Discipline Matters Most in the Hard Times

10:32Dave Ramsey:So we've used Xander for all of our family's needs for insurance for many years, including, of course, term life insurance. To get a free quote, go to 800-356-4282. That's 800-356-4282. Or go to Xander.com.

11:03Dave Ramsey:Bob is in New Hampshire. Hey, Bob, how are you?

11:07Rachel Cruze:I'm doing okay, I guess, Dave.

11:10Dave Ramsey:Cool. How can we help?

11:14Rachel Cruze:Well, we've, for quite a while now, we've had financial problems with bills. We owe a lot of debt. And one of the problems is my wife has a habit of spending constantly, and she pretty much goes through all of the income that we have in a month. We've had discussions over it and everything, and, you know, it doesn't set in, But it is a little bit. I mean, she's a little better, but she just has this habit of when she walks in the store, she's got to buy.

11:58Dave Ramsey:Okay, how can we help?

12:01Rachel Cruze:Well, my question is as to what direction should I be using to, I guess, get her to stop completely from wasting the money and then being able to catch up on things. I mean, Bob, when you say that, I mean, you're saying that she's spending the whole paycheck. So would you, I mean, would you think it's a level of addiction? Would you say it? Would you go that far? Oh, yes. Yes, yes. And has she gotten help for it? Besides you just telling her not to? Okay, why not? Yeah, yeah. We've had numerous discussions on it. Because you're not going to change her. She has to do the work to understand what is happening for her because it's a real thing.

12:45Rachel Cruze:I mean, we see that more often than I mean, it's becoming more and more common, I feel like. So what why has she not taken steps to find healing in this? um well the the strange thing is she knows that um she's you know the the problem to our problem and um you know she's always feeling sorry for it but uh you know when when the income comes in she goes out and she spends and she doesn't look at what she's spending in other

13:23Dave Ramsey:So how old are you guys? Pardon me? How old are you two?

13:28Rachel Cruze:She's 78, and I'm going to be 73 in the next couple of weeks. Okay, Bob, why don't you just take her? Like, she can't have access to the money. Like, if it's an addiction like this, this is what we would tell couples, is to say the one that is struggling does not get access to money because she has a spending addiction. and you would say, all right, we're going to have X amount for groceries. And when you go to the grocery store, this is, you know, if that's what she does, then here's the amount you have. In cash. Because she doesn't get access to the checking account.

14:01Dave Ramsey:Yeah, and to the income. What is your income monthly?

14:06Rachel Cruze:Believe it or not, it's over$7 ,000.

14:08Dave Ramsey:Okay, I believe it. And how much debt have you guys run up?

14:14Rachel Cruze:Well, the house still has$267 ,000. We probably have about$40 ,000 in debt.

14:25Dave Ramsey:On what?

14:26Rachel Cruze:Well, we have one vehicle. We have numerous credit cards. So what do you owe on your car? I believe it's about$25 ,000.

14:40Dave Ramsey:Okay. And what do you owe on the credit cards?

14:43Rachel Cruze:Credit cards total about$10 ,000.

14:48Dave Ramsey:Okay. And that's$35 ,000. And what's the other five?

14:54Rachel Cruze:The other five would probably be, well, actually, we just had a roof put on a house.

14:59Dave Ramsey:That's five grand. Yeah. Really? You had a roof put on your house for$5 ,000?

15:05Rachel Cruze:Well, I mean, I paid some of it, so there's some money left over on it.

15:10Dave Ramsey:Okay. Like a lot more. Okay. Yeah. All right, so you guys can live on$7 ,000 if you're in agreement and in alignment and you stick to a budget and you could reduce the debt. Agreed? Yes, yes. You own two cars?

15:27Rachel Cruze:One vehicle.

15:29Dave Ramsey:I'm sorry?

15:30Rachel Cruze:One vehicle.

15:31Dave Ramsey:The only car you have is$25 ,000 in debt?

15:34Rachel Cruze:Right.

15:35Dave Ramsey:Okay. All right. but I think you could probably with that kind of an income clear the$40 ,000 in debt if we were reasonably spending on$7 ,000 agreed that's what your problem is okay yeah and so I you know the way it's going to sound at my house and you can do what you want to do but you called us is hon I think we have a problem and it's you you're out of control and you can't seem to control it and it's really sad. Consequently, we don't have any money and we're in debt and we have plenty of income. And so here's what's going to happen. We're going to try this first. We're going to agree on a budget this month.

16:18Dave Ramsey:You and I both have a vote. We're going to spend$7 ,000 on the Every Dollar app and we're going to have a plan and we're going to stick to that plan. And you're not going to go into a store and go out of control again. If you do, next month, you will have zero access to the money. I will shut everything down and put it in my name to protect me and our family from you. Right. That's how it's going to sound. So we're going to try this together like two grownups that can function. And so if you're being immature, you can merely adjust the immaturity. If you are an addict, we're going to discover that in one more month and we're going to treat you like an addict at that point.

17:03Dave Ramsey:I don't know. I can't diagnose if someone has an OCD.

17:08Rachel Cruze:Well, there's a level of medicating that's for sure going on.

17:11Dave Ramsey:Well, at a minimum, there's immaturity and princess syndrome or something. Yeah. Right. But at a minimum, at a maximum, 2 % of the public has been diagnosed literally with a spending addiction, a shopping addiction. And 2%. And it's an OCD behavior. And, you know, it's a psychological label. And done by professionals. And we deal with them. But most of the time when we deal with it, we're just dealing with somebody who's being selfish, immature, and a princess. Or I deserve it. And you don't. Kind of thing. So I don't know which one she is. But if it was my wife, I'm going to have a real clear conversation that says, for one more month, we're going to try this.

17:52Dave Ramsey:and if we fail this experiment that you and I cannot act like two adults at 78 freaking years old we can't act like grown-ups and live within our means then I'm going to shut down your access

18:06Rachel Cruze:to everything and it sounds like that's what's going to happen I mean yeah 100 % and Bob for her sake too encouraging her we just said this in the last call but for real she needs to go get help for it because she's not a whole person. Like there is a level there that is eroding her quality of life, who she is as a person and who she's going to be as a wife. I'm like, you're getting someone who's not functioning. None of us are fully, but there is a very obvious issue there that she's just not addressing head on. And I don't think you're getting the quality wife that you could have too if she doesn't go through a level of healing to this because that's probably what I mean, like, yeah, it It could be immaturity and all of it, but at 78 and him having this conversation, her knowing intellectually where they are, but her compulsion, it's still happening.

18:55Rachel Cruze:There's stuff happening in there. So I would, for her sake, like the financial side is one thing, Bob. But if that's my spouse, I'm like, I want her to get healing. I want her to understand what's going on and to find, I don't know, peace in this because there's just chaos happening inside of her, I would imagine. and it's coming out, medicating and spending. And so you're not getting a great wife either, a great partner. She's not getting a great self. I don't know. There's a lot there.

19:22Dave Ramsey:There's a thing mixed up between in the psychology and the spirituality of godliness with contentment is great gain. And if I can't find contentment and so I'm chasing it somewhere else, that is a spiritual disease yeah and it's also can be an addictive compulsion um and it can be just immature immaturity yeah that's right self-centeredness that's right and no one ever told me no that's right yeah and including you bob you've never told her no and um you know and her daddy never told her in a pretty like yeah like consequential way we're not doing that yeah It's not an option. And so I can't tell exactly, and I'm really not going to diagnose something as severe as a spending addiction in this, but it could be.

20:21Dave Ramsey:So I'm going to treat it that way and move down that process, and it's going to stop one way or the other.

21:05Dave Ramsey:We'll be right back. real time, you're in a world of hurt. That's why you need NetSuite by Oracle, trusted by more than 42 ,000 businesses, including Ramsey Solutions. You need to see what's happening, what's stuck, and what's costing you, and how to fix it. And NetSuite is the number one cloud-based business management suite because it helps your business make the right decisions fast. It brings accounting, financial management, inventory, and HR into one place so you're not left shuffling a dozen different spreadsheets. That gives you the visibility you need to make quick decisions based on actionable data.

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22:26Dave Ramsey:Well, I got to tell you, we have a wonderful product that we do a low volume, very expensive print run on. We turn the creatives loose and just let them play in their little sandbox. And they do a beautiful job making this product lights out. It is the Ramsey Gold Planner. And I think this is our 10th year maybe of doing this. And it is drop dead gorgeous. It's very expensive to produce because it's so pretty and all this stuff is in it. But we've got it on sale as the pre-sale for 2026 if you want your Ramsey Gold Planner. It's only$35.97, and that's good through Labor Day. So next week that deal will be gone, in other words.

23:09Dave Ramsey:And so if you want one, you need to get in there. What it is is you open up the month, and as you open up the month, at the beginning of the month, is a couple of page, I would call it almost a devotional, from Jade or Rachel or John Deloney. And then when you open the next page, it's the entire month spread out on the two pages. When you open the next page, it's the first week of the month spread out on two pages. And then the next week, and then the next week, and then the next week, then you go the next month. So if you're old school, my wife still keeps one of these old school hand-done calendars all the time, carries it around with her.

23:43Dave Ramsey:If you like that stuff and you want the inspiration from Rachel, Jade, and John, and it's really good. And the sticker's there to do the whole thing, the whole bit. There's a whole thing around these gold planters. It's not just a calendar. There's a lot there. It's got its own little world around it. There is, yeah. So anyway, it's better than ever. New monthly content from everybody. And again, until Labor Day, it's only$35.97. and we will take the price on up because we only do about 10 or 20 ,000 of these things. We don't do a huge volume. It's not like we sell 2 million of them or something.

24:17Rachel Cruze:So time sensitive. Once the new year hits, you're done.

24:19Dave Ramsey:If we don't sell them, we've got to put them in the dumpster. Get them now. We've got to make sure that we sell out. And so RamseySolutions.com slash store. Or if you're listening online, you can click the link in the description. Nick's in California. Hi, Nick. How are you? Good. How's it going, Dave? Better than I deserve. How can I help? I love it. My wife and I, we went through FPU right after we got married.

24:43Rachel Cruze:We followed your plan ever since.

24:45Dave Ramsey:How long have you been married?

24:47Rachel Cruze:In 17 years.

24:49Dave Ramsey:Well, good for you. Wow. Are you a millionaire?

24:51Rachel Cruze:Yeah. Yeah. Well, pretty much. Good. Work. Yeah. Yeah. Really good. So we make, we gross about$350 ,000 a year. We have over 400 ,000 saved, combining all the Roths and the kids' savings and whatnot.

25:09Dave Ramsey:Good.

25:11Rachel Cruze:Yeah, so we've been very disciplined, and you've helped us get there. It's been really, really great. But I feel like, okay, we've done this for so long, it's kind of become who we are. And we're saving, and we're building wealth, and we pay off one thing. We got debt-free. We didn't do the call, but we ended up buying another farm. And then now we've got more debt. But now, you know, but that's producing income, too. And, you know, now our kids are growing up, and they're kind of at a fun age. And I don't want to miss out on memories, but we're so caught up into just paying down debt and saving and building wealth that we're not, you know, I want to go buy jet skis, and I want to get quads, and I want to go do fun things that I did as a kid and make those memories with them, you know, while they still like me.

25:53Rachel Cruze:Wait a minute, wait a minute.

25:54Dave Ramsey:You have zero debt except real estate, correct?

25:59Rachel Cruze:I would say real estate's 90 % of it. I mean, we've got a tractor.

26:04Dave Ramsey:Oh, you flunked to FPU. Oh, I thought you were a star pupil and became a millionaire, and then you went and financed a tractor.

26:15Rachel Cruze:Well, that is actually an interesting... No, there's nothing interesting at all about it.

26:22Dave Ramsey:It's pitiful.

26:27Rachel Cruze:Okay, Nick, but you got more. Okay, but he's got$400 ,000 in savings, which I know part of his.

26:32Dave Ramsey:That's in his Roth IRAs. He can't pay the tractor off with that. What do you owe on your tractor, Nick?

26:36Rachel Cruze:Do you have liquid savings, Nick?

26:39Dave Ramsey:What do you owe on your tractor, Nick?

26:41Rachel Cruze:I actually got it for free. I'll just say that. I thought you said you had debt on it. I thought you had debt on it. I do. It's$25 ,000, but it was 0%. So I took the money I got back from buying it from a government grant and put it on debt. Then I wrote the tractor off and saved myself$16 ,000 in taxes. So I was just like, oh, with the government grant and the tax refund, it actually paid for the whole tractor. I put it on the line of credit. But now Nick can't buy jet skis. Oh, my gosh.

27:11Rachel Cruze:Anyway, so it's$25 ,000. It'll be paid off in seven months. Okay. Is that your only debt other than the land?

27:18Dave Ramsey:Yeah. Okay. And do you have your emergency fund in place? Yep. How much is in it?

27:24Rachel Cruze:$31 ,000.

27:26Dave Ramsey:Okay. Pay the tractor off today, honey. Today. Oh, okay. Today. Rebuild your emergency fund. Okay. Remember, we're going back to FPU. I'm taking you back to class. This is the remedial version. Oh, boy. It's been a while. We're doing the baby steps again here. Okay. We've got to clear the tractor. We've got to rebuild the emergency fund. Then to answer your overall question, once you clean up this little mess you made, that you rationalized out of your butt. Now, once you do all that, once you clean up the mess, then what I'm going to do if I'm in your shoes, you're in baby steps four, five, and six, putting 15 % away for retirement, you're putting money for kids' college, and you're reducing the real estate debt.

28:05Dave Ramsey:When you're in one through three, getting out of debt other than real estate, and building your emergency fund, you are intense and not allowed to do anything except get out of debt and build the emergency fund. When you're in four, five, and six, you are in the phase of intentional, not intense. And that is the phase that when a guy makes 350 grand, he should be able to put 15 % aside, should be able to, in his 401ks and Roth IRAs, growing those, and still have plenty of margin to buy a quad and a jet ski. That's a quad? It's a four-wheeler.

28:44Rachel Cruze:Oh. And so, like those, you know, anyway. Like a side-by-side.

28:51Dave Ramsey:Yeah. Fancy formula. And so, you know, I just bought several of those for the farm for the grandkids. That was fun because I wanted to. But I didn't finance it at zero. I mean, I just bought it, okay? And it was a small percentage of our world, and you can do that too. So you make enough money to do some of the enjoyment things you're talking about in cash only. No rationalization, no government kickbacks, no zero percent. We're just going to pay for it like your grandmother did. And that's the only way we're going to do it. And then you can enjoy those things because they don't have all this associated intellectual guilt that goes with the stupid way I did the thing.

29:34Okay.

29:35Dave Ramsey:And move from intense to intentional. And I think you can systematically inside your budget find the money to enjoy life while reducing your mortgages somewhat and while putting 15 % away. You can do that in California making$350 ,000. But you've got to.

29:55Rachel Cruze:Still enjoy your life.

29:55Dave Ramsey:Yeah, you've got to go back to the basics, blocking and tackling that you learned in the class 17 years ago that actually got you where you are. and then you fell off the wagon and fell off the tractor and um

30:13Dave Ramsey:oh that's so fun but yeah that that's it so um you know what this does illustrate though folks is um this is a guy makes a lot of money he's obviously a bright guy you know dumb people generally don't make$350 ,000 a year. And the message of debt, 0 % debt, the message of debt is necessary, debt is wise, debt is sophisticated. If you're going to get a tax credit from the government and so this whole thing was sophisticated, that message is so prevalent that if you let your guard down, you'll buy a tractor.

30:58Rachel Cruze:Or get one for free and then go through the hoops to get back into it.

31:01Dave Ramsey:It wasn't really free. He paid for the tractor, but he got a tax credit.

31:06Rachel Cruze:Credit with it.

31:07Dave Ramsey:And that he didn't use to pay off the debt. Right, right. So he still has the debt. So he talked himself into it. Yes, yes. By the way, if you paid cash for the tractor, he would have also gotten the tax credit. there's not a debt requirement to get the tax credit so but you made you rationalize and justify so what happened is is you got financial advice from the tractor salesman that's what happened that's kind of a bad place to get it just just make note

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33:41Dave Ramsey:Sarah's in Phoenix. Hi, Sarah. How are you?

33:45Rachel Cruze:Hi, Dave. How are you?

33:46Dave Ramsey:Better than I deserve. How can I help?

33:50Rachel Cruze:well um me and my husband started a business back in 2020 and addition to the debt i have now we wrapped up about 34 000 in credit card debt to sustain the last couple of years the business has been doing great and is steady and i was able to pay that down just my credit card debt to 19 000 but out of the blue i inherited 108 000 and i'm just like what do i do with this with all of my debt.

34:15Dave Ramsey:Wow. Who died?

34:16Rachel Cruze:I just need advice. Nobody died. It was just like an early inheritance while they were still alive.

34:26Dave Ramsey:Who advanced you the money?

34:30Rachel Cruze:My uncle.

34:31Dave Ramsey:Okay. Wow. You got the rich uncle.

34:33Rachel Cruze:That's very nice.

34:33Dave Ramsey:I wondered where he was. Okay.

34:36Rachel Cruze:He's the uncle everyone wants.

34:38Dave Ramsey:So your business went through hell in 2020, and you subsidized it with credit cards up to$34 ,000. Yeah. And then you told me it's doing really well, but it only has paid down a few thousand dollars. What does doing really well mean? How much profit are you making?

35:00Rachel Cruze:About$7 ,000 a month.

35:03Dave Ramsey:Well, why have you only paid down a few thousand dollars then? Are you profiting$7 ,000 a month or you're grossing$7 ,000 a month?

35:16Rachel Cruze:I'm grossing, but also I was paying for just, you know, living expenses and food and stuff.

35:23Dave Ramsey:No, I'm talking about your business.

35:26Rachel Cruze:It was. My credit cards were$34 ,000. I know, and they're down to$17 ,000.

35:31Dave Ramsey:And in five whole years, you paid it off about$3 ,000 a year, which pretty much sucks if your business is making$7 ,000. a month profit.

35:40Rachel Cruze:Really hardcore in like the last year. And we kind of did things a little bit backwards where we saved for a home down payment and all that stuff.

35:49Dave Ramsey:Okay, let me go back. Is your business making a profit or a gross revenue of$7 ,000? Which is it?

35:58Rachel Cruze:Which is it? Yes, it's making a profit of$7 ,000 and then I also work full-time at a job, and I make about$7 ,000. Okay, so you're bringing home. Okay, okay.

36:12Dave Ramsey:So you have a$14 ,000 a month income, and you're married.

36:16Rachel Cruze:Yes.

36:17Dave Ramsey:And he makes what?

36:20Rachel Cruze:Well, he's with the business with me, so that's included at one of the$7 ,000 a month.

36:25Dave Ramsey:Okay, so your total household income is$14 ,000 a month. Yes. I'm still not positive you know what profit means. This is a real profit after all business income minus business expenses equals profit. Taxable income is$7 ,000 a month. Is that what you're telling me?

36:49Rachel Cruze:Yes.

36:50Dave Ramsey:Okay.

36:51Rachel Cruze:And are you putting any of that money back into the business, or are you guys just bringing home exactly what you profit? We're just not budgeters. I don't know. We spend like a couple thousand a month going out to eat and stuff like that.

37:05Dave Ramsey:But here, grasp with me here. There's a reason I'm asking all this regarding your inheritance, okay? Because I don't want this$104 ,000 to enable you to continue stupid butt behaviors that are going to destroy you.

37:20Rachel Cruze:I don't either.

37:21Dave Ramsey:Okay? And that's what I'm trying to get to, because I want to love you well here. I want to help you. And so.

37:27Rachel Cruze:Yeah. And what we found, Sarah, is that money magnifies what you're already doing. So you're like, we're not great budgeters. We spent a couple of thousand just eating out, like all that. And that's just.

37:36Dave Ramsey:And this allows you to continue in that misbehavior.

37:38Rachel Cruze:In a bigger way, which we don't want. Right. And so. I don't want to do. No. That's right. That's right. Okay. I'm so glad. And how's your husband? Is he on board with this of changing completely how you guys have been doing money? He lets me do everything. He just says, you handle it. I trust you. Okay. Well, that's not good. That's not good. That's got to end too. That's got to end, too.

37:57Dave Ramsey:Apparently, that's not working.

37:58Rachel Cruze:Okay.

37:59Dave Ramsey:Because y 'all suck at this.

38:01Rachel Cruze:Yeah.

38:02Dave Ramsey:So, I mean, we've got to adult up here because we're pissing away$14 ,000 a month. So, what I'm going to do in your shoes is I'm going to take the$104 ,000, act like I don't own it, and put it in a high-yield savings account. And then I'm going to go home, and the two of us are going to sit down on$14 ,000 a month, and in three months, we're going to pay off this credit card. Okay. $6 ,000 a month on the credit card until it's gone. And you're going to not go out to eat at all until you do that.

38:33Rachel Cruze:And that money will be going straight to the credit card.

38:35Dave Ramsey:And you're going to really learn what real profit is on the business. Are you keeping a separate set of books on the business? No.

38:43Rachel Cruze:Yes.

38:43Dave Ramsey:You are. Have you kept your taxes paid?

38:49Rachel Cruze:I owe like$10 ,000 this year.

38:52Dave Ramsey:Have you been doing quarterly estimates? Do you know what that is?

38:57Rachel Cruze:I know what it is, but we haven't been doing it.

39:00Dave Ramsey:Okay, but$7 ,000 a month,$70 ,000,$84 ,000 a year. And so taxes on that are not$10 ,000. Taxes on that are$25 ,000. Have you filed tax returns?

39:16Rachel Cruze:Yes. My numbers are probably just wrong, sorry.

39:23Dave Ramsey:I think that's probably the accurate statement. Because I'm fishing around in murky water here. I can't tell what's going on. Okay, so no, you do not need to use the$100 ,000. The$100 ,000 gift is a double gift. One, it's$100 ,000. The second thing is it's going to make you all wake up and behave. If you don't,$100 ,000 won't save you. Two million won't save you. And so, number one, the business ought to have a separate set of books, separate checking

39:56Rachel Cruze:You and your husband tonight, y 'all have a long week ahead of just figuring all of this out.

40:01Dave Ramsey:So in business, you set a separate checking account and a separate set of books for the business. Only thing that goes into that checking account is income from the business. Only thing that comes out of that checking account, expenses from the business. What's left, by definition, is called profit. Only then can you take it home. When you take it home, you should set aside 25 % of whatever you take home in yet another savings account for your quarterly estimates that are supposed to be filed. If you are not filing them after five years, you are being penalized every single day for not filing your quarterlies.

40:39Dave Ramsey:You're violating every IRS regulation. It's costing you out the butt.

40:44Rachel Cruze:Yeah. They need to sit down with an accountant probably. Yeah.

40:47Dave Ramsey:and get the dadgum business running like a business. Under the illusion you can out-earn your disorganization and chaos, and you can't. I tried it. It doesn't work. It caught up and hit me in the back of the head and knocked the hair off my head. Don't do this. It's not fun. You're going to bring pain to your life. It's not cute, and it's not okay. You're not a teenager. So you guys need to sit down and run the business like grownups. Then when you bring money home, after you've set aside a fourth for your taxes and filed your quarterly estimates properly, then we can talk about how much is really coming into the house.

41:21Dave Ramsey:And what to do with it. And immediately need to clean up this debt. Because if you're making$10 ,000 a month, it's ridiculous that you have not reduced the debt any further than you have.

41:33Rachel Cruze:So no more. No more eating out. And no more you just take care of it. Because, Sarah, you've been on an island. I mean, he's left you there on an island, and you've signed up for that trip. And so that has to end today. And there's no food on the island. It's survival. Survivor. We don't want that. We want bougie, Sarah. We don't want the other. We'll kick you off the island. But sitting down and you guys together do a budget. And if you hold in line, Sarah, Kelly's going to pick up. We're going to give you Total Money Makeover. We're going to give you every dollar and Entree Leadership. Throw that book in, too.

42:07Rachel Cruze:But to sit down and to plan out your income that you guys have that has hit your account as a household and say, here's exactly where our money's going. rent or the mortgage I think you have a mortgage you said you got a house so mortgage lights electricity subscription I mean you list out everything you guys spend money on and then you're going to take a you're going to sit there and start deleting categories because you're not going out to eat you're cutting subscriptions you're cutting your lifestyle to nothing until this credit card debt is paid off and I mean honestly I don't know start running

42:39Dave Ramsey:this like you work for someone and you're going to get fired if you continue to suck at your job

42:43Rachel Cruze:Because the problem is, is if you take some of this$108 ,000 inheritance and just pay off the credit card debt, nothing has changed in you guys. So I would push you not to use the inheritance to pay off the credit card debt. I would force you guys to do it. You need to learn and actually participate and have the action towards this change. You have to feel it and go through it in your life.

43:01Dave Ramsey:And if the numbers are anywhere near close, you're going to do it in about three months once you get your head screwed up.

43:06Rachel Cruze:Yeah, you all have to sit down together, Sarah.

43:08Dave Ramsey:Tonight. And he has to start carrying the emotional weight of this with you together. This is the only way you win. There's really not another option. This is it.

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45:06Dave Ramsey:welcome back to the ramsey show rachel cruz ramsey personality my daughter is my co-host today the phone number is 888-825-5225 michelle's in indiana hi michelle how are you i'm doing okay

45:20Rachel Cruze:thank you how are you guys doing better than we deserve what's up So recently I found out this past weekend how much we actually have in debt with credit cards and a personal loan. Recently just started watching your stuff, and we had not been doing finances together. He pays some, I pay some. But after learning a little bit, we joined finances, and that's when I discovered all this debt.

45:47Dave Ramsey:Wow, I'm so honored. I'm happy for you guys that you're doing this.

45:51Rachel Cruze:I'm sorry you found that you're in a hole, but you can get out.

45:54Dave Ramsey:This is awesome. How much debt did you find?

45:57Rachel Cruze:$50 ,000 in credit cards and$12 ,000 in the personal loan.

46:01Dave Ramsey:Okay, very cool. So$62 ,000.

46:04Rachel Cruze:Was the credit card debt yours and his and just combined its 50, or was it all his, all yours? 99.9 % his. Okay. Okay. But he used the cards for utilities and groceries for household items.

46:20Dave Ramsey:Yeah, I got you. Okay. And what's your household income?

46:25Rachel Cruze:He makes$101 ,000 a year. I make$21 ,000.

46:31Dave Ramsey:Okay, so$122 ,000. That's good. Very good. No car debt?

46:37Rachel Cruze:Two cars. Debt? And they're upside down, so that's not a good situation either.

46:41Dave Ramsey:Oh, so this isn't your only debt. So how much do you owe on the cars? One car is$45 ,000.

46:50Rachel Cruze:The other car is$65 ,000.

46:54Dave Ramsey:Whoa! Okay. I know. And is there any other debt? Is there any other debt?

47:03Rachel Cruze:Besides mortgage, no.

47:05Dave Ramsey:Okay. And what do you owe on your mortgage?

47:09Rachel Cruze:$315 ,000.

47:11Dave Ramsey:Okay. All right.

47:12Rachel Cruze:You have$110 ,000 in cars.

47:14Dave Ramsey:Let me tell you what I can tell you for sure happened mathematically after doing this for 35 years. Okay?

47:20Rachel Cruze:Okay.

47:21Dave Ramsey:Your cars stole your food money.

47:27Rachel Cruze:Yeah.

47:28Dave Ramsey:And your food was put on a credit card. Your husband has not been irresponsible, except for the time that he went to the car lot.

47:38Rachel Cruze:Yeah. Okay. He had to have to let your car...

47:40Dave Ramsey:Yeah. So you guys are broke. Your car broke. and he was trying to prop it up because there's not enough money to pay for these stupid cars and live and he propped it up with credit cards that's a hundred percent what happened here your husband's not a bad guy he was just trying to cover and make things happen

48:00Rachel Cruze:yes and he wasn't trying to hide it for me he didn't want me to worry he said he's trying to work on it yeah and y 'all were separate in it right he was just taking care of it so that was

48:08Dave Ramsey:we're not blaming him i'm just saying that this credit card debt is not due to irresponsible spending, it is due to the irresponsible purchase of vehicles that you can't afford.

48:22Rachel Cruze:I agree with you. I just don't know what steps to take. Okay.

48:25Dave Ramsey:So on the$65 ,000 car, who's driving that one?

48:29Rachel Cruze:He is.

48:30Dave Ramsey:Okay. So it's a truck.

48:32Rachel Cruze:No. No. It's an electric car.

48:35Dave Ramsey:Oh, okay. Oh, crap. Which one?

48:40Rachel Cruze:Honda. Honda Prologue.

48:44Dave Ramsey:Okay. And you owe 65. Do you have any idea what the actual market value of this log is?

48:53Rachel Cruze:I looked up Kelly's blue book, and it said$30 ,000.

49:00Oh, gosh. Man.

49:03Rachel Cruze:Yeah.

49:03Dave Ramsey:Is$30 ,000 for trade-in or private sale?

49:07Rachel Cruze:Actually, I think it was trade-in. Okay.

49:10Dave Ramsey:So it's probably worth$35 ,000, which still sucks. So basically what we're saying is Honda electric cars have tanked in value. They're like jumping off a clip with no parachute in value. Okay, wow. I didn't know they sucked that bad. Okay, that's really bad. Yeah.

49:32Rachel Cruze:How about the$45 ,000 car? Do you know, Michelle? Do I know what it's best for?

49:38Dave Ramsey:Yeah.

49:38Rachel Cruze:27 ,000.

49:41Dave Ramsey:And that was trade-in, so that's probably 32. Okay. All right. Okay. So. $30 ,000 loss. When did you buy the Honda?

49:55Rachel Cruze:I'm sorry. I'm a little nervous. I can't think straight. It's okay.

50:01Rachel Cruze:He's had it less than a year.

50:04Dave Ramsey:Did you have negative equity in another car that you traded on it?

50:10Rachel Cruze:I think he did. I think there was a negative equity.

50:14Dave Ramsey:I mean, I know these electric cars suck on holding their value. It's just they're pitiful. But I did not think you could lose$30 ,000 in one year. I think that's probably not right. So they're not that bad. So I hope. Either way, you're there.

50:37uh okay here's the problem if you keep it it's going to keep tanking

50:45Dave Ramsey:and you're going to look up and it's going to be worth 10 grand and you're going to owe 55 right and so you know it's almost like to save the patient we're going to have to amputate the leg you know it's like we got to stop the bleeding here there are too many too many amputations There's too much blood in this metaphor. I got mixed metaphors going. But anyway, so we got to – anyway, you've got to stop the loss in value by getting rid of the car because it's going to get worse and worse and worse at an increasing rate. Okay. So, wow. So sorry. Do you guys have any money? I haven't asked that.

51:27Rachel Cruze:No.

51:28Dave Ramsey:Okay. It's not surprising.

51:29Rachel Cruze:What do you make? Michelle, you make$22 ,000. What do you do for a living? i was a nurse i got injured and i'm on disability now okay a permanent disability permanent disability sorry yeah yeah i'll be out there working it so yeah you because man you can

51:50Dave Ramsey:make some bucks as a nurse that's a very good career oh man all right so anyway back to the whole thing we got the great news is you now know where you are the great news is you're now working together and the great news is we have identified the problem and it's called a honda prologue and it's caused all of this it's all the result of buying a car and the 45 000 i mean like i think

52:17Rachel Cruze:all of it two cars so part of me would just take if you can get a loan from the credit union take the difference you each go get five thousand dollar cars i'd rather be fifty five thousand

52:25Dave Ramsey:dollars in debt than 110 yep yep um i would if you can get the credit union to loan you enough money to get out of both of these i would sell them both and get two five thousand dollar cars that's a huge change in direction yeah it's gonna it's gonna otherwise you're gonna struggle with this for a decade and so we gotta stop this thing going off a cliff mathematically because you i I mean, you can tell from 65 down to 30, right, in a heartbeat.

52:54Rachel Cruze:Right.

52:55Dave Ramsey:And we don't want to do that another year.

52:57Rachel Cruze:Yeah.

52:57Dave Ramsey:I don't want that for you. I want you to be free.

53:00Rachel Cruze:And then you guys, yeah.

53:01Dave Ramsey:You think you could get a loan at the credit union to cover the deficits on these cars?

53:06Rachel Cruze:I'm not sure now because his score on the credit's gone down.

53:11Dave Ramsey:Yeah, I'm going to go sit down and talk to him. If you've got either one of these loans with the credit union, it's a real reason to talk to him. Mm-hmm. Because this is going to go sideways. It's bad. and then once you get that straightened up you can address the other stuff pretty quick because you make good you make good money and now you're working together the sun will come out but

53:28Rachel Cruze:we got to get rid of you guys have two to three years you got to get rid of intense of intense

53:32Dave Ramsey:intense what a plan michelle what a horrible car and i'm a honda fan in general but that's not an electric fan not an electric fan adds to it

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55:42Dave Ramsey:John is in North Carolina. Hey, John, how are you? I'm good.

55:47Rachel Cruze:Actually, I'm a little less than I deserve. A little not good. How are you? Oh, John.

55:55Dave Ramsey:John, I'm sorry. I'm so sorry. How can we help today?

55:59Rachel Cruze:Well, my wife and I, we got ourselves in a little bit of a mess. We're looking at about a million dollars in debt at the moment.

56:09Dave Ramsey:On what?

56:12Rachel Cruze:Well, I just closed down my business in June. and so we had taken out some SBA loans to keep the business afloat. And then we also have our house, credit cards, we have IRS taxes due, and a couple other things. How much is the SBA?

56:42Rachel Cruze:Right now, I think there's about$250 ,000 left on them.

56:46Dave Ramsey:How much is on the IRS?

56:50Rachel Cruze:It's$350 ,000. Okay.

56:57Dave Ramsey:And how much on credit cards?

57:00Rachel Cruze:We actually just entered a consolidation loan, and we weren't sure if that was the right thing to do or not, but it dropped our monthly payment significantly. So right now we're at about$100. I think the total payoff was about$96.

57:13Dave Ramsey:Okay. And so$6 ,000,$7 ,000. What's the other$300 ,000? Your mortgage?

57:21Rachel Cruze:$250 ,000 on the mortgage. We have$8 ,000 left on a car. And then just repaying our accountants and attorneys.

57:34Dave Ramsey:Which amounts to what?

57:38Rachel Cruze:$15 ,000 for an accountant,$8 ,000 for an attorney.

57:43Dave Ramsey:And the attorney was for what? I'm sorry? The attorney was for what?

57:49Rachel Cruze:They actually assisted me through my IRS. They got me an installment plan for$500 a month, which was great, until two months after the installment agreement went through. Now they're saying that we have to review everything again, and that we will be at least liable for$175 ,000 to pay in the trust fund.

58:17Dave Ramsey:I'm sorry, you're liable for$350 ,000. So where's$175 ,000 come in?

58:23Rachel Cruze:I'm not sure. That's what the officer said when I was on the phone with him. An additional$175 ,000? Not an additional. That includes in the$350 ,000.

58:34Dave Ramsey:Okay, so you didn't hold your$941 ,000 back?

58:39Rachel Cruze:No, we never held anything back. We just weren't able to...

58:45Dave Ramsey:That's right. I don't disagree with that. Okay. So what is your home worth?

58:52Rachel Cruze:About$550. Okay.

58:54Dave Ramsey:And what else do you own? Nothing.

58:59Rachel Cruze:Right before all this happened, we had a rental property. We had land. We sold all those to – we actually did a flip, and we lost everything on top of that. and then everything kind of just trickled down from that. And then we paid off some credit cards back then as well, which was about four years ago.

59:22Dave Ramsey:So are you now working doing something else? Yes. What do you make?

59:29Rachel Cruze:Just recently I was making$260 ,000, but now I'm making$140 ,000. I got let go from one job because they just couldn't afford me anymore. So now it's 140.

59:45Dave Ramsey:Okay. And does your wife work outside the home, sir?

59:50Rachel Cruze:She makes about 20 grand.

59:52Dave Ramsey:How old are you? 33. How long have you been married? Eight years. Okay.

59:59Rachel Cruze:Do you guys have kids? Three. Three. Okay.

1:00:06Dave Ramsey:I remember being right where you are. I was 28 with two. and um and i didn't make it i ended up bankrupt um but i can share with you a couple things okay um one is uh this stuff will destroy your marriage if you if you don't fight for your marriage and so the two of you have to sit down and say regardless of what happens we're it we're doing it together. We're in it to win it. And we have to lock arms and it's you two against everybody else. Right. Okay. And she's scared. She's scared in a way you don't even understand. And you, if you're normal, this has taken a lot of your confidence and your swagger away.

1:01:02Dave Ramsey:Absolutely. It did me. It took it all away. okay and uh because it just grinds you under a boot and so once you say those things out loud that means you're she gets extra hugs because she's terrified and we're going to do this we're going to make it we're not going to jail and we're not going to go hungry i don't know what else bad is going to happen but those two things we do know okay right now um so you protect your marriage and you understand that, um, that business failure is a part of running a business. Sometimes it happens and, um, and it doesn't define the rest of your life unless you allow it to, uh, but it, but it does suck and it does make you think that you're not worthy and you are worthy.

1:01:53Dave Ramsey:You're better. You're a lot better than you feel about you right now. Okay. Hear me, brother. You're a lot better than you feel about you. I've been there. I know. and out of the ashes of mine, this whole thing grew. So there's something to the other side of this. There's something else to do, but right now sucks beyond belief. So food on the table trumps anybody else's request. Lights and water kept on trumps anybody else's request. Paying the first mortgage on the residence, so we have a place to eat, We have food and water and utilities trumps anybody else's request. No one gets in line in front of your family.

1:02:38Dave Ramsey:Do you hear me, sir? Yes, sir. You take care of them, and then her terror will start to subside, and your confidence will start to grow, and that's where you're going to grow to fight through this, is taking care of those things first, okay? Absolutely. Are you guys in a good church? You need to be. You're not. You need to be. okay you need to get some people around you that love you and and walk into the presence of god on sunday morning while you're fighting the devil because this is wicked stuff you're going through dude okay it's warfare and there's no other way around it you got to fight it okay now i don't know if you're going to make it or not mathematically as a secondary concern i'm concerned that you make it and that your wife makes it and your marriage makes it and your kids make it and the rest of these people can jump off a cliff they're irrelevant to me the sba is going to get what they deserve probably which is nothing because they're bankruptable the irs is not bankruptable and those 941s are not going away so that thing right there is a real mess you may end up selling the house to clear the stinking IRS.

1:03:54Right.

1:03:55Rachel Cruze:I was thinking about going bankrupt, but the SBA, you know, it's personally guaranteed. So there, I don't know. You can't bankrupt the business.

1:04:04Dave Ramsey:You're bankrupt because you personally guaranteed it. And that probably means you're selling the house to pay the IRS. So you need to get the advice of a bankruptcy attorney. I'm not telling you to file, but you need to learn what your options are because number one is not credit cars they can jump in a creek i'm not paying them nothing forget whatever you're paying them screw them they get nothing and the sba screw them they get nothing right now they can all just sit over there and look at this mess because they created it too and we're gonna get we're gonna work on the irs oh you got to keep the car payment paid because you have a car to get to work and you need to sit down with the bankruptcy attorney and learn but i think if there's a way to manipulate through this you're probably going to end up selling the house to clear the irs the rest of it is bankruptable and you can start over but um i don't know how you're going to clear all this making 140 there may be a way though there may be a way so but take care of you john

1:04:58Rachel Cruze:take care of your wife okay promise me i promise all right and we're here if you need us you call

1:05:04Dave Ramsey:me anytime i'm here to help you i've been right where you are hang on kelly's going to pick up i'm going to put you with a ramsey coach as my gift we're going to be with you and walk with you Thank you, Dave.

1:05:43Dave Ramsey:Hey, we love debt-free screams on the debt-free stage in the lobby of Ramsey Solutions. We love them even more when they're one of our own Ramsey team members. Yeah, here we go. Grant and Jordan Traylor are with us. Grant is a director of data and analytics with us at Ramsey Global. How long have you been with us? About seven and a half years. Seven and a half years. Wow. Okay, cool. And how much debt have you guys paid, Grant?

1:06:10Rachel Cruze:We paid off just over$130 ,000.

1:06:13Dave Ramsey:All right. Very cool. And what kind of debt was that? That was all the mortgage.

1:06:18Rachel Cruze:Hey!

1:06:18Dave Ramsey:It's a house!

1:06:19Rachel Cruze:Paid off your house! Oh, my gosh.

1:06:22Dave Ramsey:Hey, how old are you two weirdos? I'm 37, and she's a little younger than me.

1:06:26Rachel Cruze:I like it. That's a good answer. No, like really legit 36.

1:06:30Dave Ramsey:Just a little. Very little. Way to go, guys. What's the house worth? We think it's worth around$350 ,000 or so. I love it. Amazing. Way to go, guys. So how long did it take you to knock the house out? Just over four and a half years. Okay, so you've been doing that while you were working here. Yes, sir. Now, how weird is it to be working on your get-out-of-debt plan while working at Ramsey? Awkward? Weird? It makes it pretty easy, to be honest. Oh, is that good? I've got a great support system around me helping encourage us along the way. It's been really cool. Yeah, you're not really given an option.

1:07:04Dave Ramsey:That's true. We do give you an option. We're not looking at your stuff. But, I mean, everybody around you is encouraging rather than discouraging. Yeah. So cheering you on, cheering you on, cheering you on. And since it's team members, for those of you out there listening on the other side of this on a speaker, we do not ask their – we've got about 150 of their teammates standing around here, so we don't ask their income, okay? So that's not part of it. But you did it in seven? No, four. You've been here seven years. You did it in four and a half years.

1:07:33Rachel Cruze:Was it faster than you guys were – like when you originally kind of mapped it out, Did it go faster or slower? It went a little slower. Honestly, when we kind of started out, we set a BHAG that we knew the math didn't work on. But we just wanted to be aggressive because we knew we didn't really have a math problem. We had a behavior problem. And we needed to set a goal so big that it seemed hard. And we had to change our behaviors around it. Okay. Yes. So the goal itself was probably like a little impossible. But you wanted that. Yeah. Three and a half years was the goal. So we were about a year behind that.

1:08:02Rachel Cruze:Okay. Okay. So great.

1:08:04Dave Ramsey:You're a failure. Yeah, complete.

1:08:10Dave Ramsey:So, Jordan, I mean, he comes to work here and he comes home and we're going to pay off the house in three and a half years.

1:08:17Rachel Cruze:And you're going, well, the conversations like that always come at like 11 at night when the kids are, you know, going down and you're exhausted. And so I definitely did not agree at first. Not only impossible, but like, why? and I don't have this culture around me every day. And so he comes home with these really big ideas and then I kind of look at him like he's crazy and then he talks me through it. But honestly, the thing that helped the most was he gave me a visual in his data life and it showed me this is where, you know, like we're wasting money at this point. And I was like, well, that's a lot of money.

1:08:55Rachel Cruze:Yeah, it really doesn't actually make sense to keep doing this. So let's do it, you know, let's do it. The data guy got you with data. I know. Graphs and all.

1:09:07Dave Ramsey:Data analytics comes home from work. Oh, wow.

1:09:10Rachel Cruze:Literally every day, yes.

1:09:11Dave Ramsey:I love it. Very cool. Very cool.

1:09:13Rachel Cruze:And you have three kids during the time. So were you guys, because how intense do you feel like you guys were in the four and a half? Like, was it really like, okay, we're going to do as much as we can, as fast as we can? Or did you all live a little through Baby Steps four through six? It felt a bit like a run ahead. Hold on, slow down. Run ahead. Okay, yeah. I'm like you. It's like, let's celebrate. Let's be present. Let's enjoy what we have right now. And so he went into some moments that were like, whoa, we're not getting where we're supposed to be going. This is frustrating. I think that was where he felt like, are we actually going to keep doing this?

1:09:46Rachel Cruze:So for me, I needed that cup of coffee, you know what I mean? Where it was like, no, I need to know. I like that. Yeah. And so we had an anniversary celebration in the middle of that. that was big and just a ton of fun and we acted like kids and I'm kind of still living on that that was like over two years ago you know but when you're not used to having coffee you know what I'm saying it's like yeah that helps go a long time so and our kids are like they don't know that we're weird because they're too young like this is just weird you know and that's just their normal and so they talk about it like it's normal you know so I mean yeah they get sad.

1:10:23Dave Ramsey:Well it's not it's not those kids parents are heroes you guys are amazing I mean look at what But you did. You've changed your whole family tree because now you have your entire income, no debt of any kind, and you're only 37 years old.

1:10:37Rachel Cruze:Yeah.

1:10:38Dave Ramsey:How does that feel?

1:10:40Rachel Cruze:It feels, honestly, incredible. We knew when we went into the bank, I kind of expected that moment where we pay it off to be this emotional high. And then we'd go back to normal life, and it wouldn't feel that different in the day-to-day. And it was honestly completely flipped. in the bank. It felt like we were just in a dingy bank surrounded by people who were pretending to be excited for us. And it was kind of anticlimactic. They were like, yay. Yay. And then we went back to everyday life and there was this tangible weight that I didn't know I was walking under the whole time that I could just feel not there.

1:11:11Rachel Cruze:Like there was this freedom that I didn't expect. And Jordan and I both made a comment along the way of noticing that and calling out how it was a lot more of a relief than we honestly expected it to be in the day to day.

1:11:22Dave Ramsey:what's the big thing you're going to do for yourselves to celebrate the big thing to

1:11:27Rachel Cruze:celebrate we haven't decided where we're going to go yet but we have always kind of dangled as a carrot out at the other end of this that we want to go on a big trip with our family yeah like our kids have gotten older so what that was going to look like has changed over the four and a half years so we're figuring that out but we want to do a really big celebration just get away for you know week and a half two weeks yeah either go international or even stay domestic and just

1:11:48Dave Ramsey:really live it up for a while.

1:11:50Rachel Cruze:Go big. I love it.

1:11:51Dave Ramsey:I like it.

1:11:51Rachel Cruze:How many paychecks have you guys had without the house payment? I think only two. This was the first month's budget that we had without the house. Is that crazy? That was a tricky conversation. Yeah. Why? Because you want to spend it? No. What? No, because we realized immediately, like you go into your muscle, you know, movement of like, okay, budget, talk. And then all of a sudden it was like, well, now that money is sitting there. and so he starts allocating and then I come along because I'm the one that comes up behind you know because I'm not the nerd and uh and then it was like uh no uh that's not what I was thinking we'd do with that money and he's like yeah no and so so then our kids were gone with our amazing parents who have been our biggest cheerleaders this whole time shout out to all three sets of parents and they were gone and we did a weekend of vision casting and that was where it was like whoa debt is a freaking weight and it's gone and now we get to just so great and that was like such an amazing moment not only for the financial part of our home but like us our marriage yeah who we are as souls like we are image bearers you know of the kingdom and we're imaging him in his yeah I'm not going to do that.

1:13:05Rachel Cruze:And it's generosity. And so that was the moment for me where it was just like, we've never had this before. We've never talked like this before. That is so cool.

1:13:14Dave Ramsey:That's fun.

1:13:15Rachel Cruze:It was really cool. We kind of in that moment realized we've been going for four and a half years and we had this shared goal. And now we don't have that shared goal. We have different expectations. And so it was really cool to have that conversation and actually align to where do we want to be 30 years from now?

1:13:28Dave Ramsey:This is a problem people need to have. It's a fun problem for sure. So good. All right, bring the kiddos up. Let's hear their names and ages. Come on up, guys. And so this is Cal. He's 10. Kate is 8. And Finley is 6. All right. Gosh, so great. You guys, your mom and dad have changed your whole lives and your kids' lives. You don't even know it yet. It's pretty impressive. Very, very cool stuff. Very well done. Did y 'all get to miss school today?

1:13:56Rachel Cruze:Did y 'all get to miss school to be here? No, they're homeschooled. We did it all morning. Oh, okay. See, okay. I was like, that's pretty good. That's a good day. That's a good day. All right. It's still a good day.

1:14:04Dave Ramsey:Very fun. All right, guys. $130 ,000 paid off. House and everything at 37 years old. They did it in four and a half years. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Yeah!

1:14:28Dave Ramsey:Wow.

1:14:30Rachel Cruze:Wow. Amazing. Oh, my gosh.

1:14:35Dave Ramsey:Man, that's a power couple right there. And we have the privilege of working with one of them every day.

1:14:39Rachel Cruze:Uh-huh.

1:14:40Dave Ramsey:Pretty cool stuff.

1:14:41Rachel Cruze:Well, and it just shows when you're intentional and you have the plan, even though it's a big lofty goal like they did the three and a half years, you have something you're aiming for. Even something like paying off a house, which feels impossible for so many people. Boom. They did it.

1:14:52Dave Ramsey:Boom. Such a beautiful family. Don't tell me it can't be done. Grant and Jordan will tell you otherwise. Boom!

1:15:08Thank you.

1:15:40Dave Ramsey:We've done in-depth research. 100 % of you are going to die. You need a will. You're going to die. You need a will. It's National Make-A-Will Month. And 43 % of adults say they don't have a will because they procrastinated. I just haven't gotten around to it. And so I'm going to leave my family behind completely vulnerable because I won't do adult stuff like getting a will done. Or I don't know how to make all these big decisions. Well, make them. It's a good time. Otherwise, the state's going to make them for you. And so, well, everything goes to the family anyway. No, it always goes to the lawyer.

1:16:16Dave Ramsey:The lawyers get all of it if you don't do a will. So this is crazy, you guys. You've got to get your wills done. It's nuts. The number of people that die without a will, it's like seven out of ten people. This is not good. It's a good way to destroy what little bit of wealth you've built instead of letting your family benefit from it. And so go to RamseySolutions.com slash willsquiz for a simple and free online will quiz, and we'll help tell you what the right kind of will is. Do you need to go to a lawyer and do an in-depth thing, or can you go to Mama Bear Legal Forms and do an online will in about 30 minutes?

1:16:51Dave Ramsey:I don't care, but you need to get one done. Don't be walking around without a will. If you've moved states, you need a new will. If your marital status has changed, you need a new will. If major life stuff has blown up, you probably need a new will. Update, change, amendment, whatever. I don't care, but you need to get this stay on top of this stuff, guys. It's too emotionally expensive for those people you leave behind. Trenton is in Washington. Hi, Trenton. How are you? Hey, Dave. I'm doing fine. How are you? Better than I deserve. What's up? Oh, not a whole lot.

1:17:27Rachel Cruze:Had a friend recommend me to you, and I've been hooked on your shows ever since I started watching. Just had a question. You know, I kind of got myself in a bit of a hole here. I recently got let go from my job. I'm unemployed. I got in an accident with a work truck while I was on shift and out to a job site.

1:17:51Dave Ramsey:So every time someone wrecks a truck, they fire them? apparently so you weren't like drunk or something no not at all okay what were you making

1:18:05Rachel Cruze:uh roughly 80 ,000 a year you got a cdl 85 ,000 no i'm a light-duty tow truck driver and uh

1:18:14Dave Ramsey:roadside mechanic for heavy-duty trucks such as semis okay so you're a diesel mechanic Correct. Okay. That's good news. All right. Because you probably weren't making enough. I mean, a lot of diesel mechanics make over 100.

1:18:31Rachel Cruze:Yeah. I originally got put onto the job for the light-duty towing.

1:18:37Dave Ramsey:I just wanted to branch out and try something a little different, I guess. Do you have certifications in diesel? I do. You do? Okay. How long ago did you get fired? roughly about two months ago I want to say why are you not working turning a wrench somewhere uh that's the thing is I'm unsure I enjoyed towing a lot I love towing I want to get back

1:19:04Rachel Cruze:into towing but now with that on my record it's kind of hard yeah so don't yeah I'm sorry you

1:19:13Dave Ramsey:need a job you've been sitting on your butt for two and a half months you don't starve to death You need to go get a job turning wrench, man. You make 100K as a diesel mechanic. Go be a mechanic tomorrow. Yeah. And you work your way back into towing in the future years or open your own towing thing later. But let's not get hungry first. What have you been doing during the two and a half months? Watching Oprah? Oprah's on there. I've heard of that in your shows.

1:19:38Rachel Cruze:Netflix.

1:19:38Dave Ramsey:Working with friends.

1:19:39Rachel Cruze:He's watching your reruns, not Oprah's.

1:19:42Dave Ramsey:Watching me, not Oprah. That's great. Oh, my gosh. Okay. So, honey, you've got to get your...

1:19:47Rachel Cruze:Working with a friend making a little bit of money here and there is... Yeah, you're not.

1:19:50Dave Ramsey:You're strong. Yeah, you're sitting on your butt. Dude, you've got to go. You've got to go get the... You make... You have a wonderful skill.

1:19:58Rachel Cruze:For real, though, Trenton.

1:19:58Dave Ramsey:You have a wonderful skill.

1:20:00Rachel Cruze:How are you surviving? How are you paying for food and keeping your rent or mortgage paid, you know, bills? I'm just running to the end of my savings, and my wife is currently working. Oh, you're married. What does she make? Correct. Uh, I think probably$40 ,000 or$50 ,000 a year. And how old are you, sir? I'm 25.

1:20:23Dave Ramsey:Okay. And how much debt do you have?

1:20:26Rachel Cruze:Around$60 ,000.

1:20:27Dave Ramsey:On what?

1:20:30Rachel Cruze:I think it's like$40 ,000,$45 ,000 on personal loans, like$15 ,000 on two vehicles. Okay.

1:20:38Dave Ramsey:Okay. All right. Are you guys working together, you and your wife, with money?

1:20:43Rachel Cruze:Correct, yes. No, everything's shared. It is. Share payments, everything. Great, great. Everything's together. Well, what's she doing? What's she saying to you? Is she like, hey, Trenton, is she urging you to get out there? She is, yeah. And I guess a big reason that I'm not actively looking today is I'm getting ready to go to Ohio for my dad's wedding. Not next week, but the week after. and, you know, jobs are probably not going to hire me with taking vacation two weeks from today.

1:21:18Dave Ramsey:So get the job and it starts the day you get back. Yeah.

1:21:24Rachel Cruze:I don't know. I guess, yeah, I've definitely been lazy.

1:21:27Dave Ramsey:No, listen, here's what happened, okay? You're 25 years old. You were doing something you loved with people you liked and an accident happened that wasn't your fault. or if it was your fault, it was still an accident. You didn't do it on purpose. And the jerks fired you. And it knocked the wind out of you. And you've been laying around too much trying to get your breath back because it knocked the snot out of you. It took some of your confidence and your swagger away.

1:21:58Rachel Cruze:Yeah.

1:21:58Dave Ramsey:Is that right?

1:22:00Rachel Cruze:Yeah. I could agree with that for sure.

1:22:03Dave Ramsey:I'm trying to tell you in the last few minutes that you, sir, have a wonderful skill that is very marketable and you can make a lot of money. And stacking some cash right now would feel really good to a bruised ego. Yeah. It would be really good to return some of your dignity to you that they stole from you. It's kind of ridiculous that they fired you, but they did.

1:22:36Rachel Cruze:I don't know where I was at with it, but you just got to accept it and roll with what's thrown at me in life, you know?

1:22:41Dave Ramsey:Yeah, well, that's true. But you got to roll now, okay? So what I'm telling you is it's normal to get the breath knocked out of you, and it's normal for something like this to hurt. But you cannot let that be a reason to be sidelined. They don't have the power to sideline you. Only you have the power to sideline you. and you have sidelined yourself for the last two and a half months while you hurt from this experience and so i'm mean old uncle dave who's telling you you got chops you got tools you know how to fix stuff that nobody else on the planet hardly knows how to do you can make 80 to 120 grand a year turn the wrench on a diesel buddy and then you go stack you some cash clear up this debt pile up some money, buy you a truck, start your own towing company in four years.

1:23:31Yeah.

1:23:31Dave Ramsey:I'll show them.

1:23:33Rachel Cruze:Yeah, that sounds like a damn good plan.

1:23:35Dave Ramsey:Yeah. But it's not going to happen working three hours a week. Right. Screwing around.

1:23:43Rachel Cruze:Right.

1:23:44Dave Ramsey:It's time to throw your shoulders back and go, I'm better than the way I was treated.

1:23:52Dave Ramsey:You are better than the way you were treated. You are better than the way you were treated. You have an actual skill in a world that doesn't know how to do things. You know how to do things. And so you have a tremendous advantage. I mean, if you were just doing dumb work and got fired, and then you got to go look for more dumb work, this conversation wouldn't sound like this. But, dude, I'm serious. I mean, Mike Rowe that does dirty jobs and I, He was showing me the data the other day on the trades, and one of the things that keeps popping up, and one of the hottest things out there, and the biggest shortage is freaking diesel mechanics.

1:24:36Rachel Cruze:It's literally what you can do.

1:24:37Dave Ramsey:And I talked to one the other day that's making$120 ,000. And so I'm serious. It's not a bad – you are in a really good shape. And the best – let me tell you, the best revenge for stuff like this is success. Success is a wonderful revenge. And you don't even have to mention their name ever again. You just move on. And then you can build a company bigger than them. By the time you're 46. It could happen. It could happen. I know guys that do it. Have at it, brother.

1:25:30Dave 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.

1:26:03Dave 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.

1:26:25Dave Ramsey:Welcome back to the Ramsey Show. Rachel Cruz, number one best-selling author, Ramsey personality, and my daughter is my co-host today. The number is 888-825-5225. Ann is in Kentucky. Hi, Ann. How are you?

1:26:40Rachel Cruze:I'm doing well. How are you?

1:26:41Dave Ramsey:Better than I deserve. What's up?

1:26:45Rachel Cruze:So, I'm calling today with a little bit of a different dilemma. My husband and I have been married for a little over 10 years. We graduated right before we got married, and he found you. So, we, well, he had to get me on board, kind of. But we decided to follow the baby steps. We paid off over$300 ,000 of student loan debt in about four years. Good. Oh, my gosh. And then we decided we would start saving for a down payment for our first home.

1:27:13Dave Ramsey:Good.

1:27:14Rachel Cruze:So we did that. We started investing in our 401ks, doing all the right things. But it's been kind of a struggle to find the right home, trying to find something that we both agree on. So that was about five years ago now, and we still haven't taken the plunge, mostly on my husband's end. And in the meantime, you know, we've just been piling up all this cash. So we have over$600 ,000.

1:27:40Dave Ramsey:Okay, so wait a minute. Stop, stop, stop. I'm confused. The goal that we both agreed to was to save up a big down payment and then get a house. And now you can't agree on the house for five years?

1:27:54Rachel Cruze:That's correct.

1:27:55Dave Ramsey:What is it he wants that you don't want or vice versa?

1:27:59Rachel Cruze:Well, I think at this point the biggest issue is that we have over$600 ,000 saved. And seeing that money go.

1:28:08Dave Ramsey:Okay. Now, you said you couldn't agree on the house.

1:28:12Rachel Cruze:Well, I am. Now he just doesn't want to buy a house? Well, he won't admit to that. But I do think that's a big part of it, yes.

1:28:19Dave Ramsey:Okay. So let me go back to the other part. Because if he found a house he liked, I think you could get him to do it.

1:28:28Rachel Cruze:Well, has he ever found a house he liked, Dan? Or you kept showing him over five years different houses and he just didn't like any of them? So, well, a little caveat, we live in, like, Appalachia. There's not a lot of real estate. So it is kind of hard where we live to find a house that meets all of, you know, what we want. Like, he wants a garage so we can have a boat one day, and he wants all this stuff that is kind of hard to find. We got$600 ,000.

1:28:53Dave Ramsey:Are you in rural eastern Kentucky?

1:28:56Rachel Cruze:Correct.

1:28:58Dave Ramsey:Okay, so typically you're not looking in a subdivision, correct?

1:29:04Rachel Cruze:That's correct. There are a couple of subdivisions here, but homes there are anywhere from$600 ,000 to over a million dollars, depending on what you get.

1:29:14Dave Ramsey:Okay, so what are you looking at?

1:29:18Rachel Cruze:That's another thing, is it's been hard for us to agree. You know, when we started out, we said maybe max of$600 ,000, and then he's like, well, I don't think I want to spend that much a couple years later. And then now it's back to, it's just been really a struggle to come to an agreement.

1:29:33Dave Ramsey:okay meanwhile the houses in that subdivision have gone up 300 grand correct yes that's stupid i mean you're i agree yeah we're not parking the money and instead that money sitting here making three percent and if it was invested in a good piece of real estate called your home it would have gone up 10 or 15 percent during that period of time right um i'm just struggling with at what point this has cost you a hundred thousand dollars out it's called it's called a cost you a hundred thousand dollars yeah i mean i i think you guys gonna sit down and go look i'm not okay i'm not okay we we agreed that we were gonna buy a house now we need and we're not gonna there's no such thing as a perfect house and there's no such thing as a perfect husband either so right i'm gonna settle on both of them we're gonna get a house i'm gonna get an imperfect house with my imperfect husband ready set go here we go we're gonna do this we agreed to this is what we're gonna do and sitting on this money's costing us and i'm getting increasingly pissed right yes for sure now this is this is what you're describing and i think you just need to say it out

1:30:39Rachel Cruze:i don't think you've said it out loud yes you said that you have i have i actually yeah like there's been some things um just a few months ago we things came to a head and i was like i think we just need some time apart. So he did leave for a few days and kind of had a change of heart and came back and we looked at some homes, but it's just like dragging the feet, it seems like.

1:31:08Dave Ramsey:Yeah, so

1:31:12Dave Ramsey:your marriage counselor that you need to be seeing should be walking you guys through the idea that he is not respecting your opinion and you.

1:31:24Rachel Cruze:Okay. Okay? That's kind of how I feel. It doesn't mean he has to go along with you,

1:31:31Dave Ramsey:but when he agrees to something and then slow walks it, that means he's patting you on the little head. Right.

1:31:38Rachel Cruze:Sweet little girl. I haven't been, like, you know, when we agreed to purchase a home five years ago, So, like, I just feel at this point like I've lost trust also, if that makes sense. With his word, because he said he was going to do one thing, and he won't follow through with what you guys agreed with.

1:31:54Dave Ramsey:So you're losing respect, and he's not respecting your thing. So this is a marriage breakdown. It's come really deep here. This is sad. I mean, when I started the call, it was just like we need to buy a house, and now it's like this is tearing our marriage apart.

1:32:12Rachel Cruze:Basically, yes. Wow.

1:32:15Dave Ramsey:All right. So, I'm not sure he has gotten the memo yet.

1:32:23Rachel Cruze:Okay.

1:32:25Dave Ramsey:How serious this is. I mean, I understand he left and came back. It's not about the House anymore.

1:32:30Rachel Cruze:This is no longer about the House. Yeah, that's the conversation we have, right?

1:32:33Dave Ramsey:This is now about us agreeing on something. We both have a vote and then executing on what we agree on.

1:32:38Rachel Cruze:And the statement, Ann, which I think is big in a marriage, I'm starting to not to trust you. Like that's a bit like that. The one person in life that you should trust is the spouse. Like that's the that is the you know, that's the person. Have you said that to him that sentence? I have. OK. And how does he respond? I mean, it's hard for me because he's very, he's a person who can't make a decision. He overanalyzes everything. So he acts like he understands why I would feel that way. Sure. But he just can't seem to move past the point of actually putting it into action. Yeah. I guess if I'm explaining that correctly.

1:33:19Rachel Cruze:Yeah. Yeah.

1:33:21Dave Ramsey:If I'm his, if I were sitting there in the office with the marriage counselor and you two are sitting there, I would challenge him that he now has grown to love the$600 ,000 cash more than a house and more than his wife's wishes. Okay. And that's a dangerous place. That's what you've described.

1:33:41Rachel Cruze:Yeah, that's a great way of saying it.

1:33:43Dave Ramsey:It's what you've described. And I think you guys have got to work through that. This guy sounds like he is emotionally stunted. and so um yeah you guys have got some work to do and then the house purchase will be a result of you having found some healing and trust and respect and those other words in your marriage again back in your relationship and the house purchase so i think the house purchase is not happening is revealing other things that are going on it's not the it's the symptom and it's a

1:34:17Rachel Cruze:deep scarcity mindset on his end too i mean he just he didn't want to let go of anything there's level of like that control.

1:34:25Dave Ramsey:He said he's a detail guy. He's got paralysis of the analysis. He's sitting around thinking about it. It all runs over in his head.

1:34:31Rachel Cruze:That's too much.

1:34:33Dave Ramsey:27 ,000 variables at one time instead of just going and doing something. Ready, aim, aim, aim, aim, aim, aim. There's some control he has.

1:34:42Rachel Cruze:Fire! Oh dear. Come on! Jeeps!

1:35:13Rachel Cruze:Hey guys, Rachel Cruz here. And guess what? The 2026 Ramsey Goal Planner is here. This isn't just another calendar. It's a life-changing tool that helps you set clear goals and build habits that actually stick. Get ready for all new monthly content from your favorite Ramsey personalities, tactical goal tracking tools, and upgrades that make this our most durable planner yet. But don't wait. If you order in the first week, you'll get the lowest price at just$35.97. Order by Labor Day at RamseySolutions.com slash store to get the deal.

1:36:00Dave Ramsey:Today's question of the day on the Ramsey Show is brought to you by Why Refi. If you've been turned down for refinancing your defaulted private student loans, you're not alone and you're not out of luck. Why Refi exists to give people like you another shot. Go to whyrefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not in all states.

1:36:25Rachel Cruze:Today's question comes from Hunter in Texas. My wife is a CPA and smarter than me, better looking than me, and better at everything except for choosing a spouse.

1:36:34Dave Ramsey:Good line.

1:36:35Rachel Cruze:She uses every dollar to make sure we don't overspend but treats it like a general guideline, not something to actually stick to. I always thought the budget was like a script for a play where you write the numbers and once the play starts, you don't go off script. Who is right? I mean, I yield to you, Hunter, in it that when you set the budget, it is what it is. Now, I do know after doing budgeting for 10 plus years, 15 years of marriage, there's going to be a lot of circumstances. For us, it's almost monthly now where things come up that you don't realize. And so you have to add an extra line item.

1:37:17Rachel Cruze:You got to shift some numbers around. So there is kind of this ever moving part of the budget, which is going to be real like that. That's going to happen. So it's less of a guideline. But when you when you plan it, you stick to it. And when something comes up, you may have to kind of shift and figure out how to make it work. But it's still going to work within the numbers. So that's how Winston and I do it, because I mean, I had like a yeah, like one hundred and thirty four dollar doctor visit. I literally paid today from two weeks ago. And I didn't know that was going to happen. Right. And so you got to like put that in the every dollar budget and then shift to other things.

1:37:49Rachel Cruze:So so things are going to come up that you don't expect. and so there is going to be a level of having to be somewhat flexible, but for the most part, I'd say 90 % of it is planned out that you 100 % should know from start to finish of the month.

1:38:05Dave Ramsey:Yeah, you need to agree on where every dollar is going to go to and stick to it. And if you're going to make a change, and you will, as Rachel said, make some changes, but in the middle of the month, the only way you make a change, two things have to occur. we both agree to the change you don't make the change and then go look what i did and we both agree to the change and if you if you raise the amount of money in a category or create a new category you've already spent all your money on paper so you also have to lower some other category by that same amount so if you if you create a line item for 134 dollars for an unexpected doctor visit for a sick kid and that was not in the budget, then we have to lower some other amount somewhere in the budget by$134 because you're not in Congress.

1:38:59Dave Ramsey:This has to balance. And so two things occur when changes are made. Number one, both agree to it before you do it. Number two, you lower another category by the amount you raised that category.

1:39:15Rachel Cruze:That's exactly Exactly right. And so it still balances. And that's another part of being debt free. When we tell people to work their way out of debt, you actually have margin. So you may be putting some money away in savings and you may kind of have to take some of that lower a little bit of savings to pay some of this stuff.

1:39:29Dave Ramsey:$134 less going into savings. Right.

1:39:31Rachel Cruze:That's right. But that's like all of this works in unison, right? Like you're moving forward with your money throughout the baby steps to help even with some of these things, which is great.

1:39:39Dave Ramsey:Yeah. But a general guideline means she's doing whatever she wants to do and reporting to you later. And that's not okay.

1:39:45Rachel Cruze:Yeah, I'd be stricter on it.

1:39:47Dave Ramsey:That's not, no. You're more right than she is.

1:39:51Rachel Cruze:And one thing you guys could do is sign up for one of our EveryDollar trainings. We have free trainings weekly now in the Ramsey Personalities. We do it because EveryDollar, within the budgeting app, it's going to help you not only with the budget, but we have a digital coach component, which is actually going to show you and help you work the baby steps to know, okay, what are things within my financial world that I can shift and change to be more proactive? And so all of that is in these EveryDollar trainings. So if you guys want to check it out, you can sign up for free. Yep. At RamseySolutions.com slash webinar.

1:40:22Rachel Cruze:We do a Q &A. We walk through a lot of these kind of questions, like what you just had, Hunter. So yeah, make sure to check that out.

1:40:29Dave Ramsey:Rob's in Indiana. Hey, Rob, what's up?

1:40:32Rachel Cruze:Hey, thanks for having me on. I have a very quick math nerd question for you guys. Dave is your man. Dave is ready for it. Wonderful. We owe$125 ,000 left on our house, and our monthly payment for our mortgage is$1 ,500 a month. Our take-home pay is about$8 ,500. We have a three-year-old son, and we're only going to be able to have one baby because of COVID-related stuff. And I already have about$25 ,000 to$30 ,000 saved for my son's college already. We had been putting$417 a month into a 529 for him. And I was thinking about stopping putting any money in his college, basically to just have another$417 a month to put towards our mortgage to try to get it paid off in the next three years.

1:41:27Rachel Cruze:And with your guys' online mortgage payoff calculator, if I pay around$4 ,000 a month, I can actually get our budget completely paid off, or our mortgage completely paid off.

1:41:36Dave Ramsey:Yeah, but you're talking about$1 ,500 plus$400. It would be$1 ,900, not$4 ,000.

1:41:42Rachel Cruze:Yeah, yeah. And I've went through my budget, and I've already found another$1 ,500 that I can put towards it every month.

1:41:49Dave Ramsey:Okay. And your wife's on board with all that?

1:41:53Rachel Cruze:Yes, I think she's on board with all that.

1:41:54Dave Ramsey:And you've got room to breathe. You're not doing rice and beans. That's not what we're trying to do.

1:41:58Rachel Cruze:Oh, no, absolutely not. We're doing just fine.

1:42:00Dave Ramsey:Okay. All right. um yeah you can circle back to the 529 later if you need to after the four years because how old is your baby three yeah so i mean three years from now the house is paid for four years from now the house is paid for there's seven if you need if you look up and go 25 is not going to be enough or what the 25 is going to grow to is not going to be enough then i can add some money and catch back up you won't have any trouble because you won't have a house payment anymore yeah exactly

1:42:28Rachel Cruze:I figured if I put the money we put towards our mortgage back in for one year, that's$18 ,000, which would be more than I was going to miss out on before.

1:42:37Dave Ramsey:Exactly, and way more. And it will continue to grow anyway. It might be enough in there already, depending on the college choice and what you're planning to fund and all that kind of thing. So if it's invested in good mutual funds, it's$25 ,000,$50 ,000,$100 ,000. It's probably$200 ,000 when they get there. if you don't add anything. So you need to sit with your SmartVestor Pro and calculate out what the 25 is going to grow to, and that will tell you if you need to add anything at all. And you can certainly do that after four and a half years after the house is cleared. So I'm with you. Good plan.

1:43:16Dave Ramsey:Rock and roll. Math nerd approved. Boom. There we go.

1:43:19Rachel Cruze:He said I had a math nerd question. I was like, perfect. Dave loves a good math riddle. Good math riddle.

1:43:26Dave Ramsey:I was that nerd kid for sure. All right. Mike's in Nebraska. Hey, Mike. Hey, how's it going? Better than I deserve. How can we help?

1:43:36Rachel Cruze:Great. So I have a situation where my parents, you know, growing up, I knew my parents weren't the best with their finances. It's something that I initially struggled with, but then I feel like I've done a, me and my wife have done a good job. But come to find out after my dad's passing a couple of years ago, just how bad they were with money. And they had essentially racked up$200 ,000 worth of debt living off of a line of credit. Now it's just my mom on her acreage. And I have over the past two years been working to, I started an LLC to do a storage business on her property in order to try and monetize her property a bit and get her more income to cover the mortgage that we had to get for her.

1:44:32Dave Ramsey:We had to get for her.

1:44:35Rachel Cruze:That I helped her get for herself.

1:44:38Dave Ramsey:Okay, so you're not on the mortgage.

1:44:40Rachel Cruze:We did co-sign on it because my mom's 74, so we put, because of our house was paid off, I co-signed for it. okay how can i help um my question is um they don't she doesn't have a lot of retirement um little to none she gets like essentially like five thousand dollars um annuity a year that usually goes towards uh her medicine that she has for the year um she has social security

1:45:15Dave Ramsey:coming in?

1:45:17Rachel Cruze:She has Social Security, yes. How much is that? She gets just a little over$2 ,000.

1:45:23Dave Ramsey:All right. Tell you what, hang on through the break. We'll come back and talk to you. I don't have enough information to spit an answer at you, so hang on.

1:45:48Dave Ramsey:Many of you listen to The Ramsey Show because you're sick and tired of getting nowhere with your money. You work too hard to live paycheck to paycheck with no money in the bank. But here's the deal. Just listening to the show won't change that. If you want different results, you have to do something different. We've helped millions of people save money, ditch debt, and build wealth. And you can too. But you've got to have a game plan, and that begins with our Get Started assessment. Go to RamseySolutions.com slash start now, take the free quiz, and get your free step-by-step action plan. If you've had it with money stress and are ready to take control of your money for good, go to RamseySolutions.com slash start now.

1:46:39Dave Ramsey:All right, we're talking with Mike in Nebraska. Mike's mom is 74. She's got$3 ,000 coming in for Social Security,$5 ,000 a year from an annuity to help with her medical bills. She and her husband, Mike's dad, ran up a bunch of debt. We're not very good with money. Mike jumped in, took out a mortgage, and put a storage building on their lot, and he co-signed the mortgage, and that's how far we'd gotten in the discussion. Does that all sound accurate, Mike?

1:47:09Rachel Cruze:Yeah.

1:47:10Dave Ramsey:Okay. Now, so how much is the mortgage now?

1:47:16Rachel Cruze:The mortgage right now is$1 ,300 a month.

1:47:18Dave Ramsey:No, I mean the balance. I'm sorry.

1:47:21Rachel Cruze:Oh, sorry, the balance. We started at$203 ,000, and it's at$185 ,000 right now.

1:47:26Dave Ramsey:Okay. And the property, with the storage building and everything added to it, the current value of the whole thing is what?

1:47:35Rachel Cruze:Roughly, probably a guesstimate between$800 ,000 to$900 ,000.

1:47:40Dave Ramsey:Okay. All right. So there's around$700 ,000 in equity right now. Mm-hmm. Okay. And she's lived on this property for how long?

1:47:51Rachel Cruze:Since I was little. It's been in our favorite slot. The land's been in our family since my dad grew up on the land.

1:48:02Dave Ramsey:Okay, so you're the third generation. Mm-hmm. Okay. All right, so your grandparents were there. Mm-hmm. And you have a memory of all that, too. How much acreage is there?

1:48:15Rachel Cruze:It's roughly about nine, just under nine acres. How rural is the area?

1:48:23Dave Ramsey:Yeah.

1:48:25Rachel Cruze:It's right next to a highway that connects to decent-sized towns, so it's not very rural. Because nine acres at$100 ,000 an acre doesn't sound like farmland. It has two houses on it. How many storage units did you put on it? Right now we're, like, we have two sheds, but that do, like, basically, and we're doing RV and boat storage for the storage.

1:48:55Dave Ramsey:Okay. All right. And you live nearby?

1:48:59Rachel Cruze:Yeah, in town.

1:49:00Dave Ramsey:Okay. So you're trying to help her run boat storage and get enough cash flow to pay this mortgage?

1:49:07Rachel Cruze:Yeah. So far we've been able to, between renting the sheds and the storage, been able to cover the mortgage for the year as well as a little bit more. She gets$1 ,000 rent from the other house that's on the property.

1:49:24Dave Ramsey:So is she living less than she makes now with your help?

1:49:31Rachel Cruze:Sorry, say that again?

1:49:32Dave Ramsey:I said, is she able to live on the money that these things are providing her with Social Security?

1:49:38Rachel Cruze:I have her living off of just Social Security. She did get, like, my dad was the type that he wanted my mom to be at home, and so she hasn't worked for a long time after her initial career. But she does a part-time job now, and all the money from that job goes towards principal on the loan.

1:50:03Dave Ramsey:Okay. All right. So she's on board on all this.

1:50:07Rachel Cruze:sounds like she's very much like she she she realizes her situation she got her head in the

1:50:12Dave Ramsey:game she's not gonna get to keep this property if she doesn't get her act together and she's

1:50:16Rachel Cruze:getting her act together that's good yeah the property is what i feel like is the saving grace for her um and what the only thing that we have like that keeps us from being okay so how's her financially made um she's she's her health is good not great um are you the sole heir

1:50:37Dave Ramsey:um i have a brother as well okay so what happens when she passes

1:50:45Rachel Cruze:um the the land is split between my brother and myself

1:50:52Dave Ramsey:What are you going to do then?

1:50:56Rachel Cruze:My hope was to build up a storage, the storage business on there in order to offset any costs for her future home care. I'm talking about your brother.

1:51:08Dave Ramsey:How are you going to split the land with your brother when she's gone?

1:51:12Rachel Cruze:The land is large enough that we actually got approval to, property line-wise, split the property in half. if we wanted to.

1:51:21Dave Ramsey:You can't, there's a mortgage on it.

1:51:24Rachel Cruze:That's, well, one of the questions I had, like questions for calling that I had for that was, I have stock from my company and it's sort of just been plateauing for a while. And I was wondering if it would be wiser to take that money and roll it into her loan to pay it off and then have the property storage sort of pay back.

1:51:51Dave Ramsey:How are you protected from your brother ending up with that money?

1:51:56Rachel Cruze:My mom has basically said that anything that I put into the land, she would modify her will to make sure that I'm, like the money I put into the land is protected as like first out.

1:52:11Rachel Cruze:So if we had ultimately decided to sell the land.

1:52:14Dave Ramsey:Yeah, you would need to take a lien on the land for the$185 ,000. How much is the value of your stock?

1:52:24Rachel Cruze:Right now it's$120, but as it rolls off, it'll be$200, and then if the stock goes up, whatever grows from that.

1:52:34Dave Ramsey:As it rolls off, what do you mean?

1:52:39Rachel Cruze:Every quarter or so I get more released to me.

1:52:43Dave Ramsey:Oh, so it's restricted. Okay.

1:52:45Rachel Cruze:Yeah.

1:52:45Dave Ramsey:Okay. All right. So you just got to stay with the company. Yeah. Is your brother, have you ever been having good communications with him on all this so you don't get burned?

1:52:58Rachel Cruze:I mean, we're on the same page. I think I'm more on the hook financially. Yeah. You're the only one on the hook. obviously. But, um, but yeah, he's, he's supportive and helps with the property and the management of things and helps with my mom. So like he's, he's on board with everything.

1:53:23Dave Ramsey:Yes. I would pay off the mortgage with your stock. Yes. Cause the mortgage is in your name. You have stock to pay off a mortgage that's in your name. Yes, I would. But you need to take a lien against the property, take a mortgage against the property, at no interest and to be paid when, you know, to be taken as a – that guarantees that her will functions because now you have a lien on the property and your brother cannot get anything out of the property until that mortgage is paid. Okay? And you've got the ability to split the property easily because you're the mortgage holder then. But you're not going to split a property with a commercial mortgage holder unless you refinance.

1:54:08Rachel Cruze:Right. And I guess the thing that I've gone back and forth with was between the money going from my stock into the property versus going into retirement accounts and things for myself.

1:54:23Dave Ramsey:Yeah, well, this is your retirement because you're betting the farm. Listen, you went and borrowed$185 ,000. Or you went and borrowed to$100 ,000. Now it's down to$185 ,000. you act like your mother did this you did this it's you're you're liable you have a mortgage so no you don't put money in retirement while you have a mortgage on a side piece of farmland no absolutely not so you you you left the you left the position of separation a long time ago this is no longer separated this is not your mom's tangled yeah this is your deal because you signed up for it and you're heavily invested with time and effort and everything else i like where it's taking you guys overall because your mom has taken responsibility she's reined herself in she's you know taking a job she's i'm living on a budget your brother's involved 200 000 take a lien on the property for that yeah yeah whatever he pays off if he takes 185 pays off the mortgage he puts a lien against it for 185 that means 185 comes to him before he splits with his brother after After she's gone.

1:55:29Rachel Cruze:Yeah. Yeah. What about her$200 ,000 line of credit?

1:55:33Dave Ramsey:That's it. They refinanced it and took it out. It's for the property. They already took it out. They refinanced it. So that's the thing. So we're getting rid of that. And yeah, no debt now. The only debt is you, and you're not collecting on it until she's gone. And so that money's not working very hard for you, but you're dealing with third generation land. You guys are planning to keep it. You're not going to liquidate it. So there's no out for you other than pay off the debt. So you stepped into it, and you got it on your shoe. That's the way it works.

1:56:26Bye.

1:56:44Dave Ramsey:Our scripture of the day, Philippians 4.12, I know what it is to be in need and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well-fed or hungry, whether living in plenty or in want. Maya Angelou said, forgive yourself for not knowing what you didn't know before you loaned it.

1:57:05Rachel Cruze:That's good.

1:57:07Dave Ramsey:That's good. I like it. All right, Don's in Grand Rapids. Hey, Don, how are you? Good. How are you? Better than I deserve. I see on my screen that you are a baby step millionaire. Congratulations. Thank you.

1:57:20Rachel Cruze:I appreciate that.

1:57:21Dave Ramsey:Well done. So what's your net worth?

1:57:23Rachel Cruze:It is$1 ,773 ,412.

1:57:28Dave Ramsey:Way to go, man. Way to go. Give me a little breakdown on that by category. What's it invested in? Sure.

1:57:35Rachel Cruze:It's$652 ,000 in 401K,$161 ,000 in a Roth IRA,$35 ,000 in a 529 ,000 mortgage. Our house is paid for. Home value of$446 ,000. We have a cabin that's also paid for, valid at$385 ,000. and then we have 91 ,000 in cash.

1:58:00Dave Ramsey:All right. How old are you?

1:58:03Rachel Cruze:38. My wife and I are 38, and we became millionaires when we were 35.

1:58:07Dave Ramsey:Way to go. You did early. Congratulations. How much of this did you inherit?

1:58:12Rachel Cruze:We inherited about 90 ,000 from my wife's grandma when she passed away.

1:58:16Dave Ramsey:How long ago was that?

1:58:19Rachel Cruze:2018.

1:58:21Dave Ramsey:Were you already millionaires by then?

1:58:25Rachel Cruze:2022 is when we became millionaires.

1:58:28Dave Ramsey:Okay, so you shot up, man. Way to go. Okay, so mathematically, though, you did not become a millionaire because of inheritance.

1:58:34Rachel Cruze:No.

1:58:35Dave Ramsey:No. This is all you saving and dipping. And what's been your range of income since you started working? Best year, worst year?

1:58:44Rachel Cruze:Worst year,$45 ,000 household. The max is going to be this year. We're expecting it to be around$315 ,000.

1:58:52Dave Ramsey:What do you do for a living?

1:58:54Rachel Cruze:So I work in supply chain, data analytics. in the food manufacturing industry. My wife is a manager for the state of Michigan. We've both had incremental progress throughout our careers.

1:59:05Dave Ramsey:Okay. All right. Cool, cool. So you've got a degree in supply chain logistics?

1:59:10Rachel Cruze:My degree is actually in general management, and I have an MBA in marketing. Okay. My wife has a degree in environmental science and biology, and she also has an MBA, but that's in consulting.

1:59:21Dave Ramsey:Okay. Nice. So how do you attribute the high of a 315, but that's just recently? So most of this time you've been making probably between 100 and 200, and you get to a net worth millionaire status at 35 years old. Somebody's 22 is listening to us right now. Tell them how you did that.

1:59:44Rachel Cruze:So we graduated college in 2011 living on nearly nothing. and once we got into our careers we just pretended like we had no money and just put all of our income towards getting our debt paid off so I graduated with$60 ,000 in debt and student loans we got that paid off in two years and we just really focused on putting our whole household behind getting out of debt that's what we did we bought our first house in May 2015 We paid that off in four years. And then we paid off. We bought our cabin in 2023. We paid that off in one year. So I think really the big secret for us was being extremely focused on getting out of debt, putting our entire household behind it.

2:00:38Dave Ramsey:And you've been systematically dumping money in this 401k and Roth like crazy, too, because you've got about$900 in that. yeah we've been uh fortunate enough that we've been able to contribute to our retirements but

2:00:52Rachel Cruze:also have a high enough income that we've made you know got our debt paid off too so yeah lifestyle creep is not what i would say for you guys you guys have stayed very intentional yeah if if you look at us we have a pretty average house with pretty average vehicles and we wear pretty average clothes. So, you know, walking down the street, you wouldn't see us and think we're millionaires, but we are.

2:01:17Dave Ramsey:So it's pretty awesome. Well, you weren't trying to impress anybody walking down the street. You're trying to impress the people in your house, you and your wife. That's all we care about, impressing. And so that sets it up. Wow. Very cool, man. So you think in today's world, the current economy, sitting right where we are, that if you came out of school, you could do this again in the same period of time or faster?

2:01:42Rachel Cruze:I mean, if I graduated right now, we had to do it all over again. We could probably do it as fast. That's just the kind of people we are. We both legitimately get angry at the debt that we had. When we first started paying off our mortgage, we don't even know what the minimum payment was because we would pay four or five times that every month. So, and then every time we paid it down, we would get kind of excited by it. So we were spending thousands of dollars towards our mortgage. And it was awesome because our cost of living was so low that we could do it and it wouldn't hurt us. So, but now we're set up for life and hopefully continues this way.

2:02:29Rachel Cruze:So great. What are you guys doing now for fun? Now that there's, you guys make a great income, you're doing everything. You have no mortgages on both property, on either property. what does life look like now? Well, we've got two kids. We have a seven-year-old and four-year-old to keep us busy. We really enjoy going to our cabin. It's a good way to unwind and relax. We spend a lot of time with our families. We just took our kids to a surprise vacation over in Wisconsin. And, you know, I think we're planning on possibly going on a cruise next year. So fun. That's great. Being in a position to where we could do those things without really needing to worry about impacting our personal lives is very enjoyable and freeing.

2:03:17Yeah.

2:03:18Dave Ramsey:Wow. Very cool. Good for you guys. Well done. Well, we're getting ready to announce another Ramsey cruise, so be listening.

2:03:26Rachel Cruze:Join us on that one.

2:03:28Dave Ramsey:We'd love to have you. Way to go, guys. I'm so proud of y 'all.

2:03:31Rachel Cruze:In your 30s. That's incredible. What do you drive? my wife drives a 2014 Chevy Sonic we bought that in 2014 and we bought it new but it was a pretty inexpensive car but we we paid that off about three months after we bought it and then I drive

2:03:51Dave Ramsey:a 2020 Ford F-150 that we paid cash for yeah you need to upgrade your wife's car that car sucks

2:04:03Rachel Cruze:Yeah, I know.

2:04:04Dave Ramsey:You have$2 million. She's laughing at you right now. She can hear you. Yeah, your wife's car sucks. You need to go get her a car, dude.

2:04:14Rachel Cruze:I will try. She likes her car, though.

2:04:17Dave Ramsey:I don't.

2:04:21Dave Ramsey:Hey, Don, I'm proud of you guys. Way to go, y 'all. We're so proud of you. Way to go. Baby Steps Millionaire is at 35 years old. We're talking to him here. He's 38. They are 38. they together there you did hear that very clearly we talk up to couples about the correlation between

2:04:37Rachel Cruze:the ability to build wealth and working together oh and the speed at which you do it you're both

2:04:42Dave Ramsey:all in change up yeah you're going we both were mad at debt we both agreed to put thousands of

2:04:49Rachel Cruze:dollars on our mortgage we both were excited when we've seen the numbers go down it's like they yeah

2:04:54Dave Ramsey:yeah that you heard the unity all the way through that so when we're trying to get you couples to combine your finances we're trying to get you couples to be in agreement on where you're going and how you're going to get there this is where it takes you you're 38 years old with a million seven and i'm griping you out to buy your wife a better car that's where it gets you yep okay because you guys understand when they're 44 if they do nothing else this is 3 million 4 when they are 51 if they do nothing else this is seven million dollars this is where this is going you want me to do it again 14 million dollars you want me to do it again 28 million dollars in their 60s that's where these numbers are going that's how this works and so when you once you get this thing going in the right direction and you quit supporting life insurance companies and banks and car companies and instead start supporting your own stinking family, you become this guy.

2:05:54Dave Ramsey:This guy's a... Unbelievable. This couple's a rock star, man. Power couple.

2:06:00Rachel Cruze:And the values align.

2:06:01Dave Ramsey:Don't tell me you can't do it. Don't tell me the American dream is dead. I talk to people like Don every week. I just think you've been listening to your communist college professor too much. This free enterprise system stuff works, boys and girls. Go do what Don did. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:37Rachel Cruze:Up next, we are headed out to Chicago and Orlando for the Ramsey Show Live. Yep, you heard me right. We are taking this show to you. This is going to be everything you love about the Ramsey Show, except you get to be a part of it. Part of what, George? The Ramsey Show Live. Ken, that's what I'm telling them about. Ramsey Show Live in here? Nope, we're doing it on the road. You're going to Chicago with me and Rachel Cruz September 30th. Are you free? The Windy City. I like it that time of year. You know what else I like, George? I like the deep dish. Okay, maybe we'll have some deep dish. You mind if I finish the promo?

2:07:10Rachel Cruze:Is that okay with you? Okay, okay. Appreciate that. Questions and answers, real conversations, and I'm sure a few surprises here and there. George, are you in here talking about TRS Live? I am, Jade. I'm trying to talk about it. Nice. So that means it's actually happening, right? It's happening. If I could tell the people, I think it could actually come to fruition. Listen, just tell me when and where. You don't know? Okay, we're going to Orlando. You're going to join Dr. John Deloney and I October 2nd. Yes. Okay, great. I'm going to go pack now. Thanks, George. Please do that. Go pack. Hey, George, speaking of packing, is this like sweater weather or is it not that cold yet in Chicago?

2:07:46Rachel Cruze:What is happening? Can I please just get to how they buy the tickets? Jeez, I thought it was a good question. Okay. This is not an arena tour. This is a one-night-only event in Chicago and Orlando. General admission is only$39, plus there's a VIP experience if you're bougie like that. But here's the thing. There's only 300 seats available, so get your tickets now at ramsysolutions.com slash events. Hey, how come you get to go to both cities? I just go where they tell me, man. Hey, have you been there the entire time? Maybe. Okay, and also, are you reading a children's book? I'm expanding my mind, George.

2:08:23Rachel Cruze:That's how we got those PhDs. Yeah, that's probably where you got that jacket. Okay, see you on the road, John.