Life Happens — Don’t Let It Wreck Your Finances

24:14Dave Ramsey:Okay, so what does she have? Does she have any money saved? Yes. So currently there's$97 ,000 in an annuity, an indexed annuity that's going to mature next year. Good. Uh, $91 ,000 in an individual brokerage account,$57 ,000 in a traditional IRA, and almost$7 ,000 in a Roth IRA. Good, good. Okay. What I would do is take her and sit down with a SmartVestor Pro in your area, a broker that we recommend, and help them develop a plan to get all of this money working together. She's got about almost$300 ,000 there,$250 ,000 anyway, and get that all working for her, keeping her hands off of it. Let her build a sustainable budget on the$45 ,000.

25:15Dave Ramsey:And if she just leaves it alone and keeps working, in seven years it will double.

25:23Dave Ramsey:So instead of$250 ,000, it'll be$500 ,000. Man, that's good news. Yeah. So that seems a little bit better than the amount that I was looking at. Yeah, because this is a little slim. It's not enough, but she's only 62. So, I mean, she can work. Right. As long as she can keep working, you can keep paying her. And then, of course, you know, do you have many – how many employees do you have? So we have eight guys in the field, and three of us are management, with my mom being one of the managers. Okay. All right. Well, I mean, if you can find, if you wanted to start, you can talk to the Smart Investor Pro about that too, what's called a simple 401k or a simple IRA.

26:10Dave Ramsey:It's a 401k for small businesses. It costs nothing to get it started, but you do have to match up to 3 % what people put in. But she could continue to put money in that, and you can match her then. And, you know, you can help her that way and help her fund her Roth IRAs every year in addition to having this money invested well. So there's some things you can do here because you're making some money. Yeah. Chance, did she have an age that she was wanting to retire and you guys were trying to figure out if she was able to or is she great to work for longer to get this built up? no my my family dynamic is kind of um you know my my dad had an injury a long time ago so he's not in the picture um and my mom is kind of not looking at me for but like i just i want to be a good guidance for her so i'm looking at her to work to 72.

27:07yeah she's ready to work for as long as she'd like to and even if she's not i'm still gonna pay her you know or take care of her do what

27:14Dave Ramsey:i need to do yeah well i mean uh be careful about that part of this let's let's develop a plan that has the dignity of sustainability on her own where she doesn't have to be is she going to be a problem in the workplace for 10 years considering she's gotten laid off so many times or is it is she good She's good in her role and everything. Well, my sister passed away, and after that, she left work for a while. And then when she came back, all of the other admin ladies were younger, faster. I got you. Okay. Okay. Yep. Now that makes sense. I got you. And we don't have any property in our family.

27:54Like, she doesn't own a home. She's renting right now. and the rent is a little bit higher than, I mean, it's like$1 ,400.

28:03Dave Ramsey:Yeah, it's a lot. So I think you sit down and develop a plan with a good SmartVestor Pro and that will tell you what you're going to do and also will inform her. I think she's working a while.

28:17Dave Ramsey:And I think that, you know, I don't think that's bad. There's nothing wrong with that. I'm getting ready to turn 65. I plan on working and not because I have to, but because I enjoy it. And so, uh, this is what I do and I don't really have anything else I want to do. So that's perfect. So, um, you know, uh, she's got that same situation. She gets to work with her son who's got, who's loving her and taking care of her and so forth. And so she can stay right there and earn an income. And meanwhile, continually putting some money in, meanwhile, investing this current money that she has better than it's invested now so that it'll produce more.

28:52Dave Ramsey:Cause she's not, you know, is probably not doing that well right now. So you do need to reorganize the money that she has, and that's why I'm sending you to a SmartVestor Pro to help you figure every bit of that out. Virginia's in Pennsylvania. Hi, Virginia. How are you? Fine, thanks. I'm a new listener. Okay. How can we help? Well, my question is, does it make financial sense for me to continue to be the co-owner on my 33-year-old unmarried son's financial account? No. I opened these up for him when he was an infant. Yeah. So. No, this is like a man, and he doesn't need his mommy on his account.

29:33I'm trying really, not that he's irresponsible, but I'm really trying hard. He's 33. If he's irresponsible, it's his problem. He doesn't make a lot of money. I don't care. So, okay.

29:45Dave Ramsey:No, I mean, really. You cannot carry a 33-year-old around and change his diaper, honey. I mean, I don't. I was always told there should be a co-owner on bank accounts. I'm sorry. Say that again. I was always told there should be a co-owner. Who told you that? My parents. Oh, OK. That's shocking.

30:09Dave Ramsey:OK. No. Let me just tell you, Rachel sitting beside me. She's my daughter. She's in her 30s. The number of bank accounts of hers that I'm on is precisely zero. So not even close. It's hard to let go, Virginia. That's a good boundary. It's a good boundary. He needs to fly and be free. And if he makes mistakes, he's going to have to learn it as a man. Oh, goody. I'm glad you're a first-time listener, though. Glad you're here.

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32:19Dave Ramsey:If you like the show, thank you. We could use your help. Click the follow button, the subscribe button. Share the show. Send somebody a link. Click a share button if there's one on your platform. We appreciate that. Oh, those five-star reviews, they're very helpful, too. Thank you very much. All that pushes the algorithms around and causes people to see the show on the platform that you're on, whether it's Spotify or Apple or Google Play or YouTube or wherever you are, wherever you're hanging out. If you're on talk radio, just tell people about it. It's that simple. Thank you guys for sharing it.

32:55Dave Ramsey:We appreciate it. Brianna is in Texarkana, Texas. Hey, Brianna, what's up? Or Brianna. Is it Brianna or Brianna? I go by either, but it's Brianna. Brianna, okay. How are y 'all today? Good. How can we help? I was giving y 'all a call. We're kind of in a pickle. We're currently renting, and our landlord is selling the house. It is 30 days to move out. Okay. So we've got a couple of options. I'm in touch with contractors in the area because I work with them. We looked and bought a house yesterday that was$1 ,300 a month. For rent? Which is, yes. Okay. What are you paying now? $11.50. Okay, cool.

33:45Dave Ramsey:That's good. All right. Okay. We do have some debts right now. We have two cars that we are paying down a lot on in a Discover card. So total in debt is about$25 ,000. Okay. So I've got two options. I can either start paying a little bit more in rent and, you know, push our – We will eventually build a house. Or we can, my sister told me we could go ahead and get a loan out a camper and live on her property so we can rat hole a lot of money for a down payment on a house and start building. Take a loan and buy a camper. Well, yeah, I know. Take a loan out for a camper. Yeah, I got it. You just said that out loud.

34:44Dave Ramsey:yeah well yeah i know oh no yeah so no we're not going to finance something that's going down in value while we're trying to get out of debt to save up money to buy a house it's working against you you're swimming upstream not only is it going down in value but you're paying interest for it to go down in value Right. Oh, and by the way, you're living in a camper. There's that, too. Yeah. Yeah. I'd go rent that$1 ,300 house in about the next 30 minutes before it gets away. Okay. What's your hesitation, Brian? I'm just curious. Is it that? I guess it's just. You feel like you're throwing money away renting?

35:36Yeah. Yeah. Okay. What do you guys owe on the two cars? Um, I was$17 ,000 on one and then$4 ,600 on the other. Okay. And what do you guys, what's your household? Yeah, what do y 'all make? We're, last year we did$125 ,000.

35:54Dave Ramsey:Okay. Oh, that's great. So you should be able to clean this up in a year. You'll be debt free in a year. Yeah, and also. No, no, no, no, wait a minute. No, you didn't, you said that like you didn't believe it. I believe it. You made$125 ,000, you only owe$25 ,000. Your rent's only$1 ,300. You should be debt-free in a year. You're not on a detailed budget. Y 'all are still going out to eat and partying. Yeah, we started doing the EveryDollar app as well. Last week.

36:25Right?

36:26Dave Ramsey:Yeah. You're just getting started, kiddo. Hey, listen, don't worry about the EveryDollar app, but if you were organized, think about this. If you make$125 ,000 and you pay off$25 ,000, that means you have to live on$100 ,000. Oh, my. Yeah. You could do that. Okay. Your cars are not out of control. They're not good. I want you to get them paid off. The$17 ,000 one is concerning, but you make good money. Yeah, what do y 'all bring home every month? Do you know? After tax, what hits your bank account every month for income? Every month, let me think. I'm easily$1 ,700 every two weeks, and he's at like$1 ,500 every two weeks.

37:09Dave Ramsey:$6 ,400. Okay, yeah. Okay, something's wrong. You guys got a big tax refund, didn't you? Well, not, it was about$2 ,000. Okay, and how much is coming out for 401Ks? 6 % out of mine, so$100. Yeah, okay, yeah, so stop that. Yeah, and that pays for the difference of the rent. And we do have an 18-month-old, so she's in daycare. Yeah, but that's not causing you to be broke. you're making plenty of money okay so here's the thing here's what i want you to do you're in talking to you for a few minutes you are uh you make too much money and you're too smart to be this broke okay because if i run into somebody that's either dumb or they don't make enough money i can't fix the dumb but i can help i can help if they don't make enough money you're not either one.

38:05Dave Ramsey:You're smart enough to do this. And you are not, and you make plenty of money. So here's what I want you to do. I want you to pretend like I hired you for$130 ,000 a year to take over Brianna's budget and make it behave. Make every one of those dollars scream like it was your job. And if you didn't do your job, you were going to get fired. And that's the every dollar budget. I'm going to take every one of those dollars that's coming in. I'm going to stop the 401k temporarily. I'm going to adjust my take home pay by another 200 bucks a month so that you don't get a tax refund. And that's the$2 ,000 because a tax refund means you gave Washington too much money and then they gave it back to you in April.

38:48Dave Ramsey:Santa Claus does not live in D.C. That was your money you got back. And so you lay all of that out and you make those adjustments and then you take the money that's coming in, which is now about$7 ,000 a month. You pay$1 ,300 out of it. You buy some food. You buy some daycare. You put the electric bill on there. And then you got some money to attack this. And you run the ringer on this debt, kiddo. And don't be talking about living in a camper. You make$140 ,000 a year. Let's get this done. Okay. You can do this. We have paid off. We have paid off a lot, like easily$20 ,000 this past year. Good.

39:23Good. That's great.

39:24Dave Ramsey:If you did it one more year plus a little, you're done. Because the cars, we originally started with$16 ,000 on my Highlander and$9 ,000 on his car, and we've paid it. That's great. Brianna, what's the Discover? Hey, what's the Discover card? How much do you guys owe on that? $18 ,000. $18 ,000. Okay. Is that cut up? Oh, yeah. It's gone. Okay. Good. All right. So you discovered Freedom. Good. I'm glad. Yeah. All right. Hey, get on that every dollar budget. We're going to put you in with Kelly. She's going to give you the upgrade where it connects to your bank and you can drag and drop everything automatically.

40:06Dave Ramsey:And it's going to change everything. It's going to show you exactly how to walk these baby steps. And I want you to step on this money like it was your job. Yeah, get the$2 ,600 car paid off this month. Yeah. Find$2 ,600 out of that budget and do it. Like extreme stuff. And this is extreme. Like the grocery budget, your shopping, inexpensive places. No eating out and no vacations. And no campers. No campers. No, no, no. That's going to set you back. It's going to cost you a year and a half to two years in this. Don't do that. No, your sister's sweet. She's just not smart. Don't do this. No. She was generous to let you live there.

40:45Dave Ramsey:I shouldn't say that. But that was nice. But no, if it led to her suggesting financing a camper, then I'm not going to. No, that's dumb. Don't do that. Don't do that. Go get that other house. You're going to be there two years because it's going to take a year to get out of debt. Build your emergency fund. Then you've got to build a down payment. You might be there three. But that's it. After that, you're going to buy a house. Yep. And then you're going to move on and become wealthy. This is what you're going to do because you make too much money and you're too smart to be this broke. So you're heading out.

41:15Dave Ramsey:You're doing good stuff. Keep it up. Keep it up. Keep it up. We're here to help you. And we're going to hold you accountable. Hang on. Kelly's going to pick up. We'll get you tied into that EveryDollar app.

41:26Dave Ramsey:It's interesting. That's interesting.

41:33Dave Ramsey:The camper? What's interesting? Yeah, I'm trying to think what mindset. Well, because it feels like rent. I can see it. It feels like you're throwing money away. and at least you have an asset, but understanding that the asset ends up sometimes being underwater. It's like a car, like you borrow at the high end, and when you try to sell it, you can't even recoup it. So it's just, yeah, more details and research in it, Brianna, but good luck to you guys. Good question. Thanks for calling in.

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43:56Dave Ramsey:Welcome back to The Ramsey Show. Rachel Cruz, Ramsey personality, number one bestselling author. My daughter is my co-host today. Open phones at 888-825-5225. Amanda is in Wisconsin. Hi, Amanda. How are you? I'm doing great, Dave. Thank you for taking my call. And Rachel, it's awesome to speak with you as well. Oh, well, we're glad you called, Amanda. Happy to talk. Thank you. Currently, my husband and I, with our four children, we are on baby step number three. And we've currently paid off about$125 ,000. Oh, my gosh. Congratulations. Congratulations. Yeah, it's been a lot of work. But right now that we have more wiggle room in the budget, we're struggling with momentum of trying to get that full on emergency fund filled up.

44:51And part of it has to do with we had a couple of emergencies this past year that weren't life threatening, but they are big financial burdens that we are struggling to throw that money at it to save up to that large amount versus when we were paying down our debts you know it was easy you know throwing like you know three five hundred you know at a things at a time per month um and watching that steadily go down but we're just we're kind of struggling with the momentum of um needing to get that emergency fund up so we can keep going forward how much you guys have in the account now um six thousand okay and your ideal number that you guys are shooting for?

45:31$30 ,000. $30 ,000.

45:33Dave Ramsey:That's three to six months of expenses? No, that's just at least like a couple of months right now. No, I'm saying$30 ,000 is three to six months of expenses? What's your household income? Last year, we had$110 ,000. Okay. All right. Okay. That's pretty hefty. That may be part of the problem. You may have such a big goal, you can't see getting there. And you're throwing how much at it? A month to build it? Or how much can you throw it? Right now we're throwing about$500 a month. You didn't get out of debt at that speed. No, we didn't. What were you throwing at the debt a month? Oh, gosh, like a couple thousand.

46:18Yeah. Yeah, at least.

46:20Dave Ramsey:Listen, baby steps one through three are gazelle intensity, like your hair is on fire, scorched earth, no eating out, no relaxing total focus zero lifestyle no vacations till you get that emergency fund built so it's two thousand dollars a month going in there which is a 15 month schedule from the beginning but you're six thousand in and so it's a 12 month schedule for you to get there but you've got it i mean you got to lay it out and look at it like that what happened was y 'all got out of debt and relaxed yeah guilty you didn't you didn't keep your intensity through this. Once you get the baby steps done, baby step three done, then you can relax and start 15%, be intentional instead of intense.

47:06Dave Ramsey:Put 15 % of your income into retirement, then start towards the kid's college and those kinds of things. But yeah, what does it take a month to run your household, Amanda? It takes about 3 ,700 and change. Okay, so let's call that four grand. So three months is 12, 24 is six months. So I don't know if you need 30 or not. Yeah, you could go. Yeah, you could lower that. You could call it 20 for now. Just to get there. And just go get it finished. That's 14. That's seven months at$2 ,000 a month. Yeah. That probably feels more doable. Yeah. At$500 a month, you're going to get there in about 18 years.

47:46Dave Ramsey:No, you can't. No wonder you lost momentum. Yeah. Last year, one of our vehicles that we had paid off, the motor decided to die. And after crunching it, it's just cheaper to put a new motor in, which is going to be about 10 grand. We have a second vehicle that, again, everything's paid off that we're using, but it would be good to have the actual truck back on the road. And then we had a huge flood and the furnace died. So we're heating our house with a pellet stove, but we need a new furnace, which is like another 10 ,000. And I think that's probably where that like 30 ,000 came from. Yeah, you feel overwhelmed for sure.

48:25Dave Ramsey:Yeah, you got to take care of those things. So you may want to go with a used motor from a junkyard into the truck rather than a new one. Yeah, we've been to like multiple mechanics. It's one of those situations where It's a known issue with the vehicle, like around the 180 ,000 mile mark. Didn't know that when we bought her. But, you know, even if it's a used or refurbished motor, it's still around like the lowest with like 8 ,000. Yeah. Yeah. Okay. But, I mean, yeah, you're going to have to clear those and plow through this. Thank God you're out of debt. Yeah. You'd be up a creek. You know, it's painful watching the vehicle sit there and, you know, and the furnace.

49:04And it just felt like, oh, gosh, we lost our momentum because we were starting to save up for the emergency fund. And I'm like, how do we get the momentum back? Yeah.

49:12Dave Ramsey:Well, I mean, it's saying, okay, thank God. Okay, with the same intensity that you used to get out of debt, and thank God I was out of debt. Because if I wasn't, I'd be really screwed right now. With all those payments going out. And so then you're going to be the other side of this, and you're going to go, okay, I got the furnace, the car fixed, I get the emergency fund done. And thank God I'm in that position because then something else is going to come up. 100 % of us have things happen. Well, and the hard thing is, too, I think we can kind of all live a little bit in a fantasy world that life's trajectory is just straight up.

49:44And it's not. It goes up and down. You know, the trajectory is going up, but there's going to be ups and down seasons. Like, we've talked to many people that they were on, you know, baby step three and almost complete, and then something happens, and they've got to drain it and build it back up. I mean, that is life. But the encouraging thing is, I mean, that you guys have a plan. number one, you know what you're doing and just take it one bite at a time. When you look at the whole thing, it can feel overwhelming of like, oh my gosh, we still have to get 20 ,000 emergency phone. And we have this 10 ,000, this 10 ,000, just do one thing at a time and, and look at the numbers of it to know, okay, if we really sacrifice and keep at it, we can put 2000 away a month, 1500 away a month.

50:25And you just start building on that. And then also you think about too, your jobs, you know, getting raises, like things happen too with income throughout this process.

50:34Dave Ramsey:The good news is the other side of it. And the other side of it looks like this. When you don't have any payments, the truck is fixed and the furnace is fixed and you got$20 ,000 in the bank. It's going to be the weirdest thing. Here's the weirdest thing that happens. What is defined as an emergency changes? Because when you're broke, a$30 item is an emergency. when you're when you're doing really well and you got margin in your budget a thousand dollar item is not an emergency because you just put it in the budget so uh and and even later on it gets to where a ten thousand dollar item is not an emergency as you build some wealth and you just don't end up using the emergency fund because uh you know you're starting to get margin in your life and by the way you're moving up in a little bit better cars so they're not breaking all the freaking time and you're staying ahead of the maintenance stuff on stuff so it doesn't break on you and uh you get more life out of things because you keep up with it all that so um the good news and that's i'm talking three years from now for you amanda they're not today today you've got another year of really tough roll up your sleeves you got a year of tough and you're not done you're not done you got to get through this and then but that's the only way to get through it is to get is to bust through it, and as you said, to regain your momentum.

51:55Dave Ramsey:There's not a magic thing, but when you set a clear goal and you believe it's reachable, it gives you energy. When it's a vague series of things attacking me that I don't know how I'm going to handle, it steals your energy. So break it down step by step. Here's what we're going to do first. Here's what we're going to do second. Here's what we're going to do third. And we're going to crank it up again. No lifestyle, no nothing, until we get this mess cleaned up.

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54:17Dave Ramsey:Amy's in Minnesota. Hi, Amy. How are you? I'm good. How are you guys doing? Better than I deserve. What's up? Well, I wanted to call and ask about my company credit card. My husband and I have worked really hard to pay off all of our debt, and we have our emergency fund saved, and we've been also saving to buy our first house sometime in this year. We went to our local credit union to get approved and we did get approved for a loan, but the person that we spoke with there asked me about a$17 ,000 debt that was showing on my credit report and I realized it was for my company issued credit card.

54:59I'm a secretary at an accounting firm and I was given this card when I first started working here, and I use it to book travel for employees, order office supplies, pay different company bills, but it never occurred to me that it would show on my personal report.

55:16Dave Ramsey:Is it an American Express? No. Good. Okay. Because theirs are going to show on your report, and they're going to try to hold you liable. So I would go to your supervisor and tell them you need this canceled immediately. Okay. This is ridiculous. It should not be on your report. Did you sign to be liable for this company? No. And from what I was reading, we're a smaller company, so I'm listed as an authorized user. Yeah, an authorized user is not liable for the bill. Yeah, so that's why I was curious. So it shouldn't show up on the credit bureau. But your bank is a huckster, so your boss's bank is a huckster, so you need to get away from this.

55:59Okay. I wasn't sure if I was getting the right information from the credit union person we talked to about the loan.

56:07Dave Ramsey:Well, if it shows up on your credit bureau, it's something. They've taken your Social Security number and put you on the account somehow. Yeah. Yeah, I'm an authorized user. I know. Authorized user is not liable. But that should not be reported. Sometimes they do that, though. And so, yeah, you've got to be really, really careful. And so I would just tell your boss just to shut it down, shut down the account, or shut your name down off the account. I don't want to be on the account at all in any way. If you want me to book your travel and stuff, you're going to have to give me your card to do it.

56:38Dave Ramsey:I'm not putting my name on it. Okay. Okay. Well, I will do that. I appreciate it. I don't want to be liable for it, and I don't want it reported on my credit bureau. Yeah. I worked hard to get out of debt. Now I've got a$17 ,000 debt that's yours on my credit report. That's what parents are starting to do with their kids, putting their kids as authorized users so that it builds their credit, which is that same whole. It's the same crap. And it's not supposed to show up. Yeah. It's not legal, but they do it all the time. So because here's the thing. What is reported on your credit bureau report is what you owe.

57:16Dave Ramsey:When you're an authorized user, you don't owe anything. Your name is just attached. It should not be on there. It's just that her name's attached to an account that does owe. Yeah, exactly. But it's the same thing as the kids. It's exactly why she's getting this. She's probably not liable on this account. They probably haven't screwed it up. But the best thing to do is just to get it out of her name completely, and then you don't have to worry about it. That's right. It's not going to show up anymore. God, how crazy is that? That you're like, we're out of debt, all this, and you go to your credit union, and you're like, I'm sorry.

57:43Dave Ramsey:You got$17 ,000. You're like, what? We can prove the loan in spite of that. And he acts like she owes the money. See how that happened? Yeah. See how that looks? So that's the purpose of a credit bureau report. But it's false. Right, right. You know, these companies, man. Snakes. Kathleen is in Kansas. Hi, Kathleen. How are you? Hey, Dave. I'm good. How are you doing? Better than I deserve. What's up? Thanks for taking my call. So pretty straightforward question. My boyfriend and I are going to be buying a house together. And my question is, should I keep the townhome that I currently own and rent it out for extra income?

58:21Or should I sell it, take the profit, and stick it in investments?

58:26Dave Ramsey:Kathleen, you're not going to like me. You're going to ask why we're not married. No. Maybe not too, Kathleen. Well, that might come up in a minute, but we're going to start with the idea that buying a home with someone that you're not married to is financial freaking suicide. Do not do that. Okay. one of you decides to leave you can't get off the mortgage there's no protection one of you gets disabled you can't get off the mortgage if he dies and he doesn't have a will if he dies and he doesn't have a will you own a townhouse with his mother

59:10Dave Ramsey:yeah it's a bad idea it's a bad idea okay this is these are the people that call us later yes After they do the thing you're going to do. And then they call us going, Dave, I'm so screwed. What am I going to do now? Please don't do this. Or the boyfriend leaves and stops paying. He just disappears. And then you're on the hook for the whole thing, or you're going to get foreclosed on. You know what I mean? Like, it's just not good. No, no, no, no. Do not do this. Now, and then if you were married and you did buy it together, that would be okay, obviously. So if you're going to do this, you've got to get married.

59:49Dave Ramsey:So I'm really meddling now. But then if you're going to do this, you'd have to keep debt on one or the other in order to keep the old place. And I wouldn't do that. I'd sell the old place. Okay. But don't sell the old place and buy this with your boyfriend. You're going to do it anyway. She is. You're going to do it anyway. You're how I stay in business. You're just going to keep coming back. She's going to do it anyway. Everyone listening knows it. Oh, bless your heart, darling. I'm so sorry. Please don't do this. Please, we love you. We don't want this for you. We're here, Kathleen. If it goes south.

1:00:22Dave Ramsey:It's not a prosperity plan. It's a poor person plan. You're going to be poor people. Don't do this. Don't do this. Please don't do this. It's not a matter of romance. It's a matter of stupidity. Tim is in Utah. Hey, Tim, what's up? Hey, Dave. Quick question. So my wife and I were self-employed. We own a business. and we currently own a house in Utah that we bought in May of 2022. Long story short, our house has dropped in value like$85 ,000. Why? So the market just dropped. We bought the week before interest rates started going up, and so then interest rates went up. Where in Utah? Just south of Salt Lake.

1:01:06Dave Ramsey:Bull. Salt Lake is a boom town. It's exploding in price. It's almost unbearably expensive. Our whole, it is, it's still expensive. Our house was expensive, but our value, the value has gone down quite a bit since we bought. I'm sorry, I don't believe you. I think you've got bad information. I, I, I, who gave you the comps? Who gave you the comps? Our realtor works for, uh. Your real estate agent came out and looked at the house and said the house that you bought in 21 is worth$85 ,000 less in Salt Lake City. Yeah. And we have friends that just sold under contract and their house is undervalued.

1:01:52Yeah. Yep. So here's my question, though. So we don't have any other debt. We're pretty smart financially, but we don't like how much our mortgage is. And the other aspect is we travel to the East Coast for work six or seven times a year. And so we're looking at buying a house in the East Coast by some friends, and we'd be able to lower our mortgage payment about$1 ,200 a month. Six or seven times a year? Yeah. For how long at a time? How long at a time?

1:02:27Dave Ramsey:About a week at a time. So for seven weeks. So six weeks out of 52. That doesn't determine your domicile. Well, no, but if we moved to where we're looking at, our mortgage payment would also be$1 ,200 a month. Oh, you would move. Yeah, but you'd never live there. No, but you're moving there full time, you're saying. No, no, no. We're talking about selling our house in Utah and moving. And moving to the East Coast. The whole year. Yes. Yes, yes, yes, yes. So what's the six or seven times got to do with it? That's just the reason why they're moving. Because we don't like traveling as much. The reason why we're moving on the East Coast.

1:03:01Dave Ramsey:So are you working in Salt Lake City while you live on the East Coast? we own a company and we work remote so we can work anywhere so my my question was though for us to move to sell our house we'd owe our mortgage company a little bit and then moving costs and closing costs and everything it would cost us probably about forty thousand dollars which we have in the bank to move um and it only saves us about twelve hundred dollars a month in payment mortgage payments. It doesn't make any sense at all. So we're trying to decide. No, it doesn't make any sense at all. We're trying to decide, so we just take that $40 ,000 and put it towards our house.

1:03:39That's the only debt we have.

1:03:41Dave Ramsey:I would just sit there and let the thing come back in value. You've got no reason to move. You don't have no reason to move. You're only over there six times a year. You can get a hotel six times a year. Nothing. I mean, it's nothing. So wait until the house gets to value. You're going to go$85 ,000 and$40 ,000 to move. So this$120 ,000 swing you'll never recoup.

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1:05:59Dave Ramsey:Salt Lake City is the 10th hottest real estate market in 2025. in the U.S. It's up 9 % year over year in prices, and it is 35 % higher than the national average on median house prices. Okay, this is such a - Just to make sure. Just a classic Ramsey move. No, I'm serious. I am too. This is exactly what happens when we debate at dinner as a family. We're always pulling up Google to prove our point. Well, I mean, it wasn't like I made this up. That was my point. I know, I know, but you proved it. I did. Proved it. I did. Locked that down. Christy's in Indiana. Hey, Christy, what's up? Hey. So, a lot's happened over the past year with my family.

1:06:49Me and my husband have been married for about 14 years, and we're deciding to move because of his job from Indiana to D.C., and we're deciding to consolidate my mother's house also and move her in with us. she owns her house outright um we still carry a mortgage but i'm just trying to figure out how to protect her money in this whole process if something were to happen divorce death what may i just have no clue how to walk into joining our household and making that happen.

1:07:25Dave Ramsey:Why are you?

1:07:29I'm the only child that looks out for her. So her husband had a stroke a year ago. He's in a facility. He's like a three-year-old in a grown man's body. She lived with my 92-year-old grandma who passed away about two weeks ago.

1:07:46Dave Ramsey:Oh, I'm sorry. There's just no one here. How old is your mom? I'm 72. Okay. So why does she need care at 72? Um, she just doesn't get around good. She uses a walker, probably could use a wheelchair at this point. Um, she was looking into a town home here and I'm like, well, that doesn't make sense if you've got a wheelchair in your future with a walker. Yes, I know. I know. And you know, there's, you know there's some family close and i said if she needed help would you help her you know right now she lives on an acre she has a like a seven or eight bedroom house it's just too much so we've i don't i don't doubt that but i don't what i'm trying to figure out is why she's moving in with you because i have a conscience no that's not the point she doesn't even need you i mean she's she's only 72 but she doesn't sound like she's in great health Yeah, she's not.

1:08:47She does need us. She does need us.

1:08:50Dave Ramsey:All right. All right. I don't know why. She panics. You know, even she had help with her husband. How many brothers and sisters do you have? I have one sister, my brother. I have a brother also, but we haven't seen him. Okay. So what's the house she's going to sell? How much money is she going to put into this deal?

1:09:16Probably maybe$700 ,000. And I have some other cash things that were moved around, annuities and stuff. We had hired, prior to all of this going down, we had hired an estate lawyer when her husband had a stroke.

1:09:29Dave Ramsey:Yeah, yeah. And they moved some of her money around so that she wouldn't lose it. Why would she lose it? Applying for Medicaid. She put him in a welfare nursing home and she has$700 ,000? Well, no, that's going to be what we're going to get from the house because she owns the house outright. And that's something they said that the government wouldn't take with the house. I know, but this is Medicaid. This is Medicaid is welfare. She put him in a welfare nursing home. Wow. And she had the money to not do that. No, we used all of our cash assets initially, and he was not in there for about a year.

1:10:13Dave Ramsey:Okay, so she's broke other than the house? Yes. Okay. Does she have any income? Other than what she gets from Social Security, no. Okay. What's your house going to cost? What's this proposed purchase going to cost? um we we actually made a offer on a house um for a little over a million okay you need to see an estate planning attorney and the house would be purchased in an llc and um she owns a portion of the llc and you own a portion of the llc okay and then here's the tricky part you have to do a bunch of legal work to determine what happens to her portion of the LLC upon disability or death.

1:11:10Dave Ramsey:Or if you guys just want to sell. Because otherwise you're going to get trapped and your siblings are going to be pissed and your brother will just reappear at the most inopportune moment. looking for his part of the 700K that is called your house. This is really messy. It's going to be very difficult to do this well and it not end poorly. That's why I was asking all these questions about her care. Okay. It'd be one thing if she just moved in with you and you took care of her. But when you put her money in this house, she's now your partner. She's 72 and she's in ill health. And she dies. Is that going to force the sale of the house that you live in in order to give your sister her part of the inheritance?

1:12:00Are you going to save the money to buy her out?

1:12:02Dave Ramsey:Yeah. You got to have$350 ,000 or is it going to be$350 ,000 plus what the house has gone up in value? So now the house is worth$2 million and your mother's share is now worth$1.4 million. And that means you owe your sister$700 ,000. This is not going to go well if you all aren't real careful. she was planning on giving the whole portion to us her initial offer how's your sister feel about that um she doesn't know want to take care help her out she doesn't want to help her out 700 grand worth yeah yeah this isn't gonna go well okay you guys are you know you haven't thought this all the way through.

1:12:48Dave Ramsey:And so it can be done, but you're going to have to lay out every possible negative scenario and have in writing in the LLC documentation, what's going to occur. Your mother gets dementia. Your sister says that you are signing checks illegally for her. Who's got healthcare power of attorney? What happens in the event of death? At what point do you have to liquidate to pay your sister out? What does the will say about your mother's portion of the LLC because she owns over 50 % of the house you live in. And that tail's going to wag that dog. You following all this? Yes. It's messy. That's why I was begging you to kind of figure out a way to not do it, and I wasn't being incompassionable.

1:13:36Dave Ramsey:I was lacking incompassionable. Are you married, Christy, with kids and stuff? Yes. Okay. Yes. Yes. So here would be a question for me, because this is sort of what she did. The house she lives in now, my grandma did the same exact thing, sold her house, built onto my mom's, and they didn't have any paperwork. Yeah, but you didn't have any heirs that questioned it. Well, you know, she did just pass away two weeks ago, but they knew that that was sort of like the cost of taking care of my grandma and letting her live there. Does your mother have any siblings? Yes. And that was your grandmother's house?

1:14:21Not technically, no.

1:14:23Dave Ramsey:Whose name's it in? My mother's. You sure? Yes, because she built it in 1974. They just remodeled it. Well, if your mother puts all of this money in this house and this house is in your name 100%, you've duplicated that family mess. But, yeah, that'll work. It'll keep your sister out of it. But I think your sister's probably never going to speak to you again when this is over. Because you took$700 ,000 to care for an elderly lady for a few years. It's pretty heavy pay. A lot different than the Medicaid nursing home she put her husband in. So, man, this is messy. Your sister's going to be pissed.

1:15:03Dave Ramsey:I can see it coming a mile away. I'm going to get a call from her. That's what's coming next. Y 'all got to work this through, and everybody's got to talk about it, and it's got to be documented, and you need some legal advice that's a lot better than I could give you. Because all I can tell you is it's going to be a dadgum mess.

1:15:57We'll see you next time.

1:15:57Dave Ramsey:The Ramsey Show Question of the Day is brought to you by Y-Refi. Defaulted private student loans can wreck your peace of mind, your finances, your relationships. Y-Refi offers hope with custom refinancing based on your unique situation and ability to pay. Visit Y-Refi.com slash Ramsey today. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not available in all states. Today's question comes from Alexandria in Texas. I'm currently going through a divorce and recently found out that my husband has taken out credit cards in our children's name. He racked up significant amount of debt and emptied his retirement account to pay it off.

1:16:36He keeps telling me it's not possible to pull credit reports on our kids, but I don't believe that that's true because now he wants me to sign paperwork that absolves him from any wrongdoing regarding our kids.

1:16:51Dave Ramsey:No good. Not happening. your husband is scum anybody that would screw his own kids over is scum i mean who takes out that's just absolutely the i mean to start with identity theft is illegal it's criminal fraud okay so your husband is a criminal oh and who'd he steal from his children What a jerk. No, I am not signing any paperwork except paperwork puts him in jail. That's the paperwork we're signing on him. So, no, go talk to your lawyer, darling, and tell your lawyer to send him back a little note that says, L-O-L-O-L-O-L-O-L-O-L-O-L-O. Oh, L-O-L. You've got to be freaking kidding me. You're saying O-L-O-L-O-L.

1:17:46It's L-O-L-O-L.

1:17:47Dave Ramsey:I know, but it's laugh out loud, you fool. There you go. Okay, so you've got to be kidding me. Oh. Yeah. And you can freeze your kids' credit, which is what you should do. You can pull kids' credit reports, and you can freeze them. We know this because we did it. When they first started allowing freezing, Rachel was still a minor. And all of our children entered their adult life with a frozen credit report. Nothing had ever been on it. With our kids, too. Nothing could get on it. Well, and you do it, too, to protect them from ID theft. Just in general, like with their internet. You know, the internet and scams and frogs.

1:18:22Dave Ramsey:You need to freeze it because their father is scum. Okay. And that will keep him from, if they actually check the credit before they issue the credit card, they won't issue it if it's frozen. Next time he tries to do this. Because there will be a next time. This guy is a serious con artist. Sorry. Man. Okay. This is interesting. Listen to the verbiage. He keeps telling me it's not possible to pull credit reports on our kids. But I don't believe that's true. So here's let me help you with this. Anything this guy says is not true. If his mouth is moving, he's lying. This is a guy who would steal his own children's identity for his own personal benefit.

1:19:03Dave Ramsey:So nothing that comes out of his mouth can be trusted. So the only thing that can be trusted are the actual facts and the behavior, not the verbal wishes. So, no, you can pull credit reports on your kids. You can freeze credit reports on your kids. I have done it. And I would to make sure. I mean, if he says he paid it off, who knows? You know, so I would pull those credit reports to see what the status is for your kids. I would file a criminal on him. I'd have the police. I'd set him up and say, hey, somebody stole my kid's identity. Oh, it was him. Absolutely. And then let him figure that one out.

1:19:40Dave Ramsey:Definitely. Because I don't want this guy near them again. This is unbelievable. Carlo is in Miami hey Carlo what's up I hope all you doing are well we are I wanted to ask your opinion my mom in February late February she passed away from her 10 year cancer battle I'm sorry I appreciate it in her passing big family squabbles with the scraps left behind long story short I have$110 ,000 sitting in my bank account. My wife and I tomorrow are going to go get a biopsy for her. They think she possibly might have cancer. And her father that lives with us, his cancer came back, and we're dealing with that.

1:20:34Oh, my gosh. Yeah, it's a rough 2025, but we're still blessed to be here and making decisions and trying to make things better.

1:20:43Dave Ramsey:So my role in all this. I assume you and your wife have health insurance. Yes, sir. She works in the medical field. Does her father have health insurance? Yes, sir. Okay. All right. So my biggest dilemma is this. I've always been a saver. I believe I'm baby step number five, if not six. We're doing rather well. We just turned 40 this year. and I'm trying to balance keeping funds in the reserve for if things go south and living life now. We had a hard time with that with my mother. You know, traveling with her at the end was very difficult, but we made it happen and we made our memories. Okay. I'm sorry.

1:21:34Dave Ramsey:What an amazing amount of challenges.

1:21:39I would just throw that in a high-yield savings account for six months because in six months you're going to have a lot more information on both of these situations.

1:21:52Dave Ramsey:Okay? How expensive a fight have we got? How long a fight have we got? And how much are we going to look at alternative solutions that our insurance won't cover? Okay? And that would be true in either case, but certainly true in your wife's case, right? And then with her dad, does he have money and how much is he going to, you know, above it? Unfortunately, he's out of pocket after insurance. And then is he going to try or do anything other than that that is going to be expensive? Okay. Well, he doesn't have much. He lives with us. We have in-laws quarters. And he has Medicare and Medicaid. So most of all of his treatments have been, you know, covered from that.

1:22:37Yeah. It's just, you know, I want to do right by him. He's been a workhorse, much like my mother, his whole life working.

1:22:43Dave Ramsey:Yeah, but I don't think you're going to have$100 ,000 of medical bills with him. No, no, no, no, absolutely not. Okay. Absolutely not. But, you know, I don't know what the future holds. So, you know, I have the monies right now in a Schwab account. I could put that in a high-yield savings. Yeah, I just put in high-yield savings and just forget it's there. It's just sitting there. And then as soon as you actually can quantify these situations a little bit in terms of how long we're going to be in this fight and what's the actual out-of-pocket expense from these two different fights, then that tells you if you can invest and begin to do some other things with some of that money.

1:23:28Dave Ramsey:Let's pretend that it's a minor issue with your wife. Okay. And it's and it's nothing. We're done. Six months from now, it's way in the rearview mirror. The biopsy was benign. No problems. No issue. We're done. Okay. We had a few hundred dollars in deductibles or whatever. Some co-pays. We're done. Then you don't have to worry about this hundred K for that purpose. I'm not going to leave it around for vague worries. I'm going to leave it around for specific worries. Well, one of the reasons why I've left it there in that account also is she's attempting to do a career change, which is drastically going to change her income.

1:24:10She currently makes about$100 ,000 a year, and her career change could drop us about$30 ,000 a year. So it's a pretty big shortfall.

1:24:20Dave Ramsey:Can you not live on what you make? Well, in Miami, it's a little... Can you not live on what you make with her career change? yes if you can't she doesn't need to do the career change yeah i mean it is a luxury and she wants to do it to be home more luxury is fine but can you if you can't live on it you can't do it yeah because if you got to feed your household thirty thousand dollars a year in three years this money's gone and then you're screwed you got a burn rate on this man so you don't create sustainability from savings. That's a completely different subject than you called with, but you've got to create a budget that you guys can live on, so if you can afford to live on without touching this money, her career change, she can do it.

1:25:08Dave Ramsey:If you can't, she can't do it. Or you guys change lifestyles completely. You've got to change something. But this$100 ,000 is not going to save you on that. It's not even going to come close. So, no, that won't work. But having it set aside to make sure you turn the corner on some cancer diagnoses, until you turn the corner, I'd let it sit there.

1:25:48Dave Ramsey:Many of you listen to the Ramsey Show because you're sick and tired of getting nowhere with your money. You work too hard to live paycheck to paycheck with no money in the bank. But here's the deal. Just listening to the show won't change that. If you want different results, you have to do something different. We've helped millions of people save money, ditch debt, and build wealth. And you can too. But you've got to have a game plan, and that begins with our Get Started Assessment. Go to RamseySolutions.com slash start now, take the free quiz, and get your free step-by-step action plan. If you've had it with money stress and are ready to take control of your money for good, go to RamseySolutions.com slash start now.

1:26:48Dave Ramsey:Welcome back to the Ramsey Show. Rachel Cruz, Ramsey personality, number one bestselling author, is my co-host today. Open phones at 888-825-5225. Melissa's in New Jersey. Hi, Melissa, how are you? Hi, how are you? Better than I deserve. What's up? So my husband and I have been married for 18 years. We have separate accounts. I'm a teacher. He was a construction manager, a project manager for a long time. Now he's got laid off from two jobs within the past two years, And now he's self-employed and he's building a business on his own. In that process, we had our rental property that we originally lived in when we first got married.

1:27:36We had two kids, two family home. We bought it together after we got married. And the down payment was an account that my husband had. It was$50 ,000. dollars. His dad died when he was around nine years old. And the mother put all of the father's social security checks into an account to help it grow. And that's what he wanted to use that account for to put the down payment on that house. Then we remodeled it with our wedding money. We lived in it for about 10 years. And then we bought a single family home, but we kept it as rental. So our only joint account was where the house rental income was going into.

1:28:26When I was not working, because I was a stay-at-home mom for 10 years, we also had a joint bank account that was originally his, and he just added me on. Gotcha. What's your question, honey? um my question is is we sold our rental property and um we he told me it was going into the joint account and i was sitting at the starbucks signing papers and the 475 000 that we made on the house was going into his only account his sole account why'd you sign the paper And because he told me that we would lose our house, we would lose everything because we have no money to live on, which we didn't. We would have to sell our house.

1:29:12Dave Ramsey:Well, you wouldn't lose everything if he just changed the account and put it into the joint account. Well, he didn't. No, I'm just saying, I wouldn't sign the papers until he did. Why didn't you say that? Because our dynamic is based on a lot of intimidation and fear. So when is the divorce? I looked at him. I know. Well, I trusted him to take care of our finances because he's very financially savvy. And that's, you know, we kind of have our roles and we kind of let each other take care of our, you know, what our strengths are. But now he won't let me see the money. He told me the money is his and his mother's money.

1:29:51It's not my money. He did all the remodeling on the house. He's confused. So I don't know my rights. I don't know what to do.

1:29:58Dave Ramsey:The only rights you have are in divorce court. Okay. Okay. That's the only place you're going to get a legal right. Yeah. You have moral and ethical rights, but he's ignoring those. Yeah. But New Jersey will take half of that money and give it to you. Yeah. I mean, I don't know what he did with it. I have no access to anything. He has stock accounts, investment accounts. Divorce requires discovery, and if he hides any of that, It's a criminal act. Right. Well, he says that I am a teacher because I put myself through school when the kids were little. Did you not hear me? I know. Half of this is yours.

1:30:43I know.

1:30:44Dave Ramsey:Okay. Then quit acting like you have to go do all this. What he says doesn't matter. I know. When the law tells him what to do, it's going to be interesting for him. You're right. Yeah, you're right. So, I mean, you know, it's up to him. Does he want to? I mean, this is a marriage issue, Melissa, obviously. You guys do not have very little marriage left. Absolutely. It's hanging on by a thread. I agree. Are you wanting something different? Like, what are you thinking? I want a divorce, but I'm afraid that I'm going to have nothing. We live a very, very nice life. The only way you would have nothing is if he hides it all and your attorney's so weak he lets him get away with it.

1:31:31Yeah. Yeah. Are you working now, Melissa? Otherwise, you're probably a millionaire. Yeah. When he was a project manager about two years ago, he made about almost$218 ,000 a year. And I, right now, make about$80 ,000 a year. I'm a teacher. but the the bills that i my bills that i pay toward the house and whatever random needs my i have two teenagers whatever they need by the end of the day i don't have much money to put away to save for myself okay here's what here's what you need to do you know you you have a job you can pay for it when i ask him for money that's exactly what he says yeah this guy's not

1:32:11Dave Ramsey:a pleasant human being to be around yeah yeah so i should be giving me money now you're not Let me tell you, here's, when you're overwhelmed, what you need is information and facts. And information or facts that are coming from him are not information or facts because we know him to not be a reliable source, okay? Mm-hmm. I'm not a lawyer in New Jersey, but you need one. Yeah. So if you go sit down with an attorney and say, okay, here's what I do know. I know we had this$475. I know we had this stock account. I know we had this. How can I be protected in this process? And the attorney will explain it to you what the laws are in New Jersey.

1:33:00Dave Ramsey:You can have a consultation with an attorney, a divorce attorney, and it probably won't cost you a dime to do the consultation and gather information because you're functioning in fear, not all facts. And when you're in trauma, when you're in a dramatic situation like this, your emotions are making the decisions, and they're not making good decisions because they're not based on facts. And so if you just cut through all that and go, facts are my friends, facts are my friends. The way he makes me feel is not a fact. That's a feeling. Right. The fear of he may have stole all this money, I may never get any of it, I may be broke, I may be homeless.

1:33:40Dave Ramsey:That's not a fact. That's a fear. Okay. The facts are you have a teaching job. It's really good. The facts are that New Jersey requires child support to be paid when you have teenagers. The facts are that New Jersey will require some kind of property disposition, probably around 50 % each. Those are the facts. Now, once you have those facts and you go, gosh, half this money is mine. The law says that. Now then you can go back and say, Bubba, if we're going to keep this together, we're going to have to go see a marriage counselor, and everything in this house is going to change. Otherwise, we're not going to be able to keep this together.

1:34:22Dave Ramsey:I've spoken with a divorce attorney, and I have an appointment with a marriage counselor. Which one do you want me to go to? Yeah. Yeah. I'm going to do that. Yeah. But you do all that from knowledge, which will make you much calmer. Yeah. Okay? Yeah. Because all these things are spinning out in your head, and he's activating a four-year-old version of little Melissa who thinks she's going to be on the street. Yeah. And you're not, honey. You're going to be okay. And I hope you don't have to go through this. I hope the guy can be woke up and you can save your marriage. That would be neat. But at this moment, you don't want to be married to him.

1:35:03Dave Ramsey:I can hear it. and nobody does. Nobody wants to be married to the guy you've described for the last few minutes. So I'm so sorry. But yeah, go get some actual information and that gives you power.

1:35:30Dave Ramsey:Buying 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.

1:36:12Thank you.

1:36:42Dave Ramsey:I'm a team of experts, resources to help you lead the class. So far this year, we've seen over$100 million in debt paid off and money saved in FPU classes. If you have a passion for serving other people, this is a great way to do it. Go to RamseySolutions.com slash FPU. Get your first class started now. Brian's in Minnesota. Hey, Brian, how are you? Good. Hey, I'm doing good. How are you doing, Dave? Better than I deserve. What's up? Good. I had a quick question for you, I guess. So I'm in a predicament. It's not necessarily a bad one. So I am 26 years old. I bought a house full five years ago when the market was pretty cheap.

1:37:19I have$130 ,000 in savings doing nothing for me. I only have$95 ,000 left on a mortgage. So I guess my question was, what's your opinion on what I should do? Is if I should pay it off earlier with the money I have saved, should I invest it into something or just keep it in a high-year savings account?

1:37:37Dave Ramsey:Where'd you get$130 ,000? I'm very frugal. I'm a good saver. I've worked for every penny of it, and nothing's been handed to me. Yeah, it's a good save of money, I guess. You're single? No, I get married actually next December. Oh, congratulations. Does she have any debt? No, she's got no debt at all. She makes$80K a year, and yeah. I guess we don't know what to do right now. Sounds like a match made in heaven. It's kind of too good to be true. It's kind of like, what now? So I don't want to be sitting there wasting money on, when my mortgage is only 3%, and at the bank I'm getting 4 % on my money.

1:38:15So I'm like, well, I could pay my house off and live pretty generously with my life. I obviously have some kids and go from there. But I guess I'm kind of stuck on what I should do.

1:38:25Dave Ramsey:If I woke up in your shoes after doing what I do for 35 years, I would write a check today and pay off your house. And I'd have no payments. Take your shoes off, walk through the backyard, you'll find the grass feels different. I thought about doing that. I just got out of escrow this past week, and that was a nightmare and a half. Sounds like the biggest scam we've ever been through before. And I was like, you know, I just want me to be done with this loan. I'll just be done. But each month I just got out of it. You know, I've been telling people to pay off their mortgages in situations like this for 30 years.

1:38:55Dave Ramsey:I have never had someone call me back and say, gosh, I really regret doing that. That was bad advice. That's like six then, right? I've never had somebody tell me it was a bad idea. And by the way, Brian, if you hate being debt-free, you can always go get you another mortgage. So I would write a check and pay it off today, hon. Amen. Hallelujah. Yeah, just like that. Well done, Brian. Yeah, that's very cool. Good for you. Rick's in Las Vegas. Hey, Rick, how are you? Hey, Dave. Hey, Rachel. Thanks for taking my call today. I appreciate it. Sure. How can we help? So I have a 401k question for you.

1:39:28I'm just trying to plan for next year. I max on my 401k every single year, not only as an individual, but from the company contributions as well. This year it was$23 ,500 for individual and I think$46 ,000 from the company, so$70 ,000 total. My question is, next year I'm debating on whether I want to front load at all by February. We get a huge profit sharing check every single year, and I max it out in February. Is it better to do that or is it better to spread it out throughout the year?

1:40:06Dave Ramsey:Well, we have taught in our world dollar cost averaging for so long that people sometimes avoid the lump sum. And that's kind of what brings your question to bear. So what I do is I fully fund mine in the first month of the year. Okay. And the reason is this. okay the only reason you would spread it out throughout the year is if emotionally you can't handle the stock market going up and down and you're going to freak out but i that doesn't bother me a bit because i don't even look at it i just put it in there i'm thinking i'm probably never going to touch it i'm probably putting it in there for rachel's kids because i'm not probably going to use that money anyway but the uh um and the niece and daniel's kids but anyway it's not Just Rachel's kids.

1:40:52Dave Ramsey:But Rachel's kids are like, woo-hoo, yeah, Papa Dave. But anyway, so the point being that mathematically, even if the market goes down right after you put it in, by the end of the year, it will have gone up more than it went down 90 % of the time. That's the history of the stock market. Okay? Okay. And so, you know, sometimes you get a bear market that lasts over 12 or 14 months, but very seldom. You know, if you go back and look at the track record of the stock market, look at the S &P charts, okay, and, you know, look at how many times, you know. So what ends up happening is the entire lump sum is earning money all year, or one-twelfth of the lump sum is earning money, then two-twelfths is earning money, then three-twelfths is earning money, and then four-twelfths is earning money.

1:41:51Dave Ramsey:So the point is I'm making those S &P returns for 12 months while someone that's spreading it out is not getting the same dollar result that I'm getting. Does that make sense? Sure. Yes, it does. So I lump sum it for that reason. But you can't do that if you can't emotionally handle two months later, Trump burps and the market goes down. You know, or he throws a tariff on some bizarre country that we never heard of and the market goes down, you know, or whatever it is. Right. And so you don't know what's going to happen out there on the short term. And so you can't be freaking out all the time if you're doing that.

1:42:28Yeah.

1:42:28Dave Ramsey:But you lump some ears at first. Yes. And depending on age, for sure, your mindset should always be long term. Right. I mean, if you're, you know, 61 and you're looking at retiring next year, there's something there. Yeah. So, I mean, like it's it's there's not really a point. Unless you're 58. That's right. 49 and a half or whatever. Yeah. In my case, I can I could touch it if I want to because I'm 65. Which would be I could see that having a different psychology. But when you're younger than that, you know, when you're in your 40s, 50s, 30s, all of it, you know, it's long term anyway. If you're not thinking in five-year blocks a time or longer, you shouldn't be putting in a 401k.

1:43:05Dave Ramsey:That's right. That's right. Even at my age. Yeah. You need to be thinking long term. And so I'm thinking past my death because, again, I'm probably not going to ever touch that money. I've got plenty of other stuff generating income without touching that. And so that money is probably – it's all in Roth, too. So it's all going to pass completely tax-free. It's awesome. So, yeah, another reason I won't be touching it. So, yeah, that's the thing. Which also kind of – we can sidebar on that for a second, Rachel. It's a good teaching point. And I didn't think about this when I was your age and teaching this stuff and I was your age and doing this stuff and building the wealth.

1:43:44Dave Ramsey:But now that I – as I'm hitting these milestones, 65 and all that, I'm starting to understand. At 72.5, you have, if you have traditional IRAs or 401Ks that have not yet been taxed, you have required minimum distributions that are beginning. You have to begin to take it out because the government wants their tax money. If it's in a Roth, it is growing tax-free, and there's no RMDs, no required minimum distributions. I have moved over the years 100 % of ours into Roth and paid the taxes on those lump sums as I did that. Even the matching portion at Ramsey where I match myself has to be, it's required to be traditional.

1:44:28Dave Ramsey:But each year I roll it to Roth. So I don't have anything that's not Roth now at my age. So this is really beautiful. Not only is all that growing tax-free for me, but then also I don't have RMDs. I couldn't spell RMDs. Yeah. It's just a required. No, no, no. What's the what's the dollar amount? The dollar. It's a chart. It's a percentage percentage of more each year. OK, because they want to get their taxes. Yeah. They're going to require you to begin to cash out traditionals. But if it's not traditional, you're not required to take it out. And it's continuing to grow tax free. And with the new Biden Secure Act, the legislation was passed under President Biden.

1:45:08Dave Ramsey:If you do an inherited IRA and it's a traditional, all the taxes are due within 10 years. You have to cash it out over 10 years. If it's a, there's no taxes due on a Roth, none of that applies. So when I do leave it to you, the kids, as an inherited IRA, as a beneficiary, then there's zero tax on it. None. And no required distribution. So getting that stuff moved into Roth as you get old, if you can figure out a way to pay the taxes, it voids all that stuff. And I didn't even think about all that stuff when I was in my 30s. I was just chunking money in there like crazy. And now I look back and go, man, that Roth stuff's freaking genius.

1:46:04Dave Ramsey:We've all done dumb things with money. I've done them with zeros on the end. One of the biggest mistakes I see people make with money is not having a plan for it. You've got to have a plan. You've got to be intentional and you need to get a budget. You have to tell your money where to go so you're not wondering where it went. Our budgeting app, EveryDollar, helps you do just that. It's the easiest and fastest way to make a monthly plan for every dollar you've got coming in and going out. Now's the best time to get started before the ridiculous holiday spending season gets here and sucks you in because you didn't have a plan.

1:46:37Dave Ramsey:Don't let that happen. You're done making that mistake. Go download every dollar for free in the App Store or Google Play today.

1:46:55Dave Ramsey:7 out of 10 Americans die without a will. Listen, if you hate your family, make a big old pile of money, make it real complicated, and die without a will. They will fight for the next 15 years, and they'll hate each other. You will completely shut down all their productivity because they'll be screwing with your stuff. Unbelievable. Howard Hughes, one of the richest men in America at that time, died with$2.5 billion in 1976. It took almost 10 years to settle. 600 people filed a claim. 22 of his legal cousins ended up with the money. It was split among 22 people. The judge finally decided almost a decade later.

1:47:39Dave Ramsey:Guess who got most of the money? The lawyers. That's how that works. So if you want to do that, that's fine. But that's called dumb. Okay? Get a will. I love it. In less than five minutes, you can find out if an online will works for you at RamseySolutions.com. slash will quiz or click the link in the description if you're listening on YouTube or podcast. It is your job to love your family well, make sure you have life insurance, and you have a will. So when you go, we'll knock 25 % off a will if you want to do one online. We'll help you do that. And you'll use the promo code WILLMONTH because August is Create a Will Month.

1:48:21Dave Ramsey:Will Month. Michelle's in North Carolina. Hi, Michelle. What's up? hi guys thank you so much for taking my call i'm honored to be talking to both of you you too how can we help um my boyfriend and i started dating in april and we're really in love and thinking about getting married this october um he's in about sixty thousand dollars worth of debt and i'm out of consumer debt i just have my mortgage i have about a five hundred thousand dollar net worth with my house and my retirement. And my parents helped me buy my house as a gift. And my dad is saying that I should get a prenup before getting married, especially because we haven't been dating that long.

1:49:01So I'm wondering what your thoughts would be on that. I mean, yes, I mean, you started dating and we'll get married within six months. Is that right? Yeah, seven. But yeah. Okay. Yeah. Yeah. Yeah.

1:49:14Dave Ramsey:How old are you? 34. Okay.

1:49:23Wow.

1:49:24Dave Ramsey:Well, the thing is your dad just doesn't trust the situation. Yeah, that I get. Yeah. And if you don't trust the situation, you should get a prenup. But if you don't trust the situation, you probably should be engaged a little longer until you trust the situation. Yeah. Yeah, one thing I'm worried about is this would be his second marriage, and he has a child from his previous marriage, and he's been having some custody issues there. So I'm definitely worried about what could happen with my finances and my home once we combine everything. And, you know, if his wife takes him for a long time. That's why you're marrying into that.

1:49:59Yeah.

1:50:00Dave Ramsey:And so if he spends, you know, if you have combined finances and you all have to spend some money on custody, that's going to affect your income and your savings and your investments, right? It's not going to cause you to lose your home, but it is going to, you know, that's what you're getting with the package. Yeah. For better, for worse, for richer, for poorer, in sickness and in health, unto thee all my worldly goods I pledge. That's the old marriage vows, remember them? Mm-hmm. Yeah. So, okay, our rule of thumb, when I first started, I told nobody, no one should get prenups because you're planning your divorce and if you if you like your house more than you like him you shouldn't get married and that's what i used to tell everybody okay i don't say that anymore exactly that way um i have said a couple times on weird things like one lady called up and uh her uh boyfriend her fiance wanted a prenup because he had a uh a vintage sports car that was worth a hundred thousand dollars and i'm like he likes his car more than he does you you don't need to marry him and so that that i'm willing to say okay i come down on your dad's side almost on that.

1:51:12Dave Ramsey:So, but where I have, where I am trying to keep things moving is not, assuming that you really feel a thousand percent about him, that he's okay and he's aligned on getting out of debt, staying out of debt, living like you live. You're going to live on a plan. We're going to combine our finances. We're going to make life together. We're going to make decisions together in unity. If he's completely trustworthy on that, then the only reason I would do a prenup, and if he's not, by the way, he's not ready to get married. Yeah. Okay? And that's something you've got to solve. I'm not going to put you on the spot and ask you that here because I don't think that's the case.

1:51:58Dave Ramsey:I sense this guy's – the way you're describing him is solid. Mm-hmm. Okay? I mean, he's got outside issues with the child support, possibly, that kind of stuff. But so anyway, the reason we tell people to do prenups these days is if there is an extreme difference in net worth. OK, he has negative net worth and you have ten million dollars or five million dollars. OK, you don't. You've got five hundred thousand. So it's not extreme, but it is enough that I get your dad. Okay, I understand him thinking that. And your dad actually gave you the money to get this started. So I get that too, okay? I'm not mad at your dad on this.

1:52:40Dave Ramsey:So yours is not extreme, but the reason we tell people to do that when it's extreme is actually not the person you're marrying. I'm not trying to protect you from them. I'm trying to protect you from his ex-wife thinks she can keep you guys in court forever because he married a girl who's got some money. I don't want to send her that message. And he could just look at her and go, I don't have any access to this. I got a prenup. And shut her little emotions down. Or the crazy relative of whoever that comes along and thinks, oh, hey, this guy hit the jackpot. And you go, no, he's got a prenup. So it kind of helps the outside crazies more than the two of you.

1:53:20Dave Ramsey:Does that make sense? Yeah, it does. Yeah. And so I...

1:53:27It's probably a short timeline. Yeah. That's probably...

1:53:30Dave Ramsey:If you had told me a little bit more lengthy engagement and you guys went through Financial Peace University together, you were completely aligned and you go through good, strong pre-marriage counseling, I would probably say no. I'm on the bubble with yours, though. I might. I might in yours. I wouldn't think you're stupid if you did it one way or didn't do it the other. Okay? If you do it or don't do it. So, I mean, if your dad thinks you're just crazy, I would disagree with your dad. OK, but if he's just saying this is a wise suggestion, you should consider it. Then I would agree with him on that.

1:54:06Dave Ramsey:OK, and if and also a wise suggestion is for you to you guys to spend some time in pre-marriage counseling and deal with, OK, what comes up when we got a twenty thousand dollar legal bill to fight the crazy ex on the kid? Can you handle that emotionally? And when you guys get married, Michelle, like to the point that you're so unified that the sixty thousand dollars of debt is yours, too. yeah you get it yeah and you guys solve it together and you get it paid off yeah yeah yeah and so if you guys can work through that kind of stuff the length of the engagement uh becomes less stressful for me i will tell you this the the data tells us um and there's lots of data on this that a six-month engagement period and a three to four-month dating period prior to that marriage within 12 months of meeting has a very high probability of success.

1:55:06Dave Ramsey:And as you shorten it statistically, the probability of success goes down. And as you lengthen it dramatically, five-year engagements are bull crap, okay? Painter, get off the ladder, right? And so, you know, as you lengthen it, it doesn't make sense because the relationship gets strained for all these other reasons then. We're just playing games. But anyway, that's the data that we have on marriage stats. And so you're a little bit short on that data. It's not a deal killer because that incorporates, hey, I met you last weekend. Let's go to Vegas. And we're married. Those only make it in the movies, okay?

1:55:46Dave Ramsey:Because they wake up from the hangover and like, oh, what did I do? They get an annulment like Rachel and Ross. Sometimes it works. Rachel and we have a friends reference. I'm so proud of you. So anyway, all of that end of speech, Michelle. So I hear what your dad's saying. You hear what your dad's saying because you're you're not a child. You're 34 years old. Yep. And so it's not, you know, I I think you solve for those concerns for you. Not for your dad. And if you can get to where you're a thousand percent solid, if you want to not do one, I'm OK. and if you've got a little itch and you want to do one, that's okay, but it's also an indication you probably need to do some more work before you go to the altar.

1:57:02Dave Ramsey:Our scripture of the day, 2 Corinthians 1, 4, he comforts us all in our troubles so that we can comfort others. When we're troubled, we will be able to give them the same comfort God has given us. Margaret Thatcher says, no one would remember the good Samaritan if he only had good intentions. They also had money. Josh is with us in Arkansas. Hi, Josh. What's up? Hey, Dave. Thank you for taking my call. Sure. How can we help? Well, my wife and I finally sat down yesterday evening and filled out the every dollar budget. And upon doing so, figured out that we have roughly$87 ,000 in consumer debt, auto loans, credit cards, secured loan, that kind of thing.

1:57:49Dave Ramsey:That was an old crap moment. Yes, you could say that. And we pay about$4 ,000 a month towards that debt. And we visited a little bit this morning about it, and she kind of seems to want to just keep chipping away at it. And I'm of the opinion that we could get rid of the truck payment, get rid of the secured loan, which together are about$69 ,000 worth of that and be in a much better position. And how would you do that? What's the secured loan? So the secured loan is$32 ,000. It's in a private credit union. And one of the reasons she wants to keep it is they still pay us interest on the full amount, regardless of whether we borrow it.

1:58:43Dave Ramsey:Oh, so you have enough savings in there to cover it, and that's what's securing it. So you borrowed your own money. Correct. Yeah, okay. All right. So how much do you guys have in savings total, Josh? Roughly$10 ,000. No, you got$30 ,000 over the credit union. In the savings total, in that account,$36 ,000. Okay, and you owe$32 ,000 on that. Yes, sir. And then you've got a$69 ,000 truck that I guess you're driving. No, well, it's the$37 ,000 truck. Oh,$37 ,000. Honestly, it's a part-time vehicle. I have a work truck that I drive most days. Okay. And your household income's what? About a 160, 165.

1:59:33Dave Ramsey:Okay. Our experience with this process is that people come to the right conclusions at different speeds. You went straight to, here's what we do, I'm going to fix this. She's still processing all of it. I'm going to interpret her. I might be interpreting her wrong. Okay. I think when she said, I want to chip away at this, she said, I'm still thinking this through. And for now, let's just kind of do our budget. Like we just figured this out scary enough. 12 hours ago. Yeah. I've had a whole 12 hours to process this. Okay. So I'm more wired like you, Josh, isn't that I can make a decision in about 30 seconds.

2:00:24Dave Ramsey:If it's the wrong one, I'll just make another one. my wife on the other hand likes to cook for about three days before she comes to the same conclusion but if i if i try to get her there faster than she gets there things don't go well at the ramsey house and so um i've learned to slow down a little bit on that the other thing that we find a lot of times with folks that are brand new on this stuff is that it's real easy again for people that are wired like you and you're not wired wrong uh but it's just the difference in you and your wife it's real easy to go straight to the tactical before we've clearly and thoroughly discussed the why well to be fair i'm part of the why so i'm buying sell vehicles i mean i don't i don't why are we no no no why are we cleaning this up sure why does this matter we want to build wealth Okay, good.

2:01:21Dave Ramsey:Why do we want to build wealth? We want to build wealth so we can change our family tree. We have three precious kids. We don't want them to be broke. We want to leave an inheritance to our children's children. That's what a godly man does. Why are we doing this? We want to do this so the stress is off our marriage. We want to do this so that we can be outrageously generous. We want to do this so that we can travel. And if you get those things all dialed in, in high definition, and both of you are excited about where you're going, then it's easier to endure the pain to get there. Sure. So you guys probably didn't spend enough time dreaming yet.

2:01:58Well, I think kind of what I was getting at is she is probably concerned that I'm going to go, you know, two months from now I'm going to go, you know what, I changed my mind, I want to get another truck. Yeah. Because I've done this before. Okay. That's fair.

2:02:11Dave Ramsey:And if you say that out loud to her, they would probably give her comfort. Yeah. And that's the awareness of the patterns of what it was. Yeah, that's fair that I am aware that patterns there. And I understand how this is not I don't have credibility to talk about this. But here's the difference. The difference is I was doing that in those days for one reason. Now we've got this big why that we both agreed on. OK, and in our case, we went broke. And for Sharon and I, we were very unified on yelling at the mirror. Never again. I will never be in a situation again where some butthole banker puts his foot on my neck ever again.

2:02:56Dave Ramsey:Redneck mad 35 years ago, and I'm still pissed. You follow me? That was my why. That was my why. It drove me through this stuff. And Sharon had been so terrorized by the whole process that that was a fair why. Other families that stand on the debt-free stage, they say it was for the kids. we had to change this for our family tree uh it wasn't for our kids our kids just got the benefit of eating while we were doing it i mean that was it we weren't like who the little children we weren't that way we were like no more freaking bankers but other people are like the little children i'm doing it for the children you know and it's okay i don't care what your why is it just needs to be big and noble and to get you through the hard times and you're both aligned on it and so that if you went to go buy another truck later she would go yeah but we agreed on the why and that truck's messing up my why we're not doing that and she could call you out on the why not the truck okay and if you guys so i think if you'll let her cook a little number one number two you high definition in detail write it down put pictures up of the trip we want to go on we want to do a worldwide cruise i don't care what your why is it just needs to be a real driving reason to get the mess cleaned up so that we can get to do that thing or be that thing okay okay and when you guys do that together then she's willing to sell your truck then she's willing to give up the thing but yeah if she both of her not wanting to do both of those things probably easily could go back to she's worried you're going to want to go back and get another truck for sure she's trying to keep money in the credit union even though it's secured against it just to keep you from getting another truck.

2:04:36Dave Ramsey:So the more time that passes, the more intense she's going to get because the more she's going to trust you're not going back to your old ways. Yeah. Yeah, and Josh, have a really detailed plan out of like, okay, per month what do we think we can put at this debt? If we sell this, this, this, like start to map out some actual plans very tactically, very detailed. And I think that helps too because conceptually, if it's like, we'll just cut our lifestyle and the grocery budget needs to be cut in half. And you know, you start thinking through these things, it can be way more difficult because you almost can't even see the end or the process of how to get there.

2:05:14You're just kind of like looking at today and you're like, oh gosh, that's going to be hard. So the whole plan has to be fleshed out. And the end of the plan is the why, exactly what you're saying. And then if you get off that plan

2:05:23Dave Ramsey:to go do something stupid, you can call each other out. Or if life happens, you pause the plan to figure out life and then you go right back on. But we do that together. We do that together. You don't get to go, oh, I changed my mind. I'm not doing this whole thing we laid out. Well, the only reason I agreed to the whole thing was we laid it out and we're sticking to it. And so then you've got a thing. It's a plumb line. It's your guidance mechanism and you're sticking to the whole thing. Rachel's exactly right. The encouraging thing, though, is that 32 out of the 87 is going to be cleared up because you have 36.

2:05:54So that's four. And then you have another 10. That's$14 ,000.

2:05:57Dave Ramsey:And you get rid of a$37 ,000 truck, the whole thing. You could really make a bunch of progress real fast. Yes, yeah. So I don't disagree with your tactics, but I'm trying to help you understand, and I'm trying to understand with you why she's tapping the brakes here. And I think we discovered that. So it's a great call, Josh. And you guys are going to do great. You're going to be fabulous. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:29Thank you.