Dumb Financial Decisions Stunt Your Financial Growth

26:30I love hearing that. And, you know, I heard such maturity in the dad. Oh, yeah. Holding this situation with an open hand. Not being controlling. What's a good idea? I want to kick him out, or I want him to stay and save money, and I disagree with you guys. It was neither one. It was more like, what's a good idea? What's good for my son? I love him. I mean, what parent out there doesn't want to be Jim and go, like, I'd love to have a kid who leaves the house at 21 with a great job and 60 grand in the bank and no debt? Ding, ding, ding. You won as a parent. Yeah, I think that you can check that on the bingo card for sure.

27:03Chelsea's in Pennsylvania. Hey, Chelsea, what's up? Hi, Dave. My husband and I are here, and we had a question for you. We discovered you not too long ago, and we are in the middle of the baby steps. Our question is, we have a business, and we took out a loan for$20 ,000 for the business in LLC, and we have personal debt of about$16 ,000. And we think we can get the personal debt down pretty quickly. doing the gazelle intensity that you said about. But my question is, once we pay off that personal debt, should we attack the business debt, or can we start investing? No, you need to get rid of the business debt, because it's not business debt.

27:50You signed for it personally. Gotcha. You're personally liable. The bank does not think that's business debt. The bank thinks they loaned you money. you only think it's business debt because you borrowed the money on your personal signature to use for business and that's the only reason you think it's business debt but it's legally not business debt okay so we need to focus on getting that down as well definitely and i definitely number one cause a small business failure should should we use like Like, how should we go about getting that business debt down? Because I know for the personal debt, you know, you sell everything that you have.

28:30You said you're going to go out to$16 ,000 like Gazelle Intense, you said. So you've been listening with great intensity. You're going to shrink down your lifestyle, beef up your income, not go out to eat, not go on a vacation until you get the$16 ,000 paid off, right? Right. Then do the$20 ,000. Okay. You have$36 ,000 in consumer debt, kiddo. Yeah. That's what you have. I was hoping that it was considered somebody else's. No. Not somebody else's. Nobody else signed it. You're the one who signed it. Is the business successful? Is it making money? You guys paying yourselves? It is now, yeah. That's why we took out that loan initially.

29:10That's why we lived off of$20 ,000 for the loan. So how much do you guys make? What do you make from the business? What do you take home? This year we're set to take home$78 ,000. Good. Awesome. Do you have jobs other than that? No, and we started two and a half years ago, so it's looking good. I think it's going to get better. It's looking okay. You're at least profitable, and, you know, you can see a future that's positive. That's good. But, I mean, it's not like you won the Super Bowl or something. I mean, you just now are getting to where you're making the money you would have been making if you had jobs.

29:47Right, exactly. So that's good, but now we need to go double it because the purpose of running the business is make some more money. So let's get after it and in the process to get rid of this debt. And next time you want to expand or do anything with your business, pay cash for it or don't do it. That's a great rule. That'll keep you open. Move the speed of cash. That'll keep you open.

30:48Transcription by CastingWords Real security should stop a crime before it even starts. And that's why I only trust SimpliSafe home security, because they take action while a criminal is still outside your home. When someone suspicious steps onto your property, SimpliSafe's AI security cameras identify the potential threat and alert their professional monitoring agents. The agents can then confront the criminal, and if they need to, trigger sirens and spotlights and dispatch the police. And unlike other systems, you don't have to confront the intruder yourself. With SimpliSafe's 24-7 monitoring agents, it's like having a security guard stationed right outside your home.

31:33And with a 60-day money-back guarantee and no long-term contracts, more than 4 million Americans trust SimpliSafe to keep their homes and families safe every day. Right now, get 50 % off your new system at SimpliSafeDirect.com. That's SimpliSafeDirect.com. There's no safe like SimpliSafe.

32:12Our EveryDollar team is offering free live budgeting workshops this month. In Budgeting 101, you'll learn how to make a budget with EveryDollar, get tips from our experts, and even ask your questions in a live Q &A. Plus, you'll get a step-by-step walkthrough of EveryDollar's features so you can use the app with confidence and learn to walk exactly the Ramsey way. The budgeting app is going to cause you, help you to do it. It's going to teach you as you're doing. It's pretty crazy how cool this thing is. So Budgeting 101, it gives you the support you need to get the budget going, find the margin, and walk this stuff out the Ramsey way.

32:49Sign up for Budgeting 101 for free. Ramseysolutions.com slash workshop. Logan is in Indiana. Hi, Logan. How are you? Good. Yourself? Better than I deserve. What's up? I was wondering if I'm financially doing what's correct in life. And a little backstory to that. So about seven years ago, a little before that, but my mom gave me a car as my first car. Had some mechanical issues. She offered to fix it, and I was paying her back. I never believe that car got destroyed, but I saved up enough cash. I bought another car. I want to blew the motor, took the money I had left from that. And my mom found a old college fund that she put together with like when I was born and she completely forgot about it.

33:41Took that money, bought another car. Then I got into a head on collision, took that money, bought another car, then blew the motor on that one then finally told myself all right let's go to a dealership let's go get a safe car that way so it's under a warranty and everything that one evidently started me making problems that were not covered under warranty then so then the dealership was able to buy that car back but then get me into a brand new car still with a little uh under money leftover from the old one. So now I'm 46 ,000 in debt for that one. But then at the time when I had the car that I got in the head on collision, me and my fiance at the time bought a house.

34:33And when we, we separated five years later and I had a family to go back to, he had no family to go back to. So I left everything for the house for him and dropped my name off of the mortgage and everything. So he took over that. How did you drop your name off of a mortgage? Well, he refinanced and everything. So you gave him the house and he refinanced the mortgage. All right, good. So you're clear of the house and you suck at buying cars. Okay. You ever tried riding a bicycle? This might be the solution to your problems, man. so i moved back home and since i moved back home and i got a better job i have offered to pay back my mom for everything she's done for me and uh with my new car i'm letting her drive that and i took over her old car because where i work it utterly destroys your car and i don't want the brand new car to end up like my other cars so is financially me taking care of my mom that way and all this correct the way I should have done my life?

35:42I mean, you obviously don't think so. That's why you called. Yeah. Because, I mean, the fruit of this is horrible. How old are you? 27. Yeah. And you're at home with a$46 ,000 car that you owe on that someone else drives. So, yeah, I mean, the decisions you've made have brought you here, so we can't call them good. No. That's fair. I mean, that's just an observation. You've already owned that observation, even in just the telling of the story to us. Yes.

36:23So, no.

36:27With what you outlined, I'm not sure you owe your mother any money. There was a couple times she gave you money, a couple times she gave you your college fund, a couple times she helped you get a transmission, and if you've paid her back for that, a blown engine. You blew a lot of engines in this story. Do you like to do oil changes and stuff? Yeah, I do a lot of my own work. Maybe you should have a professional start doing it. Yeah, I mean, based on the number of engines. I don't know what the root of all these problems are. A lot of engines being blown. All right. So how do we move forward from here with what we should have learned?

37:06OK, number one, we've got to get better at analyzing transportation as being solid transportation and not overpaying for it, but also not buying crap. And so don't ever buy another car. But what you don't have a mechanic, an independent mechanic do the inspection before you buy the car. Period. Number two, don't let some dealer talk you into upgrading out of a lemon into a super expensive semi-non-lemon that's so expensive that your mother ends up driving it. So this doesn't work. That car needs to be sold. You know what it's worth? Right now,$38 ,000. Okay, so you need to go borrow$8 ,000 from the credit union and sell this car and then get you a$5 ,000 or$10 ,000 car, which scares you to death because you blow engines like anybody I've ever seen.

38:00But you need to go get a$5 ,000 or$10 ,000 car, pay cash for it. What do you make, by the way? So far, this will be my first year that I'm fully at my job, and it's just shy of$200 ,000. Okay. Oh, that's great news because you're single. Right this second, you don't have much overhead, and so you can get yourself squared around and go out and be an independent human being from your mother and get rid of this car and get a car that you pay cash for that is reliable, that a reliable mechanic gives you an analysis on before you buy it. And then if you want to – go ahead. I do have five other cars that I am using right now.

38:42Goodness gracious. Do any of them have dead on them? No, only the one. You have five other cars? Yes. Where in this story did we miss that? Are they functioning? Yes, they're all functioning. Two are work vehicles that are at work, and then one is a daily driver, and another one is a race car. Okay. So do you have any money saved, by the way? I got$6 ,000 right now. Okay. I can tell. You got a lot of money. Because I'm trying. All right. So what do you do for a living now? I'm a slab hauler at the steel mill. Okay. Cool. Good for you. The good news is you don't need to go to the credit union to borrow money because your next paycheck is going to cover the amount you're underwater on and probably going to sell this race car, maybe one other car, to clean up this mess.

39:40And get out of your mother's basement, dude. Go get an apartment, be like a guy, and have a reasonable number of cars and a work truck, like one other car, like your daily driver and your work truck. And until you've got all of that, you're not making good financial decisions, no. I would simplify your life. I think I heard – let me see if I heard a trend, George. See if I can pull the thread here. Almost all of his financial problems revolve around cars. too many different kinds too expensive blowing engines the only one that he'd pulled off smart was he got his uh his roommate to take his boyfriend to take over his loan to refinance that was a smart move that was a smooth move to get out of that mess but the car he never did a single car transaction that was that smart so yeah cars are killing you so if the word car shows up anywhere in your brain run away run away anything that has a car has a motor in it or wheels on it is a curse to you sir because every interaction you've had with vehicles has been negative now most people have negative interactions because they do break and they do go down in value and people do get upside down in them and they do pay too much but not like you man you you made it into a science and so you've got to run when you hear the word car because everything bad that has happened to your money just about everything bad in the whole story you told us was revolving around cars it could have been avoided if you just rode that bicycle just like i said okay be careful that also has wheels yeah that's true anything with wheels or a motor gives this guy trouble but no engine on that bicycle.

41:34Oh, man. I'm sorry you're going through this, but you can clean it up. That's the good news. You have a great income. The good news is, Logan, you can back out of some of these bad decisions and be a three-man very soon. Like by Christmas, your life has changed if you do this. Yeah, yeah, yeah. And you'll just be almost lots less cars. Lots less cars.

42:02Hey guys, it's open enrollment time for health insurance. And if you have ever felt overwhelmed trying to figure out your healthcare costs, you are not alone. For a lot of families, healthcare is one of the biggest line items in the budget and it gets more confusing every year, but you don't have to settle. Christian Healthcare Ministries is a biblical and budget-friendly alternative to health insurance. And I am proud to recommend them. With CHM, you are joining a community of believers who actually help share each other's medical bills. Yeah, it's true. Members have shared over$12 billion in healthcare costs since CHM started nearly 45 years ago.

42:43And it's simple. You choose your provider with no network limits. You submit your eligible bills online and other members help share your expenses. CHM has program options for every stage of life, whether you're single, self-employed, or raising a family. Y 'all, open enrollment has a lot of people scrambling right now, but CHM lets you join anytime. So go to chministries.org slash budget to check them out. That's chministries.org slash budget.

43:27Welcome back to The Ramsey Show. in the Fairwinds Credit Union studio. I'm Dave Ramsey, George Camel, Ramsey personality, co-host of the Smart Money Happy Hour, and number one best-selling author is my co-host. Catherine is with us in Fort Worth, Texas. Hi, Catherine, how are you? Hi, Dave. Hi, George. How are you guys? Better than we deserve. What's up? I'll just cut to the chase. I basically I got served with divorce papers two weeks ago I'm kind of in a tailspin but most importantly I'm just really concerned on how do I like move forward my husband and I previously did go through a debt free journey to the point where we paid our house off and everything we recently sold that house back in April and bought what I thought was our forever home.

44:27And so now I just kind of feel the weight of, like, being now, like, stuck in another mortgage again, and we have two kids, and just, like, what do I now do for retirement? I just have a lot of questions, basically. I'm sorry. It sounds like you didn't see this coming. I didn't. I mean, did I know that we were perfect? Absolutely not. However, I just never thought this was something that would happen.

45:07Well, the hard part about what you're going through is a friend of mine that does divorce recovery counseling says that a divorce turns a marriage into a business transaction. and I can hear in your voice that your heart is broken and when my heart is broken, I don't function as well. And yet you are going to have to. Real clear business decisions with math, not with emotion. Okay? Yeah. And so words like forever house are no longer part of the vocabulary. instead it's just a house that has a mortgage and it's a problem so what's going to be what's going to happen to the house in this divorce um and you're debt-free except for that yes sir good and how much money do we have in 401ks and so on um i don't know he handled most of it.

46:10I do know what I have in my 403B at my job. It's like roughly$85 ,000 but we had like a separate Roth IRA. Actually, I think two separate Roths. Who's handling those? Were those with a SmartVestor Pro? If I'm being honest, Dave, I don't know. Like I said, he kind of, because I don't really understand the stock market and all that stuff. So I was like, okay, you got it. And I kind of let him handle that part. I do think he did reach out to someone, but I'm not 100 % certain. Okay. Have you talked to an attorney yet?

46:52No. I was in the two months before. I was really just trying to do everything I could to fight for our marriage. Sorry. So the serving was not a surprise. Didn't want to talk about it? Okay. Well, the serving wasn't necessarily a surprise, but in terms of, like, just everything happened so quickly. From the moment he was just telling me that he was happy, he still lives here at the house. Well, that's weird. Do you guys have kids? Yeah, two. How old are they? I have a four-year-old son and a 13-month-old daughter. She's turned one last month. All right, here's what you have to do in this situation.

47:38Knowledge is power. And when you're in trauma, in a traumatic or dramatic situation, facts are your friends. And so as you gather more and more facts about what this is going to look like three years from now, it's going to help you process the emotion. The emotion is quadrupled The broken heart And when you start talking about your babies You start crying That's normal That's four times worse Because you have no idea how this is going to turn out Because you don't know anything about the money And so you need to meet with a lawyer Tomorrow And start learning In the state of Texas What the wife is going to get And you're going to be Pleasantly surprised that it's a lot?

48:32Well, does it matter that, like, I've been the breadwinner the majority of the time? Yes. And I've never... How long have you been married? Seven years. It'll be eight years in March. And so, well, I don't know in the state of Texas what your alimony laws are going to be. It's possible that if you made a lot more than he did, you might be due for alimony to him. But you need to know these facts. I don't know them. And you get that from an attorney. and then you grab Mr. I've served you with papers and go, okay, where is the information on all of our accounts? I need it for my attorney.

49:13And he needs to tell you where the accounts are and what the account numbers are and print off the pages and hand them to you. And if he doesn't, say my attorney is going to make you do this if you don't do it. Okay? because you need to gather up the facts. I don't know if you're sitting on a million dollars. I don't know if you're sitting on$50 ,000. How much equity is in this house when you sell it? Because you're not going to be able to keep it. Yeah. I mean, when we sold our house, we paid off completely. We put a large chunk of that down. How much money are we talking about? We put$250 ,000 down there.

49:55and then the mortgage that I have is$400 ,000. Yeah. Okay, so you're going to sell the house and put$250 ,000 on the table, of which you will get at least half to start your new life with. And what does he make a year? Do you have any idea? Yeah, probably about$60 ,000 to$70 ,000. He's going to be paying child support out of that. in 100 % of the states 100 % of the time. Okay? If they're his kids. Yeah. Okay. And so pretty simple. So these types of facts, then you go, okay, you can start to project into the future what your new life looks like, and that is a very cold and calculated, non-dramatic, non-emotional thing, but it helps you then to stay in the moment in a highly emotional situation.

50:53Because if you're not highly emotional where you're sitting right now, you'd be weird. Yeah. Okay? So you have permission to cry. You have permission to rage. You have permission to, when your children's names come up, for your stomach to go in your throat because of what this means to them. and your permission to make decisions very rapidly for Mr. I'm going to serve you papers to move out. Like now. We either is or we isn't. We isn't playing house when there's divorce papers on the table. And so get your attorney's involvement in all of that. And honey, you need an attorney. By the end of Friday afternoon, if you don't have one, this is now on you.

51:39This is how you've got to deal with it. And I'm not picking a fight. You didn't pick the fight. The fight came to your door. Literally, they knocked on the front door and gave you papers. I mean, it really did come to your door. And so, yeah, you've got to have to deal with this. And facts are your friends. You're going to feel a lot less out of control and chaotic the more you understand and know about how this is likely going to shake out.

52:15I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly, and they don't have life insurance. We actually took a question of a lady and she had three kids pregnant and husband didn't have life insurance. And I'm like, I can't even imagine. Or even if it was opposite, right? If a mom passed away, there's a dad with kids and trying to figure out how am I going to afford child care?

52:52How do I outsource some stuff that maybe she was doing? And it just takes the grief and the sadness of something like a sudden death to a whole new level. Like when you have to think through how am I going to pay my bills in the middle. How am I going to eat next week? Yeah, in the middle of all that grief. Like, it's just, it is. It's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm, like, so big on for people to get because it's inexpensive. Xander is the place that Winston and I actually get all of our life insurance. And we keep re-upping it because I'm like, I just want it there.

53:22Like, there's something about that safety of knowing that you have money if something suddenly happens. And it doesn't cost much because Xander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You've got to say it out loud, and you've got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. It costs those stinking pizza. It really is. So that is one thing to do to say I love you to your family. So we've used Xander for all of our family's needs for insurance for many years, including, of course, term life insurance.

53:53To get a free quote, go to 800-356-4282. That's 800-356-4282, or go to Xander.com.

54:19Ray is with us in Miami. Hey, Ray, what's up? Hey, thank you very much for taking my call. I'm having kind of like a midlife crisis purchase. I'm interested in buying a new Bronco. and so I needed to get some advice. Would it be more wise to pay it off in cash or should I finance it and invest that$50 ,000 into the market to try to make a profit? I have met zero millionaires that became millionaires borrowing money on a car and investing it. So, no, I would pay cash for it or I wouldn't do it. Okay. Because it's going to go down in value like a rock. The new Broncos are very cool, too, by the way.

55:07I particularly like the new Raptor Broncos. They're sharp. Yes. How much money do you have saved? Currently, I have about$120 ,000 saved. What's your net worth? My net worth is about$700 ,000. Okay. We teach folks not to buy a brand-new car until they've got a net worth of at least a million because new cars lose so much value. So I'd buy a one-year-old or a slightly used, you know, 10 ,000 mile or something, same year model. Anyway, let someone else take the butt kicking on the depreciation of the first year and pay cash for it. And if you're going to do that, that's the only way I would buy the car.

55:46And like I said, it's a cool car. I don't have any problem with that. And it should also be less than 50 % of your vehicles added together. there. Anything with wheels and motors should be less than 50 % of your annual income. Otherwise, you have too much invested in things going down in value. But I'm guessing that you probably make over 100. And I'm guessing you have the cash to do this. You told us you did. And so if you buy a like a one-year-old or a 10 ,000 mile or 5 ,000 mile one, you probably are going to save 10 or 15 ,000 bucks for real. And they'll drop 10 % when you drive it off the lot.

56:24So just look for one that's barely used and you'll get a discount. Yeah, because, guys, I mean, new cars are the worst thing we buy in terms of loss in value. When you drive the brand-new car that you bought over the curb and it goes blump, blump, leaving the dealer, that sound was$10 ,000 or, in some cases,$20 ,000. Blump, blump. Yeah, just each one of those blump, blumps right there. I mean, it's a lot of money. And you can afford to do that if you've got a million dollars and you're paying cash for it and all that, that's fine. I've done it. I'm not mad about it. But, you know, you can't go buy a, in his case, he's buying a$50 ,000 car, he said.

57:08And you can't do that if you're making$50 ,000 a year and then figure out, oh, I don't know why I can't get ahead. It's because you've got all your money invested and things are going down in value. And then you regret it, but you can't sell it because now you're$10 ,000 underwater on it and now you've got a new problem on your hands. Exactly. So, Ray, I think you're in a position to buy that car. And I think I would advise buying the car because it's something you want, and you've worked real hard to get there. But I'm going to pay cash, and I'm going to buy a slightly used, unless I have a net worth of a million dollars.

57:37That would be the only adjustments to the advice. Tyler is in Salt Lake City. Hey, Tyler, what's up? Hey, how's it going? Better than I deserve. How can we help? so my my wife and i we accidentally fell into some untaxed freelance work my my wife she she's a nanny um she was doing it just as a side gig to make some extra money and the family that she was working for uh asked her to work full time so she's been working for them almost full time just kind of under the table paid through venmo um hasn't paid any taxes on it and i kind of fell to the same situation. There's a startup car detailing business.

58:15It was, you know, a couple weekends here and there. And now it's, you know, 50-hour weeks. And we've finally been able to get ahead. We're working on paying off our credit cards and everything like that. But the issue is that, you know, even though we're getting ahead on our debt, we're not paying any taxes. And it's... I'm scared of the repercussions of what that might entail. And I don't really... I want to get out of it. I don't know if I want to leave my job and just find something that pays taxes or it's not a big deal all you gotta do is just start paying your taxes it's not a big we've been thinking everything every dollar we make into paying off our debt and well now you're not because you've not been paying your taxes and that's you you're right you should be scared about that you need to be paying your taxes and when what's left over after you pay taxes then you work your household budget and pay off your debts and uh i mean everything we We've been trying to pay the credit cards.

59:10Our cars have a bunch of deferred maintenance that we've just been trying to get caught up on. You think you're going to talk me into telling you to not pay taxes? No, no, not at all. Okay, then quit arguing with me. That's what I'm... Okay, you've got to pay taxes, man. So starting today, 30 cents of every dollar goes into a savings account to pay for taxes, and you can log on to the IRS website and do your quarterly estimated payments to get ahead of it instead of hoping at the end of the year that you did it. Yeah, if you do your quarterly estimated payments, a profit on your businesses. So if you're running a detailing business, make sure you have a separate checking account for your business.

59:42Put all of your income, and her income for that matter, into that business account. And then remove any deductible business expenses, cost of doing business, a real business expense. Like if you buy a pressure washer, or you buy soap, or you buy whatever. Those are deductible items in your profit and loss statement. then what's left in that account after you've done your expenses is profit when you get ready to bring some of that profit home we recommend setting aside 25 to 30 percent of that for your quarterly tax estimates your estimated quarterlies are called okay and so just so if you're going to bring ten thousand dollars out of that account set aside twenty five hundred in a separate account just to pay your quarterly taxes.

1:00:32And then once a quarter, you're supposed to fill out this very simple little form, which is your income minus your expenses equals your profit. That will then be calculated and create your tax bill for that quarter, and you'll have the money for the tax bill because you will have set aside 25 % to 30 % of the money as you pull it out of the business account to bring it home. Is that all logical? Yeah, that makes sense. Yeah, so we're going to reduce the cash that you have to work your goals, Your goals are getting out of debt, deferred maintenance on the vehicles, and those kinds of things. But we're also going to keep you out of jail, which is preferable.

1:01:08Yeah, very much. Yeah. I get in touch with a tax pro to help you guys with this too. Your life got complicated, and it's time to seek the help of a pro. So you can go to ramsysolutions.com slash tax pro and get in touch with one that we trust to help you walk through this and do it the right way. Let me give you clarity on that because I don't want to just leave drama out there hanging in the air, okay? The clarity is it is not illegal in the United States to not pay your taxes. It is a criminal act to not file your tax return. Okay. That's where you're breaking down. So you file the tax return, oh, and you're going to pay your taxes because the penalties and the interest are ridiculous if you don't pay them on time.

1:01:49I was looking into it, and it's going to be a struggle to pay the taxes in general because we haven't been setting money aside, but I know if I don't pay them, it's just going to get upside down in a situation that I'll never be able to catch up on. Exactly. You're going to wake up one morning with a$25 ,000 IRS bill, and we don't need that. It's going to reverse all the good that you've done with the cash, and then some. Plus, it's emotionally hanging over your head because you know in the back of your head, this is the monster in the closet, and one of these days it's going to kick the door down, and you just don't want that.

1:02:25So let's get out in front of this, get it all squared around, and then with what's left, we'll start working our system again. But that's definitely the way to go. And so you can't use the excuse of I've got more important things to do with the money because you don't. The IRS, when they come after you, they have virtually unlimited power in terms of, for instance, If you don't pay your MasterCard and they sue you and they want to garnish your check, they have to go to court and execute on the judgment and get the judge's permission to garnish your check. If the IRS wants to garnish your check, they don't sue you.

1:03:05They just garnish your check. And you go to get your check at work one day and they go, surprise, there's nothing there. And yeah, it's not fun. So you don't want to be on the other side of the KGB. I mean the IRS. And sidebar, wife and the family she's working for being a nanny, she's an employee. She needs to be W-2. They need to do this legally by the books, and they need to pay their share of taxes. She pays her share. No more under-the-table stuff. It could be$10.99 if she is running a nanny service. Yeah, but she's full-time. If she's a singular one employee, if she only has one person she nannies for, then she's W-2.

1:03:43You're right. So that family's getting off scot-free because they're not paying the matching portion that they're supposed to be paying.

1:04:07Hey guys, if you're already shopping at Aldi, way to maximize your grocery budget. Good for you. Now, here's how to level up your savings. Make Aldi your first stop every week. From fresh organic produce to grass-fed beef to marinated chicken that's ready to cook to high-quality dairy products, you'll be able to snag everything you need without the hassle and nonsense. Just legit quality and low prices. And families like yours can save up to$4 ,000 a year just by shopping at Aldi. And that's not a hack. It's just a smarter habit. So stop overpaying, make Aldi your first stop for groceries, and watch the savings stack up.

1:04:40Find a store near you at Aldi.us. That's A-L-D-I dot U-S. Savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market.

1:05:07it katie is in wisconsin hi katie how are you i'm doing good thank you for taking my call Sure. What's up? Well, my husband has a bit of a spending problem, and he's gone through our personal savings, which was our emergency fund. And I'm afraid he's going to start in on our money that we have saved for a down payment on a home. And I wondered how I could protect it. Why does he have an out-of-control spending problem? What's he addicted to? do? Just whatever he sees on the internet that he decides he has to have and he doesn't stop until he gets it. Oh, so he's a child. That's a good way to put it.

1:05:50Yeah. How long has he been this way? As far as I can tell, his whole adult life. How long have you been married? Two years. Okay. And how old is he? 34. Okay. All right. So it sounds like you guys are going to enter marriage counseling or your marriage is going to end. I have tried to make an appointment with a marriage counselor and I'm not sure. I just wanted to protect it in the meantime so that it's not gone. I worked very hard for that down payment. And he didn't? It would make me sick. No, I brought it into the marriage. Oh, okay. Yeah. Well, the only thing you could do on a temporary basis is just take it out of that account and go open another account at another bank and put it in your name only.

1:06:45Yeah, I'm sitting about putting a cashier's check. No, you just open an account in another bank. Doesn't have his name on it. He can't get to it. Okay. And, of course, he won't know where it is either unless you tell him. Right. And I will bring this money back into the marriage once I determine that we have a marriage. Right. And currently we don't because currently you are trying to destroy our lives. It is very disheartening. It is, yeah. It's heartbreaking. Yeah. It's awful. Yeah. What's his response when you bring all this up? just to get angry at me and continue the argument and go down rabbit trails until we're both just like walking away like we didn't get anywhere this is not going to end well if you guys don't get some help okay no if you get some help it can end well it can be worked through but you guys don't have the tools to navigate this nor does he have the desire right now so basically he's misbehaving and when you bring it up he starts gaslighting and you end up the you end up the problem rather than the solution yeah i'm a disobedient wife yeah oh there we go i love that one yeah let's go ahead and christianize our stupidity yeah that's just that's that's wonderful yeah what he what he is is a horrible husband that's what he is so if we're going to go disobedient wife.

1:08:14We're going to start calling names. We can go there. But I don't think name calling is going to help this. I think the only thing you've got is you need to move the money into your name and you need to see a marriage counselor. And hopefully you can start getting some tools on how to deal with him to get him to the marriage counselor. And the two of you can spend some time learning how to navigate this together and stay together. And I sure hope that's what works. I sure hope that's what happens. If it's not, then you're going to have see an attorney and use some of your down payment money on that, and that's going to end the whole thing, right?

1:08:49Now, can you claim that I stole the money if I do that? It's your money. You brought it into the marriage, and I didn't steal it. I moved it. I'm not hiding it from the judge, and I'm not hiding it from the attorney. I'm hiding it from the guy who's out of control. And you're not even spending it. And by the way, it's the couple's money, but the judge will determine if you, having brought it into the marriage makes it subject to be split in a divorce. So a little tough to steal something that's yours. Okay. Okay, that's what I was worried about. Do you guys have debt? No, except for an orthodontist payment.

1:09:28Okay, I would freeze your credit because my fear is this guy starts taking out debt and your name's attached to it. Okay, how do you freeze your credit? Jump on the credit bureau sites.

1:09:44And they each have, there's three of them, they each have a place to do a freeze. And I would do them directly on the sites. I would not do them through some kind of a service. It's like go on to Experian's website, TransUnion's website. TRW. That's the three. Okay. Yeah, Experian, TransUnion, TRW. Just jump on their site and do a freeze. It takes about 10 minutes. and that keeps anyone from borrowing money in your name if they check the credit bureau report. If they don't check it, then you've got a different kind of identity theft. But I'm not putting identity theft past this guy at this stage.

1:10:20Once he runs out of savings. The good news is you can undo every bit of this and have a combined, transparent, healthy, clear, wonderful marriage once you get some healing in this situation. okay okay so let's pretend that you called us up and you said hey my husband has spent fifteen thousand dollars on cocaine in the past four months all right the advice we would give you is exactly the same advice we just gave you okay that makes sense that he has to have some help for his problem your marriage is in jeopardy so you have to have some help for your marriage and in the meantime you have to protect yourself from someone who's misbehaving financially.

1:11:09Okay? Okay. And, you know, that's what you've got to do here. And, again, I'm not doing this to pick a fight with him. That's not the point. On the contrary, I'm trying to make all kinds of suggestions that present a situation where healing can occur. But if he persists on this, and this is the only way he's willing to live his life, and any time you question his spending everything you make and then some, he yells you're a disobedient wife, if that's the only position this guy has, you're not going to be married in two years. You'll be done. Because sane people don't stay in situations like that.

1:11:49That's just cray-cray, and you don't stay there. Chase is in South Carolina. Hey, Chase, how are you? Hey, Dave, how are you? Better than I deserve. What's up? So I am 21. I'm in baby step two, and I have a mortgage. I have a wife, a son, and another son due in two weeks. Yay! Yeah. I know we want to move in the future, obviously after baby step three and four are in order.

1:12:22And some of my family is recommending that whenever we do move, that we keep our current home. which will carry a mortgage, and rent it while having a mortgage on our new home down the road. And I know... Well, that's sweet, but they're broke, and we don't take financial advice from broke people. Right, yeah. Even if they're in our family, especially if they're in our family. Right, yeah. No, that's a bad idea, Chase. That's a bad idea. So, and I'm right on board with you, and I've argued the same thing today. You don't have to argue. It's your house. yes sir is it in your name yes oh absolutely you and your wife on the house right well yeah it's just my name is on the on the deal so whoever this is your mom or your dad or her mom or her dad just tell them thank you for your input we've decided to go a different direction i guess i just like to prove them wrong on the name you can't the way you prove them wrong is you go become very wealthy doing the right things and then they look over and go well i guess chase was right after all.

1:13:26Right. Yes, sir. But the number of times a 21-year-old convinces his parents that they're wrong is really close to zero. Outside of risk, is there, because obviously you say people that do these things don't calculate for risk. Yeah, exactly. Outside of risk, what are the kind of calculations and numbers I can expect to be like, okay, yeah, it doesn't make sense. You're still trying to convince someone else. You're already convinced. All I've got to convince you to do is be a man and make your own decisions and just smile and say, I've decided to do otherwise. It's risk. It's exactly what it is.

1:14:01And you don't need to take on that risk. You're 21. You've got a marriage and two little babies. Besides that, it doesn't even matter today. We're not even talking about this today. This is all theory over Thanksgiving dinner, arguing with broke people in the family over Thanksgiving dinner about what you might do five years from now. Bullcrap. Just sell a house when you get ready to sell it. It's got your house. Let them be upset. They're right. You don't get a vote. You'd be upset about not having a vote. I mean, sorry. I mean, George drives a car I don't agree with, but I still like George.

1:14:35We're still friends. We're still friends. He's working. I don't get a vote on what car he drives. I can just abuse him about it.

1:15:12Investing may seem complicated or confusing, but it doesn't have to be. The Ramsey Investing and Retirement Hub is packed with interactive tools, including the calculator that will help you figure out how much you're going to have if you save a certain amount and if you have a certain amount. Wow. Check it all out, RamseySolutions.com slash retire, or click the link in the description. Today's question of the day is brought to you by YReFi. If your private student loans are in default, you need a lender who sees you and meets you where you are. YReFi offers low fixed rate plans based on your real ability to pay.

1:15:49Learn more at yrefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not in all states. Today's question comes from Ariel in California. My husband and I live in a joint family home with our two kids, my father-in-law, mother-in-law, and sister-in-law. The house we live in is in both my husband and his father's name. My father-in-law gambles and plays lottery on a regular basis. He's 58 with no savings. He works at a gas station and makes$60 ,000 annually. He has$50 ,000 in credit card debt,$20 ,000 on a car. We owe around$50 ,000 on the house. My husband wants to pay off his father's credit card debt so we don't have to worry about losing the house to pay his father's debts when he passes.

1:16:33My husband and I are debt-free other than the house. Would this be a wise thing to do? I haven't seen a wise thing in this whole story yet. This is a nightmare.

1:16:47Oh, my goodness. Oh, Ariel, you guys are not going to do what you are going to have to do. But until you're forced to do what you should do, which is not have been in this in the first place. And the only way out of it, of course, is to sell the house and everybody take their money and go to their corner. But as long as you're attached at the hip to people who are misbehaving with money, you're going to be affected by them. and that's what you guys signed up for in this ridiculous situation, the old woman in the shoe here. And it's just kids are everywhere. People are everywhere. Sisters and brothers are everywhere.

1:17:27This is a nightmare. And so, wow, I'm sorry. Now, a question for you, Dave. If the father dies, the father-in-law, the credit card debt is unsecured debt, but his name's on the mortgage. Would they come after family? His name's on the, not the mortgage. The mortgage doesn't matter. His name's on the deed. Yeah. That's what matters. So could they come after them for their credit card debt? Not the individual people, but they can put a lien on the house. That's what will happen. Absolutely. Because when you die, what you own, the father-in-law in this case, he owns part of the house, stands good for what you owe his credit card debt due to his gambling habit.

1:18:08And by the way, that's not going to get better because this guy's not going to change. So if you pay off his credit card debt, you know what it's going to do? In a month, he's going to have some credit card debt. He gets a clean slate and goes back into debt. Sure. Yeah. And there's nothing you can do to stop him. So, you know, no, your husband's wrong. Paying off the debt does not help. You guys ought to, at a minimum, you need to get the mortgage paid off and then build as much wealth as you can possibly build and make sure that there is a will involved that upon either of them's death, you guys get the house.

1:18:49And then there's some provision for the remaining spouse, the father-in-law or the mother-in-law. And then sister-in-law got thrown in there somewhere. Well, sister-in-law's not one of the owners. Yeah, she's just living there. Yeah, she's just hanging out. But at some point, this has to be cleared up. and, but no, you don't pay off his debt because he's going to run it back up. Then you go build wealth on the side and then if he dies and some of the credit card debt has to be cleared to keep the house, then you'll have to do that if you want to keep your house because you signed up for this ridiculous situation.

1:19:23So what would I actually, if I loved all of you, the parents and you, what would I tell you to do? The best thing for you for 10 years from today, how's this turn out the best? Put the house on the market and sell it and go to your corner. Everyone gets their own place. Everybody gets their own place, gets their own money, and you go figure it out. Well, you don't understand. Prices in California make people do stupid things. Yes, I do understand. But that doesn't mean, you know, there's no excuse for stupidity, even in California. So you just still have to deal with what you've got to deal with.

1:19:56Sorry. Well, Dave, you don't understand my culture. In my culture, we all live together and misbehave. Stupid is not a culture. this is stupid this is a stupid transaction it's set up for failure there's no way this turns out this is going to go to ashes there's no way this turns out it's going to turn out bad for everyone involved no one's going to end up liking each other no one's going to end up with a financial blessing from this no one's going to come away going oh that's the smartest financial move i ever made that those words are never going to be uttered over this deal it's not where it's going And so, you know, that's the problem.

1:20:35And so there's no reason good enough to enter into something that's stupid and that's harmful. And ignore all of the signs. So, yeah, the only one to see. Of course, your husband thinks nothing's wrong because he grew up with his dad. And he thinks his dad's normal. And, yeah, he works at a gas station. He makes$60 ,000 and he runs up$50 ,000 in credit card debt buying lottery tickets at the gas station where he works. Get a different job where he doesn't have access to lottery tickets so easily. Spending all of his paychecks there. Yeah. Or maybe, I don't know, grow up and be a normal person instead of doing stupid stuff.

1:21:11But, yeah, I mean, it's just, oh, gosh, so harsh. So harsh. It's not going to go well, Ariel, for you and your family because you're not going to deal with it. Your husband's not going to deal with it. He doesn't have the backbone to stand up to his parents to split this thing up. And you guys are going to end up in the soup before this is over. and then you're going to be calling here with a great story that ain't a great story. Sarah's in Montana. Hey, Sarah, what's up? Hey, guys. So my question is, how do I reinvent myself after losing my dream job? A little bit of background. I was a county prosecutor.

1:21:48I happened to fail the bar, and now I'm kind of feeling lost. Well, you can take the bar more than once. yes so i don't know whether or not i should reinvent myself in another area of law that is a higher paying job rather than well you're going to pass the bar either way yes okay so i am already scheduled to take it in february oh good i just don't yeah i just don't know why is county prosecutor your dream job when you could make eight times that doing something else in law My dad was a career-long law enforcement officer. I've also had some things in my past that I've been a victim of abuse as well, and so I had this dream of working with special victims.

1:22:41So you saw it as a crusade, not a dream job? Because financially it's anything but a dream job. Agreed? Agreed. It's a crusader's dream job, though. And that's cool. I like that. Yeah. Yeah. I just don't know whether or not I should take this time and reinvent myself in another area that will make more money just to pay down some of the debt from law school. How much debt have you got from law school? Law school loans alone are about$110, and then I do have some other things on top of that. And the way you're using your language, you're single? Yes. Okay. How old are you? 28. Okay. Well, Sarah, you're smart.

1:23:27Dumb people don't get to where you are, okay? They don't complete law school. They don't land in a county prosecutor's position. They're not scheduled to take the bar for the second time. You have good thinking skills, and so all you're wanting us to confirm is what you already know, and that is that I don't think, and I think you're over dramatizing and saying to reinvent yourself. I think there's a part of yourself that just becomes an excellent defense attorney and protects victims. Right. Or an excellent prosecutor of some kind later on or whatever. You don't have to go into some obscure corner of the law that doesn't involve crusading.

1:24:10There's all kinds of ways you can crusade within the law and the county prosecutor's office, just one place. So it's not reinventing yourself. It's just saying there's other options to apply my passion and my intellect where I can make enough money to get this mess cleaned up. And then I've got more options when I don't have the bills anymore. So, yeah, I'll take five years and go be somebody, make 200 grand and knock this crap out. And then if you want to maybe, you know, I don't know. There's a lot of different ways you could do what you're doing, as you know. and I don't think it's inconsistent with who you are.

1:24:49I don't think it's reinventing yourself. I think it's just another version of your current self.

1:25:00Buying and selling a home is a big deal, and you want an expert in your corner fighting for you to get the right deal at the right price. That's why we only recommend Ramsey Trusted Real Estate Agents. They're hand-picked pros who know their stuff, listen to your needs, and have your back from the first call all the way to closing day. To find a Ramsey-trusted agent near you, visit RamseySolutions.com slash agent. RamseySolutions.com slash agent.

1:25:41welcome back to the ramsey show in the fair winds credit union studio george camel ramsey personality number one best-selling author and co-host of the smart money happy hour he's my co-host today open phones at 888-825-5225 michelle is in colorado hi michelle how are you Hi, Dave. I'm good. How are you doing? Better than I deserve. What's up? Well, first of all, thank you so much for taking my call. I can't tell you how much I appreciate it. The short of my question is my husband and I are in$205 ,000 of debt. Where do we start to get ourselves out of this? What kind of debt? So we have significant student loan debt.

1:26:30We do have two car loans. How much is the student loan debt? $164 ,000. Okay. And how much are the car debts? The cars are just under$17 ,000. Each? No, in total. Okay. What is car number one? Car number one is mine. It's a Nissan Rogue. I'm sorry, what's owed on that? I'm sorry? What is owed on the Rogue? The balance right now is$12 ,196.65. Perfect. And so the other car has$5 ,000 on it? Approximately, yeah. Okay, and what other debt other than$164,$12, and$5? We have medical debt, which is worth just over$20 ,000, and then credit card debt, which is$4 ,500. Okay, perfect. Good for you. And what's your household income?

1:27:27Our household income right now is$86 ,399.04, approximately. And what do you guys do for a living? We both work in corrections. I am a criminal justice case manager, and my husband works in juvenile corrections. Okay. And your degree's in criminal justice? Well, my degree is in psychology with a minor in criminal justice. Okay. Did you get your master's? I did not. This is my bachelor's. Okay. And what is all this debt from? The short answer is I used college to go find myself and did not make smart money choices when I was 19. Okay. So you borrowed a lot of money for beer pong in addition to going to school.

1:28:21I got you. Okay. That happens. That happens. Lots of people do it. It's okay. And so now you make$87 ,000 between the two of you, and you have a normal life except for the fact that you're deep in student loan debt. Wow. Okay. Ish, yeah. I mean, so, Dave, to give you a full picture, we're legally separated. We're working on reunification. We have a 17-month-old daughter that we're trying to create a better life for, and we're in agreement that we need to tackle this. Our ideas of tackling this are different. What's his ideas?

1:29:03Well, I'll be honest. I don't quite know. Anytime we try to have the financial conversation, I can't really get him to open up. He kind of shuts down. So are you guys in marriage counseling trying to get back together? We are meeting with our pastor, yes. Okay, good. Very good. Okay.

1:29:28Yeah, and so it sounds positive that you're moving in a positive direction with your marriage staying together. Is that a fair statement? Yes. Except for the separation part. But yes. Okay. All right. So when we come back together, part of our coming back together with the pastor's guidance, the counselor's guidance, is to be in alignment on how we're going to tackle this because this is the hidden stress hanging over your household that's affecting your relationship. and not having a plan that we're unified on how to deal with it is adding to the marriage trouble, if not causing the marriage trouble.

1:30:15Is that fair? Absolutely. I mean, to the point that I've been listening to you, I've known about you for a really long time. We are signed up for Financial Peace University with a lady in our church. Good. So we're going to start that on Saturday. Good. I'm not quite sure that he's fully on board and committed for the process. Oh, he didn't have to be. If he goes through the class, I'll get him. As long as he shows up. That's the important part. It's hard to go through that class. If you go to every single class, it's hard to go through that class. We're very convincing. Yeah, he'll be on board.

1:30:49And what that, if I'm talking to him, I'm saying, hey, you don't agree with all this stuff, and you guys are not getting along, but if you want to save your marriage, you've got to be unified. And go to the class to at least both of you to agree to tell Dave Ramsey to jump off a cliff, or both of you agree to go this Ramsey plan has proven we're going to work it. One of the two. But let's get aligned together because you guys have got to be unified on how we're going to attack this. The fact that it's been hanging out in the, you know, it's the boogeyman under the bed, and it's terrifying until you turn on the lights.

1:31:23And when we turn on the lights and go, okay, here's what we're going to do. We're going to do this, this, this, and this. We're going to work extra. We're going to live on nothing. We're going to be on a budget. Beans and rice, rice and beans. you know we're gonna sell the rogue we're gonna do whatever I mean I don't care we're gonna cut up the credit cards right and we're gonna you know we're gonna make a list of these debts and we're gonna live on nothing we're gonna pay them off smallest largest and we're both aligned on that ready set go break the huddle go and when you do that together that's gonna impact other things you're arguing about positively in other words I've had thousands of notes letters and individual conversations with people that went through Financial Peace University and said it saved our marriage.

1:32:05And I'm like, well, why? I don't understand. It's about mutual funds and money because it forced us to work together. And when you agree on your spending, you agree on your fears. You agree on your spending. You agree on your goals. You agree on what you value. You agree on your priorities. And you're agreeing on every part of your life when you agree on your spending. It forces you to discuss every one of those stinking things and get aligned on it. And when When you do that, it can take a situation like you're in and be a part of, not the whole thing, but be a part of a real complete healing.

1:32:38But as a psychologist, you know that the complete healing is a spiritual thing, as your pastor knows, and it's a relational thing. And it's learning some skills to deal with each other in a better way than you've been dealing before. But the money's part of that. So, yeah, you guys go to that class together, girl. You got it. You can do this. Dave, if I can ask you one more question. Sure. Part of all of this is I am the one who makes$34 ,000 a year. I've always had super big dreams for my career. After having my daughter, the goal is to be a stay-at-home mom. I'm not sure that's realistic considering our debt.

1:33:17Not realistic for a while. Yeah. You made that choice when you signed up for$164 ,000. in. Yeah, and I have a feeling I know what you're going to say to my question. What are your thoughts on me pursuing my law degree? I don't know where that came from other than criminal justice, but I would have thought you were going to say master's degree so you could open a practice and make$150 ,000 a year as a marriage counselor, as a psychologist. That would make more sense than a law degree from where you started. We've got a math problem here, and on both sides, it's You can't get to any of that until, but you can make more with your degree than you're making now.

1:33:57You just chose to work for the state. But there's other things you can do today to make more and work your way through this. Then you've got to decide, if I want to be a stay-at-home mom, why do I want to have a law degree? It's so inconsistent.

1:34:30What's up, guys? George Camel here. What if I told you that you had thousands of extra dollars hiding in your budget right now? Listen, I know how crazy that sounds. You're thinking, dude, I'm broke. My money's tighter than the middle seat on a spirit flight. But believe it or not, you've got more margin than you think. And our EveryDollar budgeting app helps you find it. In fact, the average person finds$3 ,015 on average in just the first 15 minutes. That's like giving yourself a huge raise without an awkward conversation with your boss. Now look, this isn't magic. You're not hitting the lottery.

1:35:00This is just your money that we're helping you reclaim and reorganize. And EveryDollar shows you how to make the most of it so you can make faster progress on your goals. So don't miss out on thousands of dollars of margin. Go start EveryDollar for free by downloading the app in the App Store or Google Play right now.

1:35:33top questions people have about wills out there how do i know if i need a trust or if my state is too complicated for an online will well if your estate is north of a million dollars you to start talking about whether or not you need an attorney to do the will. But most people die without a will, and that's silly because they didn't spend just a few dollars and get a quick online will. You need to do that immediately if you're an adult. What do I need to start my will online? Well, same stuff you do for any will. You need to figure out who you want to get your stuff, who you want to take care of your minor children, who do you want to make decisions if you're incapacitated the health care power of attorney and so on um and uh why would i want an online will versus a traditional one made with a lawyer uh ease and expense um it's you know online will 50 to 75 bucks 100 bucks something like that you're gonna spend four or five hundred bucks pretty easily with a lawyer and it's overkill if you don't have a bunch of stuff and and and you got to go meet with a lawyer you got to go through all this stuff online you can just jump on and knock it out in a few minutes, one evening you can have your will done.

1:36:44And you need a will that is state-specific to the state you currently live in. If you did a will and you live in Indiana, but now you live in Texas, your will is not valid anymore. Hello? Yeah, because the law is different from state to state on what witnesses are required, what notary public is required, what you're allowed to do inside the will. The law changes from state to state and pretty dramatically sometimes. And so you definitely have an update to your will. If something major has changed in your life, the number of times we have had the call here, George, where someone got divorced and did not change the beneficiary on their life insurance policy.

1:37:32That's a bad one. There's nothing you can do. It's going to the ex. It's going to who? The beneficiary states. So you've got to get those things changed. That 401k, it's hers now. I forgot to change my will. So my ex-wife, who I hate with a passion, got all my stuff. That was kind of lacking in diligence. Hello? So you've got to do this. You've got to take care of business, right? Mary's in Arizona. Hi, Mary. How are you? Hi. How are you, Dave? Better than I deserve. What's up? I love that. So I'm calling because my question is probably going to laugh at me or yell at me. It's kind of embarrassing.

1:38:08But how do I use what I can from welfare? I'm currently on welfare to get off welfare and get in a better financial situation. I might be going homeless pretty soon. And my situation just kind of sucks. I'm not going to laugh at you or yell at you. I'm really thrilled that you called. Thank you. Okay. How old are you? So, old-ish. What's old? Forty-five. I'm 65, so I don't know what that makes me, but okay. Okay, so basically, I'm a single mom. You're a baby child. Okay, now, all right, now. Yeah, I kind of am. So what have you been doing for work? So recently, because of my health and my aging mother's health, I'm basically taking care of her.

1:39:17I'm her caregiver. She pays me, and she doesn't have a lot. My income is only$300 a month, and that's it. I'm currently on. And why are you going to be homeless? us um so they currently um the welfare i'm on is only housing i'm not on food stamps anymore praise god um so that's the only welfare i'm on is the housing um because of the big beautiful bill they're kicking people off um and where i am it's ran by the city so the city has already informed people um that 2026 right around the corner and they don't randomly take people off there was some kind of a qualification you didn't meet. Right, because I'm not disabled the way that disabled.

1:40:08And so you take care of your mom, but you don't live with your mom. Correct. Why?

1:40:18Okay, so I don't live with my mother because she's staying with my sister. She lives with my sister, and my sister works. And so I just, I'm her caregiver. And then between me and my sister, and when my sister gets off work, I go home. And your mom's sharing some of the Social Security check because she didn't have anything either, right? Correct. So what she gets, she pays me for being her caregiver. Back to your original question then. The core answer to your overall problem is income. Right. Work. And I know get... You said you have been unable to work because of your health. What's wrong with you?

1:41:10So I am disabled, but the disability doesn't qualify me to get disability. What kind of disability do you have? What are you facing? A lot of female problems that keeps me from working, and then also sugar issues. And we could deal with the sugar issues. You just have to get the right kind of employer to do that. I think you just told me you're obese, did you? No. You're not? Okay. No. Okay, good. All right. So, well, I don't know how to probe deeper on that, and I probably wouldn't understand what I heard anyway because I'm not knowledgeable in that area. But the answer to your question is to find some methodology to create an income, even given the limitations that you've got medically.

1:42:15Right, right. If you're hiring, if you want to hire me, I'll take a job if you're willing to train me. Yeah, that obviously is not – I mean, the point is you've got to figure out and we've got to help you figure out a way to create an income, and that begins to solve your problem. And then, no kidding, Dave, but the bigger the income you can create, the faster these problems go away and the further they are in the rearview mirror. Is that agreed? Correct, yeah. So this has been an ability to work, an inability to work, because of medical and other things that then your spirit got kicked around and you start to feel like there's no hope, which makes you not have any energy to move towards getting those jobs.

1:43:03Well, correct. And then once I start getting a better income, I'm going to get kicked off my housing. You're already getting kicked off your housing. Yeah. So we've got to go get a better income. But the goal is to get enough income to cover your own house. Yeah, and by the way, you called to ask how I could get out of this housing. Correct. Anyway, so good. We got you kicked out of the housing because you started making too much money. It means you're moving in the right direction. Great. Does your mom not qualify for Medicaid to get a caregiver? Correct. Because either you need to be paid a living wage as a caregiver with some kind of self-directed attendant care, or you need to find someone who takes over so you can go to work.

1:43:46But this is not working out to make$300 a month. You can't make$300 a month and live. Correct, correct. And so the only, well, what keeps me going is. And by the way, she can't get help for$300 a month anywhere else either. Right. So she doesn't have money to do it the other way. So Medicaid, she's going to have to, you know, you guys are going to have to help her get care while you go get a life. Right. She is on Medicaid, and I did try and go that route, but they had told us that she doesn't qualify. She would have to be more unable. Well, your sister and you can work on that as a side issue, but the bottom line, George is right.

1:44:27You cannot spend 40 hours a week there making$300 a month and expect to have a life. That mathematically doesn't work, Mary. Right. So I did watch your baby steps. They don't matter until you create an income. You can't do the baby steps on$2 an hour. That's literally what you're making right now. So you've got to go create income. You have to go create income. You have to go create income. That's the thing. So you hang on. We will send you a couple of books to help you move in that direction, finding the work I'm wired to do and the proximity principle. Both of those will help you. That is what solves this whole thing.

1:45:21Hey guys, I'm so excited to tell you that our new 2026 Ramsey Goal Planner is available right now. This isn't just your average planner. It's your personal guide to setting clear goals and building habits that stick. So get ready for all new monthly content from your favorite Ramsey personalities, tactical goal-setting trackers, and upgrades that make this our most durable planner yet. Last year, we sold out, so don't miss out. Order your 2026 Ramsey Goal Planner for$49.97 today at ramseysolutions.com slash store.

1:46:08Stacy is in Tennessee. Hi, Stacy. How are you? I'm doing well. How are y 'all doing? Better than we deserve. What's up? Good. I'm fairly new to following you all, and I have about$3 ,000 in student loans with about$5 ,200 in savings, and I also have a wedding on the way. Good. When are you getting married? I'm currently out of work. This time next year. Cool. Cool. What do you make a year? Yes. I make$43 ,000 gross. Okay. And you're having to pay for the wedding? Yes. As of right now, we don't know if family will chip in, but we're hoping that they will. Okay. And so your fiancé will chip in some, and you'll chip in some?

1:46:53Yes. He's currently out of work due to an injury, but as soon as he's able to work again, then yes, that is the case. Okay. Cool. Good, good, good. All right. How much is this wedding going to cost? Hopefully no more than$10 ,000. We're not really trying to have something huge and extravagant. So you're debt-free today. You can use that savings, knock out the student loans, build up an emergency fund, and save up$10 ,000 by 12 months from now, right?

1:47:25Yes, I guess that's my question, if I should go ahead and take care of the loans and just work towards saving towards the wedding. Yeah, I mean, I want you to see your way to paying for the wedding, because$10 ,000 is not unreasonable with what you're describing. Okay? Okay. And so you said the student loan balance is$3 ,500, right? $3 ,000. $3 ,000. Okay, all right. So if we say$10 ,000 for the wedding,$3 ,000 for the student loan, you need$13 ,000. You have$5 ,200. Yes. Okay. So our real need is$8 ,000. Okay. See what I'm doing? Five plus eight. Yeah, I see that. Thirteen. We got the wedding, and we got the thing.

1:48:13And on top of that, George wants you to have an emergency fund, and I do too, because stuff's going to happen, like the car's going to break and all that kind of crap, right? Yeah. Yeah. Great. So we need$13 ,000 in savings for those two things. we have$5 ,000 so we need$8 ,000 and so$1 ,000 a month for 8 months gets us there and we have 12 months so then we would have a little bit to spare so we need a goal we need a goal to be debt free and have the wedding paid for and have some extra money of saving at least$1 ,000 a month which is really tough on$43 ,000 yes it is but also Bubba's going to have to get back to work when's he back to work the doctor said that he should be cleared by the end of this month good what was he making yes uh he was making a little bit less about 42 000 okay so you got 40 he's got 40 that's 80 to work with and so if you put in 500 a month he puts in 500 a month you guys will be there right yes and that's with taking care of the student loans now yep i'd rather check take care of the student loans now.

1:49:24But I'm doing that knowing that we also get to do the wedding. Because we're both going to save$500 a month,$1 ,000 a month total, and that gets us to$12 ,000 12 months from now. And that on top of the$5 ,000 that you, oh, wait a minute, now you don't, now you've got$2 ,000. So now we're up to$14 ,000, but we only need$10 ,000 for the wedding. So that It gives us four in the account when we get home from the honeymoon. That's peaceful. Breathe that in. Yes, you just gave me so much peace, but you don't even know. That's exactly how it works. But now here's the trick, okay? You can't go, oh, we decided.

1:50:05No, you didn't decide. You decided to save. Oh, we needed to. No, you didn't. You decided. Don't tell me any excuses and get up there and go, well, I put my wedding on a credit card because I didn't save my 500 bucks. Okay? Yeah. So give you a game plan. Now you've got to execute, kiddo. All right? And by the way, are you stuck making$43 ,000? Could you take on an extra side hustle and tell the way? And he could, too. I'm actually working on—I'm doing DoorDash, and I'm working on doing the driving service for Walmart, trying to do in-between, because I do ministry work, so I have to travel quite a bit for ministry.

1:50:42But the in-between, when I am in town, I'm working on doing those, too. Good. Is the ministry a paid position? or a volunteer position? It is paid. I'm at the headquarters for the nonprofit, which is the ministry. Okay. That's your$43 ,000? Yes, that's correct. Oh, that's your job. Oh, okay. I'm sorry. I misunderstood. Yes, yes. Okay. And then in addition to that, you're doing DoorDash. Okay. Yes, in addition. Yeah, I cannot do DoorDash full time. Okay, cool. Cool. And what's your fiancé do for a living? He works in the pharmacy industry right now, but he's working on actually going towards IT.

1:51:22Good, good. So, hey, these are good answers because you've got a trajectory that's going to cause you guys to make more, save more, be able to give more, be able to be more comfortable in the ministry role, because you're going to be under control with your money flow, okay? Yes, yes. Thank you so much. Thank you. Hang on. I'm going to send you a copy of a book called The Total Money Makeover as our wedding gift in advance of this paid-for$10 ,000 wedding. See, I just spoke that over you. You heard that, right? All right. Adam's in Texas. What's up, Adam? Hey, Dave. How are you doing today? Better than I deserve.

1:52:00How can we help? Yeah, so I am 30 years old, a wife and one beautiful daughter. I've been in the insurance industry for just under 10 years now on property and casualty, and I've built my book of business up from$0 to just over$640 ,000 in that time. The company I work at is now bringing in equity partners, which is changing the structure of our business pretty dramatically. In this bio, I'm losing ownership of my book of business, but in exchange, I'm being paid two times its value. which equates to just under$1.3 million. My question today is should I pay off our mortgage and any remaining debt and invest and save the rest of it, or should I keep the mortgage and use that money for additional investments?

1:52:53Okay. What happens to your career when all this happens? Career, as far as I'm planning, is going to stay the same. My commission structure is changing to something that's a bit more industry standard. So, you know, I'll take a small hit to what I'm taking home right now because I'm going from a 1099 to a W-2. But, you know, that's a small adjustment in the wake of things. But you no longer have equity position because you're being bought out. That's correct. So any growth that occurs from this point forward, you get none of it? I'll still get, you know, the extra commission. I mean, you get commission, but you don't get to build a book of business again.

1:53:35Correct. Will you miss that? Yeah, absolutely. That's still a bit shocking to deal with. But, you know, it's kind of a... Are you under a non-compete? I'm going to ride the wave and be great. Yes, I will be. For how long? We haven't received final terms. I believe it's going to be between three to five years, depending on the person. That would be normal. Yeah, okay. Yes, yeah. All right. But because a lot of people that, I mean, it sounds like this was forced upon you. The language you're using doesn't sound like you sought this out. So the answer to your question is, yes, I would pay off your mortgage.

1:54:14And yes, I pay off all my debt because I don't find people that say, oh, I became a millionaire by borrowing on my house to invest. Right. That's not what I find. The millionaires that we talk to go, I got out of debt. And so what do you owe on your home? Currently, we owe$391 ,000. Perfect. What other debt do you have? Just the car. Okay, so$450 clears you out of$1.3, right? Yes. Okay, and then what I would do is bucket a – you're an analytical, careful, wise, frugal person. I would bucket a number that is uncomfortable to you but very comfortable to your wife to spend on fun. Okay. Like go on a ridiculous trip or buy her a much better car because her car sucks or whatever, right?

1:55:09I don't care what it is, but find something that comes under the heading of fun or some things. Put some sweat on your brow when you hear the number. Yeah, some things. So spend, save, give. That's the only three things you can do with money, and I would do all three with the money that's left over once you pay off the debt. Congratulations. Fun problem to have. Mm-hmm. Overnight millionaire, just like that, from all his hard work.

1:55:43We'll see you next time.

1:56:07Our scripture of the day, 2 Corinthians 12, 9.

1:56:24Simon Sinek said, The goal is not to be perfect by the end. The goal is to be better today. Chris is with us in Florida. Hi, Chris. How are you? Hi, Dave. Thanks for taking my call. I have an investment question. For the past five years, I've been building one spec house a year. And I've taken my profits over the past five years and built myself a nice house. I was able to buy the house next to me for cash. Everything out of pocket. Everything's paid for. I got myself out of debt. And I've got, however, the house I bought, I was out of money and I needed remodeling. So I took out a loan on that house to get it remodeled.

1:57:08Oh, so you're not out of debt. Right. Now I'm back into debt. However, I'm clearing$1 ,100 a month off of that house. But all of my money has been spent, and I want to continue building spec houses. Now, my personal house has paid off. My question is, should I take a loan out on my personal house to continue my spec houses? Okay. Is this what you do for a living? No, I do this on the side. I do this on the weekends and after work at night. I got you. I got you. And what price range of homes are you building? They're selling for$250 ,000. Okay. They're costing me around$120 ,000 to build. Okay.

1:57:54And what's your household income? Personally, I'm at$100 ,000 without my spec houses. If you add that in, I'm around$200 ,000. My job, I make about$100 ,000. And why do you have no money all of a sudden? because he put it in these two houses. If you just keep reinvesting and it gets locked up in the houses. You're not making$200 ,000. Yes. Because you're not making, you're doing one spec a house a year. I'm making$100 ,000 a year off the spec house. Okay. I just feel like there should be more profit sitting around versus you being broke. Well, what's the rental house worth? Well, okay, rental house is, I'm guessing it's going to appraise for$250 to$300.

1:58:40My personal house will probably appraise from$350 to$400. So I've only been doing this for five years. I'm 56, and I came out of divorce at 50. And I came out of that with my truck, my dog, and$100 ,000. That's when I started doing it. It sounds like, you know, now here's the thing you understand, okay? and you know this, and I think you've experienced it, that when you have a spec house, meaning you're speculating, you have an inventory item that has no debt on it, you interact with a potential buyer completely different than if you're paying construction loan payments on that house. You don't have to put up with a crazy buyer.

1:59:29Right. And you don't have to discount it because I'm stuck in it and the bank wants me to get the note cleared. Exactly. You can just sit there and wait until I get the right buyer. And that's how you've maximized your profits because you've not put everything at risk. And now you're getting ready to flip your model on its head and start taking on a bunch of risk. And it's going to change the way you interact in this. It's going to take a lot of joy out of it. And so, no, I would not go this route. I do think, I grew up in the real estate and the building business and I've owned real estate and done rehabs and built stuff my whole life.

2:00:07And I do think I'm talking to a guy who actually knows how to do it. Most people that say they know how to do it, as you know, are full of crap. But I think I'm actually talking to a guy that knows how to do this. I think you really know how to do it. And so that's going to change my advice a little bit. Okay? Okay. I would sell my rental if I were you, and I would build three spec houses. You know, I agree with you. business-wise, but here's my problem. Personal feelings come into play. This house is right next to mine. I'm worried about who's going to buy it and what kind of neighbor I'm going to have.

2:00:44You get to decide that. Sir? You get to decide that. You can't discriminate on sale based on race, creed, color, national origin, but you can discriminate based on jerk.

2:00:58I'm serious. You can decide that. I just sold a house next door to me. And we had people looking at it, and I'm like, nah, I don't think so. And we've got the sweetest lone couple over there right now, and they're going to be best friends. We love them. And you can just decide that. So, no, I don't think I'm trading that one issue for all of your piece. I think you can do two spec houses a year minimum and make$200 ,000 while you make$100 ,000 at work with cash and be able to maximize your profits because you don't get in a bank pinch. I am talking to a guy who's never been in a bank pinch. If you have been, it's been a long time, and you've forgotten how it feels.

2:01:40Oh, I've been in a bank pinch. I hate those sons of a gun with a passion, and I don't want to put you back at their mercy. Yeah, I agree. I'm out of it now. Yeah. Why go back in the bear trap, man? Not worth it. What's left on your debt on the reno? What's left on the debt, the loan you took out? I took out$100 ,000. I put$60 ,000 in it and put$40 ,000 back. So you sell the rental, pay off the debt. You got some left over to do the next spec? You got enough to do two specs. Yeah, I could probably squeeze out two if I sell that. That feels like it'd be worth it. Yeah, that's what I'm doing for sure.

2:02:21That's going to create some peace and get you out of debt. 100%. And then I'm never going back in. I'm okay being the tortoise rather than the hare because every time I read the book, the tortoise wins. It's people that get in a hurry that trip over their own feet, including me. That's how I went broke in my 20s because I got in a big hurry. And I built a house of cards. I got rich quick, literally. And it turns out the best way to get rich quick is get rich slow. If you want to keep it. So that's the best plan you can have. And that's, Chris, I think you really do know how to do this. And a lot of these guys have been watching Flip This House on Tic Tac, and they don't know what they're really doing.

2:03:00But I think this guy's really doing it. Well, all of culture tells you to just go borrow against it, borrow against it, do the Burr method, go do the next one, borrow against that. That's how the wealthy do it. And they don't talk about when it goes wrong. Not true. It's not how the wealthy do it. It's just that's a complete fabrication. Well, you're living proof, Dave. That's not how the wealthy do it. I mean, no. I mean, all of them we meet with. They don't tell us. I stayed leveraged my whole life and I lived in anxiety. And, oh, and I made wealth, but I got wealthy. That's not what they tell me.

2:03:27They went, Dave, we were kind of boring, and we went slow, and we paid for cash as we went. That's what they all tell us every time we interview them. Well, that's why they don't have the real estate course. It'd be a terrible course if you just went, well, pay cash, go slow. That's why I don't have one. It would be two sentences. That's why I haven't written a book on how to buy real estate. It's short. Now, you broke down in Investing Essentials. We do this virtual event where you actually break down your real estate principles, and it's fascinating. But the actual math behind it is save up, pay cash.

2:03:55And yeah, it's going to take you a little while to get that first one. And then there's this what's known as a cash on cash return on investment. Hello. I mean, yeah. So yeah, Chris is in a position to do that. It's just choosing what do you want more? And if I'm listening to his story, if I was in his shoes, I would want to build those specs more than I wanted that rental. Yeah. Well, it doesn't sound like he wants to be in a landlord business. He likes building the specs and selling them and making a profit. He's trying to control who lives next door. He didn't want Cray Cray to move in next door.

2:04:23I don't blame him. I don't blame him. But this is a guy that doesn't like drama, so don't invite the banker into your living room. No, thank you. You don't like drama. Keep bankers out of your life. They're not good for the drama factor. They mess up everything. Yeah, Chris, I think you're really good at this. And so I think I would go build a couple houses a year with cash. And, you know, I bought a house. There's a family here in our area, third generation. They're now on fourth gen. Gen 4 is now building houses. But great-grandpa bought a bunch of land out here when nobody was out here, out in the country, and now the city doesn't come to the country, you know, kind of thing.

2:05:00So moved out here, and they've been developing residential lots for years, and they build spec houses, expensive spec houses, with cash. And it's hilarious. You go into this million, million-and-a-half house, and they go, well, you know, I don't like the countertops in this one, and I would like to have a different color in the living room. And they say, fine, you can do that after you move in. I love it. They're not desperate. They don't do anything. They won't change a thing. And they don't build custom because they don't want to put up with people. That's amazing. That puts this hour of the Ramsey Show in the books.

2:05:36We'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.

2:05:49Thank you. Thank you.