16:00Dave Ramsey:Okay, so$500, but minus problems. Okay. And then what's owed against it?

16:05Rachel Cruze:Maybe$220.

16:07Dave Ramsey:Okay. You're not going to like me. You're not going to like me. Are you ready?

16:12Rachel Cruze:I'm ready.

16:14Dave Ramsey:Sell the stupid house. Yeah. This house has problem, problem, problem, problem, problem. And you're trying to, because you're a good mom, you're trying to minimize the pain of the divorce by letting the kids stay in their neighborhood and in their schools. Sell the stupid house.

16:33Rachel Cruze:Yes, 100%.

16:33Dave Ramsey:That's a good mom, but you're doing more harm than you're good by trying to hang on to a dream that has died, and your heart is broken and you're mad. And I don't blame you for any of that. That just means you're a regular person, and I'm on your team, okay? But that house is no longer a blessing.

16:51Rachel Cruze:Right.

16:52Dave Ramsey:Sell it as is. Get out of it. Get your money and go rent something in the same school district for a minute and get yourself stabilized and set up your life. And that'll also give you the money to put him in jail if he doesn't keep the court order.

17:09Rachel Cruze:Well, he's trying to put me in jail. He has me in criminal contempt, actually, and that's what's coming up. On the house? He has me in jail. Yes.

17:16Dave Ramsey:Okay. Yeah. Well.

17:17Rachel Cruze:Because I haven't sold a refund. I'm trying to keep a roof over their head. Yeah.

17:20Dave Ramsey:And where, that's, yeah, you need to put it on the market and you need to sell it. not because of that, but because it's what's best for you. And then go ahead and have your attorney file on him for contempt for being$40 ,000 in arrears. Right. Yeah. You need to put his head in a vice. And I make$25 ,000 a year working at their school.

17:44Rachel Cruze:However, the schedule allows me to also go to school. My oldest is in college. My daughter just graduated. She's starting college, and I just graduated with my associates getting ready to start my bachelor's degree.

17:56Dave Ramsey:And you were married 20 years?

17:58Rachel Cruze:23 years, and I barely got four years of alimony. So that ends, my daughter's child support ends in two months. My alimony ends in two years, but he's not paying it anyway.

18:11Dave Ramsey:It doesn't end until he pays it.

18:12Rachel Cruze:He's going to get away with it.

18:13Dave Ramsey:It doesn't end until he pays it, and we're going to make him pay it. We're going to use some of the proceeds from the house to make him pay it. I want to take all the teeth out of his case and put them all in your case. And, you know, this house does not represent the blessing that you were trying to create. The money from the house and the freedom from the foundation problems and the freedom from the refinance problems and the divorce problems is worth way more to your family and your kids and you than the house is.

18:41Rachel Cruze:Please let it go. And she can't assume the mortgage. But so from a legal perspective, she has to sell it, right, if it's in the divorce decree?

18:49Dave Ramsey:No, the divorce decree said she had to sell it. It's that simple. She's got to sell it to refinance. She makes$25 ,000. She can't refinance it. She won't be able to make it on the income. And you don't refinance it on four years worth of alimony anyway. They're not going to count that on the mortgage app. So it's not enough alimony. If you're getting alimony for 20 years, you can count it. Child support for two years and alimony for four years is not going to count because the a mortgage company smart enough to know how you're going to pay the payment when that's done. Right. You can't.

19:16Rachel Cruze:And Megan, go rent for a little bit. Yeah, just go rent. Stay in the same area.

19:20Dave Ramsey:Just go rent. Go rent somewhere.

19:22Rachel Cruze:And then you'll finish your degree.

19:25Dave Ramsey:It's an adventure.

19:26Rachel Cruze:Start a new career path for you. And yeah, it'll be a two-year limbo, two or three years with all of that. But that's great. I mean, there's a part of me that I'm like, it's a fresh start. There's something to that that I think is great for you.

19:38Dave Ramsey:Your kids are going to physically receive the message that their mom is a fighter and a survivor. And that's going to do them more good than this house is.

20:13Dave Ramsey:If you run a business, you already know this. Bad information leads to bad decisions. And right now, AI is everywhere. But AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP and more than 43 ,000 businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on, it's built in. And it connects everything that runs your business. Accounting, inventory, customer data, all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting.

21:09Dave Ramsey:If your revenue is at least seven figures, go to netsuite.com slash Ramsey for a free product tour. That's netsuite.com slash Ramsey.

21:33Dave Ramsey:Are you sick and tired of being sick and tired? Feel like a rat in a wheel? You ready to say, I've had it? You're going to change something? Normal is how I feel and normal sucks. Are you ready? Well, you don't have to live that way. Our Every Dollar Budget app helps you find extra money every month and helps you build a personalized plan to get out of debt and build wealth. You want to live like no one else so later you can live like no one else We'll hold your hand and show you how in this app. And it moves people along the baby steps super fast. In just 15 minutes, you're going to find thousands of dollars in hidden margin.

22:10Dave Ramsey:You're going to feel like you got a raise, and then you can begin to attack the debt and then see the way to build wealth. Don't be normal. Start every dollar for free in the App Store or Google Play. Jay is in Orlando. Hi, Jay.

22:27Rachel Cruze:Hey, Dave. How are you?

22:28Dave Ramsey:Better than I deserve. What's up?

22:31Rachel Cruze:Awesome. Hey, I've got a quick question in regards to, I just need a little bit of wisdom here. So my family and I, we're building what hopefully is a forever home, and we would like to know, or at least I would like to know what we should do with our current home. Should we rent it or should we sell it?

22:51Dave Ramsey:Okay.

22:52Rachel Cruze:I can provide a little bit more. That's okay.

22:55Dave Ramsey:Are you paying cash for the new home?

22:59Rachel Cruze:No, no, we're not.

23:00Dave Ramsey:Then sell it.

23:01Rachel Cruze:Going to be fine, yeah.

23:02Dave Ramsey:Then sell it. Okay. Okay, because you would not borrow money on the new home to buy a rental. And that's the same thing. By not paying this off, it's the exact same thing.

23:16Rachel Cruze:How much is the new house going to be, Jay? It's going to be about$400 ,000. And we pay about$1 ,200 a month for our current home. It's about$160 ,000 that we have left on it.

23:31Dave Ramsey:Yeah. And the new home is worth what? Or the old home is worth what?

23:35Rachel Cruze:$400 ,000.

23:36Dave Ramsey:Oh, what about the new home? How much is the new home?

23:40Rachel Cruze:The new home is$400 ,000.

23:42Dave Ramsey:Oh, how much is the old home worth?

23:45Rachel Cruze:Right now,$350 ,000. About$350 ,000.

23:48Dave Ramsey:Okay. You're not exactly moving up a lot.

23:53Rachel Cruze:Yeah. I mean, I make a decent income. We're expecting our third child, so we're trying to get extra room. Our current home is$1 ,300. I said you're not moving up a lot.

24:02Dave Ramsey:You're moving up$50 ,000 in value?

24:07Rachel Cruze:Yes. It's the market here in Florida. It's insane.

24:11Dave Ramsey:To build a new home is cheaper. Most of the time when people move up at home, they move up hundreds of thousands. That's why I was curious. Okay. I'm good. I don't want to be house poor. That's good. I'm glad. I'm happy for you.

24:23Rachel Cruze:Yeah, but if you apply all that equity to this new house, you guys, from a mortgage perspective, I mean, you're almost halfway.

24:29Dave Ramsey:Yeah, you're going to get that thing paid off.

24:31Rachel Cruze:Yeah, fast.

24:31Dave Ramsey:Quick.

24:32Rachel Cruze:Yeah, that makes sense. The only thing is that we wanted to start like a real estate property business to rent it out because we were looking at renting it out for$2 ,500.

24:45Dave Ramsey:I would do that only with a paid for property.

24:49Rachel Cruze:Paid for, okay. Makes sense.

24:51Dave Ramsey:Because it just gives you a lot more margin and a lot more room. And the only other comment I've got is, Jay, there's no such thing as a forever home until you get to heaven. Okay? Because it's just a stupid house and you're going to move. Okay? The number of people that stay in a house 40 years in America today is almost zero. The average American moves every 5.6 years. So I always giggle when I hear forever home. Now, what this is is a very nice upgrade that your family needed. and it's a good investment and I'm glad you're doing it. But the problem is, folks, when you frame something as you justify all kinds of stupidity if you say we're going to be there forever.

25:29Dave Ramsey:It's like someone saying, I'm going to buy a new car, but I'm going to drive it for 26 years. And that makes buying a new car smart. No, it doesn't. It's still a dumb car. Okay. So, you know, that doesn't change the numbers. So just don't use forever home to justify anything. Just say, we are ready financially to, with wisdom, buy a nicer home for our family. And you are, by the way, Jay. And so congratulations. Daniel is in Boston. Hey, Daniel, how are you?

25:59Rachel Cruze:Wonderful. How are you guys doing?

26:01Dave Ramsey:Better than we deserve. What's up in your world?

26:04Rachel Cruze:That's good. Yeah, so I got a few questions for you guys. Hopefully you can answer me. So I am a local for a union operator. So I'm getting offered a significant amount more going private than unionized. So that means I'm not going to have health benefits. I'm not going to have health, dental, and all that good stuff on this private company. But I'm going to make, so I make$115 ,000,$125 ,000 a year being the union. And the private company is going to pay me about$235 ,000,$245 ,000.

26:43Dave Ramsey:In what world is health insurance worth$100 ,000? That's my question. Not any world. Yeah. So is this a no-brainer to go to the private company for$100 ,000 more?

27:00Rachel Cruze:You bet.

27:01Dave Ramsey:It's a no-brainer.

27:02Rachel Cruze:I shouldn't be stressed out about health care and dental and all that. Go buy a health insurance policy.

27:09Dave Ramsey:They don't furnish it at the new company? They do. They offer it, but... You're going to have to pay for it, but that's fine.

27:17Rachel Cruze:It'll come out of your paycheck. How much is it?

27:21Dave Ramsey:How much is it? I think it's...

27:24Rachel Cruze:So right now, as of my local four...

27:28Dave Ramsey:No, honey, I mean, at your new company, how much does the health insurance cost?

27:35Rachel Cruze:$17 a week or something, so what is that?

27:38Dave Ramsey:That's at the new company, if you take the$250 ,000 job. Yeah. Yeah. And then you have health insurance when you give them the$17 a week, right?

27:50Rachel Cruze:Yes, that's correct. Yeah.

27:52Dave Ramsey:So what's there to be stressed about?

27:53Rachel Cruze:I think that I'm not going to have it like dental, health care. How many mouths do you have for$100 ,000 a year?

28:07Dave Ramsey:You can buy a dentist and have him stay in your home.

28:12Rachel Cruze:So this sounds like a no-brainer to take this opportunity and run. Yes. Yes, sir. And your growth opportunity is going to be so much faster and larger in the private sector.

28:23Dave Ramsey:So what you're learning, Daniel, is that your source of provision is your ability to do electrical work. It is not the private company and it is not the union. It is Daniel.

28:41Rachel Cruze:Yeah.

28:41Dave Ramsey:You are the secret sauce. And so if this private company turns up bankrupt in three years, you are still Daniel that knows how to do electrical work. And you're still worth$200 ,000 a year in the market. Yeah. And so that's your source of provision. The union is not your source of provision. The negatives about a union is they teach you, they brainwash you, that the union is all-encompassing. And they are your provider. And that's all bull crap. OK, the union is really good at some things. And being in a union many times is a good thing. But not if you emotionally accept that somehow that it's worth that, that you should take a hundred thousand dollar pay cut for dental.

29:25Dave Ramsey:They're not that good. There's nothing about a union that's that good. So, nope. And here's the weird thing. You can actually go back.

29:35Rachel Cruze:Yeah, if you hate it.

29:37Dave Ramsey:Eight years from now, if you want to go back, you could go back. Now, you won't have all the pension and all that crap, but, I mean, in the meantime, you will have made an extra$100 ,000 a year,$8 ,333 a month,$2 ,000 a week more money. That's a lot of dental. It's a lot of dental.

29:57Rachel Cruze:Well, I was going to say, I feel like his struggle, you have the fact, I mean, he knows the facts. He can run the numbers himself. I think it's just this comfortable comfortability of I've known something for so long to your point, giving me a safety net, all of that. And I have to step out of that. And that's and that feels.

30:15Dave Ramsey:But he's been told like union health insurance is like the thing, the bomb. Don't lose it. Don't lose it. Don't lose it. Don't lose it. But dudes, health insurance is health insurance. If they pay the doc when you're sick, it don't matter. That's all there is to it.

30:30Rachel Cruze:And good for you, Daniel.

30:31Dave Ramsey:Yay.

30:32Rachel Cruze:Well done.

30:32Dave Ramsey:Congratulations, man. I'm so proud for you.

31:22Rachel Cruze:If you're waiting for the perfect interest rate before you buy a home or refinance, that moment may never come. That's why people should talk to Churchill Mortgage, because rates move every day. And when rates drop, buyers flood the market, which means more competition and higher home prices.

31:38Dave Ramsey:Smart buyers know they can't time the market. They move with a strategy. Buy the home you can afford now and refinance later if rates improve. Churchill helps you understand what you can actually afford,

31:49Rachel Cruze:not just what you qualify for. And with their certified home buyer program, you can get fully underwritten before you shop so you can make moves faster and make stronger offers. And right now, Churchill has a special offer only for the Ramsey audience. Go to churchillmortgage.com slash Ramsey offer to learn more. That's a special website. Remember this, churchillmortgage.com slash Ramsey offer. This is a paid advertisement. The Churchill Certified Homebuyer Program is available for qualifying borrowers and select loan types only. NMLS ID 1591. NMLSconsumerexcess.org. Equal housing lender. 1749 Mallory Lane.

32:22Rachel Cruze:Suite 100. Brent Wendon to Z. 37027.

32:33Dave Ramsey:Reminder for everybody out there, this show that we do is Monday through Friday from 1 to 4, live every day. It's on 640 talk radio stations across America, making us the second largest talk radio show in the land. My friend Sean Hannity is holding the spot of number one tightly. and then of course we're on podcast and youtube and everything else out there in the world every other platform you can think of spotify is huge and um all of those things but anyway if you're ever around nashville we're in franklin just south of nashville and our campuses are open to the public we've got a wonderful bookstore and coffee shop and all the coffee and the homemade chocolate chip cookies are all uh on us they're complimentary to our guests we want you to come in here and smell that chocolate chip cookies feel like your mama's kitchen and hang out with us in the lobby.

33:27Dave Ramsey:And we've usually got 50 to 200 folks or so somewhere around there watching the show on the glass every day for three hours. And you're more than welcome to stop by and see the debt-free stage and see all the stuff that we do in here. And it's a lot of fun. There's a lot of stuff to do here on campus. So come by and see us. We'd love to have you anytime. We get to meet people from every corner of the nation and from just about every country these days. Countries are stopping by and seeing us. So thank you for that. We appreciate it. We love coming out. We go out at the commercial breaks and sign books and take pictures.

33:59Dave Ramsey:And that's what Rachel and I were just doing a minute ago. Matt is in San Antonio. Hi, Matt. How are you? Doing well. How are you? Better than I deserve. What's up?

34:10Rachel Cruze:Hey, so I'm kind of got, we're working the baby steps right now. we have about$105 ,000 in debt, but there's a lot of moving parts. My son was diagnosed with autism, and he's just really having a bad time in school, a lot of behavioral issues. And so they recommended ABA therapy, which is about 30 hours a week. And so my wife, who works nights and doesn't like her job anyway, you know, uh, is, um, who's also the main carrier of insurance. We think that she's the one that should, you know, step back to be able to take him and do that. I'm a teacher and I make about $60 ,000 a year and realistically it just doesn't work.

34:54Rachel Cruze:Um, as far as our budget's concerned to make that happen. And, um, and so I was wondering, so our house is valued at about 580 ,000 and our, uh, And if we sold it, we'd probably get, we owe about$306 ,000, so we'd get around$250 ,000 after fees and all that. And then we could downsize and maybe pay for a house cash. And so I'm just kind of stuck. I don't know what the right move is.

35:23Dave Ramsey:And how old is your son? He's seven. How many kids you got? I have two. I have a 10-year-old and a 7-year-old.

35:34Rachel Cruze:I'm sorry, man.

35:35Dave Ramsey:Y 'all are against it, man. Wow.

35:38Rachel Cruze:Do they know how long the therapy, how many years he'll be in that? That extensive per week, 30 hours? Do they give you a time frame at all? It is 25 to 30 for at least six months, and then they reevaluate from there.

35:56Dave Ramsey:Okay. And this is who recommending this?

36:02Rachel Cruze:His therapist. Okay. His doctor.

36:05Dave Ramsey:Good. Okay.

36:05Rachel Cruze:Because I'm just wondering if it's a decision, something this big, like selling a home and a job change, you know what I mean? All of it. If this is more short term versus making long term decisions, financial decisions. But if you guys are feeling, as I imagine you would as parents, I could only imagine just wanting to be present and just having one of us there, knowing that probably the next couple of years is going to just be a road in us and our presence is just important. Right. And if you feel that from that long-term basis, then that probably would be something to think about.

36:38Dave Ramsey:We make money to do life, not life to do money. And so you got life on you. And so I think your decisions wise, I would sell my home and I would pay off all the debt. and if you can buy another home with the remaining money or a good down payment on a smaller home with the remaining money that will suffice for a period of time, this decision is not permanent. It is not a forever decision. It's a two-year decision. What do you say your wife does for a living?

37:14Rachel Cruze:She's an operations manager for a freight company.

37:17Dave Ramsey:Okay. At night? At night.

37:21Rachel Cruze:Okay.

37:21Dave Ramsey:All right. And has she got a four-year degree in business or something?

37:27Rachel Cruze:She has a four-year degree. It's in interdisciplinary studies.

37:31Dave Ramsey:Okay. All right.

37:33Rachel Cruze:But just thinking of it from a career track, if she can plug back in after three or four years if she needs to. And so we might restart, so to speak,

37:45Dave Ramsey:the house journey and the career journeys in a couple of years. and they might look completely different then. And you might have taken a step back. You might have taken a lateral step because you cleared off all this$105 ,000 worth of miscellaneous crap debt. Now, it is incumbent upon you if you do this that you make it work. On a budget, no debt, ever. And I don't want to hear any excuses about, oh, life is tough and I went into debt. You'll screw this whole thing up if you do that.

38:19Rachel Cruze:Yeah, definitely. And I think so one of the good things is there's about$45 ,000 of the debt is the solar panels on the house. So they would take over the lease on that. So that would get rid of that immediately. Yeah, and you would get rid of it.

38:34Dave Ramsey:And you've got the other money in your hand to clear off all the debt. Now you've got no debt except whatever you do for housing. And I would just view the housing. This is not a 10-year decision. This is a two-year decision. And it's perfectly okay to rent for a short period of time, like two years or three years, while you're figuring out what life's going to look like. But at some point, I'm guessing that your wife will plug back into some kind of, she'll produce some kind of revenue. Could be work from home. It could be a lot of different things. But it's not for now. For now, we're going to take care of our baby.

39:11Rachel Cruze:So you think that this is the wisest decision?

39:13Dave Ramsey:Yeah, I would do it. And it's emotional. But here's what I'm guarding against. I'm trying to use certain language with you because I want you to guard against this. This is not a tornado didn't hit your house. This is a decision to sell one asset to clear the debts, and it's not a permanent decision. this is not a forever fit deal this is a this is we're going camping in europe for two years you're not but you know what i'm saying yeah i want you to emotionally treat this very temporary because it can feel like well we sold the house after we got this diagnosis and that that's going to be for the next 45 years it defines us emotionally you are not the single worst thing or best thing that ever happens to you.

40:07Dave Ramsey:You're not defined by that. Those are just milestones along the road. And so I really want you to guard against that because I meet people in these situations that are five, six, seven years later, and they're going, well, you know, we got that diagnosis and we'd sell the house and everything's never been the same because they never recovered emotionally and never put hope and light back in their eyes about their future. Your future is very bright if you want it to be. even inclusive of the things you're facing with this diagnosis. And so I want you to see that. But yeah, in order to get to solid ground and get some of the chaos out of our life, get your wife off of nights, get the debt gone, have the money to take care of the child.

40:49Dave Ramsey:Yeah, I'm moving down in house. I will move into a Walmart tent for a short period of time. Right. But it is just that it's just camping. It's just for a short period of time. And then you don't have to freak out about every little thing. Oh, because otherwise everything that you dislike about the next house is going to be magnified by your emotions.

41:07Rachel Cruze:Because of it.

41:08Dave Ramsey:Yeah. Because it's going to be some, I mean, it's, you get pissed off about this stuff. All of us do. And so that's what I want you to guard against. But yes, mechanically, tactically, this is the thing to do.

41:18Rachel Cruze:Yeah. I was going to say, you're not going to look up Matt in 10 years during the season and regret selling a home versus taking care of your kid.

41:24Dave Ramsey:Never.

41:25Rachel Cruze:You may look back and Like we worked our, we were not present. We were not there. We were exhausted. And he struggled for longer probably because we didn't have the capability and the time to put into what he needed to start his journey and get his tools. Right. So I'm like, the trade off isn't even, yeah, it's not even in question. It's just a house. It's just a house.

41:44Dave Ramsey:Yeah.

41:45Rachel Cruze:But also to your point, not to be stuck in a loop of that debt will be my emergency fund. Debt will be the thing that catches me if we need more. You know what I mean? Like there has to be a hard stop or you'll dig yourselves back in a financial hole, which will then bring on more stress from the financial side. So this is kind of a ticket in a great way. It's a blessing to be able to even make this decision.

42:09Dave Ramsey:Yeah, I meet people who are facing stuff like this on the air here who have used it to rationalize really dumb decisions. You're doing quite the opposite.

42:28Rachel Cruze:Hey guys, George Camel here. If you run a business, your phone is basically your cash register. And every missed call is money you didn't know you lost. And missed calls, slow replies, customers who moved on before you got back to them, that's not a you problem, that's a system problem. That's where Quo comes in, a sponsor of today's show. Quo, spelled Q-U-O, is the smarter way to run your business communications. Quo helps you and your team share one business number so you can reply faster and stay on top of every customer conversation. Nothing gets missed and every customer gets a response. Because look, you didn't start a business to spend your days playing phone tag and digging through text messages.

43:07Rachel Cruze:You're the owner, the operator, and the closer. So you need a system that keeps up with you. Quo works from your phone or computer. It logs calls, summarizes conversations, and gives you next steps. It's like having an assistant who never asks for a raise. So try Quo free, plus get 20 % off your first six months at Quo.com slash Ramsey. That's Q-U-O dot com slash Ramsey. Always say hello with Quo.

43:36Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, Rachel Cruz, Ramsey personality. My daughter is my co-host today. Tiffany is in Cincinnati. Hi, Tiffany. How are you?

43:50Rachel Cruze:I'm good. How are you?

43:52Dave Ramsey:Better than I deserve. What's up?

43:54Rachel Cruze:Hey, I was calling to ask. My son, he's 11 years old, came across a baseball card that he's thinking might be worth some money. And his first thought was that he would want to sell it and invest. And I don't know where to start with that and how to help him. That's fun. So he can help me out. Yeah.

44:10Dave Ramsey:What's the card going to be worth?

44:12Rachel Cruze:Well, he saw the same card sell for$4 ,000 online. Whether or not his gets sold for the same amount, we're not sure. But that's what he's hoping or looking at right now.

44:23Dave Ramsey:So like he was buying packs and it just showed up in one of the packs?

44:26Rachel Cruze:Yeah, he bought an old box from an antique store, actually, and it had his card in it. Yeah.

44:32Dave Ramsey:This kid is fun. I like it.

44:35Rachel Cruze:He's a blast, yeah.

44:37Dave Ramsey:Yeah, okay. Well, Rachel and I wrote a book, and we'll send you a copy of it. It was her first bestseller called Smart Money, Smart Kids. Okay. In that book, we tell people to teach their kids to do four things. One is to work, and this is his work for the purposes of this discussion. He's very entrepreneurial. I love him. And two is to save, three is to give, and four is to enjoy. And all people should learn to do those four things with money, work, give, save, and spend wisely. Okay? Okay. And so we would tell you to break this up however you guys want across those things. In other words, I would not invest at all.

45:22Dave Ramsey:I would give some of it. I would enjoy some of it. He's 11. It's not going to change his life one way or the other. It's not$4 million. It's$4 ,000. And so the lessons he gets from it will be more valuable than the actual money. Okay.

45:40Rachel Cruze:All right. Great. Thank you.

45:41Dave Ramsey:And break it down that way. Now, if you want to invest more than$1 ,000, you could sit down with a SmartVestor Pro, and there's some mutual funds that will allow you to open an account for$1 ,000 or less. I probably would, or more, I mean, I probably would not do that. But if you want to, you can. And here's the reason I wouldn't. The only reason to do it is not the investment. It's to let him have the lesson of how mutual funds work, have the experience of sitting down with an investment professional. Because this kid's kind of got it on the ball. This is a sharp kid. Thank you. He's the kind of kid that would enjoy sitting with an adult teaching.

46:24Rachel Cruze:He just bought some baseball cards. No, I mean, no. He would love to look at some Excel sheets and investment cards.

46:31Dave Ramsey:He's in an antique store digging through this. No, I bet he's great.

46:35Rachel Cruze:I'm giving him a hard time. No, he keeps on top of our envelope system with me, and he's pretty on it. He's into this kind of thing. Yes, he knows. Well, you know what's great? I have a nephew on my husband's side of the family. We were actually just talking about this the other day because even from an app perspective, looking at the S &P 500 and putting some money and watching it go up and down, and you're watching the whole correlation I think is so good to learn around his age. so for him to have some like visual perspective of the money if he does you know maybe you say hey for 1500 bucks let's put it in a in an index fund or something and we have an app and we can watch you know watch it grow and and it loses you know 79 dollars one day and i don't know it's just kind of it's a what happens when trump bombs i ran it's a it's a fun exercise to like see reality right and even though we teach investments for the long term and you're not gonna you know obviously pull money out and that kind of thing because of what's happening but for them to have some skin in the game and watching the market at a price like that, I think is great.

47:36Dave Ramsey:But it's all about the lesson. It's not about$1 ,500 is going to make him$8 million when he's 65. It actually might, but it probably won't. Okay. That's not the reason.

47:45Rachel Cruze:No, no.

47:46Dave Ramsey:That's some really good thoughts. A lot of parenting going on here and she's a great mom. Hang on, we're going to send you a copy of that. The other thing that popped into my head was that actually what we did was two things about those subjects. One is we had your college funds and mutual funds. And so it wasn't your skin in the game, it was ours. But by the time you were that age, we would get out and show, okay, you have this many shares and it's worth this much a share. And if you multiply those two numbers, you have the actual value of that mutual fund. And so I've got 100 shares at$100. That's$10 ,000 worth, okay?

48:30Dave Ramsey:So you start to look at that and go, okay,$124 a share. And you start to, like you said, they get the lesson. Yeah, you learn and see it. And then the next month, we would get the paper statement in those days. And we would open it again and show you guys again, this is the college fund. That had the benefit of showing you how a mutual fund worked. But also, we brainwashed you and said, it's your college fund. And so you just assumed you were going to college. So that was a good thing. We didn't have to have a discussion about that. You just always thought you were going. And so you went. It was amazing.

48:59Dave Ramsey:And the second thing was we actually did not take any of your all's money and invest it in anything. Instead, you guys had to buy your own car. And so you had your miscellaneous birthday money children's savings account at the bank.

49:16Rachel Cruze:Work, yep.

49:17Dave Ramsey:If you worked a little bit and babysat, you put some money in. And if you got to hit the lottery on a baseball card, you put some of that money in. And we matched. We had 401 Dave. We matched whatever you saved up to buy your first car. And so, you know, if I remember, you saved about$6 ,000 and$8 ,000. We got a$16 ,000 car. A$16 ,000 car in those days was not a bad car at all. It was a great car. You got a nice little BMW.

49:45Rachel Cruze:Lasted me through most of college.

49:46Dave Ramsey:Yeah, a little 323 BMW, and it was a great little car. And so that money in Tiffany's question, if it was at the Ramsey House, it would have gone in the car fund.

49:57Rachel Cruze:Yes.

49:57Dave Ramsey:There would not have been mutual funds.

49:59Rachel Cruze:No.

49:59Dave Ramsey:Wouldn't have done any of that. No. But we had other ways we were teaching you the market.

50:02Rachel Cruze:To show it and to feel it, yes.

50:03Dave Ramsey:None of those are wrong answers.

50:05Rachel Cruze:That's right.

50:06Dave Ramsey:They're just some of the answers.

50:07Rachel Cruze:Yeah. And I have an 11-year-old, and she's working some this summer. And actually, we just opened, it was probably two weeks ago, with Fairwinds. You can get up to 10 high-yield savings accounts under ours. So we opened up another one. I put a little seed money in just to kind of like, hey, just make it a little fun. And yeah, and we're paying her. She's done some babysitting. She's done a couple of things. She'll come here every now and then to help out. And we do. And I show her as we transfer money into that savings account. But we're talking about the card now. And she's 11. But I'm like, girl, you got, yeah.

50:39Rachel Cruze:I mean, and if you want one at 15 with your permit to practice, you got four years to save. And so that jumpstart Tiffany for his car, honestly. That could be a, it's a nice jumpstart. Yeah, not bad at all. You want to put some of it there.

50:51Dave Ramsey:Yeah. And so moral of the story is when they're 11, the Ramseys, we send them to the salt mines and we crack the whip on them. Child labor laws. They have to go to work. We bring them to Ramsey and we work them like dogs.

51:05Rachel Cruze:No.

51:06Dave Ramsey:Not. No.

51:08Rachel Cruze:It's a great environment. Everyone's been so kind. She's here today helping out, doing some work. It's good. It's good.

51:14Dave Ramsey:Yeah. Yeah, and that's what I mean. This guy, this young guy, his initiative to go to the antique store to scratch around. And his hobby is something he's passionate about and digs out this car.

51:26Rachel Cruze:And legitimately can get some great money doing that.

51:29Dave Ramsey:And thinks he's got a$4 ,000 hit. That's awesomeness. It'll also make him go do it again.

51:35Rachel Cruze:Yes.

51:35Dave Ramsey:And again and again and again. Especially if you get to enjoy some of it and have the joy of giving some of it. And so give some away. Always give some away. money's not much good if you keep it all.

52:27Rachel Cruze:Hey guys, healthcare is one of the biggest stress points in your budget. It's confusing, and most of the time it feels completely out of your control. But there is a better way to handle it. Christian Healthcare Ministries isn't health insurance. It's a health cost-sharing ministry where Christians share each other's medical bills. And it's not a new idea. CHM has been around since 1981. It's predictable and proven. And they've shared over$13 billion in medical bills for their members. Plus, you get more flexibility. There are no network restrictions. And you don't have to wait for open enrollment.

53:03Rachel Cruze:Now, let's talk about how CHM helps your budget. Because programs start at just$115 a month. and many families save hundreds of dollars a month compared to traditional options. So if you are tired of feeling stuck, check out Christian Healthcare Ministries. Right now, CHM is offering new members a 50 % credit towards their first month of membership. Go to chministries.org slash budget and use promo code RAMSEY. That's chministries.org slash budget and use promo code RAMSEY.

53:48Dave Ramsey:Hattie is in Denver. Hi, Hattie. How are you?

53:52Rachel Cruze:I'm good, thank God. How are you?

53:53Dave Ramsey:Better than I deserve. What's up?

53:57Rachel Cruze:My husband and I are wondering if there's ever a reason to take out a business loan if you feel that it would be paid back by the business in a succinct amount of time. um we've fully paid for like we're debt free and we're working on paying off our house good and i run a small um niche religious home daycare and it's the only one of its kind in the state that's montessori and i can only take four children for legal reasons but if we were able to do construction and finish to code all the issues, I'd be able to take up to 12 children, which could be conservatively$8 ,000 a month and higher if I filled all those 12 spots.

54:46Rachel Cruze:I currently have a wait list with nine kids on it. And so we're just wondering if we took out the construction cost, sorry, is$25 ,000 to$30 ,000. So if we took out a loan for that, that could be paid off within three to six months, would that make sense for us?

55:07Dave Ramsey:I don't borrow money, and I don't teach people to borrow money, especially in business, because it represents risk. The way you've outlined this makes it sound very, very reasonable, but you've only outlined it if it works. You didn't outline it if it doesn't work. If the contractor's a crook, and it gets delayed eight months, and it takes forever, if you get ripped off, if you get sick, if one of the kids gets sick and you get sued, you haven't thought about any of the things that happen to all of us in business every day. There's three rules of business. One is it takes twice as long as you think it's going to, it costs twice as much as you think it's going to, and you're not the exception.

55:45Dave Ramsey:Those are the three rules. And they happen to me, they happen to you, they happen to anybody that's in business. And so, you know, it could unfold the way you designed it, but I doubt it will. Not because I'm a pessimist, not because I'm cynical, but because I've run a business for 35 years. And it never works exactly like I freaking think it's going to work, ever. And so I have a great idea in the shower every morning. And most of my ideas suck. By the time I get them to market, I lose money on 90 % of them. But I've made really good money on the other 10%. So it's all worked out. I want you to grow your business.

56:27Dave Ramsey:I love your business. I like what you're doing. I think all of that's good. I just don't want you to put it in jeopardy for$25 ,000. How much savings do you have?

56:39Rachel Cruze:Yeah, so, well, okay. So, yeah, we have about$25 ,000 in savings, which is our three to six months of expenses. but my husband was very nervous to use that and what is your household income now? so we make about $9 ,700 a month I do have I took on a weekend job to try to make some more money that brings in an extra $1 ,000 a month we've started to save for the construction and what does it take to operate your household? we're pretty close we do send our kids to private school a religious private school, and we don't want to cut the money there. What does it take to operate your household? Yeah, we're about$9 ,500.

57:27Dave Ramsey:Why? What's your house payment?

57:29Rachel Cruze:So I said the private school fees. Our mortgage is$3 ,100, which we don't think is so bad for our area. That matches even renting in this area. But our school fees are the biggest expense for our kids.

57:44Dave Ramsey:How much are they?

57:46Rachel Cruze:It's about$2 ,000 a kid per month.

57:51Dave Ramsey:So$4 ,000 a month,$50 ,000 a year. Yeah. It's a fine school. It's a very expensive school.

57:59Rachel Cruze:Yeah, it is. It's not just religious.

58:01Dave Ramsey:It's expensive. There's lots of religious. Yeah. It's an expensive religious school. Very.

58:10Rachel Cruze:Not very. No, it is. Well, compared to Nashville. $50 ,000 a year. Well, for two kids in private school in Nashville, that's what it runs. Okay, anyway. I'm not suggesting you take them out.

58:25Dave Ramsey:It's more than your house payment. So you just need to – you really do value this.

58:31Rachel Cruze:And she runs a daycare with it. So it's obviously a core part of their –

58:34Dave Ramsey:Yeah.

58:35Rachel Cruze:Yeah.

58:35Dave Ramsey:So what I'm trying to figure out is, is there a way I can take$15 ,000? of the 25 and add another 10 while construction's underway out of my cash flow?

58:51Rachel Cruze:So, yeah, because we can add about$1 ,000 a month, but we were saying by the time you wait a year and a half...

58:56Dave Ramsey:Now, I'm thinking I wasn't going to wait a year and a half. I'm going to start construction. If I've got a way to get to the 10 by the time the construction's complete, how long is the estimation on completing the construction?

59:10Rachel Cruze:Six weeks.

59:12Dave Ramsey:Six weeks.

59:13Rachel Cruze:It's not a big project. It's just silly things like emergency escape window, flooring, drywall. It's like very basic.

59:21Dave Ramsey:How many bids have you gotten on the construction?

59:23Rachel Cruze:I got three. So the lowest was closer to 25. The highest was closer to 40. So I'm averaging 30 based on what everybody's doing. I don't think 25 would be realistic because, as you said, it always costs more than anything.

59:39Dave Ramsey:What we would do at the Ramsey house is we would use some of the emergency money down maybe to 10, maybe 15 of it, and we would find the other 15 very, very quickly by drastically cutting stuff in our monthly budget because we would want to do this. And we would not go out to eat. We would not go on vacation. We would sell some stuff that was laying around. We'd look up and go, I don't need that over there. I don't need that over there. And you're, yeah, that's right. Okay. But I'm going to do anything I can to get my income up and my out go down and cash flow it and get this done. But no, I'm not going to tell you to borrow money.

1:00:23Dave Ramsey:I'm going to beg you not to. You're going to make many more mistakes when you borrow money. And we coach about 10 ,000 small businesses through Entree Leadership. and I always teach those men and women in those businesses that when you take your next idea and you borrow into it, you magnify the size of your mistake. You magnify the drama. You magnify everything. And it's so weird that when you're dealing with a contractor with money out of savings, you handle the contract different, contractor different than you handle it if You're using the bank's money because it's like real freaking money. It's very emotional.

1:01:05Dave Ramsey:And so all of those are reasons to the borrower is slave to the lender.

1:01:09Rachel Cruze:The flooring options are very different when you're like, eh, is it like five or six grand more? That's fine. With the loan perspective, it's like, okay, maybe we can this, that. Five or six grand in this, it's like, heck no, we have a tightened up budget. Nope, get the cheaper floor, right? Like it limits your options in a good way and helps you make those decisions.

1:01:26Dave Ramsey:And what of this can I do to get to the increased capacity? And then what of this was luxury?

1:01:39Rachel Cruze:Like what do I really have to have?

1:01:41Dave Ramsey:What portion of this rehab do I have to have to function?

1:01:45Rachel Cruze:It sounds like she's done her work too. I'm not questioning.

1:01:48Dave Ramsey:I'm just saying that's the kind of stuff I'm going to do. I'm going to minimal functional.

1:01:51Rachel Cruze:And also your business is daycare, which is always needed all the time. So if you couldn't get all of this done in the next six to nine months because you're saving and moving at the speed of cash, it's going to be okay. You know what I mean? You're going to be able to recoup that money because there will always be a market for daycare.

1:02:09Dave Ramsey:You'll always have a waiting list.

1:02:11Rachel Cruze:Yeah. And the fact that it is so – it's kind of a one-of-a-kind type of daycare is the way you explained it with the – She mentioned the religious piece, the Montessori piece, all of that together is great. It makes you unique. You're not just another one out there. And I think that's awesome.

1:02:26Dave Ramsey:You'll always have a waiting list. You'll always be able to do that. But I promise you, you will not regret going a little bit slower and doing this with real money. You won't regret it. It's harder, but it's easier. It's much easier in the long haul. It's much more sustainable. Your business will be open five years from now. You won't be taught calling me up going to tell me some contractor story or something I don't want to hear.

1:03:18Thank you.

1:03:40Rachel Cruze:This show is sponsored by BetterHelp. Summer is here and whoa, everything changes this time of year. The kids are out of school, routines are out the window, you're traveling more, probably sleeping less. And if you're not careful, you and your family can end up running on fumes. I know I'm running on fumes right now. If you don't take time to slow down and take care of yourself, all that stress is not just going to disappear. It will show up in your body, it will show up in your relationships, it will show up in your work, in your patients. everywhere. This is why I'm a big fan of BetterHelp.

1:04:12Rachel Cruze:BetterHelp is an online therapy platform that matches you with a licensed therapist based on your goals and preferences. All of their therapists follow a strict code of conduct and you can message yours or schedule sessions right in the app. If it's not the right fit, you can switch therapists at any time for no extra cost. Listen, you don't have to carry everything all by yourself this summer. Go to betterhelp.com slash Ramsey to get 10 % off. That's BetterHelp, H-E-L-P dot com slash Ramsey.

1:04:53Dave Ramsey:Buying or selling a home is, for most people, the largest transaction you do. So you better have somebody that's a pro in your corner, not somebody got their license three weeks ago and plays bridge with your grandmother. No, you need an actual real estate agent that sells a lot of houses, a high octane, high protein. That's what we do at Ramsey Trusted. We connect you with vetted real estate agents who have the experience to guide you step by step to make smart decisions, not expensive mistakes, because messing up on a house is no small mistake. This is a big one. This is a big one. So that's why Ramsey Trusted connects you there.

1:05:33Dave Ramsey:And Ramsey Trusted is just that. It's trusted by Ramsey. A Ramsey Trusted agent has your best interest at heart, and it doesn't cost a thing to get connected with them. Go to RamseySolutions.com slash agent or click the link in the description if you're listening on YouTube or podcast.

1:05:50Rachel Cruze:Have you switched your example of if they play bridge because mom plays bridge now? So is that what makes you think?

1:05:56Dave Ramsey:you know mahjong or bridge i've got these things stuck in my head from random locations i was gonna say mom goes on like uncle charlie goes to church with you or whoever it is yeah

1:06:06Rachel Cruze:you added bridge i was like is that is that a slide against mom that's a new one i don't know no it's just yeah but you don't want to she does tournaments my wife's bridge partner is not how i

1:06:14Dave Ramsey:pick a real estate agent not a chance or mahjong they're good with math but that doesn't mean there need to be my real estate agent all right jerry is in atlanta hi jerry how are you Hey, how are you doing? Good. Good. How can we help?

1:06:32Rachel Cruze:Well, I am$55 ,000 in debt, and I'm trying to figure out a way to get out of it. And I don't make enough to cover it. How much do you make? A month.

1:06:47Dave Ramsey:Flex rates between$1 ,200 to$2 ,200 a month. Why? What do you do?

1:06:54Rachel Cruze:Uh, right now I work delivery gigs.

1:06:58Dave Ramsey:Why? Why don't you get a job?

1:07:01Rachel Cruze:I had a job. Um, so I've been in the restaurant business for 12 years. You've been in what business?

1:07:07Dave Ramsey:I'm sorry. What business?

1:07:09Rachel Cruze:Restaurant business. Working restaurant. What were you doing at the restaurant?

1:07:14Dave Ramsey:I worked at Papa John's. I worked at Fellini's. I know. What did you do at the restaurant?

1:07:19Rachel Cruze:Oh, uh, chef, cook, uh, dishwasher. front house, back house. How old are you, Jerry? I am 36 years old.

1:07:31Dave Ramsey:Okay. All right. So your problem is an income problem. I think you already knew that before you called, right? Correct. You don't make any money. You're at the poverty level. And that's not a put-down. It's a mathematical observation. So what are we going to do to fix that? And then we fix the other thing.

1:07:51Rachel Cruze:well the hope was to better my career so i went into um automotive and i became a certified parts specialist um and so then i worked my way through there six years of that and i got a job working um with u-haul and that was great and i think it was like 24 2 ,500 a month just enough to pay my bills, pay my rent and everything. And then I was told there's other jobs out there that can make more, $1 ,200 a week versus$650 a week. So he got in touch with me with other people, and I got in touch with them, and they told me that they would have a job for me available as long as I had a truck available to use of my own.

1:08:40Rachel Cruze:And that's what I did. I went and pushed the gun for it and got it in the truck, and now I don't have either one of those jobs.

1:08:49Dave Ramsey:So how did you—you were recruited by somebody who promised you something that wasn't true?

1:08:58Right?

1:08:58Rachel Cruze:I think it was true. It's just the economy, the way it is, the gas went up, and last time I talked to him, he said he was having to make these deliveries himself. So he picks up motorcycles and sells them. Yeah.

1:09:14Dave Ramsey:He promised you something that wasn't true, honey. You didn't make the money you were promised for whatever reason. Okay. So let's go back to where we started and say, where can we land now after that mistake? Because that was a mistake. So now where do we go to go make$3 ,000,$4 ,000,$5 ,000 a month? What do we got to do? So you're a certified parts specialist. Does that set you up to work at AutoZone or whatever?

1:09:48Rachel Cruze:It does.

1:09:50Dave Ramsey:And what does that pay? $35 an hour.

1:09:55Rachel Cruze:Actually, AutoZone doesn't pay that much. AutoZone here pays$16 to$17 an hour.

1:10:01Dave Ramsey:Well, you can make more than that without a certification at Target. $20 an hour is it going right at Target? just working over there, moving boxes around, you know? Ooh.

1:10:14Rachel Cruze:Or UPS or something. I don't know, Jerry. Is there just anything that you can just plug into?

1:10:19Dave Ramsey:So what I want you to, the answer to your question is you have an income problem, not a debt problem. Your debt problem is the result of your income problem. And you're not making enough to even get by. And you've defaulted back into this for some reason and have accepted it. And I don't want you to accept it anymore. I want you to get mad and scratch and claw and go get six jobs where all you do is work all the time until you get your head above water. And then you try to get a good job out of those six jobs. And you keep working and working and working until you move somewhere. And I want you to aim at something to where when you're 46, 10 years from now, you're making$7 ,000 a month minimum.

1:11:03Dave Ramsey:Now, what is that? What is the trek? What is the journey that takes you there step by step by step? You're probably not going to jump from where you are to there in one leap, but you can begin the steps, the certifications, the thought process.

1:11:19Rachel Cruze:I mean, the auto industry in general, all of that. I'm like, you can you can get a lot, do a lot.

1:11:25Dave Ramsey:Pays very well. In that sector. Yeah. Yeah. And so and it pays auto zone. whatever they pay pays more than you're getting. So that's not a bad step. But I don't know what a certified parts guy person is able to do. I don't know how that works. But I assume you work in a parts department at a Chevrolet dealership, you would make more than you're making now, and maybe more than you would make at AutoZone. I don't know. But that's what I'm going to start looking at. And I'm going to start looking at that like every minute of every day, you don't have time to do anything else except that you are starving to death.

1:12:02Dave Ramsey:And so go get you some food. That's what this comes down to, a healthy level of desperation, urgency. And then once you land in something, be very careful when someone promises you the moon. Someone who delivers motorcycles promises you the moon.

1:12:22Rachel Cruze:Well, and my fear is when he said, if you have a truck, And I don't know if the$55 ,000 is a truck loan for the job that he had to have. But making sure you stay financially secure, Jerry, in these transitions is important, too. So any certification or anything, you cash flow it.

1:12:38Dave Ramsey:If you have a big truck loan, like Rachel mentioned, sell it now. All right. Casey's with us in Pittsburgh. Hey, Casey, what's up?

1:12:48Rachel Cruze:Hi. Thanks for having me. Sure. Um, so my question is my husband and I are on baby steps five and six.

1:12:57Dave Ramsey:Good.

1:12:57Rachel Cruze:Um, we got a little bit of a late start to saving for college. So we have two kids, they're 10 and eight, and we really just started. So we, we threw like 2 ,500 in each of their 529. Um, but we currently are paying an extra$500 a month on our mortgage. so we can drop it from 30 years to 20 years. So I just wanted to get your take on how much should we be really throwing all of our extra money at our kids' college to fund like a four-year in-state tuition, or should we keep splitting it where we're putting an extra$500 on the house and throwing everything extra at the kids' college? Have you guys mapped out tuition rates and what this$2 ,500 will be in 8 to 10 years?

1:13:49Rachel Cruze:Yeah, so putting it into the calculator, essentially to get to pay for four years of in-state in Pennsylvania, we would have to put like$1 ,500 in for each of them. Per month. Every single month. Yeah, which isn't going to be realistic. Right. That's not realistic. That's right. So, yeah, I mean, what I would do is fund as much as you can with the reality of knowing you may slow down your house, paying it off fully just to get some more money in. But then also remember scholarships, grants, working through college, cash flowing it maybe as they are in it as well are all the options.

1:14:24Dave Ramsey:And living at home and going to community college the first two years is an option too.

1:14:45Rachel Cruze:Okay, guys, let me ask you something. What would it take for you to switch your bank? Because if you're still earning next to nothing on your savings, you need to check out Fairwinds Credit Union. And I know what you're thinking. it might sound like a hassle. Moving your direct deposit, updating bills, getting a new debit card feels like a lot. But here's what most people don't realize. Staying where you are could be costing you hundreds of dollars every year. Y 'all, the average savings account pays less than half a percent. So let's say, for example, you've got$20 ,000 saved. You might earn around$70 a year.

1:15:17Rachel Cruze:But with a fair-wind, high-yield savings account earning 3 % APY or more, that same money could earn you over$600. And that's real money that you can use towards the baby steps. So don't let temporary comfort keep you stuck. Check out the smart bundle from Fairwinds Credit Union. You get a high yield savings account, a no fee checking account, and the Ramsey Be Weird debit card. Go to fairwinds.org slash Ramsey to learn more and make the switch today. That's fairwinds.org slash Ramsey, insured by the NCUA.

1:16:15Dave Ramsey:Jamie is with us in Indianapolis. Hi, Jamie. How are you?

1:16:19Rachel Cruze:Good. How are you?

1:16:20Dave Ramsey:Better than I deserve. What's up?

1:16:23Rachel Cruze:I need massive help on budgeting, how to get through it, and how to keep from spending. It's kind of out of control. Okay. Is the out-of-control spending because you can't stop or you feel like the life you guys have created or you've created is needing a higher dollar amount because of payments and all of it? Okay. How much do you guys make a month? um it's just my husband working he's a truck driver he makes roughly 5 ,000 5 ,200 okay and that's what he brings home that's what hits your account every month yeah okay um what's your mortgage payment um we don't own a house we rent okay I'm afraid to buy a house just yet okay uh How much is your rent?

1:17:17Rachel Cruze:$1 ,200. Okay. Yeah, that's reasonable. What kind of debt do you guys have? We have like four credit cards. We owe some stuff on like bills like we like didn't pay, so we have to pay those. And then we owe to like Verizon, then we have medical debt, and then I have student loans, and then a car. How much does it all add up to? around 24 ,000.

1:17:48Dave Ramsey:How much is the car?

1:17:51Rachel Cruze:The car, it's 8 ,219, but it was from a couple years ago, so it's gotten reposed since then. Like, I haven't had it in a few years.

1:18:02Dave Ramsey:Oh, so you don't have a car payment right now. But you're still paying it.

1:18:06Rachel Cruze:No, after I started listening to you guys, I will not do a car payment ever again.

1:18:12Dave Ramsey:But you don't have a payment now. You have an$8 ,000 repo. All right. Yes. Okay. How much is your student loans?

1:18:21Rachel Cruze:$7 ,100.

1:18:23Dave Ramsey:Okay. All right. Are you paying payments on those? No. Or are they in default?

1:18:30Rachel Cruze:They're in default. Probably like a month or two ago, I tried calling and going on the website, and the girl kept telling me I had to wait because it wasn't in their system yet. so they couldn't tell me if they could bring them out of default or I could start making payments. What bills are you behind? You made a comment that there's still bills. Oh, okay. So these are bills from like other like places we've lived. Right now we're not necessarily behind on our bills, but like these that we owe within debt is like Progressive, Duke, and I think that's it. Yeah, there's only two and Verizon. Okay.

1:19:09Rachel Cruze:So it sounds like you got like eight or nine, 10 bills floating around between all of that and the debt payments. Yeah. Okay. How much a month is going to all of that?

1:19:24Rachel Cruze:To the debt payments? Mm-hmm. Okay. Right now, because we do have an active credit card, my husband is trying to pay that off. But the interest on it is so much, it, like, isn't hardly going down.

1:19:39Dave Ramsey:How many kids have you got? Two. And you don't work outside the home?

1:19:45Rachel Cruze:No. How old are your kids? One is about to turn seven. He is in school. The other one is, we'll turn five in December. But I'm trying to get him into an all-day preschool next year or this year so that I can work. Yeah, so I can work during the morning.

1:20:02Dave Ramsey:Okay. So let me tell you what I think I'm hearing, and you can correct me if you want to. It won't hurt my feelings, okay?

1:20:10Rachel Cruze:Okay.

1:20:11Dave Ramsey:It sounds like you all are completely freaking clueless. You have no idea where your money's going. $5 ,200 comes in. You aren't paying payments on the student loans. You aren't paying payments on the repo. You aren't paying payments on hardly anything except one tiny little Visa card, and you can't even seem to pull that off. you have no idea where your money's going. Does that sound accurate? It's very chaotic and very stressful. Does that sound accurate?

1:20:42Rachel Cruze:Yeah, you're about like 100 % spot on.

1:20:44Dave Ramsey:Okay. So how does she build a budget from that, Rachel?

1:20:47Rachel Cruze:Yeah, well, Jamie, I would sit down and look at where the highest dollar amount of expenses is going. So you can look category-wise, look back the last couple of months and just see food. Is it restaurants? Is it random moments of shopping? Is it Amazon? Like, where is it all going? And then you have to make a realistic budget to say, hey, the way we've been living isn't working, which you feel that. You feel the chaos. And then to say, okay, in order to have a level of control and this piece that you're looking for is that detailed plan that's going to strip back a lot of it. So I would go down the main categories.

1:21:28We'll get you every dollar for a year.

1:21:31Rachel Cruze:to be the premium version that'll attach to your checking account, Jamie. But I want you guys to walk through these categories and really say, okay, if we had to limit it and we say beans and rice, rice and beans here at Ramsey, or if it's ramen, whatever it is, but cheap, cheap groceries, no out to eat, nothing. That's the food category. What can we barely scrape by to make sure we still have food? And then you just kind of go down the list. And I bet, Jamie -

1:21:54Dave Ramsey:Food is first, lights and water second.

1:21:57Rachel Cruze:Yeah, your four walls. Yeah, food, shelter, utilities, transportation.

1:22:00Dave Ramsey:Pay this reasonable rent.

1:22:02Rachel Cruze:Stay current on the bills. And then I bet you, Jamie.

1:22:04Dave Ramsey:See,$2 ,000 will do all that.

1:22:06Rachel Cruze:And I was going to say, I bet you will find$15 ,000 to$2 ,000 after you live on nothing. You delete Amazon. You do nothing. Literally no spending money.

1:22:17Dave Ramsey:No life.

1:22:17Rachel Cruze:Yes.

1:22:18Dave Ramsey:You're broke. And when you get real radical like that, you're smart enough after talking to you. You're way too smart to be this broke. But you're just disorganized and chaotic. and you can fix that. So you sit down with his every dollar budget. We're going to give it to you when you get off the phone. And then you send a link to your husband. Is he on the road?

1:22:40Rachel Cruze:Yeah.

1:22:40Dave Ramsey:Or is he in town?

1:22:42Rachel Cruze:No, he's on the road.

1:22:43Dave Ramsey:Yeah, send the link to him. Download this. You and me are going to look at this. We're going to decide what we are going to do with$5 ,000 this coming month. And then we're, by God, going to stick to it because I'm sick and tired of being sick and tired.

1:22:59Rachel Cruze:the okay that's one thing so i started reading one of your books the complete guide to money and um i try to like okay it says in the book don't bring up your name as like a oh davrancy said that um so i try not to because i've done that in the past and he didn't like that

1:23:22Dave Ramsey:well what i don't like if i'm you is being broke and so bubba who's out there driving a truck you're gonna freaking do this or your life's gonna be miserable because i'm gonna make it miserable i don't care what dave ramsey says i'm tired of living like this we're going to fix this bubba this is you talking not dave ramsey says or the book says or there's an intellectual discussion here. I'm sick and tired of my sucky life and we're going to fix it. And you're going to quit spending like you're in Congress on the road. And I'm going to quit spending like we're in Congress back home. And we're going to get on in control like your life depended on it, because it does.

1:24:04Dave Ramsey:You got to get the two of you are going to have to get passionate. I don't really give a crap what Dave Ramsey thinks. That doesn't even matter. It shouldn't even enter into the discussion. But you know, you guys have got to get upset enough about this to attack it, both of you. And as long as you just dance around and go, well, I can't figure out how to do this, you're going to not do nothing. There's always a reason to do nothing and be broke. Look around America. Everyone in America does nothing and is broke. And they're sitting on their thumbs. And meanwhile, you can fix your life here. You can go do this.

1:24:39Dave Ramsey:You're smart enough to do it. But, you know, and Bubba's going to come along. He ain't got a choice. He gets out there bringing home the bacon, driving. Good. Grind those gears, man. Send me a check and quit spending it. We're about to do this. Get it done. And you guys got to start having a discussion with that kind of thing, not where we're mad at each other, but where we're mad at this status quo, this mediocrity, and we're not going to live in it anymore.

1:25:05Rachel Cruze:Yeah, and it's going to build a whole new set of habits for you guys, Jamie, because you probably have been used to being like, well, the kids need that. Just get it, this or that. It's going to change completely, which it should. You should have a 180 response to everything to get a completely different result of what you guys have been doing.

1:25:22Dave Ramsey:Keep doing what you've been doing. And it's going to feel different. And it's going to be hard.

1:25:25Rachel Cruze:It's going to be hard. But I tell you, that hard is much easier to push through than the heart of sitting of what you've been doing and sitting in that stress. And so there is freedom on the other side of peace and control and margin. You just have to control that income. And that means usually saying no to yourself.

1:26:02Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Andrew is in Dayton, Ohio. Hi, Andrew. How are you? I'm well, Dave. How are you? Thanks for taking my call. Sure. How can we help? So my question is, should I go into debt with my father to double my income? How long have you been listening to this show? A little over a year, and me and my wife are on baby step four now. So what are we going to say? I know, but it's tough.

1:26:31Rachel Cruze:Here's a little bit of backstory. Me and my dad work together, and he owns semi-trucks. I drive this truck currently. It's worth about$64 ,000. And he told me that he would sell it to me on interest-free payments of$2 ,000 a month for one year. And that would double my income. So I had a bit of a crossroads. Why do you have to buy it from him? Can you not just rent it or use it? Well, that's what I do now. But, you know, I would go from I make about 30 percent of every load right now to 72 percent if I actually own the truck myself. Gotcha. Why? Because he pays for it, probably. No, because I'd be—

1:27:18Dave Ramsey:Yeah, because I'd be— Who's booking your loads? Him. Is he going to continue to after you buy the truck?

1:27:26Rachel Cruze:Yeah, that's why he gets that 28%. So I would make— So he gets it for booking it or for owning it? Well, right now I make 30%. So he gets that 70 % for booking and owning the truck. If I own the truck, I would get 72%. Oh, 28 % for booking it.

1:27:45Dave Ramsey:I see.

1:27:45Rachel Cruze:Yeah, and using his trailer and stuff like that. Yeah, yeah. Okay.

1:27:51Dave Ramsey:Sounds like a no-brainer until the thing blows. Yeah, that's the other thing. Sounds like a no-brainer until diesel doubles because the straight of Hermuse is shut down. It sounds like a no-brainer until Trump decides to bomb somebody else and screw up the oil supply. It sounds like a no-brainer until... See, you're projecting a perfect future, and that's the only way this makes sense. And perfect futures don't exist in business.

1:28:18Rachel Cruze:Yeah, I mean, that's definitely fair. No, that's the truth.

1:28:22Dave Ramsey:That's not just fair. That's the world you live in, the world I live in. Now, the question is whether you're going to admit it or not. Yeah, no. Don't do it. No, don't do this. This is crazy. Crazier than crud. Don't do it. Your dad owns the truck free and clear? yes I have a counter proposal okay I will rent it from you for$2 ,000 a month that goes towards ownership that goes towards ownership well that's essentially what he would be doing no this is essentially different because if things go sideways he still owns the truck and you don't

1:29:04Dave Ramsey:that's different if the dadgum engine blows, honey. And guess what? Engines blow in trucks. Brakes go bad in trucks. Transmissions go out in trucks. Y 'all wear them out, man. You run the road with them. You've not accounted for any of those things in this scenario. So if you want to rent his truck and him sell it to you for a dollar after you've accumulated the, it's$2 ,000 a month for, until it got How many thousand? 64 ,000 was it?

1:29:38Rachel Cruze:Well, that's what it's worth. But he said he would give it to me for 24, so one year of 2 ,000 off the top.

1:29:43Dave Ramsey:Okay, so I'll rent it to you for$2 ,000 a month for one year, and you sell it to me for$1. Same thing to him, right? Yeah, fair enough. But the truck is his. It's not your right.

1:29:58Rachel Cruze:Until the purchase price.

1:30:00Dave Ramsey:And if the world falls apart, you don't owe your dad$24 ,000.

1:30:05Rachel Cruze:Yeah, that's the kind of second part of my question is us being on baby step four. I mean, I had the money to buy it free and clear with that$24 ,000, but basically it would leave me with really nothing left.

1:30:20Dave Ramsey:Oh, so that's your emergency fund.

1:30:22Rachel Cruze:Yeah, right.

1:30:27Rachel Cruze:How much do you make a month, Andrew?

1:30:30Dave Ramsey:About$6 ,000, but if I bought it, it would be around$12 ,000. Are you married? Yes. What does she make? She's a part-time nurse. She makes about$3 ,000 a month. And you've got kids? Yes, three. Okay. And what do you drive during the day?

1:30:51Rachel Cruze:Like as my personal vehicle?

1:30:53Dave Ramsey:Uh-huh.

1:30:54Rachel Cruze:Paid off truck.

1:30:55Dave Ramsey:Worth what?

1:30:57Rachel Cruze:Probably about$10 ,000.

1:30:59Dave Ramsey:Hmm. Okay. Reduce your emergency fund to$10 ,000, sell your truck, and pay your dad cash for the truck. I would do that. Okay. And then double your income. You're not going to do that. All of a sudden, this idea doesn't sound so good. I just sold his truck.

1:31:22Rachel Cruze:Yeah, but if he doubles his income like what he's saying, he can save$10 ,000 in two months.

1:31:30Dave Ramsey:It was worth it until I sold his truck. drive a 500 truck because you're not driving it anyway you're driving a semi honey and go pay cash for this sucker oh but now now we got down to it see borrowing is now a convenience in this discussion not the only way to expedite the idea so you can either rent the truck for one year and buy it for a dollar uh but i wouldn't i'd pay cash for it and start making my money now and I'd sell your truck.

1:32:01Rachel Cruze:Yeah, be a one-car family for three months.

1:32:03Dave Ramsey:I'd get you a$500 hooptie. Yeah, whatever. Well, I mean, for one month and get you a$5 ,000 truck. I don't care. It's not going to be much different, but yeah.

1:32:14Dave Ramsey:The voice tone changed. Like what? Awesome. Jack is with us. Jack's in Jacksonville. How are you, Jack? Good. How are you doing? Better than I deserve. What's up?

1:32:27Rachel Cruze:Hey, so I've got a question about my retirement. I've got to make a decision which direction I want to go with it. So I'm currently on a 401A plan. I work in public safety. And that plan, they're matching 25 % into it, and I have to contribute a mandatory 10. So 35 % of what I make goes in. So that's a 401A. The option I have to go to starting next year would be a state retirement. which is more defined benefit versus contribution. Retirement age is about the same. I already have five years on the state retirement from a previous job. So I'm trying to figure out which way to go. I think I can retire okay both ways, but I don't want to make a million-dollar mistake.

1:33:12Dave Ramsey:It would be about that. So you stay with the 401A. Why don't they have 401K as well? Most states do.

1:33:21Rachel Cruze:Just because of the – since I work for a city, they had a city pension, and then they switch it to 401A, and then they give everybody a one-time chance to go to state retirement next year or stay on the 401A.

1:33:33Dave Ramsey:If you put$500 ,000 or$1 million in this, or you put some money in it and it grows to$500 ,000 or$1 million and you die, your heirs get the money. If you go all-state retirement, nobody gets the money but the state when you die.

1:33:47Rachel Cruze:Okay. Yeah, but right now it's got$163 ,000 in it in five years.

1:33:53Dave Ramsey:And that's all gone when you die. Right. If you put it in the state. If you put it in the state. So I'd do the 401A. I also would look into personal Roth IRAs and see how much of this I can roll and how quickly I can roll it to Roths and let it grow from here. But we always take a private plan over a pension because when you die, you lose the pension. And the private plan, the million dollars or half a million dollars or whatever you've gotten in there by then, you don't lose it when you die. and it makes more in the open market than it does with a pension.

1:34:48Dave Ramsey:You should not feel uncertain about investing, and you don't have to. That's why we created Investing Essentials, a two-night virtual event where George Camel and I walk you through my playbook for investing and wealth planning. We'll simplify everything from 401ks and mutual funds to passing on wealth so you can invest with confidence. Tickets start at$199. Get yours today at RamseySolutions.com slash events or click the link in the show notes.

1:35:48Dave Ramsey:Our question of the day is sponsored by Y-Refi. If missed private student loan payments are keeping you from making progress toward your goals, Y-Refi may be able to help you explore refinancing with a low fixed rate and a payment you can manage. Visit YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

1:36:14Rachel Cruze:Today's question comes from Ava in Massachusetts. sits. She said, I'm 23 years old and I've just graduated from college. I have$25 ,000 in stocks and$3 ,000 in cash. I have no debt and will start a job this fall where I'm going to make$130 ,000 a year with a potential of$30 ,000 in bonuses. I would like to finance a new Tesla Model Y, Dave's favorite car. Side note, just kidding. Out the door, the car is going to be$53 ,000. I was giving a rate of 2 % APR if I put down$23 ,000 and the monthly payment would be$442 for 72 months. Obviously, the smart decision is to buy a used Tesla with cash than to buy the Model Y in a few years.

1:36:59Rachel Cruze:But I've been obsessing about this for several months now, and I want to get in if I can. How stupid is this decision?

1:37:07Dave Ramsey:Really? Extremely.

1:37:11Rachel Cruze:Is it because it's a Tesla day or the way she's going about it? No, it's the whole idea is stupid. I'm kidding, I know.

1:37:17Dave Ramsey:Number one mistake people make when they graduate from college, buy a new car. I've been driving my high school college car and it's a hoopty and now I make big money and so I'm going to prove I'm a graduated adult and you go buy a stupid brand new car. A new car loses 75 % of its value in the first four years. teslas are worse than that go look at a four or five-year-old tesla and figure and look at how

1:37:48Rachel Cruze:much they've gone go down in value buy that buy the four and five-year-old no don't what the

1:37:53Dave Ramsey:technology is a disaster no it's not yes it is you can't even you can't even reboot them no what are you talking about i'm sorry anyway don't buy no a listen i'm a tesla owner i know George just gave that car away to get rid of it.

1:38:11Rachel Cruze:He did not. What are you talking about? God. That is not true. Dave just hates electric cars.

1:38:16Dave Ramsey:No, I hate the value.

1:38:17Rachel Cruze:He hates electric cars. Yeah, the value. I do hate electric cars, but I hate the value drop, too. So if you're going to, yeah, so if you're going to go buy one, go buy a used one so you don't take the hit.

1:38:27Dave Ramsey:On any car.

1:38:29Rachel Cruze:On any car.

1:38:29Dave Ramsey:And don't finance it. If you have to finance it, you can't buy it, and it shouldn't be more than half your annual income. and if you can't pay cash, don't buy it. And buy a used car unless you have at least a million dollar net worth. And quit obsessing over new cars. That's going to make you broke the rest of your life.

1:38:49Rachel Cruze:Yes. You say the phrase all the time, car payments is what keeps you middle class.

1:38:56Dave Ramsey:100%.

1:38:56Rachel Cruze:Because if you invest, the car payment really is, it's the borrowing, paying interest on something that's going down in value, all really for a status type of life is really what you're what you're trying to buy you want the comfort in the and the look of it and how it makes you feel and if you invested that car payment over the course of your life it means millions of dollars that you're giving to the bank or the car dealer versus you and so the financing of the cars not smart and our millionaire study what the top Five brands of cars that the average millionaire drives. Ford, Toyota, Honda, Chevy, and Lexus.

1:39:33Rachel Cruze:That's it. So.

1:39:35Dave Ramsey:I miss Tesla.

1:39:37Rachel Cruze:Well, I miss a Raptor. So I'm sorry.

1:39:41Dave Ramsey:That's a Ford.

1:39:42Rachel Cruze:Or a whatever you drive. Whatever you drive.

1:39:47Dave Ramsey:I got two Fords. I paid cash. I paid cash. And a Chevy.

1:39:50Rachel Cruze:I paid cash. No, but for real though, the car, it is. That's where people get in the most trouble from a financial perspective. So, yeah, I would – Ava, I'm sorry, girl. You can get it eventually, but save and pay cash. Pay used – buy used until you have a million-dollar net worth. Then you financially can take the hit of a new car if that's what you choose to do. So we're not against new and nice cars. We're not against those. But you have to be smart about it, and you can't –

1:40:15Dave Ramsey:You need to have a million-dollar net worth.

1:40:17Rachel Cruze:You have to be able to afford it. Yeah.

1:40:19Dave Ramsey:Because they go down in value too fast. $442 from age 23 to age 65 in a decent gross stock mutual fund is$4.7 million.

1:40:28Rachel Cruze:And that's not Dave Matthews. It really is. You just pulled that up. No, I just used the calculator. I know, I know. Just clarifying.

1:40:35Dave Ramsey:The financial calculator on Ramsey.com, okay? Ramseysolutions.com. So, yeah, so$5 million. That's what that Tesla decision is going to cost you. That's what I meant by earlier when I said extremely stupid. Yeah, don't do it. Don't do it. Pay cash for whatever you buy and don't buy a new car unless you have a million dollar net worth. And all the things you own with wheels and or motors and or batteries added up in value together should not equal more than half your annual income. And please go look at the five-year-old version of whatever it is you're thinking about and watch how much they went down in value.

1:41:15Dave Ramsey:Yes. Particularly items that are a new model of any kind, including Tesla. but so if uh if if ford comes out with a new body style wagoneers with jeep did the same thing yeah

1:41:26Rachel Cruze:exactly that whole thing i mean those went down they suck yeah real bad in value wagoneer is one

1:41:32Dave Ramsey:of the worst on depreciation it even beat tesla and so it's horrible and so just go look at how much they go down i mean it's just ridiculous and the reason is that an eight-year-old tesla people are worried about whether they have to buy a ten thousand dollar battery and the car is not worth$10 ,000. And that's the truth. Okay, that's fair. That's why George had trouble moving that car. He almost got stuck with it.

1:41:53Rachel Cruze:Yeah, but you just said he gave it away for free. He sold it well.

1:41:56Dave Ramsey:Well, he didn't give it away for free, but he had trouble getting rid of an ancient Tesla. Antique Teslas are not going to be running around. Antique Teslas. I have an antique Corvette, but there won't be any antique Teslas. Okay? They won't survive that long. So it won't make it. So the battery won't last that long. It's going to be sitting over there in a flower, being a flower box somewhere.

1:42:15Rachel Cruze:I'm telling you, in 15 years, you never know what's going to happen. We'll see.

1:42:17Dave Ramsey:We'll see. Maybe they'll invent a technology to revive them and reboot them, but that would be great. But in the meantime, old ones aren't doing well on the market, regardless of whether we have a discussion about whether I like them or not. It doesn't matter. But they're not doing well on the market. So no, no, no, no, no, no, no, no, no, no. Number one mistake people make when they come out of college.

1:42:39Rachel Cruze:Okay. I'll see you at the gas.

1:42:40Dave Ramsey:They buy a brand new car on payments. Don't do it.

1:42:41Rachel Cruze:I'll see you at the gas station, Dave. Oh, wait. I don't have to take gas. That's fine.

1:42:45Dave Ramsey:That's because you're plugging in on my building and getting free fuel. I am. That's right. I still don't understand that. I don't have any gas tanks here at Ramsey Solutions. All of us that drive gas cars don't get free gas. But all you people that get electric cars get to plug into my building for free.

1:43:02Rachel Cruze:And we thank you for that.

1:43:03Dave Ramsey:And that way you get to go home later. And I paid for that fuel. But I didn't pay for all the other team members' fuel.

1:43:09Rachel Cruze:You own the building.

1:43:10Dave Ramsey:I think that's, yeah, I think, do they make little things where you have to charge, you have to pay? Yes.

1:43:18Rachel Cruze:I bet they do.

1:43:19Dave Ramsey:I need to put paid out there. Oh, stop that. Let people pay for their own.

1:43:22Rachel Cruze:Stop that.

1:43:22Dave Ramsey:No. Well, I mean, I have to pay for my own gas. Kelly's got to pay for her own gas. Joe pays for his own gas.

1:43:28Rachel Cruze:Y 'all, come on. No, this is 2026, 2026. That's what it is.

1:43:34Dave Ramsey:Oh, yeah. No, I miss the equity in this. I'm just losing it. Too funny, y 'all. Too fun. So we have me driving a truck and Deloney driving a truck and Rachel and George driving Tesla's. And Jay just got a new, really nice car. I won't disclose it because it's not my story to tell. That would be unfair. But she just did really well. But it's not electric. So us gas burners got you three to two right now.

1:44:02Rachel Cruze:Me and George. You and George. We're kindred spirits. That's why we do Smart Money Happy Hour together. We get each other.

1:44:07Dave Ramsey:That's it. That's it. We get each other. Hey, I don't care. I actually, the truth is, we joke about this so much that I've gotten so much hate mail on it. It's hilarious. But I actually do think, I think the Tesla is a phenomenal piece of a technology. I really, it's a lot of fun. I'm just not an early adopter on cars. And I'm still waiting on them to come out with the app with the loud muffler. Because I need a loud muffler. I'm a redneck. You're so redneck. Redneck needs a loud muffler. I need a loud muffler.

1:44:37Rachel Cruze:I can't take that Southern out of them.

1:44:39Dave Ramsey:I need a cam that goes...

1:44:41Rachel Cruze:You just need a big truck to feel good.

1:44:44Dave Ramsey:That's it. That's it. Whatever. Compensating. Whatever it is. I don't know. Whatever it is, I'm still doing it all. I still love the... It's still the best.

1:45:21We'll see you next time.

1:45:37Dave Ramsey:learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options, so you never have to invest in anything you don't understand. Head to RamseySolutions.com slash SmartVestor to get connected. Ramsey Solutions is a paid non-client promoter of participating pros.

1:46:06Rachel Cruze:Learn more at ramsysolutions.com slash smart investor.

1:46:26Dave Ramsey:People ask me how we made millions in investing. And so we created a two-night virtual event to walk you through how I have done it, what my playbook is in real estate and in mutual funds, and how I chose not to put money in X, Y, or Z, all of the other things that are out there floating around that people ask about. So we're going to unpack what not to do and what I have done. If you're interested in that, we've only done this two times, and it's called Investing Essentials. It's George Campbell and I. We're going to be doing another one, September 1st and second. And it's the only place I go through this playbook, all the nerding out and everything on the wealth planning.

1:47:08Dave Ramsey:And we're also going to add some new content this time on reducing taxes on high net worth individuals and navigating wills and how to build a lesting legacy and dealing with wealth in the family. All of that will be woven into investing essentials. Tickets start at$199. That's$199. Get yours today at RamseySolutions.com slash events, or click the link in the show notes if you're listening on the podcast or on YouTube. Dave is in New York. Hi, Dave. How are you?

1:47:43Rachel Cruze:Blessed by the best, and yourself?

1:47:45Dave Ramsey:Just the same. How can we help?

1:47:48Rachel Cruze:I am about to inherit$2 million and I don't really know what to do.

1:47:57Dave Ramsey:Wow. How old are you? So 40. Wow. Okay. What's your net worth today?

1:48:07Rachel Cruze:About$150 ,000.

1:48:10Dave Ramsey:Good. And what's your income today?

1:48:14Rachel Cruze:my wife and i we make about 90 000 a year uh we are missionaries okay all right okay well that's

1:48:23Dave Ramsey:a good framework uh on the way to view it and it'll help you uh it's helped me a lot as my wealth has built over the years and it'll help you too and that's the framework is looking at this through a spiritual lens. And so in the Christian world, we often call the management of God's money stewardship. You've heard that, I'm sure.

1:48:46Rachel Cruze:Yeah, and we are Christian.

1:48:48Dave Ramsey:Yeah, and you said missionary, so I assumed. And so if I am a steward, that's not technically a Christian term. It's technically an old English term that means manager. You're a manager of$2 million. that's different than I became an owner of$2 million. It sits on your heart a different way. Totally. It's lighter for one thing, not as heavy. It's heavier if you're the owner. It's lighter if you're the manager. And then it also keeps my perspective on I have a job to do, and that is I'm not up to speed, which is why you're calling, because you're very wise. I'm not up to speed on how to handle, how to manage this much money.

1:49:36Dave Ramsey:I've never done it before. I'm a newbie, a rookie. And so what does a rookie do? Well, they get the playbook, and they start trying to figure out what to do. And that's what you're doing. So good. The Bible also says in the multitude of counsel, there's safety. And so you're gathering counsel by calling here, and I will tell you to put together your counsel. Your counsel needs a CPA in it that does taxes. Your counsel needs a good insurance person, a broker that's not selling you investment life insurance, but that just has all of your things that you need to have insured, insured properly. You probably need a real estate person in your corner.

1:50:18Dave Ramsey:You definitely need a financial advisor. Smart Investor Pros at RamseySolutions.com I recommend. the tax advisors that are Ramsey trusted at Ramsey Solutions I recommend. But in each of these cases, you put together a group of people in these different parts of money, and they all need to have the heart of a teacher because God did not give them the$2 million to manage. He gave it to you, and it's your job to learn from them. The good news is it's not rocket science. You can learn it. You can learn it. Okay? Okay, it's going to be very basic understanding of some of these investments. And then you're going to invest some of God's money.

1:51:00Dave Ramsey:You're going to give some of God's money. You're going to enjoy some of God's money. These are all biblical things to do. You can invest some of it in generosity into the kingdom, which is what you've spent your life doing. And so that part will be easy for you. But even if you were like at the Ramsey Family Foundation, when we're picking a ministry to financially support, we vet them for how wise they're doing, how wise they're operating the ministry. Yeah. Because we're investing God's money into that ministry. And so if we're investing money into a company, we vet the company to see how well it's run.

1:51:38Dave Ramsey:Same thing with this. And so you're going to do all of that.

1:51:41Rachel Cruze:I have a question. for your like your just day-to-day life what does that look like are you guys renters or do you have kids are they in school like kind of what's your your rhythm right now with life yeah so uh no kids um we're both 40 and we are currently renting uh from um family members okay currently we we do have a heart to buy a home. And currently, apart from the$2 million that is coming up, we are currently underfunded living in New York. It's extremely expensive. And missions-wise, what we do, we are roughly around$2 ,000 to$3 ,000 a month short. Now, the way we've done that is we've done like end of year fundraising so in our organization we actually do have a little bit of a nest egg and we draw from that each month good continue to know that yeah yeah

1:52:45Dave Ramsey:i would pretend like you didn't have this that's what i was gonna say there's something about yeah

1:52:49Rachel Cruze:for you guys um putting this away i think is going to be most of it now the housing thing i'm are you guys going to be in this area for a while for the foreseeable future do you think or is there like... So, yeah, so that's a great question. Actually, what the Lord has done very recently, we don't have an exact timeline, but anywhere between the next six months and potentially 18 months, the Lord is moving us to a third world country. So actually our expenses will decrease. And don't buy a house if you're leaving. So I was going to say... Yeah. Yeah. Yeah, that's the plan. I would be giving some of this.

1:53:35Rachel Cruze:A majority of it, I would just put it, I would invest it. I mean, index funds, mutual funds, I would put it away. And if you guys needed a little bit, I just don't want this to drip, disappear over. Yes. You know what I mean? Five to six years when you start to, like, there's something about living within your means still that I think is really wise. And like you said, you guys will be moving to a different country. So your expenses are totally different.

1:54:00Dave Ramsey:But don't also, back to what I was saying earlier, do not sign up a financial person or an insurance person or anybody who's telling you what to do. Their job is to teach you. Yeah. Because it's your job.

1:54:17Rachel Cruze:So I do have maybe another two-part question that goes off of what you guys are asking as well. One, we do currently have a financial advisor. they are through Primerica. So I do have term life and we do have a Roth IRA that we are maxing out each year. Now that isn't a part of the question that I was going to ask. You were actually just getting to that in regards to if we need a little bit of extra money. My heart is 100 % to do everything that you guys just shared in regards to generosity and living below our means. We currently still do. Um, now we've already done our budget for the, the new location and we are still going to be looking at around 1500, uh, a month short.

1:55:11Rachel Cruze:Is there a way to, I, I, you know, I've heard about like dividend funds or is there a way to collect some sort of income?

1:55:23Dave Ramsey:Any mutual fund can pay you an income. Any mutual fund. You can just take a systematic withdrawal, a certain amount per month or a certain percentage, either one. Any mutual fund. It doesn't require it to – the funds or the stocks inside don't have to be dividend funds to do that. You could do that with a simple S &P.

1:55:42Rachel Cruze:And would you recommend he do that and they could live off$1 ,000 a month?

1:55:44Dave Ramsey:I recommend you go back to fundraising and raise your money and not touch this money. If you've got a$1 ,500 a month drip, take it out like you're doing now, out of the missions budget that you put together with your retained earnings inside that.

1:56:14Dave Ramsey:Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke. Not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our EveryDollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change.

1:56:50Dave Ramsey:It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the App Store or Google Play.

1:57:16Dave Ramsey:Our scripture of the day, Psalm 62, 8. Trust in him at all times. Pour out your heart to him, for he is our refuge. Sam Levinson said, don't watch the clock. Do what it does. Keep going. Ooh, I like that. All right, up next is going to be Beth in Los Angeles. Hi, Beth. How are you?

1:57:35Rachel Cruze:I'm good. How about you, Dave? Hi, Rachel. Hi, Beth. Thanks for calling in. I have I share two teenage daughters with my husband he currently owns a home it's under the property taxes under his name and his sister's name the mortgage is just under his name lately he's been experiencing some health concerns so I want to know is there anything is there something a legal thing that I can do so that way in case something does happen to him my two teenage daughters do get a portion of that home.

1:58:14Dave Ramsey:Okay, you said the property tax. There's a deed, the title to the home. Who is the home titled to?

1:58:24Rachel Cruze:I'm not sure.

1:58:25Dave Ramsey:That would be the essential part of information. Okay, and then the second question is, there are several types of things you can do with two individuals that aren't married, tenants in common, tenants in entirety, there's several different things you can do. And until we know California law and we know how it's titled, we don't know how big a concern you have. Okay. But is your husband, is he still able to do business?

1:58:55Rachel Cruze:Yes, he is.

1:58:56Dave Ramsey:Okay. Then you all start talking about this tonight and get to the bottom of this. How is it titled and how do we ensure that your portion of the ownership goes to your daughter's? Is it your daughter's? Is that what you're wanting?

1:59:11Rachel Cruze:Yes, that's correct, my daughter's.

1:59:13Dave Ramsey:Okay. Well, number one, you need a will. Does he have a will?

1:59:17Rachel Cruze:No, he doesn't.

1:59:18Dave Ramsey:Well, he needs to get a will. Everybody that's breathing that's over 18 years old needs a will. Okay. So how complicated is your all's estate other than this house? How many other things are there?

1:59:29Rachel Cruze:um he has his like stocks and investments and i i also have my own home as well and also some

1:59:36Dave Ramsey:little investments um but so this is a second marriage no no no it's our it's our only marriage why do we have why do we i have my own home what's that mean oh because i had i had purchased

1:59:51Rachel Cruze:a home before i met him okay and then he had this home before he met me and then we joined forces And that's, you know, that's how it is.

2:00:00Dave Ramsey:And how old are you all?

2:00:03Rachel Cruze:He's in his late 40s. I'm in my early 40s.

2:00:06Dave Ramsey:Okay. You need a will. If you want to do a simple one, both of you need one. If you need to do a simple one, you can go to MamaBearLegalForums.com, and you can do one overnight. It's very easy. It's really not complicated. It just means you have to deal with the fact that you're going to die someday. Welcome to the emotions of that. But if you want to get complicated, obviously you can go to an attorney. But don't drag this out two years. Get it done now. And wills need to be state-specific, and they need to be in California. Okay, if you're a resident of California, you go by California law, not by Tennessee law.

2:00:42And California law is different in so many ways.

2:00:46Dave Ramsey:But, yeah. But, anyway, you want to make sure that your will lines up with that. And then while you're doing that, you need to jump on the phone and learn about with an attorney, probably learn about his portion of this house and how to ensure under California law that his portion of ownership goes to his sister. It might be, or goes to his daughters, not to his sister. And some, there's one type of deed that you can do in some states that when you die, his portion would automatically go to his sister. You want to make sure you don't have that. Okay.

2:01:26Rachel Cruze:Okay.

2:01:27Dave Ramsey:And that California doesn't allow that. And I don't know the answer to that because we don't know how this is titled. And I don't know California law that well. So. Got it. All of that to say, we just want to, if we need to change the deed, if we need to put the deed in a trust, if we need to put it in just, it may be as simple as he states in the will that his portion goes to his daughters. It's probably that simple. Got it. But you want to double check because you don't want to have to fight with a sister-in-law after death.

2:01:58Rachel Cruze:Yeah. Do you guys have a good relationship? Because I'm sure she has to sign off if you change the deed and do a couple of things, right? Would she have to, she'd probably have to sign off on it.

2:02:06Dave Ramsey:He could sign off his portion with quitclaim into a trust. In any state, he can do that.

2:02:12Rachel Cruze:Yeah, we're very friendly. Yeah. So if you needed something from her, like a signature, it's not like a big thing.

2:02:18Dave Ramsey:You're very wise to be concerned now because you can't fix, you can't buy fire insurance after the house burns down. You can't fix estate deals after somebody dies. So you need to do it now. tonight. Okay. Don't. Yeah. Yeah. Not, not because 40 year old people, things happen to them all the time. 30 year old people, things happen to them all the time. Everyone needs a will. And it's, it's just to protect your family. And it's, what do I will? What do I want to have happen? And if you don't write that down, that's your last will. What is my will? What is my want? My last want, and here I'm going to testify to that.

2:03:02Dave Ramsey:My last will and testament.

2:03:03Rachel Cruze:And it just makes it so complicated for the people that you leave. Oh, so hard on everybody. You're done. You're gone. But, man, for everyone else. Everybody. Untangling a mess is not fun during grief.

2:03:13Dave Ramsey:So get wills and do a little bit of research on what happens to his half in California and the way that's titled. Matthew is in San Antonio. Hey, Matthew. How are you? How are you doing? That's Randy. Better than I deserve. How can we help?

2:03:29Rachel Cruze:we have a lot of house problems we're looking to for council whether we should sell the house and start over and hope to break even or invest

2:03:40Dave Ramsey:and then to possibly gain or if we should just if you didn't own it would you buy it again no right no sir if you didn't own it knowing what you know now it's not romantic to buy a fixer-upper. It's a pain in the butt. And that's what you discovered, right?

2:04:03Rachel Cruze:Yeah, very much.

2:04:06Dave Ramsey:Yeah. Those people that do it on television, they have crews and editors, and it makes it look like it happened in one hour. And it didn't. It happened over weeks and weeks and weeks and weeks and weeks, and everything that can go wrong goes wrong, and those television shows are full of crap. And so that's not how life works. And you discovered that. Sell it, man. It's no fun for you.

2:04:25Rachel Cruze:Did you guys do it because you wanted to fix it up or is it what you could afford? It was what we could afford. Yeah, that's what's hard. We bought it before. Yeah. Sorry. Yeah. No, no, no. I was affirming that, yes, that's what we're seeing more and more is because of the market. You're buying things that are not, it's not new, right? And so you're going to have to do, what's going on with it? What are the problems? Major problem is the sewage drain is broken inside the house underneath the foundation. Average pricing we've been receiving to fix it has been$20 ,000. It's been like the lowest on average.

2:04:58Rachel Cruze:How long have y 'all had it? For less than three years. We're going on into our third year, but it's really been a little over two. Okay. How much is it worth? We received the loan for$135 ,000. Now, I mean, without it, the plumbing being fixed, I'm sure, dropped dramatically.

2:05:19Dave Ramsey:We still owe$130 ,000. thousand on it. Can you get out of it?

2:05:26Rachel Cruze:Within 10 months, we can, within 10 months, because we got first-time homebuyers, no doubt, I forgot what the loan was called, but like loan down payment, basically loan. So we have a minimum of, we have to say - So is the sewer functioning?

2:05:41Dave Ramsey:How are you living in it?

2:05:44Rachel Cruze:Thank you, Lord. There was an unfinished bathroom. It was sold as a three-bedroom, one bath. There was an unfinished bathroom in the garage that pipes around the house and taps into the yard. So that's how we use the restroom. And then we wash dishes with five-gallon buckets like that. Yeah. And we have two young kids and I have not been like an on top of it husband. This is just something that has been like a huge...

2:06:11Dave Ramsey:Building up, yeah. Yeah. What happens if you sell it earlier than 10 months? We owe the money back for the down payment. How much was that? I could be wrong. I believe it was$5 ,000, but I could be wrong. What's your household income?

2:06:32Rachel Cruze:Without overtime,$3 ,300. With overtime, a little over$4 ,000. I wonder if you'd scrape together$5 ,000 and get out of it and go rent somewhere.

2:06:42Dave Ramsey:I wouldn't live in a place with five-gallon buckets, man. I'd get out of there.

2:06:49Dave Ramsey:that puts us our 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