“I’m $147k In Debt And Only Make $1,500 A Month”

27:30Or not Uber, but Instacart, DoorDash, that kind of thing. And then, yeah, you just work out at the place you like working out at. That makes complete sense. I have one more question on starting my own business I was actually going to start my own business soon about car detailing but I wanted to know whether I should try to pull the trigger now or whether I should try to pull the trigger after I get everything with my car done and pay off I mean what's it cost? You don't have any money I have about a thousand dollars saved up that I have in case my car engine messes up or anything like an emergency emergency and you need that i've been planning on touching yeah i haven't been planning on touching it but yeah so it would just for the car detail you'll probably need some equipment right to be able to so that would be saving up and paying for that so i would just price out beta what um if you talk to some people in the area that do it how much they haven't invested in it how many clients they have how long the job takes run some numbers because you may, I don't, I'm not sure what the numbers are.

28:35So you may find out, you may find out, oh my gosh, this is pretty incredible. I only have to put 500 bucks in and I'm making thousands a month. That's worth pausing, paying off the car to get that built up, to start that. Cause it's going to bring in more income or you talk to people and you're like, oh crap, that steamer and this and this to really do it. It's going to be thousands. And you're only really making X amount, like whatever the numbers end up being, you probably can make that call. You have an amazing work ethic. Like it's very incredible. And I just want you, you know, steering your financial decisions to help you not harm you and debt will always set you up in the negative.

29:12It always will financially, emotionally, your stress, everything. And I think you're kind of getting a glimpse of that, but I'm kind of glad you're getting a taste of it at$8 ,000 for a stupid car loan versus a$40 ,000 business loan that you're probably going to want to do when you're 25 because you're very entrepreneurial, right? So just remembering to stay away from debt altogether, altogether. And you're a smart, hardworking guy. And I think you're going to do fantastic. So yeah, the car dealership or the car detailing stuff, again, I would price it out, kind of figure out. And if it feels like, okay, that's a good investment, that's going to, that's going to bring me a significant more money than these other two things combined.

29:49And it's something you can start small on. You don't have to start with every piece of it.

29:57It And then starting to get this car paid off. And it's going to feel like an uphill battle with this insurance. When you turn 18, does it go back down? I'm sure it does. I'm not quite sure. Because I asked one of my friends who works with insurance. And he said not usually. And if it does, it's minimal, which I would appreciate anyway. About$700 a month for liability is the only thing that's killing me. The$400 a month for the car, I understand that. Right, right, right. Totally. Yeah, it's the insurance. Did you, where did you get the insurance? Did you price out different companies or did you just pull a quote from one?

30:34So I started with like Daico or something and they started me off at almost$1 ,000 for just liability because of my age. And then I went to a few places. I went to this mom and pop shop for insurance down the road for me and they quoted me lowest at$700 a month. Okay. Yeah, I would keep shopping that just to see. And yeah, when you turn 18, you should see a little bit of relief. And also when the vehicle is completely paid off, you should see a little bit of relief. It's not going to be a lot, but it'll be something. Yeah. Gosh, well, Beto, I hate that you're in this situation because I hear the stress and the regret already.

31:10But I really do think with putting some of these jobs kind of together, making some more money and really being focused right now, I think you're going to get out ahead on it. But I think it's a good lesson to learn. I hate to say it. It's not fun, but you're feeling the weight of debt, and that's what debt does.

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32:42Well, there's some things that no one tells you about money, and those are the emotions around it. And Jay, that's what you wrote your whole new book on. That is right. What no one tells you about money. Yeah. it's powerful thank you you're not only your story but I think putting to words how people are feeling during this process whether it's getting out of debt especially but this it's a whole journey right this money journey is very real and it's very emotional but also it feels like you are sitting across from a friend who's been through the journey and you give such great words to again how people are feeling and thinking thank you yeah I wanted to give practical steps because a lot of times like you say the word emotion and it's all like in the clouds.

33:21The book is very, very practical. The same way we give you, you know, seven baby steps, I plan for your money. I'm giving you tactical things to get and deal with those emotions. It's not just, you're gonna feel sad. It's no, how do we work through it? Give me the information, Jade. I need steps and they're there. Yeah, and some of the resolve too because your emotions aren't the end all be all to your point. There's something you can do to take that to continue. So I love it. So exciting. So you can pre-order now for$24.99 and you can get over$100 in free bonus items, including the audiobook, which I appreciate so much.

33:53The early access to the e-book, an exclusive video with your financial checkup with you, Jade, and an exclusive three-week online book club and live Q &A with Jade Warshaw. So you can go to ramsaysolutions.com slash store to pre-order it. If you're watching on YouTube or podcast, we will leave a link below. But again, the book is titled What No One Tells You About Money. All right, let's go to Ian in Hartford, Connecticut. Hi, Ian. Welcome to the show. Hey, thanks for taking my call. Yes, absolutely. How can we help today? So I'm in a pretty interesting, pretty blessed situation here. I'm a 20-year-old engineering student, and I started doing affiliate marketing on TikTok shop like a year ago, and I've gotten pretty good at it.

34:40And last October, I did$180 ,000 in sales. Good night, Ian. Holy crap. They returned about$23 ,000 in profit. But I realized I, you know, through this time, I kind of realized I hate engineering and I don't really want to do that. So I definitely don't want to do that for a job. But I have a pretty interesting opportunity to sail around the world on a semester at CUNYX semester. Oh, yes. I had friends do this. Yeah, I was just kind of wondering if I should take the time off and do the semester at sea, enjoy my youth, or if I should continue to scale. Because honestly, I think I could get to the point where I'm doing$1 ,000 to$2 ,000 days.

35:22Wow. Is there a way to do both? No, unfortunately, I wouldn't have Wi-Fi on the ship. And then also I wouldn't be able to receive packages. Oh, to like fulfill orders and that kind of thing. if you did pause it for five months does that change the business drastically or can you just pick it right back up the business has kind of built on momentum so it'd be pretty hard to just it wouldn't necessarily be hard because i'm pretty skilled at it but it would i would definitely like it would take some time to build back up sure um i love i i mean i'll tell you straight up i i worked at sea for a long time right out of college and i loved it.

36:04It was the best time of my life. I wouldn't trade it for anything. I've been to so many countries. It is quite the experience. So part of me just wants you to have that life experience. You're 20 years old. I feel like you have your whole life to earn money, even though you're earning crazy money right now. There's something about there's a specific time in life that you can just never get back. And there are experience points in life that are so good for you too, too, as a person, like to do all of it and to enjoy. There's a part of me, too, where I'm like, man, you're 20 years old. You're obviously skilled at understanding how things work and to be, I mean, not only just have an engineering degree, but let alone kind of some sales and understanding marketing.

36:45I mean, you know, you didn't just fall into this. You learned it. And so you're a smart guy. So I'm not worried about your earning potential later in life. Yeah. So there's something about just doing a semester at Caco. Have fun. You know, you're 20 years old. I don't know I I'm an experienced person though so there's a part of me that yeah are you do you have friends going uh yeah one of my best friends would be going with me okay and you want to go uh yeah I think I want to go um but at the same time I'm also kind of worried about setting up my future and like I want to get into real estate in the future and kind of have that be my main thing so yeah but you're not gonna do you're not gonna do real estate in the next four months how's the how's the semester at sea being paid for so actually i got a full ride scholarship pretty much so man i i'm telling you like you're gonna be you're gonna have to convince me that not to go because i am i all that stuff's gonna be waiting for you and i agree with rachel you're smart i'm not too concerned about what you'll do this is a kind of one of those I don't want to say I don't want to say once in a lifetime but it is kind of like a once in a lifetime for sure yeah you know to be able to go and travel for five months around the world and it's paid for yes yeah absolutely I know I think you're 20 years old Ian I think you need to just relax enjoy I so wonder what other person I wonder we may have me and Jade may be the only person on the show that happens Ken would tell them to do it Ken would Ken would say to go to Taylor Swift concert too that's right Ken would be a yes George would probably be a no I feel like George would be too practical he might i am and let me just dave who who knows throw up the throw up the point would say yes but let me just say like percentage wise i am a 100 yes i'm not like a 70 30 jade says do it even 100 what's your what's your ratio my percentage is um i'm gonna go 95 wow maybe just like a tad less than jade but again from a percentage standpoint basically we're the same that's good kelly what's yours i'm 100 okay is there anyone in the audience we have an audience out here anyone in the audience everyone's giving a thumbs up would you do a semester at sea oh we're getting a lot oh wait there's one guy uh-oh maybe one guy in the gray shirt i don't know i don't know he's a little iffy okay we got a lot of yeses ian yeah i'm thinking I think you need to go.

39:12And when you stop in Paris, enjoy it because I've never been. So give the Eiffel Tower a wave for Rachel. Eat a whole baguette just in the streets, a whole loaf of bread with no regrets. Yeah. Go enjoy and go enjoy your time as a 20 year old with no responsibilities. And then again, it's incredible that you built up that thing. I mean, now, again, if you were 34 with two kids. The internet's not going anywhere. I know affiliate marketing is not going anywhere like it's the wave of the future and of the now you're gonna do great you're gonna do great all right let's go to Sonia in Orlando Florida hi Sonia welcome to the show hey thank you for taking my call how are you today we're doing great how can we help you awesome well I'm planning on retiring soon okay and using money that I have in my Fidelity account.

40:05I'll have to use that for about a year before my Social Security will kick in as a supplement. I have five properties, including the one that I live in, and I want to know if it makes sense for me to sell one of my rental properties to pay off, which is free and clear to pay off. Yes. To pay all of my properties are free and clear. The one I live in and the one my brother lives in that I purchased after my mom passed, I bought her reverse mortgage. Are those two in addition to the five or they're part of the five? I have a total of five, including the one I live in. If you sold one of the investment properties to pay off your primary home, would you officially pay off your primary home?

41:01Oh, absolutely. Would it pay it off free and clear? And then would you have some additional money left over? I have money saved up not only in my Fidelity account, but I also have money in my bank account. How much do you have total? Total, I have in my bank account, I have$130 ,000. Okay. So, and in retirement, I have about a half a million dollars. Good for you, Sonia. Okay. And what's the real estate total? I'm sorry, what was the question? What's your real estate total? My real estate total is, I have$1.3 million. Okay. And all the real estate. Gosh, Sonia, you are a baby steps millionaire.

41:56Incredible. So yes, in a heartbeat, I would sell one of the properties to pay off your primary and be completely debt free and be living off your investments and the other rentals that, if there's income coming in from those. But you've done a fabulous job, Sonia, a fabulous job. And your next step, yeah, is just to become completely debt-free and then live and give like no one else.

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44:03Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm Rachel Cruz with Jade Warshaw. And we're going to Gabrielle in Los Angeles, California. Hi, Gabrielle. Welcome to the show. Hello, Jade. Hello, Rachel. It's Gabriel. Sorry. Oh, Gabriel. Gosh, I'm sorry. My bad. Thank you, Gabriel, for the fix. How can we help? All right. I was calling on behalf of my mom. She's 72. She's a widow who never remarried. Currently, she's retired. She's active in her church, and she has a home that's almost paid off. It doesn't include taxes and insurance, but lately she's been asking me for money.

44:45It started off small, but it's starting to escalate. How can I help her protect her being independent, but also set up her finances wisely for the future without becoming dependent on me or my siblings? yeah for sure how old are you i'm 40 you're 40 okay and her house is almost paid off is she is she still working she's not okay so she's retired is she do you know do you have any idea numbers of what's in her retirement um she's currently receiving oh as far as her retirement savings she does i believe she's exhausted them so she's currently the only income coming in is Social Security. Do you know what that is?

45:26I believe it was like$1 ,100,$1 ,300 possibly. Oh, wow. And do you know what her mortgage is and what she has left on the mortgage in full? So the mortgage currently outstanding balance is around$100K. Okay. And then the mortgage payment is around, I'd say$1 ,450. Oh, gosh. Okay. Well, yeah. So how is she paying for everything? Right now I have my oldest sister who's living with her and I believe they're splitting the cost of the mortgage. Okay. So they're half and half. Okay. So it's that 700 and then everything else. I mean, is she able to pay for, is your sister splitting other bills, you know, like electricity, water, all of that?

46:12Yeah. So from what I understand is that my other siblings. She approaches each sibling individually and asks for help, whether it's covering a bill or a few dollars here and there. And it's for real needs. It's not for... Yeah. Is she able-bodied to go to work? Is she able to work? She is able-bodied. However, she hasn't worked in some time. Yeah, that's so hard. I mean, the reality is she either... I mean, if she has no money and all she's getting is social security. It's not enough to your point when taxes are due for property tax. I mean, when she pays off the house, you know, she's going to have to pay for property tax and all that.

46:54What's the home worth? I'm just curious if she were to sell it, if she were to sell it, what would it be worth? Um, conservatively, probably about 1.1 million. Um, it's a five bedroom, three bath. Um, as far as her renting up a room that's also been thrown around but i hate that for her require uh me involving myself yeah i'm just wondering about everything is there like a go ahead i'm just wondering because my head is that she's 72 she's still fairly young and she's in good health she could live till 92 right so in my mind i as in my mind i look at one million dollars that she stands to take away from this.

47:41And I go, okay, we can throw a decent amount and invest it and start that fund going. And then maybe she can buy a condo for, you know, 250 or 300. I mean, you're in Los Angeles. I don't know what's there. What's possible? Can she buy something that's very small just for her? And then your sister goes and does her own thing. Because I'm also thinking what happens if the sister moves out and gets married or moves on in life, right? So there's a lot of variables here. I'd love for her to get some hands on that money, get some of it invested and get some of it in a smaller, modest living space for her.

48:19Yeah, I think that's that's what I envisioned for her. I just don't know where to start. I think if I do get the ball rolling, I'm seeing that through start to finish. So where would I start? Well, I would start with, is everybody in Los Angeles, like your whole family, or do you have family that lives in less expensive areas of the country? No, we're all basically based out of the Los Angeles area. Have you looked at or would you know price ranges of, again, a very modest one-bedroom condo that she could purchase? One-bedroom, one-bath condo purchased outright. Out? Possibly in the areas that we're in.

49:01Like around, oh, outskirts. Well, yeah, because she's got to be able to afford it. $400. $400, okay. Okay. So then she could invest$500, you know. Yeah. I'm not mad at that. And get that ball rolling. And then, again, if she's able to not pull from those investments and maybe for just three years work somewhere just to pay, just mortgage. I'm sorry, not mortgage. Hopefully it's paid for. Yeah. Taxes. taxes, you know, lights, water, food, and just not touch that money as long as possible and let it grow and then live off of that. Because it's either going to be that or you guys as grown kid adults all have to say, okay, mom's not going to be able to afford this long term.

49:46Are we going to be willing to support her in it? So that would have to be a conversation that you guys have. Will she sell? I mean, if you imagine yourself bringing this up to her, what does that look like? The last time that I brought up the conversation to her, it was emotional for her. For me, it's pretty straightforward. I mean, the way that we're talking right now is the way that I talk with her. And, you know, she's open to it. But, again, she kind of pushes the work onto me. So, and so do my siblings. Do they kind of look to you, your sisters, too, to say, like, what do you think? um no they don't have an opinion as far as what she should do um they feel that you know it's our home that we grew up in and that she should hold on to it and she's only got such and such ways to go listen there's no there's no getting around the fact that this is emotional like i'm i'm telling people all the time that plays such a factor in how we manage the money but if we look at the numbers, the math is not emotional.

50:55She doesn't have any money. She doesn't have anything and she's healthy. She has a lot of years ahead of her. So she's got to get to the point where the discomfort of staying the same is more uncomfortable than changing, right? And she's going to start to feel the cracks in that when you guys stop supplying the money, if that makes sense. And it's your choice, but the more that you say, okay, we'll float it, we'll float it, will float it just know that it'll float through the yeah for the next 20 years yeah so you guys have to kind of get on the same page of saying we can talk to her about this but if she doesn't do it we have to allow her to feel it because when she feels it is when she's going to realize okay i have a difficult choice to make and just try to support her as much as you can and it is emotional it is tough it's your family home there's nothing comfortable about that but the solution often lies outside the comfort zone.

51:49So. So it sounds like my next steps might be like two part, right? It's kind of initiating that conversation with my mom about selling the home possibly. And then as far as with my siblings, it's having that conversation. If we're going to do this, we need to stop enabling her and giving her money. Yeah, absolutely. Yeah. I mean, that's what I would do. And even pull some options. You can even get in touch with one of our real estate pros. Yeah, just to look for the area, like what's in the areas of where you guys are. Just different options condo-wise. And, you know, there could be one a mile down so she doesn't have to move major locations, right?

52:29Maybe it's just the actual home itself. But run some numbers and kind of get some more facts around it. But yeah, this is difficult.

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54:19The all new EveryDollar is here and it is way more than just the incredible budgeting app that it is. It now has tons of advanced features to help you make progress with your money so much faster. And the average person is finding thousands of dollars in margin in just the first 15 minutes. So get EveryDollar for free starting today. Just get it in the App Store or Google Play. All right, let's go to Alex in Grand Rapids, Michigan. Hey, Alex, welcome to the show. Hi there. Thanks so much for taking my call. Absolutely. So I'm 28 and debt-free. I'm looking to buy a tiny house to put on my parents' property without a credit score now.

54:59And a tiny house technically not qualifying for a mortgage. How do I go about getting a loan for it? Well, let's talk about the loan process and then we'll talk about the tiny house on your parents' property. So with the loan process, if you have no credit score, you're just going to have to find a place that does manual underwriting for that. Now, we would recommend Churchill Mortgage. There are companies that do that, and you just have to check and make sure they'll do it in your area. But it's the same process. You're just going to have to show different trade lines. You're going to have to show your pay stubs.

55:31You're going to have to show proof of income. If you work for yourself, you're going to have to show your tax returns, that sort of thing. But for the most part, the process is the same. but how much but you're saying it doesn't qualify for a mortgage because it's a tiny house correct yeah so if it's under 400 square feet i'm looking at 150 square feet it doesn't qualify for a mortgage what's the cost of it i'm looking at about 40 to 50 000 oh save up and pay for it alex i'm sorry save up and pay for it it's like a car right now i only have about 10 000 okay Well, then just wait a little bit. Yeah.

56:05So just be putting some money aside to$3 ,000 a month and just work your way up. And in probably, you know, 12, 18 months, then you can do it. Can I ask the long-term strategy on this? Yeah. So I have autism and I can't really live independently. So it's pseudo-independent being on my parents' property. Got you. Got you. Okay. What are you doing for work? I coordinate volunteers for hospice. Cool. And are your parents involved at all, Alex, in this process? Would they be able to help you? Not financially, no, but they've been a great support. Okay. Okay, great. How long did it take you to save up the$10 ,000?

56:48I just finished. I got debt-free in February and then saved up like$6 ,000 for my emergency to six-month emergency fund. And it's so, I don't know, the last six months. Okay. yeah I'm with Rachel just keep saving for this it seems like you've thought through the best way for you to live and I like that you've thought through that I don't think you need to go into debt for this and for anybody who is listening to my zero score spiel that's for a mortgage no but that's it yeah that are trying to do a full mortgage on zero credit score but yeah save up for it I like the 40 to 50 ,000 just understand that you that this is yours like the resale on this virtually doesn't exist because it's on your parents' property and this is money that you'll likely never get back.

57:37So understanding that is important, I'd say. Yeah. Yeah. So running the, yeah. I mean, so it will, are you able to pick up extra work, Alex? Yeah, I'm looking for a second part-time job. Okay. Good for you. You sound incredible. I mean, the fact, I mean, you're very ambitious. You're very well-spoken. You know what you want. You've been doing the baby steps. You've been debt-free. You got your fully funded emergency fund. I mean, you're literally doing it all the only thing that's going to suck is like the next probably three years of saving for this you know what I mean you just look at it like um you know people want to save up for a car they want to save up for a college education right and these numbers these are big numbers um I'm definitely not downplaying that it's just so it's going to just take you longer to do it um and even though I guess technically you know I guess you could ramsey you know go through it to say well but a mortgage is the one type of debt and this is for a house but figure out a way to do it but the fact that it's it's the fact that there is no resale because the one reason we do say a mortgage not only is because it is the most expensive thing that you're ever going to purchase as a home but also homes go up in value over time and this is more like a car in a sense where it's going to go down in value and so getting into debt even a personal loan for this financially would not be wise so it really would be you putting money aside.

58:57And I mean, I don't know about the market in tiny homes. Is there a can you can you can you buy or buy used ones? Can you buy a used one? Yeah, that's what I'm looking at. I'm looking at them on like Facebook marketplace. Okay, okay. So maybe you could even Alex. I don't know that because for some people, they may want it off their property, there may be some urgency to get one off. So maybe you could even negotiate with them and say, Hey, if I have cash, you know, what's the lowest, So you wouldn't be able to do that today because you don't have that amount. But when you're getting closer to that in three years or something, I mean, you may be able to negotiate.

59:31Okay. For a lower price. Thank you, guys. Absolutely, Alex. Yep. Thanks for the call. And again, I think, yeah, I just wouldn't do that. I wouldn't go the debt route. I wouldn't either. And because you never know, especially if you're already buying it used. Yes. What type of resale would be on maybe selling it in the future. Absolutely. All right. let's go to Elijah in Salt Lake City. Hi, Elijah. Welcome to the show. Hey, how's it going? I just have a question. I am 22 years old. I'm currently going to college right now. I'm almost done with my bachelor's degree. I have only about a year left.

1:00:08I'm only about$14 ,000 in student loan debt, so almost done. But yeah, that's my only debt. No credit card debt, nothing, no car loan, nothing like that. And I guess my question is, well, I'm looking to go into law enforcement. After after I graduate, I guess my question is, is it worth it to stay for a master's degree if I get an extra pay incentive for the rest of my career? Or if I should just once I get my bachelor's degree, take that pay incentive and just start working. Well, what would it cost you to get your master's? How would you pay for it? So that one would be loans, but it would be for a total about master's degree.

1:00:45I've been doing my research about 18 ,000 for the college that I'd be going to. And what's the difference in job that you would get if you just went into the police department with a bachelor's versus a master's? Yeah. So if I went in with a bachelor's degree, I'd be getting a 3 % pay incentive for the rest of my career. If I went in with a master's degree, I'd be getting 5 % pay incentive. So I guess my question is it would take a long time to repay that, like get that money worth, get that extra 2 % every year. But I do really enjoy college. I do want to get married before I leave college. and I enjoy my hobby.

1:01:17So I just don't know if it makes financial sense to get a master's degree. Not on debt. Not on debt, but I'm wondering if there's a way that you can cash flow it. Are you working at all? And my next question is, do you have to do it right away or can you work on it later while you're in law enforcement and still get the 5 % bump? Yeah, you can still get the 5 % bump. I've just heard from a lot of people that, you know, it's really hard once you're starting this full-time job to go back. I mean, how much are you getting paid like your first year that you're working? So, yeah, first year with a bachelor's degree would be about 90K.

1:01:55Okay. And then with a master's degree, if I came in first year, it would be about 95. Okay. So that's my thing is the percentage-wise is not big. I mean, we're talking maybe a$4 ,000 difference, and you could do that in two months with a side gig. You know what I mean? Like, so there's a part of me, and I know, I mean, I have friends in law enforcement, and they even move around, they get up to detective or they, you know, move around within it. Yeah. That can change your pay over time as well. So, yeah, I think if you had the money and you wanted to do it, I don't think, I mean, I don't think I would stop you.

1:02:28But also, since you don't have the money, it's kind of, that's a no-go for me personally. Okay, yeah. So you would just, you would, okay. So you wouldn't be okay with, you know, taking out student loans for a master's degree? No. Okay. No. Yeah, I'd get this paid off. And man, I wish we had a Ramsey dating app. I feel like we had a lot of calls of some ladies that are always single, Elijah, and they're always looking for a man. And we could have pointed them your way. I know. I know. No, I appreciate the the the the proactiveness of love. I do. I do. Because I do think that's great. I am for getting married young and, you know.

1:03:08And what he said is true. Like when you're in college, there's people right there to choose from. Once you get out in the world, it's like, I got to work. I got to go out after hours. It's exhausting. It's absolutely exhausting. I got to go to an event, get dressed up. College, it's like you got your pick right there. Got them right there. Oh, Elijah. Yeah, I hope that helps. So yeah, if there's not the cash, but to Jade's point, if you're able to somehow cash float, or even if you get into a situation where they help pay for half of it, I don't know, you know, your work, that would be incredible, too.

1:03:39So I hope that helps. And yeah, good luck.

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1:05:19so over on the debt-free stage we have christopher welcome christopher thank you rachel so nice to be here i'm glad you're here we have a lobby full of people and always when we see someone staying on the stage with the headphones, we know. We know that you've been on a debt-free journey. That's right, Christopher. Okay, so where are you from? I currently live in East Providence, Rhode Island. Okay, wonderful. All right, so how much debt have you paid off? $63 ,563. Oh my gosh, to the T. What kind of debt was it? Mostly, it was actually 50-50, credit card debt and card debt. Okay, credit cards and cars.

1:05:53How long did it take? 11 months. Wow, you were pedal to the metal. Yes, time? I went from 72 ,000 to about 80 ,000, but with overtime, I'm set to close out about 110 this year. Oh my gosh. I was working a lot. You were kicking it. Yeah. And living on nothing. You just cut everything. That was it. Uh, I actually, I even sold the car. It was a brand new 2024. I was a little upside down. So I did the one thing you say is okay with debt. Yeah. And so it's not a myth it actually works it worked out it was tough i ended up buying an 05 lexus for about six thousand dollars wow and then a few months later someone drove into it on my street oh shoot oh look at that's good looking for how much were you upside down i was upside down about four thousand five thousand okay you are the poster child or poster man adult of what we teach i love hearing it.

1:06:47Well, thank you. So when that one got hit, I actually got about$8 ,000 from the insurance company. And I was like, how much, how cheap of a car can I get? So I bought another car for $2 ,000. Put the rest of it towards my credit cards. Stop it. Look at this. That's it right there. Christopher. And I said, you know what? That's what I'm driving right now. Let's keep working. And it works. Oh my gosh. It works. A$2 ,000 car. How many miles on it? 125 ,000. Man, oh man. And was it okay? It runs great. Runs great. Manual transmission. It'll never die. Let's go, let's go, let's go. I wish you could be in the passenger seat of every 25-year-old guy in America.

1:07:22Just be like, listen, did you get this? Well, y 'all are always in the passenger seat. That's how I learned. I'm actually a truck driver. And I was listening to the Ramsey show 12 hours a day, five or six days a week. That's how you do it. And there were so many little pieces that were put together that made me realize this whole debt thing is really ridiculous. Why am I doing this to myself? Yes. So, yeah. Wow. I'm glad y 'all do what you do. And you don't regret a thing. Not one bit. So amazing. Okay, so 11 months ago. Yeah, what was it for you that you said, okay, I'm done. I'm going to just completely change everything I've been doing.

1:07:50I have a brand new car. I have some credit card debt, and I'm going to just, I'm going to change it. Yeah. Well, like I said, I've listened constantly. There were two things that stuck out in my mind. I've been working 70 hours a week plus since I was 18 years old. Oh, wow. I heard Dr. John Deloney say one time, very exasperated, you know, working 70 hours a week isn't sustainable. Baby steps one through three are meant to be intense. after that, four, five, and six are supposed to be intentional. I was like, maybe that's why I feel so burnt out. 70 hours a week for 16 years. It's a lot. Yeah.

1:08:23So I said, you know what? That's the time. And between Dave saying, the only reason, uh, the only thing a credit score does for you is show how well you play kissy face with the bank. I was like, yeah, I've been playing that for a long time. Maybe I should stop doing that. So it was time to just get it done. What was the hardest part? I want to know, like, it's one thing to hear it. And then when you start doing it and you feel like the discomfort of it, what was the main like emotion that was holding you back? I would say swallowing my pride. Like I said, I've been working very hard my whole life and to have to get rid of a brand new car that I really enjoyed.

1:08:57That was your gift to yourself. Yeah. I just didn't need it. It wasn't a necessity. I hear everyone say on here, oh, I had to go buy a new car. No, you didn't. Save up for a couple of weeks, buy a clunker like that one man you need to be behind this desk let me know christopher for real though that that i think that's a great point the ego hates going backwards absolutely so it does it takes a level of humility to say what i was presenting to the world what i'm going to present actually from a mathematical standpoint is better but from a from a from a presentation image perspective it looks less right and so the ego doesn't like it absolutely very very difficult and so the fact the people that do it, you know, are serious and I'll think a level of maturity and humility.

1:09:41That's really, really amazing. Okay. So have you turned down the hours of working 70? I have so far. I'm planning on picking it back up probably in March. Uh, I don't like driving in the snow up north. So I figure now that I'm out of debt, I don't need to work 70 hours a week anymore. Let's bring it down to 40 or 50 and in the summertime, I'll make some more money. And, uh, I'm, I'm still working on baby step three. Once baby step four comes, I'll be good. yeah and you can upgrade from the two thousand dollar car absolutely yes make some changes yeah okay have you been able to feel a difference since you've had a difference a couple years ago i uh found out i had a panic disorder so i have a little bit of anxiety i think most of it was from my debt wow at that time before i found the ramsey show i had a house that was four hundred thousand dollars so it was a lot that i had that just i didn't need i ended up selling the house long before I found the Ramsey show.

1:10:31Now it's just, I feel a weight lifted off my chest and I can just breathe. I sleep better at night. Simplicity. That's it. That's incredible. Absolutely incredible. Did you have some cheerleaders in your corner during all of this? My parents, Bob and Simone, all my friends up North, all my friends down here. I used to live in Clarksville for a while. So I'm here visiting them and I figured, Hey, come do a debt free scream. Amazing. Yeah. At one point I had 42 credit cards. Holy smokes. I was playing that game, building that credit score. Stop it. Because you know, I've heard Dave say it many times.

1:11:02Why do you get a credit card? To build your credit score. Why do you build your credit score? To get more debt. Why do you get more debt? To build your credit score. So I was like, that's just foolish. I'm done. Done. I closed every single account. I had a balance on five. One was around 3 ,800. One was 4 ,000. The other, the last three were about 8 ,000, give or take a few hundred. From that point, I went to the avalanche method because they were so close. I was like, I'll pay off the one that's at 28%. These two have zero. We'll save a little bit. Fine. So once you save the three to six months, what are you going to do to celebrate?

1:11:33Because you, my friend, deserve celebration. I am going to continue saving to upgrade that hunk of junk. And what do you got your eye on? You know, the car I sold was a 2024 Subaru Crosstrek. My rental that I got here is an Outback, a Subaru Outback. And it's a lot more spacious. I kind of like that. So probably something like that or a Forester. I love that. An SUV with all-wheel drive. Yes, because you live in the snow. Yeah, exactly. Okay. So great. Okay. So I'm going back to the 40. Was it 42? 42, yep. Okay. Credit cards. What was the one that you were like, you could not wait to close out?

1:12:08You were like, I just. Discover. Discover. I took that and I went snip, snip. Oh my gosh. Wow. So great. You're a rock star. Thank you. Well done. Well done. Okay, what would you say to someone who is listening? Maybe they're a Christopher. Maybe they've just found the show and they're thinking, what, like, gosh, I do have credit cards. I have car loans. What would you say to them if they feel like, there's no way I could do that? I would say just do it. What do you have to lose? Only your debt. You're just going to lose your debt. That's the worst case scenario. If you stop going into debt, you'll be good.

1:12:43Try your hardest. It's going to be hard. Harder for some, you know, easier for others. And just keep doing it. If you keep pushing and keep pushing, struggle now so you can have a better life later. Yes. Talk quickly about the adaptation. You took your car down to the dealership and got rid of it. That's right. How quickly did you adapt? Like, how quickly did you turn that corner from, oh, woe is me, to, I'm fine with this$2 ,000 car? Pretty quickly. I was upset, like, kind of a little bit. But my first car was a 95 Chevy pickup truck. And I loved it. So I like older vehicles. it's just now things are so new they're safer there's better features so you like the new stuff too at least with that 05 or 07 rather I can fix anything on it so I don't need to take it to a mechanic if something goes wrong I just take it apart replace apart and that's it you can figure it out that's right figure it out wow well Christopher you've made our day absolutely incredible I mean no for real you you are the reason we do this that's right and you're living proof that it happens you know what I mean and um yeah so whether yeah single married male female whoever you are out there this is the guy it's proof that you just can say if I just believe that I can do it and I start making changes I can that's right just do it I can do it incredible all right you ready Christopher I am all right so we got Christopher from Rhode Island paid off $63 ,563 $63 ,563 cars and credit cards in 11 months, making $72 ,80 overtime with$110 ,000 a year.

1:14:20Alright, Christopher, let's hear your debt-free scream. 3, 2, 1. I'm debt-free! Oh,

1:14:31ladies and gentlemen. That's how it's done. That is how it's done. the poster man.

1:15:20Today's question of the day is sponsored by Why Refi. If you're tired of, or if you've tried everything to fix your defaulted private student loans and nothing's worked, Why Refi can help. They build custom fixed rate plans based on what you can actually afford. So learn more at YReFi.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey. Not available in all states. All righty. Today's question comes from Layla in Maine. She says, when my boyfriend sold his house and moved into mine, we agreed that he can buy into my house after a few years, which is now. We plan on getting married at some point, but we're in no rush.

1:16:03He's giving me$75 ,000 to be part owner of the house. What should I do with this money? I already have an emergency fund and my only debt is$220 ,000 on a mortgage, which will now be only half of my debt and about$5 ,000 on a 2 % interest car loan. Should I put it all into a mutual fund, load up my IRA or some mix of the two? um i'm struggling layla because you're asking one question but i need to answer a different question than the one you're asking um i would give i would do one of two things a here's my problem with the whole thing is the fact that you're not married in this house and you're exchanging money in a way and property in a way that married people do and really not even the way that married people do it's all messed up but um because you're not married there's no protections here for you.

1:16:58And the more that you co-mingle money into this, it's just going to make it more of a messy process. If for some reason this doesn't go down the path of marriage like you think, because to your own point, there's not even a rush to get married. So this is getting very messy, very fast. If I were in your shoes today, and I know this is not the question you asked, but Rachel, if I were her, I would not accept money until we get married. And if he wants to pay rent or pay something for living in your house, because essentially that's what's happening. He's got to be okay with that because there doesn't need to be a level of commitment by buying into a house if there's not a commitment to the relationship.

1:17:35Yes. Well, and I'm assuming if he's going to be giving her this amount of money, does he want to be on the title, like be part owner even legally? And that means you're then sharing a legal rights of a home with someone you're not married to. And as quickly as he says, I love you today is as quick as you could fall out of love. He falls out of love. And again, because you're not married, there's zero protection he could just walk out the door and but now you guys are gonna have to refinance a house to get his name off of him because you meet someone else and want to get married to this other person and got your ex-boyfriend on it just turns into a mess so no i mean i wouldn't accept it i'm with you jade yeah um because again i think i'm assuming by accepting this amount of money he's going to want own legal ownership of the home to be put on some you know yeah on the title so um so yeah it's a it's a no for me and yeah i mean the fact you guys are living together and um before marriage, which is becoming more and more common.

1:18:26And if he wants to pay you rent and you guys have a roommate type relationship too, you can do that. It just gets really messy really fast. And from a relational level, I will tell you, studies are coming out more and more as well to show that actually divorce rates are much lower if you don't live together before. Yeah, that's right. And the quality of marriage and the quality of relationship and everything is different. When you're not just playing house and then deciding to finally commit, you actually go through the stages which is more old school but it's showing more and more from a relational standpoint it's more stable so and again that's not what you asked Layla but uh I'm with Jade I wouldn't I wouldn't accept it yeah and therefore I'm not going to answer the question you asked it's all love Layla it's all love all right let's go to Jay in Atlanta Georgia hi Jay Welcome.

1:19:15Hey, hello, Miss Jade and Miss Rachel. Well, hello, Mr. J. How can we help today? Yes, I just had a question about investing in Roth versus the traditional 401k. And only because like from my experience, I've invested in a 401k that for about a year. And it was about like$1 ,200 in there a couple of months ago. But also, I had ended up losing my job. So I just went ahead and sold it. And I got back half. So I was trying to see what was. Okay, yeah. So normally, yes. Okay, so what we would normally say is if you leave a job, you want to roll over your 401k just to a traditional IRA. So you're keeping the investments you're just moving it out of the company's 401k um versus it basically was yeah what you did you just sold it yeah and if it and if the market was kind of low at the time you know you may not have gotten you know fully what it was and probably paid some taxes and all of it yeah because it was retirement funds yes yeah so um yeah you did get hit hard with some penalties so our rule of thumb with investing is did your 401k at your previous employer did it have a match built in?

1:20:38Yes, it had about a 4 % match. 4 % match. Okay, perfect. Do you have a new job now with a 401k currently? Yes, I have a new job and they actually match up to 30%. Wow, gosh. Yeah. Okay, perfect. And is this one a Roth? You asked about Roth versus traditional. Is it a Roth 401k on this one? I think so. That's another thing. I'm not really sure the difference in, you know, I just picked one. Yeah. If you have the choice, if there's, if they're telling you you have the choice and I would ask, I would make sure to get with HR and ask that question. I would select a Roth option because in that way you're paying the taxes on the money now so that when you go to retire, all it's all tax-free growth, which is great for you.

1:21:26So I would always select that. And if not, the traditional is fine and you can, you know, get the match on that. The biggest question is if you're ready to be investing yet at this point. So can you tell us a little bit about like, do you have any debt? Do you own or rent your house? Tell us about that. Yeah. So I rent right now. My rent is about 700. And other than that, I have child support. That's about 400. That can vary. and then my student loan repayment is about$60 a month. I put an extra$60 with it, so it's about$120. What's the whole lump of debt? I just, so I found you guys about a year ago, and I paid some stuff off, so I just got about$9.7K left.

1:22:19Okay, that's good. I started at$22. Okay, way to go. Nice, Jay. Anything else? Credit cards or cars? Oh, yes. My groceries are about$200. Good. Yeah, that's it. No credit cards? No car note? No. I did open up a credit card last year, and then I found you guys a month later and closed it. Look at that. Do you have any money saved, Jay? Yes, I have about$2.5 saved. The only thing is that's earmarked for a car right now. I work for a company and we get company vehicles, so that comes out of my check. So I'm saving that$2.5 to just get another car right now. Oh, because you've only been driving the company car.

1:23:09Right. Okay, gotcha. Yeah, so what I would probably do, Jay, is just pause all retirement and work to throw as much money at this$9 ,700 that you have left in debt. and then start working to bump up that emergency funds. You know, you have$2 ,500 in it. I know it's earmarked for a car, but I would just, I would get three months. And you don't have a ton of expenses month to month, which is great. So you could be on the three month side. That could be your baby step three. And then we can start looking at retirement, which will be 15 % of your income into retirement. So like Jade said at the beginning of the call, the Roth, this is a picture I have.

1:23:48This is my dad's teaching from the old, old FPU. It's a good one. But it's the little coats. Do you remember this? He had like different jars. Like one was a IRA, one was a 401k. And then there's like a little coat that he put over each one. He was like, the coat is the Roth. So if your investment has a Roth around it, that means you have funded those retirement accounts after you've paid taxes on your income. So you pay all your taxes and then after tax income then goes into those. Now, if it's before tax, then again, that money is coming out before you pay taxes on your income. And because of that, the government has to tax you on that because they did not tax you earlier on your income.

1:24:26And then they tax you on all the growth. And if you know anything about compound interest, your investments will grow, grow, grow. So Roth is amazing. Not everyone offers a Roth 401k, but if they offer it, like Jade said, take it and open up a Roth IRA and be putting 15 % of your income into that. But that won't probably be for another two years, Jay, or year and a half after you pay off this debt and get a fully funded emergency fund. But I'm so glad that you picked up the show and you actually are making progress. You paid off so much debt already, Jay. So just keep at it. You're doing incredible.

1:25:22welcome back to the Ramsey show in the Fairwinds credit union studio I'm Rachel Cruz with Jade Warshaw and we are taking your calls at 888-825-5225 and up next we have Les in Greenville South Carolina. Hi, Les. Welcome to the show. Hi. Hi. What a pleasure to speak with you. Oh, well, thanks for calling in, Les. How can we help today? My question is, is there any rule of thumb or percentage of how much of our assets we could have tied up in our home versus cash? Our current situation is I'm 72. My wife is 69. And we still have income from our business of$300 ,000 a year, but that will slowly curtail as we enter more of a semi-retirement mode.

1:26:24But we're currently$2.5 million net worth,$2 million cash,$2 million in the home. We were looking at a potential purchase or upgrading or wouldn't this be nice in a home? We're a little bit spoiled. We've had two occasions where we've lived on the water on a lake. In our town, we have a small, they call it a mountain, but it's a small mountain. A big hill? Yeah. But it has a limited number of home sites. It's quite old. A lot of the homes are quite old up there of about 120 overlooking the city with mountain ranges in the west. So you're wanting to upgrade? Upgrade from the$500 ,000? Or second home.

1:27:25Second or upgrade? No, no. It would be primary home. Okay. What's it going to cost to get that house on the big hill? Well, if it doesn't stay within$1 million or$1.1 million, then the deal's off the table. But then that would be a shift of we'd have$1 million in the house and$1.5 million in cash. How long will you continue to draw the$300 ,000, and how quickly do you think it'll, like, what will be the rate of replenishment?

1:28:02I would, based on my projections, it won't completely end, but I projected that it'd be five years before we'd even have to start drawing off of any interest or anything in our investments. Oh, five years. Okay, that's great. And in the meantime, will you continue to invest from the$300 ,000? Please say yes. Oh, heavens, yes. Here's a brief background story. After bankruptcy and foreclosure at age 57, my wife's 54, we walked into a financial peace university class, nothing to our name,$320 ,000 in debt. in exactly 10 years almost to the day. We said, well, when Dave showed us the path, we said we're committing to this, we're doing this.

1:29:06Almost 10 years exactly. Wow. We hit the first million. The next five years, the second million, we're on track that the third million would be in three years. Three years, yes. Unbelievable. Gosh, Les, well done, you guys. That's incredible. Absolutely incredible. Yeah. So I am grateful to you folks. Oh, well, no less. I mean, you're the one that did it. I mean, seriously. And what did you say, 20 years ago?

1:29:39It'd be 16. 16 years ago. Okay. Yeah. Incredible. Yeah. So I think from the rough math, yeah, if you guys are able to, you know, be able to get this$300 ,000. And I know you have to live on some of it. But yeah, in four years, that could easily become another million to throw in. So I think if you guys keep it around that million dollar mark, from just the rough math of even if you just didn't even add the other million, but you had the 2 million, you know, and if you're living off 6 % or whatever it may be, I think you're going to be, you guys will be totally fine. Do you have a good financial planner?

1:30:17I yes I kind of hesitate because I've been kicking around just doing it myself sure yes no that's fair yeah so I think yeah I think sitting down and kind of running out all the numbers with someone because if you're 72 and in good health I mean you could live another 20 years but I think Jay did you yeah I was just looking through it I mean you're you should be putting away at least$3 ,750 a month. Does that feel about right for you?

1:30:48Yeah, currently. Or more. We're putting away$150 ,000 a year. Okay, great. And so you have to consider, yeah, lump sum is going to double every seven years. So let's say, like you said, it's at least five years that you'll continue to get that$300 ,000 income. Well, no, it's going to incrementally reduce. Reduce. Okay. But what's it cost to run your household? You've got a lot of margin, correct? Right. Current to run the household is$7 ,000. But at this point,$2 ,800 of that a month is designated to vacations. Yeah, exactly. So you've got plenty of margin. not yeah that my point is you should do this that's my point is you're gonna have plenty of money um you guys have done well you've got a great income it's gonna dwindle but it's still gonna be a really great income for the next five years even as it continues to slowly go down um i'm okay with the you're doubling in house um and i i'm okay with it rachel i'm yeah i mean i think the million you have 500 000 in your primary home now it's just pulling out another 500 000 to upgrade to a million dollar home.

1:32:09And then you guys will have that 2 million in cash. Yeah. And then you'll be putting some money away continually. And then I think from there, yeah, I mean, I think you've got a great nest egg. And yeah, I think you'd be totally fine. But again, I think running all scenarios with somebody who's looking at the market, looking at rates, looking at how aggressive your funds are, how not aggressive they're putting, I mean, whatever that you're invested in, I would be running some long-term numbers because, you know, there is the percentage of what you want to withdraw that makes sense from a historical perspective of what the market makes, right?

1:32:46So like, of course, one year, you know, or last year was like 23 % or something crazy. Oh, it was crazy. Yes. Wild. And then some years it's going to do 8%, right? So to be able to find that happy medium, and I know people have different percentages of their opinion. Financial planners will be more conservative, which is great. I think Dave's is a little aggressive when he says that you can pull out. He's like, it's fine. The market's big, fine. Yeah. But we run in those numbers long term for you and your wife over the next, you know, map out 20 years and just see, see what it brings you. But yeah, you should be, you should be totally fine, Les.

1:33:20I think you're being very conservative. And again, it's not this percentage, but the fact that everything's paid off too, because that is one thing we think about going into retirement, having a paid off house is a huge, huge upside to when you start actually pulling some money from retirement, how much you actually need to pull when you don't have to pull a mortgage or rent. Like, man, that saves you a ton. So Les, well done. You and your sweet wife, I mean, 16 years ago, decided to change the game on what you guys do with your money. And it just proves that money is a long-term marathon, you guys, but it works.

1:33:51If you do the right stuff over and over again, it works.

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1:34:57Well, you don't have to wait for Black Friday to get our Black Friday deals. The sale is happening right now. It includes$12 best-selling hardcover books,$12 questions for humans, decks,$6.99 audiobooks and e-books, which is what I'm loving these days. Yes, indeed. $15 assessments and more. Just go to RamseySolutions.com slash store, or if you're watching on YouTube or podcast, we will leave a link in the description. All right, let's go to Kim in Salt Lake City. Hi, Kim. Welcome to the show. Hi. Thanks for having me. Yes, absolutely. How can we help today?

1:35:37I'm left a single mom, unemployed after a divorce, after 26 years of marriage.

1:35:48Sadly, I thought I'd be over it in two years, but it doesn't happen always that easy, I guess, for some people. Yeah. I'm at the stage where it's time that my divorce decree claims I need to either get my home in my own name or sell it. Okay. I have all the equity. I took that as alimony because I didn't want to disrupt. I had seven children living at home at the time with the divorce. Okay. And I have two. I rented my basement immediately, like the week my divorce was final. I put up a wall, rented the basement.

1:36:36I'm going to make this happen. And now two years have passed and I'm trying to figure out how, I feel like I'm making baby steps, but I don't know how to make the big steps, I guess, or the big decisions. Yeah, for sure. How much equity is in the house, Kim? So it's an acre in horse land and property value quoted as$1.4 million. I have to give a little off, I'm sure, for the state of part of the back acreage. Okay, so for$1.4 million, how much do you have left on the loan? um 450 000 450 okay and how much is the mortgage payment a month i pay 2880 okay how have you been handling that 2880 with with no income a divorce yeah so we scheduled we we mediated November of 23.

1:37:49Divorce was final January of 24 so that he could claim us on his taxes, which I just realized, oh, no wonder that's going to affect my college, my FAFSA. anyway right now but that's a side note the point is I the minute I had an inkling he was making decisions different than for our family because we he used to have he owns a business that's worth a few million and I chose to just walk away and take equity in the home so I didn't have to disrupt my children. Sure, sure. How have you been paying for this mortgage currently? Because this has happened and you've been living. I had about$50 ,000 in savings.

1:38:49Okay, so you've just been pulling it out of that. Yeah, like somehow$400 ,000 turned into$40 ,000, what he could give me at divorce time and I said fine so you were you were given 400 ,000 did I hear that right no we had that in the bank he bought an Aston Martin understood um oh understood anyway we won't go into that part okay so you've been you had 50 ,000 in savings and you've been kind of just pulling it out every month to live and now it's gone I have good storage yes I sold jet skis I sold my truck because I don't I don't have any debt besides my home never did so but my so I'm living off my truck payment right now I'm going to accounting school and I'm online okay good and I did get student loans when will you be done with accounting school and able to work I have like a year that's the problem I really think it's a self-esteem issue well how do you stop my unemployment yeah I didn't get unemployment and he anyway I'm it destroyed me I really I know I'm smart I know I can do it and you can I and I figured out how to do all the accounting for his business for him and I was just a stay-at-home mom and I could have gotten the alimony of a stay-at-home mom, but then, oh, wait, when you work for four years, you're an able-bodied worker.

1:40:27Yeah. I want you, have you been in any counseling, Kim? Yes. Yes. Okay. I want you to continue with that because you're right. This is, this is huge. Yeah. And Kim, what are your, are your kids all in school? Well, yes. Okay. So my youngest two are high school, freshman and senior. Perfect. Okay, great. Because I was going to say, I think it would just be good for you, Kim. To your point about self-esteem, there's something about going through the actions after something that's just horrific. I mean, I can't imagine. I think what you've walked through is so difficult. It's so hard. I think it would take away anyone's self-esteem.

1:41:03I mean, it's horrible. But I think there's something to be said about getting up in the morning, putting on an outfit, going and interacting with other people, and then coming home. And that may even be a receptionist at an accounting firm or something. You know what I mean? Like if there's a way to get your foot in the door, just in that industry, since you're going to school for it and make some connections, it's going to be really helpful. But to do anything, Kim, I mean, honestly, I think it would just be really healthy for you to get out of the house, earn some money, be around people. And you're going to have to, because you are running out of money.

1:41:35So there is the self-esteem issue of that. It's good for you to do this and get some wins under your belt. But you also, you're going to have to do this from a financial standpoint. If you want to keep the house now, that's going to be a big question. to figure out if you can sustain this house. And so you need to know, okay, a year from now, here's what I have to make full-time as an accountant starting out to be able to support this mortgage payment, which you're going to need to make. I mean, gosh, yeah, I mean, it's basically a... I little bit cut it off because I had a child with anxiety that really struggled.

1:42:11Like every day for eighth grade, we ended up doing like we're doing two periods a day. But you're okay. Are you in a place now, though? I want to I know there's a lot that happened then, but I really want to focus on now. Exactly. And here's why. Let me tell you why. Because here's why. If you sell this house and you take a million dollars from it, I'm afraid that you'll just burn through that and not work. And I don't want that for you. Yeah, that's what I'm afraid, too. That's exactly. Thanks for putting that into work. You know, and so that's why I want you to take Rachel's advice. And today, this week, that be your number one priority is I'm going to look for receptionist jobs.

1:42:54And if I can't find a receptionist job, I'm going to look for another job answering phones. And if I can't find that, I'm going to pick anything, take anything. Or a local church. If there's a local church even to go get plugged into and work for them. Because Kim, to Jade's point, is so good because Kim goes with Kim. and if Kim stays the same and you're staying consistent and you get a million dollars in your lap, you continue to be Kim with a million dollars. And right now we know there's a better version of Kim. So if we can get a better version, a healthier version of Kim, and then even you make the call in a year or two to sell the house, well, we have hardworking up and out of Kim who's, you know what I mean?

1:43:33Self-sustaining with a million dollars, which means you're going to be making really clear decisions when it comes to money, I think you still are in that fog, which again, I do not fault you for. I think when you walk through a divorce, that grief is horrific and having seven kids that you're still thinking about. I mean, all of it, it's very, very difficult. So the fact that you're still grieving, I would not, I would not shame you for that. And I don't think you need to be shamed, you know, shaming yourself. I think give yourself the freedom to still feel and experience what you're experiencing, but we also have to start making some moves to create a positivity around us.

1:44:09And I think part of that is getting some quick wins. And I really do think there's a self-esteem boost when you earn and you do something and there's a cause and effect, then you know, I can do this. Because you can, Kim. That's right. You really, really can. So we are cheering you on. If you'll hold on the line, Christian will pick up and we're going to give you every dollar for a year to help you get this budget crunching when you start earning this income to figure out how to stay on track.

1:45:00Transcription by CastingWords And when you're ready to get the coverage you need, you can connect with a Ramsey trusted insurance pro who will only get you what you need at the best price. Go to RamseySolutions.com slash insurance. RamseySolutions.com slash insurance.

1:45:34Well, it's not every day, Jade. We get two debt-free screams. What? In one show. And so we are so excited that on the stage, in the lobby, on the debt-free scream stage, is Steve and Tanya. Welcome, you guys. Thank you. Thanks, Rachel. Absolutely. Okay, where are you guys from? We are from Piedmont, Alabama, which is about an hour north of Birmingham. Okay, so close to Birmingham, Alabama. Yes. Okay, so how much debt have you guys paid off? $279 ,000. Oh, my gosh. Okay, and how long did that take you? Six years, 10 months, and 27 days. Oh, man. 27 days, yes. And making what kind of income during that time?

1:46:14When we started, it was$135 ,000. We finished up at about$252 ,000. Wow, very nice. And what kind of debt was the$249 ,000? Well, we had about$279 ,000, my guess. We had about 61 in consumer debt, like tractor, truck, a little bit of credit card. And the rest was our house. I knew it! Oh, you did it! Oh, you paid off the house. We did. Awesome. Completely debt-free in six years, you guys. Yes. Wow. Incredible. I mean, just below the seven-year mark. You guys did great. You guys really, yeah. Amazing, you guys. Congratulations. Thank you. Okay, so what happened six years ago to make you think, we want to go on this crazy journey and pay off our house?

1:47:01Right. Well, we actually got married seven years ago, seven and a half years ago. And so we were about to embark upon building this house. And so, and we had kind of, I had gone to FPU years ago. I kind of dabbled in the baby steps, but never really was aligned in that marriage and just kind of struggled the whole way through it. When we got together, we just committed from day one that this is what we're going to do. Oh, yeah. Log stat. She said, we're doing it. Yeah. We're doing it. I love that picture. Oh, it was so good. Is that why y 'all paid it off? Was that the picture of when you did your last mortgage payment?

1:47:44Yes. Oh, I think they throw it back up there. I think so. So good. Okay, so when you guys got married, did you guys talk about it a lot before you guys tied the knot? Money in general? Because I do feel like people get nervous. And if it's a second marriage, we hear that a lot. That people are like, oh, gosh, I don't know. If I kind of want to keep my stuff over here, his over there. How did you guys work that out? Well, it was kind of, hey, we're going to do this. We're going to do this together no matter what. Yes. You know, because I know in my past and in his, you know, we, you know, we weren't on the same page.

1:48:18So we definitely talked about faith, finances, family. So the three F's. The three F's. Yes. That's what you get. I love it. Well done, you guys. Okay. So what was, what was the hardest part of all of this? I think the hardest part is just choosing to live different. You know, everyone around you is doing all the things, eating out, you know, doing all the things. Like we ate out on Tuesday night when tacos were$1.25. That's the only time we ever ate out. Yeah. You know, we packed our lunch every day. We bought our clothes at thrift stores and on eBay. We sold things we didn't use. We just chose to live differently.

1:49:02Did anybody ask questions? Like was it obvious to people around you like you're doing something different or were you kind of flying under the radar? No, I talked about it a lot. They were sick of hearing it. I know my grown children were sick of hearing it. My friends, my coworkers. I mean, I just kept, we kept laser focused. And that's all that I thought about. And I'll tell you what really turned it around. We sat and did our written budget. We do the old school papers, the written budget. And I asked Steve, I said, have you ever really tithed 10 %? Like, have you went all in? And he's like, no.

1:49:36And I was like, we're doing it. And we did it. When I tell you, promotions rolled in and raises. And I mean, it just all came together. I mean, we were obedient. We were very disciplined. Like you said, we packed our lunch every day. And yeah, I'm so sick of Tupperware. Yeah, that's right. I know. Well, it's funny. I was going to ask you guys, because we always talk about baby steps one through three is intense. Yes. And then four through six is kind of, you know, we say intentional. all, but it doesn't sound like you guys let up very much to pay off the house. Or do you feel like a lot of that sacrifice was during the consumer debt stage?

1:50:13And then did y 'all lighten up when you kind of went to work on the house or were y 'all intense the whole way? No, we, we actually wound up, um, at the end, we were paying$5 ,500 a month every month on the house. We didn't, we didn't let up once, once we got, I mean, once we got, um, the savings in place. Then every spare dollar went to the house. Went to the house. So then I want to ask you the question that I hear all the time, which is, I mean, six and a half years, six years is a long time. How did you stay motivated? Like what was the thing that kept you going with that? I mean, $5 ,500 a month is a lot.

1:50:53That's a lot. It was little wins. It was if we wanted something special, we wanted to go out to eat or, you know, I wanted to buy a new blouse or whatever. I sold things. Also, people were sick of me on Facebook. You're like, I'm going to find the money to do this. Tanya's like, there's Tanya again. Sell them something. I would buy decor and just flip it. But we followed the baby steps. I love that. Just to the T. Yes. And I was kind of like you, Jade. Like I always heard, you know, we ain't got no money. I mean, I was raised, you know, paycheck to paycheck. And I literally changed my family tree.

1:51:25And I'm leaving a legacy to, we're leaving a legacy to our children's children. Yes. It's incredible. But by that decision to live differently, which you're saying, Steve, I'm like, it's just it's so powerful. So powerful. OK, so what would you tell a couple that's listening and maybe they're in your stage of life? Right. And they are they've walked a similar story to you guys and they're thinking, oh, gosh, but there's no way. Like, I don't know. I don't think we can change. I don't know if we can do something different. What encouragement or motivation would you give them to say, yes, you can do something that is totally different than maybe how you would you ever done with money?

1:51:58you could even have a paid off house. Well, for me, I mean, I, I mean, I basically started over when I was 55 years old and you know, so my message is that it's not too late. You know, you can, you can turn things around, you know, I was not in a position where, I mean, where I wanted to be. And I mean, back to the motivation question, I mean, my motivation was that I want to retire before I'm 65. Yeah. Yeah. Yeah. It's good. And so, yeah, mine was, um, you know, like I said, I just wanted to do something completely different than, than how I was raised or how my family, I wanted to make sure, you know, my children have the things that they needed and they see me as an example and, um, and also grandchildren.

1:52:45And I just, um, yeah, yeah. I just refused to stay the same. That's right. So how are you going to celebrate? What's the big thing that you guys are going to do to put a big bow on this? Well, when I turned 50, he took me to Hawaii. So we have, you know, once we were out of debt, we saved and paid cash. And so we've done some trips. We love to travel. Generosity is huge. Yeah, that was us in Montana. So good. Generosity is huge. And just enjoy and travel and... Beautiful. Live like no one else. I hope y 'all enjoy a Nashville night tonight. Thank you. I hope y 'all get to celebrate doing the Step Free Scream because it's incredible.

1:53:27And your story is so inspiring to so many people that, yeah, anyone can do it. It's just like if you just got to believe and you got to stay consistent. Exactly. That's what I heard, too, which is incredible. All right, you guys. Are you ready? We're ready. We got Steve and Tanya from right outside of Birmingham paid off$279 ,000, which includes their house. and they did it in six years, 10 months, and 27 days, making$135 to$250. All right, you guys, count it down. Let's hear your big debt-free scream. Three, two, one. We're debt-free!

1:54:06Oh, my gosh. So good. Do you know what I love about that is, you know, they both said they had been married before, second marriages, and there is and Steve said I had to start over at 55 and there's just something about this redemption that you get to it's a second chance there is something that I can still change what I've done and because of that still their grown kids are watching them that's right and then their children's children you know just like what Tanya was saying there's just something beautiful about that legacy that even when when hardship happens and occurs which it has in all of our stories but you can still change something and that redemption is so beautiful for what they've done.

1:54:44Such encouragement and so excited for them. Well done, you guys. Well done.

1:55:13Thank you.

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1:56:27Our scripture of the day comes from Proverbs 14, 23. In all toil, there is profit, but mere talk tends only to poverty. Ann Lander said, no one, nobody ever drowned in his own sweat. Oh boy. Well, what a picture that is, but I guess it's true. I guess it's true. Work hard, people. Work hard. It's very dramatic. The grit is good. All right, let's go to Lisa in Charlotte. Hi, Lisa. Welcome to the show. Thank you. Yes, absolutely. How can we help today? So my husband and I, we have between our Roth IRA and our 401k, he has$535 ,000 and I have$275 ,000 plus$200 ,000 in a CD. Okay. And I think we messed up during the pandemic when at the beginning, when it took like a big dive, I got nervous because I'm on disability right now.

1:57:28I got I have lupus bad. And so we're not contributing to our IRA anymore. And so what we I did is I moved everything. I kept it in the Roth IRA and mutual funds, but I took it out of the stock market. So it's kind of been sitting there earning a little less interest. So I'm wondering if we messed up for retirement or if we should move it back into the stock market at our age or what we should do. So the 535 and the 275 are no longer invested. They are, but not in the stock market. They're more in a secure. I put them in the CDs, four and five year CDs. So they're earning four and five percent interest.

1:58:11Oh, yeah. OK, so not to just let you know, Lisa, but did you make a mistake? The answer would be yes, because I just want to use this as a teaching example that what you did, you know, is pretty normal. People do freak out if they start to see a dip in the market. They're like, oh, dear God. And they pull their money out or they put it somewhere else. And what we always say is the only person that gets hurt on a roller coaster ride is the person that jumps off. And essentially, Lisa, you did. You jumped off because the last, you know, few years have been 23 percent. I mean, it's been like it's been crazy.

1:58:43So it would have been, I mean, yeah, yeah. I mean, seven times, you know, what you've been making is what you would have earned. So did you make a mistake? I'm going to say yes, because I think long-term investing, you just stay in. Whether it goes down and you get freaked out, just stay on the roller coaster because it's going to go up and down. It's what the market does. But when you pull your money out, if you pulled it all the way out, which I can't tell if quite what you, I don't know, I don't know exactly how that transfer looks. I didn't pull it out where I'm paying taxes on it. So it's still under the 401k, but just in the market.

1:59:18But what's difficult now is when, because I'm going to say, yes, put your money back in. You're now going to be buying back in at the top where you would have, you know, you would have lost all those returns. So it's not too late. You can still get back on, Lisa. So I didn't mean to harp on you, but I did want to make that kind of a teaching point because what you did was very common. People do that a lot. but just not to freak out next time because you know you guys did lose out on a on a on a lot of interest that you could have earned so what I would do is yes I would get back in how old are you guys I'm 54 and my husband's 59 and 59 okay perfect yes what we're worried about is retire retirement like we don't want to go back in and then worry a little bit about about that but our house is almost is almost um paid off paid off so we feel better about that but we still we owe 168 000 left on your house okay how much do you guys make a year um so again right now i'm not so he makes 122 000 and i get about 30 000 with my social security that's right okay perfect okay that's great so you guys it's about 150 um and then yeah so i'm just thinking you know at 54 59 nine.

2:00:35I mean, you guys, you know, I mean, it could be another 30 years, 35 years that you guys live, you know, if you're if you guys are, you know, healthy and doing all the things. So that's why you still have a long term, if you will, time to get back in the market that even if it does dip for a little bit, a few years, think you got you got, you know, just picture 30 years as an example of what you guys have to kind of ride this out. Yeah. And am I if I'm understanding the numbers, right? You have a million dollars, right? You had$535,$275, and$200. Our house is worth$900, our house is worth, and we owe just$168 left at 2.5 % interest.

2:01:13So I haven't been paying that much extra on that right now just because our interest is so low. Right. But just the CDs alone, the$535, the$275, and the$200, did I get those numbers right? Yes, yes. Yeah. So if you're saying, hey, today I'm going to plug in a million dollars, that's not bad. Right. I mean, of course, keep three to six months out in cash, but you're going to be just fine. Okay. Yeah. Put that money. And I would, Lisa, I think you're a little hesitant to even get back in the market, but I would. Because if you think about even in your house, you've got to get aggressive on that house.

2:01:45Lisa, even if it's two and a half percent, you're making three percent on your CDs. You guys are, you know, you're paying what you're making and you're kind of just. Yes, you have a wash right now. So, yes, I would be aggressive on paying off the house. And then we just talked to a couple. We literally just had that free screen that they, you know, they paid theirs off, which is amazing. So so it can be done. So I do that. And then I would I would even sit down. We have great SmartVestor pros there in Charlotte. it. And I would sit down with someone and look to see and tell them about, about, you know, a little bit of your nerves around the, you feel like it's risky, like you don't want to lose your retirement, you know, these kinds of things.

2:02:20Cause a lot of people can feel that way. But what I want you to do is listen to someone that you trust, someone that you like, you know, find a financial planner that you actually, I think personally enjoy because I think it's important that you trust them. Um, and let them show you some of these numbers and to be able to say, hey, here's the facts of the track record of the markets. Yeah, with the COVID, I mean, what was the stats? We taught on this, gosh, it's been five years now. But when it went down, I think it only took nine months to get back to where it was and beyond. Do you know what I mean?

2:02:51So like, even that was a quick, when you look at these massive, you know, 08, 07 was a little bit different. But you look at, you know, things like COVID, September 11, you look at these major events that do take kind of a dip, but then a lot of them return so quickly that the news doesn't talk about it, that it all gets back up, you know, within a few months. So, um, so I do want you to do some digging and some learning when it comes to it, cause it is worth it. Uh, Lisa, you guys still have plenty of years ahead of you that you guys could really be making some gains when it comes to your money versus it just sitting in CDs.

2:03:24I mean, honestly, I think that's one of, um, it'll be a detriment long-term. And I think if you, I think what will help you with your fear is play it out, not just the way it went down, but play it out in your mind, what would have happened if you hadn't made that error. And then you'll see, oh gosh, the juxtaposition. Yes. And you'll, I think that'll help with some of the nerves to say, well, everybody who stayed in is actually doing better. Right. So, yep. So yeah. And then as far as the house goes, you do recommend paying, because I have money in a CD. I could, yes, When that expires, I could just pay the house off, but I was thinking since the interest rate was low.

2:04:00Okay. No, I would do it. So you guys do recommend. Yes. You got to account for the peace part of that. You guys are, you know, your husband's about to be in his 60s. There's nothing better than having no payments in the world and owning the place where you live in. Okay. Great. Yeah, absolutely. Thanks, Lisa, for the call. We appreciate it. Yeah, there is that house portion is it's an interesting one because I think every single person we've talked to, Jade. That sounds extreme because we've talked to a lot of tens of thousands, hundreds of thousands of people that have paid off their home at events or been here on the debt free stage or contacting us on social or something to let us know.

2:04:37I mean, I have not gotten one message or one comment that someone who pays off their house regrets it. That's right. No one has ever said, man, I wish I had. I wish I still had my mortgage. Oh, I just wish I still had my mortgage because here's the thing, too. You can always go back and get another mortgage if you want to. You and go back and borrow on your house once it's paid off. So, and from a mathematical standpoint, you know, the game is that people play that I can make more in the market than what I'm actually, you know, invested in a two and a half percent interest rate, but I could be making 15 % in the market.

2:05:09You know, oh my gosh, like I have this huge spread. But what doesn't, yeah, what you can't calculate, what you can't put in a spreadsheet or a formula is that peace of mind of knowing that my house, I don't owe anyone anything. And there's something so powerful about the autonomy of our money. Absolutely. And then I think about, I mean, this is just worst case scenario, but I think about the person who doesn't pay off their house and they go into retirement. And suppose you go into retirement in a really down or really low year. Yes. Now you've got less money in your accounts currently, and you've got your mortgage and this whole life of debt to keep up.

2:05:42So there are things to think about. Absolutely. Such a great point. But yeah, Lisa, thanks for the call. And I think that's a great, you're a great example of what people are feeling and thinking sometimes. And so I really appreciate you calling in. All right, Jade, thanks for a great show. As always, thanks to our audience that always comes and visits us. We so appreciate you guys there in the lobby. Thanks to everyone in the booth. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.