Don’t Go Broke Trying to Keep the Peace

28:30Rachel Cruze:It was just the fact that our net worth was so vastly different. So different, yeah. Sarah, I'm so sorry. I'm so sorry. So are you separating from him?

28:46Rachel Cruze:No. I feel we have two very small children. And again, I'm still very much in shock, but we have two very small children. and I know the statistics with growing up in a home with a broken household, and I don't want that for my children either. Yeah. Are you in counseling? They're just so young. Are you guys in counseling? Will he go? No. He said he would go, but to be quite frank, it's not something that we could afford right now. Well, if you're going to make the marriage part work, Sarah, you're married to a liar. and not just a liar like here and there. Like, I mean, this is like a, this is, yeah, this is like, there's something wrong, deeply, deeply, deeply wrong with him.

29:38Rachel Cruze:And in the process, he's hurting his family. And so for you to draw boundaries for yourself does not make you a bad mom. I just wanna give you freedom to do what's best for Sarah in this moment. And for this to be a healthy longevity, you know level of a marriage there is there's a lot of broken broken broken pieces and without a professional I really believe uh to be in the mix of this and and for him to show deep remorse and a pattern of change until you have trust I'm separating everything today Sarah financially you need to protect yourself um you need to your income now goes into a different account with his name nowhere near it I would contact a lawyer um just on the basis of lying about a prenup I would just get some more information to protect yourself and your kids because I have I have already done most of that and I'm in the midst of a post-op which he has agreed to where you go back and and have like basically a prenup in the middle of the marriage is that is that what that is changing the prenup to make it correct so where you guys currently are No, no, no.

30:53So I'm just reiterating that like his debt is his debt. And even if I decided to, let's say, help him get out of his debt, that I would not be, you know, I'm expecting to get reimbursed at some point.

31:08Rachel Cruze:It's not just my responsibility. I hear you. Yeah. Well, what we find so much often, Sarah, with these, I mean, that this, I mean, the level of financial infidelity that you've experienced is the level of an affair. I mean, you know, you can put anything in place, but you start to question yourself. I mean, there's so much in that when you are so deeply lied to from the person that you're supposed to be in a marriage with. So I would do what I would have my own therapist. I would have him go to therapy if you're going to make this work. But I would also protect yourself until a pattern is proven that he's proven back his trust with finances.

31:42Rachel Cruze:But for now, I would keep it separate and you have your stuff.

31:55Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if You hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. And you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

32:26Me too. They don't know what to do next. Me too. I mean, you're going to have a crisis here. And, you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. Take care of your dadgum family, man. Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually have the opportunity to just be sad, to just miss you. That's exactly what it's supposed to be.

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33:36You are listening to The Ramsey Show. And hey, thank you for listening to this show. This show is bringing hope to so many people, changing millions of lives. I'm one of those lives. And so I just have a special appreciation. And by the way, if you want to show your appreciation, something that you can do that's so easy, it'll cost you nothing. Just share the show, whether that's you sharing it through text, whether it's you liking and subscribing. Because when you do that, it does share it through the algorithms. It makes it more readily available. And so when you do that, it just gives more people access to the life change that we know is within this content that we share day in and day out.

34:18So thank you for listening. Thank you for liking. Thank you for subscribing. And thank you. Thank you for sharing this show. We really, really appreciate it. It helps us oh so much. So keep doing that. And in the meantime, we're going to go to the phones. We got Brenda. She's in Jackson, Mississippi. What's going on, Brenda? hello um hi jayden rachel thank you for um taking my call you bet um me and my husband are having a little bit of a disagreement about a job that's coming up um me and my husband are in baby step three um so saving up for that three to six month emergency fund um my uh my husband and i just run a little side gig of um handyman service we have not been formally trained or anything but we work on our own house and um so do it for friends and family that need help um the job that's coming up this weekend is for a missionary friend of ours um the wife doesn't work and the husband works two small part-time jobs and um they had a leak in their bathroom and they knew about it but didn't deal with it for a couple of years so now the damage is pretty extensive um so uh my husband wants to charge them about uh ten dollars an hour for us to do the work they will cover the materials um in addition and then but i want to charge our standard service which is about fifty dollars an hour oh okay um he says that they're poor um and And so we shouldn't charge them.

35:59And they have told us that they don't really have the money to do it, but it's getting to the point where their shower is about to fall through the floor. Did they come to you because they figured you would give them a discount? Like, have they given any indication that it's like, oh, they'll probably give us a discount? Not necessarily, but they know that we're going to be cheaper than a regular contractor. it's going to come out and do it.

36:28Rachel Cruze:I mean, Brenda, how long would the project take? Two to four days, depending on how extensive it is once we get into it. If it's worse than we think it is. And if you did it, that would be the only thing you could work on for the two to four days? Yes, but it's time that my husband has off anyway. So it's not like we're taking off additional work. Yeah. I mean, if you feel like you're being taken advantage of, that's one thing for sure. That doesn't feel good ever to anyone. But we also, when we talk about giving, you know, there's giving and money, there's giving and time, there's giving and talents.

37:05Rachel Cruze:And maybe it's a thing your husband's like, yeah, I just feel called to help this family. And they're in a really rough situation. They don't have the money to fix something like their water. Like, I mean, it's kind of a need, it's a necessity. And I mean, if he wants to do it, and again, I think it's a one-off. If it becomes a pattern where he constantly is using his time and keeps losing money, continually, maybe like a red flag, but for two days, if it's something that he wants to do, I mean, I get you guys are on baby step three. I understand it. And again, if you're being taken advantage of, like that feels gross, right?

37:38Rachel Cruze:Like there's a, there's a level there where you're like, Oh, I don't know if that feels right. And, but I feel like if he wants to do it out of just who he is and he can, and y 'all aren't paying y 'all, it's no out of pocket for y 'all. It's really just time at that point. I don't know. I could see it, but I'm more of like the emotional side person when it comes to that stuff. We're like, yeah, absolutely. We can do it. But I don't want it to be detrimental to you guys, but I don't think 20, I don't think two days is detrimental. I mean, I'll tell you what my husband and I do because I'm always the one that's like, let's give this much.

38:15And he's like, cool out. Like, let's pull back. Like, let me, let me look at the numbers. And so what we always do is we agree to pray about it. Like you go over there and pray about it. I'll go over here and pray about it. And then when we come together, it's like one, two, three, say it. And still I'm always the one that's trying to do the most. And he's come up a little bit, you know? And so then from there, we just kind of meet in the middle. So maybe it's, you know, you want to charge the whole$50 an hour. He was doing 10. Maybe it's like, Hey, maybe getting off this call, you're like, fine, I'll just do what he wants to do.

38:46But if you're not like, go pray about it, give yourselves 24 hours or whatever time you have, and then meet in the middle. Like you'll either come out on the same card or it's something that you have to meet in the middle. And maybe it's like, okay, we're not going to charge 50, but we're going to charge 25 and we're going to give them half rate, whatever it is. Yeah.

39:03Rachel Cruze:Or maybe it's a time thing too, that if you guys get into it and it's going to take an a day beyond that, that you guys may say, Hey, there's a point that we're not going to be able to continue this because of x y and z and letting them know that up front uh have you guys asked their budget at all we know they follow we know they've heard about the ramsey plan and they agree with it but we also know that they they don't have the money yeah but did they say that to you guys like we don't have money to fix this well not necessarily but they told us that they might put like we we said we would need money up front to pay for the materials and they said well if we don't get paid this week um like if our check isn't big enough we'll just put it on a credit card and that's when my husband was like no well you know we don't really have to so that much yep so again i think you know we didn't put them in this position they knew about this leak for years and they did nothing about it sure could have been a cheaper fix so yeah yeah you know so So yeah.

40:06Rachel Cruze:And again, I think if there are people in your lives that you continue to enable and continue to give and give and give and give and give, and they don't, I mean, like there's a, there's a level that you could start to be taken advantage of for sure. But if you haven't had history of that or history going forward, and he just feels this like tug on his heart of like, I just feel like, you know, I want to do this, not because I have to, or because I feel bad. Like, you know what I mean? Like there's bad, there's not great motivations always. Like it needs to be something that he's like, listen, I see this family.

40:37Rachel Cruze:I know I can do this. I'm going to give them two days. I'm going to give them a significant discount. They need the help. And I feel called to do that. Like that may be what he wants to do. You know what I mean? But I do think, yes, I hear you, Brenda, that it doesn't feel right. There's not a level of justice there. She's not working. She could go and get a job and bring in money. Like I hear all of that. Totally. What's the real numbers here? Cause you gave us by hour, like what, how, how much money is this equating to? So if it was my fee, it would be, um, a thousand to$1 ,500, not including materials.

41:11And we don't upcharge on materials at all. Um, and if it was my husband's, it would just be$200 flat. And who covers the materials they do? They still cover the materials. Yes. So it's about $300 in materials and then an additional$200 for labor. So$500 total. Okay. So we're talking about the difference between like$200 or$1 ,800? Uh, no, uh,$1 ,500 or$500. Okay. So it's a thousand. The materials is 300 and it'd be the same either way. so it's a thousand dollar difference um you know i i wouldn't tell you what to do i mean i can sit here and be like listen if you guys have the money do it but at the same time you and your husband have to be on the same page and that's something that rachel and i can't do for you so listen take my advice go home and give yourself a quick little bit of time and be like we're going to pray about it we're going to take you get 24 hours i get 24 hours we're going to reconvene and no matter where we hit, we're going to meet in the middle.

42:19And then there is some bit of give and some bit of take, because I would be feeling some type of way if I was like, this is my, this is my vacation time. Like we were supposed to go away with the family and do something fun. Cause then it's not only the time, but it's the value of the time too. So there are.

42:36Rachel Cruze:Yeah. If he's having to take PTO and all, yes, I think that there's yes, wise ways to go about it. But if you're self-employed, he's doing his own thing and he has two days that he wants to go help i don't know i think service is a great way to give yes and it hurts sometimes more than money time is so valuable it's so valuable oh yeah oh that's a conundrum but you know i always like to live to lean a little bit on the side of generosity i mean you have to do what you can afford and what makes sense for your family um but yes generosity is very very important that does it for this hour of the Ramsey show.

43:11Thanks for hanging out with us. Check us out next hour.

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44:42Rachel Cruze:Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend and best-selling author, Jade Warshaw, and we are here to answer your questions. So give us a call at 888-825-5225. We'll be answering your questions about life, about money, relationships, career, We are anything or everything. We are here for you, America. All right. Up next, we have Josh in Sacramento, California. Hey, Josh. Welcome to the show. Hi. Thanks for having me. I'm taking for my calls.

45:19Absolutely. Kind of straight to the point. Straight to the point. I live in the People's Republic of California. I'm trying to leave this state. What I have a problem with is it's kind of financial and life career as well. So right now, I'm a federal government employee. I am seven years out from retirement or when I'm eligible. uh my wife is a nurse she makes really good money in california and they make around anywhere for 90 an hour uh my my goal is to one soulmate house transfer to a different position and to a different state uh within the same agency uh just because i have a very toxic work environment going on right now and i just i need to get out um but the problem is if my wife leaves the state of california she'd go from 90 an hour to 30 an hour which is a huge financial huge financial cut um she'd also probably lose her 401k as well as that um we did talk about doing foster to adopt uh in the event that we did move but my question to you i guess is am i just being cutting my nose off the spot in my face and just i just deal with it knowing the fact that i have seven years left to retirement my house will be paid off in four years you sound like you're at the end of your like rope you sound really frustrated are you i am i'm very frustrated yes i'm very frustrated i've i've won a transfer i've wanted to transfer and get out of the state for 17 years of my career does your wife want to leave

46:37Rachel Cruze:as well besides the money i know she'll take a pay cut but just in general her family's here but she realizes how frustrated i am and like i said my my boss is just terribly horrible right now and it's been going on for a long time oh yeah yes it has so my question to you is my being emotionally stupid by wanting to leave just so i can quote unquote have a more happy life to trade one stress for another for financial stress well is it is it california like okay so if you you work for the state it's okay it's california the state sucks the high taxes just getting out everything all right okay you are yeah you you're at your wits you're done you're done um okay so if you were to leave what would you do and where would you go uh i'd basically stay with the same federal agency um i would go from what i'm doing now to basically to just a different function of job function but just for the same pay is there a different i would get it a little bit i'm glad it would be a lower cost of living which would be 13 grand a year where but i'd imagine that so it'd be from california possibly to georgia but i'm wondering if based on the tax rate out of cash well that's where that's where the position is at for my agency have you ever been to georgia okay have you ever been yes i have okay what's your wife think about georgia sections of it she hates yeah okay because here's the thing josh i mean i can hear you're frustrated and i i mean i could only imagine i mean i understand it is from from like just the state perspective that you're frustrated with and then on top of that you have a terrible job you go and work somewhere for 40 50 hours a week yeah in a miserable place so yeah you're you're not in a good this isn't like a good headspace for josh so my question is um you're not the only one in this equation, right?

48:29Rachel Cruze:So your wife is going to have as much of an input in this decision too, because I think that there has to be this, you know, I don't know, but if she is not on board, resentment later on in life, you know, moving away from family, going to a place she hates, she's going to end up being you in four years, possibly. I don't know, but that's a warning sign. It's just like, you guys need to be so tight knit. on this decision because it's a big deal to move across the country. So you guys need to lock arms and like be like we are in this together. The good, the bad, the ugly, we are in this together.

49:07Rachel Cruze:Because I don't want your marriage to be destroyed in the process either. And I want to be able to give her a voice too. And her frustrations may not be as deep as yours. And I don't want her. And honestly, Josh, the motivation for her, I'm like, there's a part of me that I'm like, I would hate for her to do it just to make you happy because Josh is frustrated. So we got to go do what Josh wants to do. right so like there needs to be a level of agreement upon you guys um and i thought plan b too which i know you hate california but is there a different position you could take where you guys live a different job a different opportunity at least to get out of the toxic ness of that job and then just have the frustrations with the taxes in california i don't know but if you and your wife agree to move to georgia then make the move you're not no leaving a job seven years away from retirement is not stupid because the work is you're you're in a terrible situation so no that is not stupid to leave that no i listen i i am of the mind that if one spouse is completely unhappy then the neither nobody's happy that's true so i do think that probably a move is good but if she has come out and said i don't really like georgia then georgia's got to be off the table uh you've got to pick a place where both of you are like yeah i feel yeah i I'm up for that adventure.

50:24And I mean, there's 50, I don't want to say 50 states. What is it now? 49. No, it's 50. But don't the other territories count? Okay. So there's 50 states and then some territories, depending on what history book you look in. Okay. And so there's a lot of options here is what I'm saying. Going back to the conversation about the 401k quickly, what made you say that she'd lose her 401k? So, so, well, I wouldn't say she would lose her 401k. What she did is she would stop contributing to a 401k. So she'd be able to take it out. Yeah. Yeah, you just transfer it. You just transfer it. Right. Okay. I just want to be clear about that.

50:58I guess the issue with me is, you know, I've only got seven years left. My mortgage will be done in four years on my house. My wife is going from$90 an hour to basically$30 if she decides to work. If not, then it's like it's a huge pay a lot. Let me ask you this. Is there any world where you're willing to ride this out longer? because you're the person who brought up in just seven years I'll retire and in just four years I'll have my car paid off so or yeah I'm sorry my house paid off so do you really care about those things or do you know what I'm saying like are those things that you're weighing in or are you beyond that so here's the problem emotionally and mentally I'm just I am checked out the problem is is I don't want to live life on the emotional aspect I know logically financially it makes more sense to stay However, I don't know if I can emotionally and mentally handle it for 10 years.

51:51Rachel Cruze:Yeah, mentally and emotionally is going to be, because you could be debt-free and still be miserable in your job. And you're not saying this is after six months. You've said for years. Seven years. For years you've been upset. Yeah, I thought about most of my career, probably about 10, the last 10 years of my career has gotten like that. So it's safe to say that you have sacrificed a certain level. Why have you stayed in it, Josh? I'm curious. What was that? Why have you stayed in it for 10 years? The pension and early retirement. Okay. So this is a good lesson for America that money does not equate to happiness.

52:26Rachel Cruze:There is a level of your life that as adults, we have to decide to bring a level of peace and just, and to work a crappy, I would say a different word, but we're on a family friendly show. Crappy, crappy situation just to make a paycheck. You guys, it's not worth it. It's not worth it. Like life is too short. Life is too short, Josh. Josh, so you and your wife, I would sit down. You guys, yeah, pick a place on the map and say, we're going to transfer. And we may even be in different careers, but we're going to find the level of peace and enjoyment. And we may make less, but people that make less and live within their means and work somewhere, they're happy.

53:00Rachel Cruze:So, yeah, you got to, yeah, Josh, y 'all got to make some changes for sure. And you should have made them eight years ago, if I'm being honest, not to shame you. But we need to make some decisions here, Josh. We're rooting for you. Come to Nashville. This is The Ramsey Show.

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54:41Rachel Cruze:Lane, Suite 100, Brentwood, Tennessee, 37027.

55:08Rachel Cruze:Today's question of the day is brought to you by Why Refi? Private student loans are different than federal student loans like Sally Mae, but they can hurt just the same. YReFi refinances defaulted private student loans and builds a custom loan based on your ability to pay. So stop feeling the pain of defaulted private student loan debt and go to YReFi.com slash Ramsey. That's the letter Y, ReFi, R-E-F-Y.com slash Ramsey. May not be available in all states. All right. Today's question comes from Justin in California. He says, I've been working hard to save money for a house. My wife and I have no debt and have a six month emergency fund.

55:50So far, I've saved$175 ,000 for our down payment. We have a combined income of$140 ,000. We live in California and are looking at houses in the$650 ,000 range. I want to save more so that we can put more down on the house. My wife has been asking me to buy her a diamond ring that costs about$3 ,500. I am holding off on buying the ring because we can use that money to pay for closing costs. Should I buy a diamond ring for her or wait until we buy the house? This is wild. I'm assuming that the diamond ring is not like a wedding ring or like, I'm assuming it's just a gift that she wants. Right, right.

56:35Yeah, I think based on what you've laid out here, I would have loved to hear her side of it. But based off of what you've laid out here, it sounds like you have decided that the priority is the house. And at the end of the day, you both need to sit down and re-talk and say, okay, what's more important, us trying to get into this house? Because if I buy this ring, this is how much it sets us back.

56:57Rachel Cruze:So yeah, and I would want to know the time frame on how much, like how, how many months or how, you know what I mean? Like just to know, like how, what is this setting you back? And is that, are you, are you okay with that? Both of you? Yeah. And I do think it's okay. And Rachel, you can drop in here. I think it's okay. Like as a couple, when you set a focus and you're going towards that thing and as the time passes, other things crop up and you're like, oh, that could be cool or that could be fun. Yes. And I do think it's important to have those conversations and decide, are we realigning back on what the goal was or are we going to divert here for a moment because at the end of the day it is your life and you get to decide you know how how urgently are we moving that's right and I don't know if this diamond ring was something you've been promising her maybe you guys got engaged and you never got her a ring I don't know any of that but have the conversation but it sounds like the house is what's most important and I would say you know the down payment you guys are you know above that 25 percent yeah so I'm like you're in a good a good spot for the down payments um you know like it's a I don't know you you have a lot there percentage wise for what the house is worth um so how much would three thousand really set you back but also I'd want to know from her like you know what's this about and I do you know don't get me wrong I love jewelry I love shopping all of it but also you're like okay what what is that gonna get me in the in the near term right maybe yeah maybe maybe he got her just like a band when they got married and always promised her like an actual like diamond ring I don't know that's valid if there's something there um but I would want to see time frame how long this would set you back to the goal that you want to have for your down payment on the house that's what I'd be curious about hope that helps Justin all right up next we have Haley in Omaha hey Haley welcome to the show hi thank you for having me today it's such an honor to be on the show absolutely thanks for calling how can we help up.

58:55So my parents took out a universal life policy on me when I was born, me and my sister both. And now that I've turned 21, I have the option to continue paying those payments for the universal life policy or cashing it out at the cash value and giving that back to my parents and just moving on for the future. Oh, you have to give it back to them when you cash it out? Yes.

59:22Rachel Cruze:Is that what they said? Yeah. Okay. How much will it be? It's just$750 for the cash value. Okay. I'm just curious because you said you have the option to keep paying on it or cash it out. Yes. So that's interesting to me that you would keep paying on it and then, but if you were to cash it out, you have to give the money back to them. This is very odd. Either way, I would cash it out and get out of that. Yeah. How old are you, Haley? Did you say? I'm 21. 21. Okay. So the difference between what they have, a universal life policy is similar to, it's like basically a whole life policy. And you're paying probably four times the amount than what you would pay for just a standard term policy.

1:00:10Rachel Cruze:Because what you have, this universal life, what they basically pair is this like investment savings account with life insurance. And what ends up happening when you pair and marry those two products, you kind of get crappy on both. especially the savings side. So the rate of return usually within these policies is like, it's terrible. You could do better in a high yield savings account, much less like actually investing your money with the 10, 12 % return that the market brings. So the savings investment portion sucks on these and that's the selling point. So always remember this, Haley, going forward into adulthood that you wanna keep your insurance and your investing completely separate.

1:00:52Rachel Cruze:Never combine them. Because when you combine them, you're not getting the best of both worlds. You're paying more for a policy and you're getting a crappy investment with it. So like it's a horrible product. And a lot of parents, yeah, you took it out when you were born. I mean, that's the Gerber life insurance. I mean, like all these companies go and they do this, you know, these policies for babies. And why you need life insurance too, Haley, is if someone is dependent upon your income. So if I were you, Haley, I would cancel it. Say goodbye to the$700. dollars give it back to your parents okay and live your life don't don't be paying monthly on this and then when you need life insurance aka when usually when you become a parent or even if you get married um you know and someone is dependent upon your income to live the lifestyle that you guys are living then I want you to go mention that I could have this policy if I were to like pass away and then someone were to have to pay for my funeral cost so that's why this policy is around like$25 ,000.

1:01:52Sure. Okay. Well, I think you would recommend having savings for or a policy for the purpose of insurance is for people who are dependent on your income. Typically when you have life insurances in place, it's because like, for instance, I have life insurance in place because my family depends on my income. My husband has life insurance in place because we depend on his income. We have children. And so if one of us, God forbid, if something were to happen, the family will feel that. And so we say, let's have this policy in place so that if the worst happens, everybody who depends on this income will be set, not just enough to pay for funeral and burial costs, but they won't have to worry about money.

1:02:30That's the blessing that can come out of a really tough situation. So in this case, your parents having a policy on you was completely, truly unnecessary. Yeah.

1:02:40Rachel Cruze:And the funeral costs, you know, idea funerals, they are getting more expensive, but at 21 years old, I would not have the burden of feeling like I need to have savings for my funeral. Right. So like that, I would not add that into the conversation. Some people may be like, that's irresponsible, but as a 21 year old, your parents will take care of it. If something were to happen to you, Haley. Um, so yeah, I would not be paying monthly into something just for that. Uh, and that is a selling point they say too, right? Like that's right to cover the funeral and all of that. So, um, so again, Haley, when you, uh, get in a position in life though, that you need life insurance, remember term life is going to be your best friend.

1:03:14Rachel Cruze:And the earlier you get it, the younger you are, the healthier you are. It is like, it is so inexpensive. Even for me, I'm in my late thirties and it's still inexpensive at this point. I mean, like it is, it is a fraction of what you pay with whole life. So. And the coverage you get for that is, yeah. I mean, it's so much better. Yes. And for term life, it is for a term of your life, right? Whole life is for your entire life. Term is for, you know, a 20 year, 30 year, whatever policy you buy. But as you're doing the Ramsey baby steps and you're walking through getting out of debt, you have an emergency fund in place.

1:03:50Rachel Cruze:You're funding retirement. Eventually your house is paid off. You know, baby steps millionaires are doing all of this on average in about nine to 12 years doing everything. And at that point, you're self-insured when you, when you, if something were to happen to you and there's no house payment, there's no debt and you have, I don't know, 300 grand and a 401k or whatever it is. Like, you know, everyone's fine. So you won't need life insurance for your entire life if you're doing the Ramsey way when it comes to your money, which is what we recommend. I feel like. It's a great call, Haley. Great question.

1:04:21Whole life, universal life. It's like the spork.

1:04:23Rachel Cruze:It's a spork. It is. It's not really a fork. It's not really a spoon. Yeah, and if you go to Xander. It sucks. Xanderinsurance.com, you guys. Check out Xander because you're able to get a quote so quickly with them just to even see and compare. Maybe the insurance that you all have that are listening or watching, and maybe you can get a better deal because they go and shop many companies, and it's a great, great company. So check out Xander.

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1:06:34Rachel Cruze:welcome back to the ramsey show we have katie on the line from dallas from the last segment and katie was telling us she has 47 000 saved 24 000 in debt which was car and credit cards and she was wondering initially when she called in about how to invest and how to pay off debt not just let that money sit there because she wants to make progress. And as we kind of were digging into the numbers in her situation, kind of unpacking the relational side of money and marriage and money is so closely related. When you are married, working together with your spouse and being on the same team is a crucial part.

1:07:13Rachel Cruze:But also we know on the other end, it's one of the leading causes of fights and tension and divorce and conflict. And when you're not on the same page and when you live kind of separate lives financially, And as we were unpacking with Katie a little bit, that's what we've kind of started to discover is where they are from a relational standpoint when it comes to their money. Katie, is that a good overview? Would you change any of that or add anything? Oh, gosh, that was unexpected. Yes, you've definitely unpacked it. We unpacked it. Yeah. So before we were getting off the call, we just kind of asked.

1:07:44Rachel Cruze:And I feel like you it kind of struck some emotion in you of knowing that you guys don't work together. But yet he has a lot of debt. And you said it was just too much debt for you to even want to handle or to face. Is that right? Yeah. My parents, they they they got divorced because of money. So that's a big fear. Kind of the background. My husband, he has let a few credit cards go to collections recently as soon as my daughter was born. He's been underwater for what feels like a long time, probably two years already. And if I mention this, you're going to say sell it. Well, tell us. The truck.

1:08:33It's the truck. he has$11 ,000 left on it, but it's these monthly payments of$600 that he wants to be free from.

1:08:43Rachel Cruze:Okay. What other debt does he have? What's the credit cards and collections? What are those amount to? Do you know? I want to say roughly it's$7 ,000. Okay. Anything else?

1:09:02Now you've opened my eyes. No, not that I know of. Maybe I need to have a discussion with him. I think so, because don't get me wrong. I hate debt and I don't like any amount or form of debt. But I was, again, expecting for you to say, like, he's got$200 ,000. I was expecting something way more astronomical. And when you told us, hey, yeah, he's got$18 ,000 of debt, I kind of just was like, oh, OK, cool. Like, we can pay that off. And he's working, right? Yes, he is. OK, let me dig deeper. It just came in. So we have this watercraft boat. It is under both of our names, but he takes financial responsibility for it, and the balance is$11 ,000.

1:09:46Okay, so there's another$11 ,000. Okay, what else?

1:09:50Rachel Cruze:Anything else? Aside from his truck, the car, and the few credit cards, there is nothing else. So a truck and a car? uh sorry the the truck and the boat okay truck and the boat so we're 28 000 how much how much is the boat worth do you know no idea okay okay we haven't looked into it it's very precious okay and does he have any money saved in his name

1:10:22Rachel Cruze:um no no okay so um okay so Katie I think what this starts to open up and what you're feeling and correct me if I'm wrong but it is touching every security insecurity part of your story and in your life like you've done everything you can to stock money away even taking out credit cards and spending over here, but just knowing the safety of money has been a lifeline for you and probably coming out of a lot of pain from your parents' experience. And you've done everything to safeguard yourself, right? Against, I would say against debt, but what's funny is you've taken on some debt, right? So there is still a level of risk there, but you've padded yourself with the savings and it's kind of become your lifeline and you're gripping onto that and letting go of that is one of the scariest things for you to do.

1:11:12Rachel Cruze:Would that be correct? yes yeah which is very understandable katie very understandable and so i want you to as much as you can because with money emotions drive so much of this and the more logical we can get the safer i think you're going to feel with some of these decisions and one of the first steps um i would do is sit down with him because i don't know his i'm not on the phone with him and i can't ask him these questions. I don't know where he's at. If he is at a place, Katie, that he's like, I'm so overwhelmed. I'm so mad at myself, right? He's probably not feeling great about himself. And it's like, I want to change.

1:11:50Rachel Cruze:I want to turn this around. That's, that's one scenario. A scenario I would have a red flag and cause you to pump the brakes a little bit on all of this. If he's like, I don't care. I don't care, Katie. I'm going to do what I want. And we get those calls too, with some guys that are like, well, he wants to buy the truck. He doesn't care. He's going to buy it and we're, you know, we can't make the payment, but he doesn't care. Right. So like that is a character issue. If it's that, would you say it's kind of the first scenario or the second? I'm pretty sure he will call the show tomorrow. Yeah.

1:12:21Rachel Cruze:But so he's more of on the first and on that first, you know, scenario, you would say. He's all for it. Okay. Okay. So Katie, okay. I, I just, I want to encourage you that you're, this is all good right like I know you feel overwhelmed and we're gonna walk you through a very clear plan right now um so the first thing I want you to do is you guys together tonight you can open a bottle of wine if you need like just a good sip of something order a pizza whatever you gotta do to relax and say okay together we're gonna look at everything we're getting out our um pay sub stubs we're gonna know exactly because when I asked you how much money you guys make a year.

1:13:00Rachel Cruze:You said, I think around six, like I want you to know to the dollar, here's what we make combined. Here's every debt. We're going to write it out and we're going to know everything here. And we're going to tonight shake hands and say, we are now a team together. No longer are we roommates Venmo-ing each other for the mortgage. No, screw all of that. No, we are one. Our income, when our income hits our new checking account that we're going to open on Monday morning, when our income hits that account together, we are working as a team. Because when you do that, Katie, not only from an emotional perspective, does it create so much unity and so much of a more beautiful marriage because you see yourselves as one, which is what you do when you choose to get married to live life with another person.

1:13:43Rachel Cruze:You're living that out on a tactical sense with your money. So that's such a beautiful part of it. And then together tactically, as you start to trust each other in this, you're gonna have this cleaned up, Katie. I would sell the boat immediately but then by Monday you guys can take this 47 ,000 and this is going to scare you, but I would pay off all, I would keep a thousand and, and, and you would have, you have, I think 42 ,000. If you, if you don't count the boat, cause I want that sold. Right. You're going to pay off everything else. Okay. And so you're going to have$5 ,000 left and you guys together are going to have a goal.

1:14:16Rachel Cruze:I would say to save up, uh, probably, I don't know, 26, 27 ,000 for an emergency fund. and that's your next goal together, Katie, is to work to buff up that emergency fund, okay? And that's gonna take you guys, maybe the next eight, nine months, 10 months to do all of that for that emergency fund. But together, that's gonna be your goal for 2025, together doing this, getting rid of the payments. We're done with payments and now you're gonna have your full income to be putting towards this emergency fund.

1:14:51Rachel Cruze:What'd you say? 5 ,000 left. Yeah. I would have 5 ,000 left. So I'm paying off my two credit cards. Yes. I'm paying off my car. Yes. Selling the boat. And you suggested paying off the truck. Yes. Oh gosh. That's scary. Is it scary because of what's going to be left? the$5 ,000 or it's scary that you're paying off his debt. That's great. You know what might make it less scary if I were you? I'd calculate up all the monthly payments. I'd calculate what you're paying in car payments, what you're paying in credit card payments, what he's paying in credit card payments, what he's paying in boat payments and what you're paying in truck payments.

1:15:39Add up all that money and when you see that, that you're going to have that back every single month, I I think that's going to make you feel less scared because that's a lot.

1:15:47Rachel Cruze:That's a hefty chunk. You have a lot of your income, Katie, leaving and a lot of it's going to be coming back to you. And you'll be able to build this emergency fund up back very, very quickly. And then beyond that, you can start investing. Hold on. Stay on the line, Katie. And Emily's going to pick up and we're going to put you guys through Financial Peace University. It's our nine lesson course and give you every dollar premium. So when you guys start looking at numbers today, you can start building out your first budgets. Thanks for the call, Katie. We're cheering you guys on.

1:16:44Rachel Cruze:I'll see you in the right. Imagine you look up a year from now and everything that you wanted to accomplish, you accomplish. Because when you want to do something, it doesn't just happen by chance. You have to be motivated. You have to have a plan to really get there and be organized. That's why we are so excited about the new 2025 Ramsey Goal Planner. It is here. And myself and Jade Warshaw and our friend, Dr. John Deloney, we have content in there for you. We're going to walk you through different months talking about your money, talking about your spiritual life, your relationships and within it it features so much you guys it has a month and weekly calendar stickers a vision board goal setting system and all of it so this can be yours today for$49.97 and don't wait because it has been selling so fast yeah and these sell out because we only order a certain quantity because once 2025 hits people yeah they're not buying planners so we have a limited availability so make sure to get it and it's been fantastic so go to ramsey solutions.com slash store or click the link in the description if you're watching on youtube or listening on podcast up next we have vanessa in seattle hey vanessa welcome to the show hey thank you for taking my call absolutely okay so i'm just going to dive right in so i'm a 54 year old woman i live in the Seattle area.

1:18:09I am not working right now. I'm at the tail end of a bankruptcy. I was married and I got, I, there was just too much debt. I couldn't, there was no way that I could get out of that. So I did file bankruptcy. It just discharged. And so there's that having, you know, just starting over with credit. I, I am not going to have a place to live as of December, the end of December, the owners of the home that I've been living in have decided to sell. It's been an absolute shock because my ex-husband completely remodeled the inside and I thought for sure, you know, I'd have some time here. Oh, wow. Gosh, you've had a lot, Vanessa.

1:18:51I have a lot going on in my, yes. Yes, I'm so sorry.

1:18:55Rachel Cruze:Divorce and the bankruptcy and a living situation that's up in the air. And you said your ex-husband remodeled the inside of the rental house he did of a rental yeah when y 'all were living there together we were for four months and then he moved out it was an abusive uh marriage so it took me a long time to get out of that but i did i'm so proud of you yeah yeah i appreciate that so i was making uh anywhere between 15 and 18 000 with an ebay business while i was married he was the primary um you know he had the job he was bringing in very good money but we were renting in the previous house we were at for nine years so um this is my third marriage I just want to say that if if I knew that I was going to be here I would already have a house but it just didn't work out that way so okay so what are you doing right now Vanessa for um how are you paying your rent right now how are you paying for expenses well I was living off my savings and then I lost on top of everything I lost my daughter it was very sudden um she she died she was 26 I'm sorry I know there's so much going on so that just killed me I mean it's so hard so horrible you know and there's nothing like losing a child.

1:20:23It's horrible. I can't even imagine. So it's been hard, you know, to work, um, to concentrate on eBay, to do anything really. I mean, it just completely, it was debilitated and just from everything. So did you get anything out of the, out of the divorce? I did. And I've been living on that for the last three years. Um, uh, let's see. So I was receiving maintenance and then I had about$50 ,000 saved. What's that down to now? It's down to zero. However, there is some good news. I just inherited$30 ,000. Okay. So I need to know what to do with my$30 ,000. I don't have any debt other than the car payment.

1:21:08I have a car payment that's$300 a month. And how much do you owe on the car? What's the total amount you owe on the car? I owe about$18 ,000 on that. Okay. Okay. So 18 to 20. It's, it might be about 20 with the payoff. Fine. Okay. Um, so, but if I take that, yeah, let us, let us give you some help here.

1:21:25Rachel Cruze:And real quick, will you just give me a quick timeline? These are big, these are big things that have happened. Will you, will you just kind of walk me through really quickly, really quickly when the divorce happened, the loss of your daughter and the bankruptcy? When, when, when did all this play out? Okay. So the bankruptcy was, um it just discharged so that was 90 days it's been about four months total with that okay um losing my daughter happened um it was last January so it's been it's been a year and a half okay okay and my divorce um we separated after we moved into this home which was November of 2021 so he moved out in April of 2022 okay so since then I have been living off of what I have what I got what I received on that.

1:22:11Rachel Cruze:That's good. I just want to know, because I mean, these are like three very traumatic things that have occurred. So I just didn't know how timeline wise, because I think for you, Vanessa, this, I mean, you're, you're the biggest glaring light that I see is, is the income side of not, because as you experience with the 50 ,000, if you continue to live on savings and you're not replacing that with other income, it eventually dwindles. And that's what you've experienced. And so making sure that this$30 ,000 does not dwindle and the only way to really do that is to be able to be bringing in some income, which I know is...

1:22:53Rachel Cruze:Sorry. No, you're good. Go ahead. Okay. So I've been working on my master's degree. I was busy with that in art history. Now, what I'm going to do with that, I have no idea. I mean, people ask me, what are you going to, um, art history. Yeah. Cause I love, I just love it. I love architecture, art. What did you plan to do with it when you got it? And yeah, that, and how are you paying for it? I don't know. Maybe, maybe teach. Um, I was, I was paying for my, uh, my education as I went. So I still have some, I have some loans. I think, I'm not sure exactly. yeah I have student I wasn't able to file you can't file on those no you can't okay so let's get that we gotta we gotta get organized and we gotta get a game plan going forward right now is not the time to keep taking those classes because you can't afford to pay for them and you still have some existing student loan debt it sounds like you've got the 18 ,000 for this car what I believe your homework should be and I think Rachel probably agree is first things first is you got to get a job.

1:23:56Rachel Cruze:Yeah. And a job. And this is, and you know, this is target Vanessa. I mean, this is making 18 an hour at Walmart. I mean, this is truly doing what you can because the decisions so far are not panning out in reality for you, right? An art history degree. Well, I'm going to go get a master's, but I don't know what I want to do with it. Right. So I want to make sure the ROI on your time is realistic. And, and so being able just to get something in, I think it'll be good for you, Vanessa, I think there's going to be a level of dignity and confidence of you going and earning your own money. Um, that's going to be huge.

1:24:29Rachel Cruze:So for the time being, I mean, it would be tomorrow I would be out and just retail, um, whatever you can just to be getting an income in and then eventually figuring out what does Vanessa want to do and what can Vanessa do to support herself and be able to, you know, advance throughout life. You know, you're, you're in your fifties and there's, you know, there's still a great, yeah, a great life to live. And I want you to be able to do that. But the steps would be number one, finding a job tomorrow, any job. And I would be, I would be working like crazy. I think my goal would be not to touch the 30 ,000.

1:25:01Rachel Cruze:That would be the goal. And I think selling the car is probably good. Selling the car is big. Because you don't need an$18 ,000 car, Vanessa. You need a$6 ,000 car. And then third, I'd say, you know that, you know that the time is coming where you won't be living in this house anymore. So let's start doing research on a place that we can live that's less expensive, possibly, right? A studio apartment may be just tiny. I mean, anything, again, it's going to be uncomfortable for a little bit, but I think making some of these wiser, more conservative decisions is going to give you some bandwidth and some margin.

1:25:32Rachel Cruze:You need it. Yes. The car might be a little bit tricky. And the reason is because I kept that through the bankruptcy and then just negotiated the interest rate. So if I let that go, then it's going to hit my credit, which I want squeaky clean from here forward. Possibly. Yeah, I probably could sell it. Yeah, that's what we're talking about. We're talking about you looking on Kelly Blue Book and seeing what it's worth and then you selling it and buying something cheaper in cash, not a payment. Yep, that's right. Okay, Vanessa, that's a lot. Why don't you hang on the line? Christian will pick up and we'll get you with a Ramsey coach to help you.

1:26:11Rachel Cruze:Well, if you're listening on radio, keep on listening. But if you're on YouTube or podcast, Make sure to go download the Ramsey show app to get the third hour there. Thanks to everyone in the booth. Thank you, Jade Warshaw. And we will see you soon, America.

1:27:07We'll be right back.

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1:27:34Rachel Cruze:Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Rachel Cruz hosting this hour with my friend and best-selling author Jade Warshaw And we are here again to help you out America You can give us a call at 888-825-5225 And we'll answer your questions about money, about life, relationships, career Give us a call Up first we have John in Houston Hey John, welcome to the show Hello, welcome, thanks for having me I guess Absolutely, yes, for sure, how can we help? Well, I filed for divorce from my wife about a month ago.

1:28:19Lots have transpired since. We're kind of trying to maybe make it work, going to marriage counseling. In the interim of all this, we kind of split our finances about two or three months ago due to her spending and daughter. That's a long story. So fast forward to this last week. I got a bonus from work, a$30 ,000 bonus. By the time it was put into bank, it was about$24 ,000. I currently owe$11 ,000 on a credit card. Most of that is for the divorce attorney. And then the other issue I have is I have, during COVID, we had two credit cards with Chase that we quit paying because we lost our jobs and obviously employed now.

1:29:04But there's a lawsuit pending against me, and those are about$26 ,000 each. So I don't know what to do with this bonus money. One, I don't know if I should tell the wife or not because we're not divorced, we're trying to work. That's part of it. But the other part is, do I keep the cash and try to settle with Chase? Do I pay off the current credit card that I have so I can get me back to debt-free, sort of-ish, other than my home? It's not real sure.

1:29:32Rachel Cruze:Sure, yeah, absolutely. Any other money saved? I have just a couple thousand dollars in the bank. Nothing major. Okay. Okay. By a couple, like six or like two? Like two. Okay. Yes, two. So the bonus is$3 ,000, yes? No, the bonus is$24 ,000. $24 ,000. My hearing is off today. Okay. So what do you think you can settle these chase cars for? Have you kind of floated it out there to them? I talked to the debt attorney that I filed the lawsuits. He said there may be a 25 ,000 or a 25 % reduction. Yeah. So he's thinking they could probably settle for about 20 ,000 each. Each. That'd be a total of 40.

1:30:16Okay. So. But they're two separate cases. So I don't, one's coming up the 1st of September and the other one I don't have a date on yet. Okay. So the one coming up the 1st of September, if you can settle it, I think there's part of this since it's already like gone to court. like it's already progressed to the point where you're going to have to pay something. I do think there's a smart part that would hold on to that money and not put it on the other$11 ,000 debt because you know this is coming and you know you're going to be on the hook for paying, whether it's the full sum or a reduced amount.

1:30:55Rachel Cruze:Well, I was going to say yes. So, and anything obviously you get in that lawsuit, have in writing. And I would tell them, hey, I have$24 ,000. Well, I guess there are separate lawsuits you were saying. Correct. Okay. Yep. So I think getting them down as much as possible, obviously would be the goal. And ideally not going into collections and all of that, that you kind of just take care of it. Absolutely. And if that's the case, then yeah, you have 4 ,000. When does the other lawsuit hit? This one, September. Do you know when the other one will be? I don't know. I don't know. I mean, they've already kind of hit.

1:31:27This is obviously in the caressives. So now it's like going to the trial thing and all this other stuff where I'm going to have to pay Chase. It's already been on my credit. All that stuff's already kind of happened. How long is this? Oh, sorry.

1:31:37Rachel Cruze:Was it all under your name or is your ex, or I guess she's not your ex, is your wife's name attached to this as well? No, they were all mine. They were cards that I had prior to our marriage. And we've always done good. And then we spent a bunch of money and then we tried to get out of debt. And then we were doing okay. And then COVID hit. We both literally lost our jobs in a week, and it was pay mortgage and feed our children or pay this credit card. Well, we chose a home and children. As you should. Yeah. How much are you making a year, John? I bring in my base salary is$104 ,000, and my bonuses are in the$60 ,000 to$80 ,000 range annually.

1:32:15Rachel Cruze:Okay. And with her, what does she make? It varies. We own a small business, a food truck business. So she brings in roughly, I would say,$60 ,000 a year. Okay. And considering you guys are somewhat separated, I don't know if it's through legal means or not, have you guys separated your finances? Yes, we did that about two or three months prior, and that was kind of her final straw for us. But her spending was really the issue for me. Okay. So these three accounts, are these the only debts that you're on the hook for? Is there a car? Is there anything else? Because there is a Cadillac that we purchased together.

1:32:59That's her car, not my car. So in the divorce, she would get the car. Okay. Kind of the thing. She would get the car paid. I have a truck. It's paid for. Other than if we were divorced today, the only debt I would have would be the two chase and the$11 ,000 credit card. Okay. But you're making, you know, on a good year,$180 plus a year. Yeah? Correct. So, I mean, when I look at these debts and knowing that one of them is going to be settled, you should have this knocked out like lickety split. What's this? What's your living situation? Currently living is she moved out Thursday. So literally just two years ago, she moved out.

1:33:38She's living with a friend and her two kids and I'm living in my house with my two kids.

1:33:43Rachel Cruze:And what was the second marriage then for both of you? Yeah. Yes. Okay. And are you able to cover the mortgage in a way that it's no more than 25 % of your take home without her income added to it? Mortgage is$3 ,000 a month. So that's not a problem. Okay. That's great. Yep. So, yeah. So to answer your question of why you called in for sure, I would take the one that had the lawsuit attached to it, go ahead and knock that out. And then like Jade's saying, I mean, I would cut back on everything until you get this mess cleaned up. And then I think you do have this kind of fresh start. But I also I'm cheering on for you guys, you know, that that possibly I heard a little bit of hope there at the beginning of the call.

1:34:22Rachel Cruze:Yeah. That you guys can. Yeah, I think you do do some work, do some counseling therapy. And I pray that it is reconciled. I think that's always the best hope for for this. We never want to see, you know, marriages torn apart. And he said part of it was because of her spending. But we do see money issues play into that. but always you guys remember that those money issues usually is an indicator of something else going on underneath and that's why having you know professionals on your side to really dig in to know why I mean they're we are complex people and the way we whether it's Medicaid or whatever it may be our habits come out sideways and when you can get to the root of that of who you are as a person that's really a beautiful thing so John we're cheering you guys on I really do hope that there's reconciliation.

1:35:12But just from the money standpoint on your side, I think

1:35:17Rachel Cruze:you can have a lot of this cleaned up really quickly. So I'm thankful you got back on your feet job-wise since COVID, because I know that was a pain point for a lot of people. Absolutely. No, I feel like today, Rachel, we saw a big theme of divorce, which is tough and it's so difficult, but I think it just drives home the point even more like, I've heard Dave say it, marriages need maintenance. Like you need that regular, the same way you bring your car in for a checkup, you go to the doctor for a physical every year. Like you need a regular rhythm of, let's go see a counselor. Like let's just make sure everything's good.

1:35:50And let's make sure, you know, premarital counseling, all those things that are checks and balances to make sure that you're operating at an optimal safe level in your marriage.

1:36:01Rachel Cruze:Yep. And we have Dr. John Deloney here on our team, you guys. So check out his content and books because it's kind of in this whole realm of life. This is The Ramsey Show.

1:36:36stressed out, from credit card schemes to mortgage myths to investing traps. So if you're not where you want to be financially, I can help you finally get ahead. You can get breaking free from broke today at RamseySolutions.com slash store. That's RamseySolutions.com slash store.

1:37:13Rachel Cruze:welcome back to the ramsey show up next we have kashim in portland oregon hi welcome to the show hi rachel thank you so much for taking the call yes absolutely how can we help appreciate it i've been watching dave ramsey for the longest time and i love the show and everything that Dave does and you as well. Thank you. My question is, we make good money, my brother and I. We run an assisted living, and we have paid off all our consumer debt, no call loans, no student loans. We have invested into real estate, and we have about six properties. But for some reason, you know, it still feels like we are paycheck to paycheck because everything that we make, we invested back into real estate.

1:38:12And then I was wondering, should we maybe stop investing and start paying off like we did with our consumer debt, the cars and student loans, pay off these properties? and then once all of those properties are paid off, then maybe start investing again with the cash that we would have.

1:38:33Rachel Cruze:Okay. How much are you guys making a year, income-wise, for you? Together we make probably about$400 ,000. Okay. So do you take$200 ,000 and he takes$200 ,000? Yes. Okay. And how much debt is on the six properties total? it's about uh two two point five million okay um and also um yeah sorry one more thing uh we have 401k and i know um also we've been investing in 401k for the past two years so we're thinking maybe we need to stop that we do the mac we max it out for the past two years for both of us what's your full-time job so we're running um that's his living it's our own business yes okay that's right you said that okay so just to clarify all of it together the income from the assisted living the income from the properties is the 400 000 right not just the properties correct okay so could you i mean i'm thinking you know to relieve some of the pressure because you said you feel like you're still living paycheck to paycheck uh and you know making 200 grand if you're yeah if you're making mortgage payments you have renters and all the six we do yeah the properties are all cash flowing um um but i mean uh whatever we make in in the business save it up and then we just go and buy another property yeah so i would i would yep so i would pause maybe even go a step or two backwards possibly just to give you some breathing room so instead of going and continuing to invest in these properties and taking leverage out on all of them, that's what's causing you to feel so tied down or right, like with no margin.

1:40:28Rachel Cruze:So I would take some of that income, throw it at some of these properties to pay it off faster, and I would cash flow it. So that may even mean, Kashim, to list out the six and say, hey, maybe we sell two. you know the the equity from the two could help pay for you know pay down some of the the other three and our cash flow because you know we don't mind having real estate I think it's a great opportunity but when you are leveraged in it and you continue to leveraging in it it's gonna eventually eat up your income right because it's not going to be perfect but having that paid for income when the income comes in from the rentals and it's all yours then suddenly you feel like oh we're making the money that I feel like we should be making, right?

1:41:12Rachel Cruze:I mean, you have$2.5 million worth of rental properties. You should feel like we're doing really good, but it's not working out that way. No, it seems like, you know, on the paper, we have a lot, but then, you know, kind of cash broke. Yep. So, yeah, exactly. Exactly. So I would free up. I would be okay with you keeping a couple of them, you know, knowing that, hey, we're going to snowball this and pay them off quickly? Because did you guys get them a few years ago or have you gotten them recently? A few years ago. We started back in like 2022. And then the last one we just purchased this year.

1:41:51Rachel Cruze:Yep. So I would stop purchasing. And again, I would sell a couple of them. But I would list them out and say, hey, here's what they're worth. Here's what we owe on them. What's smart to do this. And are you doing this all with your brother? Yes. Okay. Are both of your names on the notes? Yes. Okay. So would that be something that he's willing to do as well? Yes, actually he's sitting here and listening too. We started together, we're doing things together. Actually, he's the one that got on the phone and calling to the show actually. Okay. Okay. Well, we have a little bit of time, Kashima, I would be interested.

1:42:32Rachel Cruze:Do you have the numbers off the top of your head of what each property is worth and how much you owe on them? Yes, I can look it up here in the background. And also, regarding the 401k, should we keep investing into that 401k? Yes, I would. You said positive. Yeah, no, I would. Yeah, I would keep going. Because that's going to be consistent. Yep. did you say you wanted the yeah let's go through let's go through them one by one okay so first one is a condo we all 150. um and then another one is a house uh what's the one that's one before you go the one that's 150 what could you sell it for um probably like 250 260.

1:43:25okay perfect keep going and then another one is we owe 230. That one is about$410,$420 right now. Okay. And then we have a condo. We owe$450, and that one is about$600. Okay. Okay. And then we have another condo or a duplex. We owe$340, and that one is like$5. Okay. And then we have our primary houses, but not the windows, I guess. Okay. Okay, that was the two. Perfect. Now on the primary mortgages, you, you are the only person on your mortgage and he's the only person on his mortgage, right? All right. Okay. So, I mean, Rachel, I know what I'm thinking right off the bat.

1:44:11Rachel Cruze:Yeah. I mean, I'm, I'm probably, you know, and again, you can rearrange some of these. I would take the ones that are probably in better condition, less hassle, ones that are in better part of the city that you can rent out. That's more stable, but you could sell two of these, you know, rearrange some of the numbers cause you even, and have two paid for properties there. And I would, and I, I know you and your brother are doing this together, but my advice, you probably won't take it because she was, is to do it, you know, individually. I think when you have a partner in all of this and we both own it, it can get really messy, really fast, but that's just my two cents.

1:44:41Rachel Cruze:But well, there's part of that. Cause here's the thing. If you were in this deal alone, my first thing would be like, Hey, okay. For instance, property number three, it's a duplex. I don't know what side of town it's in, but I'm thinking, okay it's more work to rent it out it's two places um and you owe the most on it and the gain is pretty decent so I'm like okay I'd probably go for that one first just based on little knowledge here but I'd want to then take that money and pay off my personal residence before I reach over and do properties but since you're in this with your brother it doesn't necessarily work that way so that's kind of just one of the ways that it muddies the water a little bit on this.

1:45:20But that being said, you could still reach over, you could pay off the one property number two, probably if you made that sale, and then property number four, if you sold it, and you cleared out property number one, there's a lot of options. There's a lot of options.

1:45:31Rachel Cruze:Yeah. So yeah, I think you could make one or two moves here. And I think what that would do again is if you have two paid for properties, you're getting rental income, and then you and your wife say, hey, our next goal is to pay off our primary home, because how much do you owe on your primary? uh about 340 okay and uh it's worth about 7 30 740 we bought it back in 2017 okay that's great yeah so yeah you can go down the steps there or if you want to go real crazy which i don't think you'll probably will you could sell everything and put some of this towards towards your primary but but again i think you and your brother can need to sit down and just say hey what what are the you know the properties that we're confident in and i think you can keep you know maybe two of them sell to rearrange some of this.

1:46:16Rachel Cruze:And I think it's going to relieve it because you guys are kind of playing the game and because you guys are smart. So honestly, at the end of the day, once you have all this kind of cleaned up and you guys are making a better income, then take your time and save because some of these, you know, you bought for 150. There's still deals out there. I mean, you can still go and, you know, buy something crappy and fix it up, put some money into it and rent it. So that's still a possibility. But just doing it with cash is going to give you less stress, which is what we want for you. Thanks for the call.

1:47:01I was sick and tired of being sick and tired. Bankrupt with a toddler and a brand new baby at home. Scared doesn't even begin to cover it, but I got mad enough to change. I started using God's and grandma's ways of handling money. That journey became the total money makeover, a plan everyday people can use to take control of their money. Millions have changed their lives following the plan in this book and found hope. Start your makeover today at RamseySolutions.com slash store.

1:47:54Rachel Cruze:Welcome back to The Ramsey Show. We're going to the phones and we have Jake in Houston calling next. Hey, Jake, welcome to the show. Hi, how are you guys doing today? We're doing great. How can we help? So I have a chronic condition and I'm currently on baby step six, but I do not have any life insurance for my wife and family. And I'm having trouble getting life insurance. And so I'm wondering if I should be putting money aside since I don't have the life insurance option. Yeah. What's what's the condition? Can I ask? I'd really rather not say that the doctor said I have about 10 more years of working time before I'd be really really in a critical position I'm so sorry so sorry that's okay um either healed in this life or the next so yeah that's right well you've put yourself in a really good position with your family so kudos to you there and I know they're going to be very grateful The fact that you're in baby step six is amazing.

1:49:02So that tells me that you don't have debt. You guys have got a significant level of savings, which is nice. And I'm guessing you've been investing all this time. Can I ask, like, do you have a nest egg? We do. We have a$1.4 million nest egg. Okay. Wow, Jake. We make about$180 ,000 base pay and then about$150 ,000 bonus. Wow. So great income, but all of our money is in retirement accounts. And how old are you and your wife? I'm 39, and my wife is 42.

1:49:41Rachel Cruze:Okay. Do you guys have kids? I have one child, yes. Okay. What is, is she working or is she staying home? She stays at home. Okay. How much do you guys have left on the house to pay off? $340 ,000. 340, okay. And what's your timeline on paying off the house when you've talked with your wife? When do you think it'll be done? About three years if we put all of our excess income towards the house. Okay. And so it's about seven years where I've got to be totally ready for medical and retirement. You said you've got seven years until you feel like you need to be totally ready? Is that what you said?

1:50:23Ten years total. if it takes me three years to pay off the house now then seven years after that to save for

1:50:30Rachel Cruze:everything else okay will you be able to bring in i know you said well you'll have to stop work in probably two years um does that mean physically going to a location or will you still be bringing it and come at that point or probably not um stopping working 10 years i'm sorry oh i thought you said two. 10 years. Oh, okay. That's way. I'm happy to hear that. Okay. So the good news is, you know, you, the first problem was, Hey, I don't have life insurance, but the good news is you're going to be self-insurable. You, you've set you and your, your wife have set your family up in a really, really great way.

1:51:08Cause the thought here is in that I'm not even running any numbers. I just know that a lump sum is going to double every seven years. And the point that you already have 1.4 million and then there's this 10 year horizon and you know you're making over$300 ,000 a year and the house is going to pay off you're not going to have a payment in the world and so I think that your wife is going to be okay what I would do is I'd probably sit down with a smart vester pro because I want to make sure to your point that she's able to access the money she needs, even if it's before her being 59 and a half. All right.

1:51:44Rachel Cruze:Yeah, because I'm thinking if, you know, 10 years from now, she will be, yeah, 52. So there'll be about that seven year gap. But I do wonder, Jake, because you guys are making such great money, do you foresee yourself making around that 300, 330 ,000 a year for the next 10 years, if not going up? Or do you see it going down at all because of health issues? um it'll it'll continue to go up so luckily i am an engineer so i can work remotely or i have options so i mean yeah so if you think about jake if you guys pay off this home in three years which is what i would do you'd have seven years left of working of making that amount of money you guys can stash away so much just in a high yield savings account you know that she could um that you guys can live off of after you stop working for that time that seven-ish years um between retirement age.

1:52:37Rachel Cruze:And then once you guys hit that age, you'll be able to access. Yeah. I mean, like you said, it's going to be over three, four, it'll be$4 million by that point. Oh yeah. And a smart investor pro is going to help you figure out like that best bridge. Is it a high yield savings? Is it a brokerage account? Is it another vehicle that you're able to get to that money, but it can also still have some, some gain on it. Um, a decent amount of gain. Uh, Yeah. Hey, I hate that this situation is what it is, but you're a great dad and a great husband for setting this up with your family. Thank you. Truly.

1:53:13Rachel Cruze:Yeah. Jake, thank you for calling. If you stay on the line, Christian is going to pick up and maybe we can hook you up. Yeah. With a SmartVestor Pro and we'll help you show you like exactly where to look, get a couple of names so you can call them and kind of just see who you're comfortable with. Um, but I'm with Jade. I'm praying nothing. I pray for healing on the side of heaven for you and your family. And, um, I'm so sorry. And, you know, it's one of those things that when life, well, there are things we just, we can't control, you know, health is for sure. One of those. And on this show, we get, we get that call a lot of just, um, you know, things happen.

1:53:49And one of the

1:53:51Rachel Cruze:best ways it doesn't make it better. Um, but it does bring a level of peace in an area of life is when you have your money under control. And so that's... And when you've set your family up, that worst case scenario, I know everything's covered. And I mean, these are the reasons that we teach. You need a will. You need life insurance. You gotta pay off your debt. Because no one predicts these things. That's right. That's right. No. You know, no one predicts it. Yeah. Oh, Jake, we're praying for you and your family. Thanks. I'm so glad you called. I hope that helped. Up next, we have Ken in Wichita.

1:54:26Rachel Cruze:Hey, Ken, welcome to the show. Hey, Rachel. Appreciate all that you, your dad, and the Ramsey personalities do. You guys are a true blessing. Thank you. I had a question today, hoping you could pressure test something regarding my pension. So my wife and I are FPU grads, debt-free, including the house. I was laid off about three weeks ago. I'm 55. And since I'll be separating from the company, I can start taking the pension now. And if I do that and I plug those numbers into Excel, it seems to me like I'd be crazy to not start taking it at 55 versus waiting until 62, even though the numbers are higher, because my calculations show it'd be 19 years for it to catch up if I wait till 62 versus taking it now.

1:55:19and investing it at 8%, like I would assume Dave would say, it never catches up. So am I crazy to start taking it at 55 versus waiting until 62?

1:55:31Rachel Cruze:No, I don't think you're crazy. And especially if you do something with that money that helps, you know what I mean, to grow it, right? So even if you put it somewhere that you're going to be making more than if it sits in that pension, I think that's ideal. um so how are you um do you guys need it to live off of or you're just thinking because of the math might as well take it now because we'll be able to to get more out of it yeah totally a math situation obviously i've i've i've got to go find another job but we're uh in good shape on that i'm employable and and and we'll do that um but just talking to some peers that are in the same situation from this layoff um they were like hey why would you take it now but i'm just I'm an Excel guy.

1:56:16So I put it in there and then use the investment calculator at 8%. And I'm just

1:56:20Rachel Cruze:like, man, you're thinking you're going to turn around and, and reinvest that money. Is that what you're thinking? True. That's the plan. But even if you don't, um, just the raw numbers, the seven years, uh, in order to make up that seven years of withdrawals, it would take 19 years and put me at like 81 before it would catch up if I started taking it at 62. So I just want to make sure I wasn't missing something. I know the taxes might be a little bit different when I'm retired, that type of thing. But it just seems like take it now is mathematically the way to go. And I've always heard Dave say, you know, the pension, you know, it's not yours until it's yours.

1:57:05That's right. Yeah, that's the thing. Get it in the hopper type thing.

1:57:07Rachel Cruze:That's right, yeah. The good thing about it is it puts you back in control of what you do with it, even if you're going to go back and reinvest it. And the truth is, too, Ken, you've done such a great job. I mean, you guys are completely debt-free. Like, if you take it now or you take it six years, you're going to be okay. You know what I mean? Like, I don't think you're going to make this dire mistake. But anytime you can get money, even in a lump sum in some situations, putting it back in your control, you're usually better off than leaving it somewhere else. So I hope that helps. Thanks, Ken, for the call.

1:58:11We'll be right back.

1:58:12Rachel Cruze:Command them to do good, to be rich in good deeds, and to be generous and willing to share. Shonda Rhimes says, be a doer, not a dreamer. Good deal. I appreciate that. Put some stuff into action, people. Put some stuff into action. I know. That's right. All right. Going to the phones, we have Sarah in Fort Myers. Hey, Sarah. Welcome to the show. Hi, ladies. Thanks so much for taking my call. Absolutely. How can we help? Um, so I'm looking for a bit of direction. Um, the long story short is I just found the Ramsey show on the podcast a couple of months ago, uh, when I was pregnant, uh, with my first child.

1:58:54Yay. Yeah. Congratulations. Yeah. Thank you. Uh, he's two months old now and he's absolutely beautiful. Um, my question is, um, when I was six months pregnant, um, my husband was laid off from his job, which was extremely stressful. We had a lot of medical complications with my pregnancy and then with the delivery as well. And when he was laid off, we ended up having to pay an arm and a leg to extend our insurance policy through the former employer. So we unfortunately had to burn through what little savings we had to afford that. And now we're pretty much starting from scratch with a newborn and my husband is really wanting to try to pay off our credit cards and get our debt down and I'm trying to decide if we should try to put more money towards our emergency fund which we don't have now.

1:59:52I'm going back to work kind of part-time so I'm trying to decide if I need to go back full-time should we sell one of our cars I don't know. You've got a lot on your mind. You've got a lot on your mind. I mean, the good news is you did what we tell people to do when you were pregnant, you stacked up because you don't know what's going to happen. And so you went into stork mode and you needed what you saved up. And so no guilt on that. You don't need to be feeling bad. Sometimes people go through their emergency fund and they feel guilty that they used it. And I'm like, no, that's what it was there for.

2:00:24And so you did right. But now oh, that the storm is over and the baby is here. Now you can get back onto the baby steps. And yeah, it's getting that$1 ,000 back saved again. And to your husband's point, whatever the smallest debt is, if it's the credit cards, how much debt do you guys have? Well, we have two car loans. Altogether, our debt is probably between 35 and 40 between the two cars and then some credit card and then of course the medical. Tell me the real numbers so we can really see. yeah so on his car uh we owe about uh 14 000 my car we owe about 21 i believe his car just yeah 21 000 um we just started having some mechanical issues with his car so we were considering selling that because it is worth right about what we owe on it so we thought about going down to one car yeah um which we could do it would be a challenge but we could do it i I love that.

2:01:27With the baby, it's a little tricky, but we could try to find a way. The hard part is my husband's job, he's really not loving it. He's exhausted emotionally from the pregnancy and all the medical stuff that I went through. He was really scared. It was a lot to handle. And now he's considering changing careers because he absolutely hates the field that he's in. So we're on this little bit instability storm right now. I would press pause. It's really hard. I would press pause for a second because you guys have just come through a unknown difficult season. Right. It was the layoff. Then the baby came.

2:02:08Then there was no insurance. So there's part of this where I would love to create just a quick sense of like we're getting our bearings. We've got our bearings before we add another big change into the mix. Because that would have mean he just got this new job. Right. right yeah he's he's we've only just been on the insurance this month for the new place yeah he's only been there he had to wait like 90 days or something and don't get me wrong like I'm all for happy I'm all for people being happy in their work but we need to just cool out for a second like let's get this baby home let's get our heads around what the financial picture is and then that can decide what we need to do going forward because and I mean I I get it everybody wants to be happy at work, but there could be a period of time where he's like, I'm doing this because I need to do this to get the family on good footing.

2:02:59And then I'll be able to go and pursue more of what I want to do. So the 14 ,000 car, 21 ,000 car.

2:03:06Rachel Cruze:Well, I was going to just add to that, Sarah, that usually when there's some level of like a traumatic experience, which it kind of sounds like y 'all walk through, don't make knee jerk reactions. And we say this, if someone's had a death close to them or, you know, if something big happens in life that really kind of takes you out emotionally, making big moves in life is not smart. So waiting before he quits and all of this, like I would. So I echo Jade for sure. And for you guys, yeah, that because how much is he making now? He makes about 85, but he's I'm not so much concerned about him quitting.

2:03:43I mean, he's totally in the mindset of I need to provide for my family. I'll do what I have to do. Yeah. Plus he wouldn't quit until he had something else lined up, right? Exactly. But he's afraid that they're going to let him go again. And I think he's got a little bit of PTSD from being laid off previously, which wasn't any fault of his. But the company that he's at now, like the new job that was supposed to kind of stabilize, it's not really a good fit. What type of work is it? The way the business is set up. So I'm sorry. What type of work does he do? He works in accounting and financial analyst positions, mostly for home builders and construction firms.

2:04:20So being the numbers guy, he's tracking all the mistakes. He finds a lot of things that are wrong and everybody thinks he's the bad guy. And it's just kind of the way that the industry goes, I think. Okay. Well, even more reason then for you guys to really get laser focused on this debt, because that's what's creating instability and a lot of risk in your life. So aside from the cars, which I love the idea if you can break even on one of these, even if you go and you buy something a lot cheaper in cash. I like that idea. If having a one car family doesn't work, but back to your initial question.

2:04:54Yeah. Up until something does happen right now, I think we're operating on a lot of fear and what if, but the truth is you're home, the baby's healthy. He's got a job and right now nothing's happening. So I would say, okay, let's push pause on the baby steps, get that thousand there. Do you have any more money left in savings above a thousand?

2:05:17Not really. Okay. That's fine. I think he has, yeah, he has a Roth, I think he set up a few years ago that's got a little bit in it. No, don't touch that. I meant liquid savings. Okay. No. So yeah, you're listing them smallest to largest and you guys are getting on the same page. You're sitting down tonight and going, okay, we've been through a lot. it's time for us to make this right. We've got a family now. Let's clean up our mess and let's decide that moving forward, we're going to move methodically. We're going to make decisions together. We're going to get out of debt. And I mean, kudos to you.

2:05:50Cheers on a brand new life. Yeah, that's right. Yeah, it's a mixture. We're absolutely in love with our baby boy. He's healthy. Praise God. It was a really stressful time getting through all those issues. So we're thankful but we're also trying to find a way to start looking up you know it just seems like one thing after another and then the car breaks you know and then the you know the boss doesn't like you know whatever just seems one thing after another so i'm just kind of looking for some

2:06:18Rachel Cruze:peace of mind for a few weeks at least for sure yeah and you'll find too sarah you know life in general and then you throw kids in the mix and this is it magnifies this too but it it's if it does it can feel like seasons of life it's like two steps forward three steps back one step forward two steps back oh my gosh and then and then a rhythm another season hits and it's like wow this is a peaceful season we're thankful for this and then something else happens right I mean it's just it is the rhythm of life and you guys are experiencing that uh but in big ways I mean kids job I mean these are big adult things right that you they are that you feel so I think um Getting some control around the money, I think, is going to give you a level of peace.

2:07:01Rachel Cruze:Even if the debt is still there, just being on the same page with your husband, knowing here's how much we're spending on groceries, here's what. Like, there's just a plan in place. And it allows you to pour that energy into something. Yes, that's right. Into something else. Yep, for sure. And I do, and we hear you loud and clear, and I think a goal would eventually be for him to be in a great environment working. Yeah, you don't want to work for a jerk, you know, for so long. So we're all about that too. yeah so great well thanks for the call sarah we really appreciate it thanks to all the gentlemen in the booth thank you jade to being great co-host and thank you america for listening remember to take control of your money and create a life you love

2:07:58We'll be right back.