Don't Settle for Living Paycheck to Paycheck

25:14I'm the co-signer. Um, so I can't like do anything. I've got the 38 ,000 in a money market savings. I've got 3000 in just an emergency fund. My, um, we've had a lot of changes in education in Arkansas. So my salary starting this coming school year will be$52 ,400. And I have also taken on a second source of income that generates roughly for the 2023 year I had. It brought in around$12 ,000, which minus the 30 % taxes out of that, whatever that would be. And I'm on track to make about$14 ,000 with it this year.

25:59Dave Ramsey:You're not in a 30 % tax bracket, but go ahead. uh-huh oh well that's what when i paid taxes that's what the irs charged me they literally took 30 percent of that income yeah well you need to file your taxes properly you'll get some of that something's not right there how can we help today um so i need to know what to do so i had so i spent my whole life raising kids homeschooling them so i have basically no retirement i kind of started my own since all this happened and i found out this coming school year my school is going to start a retirement for us. It's not a 401k. It's, I can't remember the letters.

26:38403b. Is it automatic or do you get a say in it? I get a say in it. They match 3%, so we can opt in or not. Let's just stop.

26:52Dave Ramsey:The bottom line is that you've had your heart broken and you've been drug around behind a car for the last two years. So you're just raw. right okay other than that your math is okay your math is going to be okay you're going to get there okay you're very analytical and that's how i know you're going to get there you know all your numbers we don't have to ask you what they are you're just spitting them out just left and right even the ones in the past that don't matter anymore so here's what we're going to do we're to walk you right up what we call the baby steps. Lots of 51-year-olds making$50 ,000 a year, $75 ,000 a year with your extra income coming in, have become millionaires by the time they were 65 or 70.

27:38Dave Ramsey:Lots of them. As a matter of fact, the number three most likely career in our millionaire study. We studied 10 ,000 millionaires. Number one was engineer. Number two was accountant. Number three was teacher. And the reason is, is that you're very process driven. And I'm going to give you the process. It's called the baby steps. Baby step one is a thousand dollars in the bank. You've done that. Two is be debt free. Everything but your house. Now, how much debt do you have that's not a house? Well, I don't have a house anymore. We live in an apartment. One of my daughters and I live in an apartment, but I have a car.

28:16Okay. How much is the debt on the car? It's$25 ,000. The car is, I owe$25 ,000. It's worth$21 ,000.

28:23Dave Ramsey:Okay. And it's a lot of car. That's that stupid car that was bought right before the divorce, right? Right. Yes. And you refinanced it. And so you got screwed twice on it. Okay. Now the, and you've got how much in a money market account? $38 ,000 right now. And how much debt do you have other than the car and the living in the apartment? None. Okay, this is going to be very scary for you because you've built up walls trying to survive the last two years. But if I woke up in your shoes, I would write a check today and pay off the car. Now I'm debt free and I have$13 ,000 left in my money market.

29:06Dave Ramsey:And how much was in the other account? $6 ,000? $3 ,000. $3 ,000. Okay. So now I've got$16 ,000 that I can earmark into a money market account as an emergency fund, which is adequate for you to have as an emergency fund. That's baby step three. Then baby step four is start putting 15 % of your income away. If she puts 15 % of 75 ,000 away from age 52 to age 65. What does she have? 65. I have 70 in here. Oh, you got 70? 480 ,000. But I did that at your current income. You didn't do that with the extra income. I did that 64. That's 64 ,000. Okay. So you'd have a half a million dollars if you invest 15 % of your income and that's with no match, but you told us you get a match.

29:56Right.

29:57Dave Ramsey:Okay, good. 3%. Yeah. So you're going to get that on top of that. So you're going to have six or eight hundred thousand dollars if you invest 15 percent of sixty four thousand dollars and you never get a raise from age 52 to age 70 okay so you're okay you're gonna be fine but you're gonna have to continue to be very process driven math driven and let the facts talk to you and the facts have done a good job talking to you in the midst of all your pain and trauma You've remained fairly clear-headed. Congratulations. It's very difficult what you've been through because you've been through hell. Thank you.

30:35Dave Ramsey:And then the other thing I'm going to do is I'm going to put a kiddo that has the student loan on a tight budget, make sure she gets a freaking job, and she pays the bill. She's got to be responsible. She can't throw this back on you. Right. No, she's been doing great. I know. She gets to keep doing great. And we're going to put her on a beans and rice, rice and beans. no run around Italy get the freaking student loan paid off kiddo and then you can go have your life but mom's on this thing and mom can't handle any more people dumping on her had enough dump on you lately so you can fight through this you can do it hang on we're going to put you in the every dollar app the advanced version as our gift free to help you work your way through this you can do this

31:35Switching banks can be a hassle, and I totally get that. But when Winston and I opened up our Fairwinds account, we were shocked by how quick and easy it was. It just took a few minutes online. We didn't have to block off an entire afternoon or track down paperwork. And the next day, we got a personal call from a Fairwinds specialist just checking in. I couldn't believe it when I answered my phone. And I was talking to them, I was like, y 'all are the nicest people. Now, if you're working hard to save money, get out of debt and build a future, you should have a bank that supports that, not fights it.

32:07That's why I recommend Fairwinds. They created the smart checking and savings bundle specifically for Ramsey fans. Plus they have a great app and you have access to over 33 ,000 fee-free ATMs and more than 5 ,000 shared credit union branches across the country. So you can have access and withdraw your money just like you're used to, no matter where you live. Don't settle for a bank that slows down your progress. Make sure you choose one that helps build you up and helps you win with money. Visit fairwinds.org slash Ramsey and open your smart bundle today. fairwinds.org slash Ramsey. fairwinds.org slash Ramsey.

32:47Fairwinds is federally insured by the NCUA.

33:04Dave Ramsey:Are you staying on track with your baby steps? You can take a quick quiz to check your progress and receive a personalized plan just for you. That's kind of personalized means, right? Simply head over to show notes. Click the link titled, Are You On Track with the Baby Steps? Do the quick quiz and we'll help you with a personalized plan. kiko is in tacoma washington hi kiko how are you hi dave good how are you doing better than i deserve what's up um yeah so i'm a 47 year old single dad twice divorced both my marriages i let my ex-wives handle my finances so i never really learned how to manage money myself or develop the necessary discipline and i'm just really embarrassed that i haven't given my kids is the best example how to respect and manage money.

33:55Dave Ramsey:Now I'm at a point in my life where I'm trying to rebuild, but I'm living check to check in debt. I'm also an Army vet, so I struggle with not only childhood trauma, but ADHD, PTSD, anxiety, depression, which make it all hard to stay focused and consistent. But I have been taking some steps, like seeking mental health counseling, going through Financial Peace University years ago through my former church. And I recently met with a debt management counselor, but I'm still feeling stuck and unsure what my next move should be to finally get control and give my kids a stable future. Are you disabled or are you able to work with your conditions?

34:38I'm at 90 percent, so I'm able to work. I'm an academic advisor and part-time college professor, but education doesn't really pay a whole lot.

34:47Dave Ramsey:So with all of these different income sources, including your ex-military, thank you for your service. What is your household income? I take home about$4 ,000 a month in salary and$2 ,400 in VA disability. Okay. She got$6 ,400 a month to work with. Good. Nice. So where's the dream? Is it debt? Just keeping up with child support, rent. I'm doing everything all by myself. You're just disorganized. Yeah. You have no idea what's going on. You just spend money until it's gone, and then you worry. Yeah, a lot of it is admittedly coping, trying to get through the season of fear. Yeah, absolutely. And that would be normal.

35:31Dave Ramsey:I don't blame you for that. But the good news is you can identify that so that we can whip it. Right. Because what you need to be is cold calculated on the other side of this, where this money thing is you're telling this money what to do instead of wondering where it went, right? You want to get control rather than be controlled. Absolutely. Yeah, I believe you. I don't blame you, man. I think I can smell that a mile away. I've been there. It kind of knots up in your stomach and moves towards your throat. Definitely. Definitely. Yeah. Yeah. It ain't no fun, man. So what we're going to do is I want you to flip a switch because you've got this ability with your background, especially in the academic side.

36:13Dave Ramsey:You don't need your – the debt counselor person is going to put you in more debt or they're going to put you in some kind of a debt consolidation loan. That's not what you need. You need a system where Kiko takes control. Absolutely. We're going to flip a switch and pretend like I hired you for$100 ,000 a year to manage this very simple set of finances. $6 ,400 is coming in, and every one of those$6 ,400 needs a name before it leaves. Right. before the month gets here, before the money actually comes in, it needs to already be spent in the EveryDollar app, already be allocated. And so when you start telling your money what to do before the month begins, that forces organization and it removes anxiety and stress like you will not believe.

37:04Dave Ramsey:You're going to be amazed. Even though you're still in debt and even though you're still fighting some stuff, Once you get on the other side of this and you're cracking the whip on it instead of it cracking the whip on you, you're suddenly going to get a sense of peace. Now, you've got some hard work to do. You've got some calluses to earn, but you can do this. And, Jade, you've been showing people how to do this in these webinars. It works. Yeah. As a matter of fact, I'm going to give Kiko some homework. This is your homework tonight. We're going to set you up with 14 days free. We're going to give you the first 14 days on us, but then after that, you've got to pay for it so you have some skin in the game.

37:34but tonight I want you to download it and I want you to set up your first budget. That's you Kiko putting the 6 ,400 that you make every month right at the top and then you're just gonna go down and think of everything that you possibly spend money on in the month including your debt, write it all out and then after that I want you to go into the other part where it's gonna give you your personalized plan so you can start to walk through and say, okay, what do I do first? What do I do with the margin that I found? Margin is just extra. What do I do with that extra money? Which debt do I put it on?

38:05How long is it? It's going to tell you all that. It's going to tell you what debt to put it on, how long it's going to take you to get out of debt. And then you're going to walk away with what's called hope.

38:13Dave Ramsey:Yeah, it's the every dollar app. It started out as a budgeting app. Now it's become a financial management app because we've kept iterating it and to where it starts to tell you what to do step by step while you're laying out your plan. And our team is our team's here to help you. We're going to walk with you through this and and we're not charging you anything. OK, this is all just to help you out. You can do this. You'll be amazed once you once you lay out and say, OK, here's the seven baby steps. I need to first save a thousand dollars and I need to work off my debt smallest to largest pay minimum payments on everything with the little one attack, the little one.

38:45Dave Ramsey:And the way I'm going to find that money is I'm going to write it all down before the month begins in this app. I'm going to tell the money what to do. And then the app's going to give you suggestions on where you find more margin. Exactly. And that's the thing. If you call into the show, based on what you're telling us, we can maybe come up with a couple of things to tell you, but the app is going to go through everything. On average, when people just fill out the stuff to start, they find about$9 ,560. That's right. That's been our average in the last 120 days using this new process. In just a couple minutes.

39:16Dave Ramsey:Pretty incredible. Yeah. It's blowing my mind. That's the average, which means you might have$6 ,000 or you might have$16 ,000. That's right. No, but you can get a head start on this thing and get it turned around and get moving in the right direction. And it's kind of like what we do here, but it's actually more sophisticated because we forget to ask. That's what I'm saying. And it'll go step by step and remind you, hey, this is what you do first. This is what you do next. And by the way, if there's something you don't understand, it'll teach it to you so that you do understand. Yeah, it'll pop up and throw a video of Jade up there explaining it or George Camel or Dave Ramsey up there explaining it for you.

39:49Dave Ramsey:So the thing is thinking, yeah, it'll show you what to do exactly. And you don't need a debt manager person. We'll be it for you, and it doesn't cost you a thing. There you go. So you hang on, man. We'll pick up and get you set up on that. Katie is with us in Seattle. Hi, Katie. How are you? I'm all right. How are you? Better than I deserve. What's up? Well, so I have kind of a complicated question, But basically, I've been trying to manage our finances as a household. I'm a wife with a 14-year marriage with my husband, and my daughter is also 14. That is my husband and our daughter. And then we were blessed to finally have another child because we've been trying to for a long time.

40:36Yeah, what's your question for our run out of time, honey? Sorry. So he recently gambled a lot of money. How much is a lot? I don't know, honestly. I just know that he won some money and didn't tell me about it until I started questioning why he all of a sudden had extra funds. I mean, are we talking hundreds of thousands? How much are we talking about? Give us a ballpark. So I know that he had been giving me$1 ,200 from his paycheck every week, and he's now confessed to me that he actually gets about$1 ,900.

41:10Dave Ramsey:So we need to change our system. Okay. He no longer gets to give you his paycheck. It's direct deposited into our checking account, and we decide what we are going to do with our money. And if that includes gambling, that is a mutual decision, and obviously it would be a small amount that it wouldn't affect the household. Right. If he can't go along with that, you have another problem. Yeah. It's a husband problem. The hard part is you don't know the exact numbers because there hasn't been that transparency. So the first step is let's add the transparency. See how does he react to that. Then you can know if your troubles go deeper than just that.

41:51Dave Ramsey:Are we dealing with a gambling problem or a budget and disorganization problem? If you're dealing with a gambling problem, you can't fix that until you fix the gambling problem. Or you may find that you're dealing with a marriage problem if you say, hey, I want this level of transparency. And he says, I don't want to give you that. Do you see what we're saying? Well, yeah, I do. And I mean, this is not the first time. And trust has been an issue in our relationship for various different things beside the gambling. And I feel like every time I bring it up, he gets a little better. Yeah, but it doesn't stay there.

42:27Dave Ramsey:So we need to get to solving on this because you're not going to live like this the rest of your life unless you're crazy. You're not crazy. So you need to have all the account, all the money going to one account. and we are in agreement on what we are doing with our money, then trust will be solid.

42:52Dave Ramsey:You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind, scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of ripoffs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company.

43:35Dave Ramsey:This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options, and they've been around for over 95 years. So you know they'll be there when you need them. Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I trust them, and you can too. Visit Zander.com for instant online quotes, or for a more personal touch, Give them a call at 800-356-4282.

44:24Dave Ramsey:Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, or create actual amazing relationships. Jade Washaw, number one bestselling author and Ramsey personality, is my co-host today. Ashley is in Columbus, Ohio. Hi, Ashley. How are you? Hi, I'm good. How are you guys? Better than I deserve. What's up? Well, we have a pretty good night. We have a very high net worth, But right now, our financial advisor is suggesting that we take a loan out on our vacation property, which is paid in full. There's no mortgage there to help supplement our income since our money is not liquid.

45:12Dave Ramsey:What is your net worth, hon? About$40 million. Oh, my word. And you don't have enough income coming in off of$40 million. So it's a little tricky. 30 of that is invested in the husband's business, which is close to about a billion dollar business. But we can only touch that when we are allowed to touch it. I'm sorry. If it's your business, why are you not allowed to touch it? So he's not on the board. So the board makes the decision on who gets money when. I thought it was your husband's business. Wait a minute. Who owns it? He's one of the owners in the business. Who's the majority shareholder?

45:54There's a handful of people who own the chunk of it. He's one of those people. But he is not on the board of directors, so he doesn't get to make the decision on when redemptions can be made. So, wow.

46:10Dave Ramsey:Yeah. So, well, that's$30 million, but you've still got$10 million. You don't have anything in that that's creating income? Okay, so we've got$4 million in retirement. We bring he brings in about 400 a year and he's 100 percent commission based on what he does. So what do you need money for if you make 400 a year? So what we were hoping to do and what we had been doing with the redeeming shares each year, then come to find out that we can't redeem every single year was my husband's 56 and he's wanting to. After 26 years of service, he's ready to kind of back off and enjoy our vacation home and homeschool our kids.

46:49and be a little more present after being very, very invested firsthand in what he does. So he was hoping to help to supplement our lifestyle with using some money from the HELOC. How much would the HELOC have been? I'm just curious.

47:08Dave Ramsey:Let's just stop. I'm sure. There's no possible way that borrowing on your lake house is a good idea when you have$40 million. There's no scenario by which I can get there. And I'm really disgusted at how pitiful your financial advisor is. This is just asinine. You make$400 ,000 a year. You have$10 million. It's not tied up in this company. And you guys can't figure out a way to get to some of that. How old is he? 56 this year. Yeah. Yeah. Okay. And I've just recently taken over our finances as of April because I found out a lot of stuff has gone on. So what do you mean? Well, for instance, I, I just, we got married 15, six, 15 years ago.

47:58I trusted him completely. He made great money. I worked as well. We had three children together. I've been homeschooling them.

48:06Dave Ramsey:I haven't heard anything wrong yet. What happened that was wrong? So he trusted that he would be able to redeem shares every year and didn't realize that he couldn't do that. Then we spent money assuming that we were going to be redeeming shares. In excess of 400 grand? Like a million over. You spent the money before you had it yeah okay and how was that covered well um initially we were getting the redemption so it was not it was like oh yeah well we get the redemption at the end of the year so and how much was you redeeming of your 30 million dollars in start a million million and a half a year we'd get and you were spending all of that and now his income hang on keep keep in mind his income would drop down i know a million and a half a year on what well we have two homes we have staff yeah uh in those homes uh we have children uh very generous with still not gotten anywhere near close to a million and a half we got a jet horse farm that that we pay for you have a horse farm That you pay for.

49:28Not hours. That's life. That's life. Uh-huh. Yeah. Yeah. There are some things. So I've consolidated quite a bit of that. None of this adds up to a million and a half dollars. Well, we, you know, chartering yachts and flying private. It all happened real fast.

49:46Dave Ramsey:Yeah. Okay. Now I'm getting there. Yeah. Okay. All right. Yeah. So when I found out all of this, I said, I'm taking over. All right. Well, there's not a, I'm taking over. It's the two of us need to be both using our brain. about the actual money that we have to work with. And what of the$10 million can we access? And what percentage of this company does he own? Do you know? Oh, gosh. I couldn't tell you that. 1 %? 12 %? 82 %? We know it's not 82%. Well, of a billion? No, shares. What percentage of the company? What percentage of shares? I don't know. No, that would be a good thing to know, because he needs to start taking some action, because he has$30 million tied up in something he has absolutely no control over.

50:31Dave Ramsey:That is not okay. That is where your problem is. It is not a lake house home equity loan. Good God. Right. The last thing you people need to do is be going into debt to be renting a yacht. Right. You just cut your freaking lifestyle. Just cut your lifestyle. Live within your means. We absolutely have. Absolutely. Then you don't need to be having this conversation about borrowing money on your lake house. Okay. Live within your means. Now, how do we adjust our means? Well, one is we've got to have a discussion with these partners about my$30 million, and I'm 56 years old, and I poured my life into this company.

51:12Dave Ramsey:And how and when am I reasonably going to get access to that money? So we've had that conversation. I had that conversation, and it was told to me crystal clear, no questions asked. we will never prioritize shareholder redemptions over the growth of the company. That's not the point. We can divest. We have an option to divest. Oh, good. They can do it in four years. The challenge with that is on the$200 ,000 that we invested in this company, it turned into$30 million. So you kind of go, you don't want to completely divest? Yeah, I do. I completely want to divest. Absolutely. Okay. Because you are going to lose your butt.

51:53Dave Ramsey:You have no control, and people are looking at you going, you have$30 million, and you don't count. Yeah. Absolutely, I'm getting out of that deal. Yeah. Crystal clear, meaning they were arrogant, dropped their glasses down on the end of their nose, and man spoke you, girl. I mean, come on. Yep. Bull crap. I ain't putting up with that. I'm going to pay some taxes and get free of these jerkwads. No. No way. redeem redeem redeem away that's what i'm doing no chance i'm putting up with that crap because this story doesn't end well when someone keeps control of your of 75 of your net worth and you have a 40 million dollar net worth you have zero access to it because darling you don't understand how business works we will never put redeeming of share redemption of shares above the growth of the company.

52:48Dave Ramsey:Oh, you've got to be kidding me. So I think we're going to handle that. We're just going to redeem the dadgum shares. I can fix that. Oh my God. So no, and you may need a new financial advisor too. This one's an idiot. Borrow on a lake house to solve this spending problem? Yeah, I don't think so.

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54:49Dave Ramsey:Well, buying or selling your home is a big deal with all the clickbait headlines and conflicting data out there. Let me help you. When there's drama going on, you know how to fix it? Facts are your friends. Facts just put drama, just put it to sleep. It's done. So if you find out what's really going on, then all this, all this stuff that's happening in the real estate market, it just calms you right down, okay? So here's the actual facts. The median home price, which if you know anything about statistics, median is the number that's in the middle. Average is not necessarily in the middle. It's close, but they're close.

55:31Dave Ramsey:Close to the same thing. But median is actually the far end and the other end and right in the middle. The median home price in America has gone up again this month to$441 ,000. That's the median. So when you tell me you're in Kansas City and there are no homes under$800 ,000, I'm going to call you a liar. Okay? You haven't looked in the right neighborhood. There are homes under$800 ,000 because the median in America and Kansas City would be pretty normal town, not above average, not below average, right there around the middle. Nashville, Tennessee, same thing. Louisville, Kentucky, same thing, right?

56:18Dave Ramsey:These are all going to hover. That's going to be your house price median. Now, I live in Williamson County south of Nashville, which is the 11th wealthiest county in America. and the wealthiest county in Tennessee. The median house price in Williamson County is not$441 ,000. Sure, you're right. Okay? It's probably approaching a million. So, but it's, you know, it's crazy out here. So it's just a land that I live in right here where this building is sitting. Okay? But, so I don't know where you live, but one county over, it's a lot less. Okay? True that. Probably. Listen, Moray County. This is Murray.

56:58Dave Ramsey:Yeah, you go down one more county from here and you get a whole different world. Most of the people that work in this building live one county further south of here and not the 11th wealthiest county in the nation. So anyway,$441 ,000. And by the way, that's up from$440 ,000 last month and$439 ,000 the month before. It's averaged$1 ,000 a month is all. So house prices are not declining. They're increasing but very slightly. That's the mathematical facts. 15-year fixed rates, still under 6%. So if you want to know more about this kind of stuff, go to RamseySolutions.com slash market. Alex is in Utah.

57:36Dave Ramsey:Hey, Alex, welcome to the show. How can I help? I have a question about how I can help ease my wife's worries about not investing until after we're done paying debt off. I think something that kind of adds to our stress is we just had our second kid two months ago, and we don't have wills of life insurance, which I think is causing some of that. Well, there you go. So you know two things to fix it. Go to MamaBearLegalForms.com, get your will. Go to Zander Insurance, get your life insurance. You need to do that anyway, right now, today. Now, how old are you guys? So I'm 26 and she's 27. Okay. And how much, what's the timeline?

58:14Because obviously you're saying, hey, I want to pay off debt and build up savings before I invest, which is what we would teach. How long is it going to take you to do that before you start investing?

58:23Dave Ramsey:It's probably going to be a few years. How much debt have you got, not counting your house? So we don't own a house. We have roughly$96 ,000. On what? So we have$64 ,000 on a truck and then another$2 ,000 on a car that we're going to pay off here in the next few months. and then$24 ,000 in student loans and then$6 ,000 left on the birth expenses. Oh, cool. And your household income was what? Did you tell me that already? I didn't. No, it's between$125 ,000 and$135 ,000. I'm self-employed. Okay, cool. What do you do? Work in construction, just a foreman. Okay. Good. Hey, wow. So I got great news.

59:10Dave Ramsey:your wife is going to feel a whole lot better and you're not

59:19Dave Ramsey:you're going to get a will you're going to get a life insurance policy and you're going to sell your truck okay because your truck is stupid so one thing with that is oh don't give me one thing you owe 65 000 on it and your wife's afraid you're not going to get out of debt fast enough to start investing. She doesn't believe you because you keep buying crap you can't afford. That's fair. The sucky thing is, because I bought it last year, it's worth maybe$37 ,000. Whoa, that's not because you bought it last year. Did you run a backhoe into it? How's it worth$37 ,000? No, I have 27 ,000 miles on it.

59:59Dave Ramsey:So what? It didn't drop$30 ,000 in value in one year. That's what Kelly Blue Book said for private sale. You're kidding. No. What kind of truck is this? Yeah, I was going to say, what is it? It's a 24 Tacoma. And you didn't roll any negative equity in it? Nope. I got to tell you, man, I'm a huge Tacoma fan, a Toyota fan in general. I don't own one, but I mean, my perception is not only is that a quality vehicle, but it would hold its value a whole lot better than that. I'm really shocked. I think you must have looked that up wrong. I cannot believe you cannot get$30 ,000 a year later for a Tacoma you paid$64 ,000.

1:00:45Dave Ramsey:Yeah, it's pretty rough. That's my conundrum is upside down. Well, I mean, if you really are, I'm just saying I don't believe you. I think you looked it up wrong. I really do. I can't imagine. Is there anything wrong with it? Did you add something crazy to it? Pop open. See if you can find it. I'll see if I can find it. I went and canceled all the warranties and everything, so that's good. That's good. Okay, well, you're on track. All right, so here's the thing. The reason that she doesn't want to stop investing is because she's afraid we'll never restart. Uh-huh. Not because she thinks it's the wrong thing to do.

1:01:24Dave Ramsey:If you really believe that you could be completely debt-free in two years by being on beans and rice, rice and beans, and then take$125 ,000 income and invest that wisely for the rest of your life. You'd be multimillionaires mathematically, easily, easily. That's the plan. Yeah, that is the plan. But that requires that you play all the way through, and nothing in your all's past indicates that to her. So she's got to feel like, A, she has a vote on this budget. B, you're willing to do whatever it takes to get there, and we're going to get there as fast as we possibly can because it's urgent that we start investing because your most powerful wealth-building tool is your income, and right now you're giving it all to Toyota.

1:02:11Basically.

1:02:12Dave Ramsey:Yeah, and so she knows that. And so it's not that your wife won't go along with really stopping investing in order to get out of debt. But it's that she doesn't want to stop investing to never get out of debt. Yes, and that's, like, I've continuously expressed to her, like, hey, we're done. Like, I'm done buying new vehicles. That was a stupid thing. I started listening to you guys, like, two months after I bought them. I'm like, no, that was a stupid tax I'm paying now. Yeah, you are. If that's the real numbers, I'm, God, I'm distressed because I just love that car. I know. But I don't love it enough for you to keep it, but I love it.

1:02:52Dave Ramsey:um so all right well i think you guys keep talking through this and um but that's what you've got to become of a common mind that we are willing to um sacrifice in order to get there and we both believe it's really going to happen it's it's she's afraid it's not really going to happen that we're not going to play through at my house when i was your age i'm not accusing you of this Alex, but it was me. And sometimes this is true. I would come in with a new scheme or a scam every week that we were going to do. And if my latest one was, we're going to stop all investing to get out of debt after the other schemes and scams only lasted three or four weeks or three or four months, my wife would roll her eyes at that time and go, oh, another one of those things you're not going to play through on.

1:03:43Dave Ramsey:Another one of your great ideas, Dave. And, And, you know, that was back 35 years ago. Today, we're very, very much dialed in, very much aligned. Did you find anything at all? I'm just, yeah, he's not far off. I'm just trying to understand how you spent what you spent to begin with and why I can find them for$31 ,500 and that type of price range. So I don't know what you did, but you did it. If you owe 60 on it. Unless you borrowed on a subprime loan and the balance is not really 60, but the total of payments is 60. That's another possibility. Maybe that's not the real payoff. Make sure you got real payoff numbers.

1:04:23Dave Ramsey:Maybe that's the number that's the wrong one. Fight through it, Alex. Fight through it. You're on your way.

1:05:07Dave Ramsey:This podcast features Jade Warshaw and Dave Ramsey. Hi, Dave. Hi, Jade. Thank you for having me. Sure. What's up? So my question is, while we're working through the baby steps, how do we handle family dynamics and not seem like the cheap family? This sounds like expectations from extended family, yes? Yes. Like what? They are familiar. They are familiar with the Ramsey method. They actually kind of introduced us to it, but they have since they decided to kind of give up on it. And they said to they're going to make memories of their money now instead. And that's their choice. Who is they?

1:05:53Sister, brothers in law. And so they've decided, hey, it was too much for us. We're not doing it. And they think you should be in that boat. Whereas though you've said, hey, no, we want to be intense. We want to pay off for a debt. We're going to do that. And they're kind of making you feel bad about it. Yep. Yeah. Give me an example. Yeah. So, for example, they like to go to places where they play golf for fun that, you know, is that recreational place? Topgolf. Huh? I said Topgolf. It's expensive. Yep. And we're a family of six. And so trying to cover that. And I have tried suggesting alternative activities for us to do.

1:06:45And they often kind of respond with that's boring. Well, then, you know, OK, that's a great example. I mean, this is one of those times where you're just going to have to put your foot down and say, we're not going. I mean, I can't tell you how many times when Sam and I were getting out of debt that I would just say, hey, that's not a priority for us this month. And I might suggest something different. And maybe I don't. If, you know, if everybody's going out, we just can't do that this month. Yeah, we're not able to go this month. And like I said, you can suggest another option. What if you guys all came over here and we did board games?

1:07:18And if they say, no, that's not fun, then that's then their choice. So the same way you can't get mad, the same way you don't want them to get mad when you make your choice, you then can't be offended when they make theirs, which is we don't want to do family board game. We want to go to Topgolf. Okay, have fun.

1:07:35Dave Ramsey:Yeah, I hope you have a great time. Yeah. And we can't do it this month. But thanks for asking. Right. You know, let's pretend something was crazy, okay? Someone called you up and said, hey, I want you to charter a private jet and fly to London. You would go, I'm sorry. That would be neat, but I'm not going to be able to do that. Why? Because it doesn't fit your financial picture. Right. Even though that person might be able to charter a private jet to London. which by the way, be like 120 grand. Okay. But, um, you know, so it's not, you know, so you just, it's just something you can't afford to do is all it is.

1:08:23Dave Ramsey:I mean, oh, well, you know, toughies. I mean, Hey, we want you to, we're, we're, we're all buying new, new boats and we want you to go get a new boat to match our boats. Oh, that'd be sweet. I wish I could, but I'm just not able to do that right now. I hope you guys enjoy your boats. In that moment with the extreme examples that Dave is giving, you'd be able to see how absurd it is. That someone else was trying to manage your money. Yeah, and that they would be able to say what you can and can't afford. You realize how absurd that is. It's the same thing here. It's just a smaller, it's just a different scale.

1:08:59And you know you can't afford to take your family of six to Topgolf because you've got more important priorities. But they don't get to decide that. What's the repercussion? Tell me, is it even real? Let's decide, is this something that's just taking place in your mind or if it's really happening? What happens when you say, hey, thanks for inviting us. We're not going to go this month, but you guys have a good time. What then takes place? What do they do to retaliate?

1:09:25So they'll go ahead and do the event, which is fine. And then I guess it does put it on us to maybe try to set up something else outside of that event, you know, at a different time. See, and I don't think it does. I think you kind of created something that's not even really there.

1:09:42Dave Ramsey:You just didn't go. That's all it is. Yeah. You just didn't fly to London. I think they're just getting tired of us saying, sorry, we can't afford that. Who gives a crap what they think? They don't get a vote. You know, listen, people that love you are supposed to encourage you. That's right, Dave. Not send you on a, not be travel agents for guilt trips. you are way too worried about what other people think kiddo

1:10:13Dave Ramsey:just smile and be happy and happy that they want to go to Topgolf hope you enjoy it Topgolf's fun but it really won't change your life and can I just I I'm creating something here but can I just say these types of people are the same people that when you do get out of debt Anna and your money is looking good and you do have margin and maybe you want to do something beyond Topgolf and they can't afford it, these are the type of people who will be frustrated then at you for that as well. Does that make sense? You're not going to win with these folks. When you have$2 million in your account and you guys are going to go away for an expensive weekend at the Montage and you want to invite them, they're going to be going, well, wouldn't it be nice?

1:10:57Yeah, that's right. Wouldn't it be nice if we were like you?

1:11:00Dave Ramsey:Well, it would have been 10 years ago if you'd had a dadgum half an ounce of maturity and learn to live on less than you make. But you just have to keep all that to yourself. And it's just, you have to be sweet, be kind, and just know I can't go and quit reading into it. Somehow you've done something wrong. Even if they think you have, they don't get a vote. The biggest superpower you can have with your money is not caring what people think. That's the number. If you can accomplish that mentally, you can go further faster. Well, because that, Jay, bleeds over past this type of discussion. Because it bleeds over into the, I'm not buying the crap I saw on Instagram to make people think I'm somebody.

1:11:42Dave Ramsey:You don't care. I don't need to buy, I don't need to carry a purse. I don't need to wear a shirt or shoes or drive a car or live in a house or go on a vacation for someone else to look at. And I was that guy in my 20s. I really, I bought a Jaguar. I had a Rolex. I had a custom made suits. I wanted when I was making a little money back then before I went broke and I really wanted other people to be impressed. And one of the benefits of going broke is I lost all of that. My need for you to be impressed with me is zero. I hear that. I just, the only thing I want to do is just love you and help you.

1:12:19Dave Ramsey:And if you're not impressed, fine. If you are impressed, that's fine too. Life's good. Go on and do your thing. And I'm probably never going to see you again anyway. So good luck with that. And, you know, it's okay because, you know, I'm not going to spend – now, I've got a nice car. I've got a nice truck, a nice boat, whatever. But it's for me. Yeah. It ain't for you. Yeah. It's not for you to look at. I don't care whether you know what I drive. I think that is one of the benefits of when you do walk through the baby steps, as we teach you, more importantly, when you walk through the debt snowball, right?

1:12:49Because you're sacrificing.

1:12:50Dave Ramsey:You have to not care what people do. Yeah, because you're sacrificing. And there's part of that. You can't hide that. It shows. and so you start getting used to it showing you get start you start getting used to wearing the same clothes you get used to uh saying no to going out to dinner you get your jaguar repo to show yeah that'll knock you out that's a problem and so but ain't there no more the positive side of that is yeah you you kind of burn out that part of you that cared about what other people think and when it's gone that's a great place to be yeah your confidence it's kind of sweet when it's coming from her because she's kind of sweet.

1:13:22Dave Ramsey:Yeah, she's sweet. But just it's not it's not getting power. The power comes from I love you. I want good things for you. But we're going to do our thing over here. Over here, we're going to do our thing. This is what we do over here. And, you know, if you if you're going to be mad about that, then you're just going to be mad about it. Yeah, I'm going to vote for who I'm going to vote for. I'm going to travel where I want to travel and by the car I want to travel. I'm just not my need for you to be okay with that is really really low yeah it's different you know when you're in debt you are your self-esteem is low and you're trying to cover that up with buying things and going places and doing things it's a different motivation than when you're on the other side of it the list of things you want even changes because it's coming from a different place it's not coming from insecurity good point interesting so Anna honey they don't get a vote just smile at them.

1:14:20Dave Ramsey:Have fun at Topgolf, y 'all. See you next time we have dinner. It's all good.

1:14:54Dave Ramsey:Sarah is in Los Angeles. Hey, Sarah, what's up? Hey, how are you all? Better than we deserve. How can we help? I doubt that. I think you deserve it. I just received$100 ,000 from my parents. I'm married, so my husband and I just received this. Wow. And I know. As a gift or was it a, did someone pass away? It was, it's a gift. Okay. They also gifted my brother the same and his wife. And so I just want to make sure I do the quote right thing with this money. I'm looking at paying off both of our cars first. We don't have any credit card debt. We pay it off every month, but I'm actually going to stop using a credit card.

1:15:45Dave Ramsey:Wow. I like you already. Well, I appreciate your guidance. So I felt like the credit card was not optimizing my savings. Like, it just, I was spending more than, yeah. It just does that for some reason. Okay. So your only debt other than your home is your cars? That's it. Yeah. And how much are they? What's the debt on them? So$16 ,000 on one and$7 ,000 on another. Okay. Well, that's kind of a no-brainer. Good. Okay. So$23 ,000 of the$100 ,000 is gone. Okay. Yep. And then I was thinking about doing about$32 ,000 in an emergency fund. That would be four months of my husband's income. You don't have any money in an emergency fund today.

1:16:34We have$3 ,000.

1:16:35Dave Ramsey:Okay. Oh, that would put you at$35 ,000. Okay. I got you. I see what you did. Very good. And like that would be, I assume, and we have it just in like a high yield savings. Is that where you would keep it? Yeah. Because it's liquid? More liquid? You're doing really good. I like your plan so far a lot. What's the next part? Okay, good. Good, good. And then the car payments I was going to put towards my mortgage, the car payments that we would have had. Not sure what you think about that. The main thing I would just do is I would do a budget, and I'd start putting 15 % of your income towards retirement, doing something towards kids' college out of your budget, and then out of your budget, which includes no car payments now, then I'm going to put some extra on the mortgage.

1:17:20Dave Ramsey:I don't know how much. It may or may not equal to the old car payments. Okay, I see. Yeah. Because I just want you to do a budget and find money in there to live. And now you move from intensity to intentionality because you're in baby steps four through six, which is 15 % into retirement, kids' college savings, and then systematically pay off the house while enjoying our life. Were you already investing? It sounds like you were. No, we're not. Okay. We have not invested yet. So that was kind of my next step. If I have a little bit left, we do want to paint our house because it's crumbling and do a couple of things to help improve my side hustle, which is our Airbnb in the house.

1:18:05OK, after that, I don't I don't know. Yeah, I don't know where to start for investing. And also another piece is my husband is 20 years younger than 22 years younger than me. So I'm 54. He's 32. I wonder if that factors in at all for. Well, I wouldn't pause investing to do the things that you're talking about with the home. Investing is something that it's kind of like you set it and forget it, and it's the new normal. My guess is that once you pay these cars off, basically, that money that you were paying in car payments, you're now going to feel that go away in your 15%, that and some, in your 15 % that you're investing every single month.

1:18:43So turn that on immediately. Once you park this money in the savings and your emergency fund, turn the investing on immediately because you'll be there.

1:18:51Dave Ramsey:We've still got about 50 grand we've got to decide what to do with. Right. And what was your plan with the other 50 grand? I mean, I was going to get a new tooth because I had some of my teeth. I got to get a new tooth. Unfortunately, I live in a very expensive area. It's going to be about eight grand. Get your tooth. Get my tooth. Yeah, you need to get your tooth. Get my husband's life insurance because we have it on me, but we don't have it on him. Okay, that's smart. Get a will. Pardon me? Get a will. Yes. Good. Yes, we have a will. Good, good. Like I said, I was using the credit card, and I just noticed we could pay it off, but I kept stretching it every month, so I want to stop doing the credit.

1:19:40I was trying to get air miles because my baby girl is going to college across the country. So I want to be able to see her. But I'm wondering.

1:19:48Dave Ramsey:Yeah, I think you just pay for your airline tickets. Have you received the$100 ,000 yet? Yes. Okay. Do you have the credit card? I have the credit card, yeah. Why don't you pull it out of your wallet right now and cut it up? Okay. I think that would be a great way for you to turn over a new leaf. So why save for tomorrow what you can do today? Yeah, that was my point. It's like, couldn't I just save money for airline tickets? Yes. And actually have money for airline tickets. So you need to get on the EveryDollar budget, and it'll walk you through all these baby steps as well as help you plan with your monthly spending that you and your husband can agree to.

1:20:32Dave Ramsey:So we'll give you 14 days of free premium version. You need to try this new version of EveryDollar we just came out with. you're going to love it. It's going to hold your hand and walk you through all the things we were just talking about. So now you're debt free. You have an emergency fund. You're living on a written plan so that you're spending money wisely. Oh,$8 ,000 for a tooth. And so we have$42 ,000 approximately left. Um, 32 and yeah, no, no, no, no, no. It's not quite that much. It's like, but anyway, whatever we've got left, I still want you to, you and your husband to sit down. I would recommend that you plan to enjoy some of that.

1:21:13Dave Ramsey:And that might be a small trip. It might be a new couch. We might need a new bed. We haven't bought a mattress in 15 years. It might be. Oh, yeah. You said you want to paint the house. If you want to paint the house. If you want to upgrade a car a little bit. But all of that is with cash. We're not going back into debt if we just turn around and clear the debt. Right. And so just take a yellow pad, put$100 ,000 at the top, and you and your husband sit down and give every one of those dollars a name. We know 16 and 7 went to CAR. We know 8 went to Tooth. We know 32 went to finish up the emergency fund.

1:21:55Dave Ramsey:Okay, so you just keep working your way down until the money has already got a name. because if you don't do that, what we all do, if we keep it just kind of floating around in our brain, is we spend$100 ,000 four times. Yes, yes. And you end up worse off than if you hadn't gotten the thing. And you also have this horrible taste on the back of your tongue called regret. So, yeah, you just have a diligent plan, and it's not going to go as far as your emotions wished it would. It's not going to go,$100 ,000 isn't what it used to be. Well, that's true. It's just not. But it's getting a lot done for you.

1:22:34It's getting you out of debt. It's getting you an emergency fund.

1:22:36Dave Ramsey:You're advancing right down these baby steps and getting yourself in a position to really build some real wealth. I know. I'm slaying the baby steps. It's so fun. I'm so appreciative of my parents. How do you restock your emergency fund? Do you put a little bit every month? You don't need to restock it. You don't need to, but let's just pretend you did have an emergency fund and an emergency happened. You spent, you know,$3 ,000 on a new AC. You put it back as soon as possible. As quickly. It becomes your 30-day challenge as quickly as you can. And I'll tell you what else. If you did end up using it, I'll be shocked.

1:23:12Dave Ramsey:Because once you get to the stage that you are now at and you've got enough income coming in and no payments going out, a lot of what used to be an emergency becomes a monthly budget item. Like if you had a$3 ,000 hit and you got no payments in the world, you can just tighten up the budget real tight one month and just do it and not even hit the emergency fund. So what used to be an emergency, a flat tire is no longer an emergency. It's just a crap. I got to take that out of this month's budget. And you can actually cash flow through them. Okay. And what about for vacations? Save up and pay for them.

1:23:48Is there a separate account for that? Yeah. A separate account?

1:23:50Dave Ramsey:We can have a separate account or a separate line item within an account. Same thing as Christmas. Yeah, I'll tell you what I do practically. I looked it up, by the way. Christmas is in December this year. I'll tell you what I do practically. I have a separate banking institution for my emergency fund because I don't even like looking at it. I don't touch it. It's just over there. And then any other normal savings for trips and things like that. Can be in the other bank. It can all be in one account, but just kind of keep a little spreadsheet on how much of that account is for trips, how much is for Christmas, so on, that kind of thing.

1:24:21Dave Ramsey:Just keep a breakdown on it. It's called a sinking fund when you're working your every dollar budget. It'll help you do that, too.

1:24:46Dave Ramsey:I was sick and tired of being sick and tired. They're 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.

1:25:30Dave Ramsey: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 actual amazing relationships Jade Washaw number number one best-selling author and Ramsey personality is my co-host today. Open phones at 888-825-5225. Ron is with us in Honolulu. Hi, Ron. How are you? Great. How are you, Dave and Jade? Better than we deserve, sir. What's up in your world? Hi, sir. I'm a 49-year-old active duty Army officer. I've got 26 years and married with three teenage daughters. Thank you for your service. I was diagnosed with cancer last month, and in the process of kind of getting our finances in order, I was able to sell my truck and make$20 ,000 profit.

1:26:31I was trying to get some advice from you all on would the current market where it stands would be the best use of that money for investing either lump sum into the market or gradual overtime.

1:26:43Dave Ramsey:Wow. Wow. What is the prognosis of your cancer diagnosis? We're still not sure yet. We're obviously trusting God. I had surgery last Thursday, and we should get the pathology back this week. But we're hopeful. It was a miracle was caught as early as it was. So we're optimistic. So the optimism is obviously part of your faith, but it's also the fact that you caught it early. Yes, sir. All right. Okay. And do you guys have any debt now other than your home? No, sir. We actually did Financial Peace University in 2010. And we live on base now in Hawaii, so we don't own a home. and we've been investing for quite a while.

1:27:41Dave Ramsey:Okay. And so what is the size of your nest egg, sir? With my wife and I's Roth IRAs, we have about$750 ,000 total invested between the two IRAs and my TSP. Our emergency fund is just under$30 ,000. Man, you've done such a good job. Really good. Such a good job. All right. And any life insurance in place? I have my SGLI, and then I have policies on my wife and daughters. But on you, that's$200 ,000, right, on you? That's$500 ,000. $500 ,000. Oh, okay. Oh, officer. Okay. Yes, sir. Okay. Wow. And you got a will in place? Yes, sir. We have a will. thankfully we got a will all the things legally that we need in place for my wife and daughters so they'll be able to get the life insurance and all the everything else that we've got because my experience in these situations is just looking in from the outside like I am now that when you have checked all of those boxes and you've got everything tight you've got a tight situation everything's up to date, ready to go you don't have to think about those things You can put all of your energy in fighting cancer, which is where it needs to go.

1:29:09Dave Ramsey:Yes, sir. Okay, so we don't have to think about all this other stuff because you've done such a good job. Your prep on life in general is so grown up, so adult, so well done. I'm so proud of you. Very, very well done. So all of that to say the$20 ,000 where it's invested or how it's invested is not going to change your family's life. All the other things you've done is going to take care of your family. whether you live or whether you die okay and so the other the rest of the picture we've just been discovering since you called in is and how wonderful a job you've done is what takes care of them 500 000 750 000 uh no debt no house debt living on base uh i mean you guys have got you've have a detailed, well-executed plan.

1:29:59Dave Ramsey:So she's fine. They're fine. Whether we take the$20 ,000 and burn it in the middle of the floor or not, they're fine. So that's not to say we don't want to do something smart with it. Now, having said all of that, what would I do if I had an extra$20 ,000 laying around? I'll tell you what I would do with it. I did it this afternoon. I'd dump it into an S &P index fund and just throw it in the market. It may be worth$15 ,000 a year from now. And it might be worth$25 ,000 a year from now. And neither one of those numbers are going to change my family's life. And neither one of those numbers are going to change your family's life.

1:30:34Dave Ramsey:I don't know what the stock market's going to do, but it goes up more than it goes down. And over time, it's gone up if you leave it alone. So if you leave it alone five years, you have a 97 % chance based on history that you're going to have more in there than you should put in. so um and if you go to heaven and she's got a 97 chance if she leaves it alone five years that it's going to be worth more right and so i me i'm just going to grab an s &p 500 fund or sit down with your smart investor pro whoever's helping you with your investments and pick a good growth stock mutual fund and drop it in there and forget it and then who cares what the news says tomorrow you read because if you read the news it may go down tomorrow right after you do it but i don't even that's not my motivation my motivation is i'm putting i'm not i don't need the money i'm gonna leave it alone a long time and you're gonna leave this alone a long time right oh definitely yeah so if you're investing it which means you're gonna leave it alone a long time that's the definition of investing um five years or longer then then and that's your mindset three years or longer you're you're gonna make some money that way and i would just lump sum it But you've got to commit to yourself to not go, oh, no, I turned on Fox News this morning and President Trump burped and the stock market went down because when he burped, the French burped three times and the Chinese burped five times.

1:31:55Dave Ramsey:And oh, my God. And this is what happens. And then the market goes back and forth. The market goes back and forth. That's exactly what happens. How long do you plan to live on base? there's still a lot of unknowns on whether or not i can continue to serve and whether or not i'll need to retire and move back to the mainland so i mean we're we're secure if whatever long however long we need to be here the army's taking care of us to get treatment and stay here you might you might factor that into the investment of that money if you think that it's less than a five-year play for you to be on base it might serve as some down payment going forward that's just one thing to think about yeah but it's probably you know a two or three year play anyway yeah so yeah cool i i'm just i ron i just gotta tell you i'm so sorry that you're having to fight this and i'm so proud of you the job you've done as as the dad as the husband to take care of your family you have just done a stellar exemplary job it's amazing thank you thank you and we'll keep you in our prayers brother you're gonna be fine oh man wow it's so weird um the sense of I have my act together and how that factors into a wellness equation when you're fighting an illness or even a terminal illness.

1:33:31Yeah.

1:33:32Dave Ramsey:I've got several friends right now that are facing different kinds of dramatic health issues. And the way they are reacting is based on two things, their faith walk, their spiritual walk, and whether or not they know everybody's going to be okay because they got their act together. They got their act together. And if you got your act together and you know it, then you can just kind of put that to the side and work on what's important. You know, it's pretty incredible. Wow. Another reason yet to do this stuff, boys and girls.

1:34:17Hey guys, George Camel here with some exciting news for our Financial Peace University coordinators. If you've ever led FPU or even just thought about it, you've got to join us for our coordinator rally happening on July 24th. It's packed with insider updates, powerful stories, and encouragement from me, Jade Warshaw, and Dr. John Beloney. It's totally free, and when you register, you'll be entered to win our$3 ,000 giveaway. So just head to fpu.com slash rally to save your spot today. That's fpu.com slash rally.

1:35:08Dave Ramsey:John is with us in Canada. Hey, John, welcome to the Ramsey Show. Hi, Dave. Hi, what's up? I am in a massive amount of debt and I don't know what to do. I just feel like it's a huge weight on my shoulders. We owe over$400 ,000 between credit cards, credit lines and a car loan. And our take-home pay after taxes is around$13 ,000 between my wife and I. and our expenses is about$10 ,000. This is after we've stripped out everything. So how much on credit cards? On credit cards and line of credits, around$350 ,000. What's that a result of?

1:36:02So it's twofold. So we faced a deposit on a house during COVID and we were selling our house at a profit originally the buyers couldn't close on it so we ended up selling and taking a loss and to close on the other house without losing it I had to take money out from our credit line to pay so that was about 150 ,000 at the same time I got really sick and um to the point where um I didn't think I was going to live and so um when I got out of that um something I guess this switch flipped in my head saying why am I being so frugal about money because I used to follow the Dave Ramsey principles very very very good and we were pre 2021 we were out of debt um and so I started because of this illness I just started spending And so it went down this spiral.

1:37:01And now I've learned being in$400 ,000 of debt and mentally better, it wasn't a good decision.

1:37:08Dave Ramsey:And so now I have to stress. We own a home. It's worth about a million dollars. We owe$850 ,000. It's worth about a million now because it's down. But a year ago, it was probably 1.2, 1.3. Okay. Why is it down? The Canadian market has taken a hit because of interest rates here. Oh, okay. Okay. Yeah. All right. So I guess my question is, when does it make sense to consider bankruptcy? Because I'm doing my numbers here. We're paying this$3 ,000. I'm trying to do Ubers and whatnot on nights that I can. We're throwing everything at the debt. But when I do the math, it's$36 ,000 of interest annually, and I'm only putting in$3 ,000 a month.

1:37:54So to me, it's like this vicious cycle. Are you well now? Are you healthy? I am. I am better, but obviously this stress of debt is mentally a burden, and I'm connected to the right therapist. Okay. So I don't know Canadian bankruptcy law at all.

1:38:13Dave Ramsey:In the U.S. where you're to file bankruptcy, you would have the option of keeping the car and keeping the house by reaffirming the debt, which means you don't bankrupt on that debt. You keep that debt and you keep the asset, which would absolutely be asinine, obviously, but if you're going to file bankruptcy. So, and again, I don't know Canadian law. I have to assume that they have collateralized those loans somewhat like they do in the U.S., though. If I woke up in your shoes, and again, subject to not knowing the laws there, and I would want to know that, to know what was possible there or how that thing works.

1:38:54Dave Ramsey:But if you were in the U.S., it would be very simple for me to tell you, because I do know the law there, or here. I'd sell my car and sell my house. Yeah, my car, so we have a Tesla. We owe$80 ,000 on it, but we bought it when that was at the top of the market, and it's worth, based on AutoTrader, which is similar to Kelly Blue Book, about$40 ,000. So it would be underwater about$40 ,000. I'd sell my car and I'd sell my house. because you have huge car payments and you have huge house payments and you have a decent income and if you did that you can clean up a portion of this debt over half of it and then you would just plow through the rest of it get your life back and then start rebuilding again because the house doesn't have much equity in it it's not like is some kind of big prize.

1:39:51Dave Ramsey:Right. And other than it's probably a nice home. But it's a serious burden. The Tesla's serious burden. My guess there's... So I would just take the$40 ,000 that I'd be underwater and just add it to the debt snowball, essentially. And is there anything in the house? I mean, this is a lot of spending in a short period of time. Anything in the house that you can sell and liquidate and get rid of? We've been doing that, yeah. We've been putting everything and anything on Facebook Marketplace. And it's been, I mean, we've been getting, you know,$50 to$100 to$200 here and there that we've been throwing on.

1:40:24And we continue to do that. But there's no big item you purchased in the spending spree. Yeah, because you left out selling the Tesla. That's what I'm saying.

1:40:31Dave Ramsey:You left out selling the motorcycle or the Sea-Doo or the snowmobile. Yeah, I mean, we have TVs, but I don't know how much those are worth. No, that's not what I'm talking about. What did you spend money on? Yeah, it's really bad. Just trips. Okay. Okay. All right. You know, we can't get those back. Hard to repo that, but okay. Yeah, I'm just going to fight my way through this, and you're going to take some lumps here. This is not going to be pleasant. But neither is bankruptcy, by the way, because you're turning in the Tesla, and you're turning in the House to file bankruptcy anyway. Right. By U.S.

1:41:06Dave Ramsey:law. But now I don't know, again, what Canadian law is, but I can't imagine a bankruptcy process in a North American country like Canada that allows a bank to not get their secured position. Right. I would be shocked. Thus a mortgage or a loan on a Tesla. They at least have a lien against the Tesla. They have a lien of some kind against the house. And that lien is protected in bankruptcy in the United States. And I suspect it works the same way somewhat there. It's logical that it would. But again, I do not claim to know the answer there. I think you guys just went through a series of large bad decisions.

1:41:51Dave Ramsey:And now you're going to go through a series of hurtful good decisions to clean up the mess from the bad decisions. So you've got about two years minus a house and a Tesla to get your life back. and then you start fresh again. That's what it sounds like to me. I think you'll be free in about two years because you make pretty good money, but you're consuming all of it still. And you've justified that as like, this is our minimum baseline. No, it's not. Million dollar house is not a minimum baseline. Nope. And neither is a Tesla, for God's sakes. Not a minimum baseline. So not even if you're George Campbell or Rachel Cruz.

1:42:30Dave Ramsey:So there you go. abby is in jacksonville florida hi abby how are you hi great i have a question okay um my husband and i are currently debt-free with the exception of our house um we're wanting to buy a specific business and my question is one do we buy the business but more importantly two do we pay cash for the business or don't buy it unless you pay cash for it okay do you have the cash yes how much we have about 220 and a high yield savings account what do they want for the business 80 000 what is it uh it's an after school enrichment program why do you want to buy it i want to buy it because he loves what he does so nothing would change with his job I'm a pediatric oncology nurse.

1:43:28I've been doing it for 15 years, and I'm just looking for something else, something where I can be home with my kids more and just, you know, run my own business with my own hours.

1:43:42Dave Ramsey:What's the business profit, net profit? Last year,$50 ,000. Okay, and then how much for it? $80 ,000. Okay. That's a good return. That's a cheap price. So I want you to investigate carefully what's going on. Because if it truly made$50 ,000, it's worth more than$80 ,000. But get into it and figure out why they're selling it, what they're doing. And if you've got$200 ,000 in the bank and you want to pay cash and write an$80 ,000 check and start your next business and move on to the next thing after, yeah. I can't imagine the job you've had. Ouch.

1:44:29Dave Ramsey:Rewarding, but also trauma-filled. Yeah, that's right. Wow. I don't blame you. This is The Ramsey Show.

1:44:51Hey, what's up? Dr. John Deloney here. The new dates have dropped for the Money in Marriage getaway over Valentine's Day weekend in 2026. This is your chance to hit pause on everything in your life and reconnect with your spouse over a long weekend in Nashville, Tennessee. Me and my friend Rachel Cruz will be digging into topics like sex, money, communication, and more. This weekend is happening on February 12th through the 14th, and early bird prices start at$749 per couple, but the prices will be going up soon. Get your tickets today at RamseySolutions.com slash events.

1:45:52Dave Ramsey:The Ramsey Show question of the day is brought to you by Why Refi? When the payment on your defaulted private student loan is as much as some mortgages, it's hard to get ahead. That's when Y-Refi can help. Refinancing to a low fixed rate loan built just for you. Find out more at YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states. Okay. Today's question comes from Shannon in California.

1:46:31She says,

1:46:52And if you prefer the savings option, where would you invest it? Okay. Yeah, I tend to agree more with it sounds like the wife, however, with a couple of changes. So I'm going back to when I was 15 years old. I was working at Kroger. It's a grocery store. If somebody said, hey, Jade, you got to take all of this paycheck and invest it, I would lose all motivation in that moment to keep working and bagging groceries at Kroger. So there's part of this where you do want them to do the three things that we talk about with money. You want them to give some, you want them to save some, and you want them to be able to spend some.

1:47:27So I never heard you talk about him being able to spend any of this. So that needs to be part of it, as well as the giving component. And then with the amount that he chooses to save, yeah, I'm with you, Shannon. I would keep it liquid in just a savings account because, yeah, you're right, college is coming up. Maybe he's going to want to purchase his own car. You didn't mention a car. So there's just a lot coming up on the horizon that you're going to want your hands on that cash. And it's less than a five year play, which is why I wouldn't invest it. It's college. It's, you know, planning for whatever those costs are.

1:48:02It's planning for him hanging out with his friends. He him having an emergency fund, all of that. So, yeah, I'd keep it liquid in a savings account. And don't be too much of a drill sergeant with this money. Let him enjoy some of it. Yeah. So mathematically, here's where you're making a mistake. Both of you think this matters.

1:48:28Dave Ramsey:This 15 years old, he's not going to be making that much money. I mean, what's he making? A hundred bucks? So 98 % of what this kid needs to take from this is the lesson. 2 % is the actual investment decision. If he can learn to live with a plan, he can learn to work hard, make some money, put it to a plan, spend some of it wisely, be generous with some of it, and invest some of it. you have laid the groundwork for the young man to become a multimillionaire. It's the lesson that matters. The reason that you bag groceries at Kroger when you're 15 is not because there's money in it, because there's not any.

1:49:13No, it's because you want to go out with your friends.

1:49:15Dave Ramsey:You learn to work. You learn work is where money comes from. And the first time you get a check and they see how much taxes come out of it, you know how to vote after that. I know that's right. Golly. You know, I mean, and so on. So you learn to work. Work is good. But you're not really teaching. You don't really. A teenager is really not working because the result of the work is going to change their life. No, the groove that drops into their brain called work ethic, the neuroscience of it that resides there for the rest of their life. That's what changes their life. And so we're teaching them to work.

1:50:00whether you get an A on your term paper in the sixth grade or you get a B

1:50:09Dave Ramsey:matters not at all in the scope of your life what matters is what did you learn during the discipline of not waiting to the last night to write the term paper of putting you know doing the academic rigors of putting the paper together properly to footnote it properly so that you learn not to plagiarize and you learn how to, you know, but the actual difference in the A and the B doesn't matter. What matters is, did you do the work to get there? Because honestly, no one has ever gotten hired or fired based on whether they got an A versus a B in the sixth grade. True that. Ever. But some parents act like it.

1:50:51Dave Ramsey:Some of your parents lose your freaking minds on this stuff. So don't major in minors, major in majors. So the money from this 15-year-old doesn't matter. What matters is he's learned to work. He's learned to give. He's learned to save and invest. And you can put it in a Roth if you want to. You put it in college if you want to. I tend to agree with Jade. Let him put it towards college and make sure we get through college debt-free. That's a better investment than a Roth. If you pay cash for your education, whatever form of education he chooses to engage in, and he puts some skin in the game on that, I think that's much more valuable than the actual 12%, 14%, whatever it is you're going to get on your mutual funds and your Roth IRA.

1:51:31Dave Ramsey:Now, having said all of that, once he's doing all of that, if you guys have some extra money and you want to file a tax return on the money that he earns, and you pay the taxes, if there's any taxes due, there probably won't be, and then you file and open an IRA. Yeah, great. I did that on the kids. We didn't cost the kids anything. I just had some extra money. And so Rachel Cruz made$1 ,233 babysitting and walking dogs and whatever else she did, working at Lulu Lemon or whatever it was she did. And we filed a$1 ,233 tax return, put$1 ,233 in the Roth IRA when she's 14 or 15 years old. Okay. And did that at 16, did that at 17.

1:52:11Dave Ramsey:But that wasn't her money. Yeah. That's just because she had some earned money that gave me an opportunity to put some money in her name. Now that was fun. And the result of that when she was 25, that was worth doing. Yeah. But it's not like the 15-year-old became wealthy based on their income and investment strategy. They don't. They don't make enough. There's not enough money involved here for that to matter. What really matters is the lesson in building those muscles. That's very cool stuff. Shane is in Detroit. Hi, Shane. How are you? I'm good. Uh-oh. Uh-oh, got a bad connection. Try it one more time.

1:52:51Dave Ramsey:I'm doing well. How are you? Better than I deserve. What's up? So I'm recently homeless. My car just got repossessed, which was my house. And I've got like 300 saved up. I was wondering what would you do to just get yourself back up on your feet? How'd you end up living in your car? I was in foster care. I don't really have family or friends. So I was with my ex-fiance, and then we broke up. Okay. How old are you? 23 or 24 in August. You're what? 23. 23. 23. Okay. Are you working at all? No. My job went under. They lost their contracts. And I've been applying. I have about 200 job applications out.

1:53:42Not really sure why nothing's calling. um but again i have no car so i don't have a way to get to these job applications either where are you right now um i'm couchsaving at the moment okay right now i'm in a buddy's house for the next few days and then um i'm gonna be headed north to be staying with another buddy's house for a couple days and from there i'm not sure okay

1:54:11Dave Ramsey:All right. So the first thing I need you to do is I need you to get plugged into a strong community that can help you walk through this time. So I want you to find a good local church in the area that you're going to land in, whether it's this buddy's house or the next buddy's house. And you need to define how long you're able to surf their couch. Okay. Okay, so that you're not overstaying your welcome, but you're also taking full advantage of their generosity, not in a manipulative way, but you're able to use that. So I want you to plug into a good church and let the pastor know at that church that you've aged out of foster care and what you're facing.

1:54:51Dave Ramsey:Okay, and if you'll hang on, we'll hook you up with a church in that area where you're going to be. And then, you know, yes, we have to get a position of some kind. It's probably not about filling out applications. It's probably about connecting to a human to actually get a new job, start earning some income, get a thousand dollar beater car, earn some more income, get a one bedroom apartment, earn some more income and then begin to work on your career. We've got to get sustainable first. Hang on. Our team will pick up and we'll guide you, son.

1:55:57Dave Ramsey:This podcast is brought to you by Deuteronomy 8.18. Earl Wilson said Benjamin Franklin may have discovered electricity, but it was the man who invented the meter who made the money. Oh, that's pretty good. If you're feeling stuck and overwhelmed with your money, you don't have to stay there. The Total Money Makeover is the crash course that helps you learn the Ramsey Plan, how to beat debt, build wealth, and take control. It walks you through the seven baby steps in plain language. It's fast. It's a clear read. Most people finish it in a day. Over 10 million people have picked it up, and it's helped them finally get it.

1:56:33Dave Ramsey:Get your copy at RamseySolutions.com slash store, or click the show notes if you're on YouTube or podcast. Carlos is in Melbourne, Florida. Hey, Carlos, how are you? I'm doing good, Dave. How are you doing today? Better than I deserve. What's up? Hey, I am calling in. My wife and I are expecting our first daughter to be born any day now. Wonderful. Yes, very exciting. And we have about$6 ,000 in a savings account that we've been stowing away and are planning on using that for the cost of birth and any unexpected things that may come along with that. How much is insurance covering? um we're gonna find that out we should have met our deductible um through all of the prenatal screens and things of that nature um so as we move forward we're ballparking based on her co-workers we're on her insurance and what some of her co-workers who have recently had kids uh have said to expect around 5 000 maybe some more um i know it'll be different with each situation, but that's kind of what we're ballparking, where we'll be able to spend the$5 ,000 and then still have a little bit of money saved afterwards, if all goes well.

1:58:01The reason I'm calling is because I have$17 ,000 in my 401k, and I know that we're able to withdraw from that 401k penalty-free, it'll still go on taxes as taxable income. I've done the research, and it won't change our tax bracket if I do take the$5 ,000 out of the 401k. Nope. No?

1:58:32Dave Ramsey:No. Absolutely not. Absolutely not. Not even peace of mind. No. Okay, so my wife was right again? No. Yeah, she was right again. Yeah. What's your household income? We take home about$7 ,000 a month. Okay. Just rebuild your emergency fund as fast as you can if you have to use some of this money for if the insurance doesn't cover it, if the coworker version of the estimate was right. I don't like that methodology for discovering how much you're going to earn or how much you're going to owe. I think I would just rather talk to the health insurance company and find out what my deductible is and what my copay is and what my max out of pocket is and see how far up the ladder you are on that.

1:59:16Dave Ramsey:Because you might get actual information, real information, and find out it's$3 ,000, and then this whole discussion was for nothing. Okay, got it. I don't use coworkers who are broke people as my guideline for much of anything. Okay, got it. and you feel that maybe if it is less, whatever the case may be, everything will be all right. I don't need to take out. Let's pretend it's$8 ,000, okay? You take the$6 ,000 out and you pay it towards the$8 ,000, and you cover the other two out of your$7 ,000 a month income. First, finding out what your deductible or out-of-pocket max is. Sometimes it's the same number.

1:59:57Sometimes it's different. But knowing that, I mean, and prepping for that, that's what's going to give you ultimate peace of mind.

2:00:03Dave Ramsey:Yeah. Yeah. Congratulations on the new baby, by the way. And the great news about that is it makes you get very serious, some people, most people, about getting your crap together. Yeah, it does. I mean, you really start saving. You start getting out of debt. You start living on a budget. You start being like grownups and stuff because the shocking thing, I'm responsible for this helpless little small person. We'll wake your butt up, man. It's pretty amazing. I love it. Jessica is in Santa Barbara, California. Hi, Jessica. How are you? I'm doing great. Thank you. And I'm so happy to be able to talk to you.

2:00:40You too. So the situation is we just listed our home for the sale. We listed it for$2.4 million. We had an offer come in within an hour of it being listed for$1.8 million. Well, that's kind of useless. I know, right? Well, so here's the story. We have a$216 ,000 mortgage, a$45 ,000 HELOC,$50 ,000 solar system, so$311 ,000 against the house. Why are you selling the house? We're selling the house. My husband is 73. I'm 61. And it's like money is always an issue, always just arguing about it, fighting about it. I have a 17-year-old and a 20-year-old. They're always hearing my husband say I can't afford it.

2:01:31Dave Ramsey:Why does that cause the sale of the house?

2:01:36Because we can't really afford it. We're living off of his disability income.

2:01:42Dave Ramsey:Oh, so you're going to move to a cheaper area? That's what I think we need to do, yeah. I mean, is that why you're selling the house? we're selling the house because so we we've been living between british columbia and santa barbara um using the house in santa barbara as a rental to supplement the other house and the children's education so it's just kind of this this this mess like it's working but it's it's stressful and it's really tight financially what's your income what are you guys living on every month we're um we're living on his disability which is 4 000 and social security which is 1800 and then whatever i can get from the rb and b which is averaging about six to eight thousand but it's just dried up and do you have a nest egg do you have retirement so how why did you list it at 2.4 did somebody tell you it's actually worth that or you were just hoping yeah yeah no well they said it's worth it's listed on zillow it's like 2.9 i don't care what zillow said why Why do you think it's worth 2.4?

2:02:46Dave Ramsey:Do you really think it's worth that? I didn't necessarily. My husband is a realtor. He did. I mean, he's retired. And another, the person he co-listed with feels it's worth it. It's an expensive area. Okay, but so if it's worth 2.4, then 1.8 is an insult. Right. So we counter it at 2.399. Okay. Just to let them know that we think they're smoking crack. How long has it been on the market? One day. Literally five hours. Got you. Okay, missed it. Okay. So I'll give you a quick nope. If I'm the seller and I'm not desperate and I'm not freaked out and I haven't overpriced the house, if the house is actually worth this, which I can't tell from this conversation if you have any clue, to be honest with you.

2:03:38Dave Ramsey:I'm not sure any of you people have a clue in this conversation. Your husband, a former real estate agent who doesn't do anything, you running an Airbnb half butt and running back and forth between B.C. and Santa Barbara. Oh, my God, what a run. And you've got a co-listing agent who maybe sold one house last year. So I'm not sure anybody in this whole pile knows what you're doing in terms of pricing houses. But if you're accurate on your 2.4, then I'm going to counter that at a ridiculous 3.99999, just to let them know that their 1.8 is ridiculous. But it may give you an opportunity to get to the bottom of what the house is actually going to appraise for.

2:04:23Dave Ramsey:in its current condition, regardless of the story, regardless of the history, regardless of your wishes. Nothing works there. What's the house really worth? If it's worth 1.8, take their offer and you're done and you move on and use this as a time to get some cleanliness back to this chaos that you just described, because it sounded very disjointed to us on this end. It didn't sound good at all. It sounded kind of scary. So, and if you think a million dollars in your pocket's going to solve that, no, that million dollars will be gone in about 32 minutes. Not going to solve it. That puts us out with the Ramsey Show in the books.

2:05:06Dave Ramsey: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.

2:05:25Thank you.