Debt Is the Enemy of Your Freedom

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21:32Dave Ramsey:Wild world out there in the real estate market right now. If you're thinking about buying or selling a home, it's a big deal. You want a real expert in your corner, not your Aunt Sally who got her license three weeks ago. Your house is too expensive to put with the guy at a church who's never sold a house. You need to actually get a pro in your corner. This is a big asset, and you need to have somebody that's high-octane, high-protein to get it done. The Ramsey Trusted Program is the only way to find a top agent that you can trust who is high-octane, high-protein, and they'll help the home be a blessing and not a burden.

22:07Dave Ramsey:It's easy to compare the agent profiles, interview them, choose the right one to work with. Find a local Ramsey Trusted real estate pro for free at RamseySolutions.com slash agent, or click the link in the show notes. Shane is in Michigan. Hey, Shane, how are you? Hi, how are you doing? Better than I deserve. What's up? So my wife and I were in a serious accident, and we both lost our left leg. And things kind of just, well, it goes very fast once that happens. So we went and we were in the hospital. We got out, and now we're starting to do our recovery. And then we got lawyers involved, of course.

22:49Luckily, I hit all the right boxes on my insurance, so my medical for our injuries are going to be covered for the rest of our lives. Um, but the lawyers, I didn't know they were so fast. Like they closed and I said, Hey, in 45 days, you're going to get a settlement, um, of roughly $350 ,000. And I'm, uh, you know, we're factory workers. We try to do the best we can, but you know, we're not prepared for, you know, a quarter of a million dollars. so my question is you know I ask friends and stuff but what do I do from here to set myself up for success not right now even just in the future because we are going to have hurdles and we are going to have challenges so that's my question is how do I not blow this big lot of money and set us up for a good future Yeah.

23:48Dave Ramsey:Man, you guys have been through hell. I'm sorry. Yeah. How long ago was the accident? We're not even three months through. We're both in rehab and doing pretty good. And you both lost a leg. I'm afraid we did. Yeah, we were going through a green light and somebody decided to turn left and we were doing 55 and it took both of our legs. You're on a motorcycle? On a motorcycle, yes, sir. Yeah, and we're getting recovered, and all that recovery is covered. Let me ask you this. The first thing that comes to mind is that it doesn't sound like you're getting enough. Well, that's the thing. He was an underinsured motorist, so we got$50 ,000 each from his.

24:37Kind of an insult to losing a leg. But luckily, I checked the full PIP, so all of our medical stuff is covered from my insurance, my car insurance, and then it maxed out at$250 ,000 each, and then the lawyers take their chunk, and we're left with, you know, what's left.

24:59Dave Ramsey:Your lawyer is getting a chunk of your insurance? Yeah, we got a lawyer to make sure we got everything right, and they take 30%. Of whatever insurance. And basically they got nothing for you. I mean, they got his underinsured motorist, which is basic stuff, and they got yours that you already covered, you already had. There was no big negotiation here. They just caused the insurance company to write a check they should have written anyway. Correct. This is not a good deal for you, okay? You're paying way too much in attorney's fees for them to do something that you probably could have done on your own.

25:34Dave Ramsey:This is not an injury lawsuit here. This is just your insurance paying its claims. It was an insult when we got it because, I mean, we're. Well, it's not an insult. It's all they had. The guy's broke. He's not going to. You can't get blood out of a rock. Yeah. Yeah. But it wasn't like a personal insult, but it's a sad small amount. Okay. Well, at least I know how we got there. Now, back to your question. Oh, man. Okay,$350 ,000 mathematically is not enough for you guys to not work the rest of your lives. Correct. So you're, I mean, let's just pretend you invested it at 10 % for easy numbers. That's$35 ,000 a year.

26:23Dave Ramsey:You're not, you know, that's not going to work out. No, we made about$70 ,000 when we were working, and we get 80 % pay for like three years. Okay, so that's going to be helpful while you rehab and retool for a new career. We also, just before that, we needed a new roof, which we couldn't really afford. So we refinanced. We put all of our debt into the house. I know how you feel about that, but I was out of options. The house would have deteriorated too much. So we owe$150 ,000, and we have no other debt but utilities. So we've been kind of trying. What I would do is to try to, during the time you're getting your 80 % pay, to create a career for each of you, where the net is that you actually end up with your new careers making more than you used to make.

27:15Okay, that's what we were kind of thinking, too.

27:17Dave Ramsey:If you get there, then you don't have need of this money for survival. Right. Then we can use it in the ways that you would rather use it, which would be paying off the house and investing it. That was my question, too. But I'm not doing that until you've got an income, dude. Okay. All right. That's what I was wondering. Yeah. So you've got it. What are you all going to do? You've already thought about this. What do you think you're going to do? I'm not sure. So the bummer, too, was that my friend had a trash truck driving job for me, which would have been a substantial step up and they match like double digit for your retirement, which we have none.

28:01Um, and, uh, they would, it would have been better pay. I got my permit and then two weeks I was gonna, you know, start the classes and, uh, I had that job lined up and then we got hit and that kind of, I don't know, once I get the prosthetic and I get better with it, maybe I could do something like that, but we're still talking manual labor with a leg that,

28:23Dave Ramsey:But, you know, I don't have any idea. I don't know. But wow, that's that's the stuff you're facing. So you've got to solve for income. And when you solve for income, then that frees up the money and then you can decide what to do with it. And it's pretty basic because you don't have a lot of options. I mean, you know, you pay off the house and I would sit down with a smart investor pro and get this money invested and pretend like I don't have it. In other words, I don't have a house payment anymore. I don't have any debt anymore. I'm going to live on a budget, and I'm going to create a sustainable life with my income and never touch the rest of that money.

29:00So you would pay off the house and then with the rest of the money? Investing. Yes, yes. And get somebody to help me? Yes. My friend was like, money market account? No, no, you don't listen to your broke friends about money, honey. I know, I know. Hey, I know. Right away, I was like, I don't know. I need somebody, I think, professional.

29:18Dave Ramsey:No, just go to RamseySolutions.com and click on SmartVestor Pro. and they can help him, Jordan. Yeah, and then make sure you get an emergency fund before you invest that money. Set aside six months of expenses to cover you guys in case of emergencies before you use the rest of that money. But that'll set you up. You get that foundation right and get the income going. You've got a great quality of life. The money will turn into a lot of money over time if it's invested and you keep your hands off of it because you've created a sustainable income with your new careers. Yeah. So, hey, I'm going to send you a copy of Ken Coleman's book, finding the work you're wired to do, and it'll maybe help you on this journey of figuring out what your next new normal looks like.

30:02Dave Ramsey:What a wild, horrible thing to go through. 55 miles an hour. With no protection there on that motorcycle. Yeah, that's just wow, man, crazy. But here's the news on the compound growth. Like you mentioned, you leave 150 grand sitting there for a couple decades, it turns into a couple million if you add nothing to it. And so that's the good news is that this could add a nice cushion to their nest egg. And who knows what the rest of their life looks like with expenses and medical and how this affects other areas of their life. Exactly. Well, the great news, he's got 80 % pay. That's pretty good workers' comp right there, man, or whatever it was.

30:39Dave Ramsey:He's got disability. I guess disability income is probably what it is. Yeah. Wow. Yeah, he had checked the boxes on the insurance. Lawyer ought to be ashamed of himself taking a fee on that.

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33:01Dave Ramsey:Katie is in Louisville, Kentucky. Hi, Katie. How are you? Hi, I'm great. Long-time listener, first-time caller. I'm so excited. Well, thank you. How can we help today? Yes. Hi. I'm calling because I have a mother-in-law who has been scammed out of probably somewhere between$150 ,000 to$200 ,000. She lives a quarter mile from our house in a patio home, which she purchased from the sale of her home in North Carolina. That patio home is in my husband and I's name. And we're wondering if she should move in with us. Why would she do that? well she no longer can pay for the mortgage out of what she is currently getting so she didn't purchase she didn't pay for the home when she bought it she took out a mortgage when she bought it she took out a mortgage the mortgage is in our name my husband and i so she didn't have enough money from the sale in North Carolina to buy the house.

34:17No, well, she did. She stockpiled the rest of it in a savings account. And then when she had an online scammer tell her that he was going to come to the United States and marry her, not once, but it was a romance scam. Yes, the romance scam. That's exactly right. And so obviously, you know, my heart bleeds for her because she's lonely. She lost her husband probably 11 years ago. And my husband and I, when we first got married, he said, FYI, when my dad does, my mom's moving in with us. And I said, that was great. I love your mom, plus she gives me diamonds.

35:00Dave Ramsey:Okay. So if you sell the patio home and she moves in with you, then you've gotten your wish. What's the question? yes yes so the patio home it was probably$250 ,000 however my husband and my mother-in-law don't want that to happen we are supporting my mother-in-law with not a lot basically$50 to $100 a month to stay in her patio home but we can't afford that either my husband and I are both horse trainers. We got into a little bit of tax trouble after the sale of a horse a couple of years ago. Now we have a great accountant on board and I see the light at the end of the tunnel. We are, could probably be debt free.

35:53What is your household income? We are averaging, I'm using the Dave Ramsey app, which I love. We're averaging about$7 ,200 $100 a month.

36:07Dave Ramsey:You can afford$100. Pardon me? You can afford$100.

36:16Dave Ramsey:You said you're giving her$100 a month to stay afloat, and I can't afford that. That's not true. You can't afford it. You have$7 ,200. $100 is not breaking you. It's not breaking us, but we are, like, by the end of every month. You have other issues then. It's not your mother-in-law. You have$7 ,100 worth of other issues. Yes. Yes, we do. We do. And the other part is if mother-in-law can't pay the mortgage, you're getting foreclosed on because it's in your name. Yeah. That is also correct. Yeah. And she's paying that with her Social Security, I assume. she is saying that with her social security and then on top of it barely has enough to pay for the medication that she needs right so this is unsustainable for her to stay in this house yeah well at 100 bucks a month it's sustainable is what she's saying yeah they're they're giving her a hundred dollars a month that's making her budget balance and that's what her husband and the mother-in-law want to do and she wants to sell the sell the house and have her move in for a hundred bucks.

37:26Dave Ramsey:No, I mean, you don't have a math case to make this case. If you guys as a family want to do this, to take care of her and everyone involved thinks it's a great idea, it's not a problem for me. Sell the patio home and put the money in an investment and you'll be fine from the equity in that thing. But the idea that a hundred dollars a month is not sustainable when you make 7 ,200 is not true. There's other things going on in your budget that may not be sustainable. So if that's what they want to do, you can afford it. I just, I. Wouldn't be my first. Well, I don't know. I mean, if you want to, if she wants to live there, doesn't want to live there.

38:04Dave Ramsey:I don't want to force her to live there. So it's just. Sounds like she's more lonely than anything at this point. Yeah. But she's a quarter mile away. She's not too far. Austin's in Oklahoma. Hey, Austin, what's up? Hi, Dave. um so about three years ago my wife and i we bought our home and then now my life is looking at going and getting her doctorate degree and so if we were to do that we would have to move away for a little while probably three maybe four years at the max um and so my question to you is would you suggest we sell our home and take that equity to pay off and not get any student loans Or would you suggest us just renting the home, taking on some loans or some debt for that student for the doctorate degree, and then eventually we'd like to come back.

38:55And so that's the main reason we would want to rent instead of just selling it. I don't know. What are your thoughts?

39:04Dave Ramsey:Why is she getting a doctorate degree? So she can be a professor. In what? It's like a biblical theological studies. And does she have a career now? She does. What does she make at her career? About$40 ,000. Okay. And so she can make$100 ,000 as a seminary professor? Yeah, probably between$80 ,000 to$100 ,000. Yeah, that's probably about right. I agree with you. So that's the return on investment in the Ph.D. And what's the Ph.D. cost? It's about$60 ,000 to$80 ,000. Okay. So you're going to send$60 ,000 to$80 ,000 to get a$40 ,000 raise. That's probably okay. I'd spend$60 ,000. I wouldn't spend$80 ,000.

39:57But, yeah.

39:59Dave Ramsey:And that's going to take how long? I think the max is typically four years. I think it can be done in three at some schools, depending on which one. Is she working while she proceeds? But also then she has to go somewhere where she can get that job after she completes it, and it probably won't be your hometown. Yeah, we do have some connections in the hometown with a couple schools. So there's a chance. Not super high. But, I mean, it's not a sure thing. So, number one, I'm not going to tell you to borrow money for student loans, period, ever, under any circumstance. Number two, I'm not going to tell you to borrow money on student loans so that you can keep a rental property.

40:44Dave Ramsey:So that would just double down. So, no, I'd sell the house for sure. Okay. Yeah, if she wants this dream and you guys are on this dream more than you want this house, then it sounds like you do. Then the proper thing to do is use the house money to get the Ph.D. and then use the Ph.D. to get your next house. Okay. which we do have we have savings but you don't have enough to do this and everything else you don't have enough to do this because you said you were going to take out student loans but it would cover about half of it there would still be student loans no don't do student loans pay cash for the PhD or don't do it what's your household income

41:29about $180 ,000 I mean you could save up in a year and knock this out and cash flow it.

41:37Dave Ramsey:Here's an irony for you. Here's an irony for you. You can't find anywhere in the Bible that God used debt to finance his plan on the earth, not once in there. And she's going to study biblical studies. So, no, don't be borrowing money to do this. No. It's too much irony here to chew on. Don't do it. No, no, don't do it. And don't go into debt for a PhD. Don't go into debt for a master's. Don't go into debt for a bachelor's. There's lots of ways to get your education out there today. It's ridiculous to do that. And then try to keep in mind that what you're looking for is a return on investment on this education.

42:21Dave Ramsey:And the lower the investment, the better the return. So get the cheaper PhD because nobody's going to give a rip where you went to school.

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43:41Dave Ramsey:welcome back to the ramsey show in the fair winds credit union studio george camel ramsey personality number one best-selling author and co-host of the smart money happy hour he's my co-host today the phone number here is triple eight eight two five five two two five julia's in colorado hi julia how are you hi how are you guys better than we deserve what's up um well first of all i love you guys so happy to hear that i have been listening to you guys for like the last eight months me and my husband and i um and we've been working on getting through steps one and two. We just had a baby not that long ago in May.

44:25And I heard just through the grapevine that my mother is going bankrupt. I think she already filed actually. And she has a parent plus loan from my first two years of college and has been just recently just started asking me to help pay for it, which we already agreed that I would pay for it. That was the goal. but I had no idea what we signed up for, and I don't know what it looks like with her filing bankruptcy.

44:55Dave Ramsey:The Parent PLUS loan is not bankruptable. It will depend on what type of bankruptcy she files as to whether it will affect the loan at all. There's two types of bankruptcy that might work. One would be Chapter 13 bankruptcy, which is a payment plan for five years. If she puts the Parent PLUS loan in the Chapter 13 bankruptcy, which if she's doing one, she probably did, then they're going to be paying payments inside the bankruptcy on that loan through that five-year period of time. Okay? Oh, okay. And so it's a mess. It's a mess. And so if she files Chapter 7 bankruptcy, which is what most people think of when you think of bankruptcy, which wipes the slate clean, the Parent PLUS loan is not bankruptable, and it'll still be standing after the bankruptcy.

45:44Dave Ramsey:It'll wipe off her credit card debt. It'll wipe off her medical debt. It will wipe off any unsecured debt, but it won't wipe off a student loan or an IRS debt. So she still owes it. But the bottom line is you morally owe it because you promised to pay it. correct? I did. Either way, it's not going away. And so either way, you're going to get the opportunity to do what you said and pay the bill. But you don't even know how much the stupid thing is. I do, actually. They sent me a statement last year. And I just had trouble getting in there because I thought I was co-signed on it. You're not. Not on a parent place.

46:25Dave Ramsey:You can't get in there, but what was the balance? It was about$19 ,000. Okay, good. And what's your household income? A couple hundred. So my husband and I, we make anywhere between$40 ,000 to$50 ,000. We're working on growing our income right now. He just started a business, and that's gradually growing as time goes by. And how much debt do you have other than this 19k parent plus loan so without that would be about 30k 16 of it 16 is on credit cards he has a credit card um and then we have a car which is only about 9 800 of it and then the rest is other student loans because i went back into school thinking i can do it now that i was sober because I went through this whole time period where I was struggling in addiction, and I really got behind on finances, and it took me a long time to catch up.

47:26This is my fourth year.

47:27Dave Ramsey:Good for you. Proud of you. What were you on? What were you addicted to? Mainly, so I started on psychedelics, and then I would use weed to kind of make up for it when I gave up the harder stuff. And you've been derived for four years. Good for you, kiddo. And you've got a baby. and things are turning around, your husband's got a new business. Good, good. Good for you. I'm glad. Yeah. Good. Thank you. Are you working full-time right now? So, yes, I am working full-time. I'm an independent contractor in the marketing industry as a brand ambassador. So I have busier seasons, like, throughout the summer and spring into fall, and then winter is our slower season.

48:09So we like to make up for it with Instacart. And then we also do ministry on the side, so we have some fundraising money that's coming in, and we're starting to learn how to fundraise a little better for that stuff.

48:22Dave Ramsey:All right. Yeah, and he's got to get his business going because y 'all don't make any money. No, we don't make a lot. Yeah. Well, you need to really get the career going, both the careers going, and get them going. Because basically what we're saying is you've got$30 ,000 worth of debt plus$19 ,000 that you promised to pay of your moms. And again, you're not legally obligated. So what I would do is deal with what's in your house right now. Let's get your income up and address these debts smallest to largest. And once you're out of debt, then I would reach over and start taking care of the parent plus loan that you promised to.

48:54Dave Ramsey:But it's not in your name. You are not legally liable. You're just morally liable because you did a handshake with your mom, said I'll pay it. Right. And I think the problem is, like, I explained that to her recently that we're trying to do a snowball. We're just getting our household in line and then paying off the way you guys teach.

49:18But we don't have the best relationship. It's already strange.

49:22Dave Ramsey:Yeah. And, like, we don't talk. She hasn't even met her grandson yet. Oh, man. Because I don't feel like I can let her into my life. Yeah. Well, that's okay. I mean, you still are going to go and pay the bill when you can pay the bill. You paying a bill one way or paying it another way is not going to fix your relationship with your mom. And it's not going to fix her money problems either. Right. She's not paying it now. So, I mean, if you want to start paying the minimum payment on it as a part of your plan, pay minimum payments on everything but the little one, attack the little one, and when it's gone, attack the next one.

49:58Dave Ramsey:That's snowball process, right? If you want to pay this and put this in the debt snowball that way, I don't have a problem with that. But prepaying that loan before you take care of these other things, no, I wouldn't. Regardless of if it upsets the person that's already upset. Oh, well. Right. Yeah. And what kind of business does your husband do? So he kind of does a lot of different things related to music. He runs equipment, and then he's a show promotion promoter, and he runs a record label. So there's a lot of different things going on in that area. Which one is most lucrative? The most lucrative would probably be his show promotion and planning.

50:41We make, we're making up to 200 a show right now. So he needs to do 10 shows a month to make two grand? About, yeah. Is he doing that? No, but we're just getting started. He just got started with that like a couple months ago. I would make this a side hustle, and he should be working full-time doing something else, even if it's retail. Because you guys need consistent income right now. We can't hope for a show and hope for a brand ambassador gig. We need stability.

51:12Dave Ramsey:When Instagram's your fallback, it means you need new careers. Right. So the problem is he had a manager job last October, and there was a lot of politics with the regional manager, and just last minute lost his job when I was pregnant. And so he's been trying to get a lot of, like, jobs that doesn't require, like, 60, 70 hours as a manager. And they won't hire him unless he's, like, full-time. Yeah, he's got a baby. He needs to be working full-time. He's in crippling debt, and his family needs him. He should be working 60 hours a week right now. We've got a mess to clean up. Yeah, great place to go when you're broke.

51:51Dave Ramsey:To work.

51:56Thank you.

52:30Dave Ramsey:statistics show that half of americans don't have enough life insurance or they don't have any at all i don't understand this john why don't people want to take care of their family they think they're going to die or something well i used to be one of those guys i didn't even think about it and one of my buddies said hey the only reason to not have life insurance is if you hate your wife and kids and i immediately went and got term life insurance that's a gut punch and oh you're telling me and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

53:01Me too.

53:01Dave Ramsey:They don't know what to do next. Me too. I mean, you're going to have a crisis here and you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly the two options. And take care of your dadgum family, man. Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually have the opportunity to just be sad, to just miss you. That's exactly what it's supposed to be. It's saying I love you to your family.

53:32Dave Ramsey:Term Life Insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282.

53:55Dave Ramsey:Our question of the day is brought to you by Y-Refi. You've tried budgeting, you've tried making minimum payments, but those defaulted private student loans are still weighing you down. Well, Y-Refi might be able to help. Learn more at Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not in all states. Today's question comes from Kurt in South Carolina. I decided to dive into real estate investing a few years ago. I bought five single-family homes, all 100 % financed, for a total of$825 ,000 and thought, wow, I'm a genius. I also had$175 ,000 personal mortgage and$40 ,000 in student loans.

54:35I had my wake-up call last week when I had to take my three-year-old with me to post an eviction notice on a tenant's door. I just didn't take into consideration the time and the emotional stress this leap would require, not to mention the constant calls for repairs. The house's cash flow and the tenants pay on time, but at this point, the return doesn't outweigh the hassle. I bring home$150K from my day job, and my wife, who's a stay-at-home mom, could work from home if needed. How do I get out of this mess? Man, this guy sounds like a young Dave Ramsey.

55:07Dave Ramsey:That's exactly the—well, except I had a little better situation than he's got. Yeah, he's 100 % financed. He's got personal student loans, and he's going, how do I get out? Well, the good news with a house is you can sell them. So that's maybe one way out of this mess. George, that was insightful. I'm Yoda of the finance world. That's it. Just sell the house, dude. I mean, why do you even need to ask the question? And he might take a loss on some of them. I mean, who knows what that— Oh, well, you pay some stupid techs for doing stupid stuff. Play stupid games, get stupid prizes. But yeah, I mean, I've done that, right?

55:43Dave Ramsey:And you have too. Everybody's done that. But yeah, you just woke up and went, I just did a bunch of$825 ,000 worth of stupid. The good news, I can probably get$800 ,000 worth out of it, and it'll only be$25 ,000 worth of stupid. And I make$150 ,000, so I'll clean up the mess. Yeah, the good news is his day job has a great income. Maybe they went up in value enough. He said a few years ago. So if this is 2022, we've seen some decent appreciation over the last few years. Yeah, in South Carolina, maybe you can make a little money on it even and get out whole. That would be incredible. Knock out your student loans in the process, get you an emergency fund, and restart from there and do it the right way, which is slow, which is let's get rid of the personal mortgage first, then save up and pay cash for any investment property.

56:25Dave Ramsey:Katie's in Utah. Hi, Katie. How are you? Hey, Dave. I'm better than I deserve. How are you? Just the same. What's up? So I am the mother of eight children. We just had our eights back in April, and I homeschool them. I stay home with them. And my husband is a physician assistant. And a couple years ago, we bought our first home, top of the market, top of interest rate. We were kind of lured into it by the 2-1 buy-down idea. And our mortgage hit its full scope in July, and I feel like I'm going crazy. So I'm wondering if you would advise us to actually sell our home. How much is your house payment?

57:07$3 ,900.

57:08Dave Ramsey:And what's your husband's take-home pay? He makes$120 ,000, and he works full-time at one clinic, and he picks up a couple extra shifts at another clinic, and he's also donating plasma every week so we can pay for groceries. Yeah, because your house payment is 50 % of your take-home pay. I know, I know. And it was before the 2-1 started even. I mean, it already was in the stupid zone. As soon as you moved in, the 2-1 didn't even buffer that. we were living with my parents and i was expecting my seventh child and my husband was commuting an hour every day yeah but i mean you went from like you went from homeless in your mother's basement to four thousand dollars a month i know this is not like a small step this was a great leap i know yes you got to sell your house kid you bought a house you can't afford unless his income is about to double which i i don't think that's in the cards I know it's not.

58:09The thing, too, is that he loves his job so much, and where we live is actually very, very expensive. So even renting a three-bedroom house would cost us around$3 ,000 a month where we live.

58:21Dave Ramsey:Well, you can't afford to live there, then. I've been telling him this for a long time. Back in May when I had my four-week-old baby, I said, let's just sell our house and live in a trailer. I'm willing to do anything, but it's hard for me to get him on board with making a change. I'm not saying live in a trailer, but you go to extremes. You go to extremes. I do. $3 ,000 a month rent to a trailer in one sentence. I know. Why don't you just go do something reasonable like$2 ,000 a month and live out far enough away that you can find that and let him go to work? Okay. Yeah, and let's get rid of this problem.

58:57Dave Ramsey:But, yeah, yeah, don't, you know. And then let's start talking. Maybe you can find something you could buy that fits in that. I don't care if you own or not. But the house payment needs to be more like a fourth of your take-home pay, not half of your take-home pay, especially when you have eight little birds to feed. I can't imagine eight kids in a trailer. No, we're not doing a trailer. And we're not going back to mamas either. None of that's necessary. But, I mean, we're a fur piece from there at four grand a month. Okay? This is a big, serious, nice house here. So there's a lot of different things we can do.

59:38Dave Ramsey:Millie is in Washington. Hi, Millie. How are you? Hi. Thank you for taking my call. Sure. What's up? Well, I've had to pay the stupid tax, and I did the wrong thing in the past, and I'm trying to do the right thing now, so I'm calling you and asking for advice. My question is, should I cash out my index fund? And if I should, should I use it to pay towards student loans or for car repairs or for both? What's wrong with your car? One of the problems, they're not sure they can't figure it out. The other one is like a cooling system. He's replacing their estimate for that is$1 ,900. Whose estimate?

1:00:20Dave Ramsey:The dealer? No, the mechanic. You have an independent mechanic that doesn't work at a dealership? Correct. Good. Okay. Is it just you? Are you single or are you married? I am single with five children. Okay. And what's your income, ma 'am? Up until this month is about$3 ,000, but I am increasing my hours, and I did just get a raise. I do have some health issues from keeping me from working too many hours or physical labor, but for the job I have. How old are the kiddos? I'm working what I can. My youngest is 12, and the oldest is 18. She set it off the college year this week. Is there any child support or alimony?

1:01:08No. Wow. In lieu of alimony, when we divorced, I did get a little bit extra on the house when we sold it.

1:01:21Dave Ramsey:And that money's in the index fund. How much is in your index fund? $7 ,800. Not much. Okay. And how much student loan debt do you have? About$90 ,000. Okay. Well, number one, you're out here fighting this by yourself, so you've got to get the car to where it's reliable. Mm-hmm. Period. And more debt is not the answer to do that. So, yes, we have to use some of this to get the car reliable. and the rest of it, you know, we're going to try to make sure that you continue to move up in your career and continue to raise your income because that's going to be the issue to address the 90 ,000. What did you get your degree in?

1:02:03I got it in marriage and family therapy.

1:02:06Dave Ramsey:Okay. Undergrad or did you finish your master's? My master's. You're licensed? Yes, sir. Why are you're not doing that? I am doing that. $3 ,000 a month? Yes, because I was only working three days a week, but I'm increasing. I just increased it to four days. And like I said, they just gave me a raise bill. It will be going up. Yeah. Because most of the issue is that I work 50 miles from home. So it makes it a little bit of a juggle with the kids and making sure they're out the door in the morning and such. Can you do any remotely part-time? Not with this company. Okay. Because, you know, if we could rearrange this situation a little bit, a typical marriage, licensed marriage and family therapist will make$100 plus a year.

1:03:01Yes, but I only am at an associate level right now. I'm not fully licensed.

1:03:06Dave Ramsey:Why? um because i just graduated in 2023 and just got this license in 2024 oh you gotta you gotta get some hours you gotta get some hours in to move up okay all right yeah you're gonna have i mean the income is going to be your overall answer not a 7800 uh index fund but for now the answer is yes fix the car but long term the answer is let's rearrange our situation so we can get our income up. And I think that's going to be really, really important in order to be able to create a sustainable situation.

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1:05:29Dave Ramsey:If you're tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free every dollar trainings. There are new trainings every week this month, and they're all hosted by one of their MC personalities, George or Rachel or Jade. We're going to show you how to stick to a budget and even find thousands of dollars of margin using every dollar so you can get out of debt and start building wealth. Plus, you can ask us any question during the live Q &A. Sign up for free at RamseySolutions.com slash webinar. Greg is in San Diego. Hi, Greg. How are you? I'm doing well. Thank you for taking my call.

1:06:03Sure.

1:06:03Dave Ramsey:What's up? So after listening to your show, I learned that I acknowledged that I made an impulsive decision. I attended a faith-based event in 2024, and the event pretty much motivated faith believers to invest in the real estate market and also the stock market. I paid for that training. I didn't have the money, but they told me that if I charged it on credit cards, that I would be able to make that money up during the zero interest period and pay off the charge and learn how to trade. Well, that period is gone and it didn't happen. And so now I'm stuck, you know, because now I have a$20 ,000 credit card debt from that, and I haven't made much money on the stock market.

1:06:47So now talking to my wife, I'm trying to decide, okay, do I keep trying to invest and pay and make money so I can pay off this charge that I accepted, or should I just focus and go back to the snowballing the credit card debt?

1:07:02Dave Ramsey:I'm sorry, Greg. Yeah, you got scammed. Yeah, after the fact, I realized it. And we were doing the snowball effect. We were on track. We were about 20K away from reaching zero. But when I saw this, I said, hey, we can do this. And I'll accept my leadership decision at my home. I thought it sounded great. But it is what it is. You were looking for an easy button. Yeah. And there's no easy button. And this easy button is broken. And it's and you've discovered that now. So I'm sorry, man. Yeah. You just got to pay your 20 grand off. And the last thing you do is keep investing the way they were teaching you because you're going to get in more trouble.

1:07:47So we do have money on the side because I was going to invest. So you're saying, oh, you do. I'll pay off the debt. About a thousand bucks.

1:07:56Dave Ramsey:Yeah. Just, you know, you're going to do what you're going to do. But if you ask us, we're going to tell you what we would have told you before you did all this. and that's list your debts, smallest to largest, pay minimum payments on everything but the little one, take all your money that's not in retirement accounts and throw it at these debts in that order and let's get them cleaned up because the shortest distance between where you are and wealth is not an easy button stock market course. It is your income. And getting that back and understanding that the borrower is slave to the lender is the only way to do it.

1:08:27Dave Ramsey:There's nothing worse than a scam artist except a scam artist that wraps himself in Jesus. And charges$20 ,000 for this quote-unquote training. Man, that's heartbreaking, Greg. That just pisses me off. I get so mad. It's just so wrong. But, you know, when you fall for stuff like that, you need to do a CSI on your character and your soul and your spirit and say, Lord, what is in me that allowed me to believe that? And, you know, there's some interesting proverbs. He who is impulsive exalts folly. Impulsive exalts folly. Folly is the verb of a fool in action. And I have been a fool in action. I've been impulsive plenty of times in my life.

1:09:23Dave Ramsey:But I exalt folly. I lift up a fool in action when I'm impulsive. I become a fool in action. The other one says, Proverbs says, the wise see trouble and seeks refuge. The simple continues on and is punished for it. You just keep walking right off the cliff. Yeah, and just keep moving. And I've done that. I've done that. I like, I know better. I know this is bad. He even said it. He's like, I know down inside of me, this is not, I know this, I know this is, and you walk right into it anyway. That wisdom section of the brain just shuts down. You go, I can get rich quick, though. There's something about it, and I'm simple then.

1:10:04Dave Ramsey:That's another word for fool, right? And I've been a fool in every one of these cases. And, man, when you start studying fool and Proverbs, you start seeing yourself. It's painful. It's just like, God, I did that. Yeah, I did that one. It's holding up the mirror. I did that one, too. And the number of times I've been a fool and survived, because a biblical fool is not a greeting. It's not like, hey, fool. No, this is like an idiot. I mean, this is like when I have done this, I was an idiot. You know, it's like, yeah. So, Greg, I can relate, man. I can relate. I haven't done that one in a long, long time, but I did that one once myself.

1:10:38Dave Ramsey:Not 20 grand, but, I mean, you believe that there's an easy button, and they'll show you a course on how to get the easy button. A get-rich-quick scheme is what we would call it now, looking back at it, right? And you go, the wise see that. They seek refuge. They see danger, and they seek refuge. The simple continues on and is punished for it. Healthy skepticism with these Facebook ads, however he fell for it. Yeah, here's a healthy skepticism on anything on social media, period. Is it even real nowadays, right? Is it AI? Oh, gosh. Did he really say that? I saw one the other day that I was promoting car loans.

1:11:16Dave Ramsey:Someone asked me, they said, hey, I saw a video of you and Dave promoting these car loans. I said, nope, that was a scam from AI and the devil himself. Yeah. Yeah, I mean, if it's completely perpendicular to everything you know about us, come on. I mean, how dumb are you to believe that, that that's not AI? But, yeah, there it is, and it's just, golly. But, yeah, we're there with you, brother, but I'm sorry you're having to clean up the mess. The good news is you'll probably never make that mistake again. That's the good news. Amy's with us. Amy's in Chicago. How are you, Amy? Hi. Thanks, Dave.

1:11:48Thanks for taking my call. And I've been listening to the show for about a year and I'm almost through with the last bit of our debt. We've paid off$500 ,000 in medical school debt. Yes, we got radical. We sold our house and used part of the equity to downsize and the rest to pay off the medical school debt. Wow. So what's your household income now? Well, my husband's a doctor, so we're doing pretty okay.

1:12:17Dave Ramsey:We make about$25 ,000 a month. Wow, good. I'm so glad. Congratulations. Yeah, thank you. Thank you. But I'm in a weird situation with a car loan. I'm in outside sales, and so I drive for work, and I'm putting on easily 2 ,000 miles of my car a month. And I had to buy the car for the job, and now I'm underwater. So I'm underwater about$7 ,000. and I've just been told that my company is going to be going to fleet vehicles in the next year. We have basically a year to three years to start participating in the fleet vehicles. So they'll give me a car and they'll cover all the costs associated with it.

1:12:57Dave Ramsey:Love it. Yeah. That means between now and the time you get the fleet vehicle, you've got to get this one sold and cover the$7 ,000, right? Yeah. When are you going to get the fleet vehicle, do you know? um it'll probably be sometime next year that they'll open it up for us to start doing that and um at that point i'll have to i'll have to have something to drive between now and then yeah we'll just keep driving it unless what's it worth get it paid down you got great income yeah that was my question do i keep driving this and just pay it down until i'm no longer underwater or do i try and like sell it get something cheap well if you pay it off you're going to get all the equity when you sell it.

1:13:38Dave Ramsey:The difference in now in six months, it doesn't matter. Okay. So just pay it off. Let's just get it paid off as soon as you can. And then you're sitting there with a paid for car, it's got a lot of miles, and you sell it when you get the fleet vehicle. I mean, you can knock it out before the end of the year, right? I think so. What's left on it? It's$36 ,000. Yeah, you can knock it out. Because now you've got a$400 ,000 income, don't you? You make$25 ,000 a month if you throw$12 ,000. makes 25k yeah you make how much i make uh 165 base he makes 165 base and we both make commissions okay all right wow good for y 'all so yeah this thing's knocked out by christmas and you don't you're not losing sleep over it and then you'll sell it when you get the fleet vehicle and whatever it's worth that makes you debt free right yeah yeah let's knock it out and then and be done with it.

1:14:31Dave Ramsey:Man, wow. Good for you. Good for you.

1:15:10We'll be right back.

1:15:31Dave Ramsey:Casey's in Ohio. Hi, Casey. How are you? Hi, I'm doing great. Thank you for taking my call. Sure. What's up? So me and my husband are on baby step two. I have a debt about$6 ,000, and including his, it will be a total of$78 ,419. $68, which I find very appalling, and we are not— Stop a second. I didn't understand what you said. You said he had$78 ,000 on what? No. So I owe$6 ,000, and adding my husband's debt, it's going to total up to$78 ,000. Okay. So your husband has$72 ,000 in debt, and you have$6 ,000. Yes. And his$72 ,000 is on what? It's mainly on student loans. And what's your$6 ,000? It's a medical bill and credit card.

1:16:32I have$4 ,000 in medical bills.

1:16:34Dave Ramsey:How long have you all been married? A year, but we've been together for six years. Okay. And what's your household income?

1:16:46What I make as a nurse is about$90 ,000. And my husband has his own insurance company, which is not doing well, and he makes about$30 ,000. um he did get a new job right now which uh which he get he brings him um three thousand to four thousand now monthly our main issue is mainly um him disagreeing on my me giving tights um every month and i do not like the fact that he has leased a tesla and sold our car which we only had two years and we could have paid it off so I'm not sure how we can you know work together together to tackle this debt and you have it when y 'all got married did you not talk about like doing life together I didn't think so before getting married I was thinking about like oh my money's my money and your money is yours, but I am watching your show.

1:17:49I just, I've come up on your show probably like a couple of months ago. And that's when I realized that, um, yeah. So you want to get out of debt and he doesn't really care. What's the status now? Well, he does care, but he doesn't agree with the baby steps. Um, he wants, um, I don't know. He doesn't want to get out of his credit card. He thinks we need credit to get approved to buy a house, to get a car, and things like that. And in one of your videos, I watched... How old are you, too? Over 33.

1:18:24Dave Ramsey:Wow, you sound like you're 20. I, I, yes. He sounds like he's 20. He's so immature. Yeah. Yeah. Wow. Okay. So what's his plan to get out of this mess? he just wants he wants to pay off the smallest amount that doesn't have an interest yeah i mean that does have an interest he wants to start with that but i know with the baby steps you have to um start with the smallest amount first which i've been doing i've been doing that myself but um And he hasn't. I'm sorry. I'm just so overwhelmed. I've never been in this so much debt before. The most debt I've had was a$6 ,000. Yeah. So here's what you need to do, hon.

1:19:15Dave Ramsey:Okay. You need to sit down with him tonight and say, I'm so scared I can't breathe. And you are killing me. So I'm going to go see a marriage counselor because our marriage is in deep trouble. And I'd like for you to go with me.

1:19:35Dave Ramsey:okay okay and you need to go see a marriage counselor okay you don't need to be talking to two goobs on a podcast when your marriage is falling apart all right you got to sit down with somebody that can actually help you and him grow up and walk through the process of learning to respect each other combine communicate but this guy does whatever he wants to do and then just comes home and tells you at least a Tesla. I mean, that's a husband needs to be smacked. And so I can't help you with that because I can't reach him from here. It's clear he doesn't respect your opinions on money. Yeah. And he's not communicating.

1:20:14Dave Ramsey:And he doesn't make any money, which is kind of humorous. You're making triple what he makes. But he's got all these opinions. That's hilarious. Broke people with deep financial principles. And so, but yeah, it's that all that comes out in marriage counseling, but you're terrified and your husband's causing it. So that tells me that we have marriage counseling issues and you need to sit down with somebody. I'm sorry you're going through this kiddo. All right. Eric is next. Eric's in Houston. Hi, Eric. How are you? Hey, Dave. How's it going, buddy? Better than I deserve. How can we help? yeah i just need uh some you know advice from uncle dave i'll call you marco because i've been listening to you for a little while now so i just need some advice um i'll give you the quickest shortest story uh rundown i can't a year ago i was facing some legal uh troubles had to go to court stuff like that i needed a lawyer so i went to my uncle he was doing a little bit well off financially so I told him if you can help me find a lawyer you know but he decided to take on everything himself he paid for the lawyer with you know the lawyer won't want me to court fast track a year up to today you know I've come to find out you know from the news and everything that he gained all his money from illegal immigrants looking and seeking, you know,

1:21:50legalization, green cards, stuff like that, to be able to live here in the U.S. He was defrauding them, telling them that he, you know, he works for the law firm. He can help them expedite that situation. Your uncle was doing this. Yes, sir. Yes, sir. How much do you owe your uncle for the lawyer? I owe him$10 ,000.

1:22:12Dave Ramsey:And what do you make? Okay, but let me give you just a quick sidetrack to that. The money that he gave me, the money that he accumulated from all these people, it was about$1.4 million. FBI and everybody, they did a joint task force investigation. and, you know, where I'm at now, I'm trying to figure out morally, you know, should I pay him back? I would like to try to help out somebody, you know, I mean. I don't know that you can. Have they seized his bank accounts? I mean, I'm guessing he's going to jail for a long time. Yeah, they seized his bank account. Do you have$10 ,000? No. Okay, then it doesn't matter, does it?

1:22:58yeah i mean i mean but the thing about it the thing about it david that he's he's been he's

1:23:05Dave Ramsey:been hounding me and he you know he's been hounding you for money you don't have exactly and he's been throwing my name under the rug to my whole family making me out to be this bad person but maybe we don't have to worry about what he thinks because he's a scam artist he's going to jail okay we're not going to have some kind of moral nobody's worried about his opinion of anything he's a criminal he's a criminal yeah yeah so none of that none of that matters but but what does matter is is regardless of how horrible a person he is or what he said or did he loans you ten thousand dollars and you owe him ten thousand dollars so someday when you get some money and you get a job and all that you probably ought to pay the man back what you owe him regardless of morally, regardless of what he has done.

1:23:52Dave Ramsey:You know, that's up to you, but you can do that. But that's your only option is either not pay him or pay him, but you don't have an option today at all because you don't have the money. So it's theory right now. He can call you. He can hound you. He can tell all the relatives that you're a bad guy while he's sitting in a jail cell because the FBI raided him. That's funny. He's telling people you're a bad guy? That's kind of humorous. if you think about it. But yeah, I wouldn't worry about it, Eric. When you get some money together, then deal with the problem. And when you get some money together, you someday should pay the band back what you owe him regardless of his character.

1:24:30Dave Ramsey:Because you paying him back is not about his character. It's about yours. And so I want you to pay him, but not today. You don't have it. It's living rent-free in your head until you do pay him. I can tell. It's weighing on you. You don't like what it's doing to your reputation. So I'm not paying him because of anything he says or does. And I'm not paying him because your mama calls because he called her. I'm not paying him for any of that. I'm just paying him because I owe him. It's that simple. Nothing more, nothing less.

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1:26:04Dave Ramsey:Welcome back to the Ramsey Show. in the Fairwinds Credit Union Studios. George Campbell, Ramsey, personality number one bestselling author, is my co-host today. Open phones at 888-825-5225. Brianna is with us in Maryland. Hi, Brianna. How are you? Hi, Dave. I'm so glad to be here. Well, it's good to have you. How can we help? Well, I'm feeling overwhelmed. I recently signed up for the free version of the EveryDollar app. I did all of my budgeting. I'm still feeling underwater and I can't find a second job, but I'm calling because I want to find out if the 400 % interest rate for the payday loan that I originally took out for$1 ,500 is considered actual debt.

1:26:53It's not on my credit report. I've already paid about$2 ,500 of it. And when I realized that, I kind of like stopped answering their calls and ignoring them. So just not sure what to do. Why are you ignoring them? I really don't have the extra finance to pay them, and I figured it wasn't showing up on my credit report, so it wasn't necessarily hurting me. And I kind of felt like they already got their money because the loan was for 1.5 originally. Well, it's debt. I mean, oweing anyone anything for any reason is debt. And so whether it has shown up on your credit report or not isn't the issue.

1:27:35you've got clearly in a bad cycle. I mean, there's a lot of problems that got you into that payday loan, payday lender, right? What caused this? Yeah. Well, I do a lot of lending, I guess, to my family. And I'm actually currently trying to get out of, like, our family savings club. Like, we all put in, like,$600 a month. And then when your month comes, like, you get the money. and then I recently got a car it was$15 ,000 but I'm upside down it's just$55 ,000 student loans so I'm just trying to like make it day by day I have a clearer picture of my finances with the EveryDollar app but I don't understand why it's so hard to find a second job right now What's your total debt?

1:28:27I've got$75 ,000 And what are you making right now? loans,$61 ,000 a year, about$3 ,800 net. Okay. And your smallest debt is now what? Is it the payday loan? No, a$900 buy now, pay later type thing.

1:28:46Dave Ramsey:What did we use that for? I got a TV. Okay. How long ago was that? It was about two months ago and I was paying the minimum. When did you start the EveryDollar app? I only started a few weeks ago. I just started listening. Okay, good. All right. Have you stopped your 401k? I did. I did stop that. It was only$900 in there anyway. And you're going to stop the family thing today. Just call the family and say I'm out. They're not going to take that well, but yeah. I'm sorry. Tough. I'm broke. I owe a payday lender 400 % interest. I don't need a family savings club. You're taking out a 400 % interest loan to put into the family savings club.

1:29:34Do you understand how crazy that is? Yeah.

1:29:37Dave Ramsey:Yeah. So that stops today. Just, you know, sorry, guys. I'm sorry. I've messed up my finances, and it's going to take me a little while to get them straightened out. And I've got this payday lender I've got to get off my back, and I'm sorry. So, yeah, I can't put anything else in. And I can't participate in something that involves money right now. So I'm also not playing poker with you next week. So it's like, we don't have any money. And then I don't know why. What do you do for a living? I'm actually a secretary for the Defense Counterintelligence Department. So I really can't have my finances out of order, otherwise I'd lose my job.

1:30:16Dave Ramsey:Yeah. Your finances are out of order. If they did a security check on you, you're in trouble already. Yeah, they did an audit. Yeah, you've really got to get this mess cleaned up or you will lose this job. You're right eventually. So, yeah, there's lots of things you can do part-time. I mean, you can clean houses. You can pet sit. You can do all kinds of stuff part-time. And I would get with doing something starting yesterday immediately. Six different things working my tail land off. See if you can return that TV if you're in a 90-day window. You can do some secretarial work. You don't have time to watch TV.

1:30:51You got nine side jobs you're about to have. And so just follow the debt snowball. It works. And get rid of this payday lender. I don't care what's on the credit report. You got to get this monkey off your back. Otherwise, it's going to be another fee, another rollover loan. And that's how people get stuck in these cycles.

1:31:07Dave Ramsey:If it's been several months since you paid them, you may be able to call them and settle it with a lump sum. But you'd have to have the lump sum. Say, look, I don't know what I owe you, but I've got$1 ,000. If you'll take that as settlement in full, we'll close this out. But you need the$1 ,000 in your hand to be able to have that discussion, and that is involving extra work and extra income. Anything you can do to create some extra income that's moral and legal, you need to start doing it yesterday. Lisa's in Georgia. Hi, Lisa. How are you? I'm fine. How are you? Better than I deserve. What's up?

1:31:44Question. I've been married for 42 years, And then in the last few years, my husband's been diagnosed with mild to moderate dementia. With that has come a lot of radical changes in his personality as far as our finances. The latest is we have a second home we have for sale. And now he wants to rent it out. And I'm at a point in our lives where I feel like we need to sell it, take the equity, invest it. That's our retirement.

1:32:14Dave Ramsey:Is he aware that he has dementia? he's aware but denial strong denial then he's not aware he doesn't believe he doesn't believe he doesn't believe he does not believe he has dementia um one of the things he wants to do in our discussions now with the sale of the house he's decided that he wants to take 50 percent of the proceeds and spend it any way he wants to and the answer is no the answer is no You have dementia, and I'm not going to go along with anything you want to do. No. And that's the way I've been pushing back. No, you have dementia. You are not of your right mind, and no, we are not going along with any plan you have.

1:32:56Dave Ramsey:I'm here to take care of you. I have for 42 years. I'm going to stick with you in sickness and in health, and we're not doing anything you want to do with money. You have dementia. so how do i move forward to do i need to to do a court order that he can't because everybody else think there's nothing wrong with him i see everybody else i thought you said the doctor diagnosed him that that's true well then everybody else doesn't think that just the doctor just the thought but yeah it just he thinks his there's his friends and his well who gives a crap What his friends think. Yeah, exactly. So do I need to get an attorney and do a court order so that he can't make these decisions?

1:33:37Because right now, we're 50-50 on account. He can do whatever he wants.

1:33:44I don't know how to move forward.

1:33:46Dave Ramsey:Yeah, I think you have him declared incompetent in court. Okay. And your physician's going to have to go along with that. Because he's not of right mind. We have to protect him from himself. Yeah, I don't know that he'd sign a power of attorney for you to have financial control. No, he's not going to do that because he doesn't think he's got dementia. Correct. So he's going to need to be forced into it. Yeah. I mean, in order to take care of him, he's not of his right mind. That's sad. I'm so sorry that because, you know, when people get early onset, they generally turn either really mean or really nice.

1:34:15Dave Ramsey:And it sounds like he's gone the mean one. So, wow, I'm sorry. And it's just going to be really combative. But, yeah, what his friends think doesn't matter. I mean, that's irrelevant. What his mama thinks doesn't matter. I mean, what the doctor says he's got this, and you've observed the pattern, then your job as his spouse is to take care of him in spite of him. And, yeah, that's a court order.

1:34:50Hey, what's up? Dr. John Deloney here. The new dates have dropped for the Money in Marriage getaway over Valentine's Day weekend in 2026. This is your chance to hit pause on everything in your life and reconnect with your spouse over a long weekend in Nashville, Tennessee. Me and my friend Rachel Cruz will be digging into topics like sex, money, communication, and more. This weekend is happening on February 12th through the 14th, and early bird prices start at$749 per couple, but the prices will be going up soon. Get your tickets today at RamseySolutions.com slash events.

1:35:38Dave Ramsey:Ed is in Kentucky. Hi, Ed. How are you? I am doing well. How about yourself? Just the same, sir. What's up? All right. Well, thank you all so much. My wife and I were really excited. We bought our house back in 08, and we have been throwing a lot of money to get it paid off, and we are on track to have our house paid off by Thanksgiving of this year. Way to go! Good for you! Thank you. It took a lot of hard work. But, so, you know, we're really excited about what's coming up next, but also, that's a lot of unknown for us. And so, you know, we keep investing in our 401k. I've actually upped my 401k contribution rate, and she's going to be doing the same.

1:36:23But I just wanted to kind of at least get an idea of what are some things that suggestions that you all would have for us post having the house paid off? Because after that, we will have no other debts.

1:36:35Dave Ramsey:Yeah, way to go. Well, maybe step seven, we just say build wealth and give. And so there's three buckets, and you need to be very intentional with the money that you will have. And you're going to have a lot of it now because no payments. Right. And go, you know, there's three things we can do. We can have fun and enjoy the money and you need to do some of that. You can invest some and you need to do some of that and you can be outrageously generous and you need to do some of that. And so, you know, you're still going to look at the pile of money coming in every month and you're still going to assign it to something that falls in one of those three buckets.

1:37:10Dave Ramsey:And you need to have a pretty good rhythm where you're touching those buckets, at least annually, but hopefully monthly. Yeah, definitely. And, you know, definitely, you know, the fun part and the invest part and the generous part, yeah, that totally makes sense. And that's something that we really want to do. And, you know, we just want to also make sure by the time we retire that we can retire and have some peace of mind. And so how old are you? I'm 42. And how much is in your 401ks now? Retirement accounts. Right. Well, in my retirement account, I'm currently at$340 ,000. And your wife? And my wife, she actually has a little bit more.

1:37:58She's actually at around$500 ,000.

1:38:01Dave Ramsey:Okay. She got$850 ,000 in retirement right now. What's the house worth? The house is worth$175 ,000. Okay. So you're millionaires. Cool. Out of your 40s. That's pretty neat. Yeah. Yeah. The$800 ,000, if you don't touch it, you know, you said you're 40 what? I'm 42. You're 42. If it's invested in good mutual funds, when you're 49, it'll be 1.6. And when you're 56, it'll be 3.2. And when you're 63, it's going to be 6.4. You're okay. You did it. You're real far ahead on retirement. So I wouldn't worry. Keep investing. Don't let the foot off the gas there. But also figure out, hey, do we want to upgrade a house?

1:38:55Could we pay cash for a different house five years from now? Yeah. Start setting some goals in your spending, saving, and giving areas at least once a year

1:39:04Dave Ramsey:and then check in and do the monthly budget. You've been so focused on this house, there's some stuff you need to do in the fun category. You need to upgrade her car. you need to go on a trip you've been telling her for 20 years you were going to do i don't know what it is but there's some stuff y 'all need to do renovate the kitchen oh yeah something like there's some things like that you need to allocate some money to and and yeah while you're doing some investing and while you're doing some in increased and intentional generosity and yeah you just keep all of those things moving and you know make just make lists of things we want to do and then let's force rank them what do we want to do first what do we want to do second what do we want to do third and then you start to fund that with what used to be a house payment.

1:39:44Dave Ramsey:And you're going to be in great shape, man. I mean, you're really doing beautiful. I'm proud of you. Pretty stinking incredible. Cantry's with us in Texas. Hi, Cantry. How are you?

1:39:57Yes, sir. I am doing good.

1:39:58Dave Ramsey:Good. How can we help? Yes, sir. So I am currently joining the United States Army Special Forces, and if I pass, I will get a$34 ,000 sign-on bonus. I'm used to being broke, so I'm not sure exactly what to do with that, but there's a motorcycle that I want to get that is about$20 ,000. What do you think I should do with that bonus? How old are you, sir? I'm 20. Thank you for serving your country. We appreciate you. Yes, sir. Thank you. Well, number one, if you invest in things that go down in value, you're going to be broke your whole life. Yes, sir. motorcycles go down in value. I don't mind you getting a bike, but you don't need a$20 ,000 bike.

1:40:43Dave Ramsey:What are they paying you? What are they going to be paying you, not counting the signing bonus? It's going to be about$2 ,500 a month. Good for you. But, of course, I will be living on base, so I don't have to pay for living expenses. Yeah. Okay. Well, you need to be very, very careful with what happens to that$2 ,500 a month, and you need to be very careful with what happens to$34 ,000. I would spend some of it on fun, but I wouldn't spend two-thirds of it on fun. Yes, sir. So, no, I wouldn't buy a$20 ,000 bike. You're 20 years old. You make$2 ,500 a month. You're brand new in the military. But if you want to get a$5 ,000 bike for fun, that'd probably be okay.

1:41:23Dave Ramsey:Do you have a car? Yes, sir. Yes, sir. Yes, sir. I have an 01 Silverado. Is it paid for? Yes, sir. Uh, also I do have a loan that I'm currently, it's a$4 ,000 loan. I've already paid about 1400 of it off. Good. Okay. So shall I take that bonus? Definitely. Definitely wrap that up to knock it, knock that out. Set you some money aside as an emergency fund, get you a toy, but a cheaper one. Okay. Yes, sir. And, uh, and then let's start talking about investing and doing grownup stuff with some of this money. A lot of the guys you're running around with aren't going to be doing that. Good. Yes, sir.

1:41:59Dave Ramsey:Okay. Because we've worked with the military for 30 years, and when you step off the base and most of the bases in the U.S., down each side of the road for the next two and a half miles is stupid. Yes, sir. Every stupid thing a 20-year-old could possibly do is on each side of the road all the way down through there. And it's like they set it up to suck all the money out of you guys. And it's a shame, but it is. It's like stupid on parade right outside the base gates everywhere you go. And, yeah, you can really screw up here, man. And so be a grown-up and not a little kid with the way you're looking at this stuff.

1:42:33Dave Ramsey:And thank you for asking the question. It's a good, wise question. Yeah, I mean, this$34 ,000 is going to disappear quick in a good way if you do the right things with it. You pay off this loan, that's$2 ,500, maybe put$20 ,000 aside in your savings and spend$5 ,000 on a bike and fund a Roth IRA with the rest of it. It's gone. And then you can't do something stupid with it because it's gone. Yeah, you're going to be able to do a lot of fun stuff with this over time. But, yeah. Use this to set yourself up with a great foundation. As a 20-year-old man, I wish I was in that shape at 20. By the way, the$5 ,000 bike is probably a four-year-old version of your 20.

1:43:11Dave Ramsey:That's how much it's going to go down in value. Get on Facebook Marketplace. Maybe a five-year. You'll find a 24-year-old who made that decision at 20 who's now trying to sell it. There you go. He's probably in the military. Yeah. That could easily be the case. If you're on base and you jump on Facebook, all those people are probably in the military. So that's how to find the deals right there. Yeah, that could easily happen. No doubt about it. Well, everybody needs insurance, but it can be hard trying to figure out and find the pros who aren't just looking to make a buck. And let's get an agent who actually knows their stuff.

1:43:47Dave Ramsey:With a Ramsey Trusted Insurance Pro, you never have to deal with a sleazy business or slimy salesperson because they're all interviewed. Our Ramsey Trusted people are vetted. They're coached to make sure they are market experts, and we don't deal with anyone who's going to slam you. It's pretty simple. They've got your best interest at heart. Go to RamseySolutions.com slash coverage to find the type of insurance you're looking for and to connect with a Ramsey Trusted agent. Or click the link in the description if you're listening on YouTube or on podcast. By the way, folks, if you are listening or watching the show, So please click the follow button, the share button.

1:44:25Dave Ramsey:Share it with somebody. Let somebody know we're here. And, of course, you can click the subscribe button. All of those things matter. And leaving that nice five-star review with glowing comments about George is always helpful. And Dave's good looks. That helps, too. That's what people get. I didn't ask him to lie. I just asked him to say good things. That's all. Just saying good things. That's all. Dave has a face for radio, but we love listening to it. It's all good. We can do that. I can handle that.

1:45:06We'll be right back.

1:45:31Dave Ramsey:We've all done dumb things with money. I've done them with zeros on the end. One of the biggest mistakes I see people make with money is not having a plan for it. You've got to have a plan. You've got to be intentional, and you need to get a budget. You have to tell your money where to go so you're not wondering where it went. Our budgeting app, EveryDollar, helps you do just that. It's the easiest and fastest way to make a monthly plan for every dollar you've got coming in and going out. Now's the best time to get started before the ridiculous holiday spending season gets here and sucks you in because you didn't have a plan.

1:46:03Dave Ramsey:Don't let that happen. You're done making that mistake. Go download every dollar for free in the App Store or Google Play today.

1:46:38Dave Ramsey:Leonel is with us on the stage right here, the debt-free stage in the lobby of Ramsey Solutions. Where do you live? I live in Menifee, California. Cool. Welcome to Nashville. And you're here to do a debt-free scream. How much have you paid off? $75 ,117. I love it. And how long did that take you, sir? 20 months. Good for you. And your range of income during that two years? $78 ,000. It included my bonus for my base pay and around 96, nine months after that. Good for you. What do you do for a living? I'm a CPA. Good for you. Wow. Very cool. How old are you? 25. What made you get in gear and say, I'm going to get rid of$75 ,000 20 months ago?

1:47:22I was actually given a book called Foundations and Personal Finance. It was gifted to me my last year of my MBA. And I started seeing, wow, that's a lot of debt. That was more than I was expecting because I went straight in, not realizing how much I borrowed. And I saw I was in a big hole. So you said, if I follow your plan, be very aggressive towards the debt. I could pay it off within about, I believe you said a range of 20 to 24 months. So I said, okay, I'll do it. I'm in a bad hole. I'll do it. Wow. You took Dave up on the challenge. I did. And he was right. Yeah, he was right. As per usual with Dave.

1:47:59I love that, man. Congrats. So this was our curriculum, the workbook for the curriculum, Foundations and Personal Finance. It was a green book. It was a thin little green book.

1:48:08Dave Ramsey:Okay. Very cool. Went through that. Very cool. And the$75 ,000 was student loan debt. All student loans. Couldn't bankrupt on it. Okay. Good for you. Did you attempt to? You sounded like you're like, I couldn't. Well, I learned in my CPA exams that student loans, you can't bankrupt them. Yeah. So you're like, well, I guess I got to claw this out myself. I took it out. I signed the dotted line. Let's knock this out. Oh, yeah. Wow. What did you learn during the 20 months while you're working on this? It's more behavioral than it is actually mathematical. Because I would take a look at what you would talk about.

1:48:39And, you know, I'm a CPA, so I would just check everything you say. And I say, is this guy really right? And he said through the snowball method, it's only around, you know, at most two months slower. And when I looked at the avalanche method, it came around that much for me. So I'm like, wow, this guy actually knows what he's talking about. So I followed it, and it worked really, really well, and it made sense.

1:49:02Dave Ramsey:Wow. How does it feel to be free? You know what? I have a lot of peace. Actually, it's pretty great because now I feel I can actually take risks I couldn't take before. Like what? Well, I was really taking a look at my course study work that I can be really aggressive in my investing now. So I can actually grow my wealth as, you know, within reason to actually grow my wealth more. I was learning through education where they said the three biggest risks in stocks was overpaying, having to sell before you have to, and bankruptcy. and by being debt free I'm able to avoid overpaying by you know I can invest in mutual funds you know using dollar cost average or I could do valuation with my background not having to sell before I want to is being debt free that's the only thing I would really force me to sell you're not desperate you've reduced your risk and therefore you're less desperate to go do something stupid and miss out on the market returns you're staying invested consistently yes sir way to go man so if somebody's listening and they said, okay, guy paid off$75 ,000 in 20 months.

1:50:10Dave Ramsey:How did he do that? What would you tell them the key is to getting out of debt? Well, for me, I was a college student, so I delayed my life heavily. I moved back home with my parents. I didn't finance a car. I didn't go and get a mortgage for a home. I lived humbly with my parents, and then I just saved as much as I could. My goal was to only live on about 25 % of my take-home pay. which I achieved, and I put 75 % of my take-home pay towards my loans. And then I had people who keep me accountable, such as my brother and my parents. Wow. So living on less than you make. Oh, hands down. That was the key.

1:50:50Just be super disciplined about that, and you'll be shocked at how quickly you can knock out the debt. Absolutely. Which makes the avalanche method obsolete, because of how fast you're knocking this out. Yeah. And even as a math nerd, you're like, yeah, you could, you might, but the people who actually become debt-free, it's behavior. It's behavior. Way to go, man. That's big. We're proud of you. You get the rest of your life now to build wealth, to give, to enjoy. So you went like one step backward going, well, I'm missing out right now. There's probably some FOMO. But then you're catapulting forward exponentially.

1:51:20Yes. While your friends are going, dude, how are you investing that much? I don't have debt.

1:51:25Dave Ramsey:That's incredible. Wow. Well, good for you. Good for you, man. That's awesome. I'm proud of you. Very cool. Who was cheering you on as you went? Oh, definitely my brother, my father and my mother. And I could tell that I made them really proud because I did something that they haven't done. Yeah. Changing your family tree? Well, now they're out of debt, you can get out of their basement. Have you moved out yet? No. Actually, I'm glad I paid off my debt so quickly because I got laid off. Whoa. Yeah. So one month after paying off my debt, being aggressive, they said, yep, we don't see you as meeting our standards or valuable.

1:52:01well, we got to let you go. We're going to go with other people. But from there, I was just glad I was really aggressive. And you're working again now? It's only been about a month or so. Okay. So I've just been applying, applying aggressively. And I'm not too worried because my credentials and background, I'm willing to move if I have to.

1:52:18Dave Ramsey:Yeah, you're a sharp guy. Good for you, man. Well done. Proud of you, proud of you. And you brought your brother to stand with you while you do the debt-free screen. Bring him up and introduce him. Hi, this is my brother Danilo. He's following my footsteps. He's doing everything I'm doing but better. I love it. Way to go, Danilo. Very cool. Very cool. All right, Leonel from California. $75 ,000 paid off in 20 months, making$78 ,000 to$96 ,000. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yes, baby!

1:52:56Yeah!

1:52:57Dave Ramsey:There we go. Oh, my goodness. That was incredible. He gave it his all on that one. That's fun. Left it all on the dance floor, as they say. I wish I had that energy. You know, I missed the 25-year-old energy. I'd probably hurt my back doing that now. Yeah, well, I mean, you're staying up all night with newborns. Yeah, different phases. It affects your energy level, George, I'm just saying. What a great story. Well done, sir. Well done. Very, very proud of you. Good work. Jasmine's in Texas. Hi, Jasmine. How are you? Hi, Dave. I'm doing fine. Good. How can we help? So my husband and I are on baby step two.

1:53:38We're kind of newer to the Ramsey teaching method. And I was actually recently laid off as of yesterday. Whoa. So it was, yeah, it was a little bit of a shock to us. You didn't have any idea it was coming? um we had some differences and my um boss said that they i wasn't meeting the expectations that the company was wanting um so i thought i was fixing a lot of those issues and then yesterday they asked me for another meeting after um having a meeting last week and then they said that we're just going to have to let you go so i thought that i had a little bit more time to kind of save up and it turns out I just had yesterday.

1:54:22Dave Ramsey:What did you make? I made$45 ,000. Doing what? I was an admin assistant for one of the businesses local into the town that we live in. Okay, cool. All right. And are they giving you a severance package? They are not. Wow, okay. How long did you work there? About a year. Okay. All right, cool. All right, and what does your husband make? He makes$65 ,000. Okay. So you used to have a$110 ,000 income. Now you have a$65 ,000 income for this moment. Yes. Okay. Well, here's what we have found, and we faced your situation many, many, many times over 30 years. The first thing is it's really emotional, and you're semi kind of angry and scared at the same time, right?

1:55:23Yeah.

1:55:23Dave Ramsey:Yeah. The second thing is if you push through that and go out there right now and go get another job fast, you'll probably get a better job than you had paying more than you had. If you wallow in this for about six weeks, you're going to end up probably getting a worse job than you had. so you you throw the shoulders back and you brush your teeth and you go to work again fast hang on we're going to send you a copy of ken coleman's book the proximity principle which will help you get that next job quick quick you're better than they said you are girl go get you something better

1:56:10Thank you.

1:56:16Thank you.

1:56:46Dave Ramsey:arguing so that you may become blameless and pure, children of God without fault in a warped and crooked generation. Then you will shine among them like stars in the sky. Maya Angelou said, if you're always trying to be normal, you will never know how amazing you can be. Dave's in Maryland. Hi, Dave. Welcome to the Ramsey Show. What's up? Hi, Dave. How are you, sir? Better than I deserve. How can I help? I, um, well, first and foremost, I want to thank you for everything that you've taught me over the years. You changed, helped me change my life financially and never thought that I would be in the position that I am today with money.

1:57:27Dave Ramsey:And it's because of everything I've learned from you. Wow. Well, good for you, man. I'm proud of you. Yeah, it's awesome. So I just, I've been struggling for a while now in my current relationship with my girlfriend. and I'm just trying to figure out whether I should stay with her or not. And most of it has to do with our differences financially. How old are you guys? So I'm 48 and she's 44. We've been dating for about five years, and it's kind of at the point to where this is either going to be it or it isn't, you know? Yeah, that's a long time. Time to pay her get off the ladder, right? So what's the difference in financial values here?

1:58:21Well, I'm a small business owner, and I think I do pretty well. And she's, I don't know, I'm more goal-oriented, money-driven, success-driven than she is. and she really doesn't have a whole lot financially or like possession-wise and things like that. And sometimes I just feel like I would rather date someone that has a solid career path, you know, makes a good salary, someone that's more focused on their career and money. But on the other hand, we get along. I mean, she is just, she's an amazing woman. She's the best girl that I've ever dated in my life. So are you wanting someone who has the same level of drive you do?

1:59:12Well, maybe not drive, but just someone that's closer to me financially, you know. So you think there's a disparity between how hard you've worked to build your wealth and success and how little she cares to do that for herself? Yeah, something like that. And I guess it's also, you know, I'm afraid, not afraid, but just being the breadwinner. And I don't know, it's a little difficult to explain, but I just wish that she had more money and she had a better job. You know, that's pretty much it. What is she making? She makes about$60 a year. That's a solid income. And I'm, well, see, that's the thing, because if we combined our finances, I think we would do okay.

1:59:58I make between 80 and 90 a year, and she makes about 60. So we would bring in around 140 combined. And we've been talking about moving in together and things like that, but the money thing just kind of is what's been holding me back. I don't see any crazy red flags so far. Is she in crippling debt that she refuses to get out of? Does she have spending problems? No, she's very frugal. She's a single mom. She raised her son pretty much on her own with help from her family, but she's a single mom. She's very frugal. She's independent. She has no debt. I mean, she might have like a$1 ,000 or$2 ,000 credit card.

2:00:40She rents her house, and her car is paid for. I mean, you guys are going to build wealth together, and you'll accumulate more assets, and you'll have a paid-for house together. And so I wouldn't judge this just based off of, well, she's not coming to the table with enough assets for me to move forward. You know, I would need a little more ammo than that to end this relationship. And it's not like you make$400 ,000 and she makes$30 ,000. And so the disparity is not as big as I think you think it is. It feels more emotional that you're worried you'll resent her and not respect her going down the line.

2:01:16Yeah, something like that. And also, I struggle a little bit because I grew up in poverty, you know, so I've had this inborn fear of poverty my entire life. And that's why I save so much. And I guess sometimes I think, what if the bottom fell out of my business and I lost my money? Could I count on her to support us? I know that doesn't really make sense, but sometimes that's how I think, you know.

2:01:52Well, I'm not hearing any huge fireworks going off in terms of some kind of bad warning here.

2:02:01Dave Ramsey:This sounds like a lady who's rolled up her sleeves, raised a kid by herself, and has pulled off life pretty well. you know maybe she's not quite kept up with you but it's not like you make a million dollars a year and she makes ten thousand or something i mean this is not some huge disparity uh it's fairly minor um but i guess her but here's the big question is not how much money she has or how much money she makes that part i would that shouldn't even really be in the discussion what should be in the discussion is do you respect her character her work ethic do you respect her intellect and what she can add to the equation.

2:02:36Dave Ramsey:And if you don't respect someone, then it's very difficult to love them. And they go together. And so long-term, real, lengthy, 25, 35-year marriage, 50-year marriage love type stuff. Okay. If you think she's deficit the whole time, that's probably not going to end up being there. And so, but it's not based on her income and it's not based on that. Actually, the things you, her story that you described to me, I think she's pretty incredible. So, um, but you know, you gotta, you gotta think that, um, that it's not me, I'm not marrying her. So I got pretty incredible already. I've already got that covered about 44 years ago.

2:03:15Dave Ramsey:So, um, but, um, yeah, that, that, that's what I'd be looking at. Um, it sounds, you know, probably a good opportunity for some good pre-marriage counseling to sit down with a good marriage counselor and get this stuff out on the table and those fears out there. Kind of comb through it a little bit, that kind of thing. And, you know, the other thing that might help too, you kind of brought up your poverty past. Let me send you a copy of Rachel Cruz's book, Know Yourself, Know Your Money. It talks about your family of origin and how it affects your view on money, her family of origin, how it affects her view on money, even her story, and it affects her view on money and how she got to where she is.

2:03:53Dave Ramsey:And you guys get, you know, give you some jumping off points to understand each other a little bit better before you make the final decision on marriage or on breakup, either one. And, you know, that's definitely where I would go with that. So, hey, thanks for the call. We appreciate you joining us. Open phones here at 888-825-5225. So, George, one of the big things we get, and I think that Know Yourself, Know Your Money book is helpful for that, is with couples that are dating trying to figure out if they're a match. And money is a good thing for that, not because money's important, but because money reveals a lot about your character.

2:04:35Dave Ramsey:It reveals a lot about your dreams. It reveals a lot about your fears. It reveals a lot. And Jesus said your treasure's where your heart is. And so how you handle money, the way you look at money, what you're trying to get from money all say a lot about you. And so it's a great way to get to know someone in a relationship like that is to study their money habits. Because as Dr. John Deloney says, behavior is a language. Yeah, and if the values are there, then you can survive it. You'll have a nerd and a free spirit, a spender and a saver. But if the values are there at a foothold and foundation, you can survive the relationship.

2:05:16And so that's an important thing to look into is, hey, do I value living a debt-free life?

2:05:20Dave Ramsey:If not, you're probably going to be broke for a long time. You know, that's a good point. Looking back on it, we didn't mean to do this. We weren't sophisticated enough to do it when we were dating and getting married. But Sharon and I accidentally got married with having two extremely different families. But both families put a heavy emphasis on hard work and work ethic. Common sense. And so neither Sharon nor I have much use for somebody that won't work. and consequently we team up on that a lot like Sheenie says you need to go to work and Dave does it 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