Live Life With Less Financial Stress

26:33Complete and total peace in your house. you and your wife walking through the front door, y 'all don't owe anybody anything. Y 'all don't have the fanciest cars in the world, and that's super okay. Y 'all don't owe anybody anything. Y 'all can do whatever you want, whenever you want, within the limited means y 'all have. And if she wants to work more, if she wants to work less, if y 'all want to have kids, you can kind of do whatever you want. And you don't have to always be hoping that this deal hits and that this one guy pays his rent because he didn't pay last month and this other guy. You know what I mean?

27:07Like you could Uber and make$1 ,800 on the side for the headache you have with this mobile home park. I've got good tenants in it, but I know that doesn't last. Okay. Here's what I'm going to promise you. You have to decide in your house, as for me and my home, we're not going to borrow money. And then we're going to figure out life with that principle in mind. If it's always on the table and it's always, well, this is going to cash flow. this we're going to move over here we're going to slap it up flip it and reverse it over here that's that's a chaos that happens every day you need every card to land on your poker hand or the whole domino like the whole set of dominoes falls over it's just a wild way to live man and

27:50Rachel Cruze:after doing this adam for so long and being able to see the result of so many people who have built wealth that have actually stayed wealthy they did it i'd say not not the get rich quick way it was the slow methodical yes and one of the number one things is you get out of debt because when you don't have debt your income is your most power most powerful wealth building tool you're able to take your income and instead of it going to car payments and credit cards or paying on the house and all of this you guys get to keep that and start investing you guys get to start making money for you all and not for everybody else but if you keep playing the debt game and moving debt around which is what this would be you you put your house at risk for a$35 ,000 you know truck or whatever it is and all this other stuff and it's it's not a smart move to take equity out of an asset to be paying for all this stuff so okay what I would do is in other words the 70 ,000 in debt if I paid the possible trailer part mobile home part I would have 170 cash you recommend and putting the$70 ,000 towards the debt and then having$100 ,000 in the bank, and then everything paid for.

29:04The only other thing I would add is, this is just me talking to my brother Adam here, I would sell that car too. It's too much car for y 'all. Yeah, I agree. The one thing that complicated this, we just got married and we have a newborn at the house. I've pinched pennies my whole life, and I've got a 2005 Honda Civic with 200 ,000 miles on it. That sucker's just... We have to have a family car, but maybe we bought too much car. Yeah.

29:31Rachel Cruze:What kind of car is it? What's the 35 ,000? It's a 24 Nissan Rogue. Yeah. Yeah, well, just from the income perspective, it doesn't... Right. You're right on that borderline, Adam. So, again, if you sold the mobile home park and wiped everything clean, I would put$100 ,000 in, I'd probably put it in a brokerage account, and I'd leave it in there, and I'd let it grow. And then maybe if you do enjoy the rental business, if you will, of having other properties, you could probably take some of that money in Greensboro, yeah, here in a few years, cash flow a home, fix it up, and rent it. And you guys have, you know, two paid for properties at that point that's taking some rental income.

30:22Rachel Cruze:If you want to. That's what I would do. And you guys have a newborn. Your wife may even want to stay home full time. She may not even want to work full time. I don't know. Just think about coming home to a house with a newborn that's your house in your car. And you got$100 ,000. You have$100 ,000 in the bank. Yes. Make an interest all day. That's a piece that you can't even imagine. And you guys are young, Adam. And if you guys want to get back into some of this stuff, you can. Just take your time and walk your way in it slowly. and not use debt as the mechanism at which you buy all this stuff with.

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32:33Rachel Cruze:Today's question of the day is brought to you by Why Refi? When private student loan payments start getting away from you, it can feel like you are paying for decisions that you made years ago. And so YReFi helps borrowers explore low fixed rate financing options and payments designed around your current situation. So visit YReFi.com slash Ramsey may not be available in all states. All right. Today's question comes from A.A. Ron from Aaron in Wisconsin. Here's the question. My wife and I recently married and we are working on our budget. She has a$10 ,000 car loan. Oh, I smell trouble already.

33:13$70 ,000 in student loans and only$500 in her bank account. Oh, no. I was expecting her debt to be half the actual number. The only debt I have is my house. I have$85 ,000 in a brokerage account and$125 ,000 in savings that I had earmarked to put toward our house. Oh, brother Aaron. Together we earn about$9 ,000 a month. How should we approach the debt? Should I have my wife use her income to pay off the debt and not contribute to our monthly living expenses? Or should I offer to pay a lump sum of cash to her debt? I actually think you should find, go watch Back to the Future 1, get your hands on a DeLorean, go back in time and unmarry yourselves.

34:01Because this is, you're going to be calling my show in a couple of years saying, our marriage is falling apart. And I'm going to be like, yeah, we talked earlier, A.A. Ron, and that's the truth. Dude.

34:12Rachel Cruze:Dude, you kind of suck. Yeah. Kind of you're the worst. The only one. Oh, my gosh. And I get it. I get people are getting married later. I get people have built up their thing. But you're getting married and you're like, do I choose to put part of my savings? You married her. You're sharing a bet. Like, oh, my gosh. I have cash earmarked for our next house. You're going to make her pay for some of the house too, Aaron? Gosh. Yeah, I think. You knew what you were walking into, Aaron. If it made you that mad, you shouldn't have married her. He says, I was expecting her debt to be half. The only way I'll have some grace and compassion for you, brother, is if she lied to your face.

34:57That's fair.

34:57Rachel Cruze:That's fair. And then you all got to deal with that because that's a big deal. If she promised you it's$35 ,000 and then when y 'all got married, you started looking at each other's bills. But y 'all have an income, and this is going to make people uncomfortable. Y 'all have$125 ,000 in savings earmarked for what y 'all decide is your next big move as a new couple, as a family unit, as two people who created this secret world called marriage. right y 'all have$85 ,000 in a brokerage account and until you get that through your head brother y 'all gonna be y 'all gonna be roommates y 'all gonna be running parallel lives and you're gonna go one way and she's gonna go another and it will always be tip for tat at that point always I made this she made that well she spent I mean it will be I need you to for Taco Bell for the rest of your life yes oh man now I will say is she sucks with money and she doesn't care and she spends it like right it's so much more it's not the numbers that bother me it's the attitudes behind it so if she is terrible and you feel like i can't trust her in that that's one thing that's not what i'm hearing no but it feels like you're sitting on top of this mountain aaron aaron and you're staring you're casting down like looking down your nose that i cannot believe but me over here this lesser person who got a student loan no actually i actually think your other your plan is actually pretty good i think um she should have to just work the debt off and you can just pay her part of the light bill for a couple come on man you're married what if you like play out play out if we if we because we have strong opinions on this side and people get mad at us all the time but it is what it is what if our opinions were that strong on the other side and we're like, you're right, Erin.

36:46Rachel Cruze:You make her, yeah, she still has to pay her end of the deal, though. She still has to pay half the bills, and she's going to be, she may not make it, she may have to borrow money from you, Erin. Like, if you go down that road, that's crazy. Play it out how ridiculous it is. It's crazy. Play it out. And you're married, people. Are you going to evict her? Yeah, what are you going to do? You're going to evict her? She doesn't pay her light bill? What if she has to pay interest? You're going to turn her lamp off? You're going to, like. She's not allowed to use her nightstand lamp. Put little plastic plates over her plug so she can't charge her phone.

37:19What are you going to actually do, dude? When y 'all go out to eat, I'm going on a date tonight. Oh, you can't afford your plate? Sorry.

37:25Rachel Cruze:Good luck. Have fun with the free bread. Yeah, we'll go to Olive Garden so you can have the breadsticks. And I'm going to get a glass of wine. You can't afford it. You're going to Venmo me$9 for the tip. Come on, man. Play it out. Play it out. Y 'all need to have one checking account. Y 'all sit at a table. And by the way, now I'm being ugly. y 'all aren't working on y 'all's budget. You handed her a budget and said, this is how we're going to live. And I get to have a right to say that because you're shameful with money. Don't be that guy. Sit down and ask what kind of world do we want to co-create together?

37:59What do we want to build together? Where do we want to end up in five years, 10 years, 20 years and have that discussion and then live in reality and y 'all both get there. And by the way, here's what really pisses me off about this. Dude, you could clear your household. Y 'all could clear your household debt right this second. And you'd still have 85 grand in one account and what? $45 ,000 another account. You know what that would make you? Way ahead of the game still. And your wife would have her education. Her car would be y 'all's and we'd be good to go.

38:35Rachel Cruze:And you start from there. Yep. Like if this was, we don't have any money and we're broke. What do we do? I get that. You have a lot of money, man. So, anyway. No, and I think part of what we see with conflict and money in marriage, because we do that, the money in marriage, we can get away. We have a few tickets left, October 22nd through 24th. It's the best marriage event on planet Earth, and it sells out every time. It will sell out, but I think there's still a few tickets left. Get online and get them. Yeah, go to RamseySolutions.com and check out those tickets and come spend the weekend. But one of the attitudes that we kind of see that can start to really, I mean, I think create a lot of resentment and erodes intimacy in a marriage is that superiority complex.

39:23Yes.

39:24Rachel Cruze:With money that someone, well, I make more. And because I make more, I get to make, I have more voting rights, if you will. Or I didn't take out, it's her debt. and so she needs to deal with it over here i didn't do that or he whatever it is there's this feeling of i'm better with money and automatically it puts the other spouse in a position of i guess i'm not great at it i'm gonna let them just do it and i'll just and i'll just take the take the crumbs off the table of of what's left um not even from a financial perspective but an emotional like okay i'll just sit here and let you tell me what to do right and and over time you guys that is a that's a bad deal like when you get married there is a level of sacrifice a level of humility and selflessness and serving each other and you're on the same team but when that starts to imbalance especially with money it gets weird there gets to be a weird power dynamic the wife either is taking care of the husband and he ends up being some weird mom yeah like he ends up being like the fifth kid or the third kid or he is so dominant over her and she she has no voice because she hasn't made an income and she, you know what I mean?

40:35Rachel Cruze:Like it's, it gets weird really fast. I mean, I feel like we, that comes up. Yeah. It comes up every, from almost everybody universally in some shape, form or fashion. Cause sometimes it's not money. Sometimes it's the kitchen's not exactly the way I wanted it. And that makes me better. And, or the garage is not, the cars aren't parked perfectly in the garage. And so, because I would park them perfectly, that makes me better. Anytime you feel like I am better than, right? That's a recipe for disaster for your marriage, right? Both of you are going to have things you're better at than the other, like skills.

41:12And that's like, you make it, that's a team, right?

41:15Rachel Cruze:Yes. It's a good thing. And that's a, that's a, that's a great thing. But yeah, Aaron, dude, like just cutting you straight, man. Today, before the day is over, her, the debts she accrued that are now y 'all's debts are paid in full. And I want you to take her out to dinner and celebrate the fact that y 'all are debt free and y 'all dream about what you want your life to look like. Because by the way, what people think, the freedom they think they're getting from being controlling like this, it's a prison with a lock on the inside, as C.S. Lewis calls it. Your life will be miserable too, trying to control another person and how they breathe and how they spend money and how they're ashamed, your life will suck too.

41:58Free your whole household, man, including yourself.

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43:30Rachel Cruze:Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I am Rachel Cruz hosting this hour with Dr. John Deloney. So give us a call at 888-825-5225 and we'll talk about your life and your money. My oldest is 11. And she saw John the other day in the office. She was like, Mom, can I call him John Baloney? And I was like, sure. I think he can take it. That would be the least offensive thing I was called growing up. So, yes, I accept. I almost was like, I'm with Dr. John Baloney. I mean, Deloney. I asked my kids if people call him Baloney. Was that like a go-to? It's not like a lunch meat that we eat as much anymore than we did in the 80s and 90s.

44:12Yeah, it was a staple in my home growing up. But also, I got the impression they didn't have the language for this, either my 16-year-old or my 10-year-old. They didn't have the language for this, but I don't think kids are mean to each other like they used to be.

44:26Rachel Cruze:No, there's not like a Disney Channel bullying. Yeah. Yeah, yeah, yeah. They post mean stuff about each other. Yeah. It's not going to be like, your name rhymes with, like, we're brutal to each other. Totally. Bring it back. Bring it back. Bring back the 90s. All right, let's go to Jennifer in Dallas, Texas. Hi, Jennifer. Welcome to the show. Hi, thank you so much for taking my call. I really appreciate it. Absolutely. How can we help? Okay, so my mom was served with papers. She's being sued. She's 82. She's being sued by a creditor. It's only$1 ,500. Oh, my gosh. And now, but she doesn't have the money.

45:11Rachel Cruze:She lives on Social Security. and yesterday she told me that she had$30 ,000 in debt when my dad died in 2020. So she didn't pay any of that. Oh, wow. Okay. My first question is, what do we do about this? I think I heard your dad, I was listening to some old episodes, say that someone could call the actual creditor even after the lawsuit was filed and try to negotiate a lower payment with something like an agreed order. Just tell them, hey, my mom's 82. She's a widow. She has nothing. I'll send you$300 in a money order. And God help you, don't give them your... Because they're going to say, we're going to withdraw from your account.

46:08And make sure you get the offer in writing. They're not expecting to get a penny of this. And so you giving them money on a 5 - or 10-year-old debt of an 82-year-old widow, they're going to be happy to get what they get.

46:20Rachel Cruze:Do you know what the$30 ,000 is? The additional debt that you just found out about? What kind of debt it is? I don't know. I just heard about that yesterday. I'm assuming it's credit cards. Okay. Has she been getting any notice from any creditors for that type of debt or just the$1 ,500? No. So this is the first thing that has happened.

46:45Rachel Cruze:And so, sorry. Yeah, yeah. No, don't stress, Jennifer. You're fine. It's fine. Tell me this. The$30 ,000, how long has she not been paying on it? Did you say 2020? I guess since 2020. I don't know about it. Yeah, no, it's fine. I didn't know about that part. All right, let me ask you a wilder question. Is there a chance that she's off on her numbers? Probably not. Okay. Okay. So you think that that's legit? Probably. Is there a chance those credit cards were solely in your dad's name?

47:21I have no idea. Okay. I didn't know anything about$30 ,000 until yesterday. Okay. She just said, I've been served with papers for this one credit card, and I don't have the$1 ,500. and also I don't know what's going to happen with this other debt. Yeah.

47:40Rachel Cruze:So if I were you, Jennifer, I would just let it sit. I mean, honestly, you don't know where the paperwork is. She doesn't know. This$1 ,500, I would call the creditor and say, hey, she's got$300 to give you. What will you settle? Because they'll usually settle pennies on the dollar, especially if it's very old debt because it's been – what's happened is that creditors have bought bad debt from credit card companies, right? And it just gets passed and passed and passed. And so to even find the company is a miracle, honestly. So I would call them. Yep, I would get it in writing, have them email you or by letter, but they could email a proof of settlement.

48:19Rachel Cruze:And then you guys send them, send them a check. And then probably what I would assume will happen is that 30 ,000 in some world is going to start possibly bubbling up. And I would just do what you've done with that. She can't pay it. So let it go bad. And the longer they don't get paid, honestly, probably the more likely they are to settle. So I would not stress about this, Jennifer. It's, they're just, it's someone in a cubicle that has a script that's calling with a headphone and they're going to be leaving the company. The turnover in those companies is like every six weeks. I mean, like, it's just, it's not as scary as what it feels like.

48:59Rachel Cruze:So get a dollar. I heard Dave say that they take a box full of files like this. Yes, and they just go through them and just call. Yes, yes. So get a dollar amount. Get a dollar amount, get it in writing, and don't give them your account. Right. That's it. So her main concern was that she felt that since this is already in a legal process, that she could not call the creditor, but I'm assuming that she can call the creditor. Yes. A hundred percent. Probably not the original creditor, probably not Visa or MasterCard or whoever. No, it's not the original creditor. It was originally credit one, and now it's with some sort of whatever.

49:47It probably wouldn't hurt for you to call them. I'll call them. Okay, yeah. So I can call them even though a lawsuit has already been filed. Is that correct? Yes. I don't even know if that lawsuit's for real. Sometimes they have these scary letters that they just will send out, and they're blanket. Did she get a court date? Well, she did not get a court date, but it does say that the law firm requested a remote hearing. It looks like court papers. She even said, this is something for a professional. Here's the thing you need.

50:29Rachel Cruze:You just need real information. So get on the phone. Okay. And just say, my 82-year-old widowed mother just got this thing. Okay. What do we need to do? And you say, I don't have$1 ,500. She didn't have. She surely didn't have$1 ,500. I'll send you$300 right now, and we'll call this thing. Okay. Yeah, Jennifer, how are you financially? I'm just curious. Well, I got a letter like this two years ago, and I ended up filing bankruptcy because I got so scared. Oh, no. And it was before I found you guys. Oh, yep. So I'm— You're climbing out of a hole. This is like bringing you back to your days. Otherwise, I would just pay it.

51:09Rachel Cruze:Like, just pay it and go away. Sure, sure, sure. Well, yeah. Can I give you an exercise I want you to do? I would love that. Okay, I want you to write Jennifer from two and a half years ago a letter. And I want you to imagine her being scared and terrified. You remember, it's still in you right now. And I want you to write her a letter and say, in a couple of years, this same situation is going to show up for mom, and I'm going to do what I should have done then, this time. I get to run it back. And this time I'm going to fight. Okay? and set old Jennifer free and give new Jennifer new power for moving through the day and get this piddly$1 ,500 nonsense off your mom's back.

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53:37Rachel Cruze:next up we have tara in richmond virginia hi tara welcome to the show Thanks for having me. Absolutely. How can we help? Well, my hubby and I are in our early 50s, and we have two special needs sons. Well, we have six boys, but we have two special needs sons, 29 and 17. And we've been pretty smart with our money over the past almost 35 years we've been married. So we want to set up a trust for the two of them to make it so that our house becomes like their house. And they don't have to change. We don't have to change things. We don't have to move them. We don't have to do anything like that. If my husband and I, if anything happens to us, we're not looking forward to that.

54:27Rachel Cruze:But we're trying to make that plan. No, you need to do that for them. Yes. Have you guys looked into special needs trusts? no we haven't that's kind of why i called kind of yeah well you know how do we start this what should we look out for my dad just got a trust for his his investments and it cost him twelve thousand dollars in legal fees so that was like did he pay too much you know i i have probably every question that you can imagine yes i will take whatever you can give me so i will say this trusts in general it kind of depends on the situation and your estate but when you have a special needs child.

55:03Rachel Cruze:That is the one time that I see it as a requirement. You need to do this because it will make the transition of taking care of them so smooth. Now, I don't know how much specifically it's going to cost in legal fees. You will have to hire an attorney. I would ask around if there's anybody in your community that you know of, that you trust to sit down and kind of build this out. And you guys will get to pick, make all the decisions that what you want going forward if you know when you all pass away um and it will have to kind of reconcile with the other children right um oh definitely yeah what's your thing that the older kids would would manage and actually be the exact yes that's right yeah so they could be the caregivers i guess totally Do they know that?

55:53Rachel Cruze:Yes. Yes, they do. Yes, so this is... They are two years older than the... We have a 30-year-old who is in Japan and is pretty financially in great shape. And then we have a 29-year-old who is special needs, is autistic. And then we have three more. And then we have the youngest who is 17 that we adopted from the foster care system. And he is, he's a lot of work. He has a very rare genetic abnormality. So we're going to have to, he's going to need care for sure for the rest of his life. The 29, the 29 year old is, is functional. He does many things for himself and he's very sweet and well loved by people, but we, there is no way he could manage his future.

56:42Rachel Cruze:Yes. Yeah. So, so in that process, Tara, you guys will look at assets. You'll see what names need to be placed on which assets, the executor of the trust, different people making different medical decisions. I mean, you kind of paint everything out there. And, yeah, the good thing about a lot of this is it skips a lot of, you know, the legal side when you have, especially for a special needs child in place. That is one time that we say it is worth every penny to sit down with a good attorney and map this out because they don't need to be making any decisions or, you know, making any calls at that point.

57:17Rachel Cruze:And, you know, and then I think probably even your 17 year old's case wouldn't be able to. So all of that played out and protected and that trust is so, so important. So, yeah, but I would sit down with a good attorney and state by state has different laws and how you how you would structure it, too. And so, yeah, I'd sit down and take care of that for sure. And 12 grand might be pennies, depending on the size of your dad's estate. So I wouldn't be scared of that number. Or it might be a ton of money, and he overspent by a lot. So every situation is different. And the trust that he had drawn up for his situation is different than the one you're going to be doing.

57:56So just like Rachel said, find somebody you trust, and no pun intended.

58:01Rachel Cruze:Yeah, get that taken care of. Get it going. For sure. And I would do that as soon as possible, too, Tara, for them. All right, next let's go to John in Little Rock. Hi, John. Welcome to the show. Hey, how are y 'all? Hi, we're doing great. How can we help? Yeah, so me and my wife, we bought an older home. It was built in the 60s. And underneath in the crawl space, there is a lot of water damage and mold. And everything underneath the house is going to have to be replaced and redone. the estimate is about a hundred thousand to fix all the flooring and the duct work for the hvac system and we only owe 89 000 on the house and so that's kind of devastating news we also just found out we're about to have a baby so that's also kind of put a little stress around the situation um so we're just wondering basically do we need to just try to sell the house as is and go rent somewhere, or we don't think it makes sense to go get a loan for that much on a house that is going to be less than the price to repair it.

59:11Well, the house wouldn't be what you owe on it is, but how much is the house worth? The value with land and everything would be about$170 ,000, I would say. I personally, and I could be wrong, you need to check with professional in your area, but I don't think you could sell the house for more than you owe on it. Because an inspector is going to find all the stuff that, or you're going to have to disclose it because you know it now. So you have to disclose it when you list it for sale. And if you sell it as is and the whole property in and of itself is worth 175 grand, you're not going to get, you know what I mean?

59:51You're not going to get$89 ,000 after the sale of that.

59:57Got you. Okay. You get what I'm saying? Right. Have you had another person come out and give you a second estimate? We have. It's still going to be pretty expensive. They quoted it like$70 ,000. Okay.

1:00:15Rachel Cruze:How much do you guys make a year, John? We make, after taxes, like$100 ,000,$105 ,000 a year. Okay. I wonder if you could pull this apart in stages. That's what I was thinking. what could you do right now? A little bit of work, take a few months, do some more. How long have you guys lived in the house? It's been about, I'd say, four years now. Okay. Is there a possibility, and dude, I don't know what I'm talking about. I'm way over my skis here, but is there a possibility you could get the mold remediated and then do the flooring but not put fancy floors down on top of the new subfloors and then come in six months later and redo all the HVAC stuff?

1:01:05Is there a way you can do this in stages where you can cash flow this thing? But it takes you a year and a half versus doing it all at once. I know it's a pain in the butt. It'd be awesome to write a check and go away for a month and have it all done, but it may be cost prohibitive to do that. That's true. The only thing is he said that they would have to fix the ductwork because the ductwork is also very old. And he said to get to the other part of the house, they would have to have that repair, too. So it just seems like every way we look at this, it's going to be a huge expense. Yeah. And it's a tough...

1:01:41Rachel Cruze:But it's basically what you're saying is, in a way, it's like it's worth$70 ,000, right? If it's worth$170 ,000 and it needs$100 ,000, they're not going to, you know, when you just do quick math, that's$70 ,000. You owe$85 ,000. So I think about it even in the sense of a car, right? When people are like, I have to put more into my car than what it's worth. But then you do want it fixed to get a higher value. But you know what I mean? It's kind of like sunk cost perspective. Right. And it's the home. I mean, honestly, John, I probably would slowly probably cash flow this. Do you guys have consumer debt?

1:02:24The only debt we have is the home, and then we do have a truck.

1:02:29Rachel Cruze:Okay. Shoot. This is the part of home ownership that is so hard because it costs— I mean, it's the stuff that comes up, you guys, all the time. I mean if I were you John I probably wouldn't just wipe my hand I think I would slowly start doing some repairs I'd sit down with the GC and say I've only got to go in steps yes go in steps and what steps could I make to maybe break even so that if we wanted out we could eject at a certain point to give yourself an out if you wanted to but oh I hate this for you brother sorry John I hate it man

1:03:10Thank you.

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1:04:47Rachel Cruze:Well, the 2027 Ramsey Goal Planner is here and it is more practical than ever before. We heard some feedback and we said, you know, we're going to give the people what they want. So you're going to get brand new content from Jade, John, and myself. And it's going to give you clear action steps, some guidance to get you the momentum that you've been wanting this year. But here's the thing. We sell it every single year. So don't wait to grab your planner. So it is$49.97. You can get yours at RamseySolutions.com slash store. Or if you're watching on YouTube or podcast, click the link in the description.

1:05:23Rachel Cruze:All right. We're going to. It's for sale right now, though, right? It just says grab your copy for$49.97. I think it's... I think if you order it now, it's the cheapest it will ever be. Okay, there was a deal of that. I don't know if that's it. Okay, two different graphics. I don't know. I'm just, I'm reading my ad. I'm giving, I've just given. I'm like Ron Burgundy. You give me a script and I read it. I don't know. But sometimes... Do what? We got a live tournament. It is on sale. You're trying to... Here's the deal. I don't know. Rachel Cruz is a part owner of Ramdu Solutions. She's trying to get more money out of you guys.

1:06:02This thing is on sale right now. And last year it sold out when it was on sale. Yeah, man. Listen.

1:06:09Rachel Cruze:Listen, I don't know. I just am told, okay, we got a new graphic up. It's$35 if you buy it right this second. You got to go now because I think tomorrow, this may be the copy for tomorrow. RamduSolutions.com slash store. All right, let's go to South Bend, Indiana. We got Sam on the line. Hi, Sam. Welcome to the show. Hi, thanks for having me. Absolutely. Thanks for calling in. How can we help? So I just kind of want some help trying to get kind of a roadmap for how to get out of debt because I'm about$65 ,000 in debt and I only make$60 ,000 a year. I have a one and a half year old at home and my wife is six months pregnant.

1:06:47So I'm just trying to clean this up so that my kids don't have to suffer through any of that. I love it, man. I love your heart, brother.

1:06:53Rachel Cruze:Yep. The kids turned everything around. Once you have kids, you're like, oh, crap, we got to get our stuff together. We got to be different now. Oh, man. What's the debt, man? So about$18 ,000 of it is credit cards. They're split up into two different accounts. They've already been sold off to third parties, and it's been a while. So I actually went into a debt consolidation program originally, and then the law firm that I was working with just liquidated and was done with it. So they kind of handed it back to me. And I want to try to get the ball rolling because I really am starting to look around and realized that things started to fall apart around me and I need to, you know.

1:07:29Okay, so what else besides, so you have 18 grand that's already gone to collections and two different credit cards. What else you got? Then I owe about$1 ,750 on a car I just financed a few months back. I just bought a second car for my wife and I just actually over the weekend. That was about$3 ,500. I paid cash.

1:07:50Rachel Cruze:Oh, good. I owe about$10 ,000 on an AC unit for my house. It blew up the first year that I moved in. And then I got my wife's car that we originally had as our only vehicle repossessed, and they still want about$15 ,000 for that. And they took it. That's done? That's already done. They already auctioned it off, and that's what they want afterwards. That's the difference. Dude, what has happened up until now? Because this isn't just a matter of you being a debt. this is a matter of you you just didn't pay bills yeah i so what what truly happened was uh around the time that everything started to slow down with covid i was working at a factory job and i started to get into some credit card debt when they cut my hours and eventually i kind of just you know got tired of it and went and started doing my own thing so i'm self-employed now i have been for about three years but i clean houses for a living and it was rough trying to get everything on track at first and then I guess I just kept knocking my wife up and now I don't have any help and I have to have the, you know, ability to get out and really even get more clientele because I just don't have the time of the day as one person.

1:08:57How much money do you make? I make about five grand a month on average and it just fluctuates in the wintertime because I have some clients that go away. Okay. And you've been in that business three years, you said? Three years now, yep. three years now.

1:09:16Rachel Cruze:And do you have predictable downtimes, you said, with certain clients? Yeah. From about January to April, I was probably about between$1 ,000 and$1 ,500 a month. So what do you do in that gap to earn money? Honestly, I've just been trying my best to kind of stack up money aside so that when that time comes around and stack up things around the house so that I don't run out of things, I have you know kind of stockpiles and i also have been very fortunate enough to when christmas rolls around and especially with the birth of my child that people have been extremely generous giving me bonuses i don't like to bank on that for the holidays but it's been extremely helpful how much cash do you have set aside i have a thousand dollars set aside i'm done with baby step one but uh that's that's about all i have after the car what's the the car the 17 000 car if you sold it today do you know what you would get from it uh i want to say probably about 13 14 something like that okay so you're a little underwater in that a little bit yeah just from the depreciation but yeah because i'm just trying to think through some math here because for me my goal for you sam would be to get out of debt as quickly as possible okay so that's going to mean working nights and weekends your wife is is gonna probably feel like a single mom for a hot second because you are working so much.

1:10:39Rachel Cruze:You guys, I mean, I'm sure you don't have a ton of expenses to cut, but where you can cut, we're not eating out. We're not going on Amazon. Like we're doing nothing. We're not spending money except for keeping the lights on, keeping the roof over our head, like the absolute needs, the necessities. And then the other thing is selling stuff, right? And so you're doing all of this at once to get out of debt as quickly as possible. So I'm just looking at your numbers and I'm thinking, okay, $18 ,000 in bad debt, you know, I mean, you possibly could settle, maybe let's just say, generously, you know, half, you know, what if that went down to$9 ,000, okay?

1:11:22Rachel Cruze:You can't do much about the repoed car. You can't do much about the HVAC. And then the car, let's just say you took a$3 ,000 hit, and if you could get a small loan from a credit union for$6 ,000, go get you a$3 ,000 car and then have that, right? That loan goes from$17 ,000 to$6 ,000. You start to kind of play with the numbers of what the ideal situation would be to get out of debt as fast as possible. and there's a chance that your debt's looking more like 38, 39 versus 65 at that point. I was hoping, especially since it's been the third party, some of the debt, and they seem willing to kind of work with you to just get anything.

1:12:07They will, but you're going to have to save up a lump sum.

1:12:11Rachel Cruze:To settle with them. Yeah. Right now, like I said, I bought the car in cash, and it took me about five months to do it, but I saved about$800 a month so that I could buy that. So I saved up four grand within that five months. I think that's about the pace that I'm at right now. This is going to sound nutty because I know I'm talking to a guy who's so tired because he's got a newborn and a pregnant wife, and you're hustling your own – you're a one-man shop on your business. but you can't afford you simply cannot afford to when when a big chunk of your clientele goes on vacation during the the cold winter for you just to hang out at home you got to go find other work and you've got to grind and grind and grind and after you get done cleaning all day you come home and have dinner with your family and then you go stock shelves at walmart until midnight and this is going to be the next 18 24 months and you're going to feel like you're going to collapse but on behalf of your family, you can do it.

1:13:10I believe in you. But it's going to take that level of negotiating with certain folks, selling stuff, cutting expenses to the bone for 24 months, and, bro, you've dug yourself a big hole, so to fill this hole up, you're going to be tired shoveling. You can scroll all day. You can Google hacks all day. There's not any hacks around you've got to cut expenses and make more money. That's the only things you can do right here.

1:13:38Rachel Cruze:And the wild thing is too, Sam, if you can get this credit card debt where they can settle and you do this car and you find three grand extra a month, right? I mean, a lot of this is gone in a year, year and a half. I mean, it's pretty wild what the math starts to do, but it's going to take some drastic changes. It's going to be a drastic year and a half for you guys to get this to play out the way that you're wanting it to. But a year and a half of it, and it's behind you, and then you've learned, gosh, such a way of life of what you're not going to go back to. Like, that's the legacy changer there for your kids that you're looking for.

1:14:12Rachel Cruze:Having healthy money habits where you actually control your money and your money's not controlling you.

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1:15:54Rachel Cruze:If you're enjoying the show, one of the best things that you can do to help us spread the word is to share it with a friend. Maybe post one of the clips on social media, but just spreading the word about the show is one of the best ways we can get the word out to help people do what we want is to, you know, get control of their money and create a life that they love and finally find some peace with the subject in life that can be so, so complicated. So, yep, we're thankful for you guys for listening and watching. So leave a comment. We love hearing from you and share the show when you can. All right, let's head to Kansas City and we have Andrew on the line.

1:16:30Rachel Cruze:Hi, Andrew. Welcome to the show. hey how are y 'all hi we're doing great how can we help good i have to start off by saying since you rachel started it i think that baloney is way better than the name that john's high school football coach called him back in the day listen andrew andrew is deep i don't even know what the i don't know what the yeah it's it's far more socially acceptable to say john baloney out loud. I'm going to start calling her Rachel Bruise or Rachel Snooze. Ooh, I like that one. Rachel Snooze. I like that. What a snoozer. Oh my gosh. What's up, brother? We are in baby step three, my wife and I.

1:17:15And my wife is certainly the free spirit and I am definitely the outspoken cheapskate. And every time we talk about money, the tension is pretty high and we overall just tend to avoid the conversation altogether. How can we tell if we're actually pretty close on our goals and I just need to loosen up, or if our household spending genuinely needs to be reined in? I want money to be a conversation we can approach without fighting or dreading the finance talk. Okay. Before we get to that, because Rachel's wrote a book on this, she's the expert here, but I want to ask you a question, okay? Ask that last question again.

1:17:55I want money to be a conversation we can approach without fighting or dreading to talk. Okay. Let's take the actual topic of money off the table. And let me ask you a question. Are you a person your wife can sit down and have a conversation with and you don't try to fix her? You hear her. You say, thanks for sharing that, even if you think it was dumb or boring or whatever. Are you a safe person that she can just talk with? the answer to the question before yesterday would have been no okay uh we we go in seasons of that but just yesterday we kind of had to sit down redefine the marriage relationship conversation love it we're both of a share of hearts and that was one of the things that she really wanted to talk about uh and i totally understand and i admit that yes i'm a problem solver along with many other uh many other men yeah and that's something that i need to work on and so even yesterday after that conversation, it went really well.

1:18:52And then even this morning, I was able to practice that, but we're getting there. So historically, no, but starting last night, the answer is yes. Perfect. So what I want you to work on in your home, and it sounds like y 'all are on it and you use the magic word, this is just practice. And for the wives out there listening, often a husband tries to fix a problem, not because they think you're stupid, but because their whole life they've been told the only value you have in the world is utility, is the solution to a problem. It took me being married forever before I realized, yes, my wife likes that I can change oil in the car.

1:19:29And yes, that she likes things I can do around the house, but she likes me. And that was hard for me to metabolize because I thought I was only worth my answers. And so y 'all practicing just talking, listening, remembering she's your friend, that you're her friend, right? You get what I'm saying? So y 'all are on the right path there. That will make not only money conversations, but any conversations you have one of curiosity and not judgment instead of that's a stupid thing. Dude, tell me more about that. That's different than how I see it. And one of those is an invitation. One of those is a slam door, right?

1:20:03All right. So we'll talk about the money thing here. Go for it, Rachel.

1:20:06Rachel Cruze:Well, I was going to just, I mean, when you said we continue to fight about money and then you're like, but we're on baby step three. So I'm like, this is, the problem isn't the system that you guys have put in place. It's the attitude and the posture around the subject that's caused the strife, right? Or something's come up and gets triggered in her or you, and it's like, you guys just can't come eye to eye. But I think it's probably more what John's saying is the approach at which you take those conversations. And a helpful thing that I feel like has been good that Winston and I, and we do this with more than just money, but we see the thing that we're talking about are the tension points where we're so different.

1:20:46Rachel Cruze:We're coming at it in such different perspectives, different backgrounds, how we grew up with my, I mean, all of it, right? That all plays in. And we see that subject matter as kind of the third party in the triangle and it's out there. And Winston and I are on the same team. Like it's us locking arms against that thing out there that the spouse is, your wife isn't the enemy. You're not the enemy to her. It's this thing out there. And what is this thing out there creating in me or creating in her or him, you know, in my case, this strife that we just seem to have this conflict all the time. And when you can start to pinpoint that, that that's huge.

1:21:24Rachel Cruze:And I think we have found, too, with married couples, we were talking about money and marriage, but we talked about the subjects a lot over that weekend. And but having empathy with your spouse, actually seeing your differences and her massive free spirit as a strength, Andrew, like she gives you a gift in your life. You would be probably a semi boring person that doesn't leave the house much if it probably weren't for your wife. Right. Who brings the fun and the levity and the enjoyment. Right. And then you are a godsend to her because if she's like me, details are not my ideal. I don't really enjoy looking at every single little thing and every interest rate.

1:22:03Rachel Cruze:And if we put it in this thing and we change here and we do that, I mean, I'm like, it's great. I trust you. Like, it's fine. Go, go and do like, I don't enjoy that. But because of that, it actually gives me a subconscious safety net of knowing I have a husband who's taking very good care of our family in that way. Does that make sense? Like, there's a beauty in the differences. And I think that's, you know, so yeah, we can, we can dive into the numbers if you want. But I do think there's a level of respect and care to give each other in these conversations that's going to help tremendously where she'll have the freedom and probably maybe even say, hey, OK, because this has been going so well and I feel this freedom that I don't get slapped on the wrist or feel like I'm getting, you know, judged.

1:22:50Judge, yes.

1:22:51Rachel Cruze:Okay, maybe I don't need to – I may not need to spend so much. Sure, do we want to cut back? Like there's more of a willingness on both parties' end to do some level of change when you know that the other person is for you and there's a beautiful love and respect situation happening. Does that make sense? 100 % it does. Absolutely. What's the number you're worried is too extreme?

1:23:17I would say there's a few examples. Um, but things like, uh, birthdays, birthday gifts, we, she has a large family. Um, and so, you know, when it comes time for celebrating a few birthdays, you know, maybe sometimes there's a month where there may be three or four birthdays and we want to spend, or she wants to spend$25 or$30 or$40 for per person, or, you know, going out to eat a big one for her would be clothes. And so I'm not necessarily opposed to spending money because I kind of train myself, hey, you know, let loose every once in a while. Go get your – I like coffee, so go get yourself a coffee or a specialty coffee or something like that.

1:23:58But, you know, where the line is, because I realized that we're still in baby step three. We had an emergency fund. Then we had a baby in April, so we depleted about half of it to pay off the medical bills. And so now we're kind of building that back up. And so because we're in a mid to late 20s, or I guess I'm 26, so mid 20s, I'm just kind of worried. Like I just want to get into a house. Like I just want to complete maybe step 3B and I want to get into a house. And her maybe goals are like, well, I want to get a different car. And I really don't care about a house right now. Maybe five years, absolutely.

1:24:35But in 2026 or 2027, no. So let's have that conversation. Where do we want to be in five years? Who do we want to be in 10 years? And those dreaming conversations where they're like the old corporate whiteboard, there's no bad ideas. Like what's your picture of five years from now? We have one or two or three little kids running around here. Where do you want to be? What do you want that to look like? And then you begin to reverse engineer action steps based out of this shared vision of what y 'all want to be. and there's always going to be pinch points. I'll actually want a new car before I want a house.

1:25:10I want a house before I want a new car. Well, one of those is a depreciating asset and one of those is like this, but getting beneath the house is I want the security for my family. I want a home. Sure. Right? And so getting to those real issues underneath the fight points.

1:25:26Rachel Cruze:Yes. Man, it changes everything. And her to have a level of freedom with income that you guys are out of debt, you're building that emergency funds, but I do also want to enjoy my life. So there has to be a both and.

1:25:49Rachel Cruze:Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I am Rachel Cruz, hosting at this hour with Dr. John Deloney, and we're answering your calls. So give us a call, 888-825-5225. Looks like the phone lines are all taken at this moment, but just keep trying and hopefully we can get you in this hour All right, let's go to Casey in Lexington, Kentucky. Hi Casey. Welcome to the show Hi, thanks for taking my call. Absolutely. How can we help? A little backstory. Me and my wife, we are in her early 40s, baby step six The question is, she is planning on going back to school, and we do have the money saved up for her to go back to school.

1:26:33But her work is willing to reimburse her, but only if she takes out student loans. What? Yes. So she takes out student loans. What kind of industry is she in? She is in health care. I've heard of all sorts of reimbursement plans of all types, but I've never heard of somebody. that it has to go

1:26:55Rachel Cruze:has to be a student loan. I don't understand that. Has she asked more details of why the process is that way? Not necessarily, no, but we for sure do have to take out student loans. That is the answer. What will the degree be getting her?

1:27:19Like payment wise?

1:27:21Rachel Cruze:Yes, and advancement. and I'm assuming her career track. Correct, yes. Approximately a$30 ,000 jump. Okay. Per year. Good for her. And how much is the schooling? $25 ,000. Okay. And it is two and a half years. And it's two and a half years doing that. Okay. Good for y 'all. She must be awesome. That's really cool. Let me throw one other wrench in there before Rachel answers. I would want to know if I go in and put my tuition on a payment plan until the university, because they'll put you on a three or six month plan instead of writing a check on day one. I've just never, I've been around higher ed for almost all of my adult life.

1:28:11I've never heard of this. I've heard of blanket reimbursement. And unless there's some tax advantage that the business has by paying down their employee student loans or something, I don't know. I just never, ever heard of this, which in anytime I've never, ever, ever heard of something, A, I could be totally wrong, but B, I would want to dig in a little bit further and see if I'm not hearing stuff right.

1:28:35Rachel Cruze:Because if there's paperwork that has to be done of, okay, I, and not from a loan perspective, but I'm wondering, yeah, like a payment plan here and then the school writes her the check and reimburse, like it's all, but I don't, and sometimes if it's attached to a loan, They sometimes have a weird repayment plan and or you have to stay with that company for X amount of time, right? Like there's some strings attached always. What are the strings on this one? It is three years. She has to be on for three years. Is that after she finishes her schooling? Yes. Okay, so five and a half years. She currently works there now, yes.

1:29:18Rachel Cruze:Sure, sure. Oh, bro, I wouldn't do it. There's no chance. I know. And you know my feelings on debt. I'm on the Ramsey show for God's sakes. But I would gladly pay$25 ,000 that I have for a degree that will reimburse itself. That will pay for itself in less than one year for four and a half years of freedom for me and my wife. Gotcha. Because she's one bad boss. She's one bad transfer. She's one bad – the hospital sells to another hospital. I mean any number of things. Has a baby that she wants to be home with. I mean I don't know. I don't know what it is. But it's like – Yeah, dude. the freedom for my family again you hear me say this all the time i saw for peace and i saw for freedom i'll pay that 25 grand all day long especially in a health care position that's going to roi in one year or less shoot i wouldn't even think twice about that gotcha well i thought i know the answer but she wanted me to call well i'll tell you normally i mean i could give you the i could i could preach to you about student loans or something you would actually have me kind of bound up to be honest with you i would have to i'd have to i'd have principal versus principal in my own spirit.

1:30:22If, if she has the ability, a company is going to pay for her to go to grad school and maybe they're going to ask her for two years or for one year. And, but they have to take student loans. That would be principal versus principal for me. But this one is a no brainer. Y 'all have worked your butts off for just this moment where she can get the advancement. It's awesome. And she doesn't have to sign a check with, I mean, she'd have to sign a commitment to anybody like that. Yes. Yeah.

1:30:48Rachel Cruze:Yep. Yep. I would, have options. That's the beauty in life. When you have autonomy over your decision making, like it is, that's a game changer. We're not stuck in just a crappy situation if it ever turned that way. Right. So, um, yeah. And you don't have to pay it all up front. I mean, you probably pay five grand per semester, you know what I mean? As you go through. So, um, you know, it's the, it's the same conversation. I feel like that we have to talk people off the ledge of, um, of student loan forgiveness, right. If they're on the front end of it and like, well, I could wait 10 years and this could be for you know what I mean and it's this long time and that's why we're even like no you never know what's going to change in 10 years is a long time you know and and to work and to pay off what you've had where it feels like a free situation 10 years from now or in her case kind of a free situation but that's five years right it's and your fingers are crossed that that's one two three potentially three presidents away yeah that's right god knows what they'll You know what I mean?

1:31:46Rachel Cruze:What's going to happen? Don't get our conspiracy theory. ChatGPT will be our president and three presidents from now. Who knows what the plan will be? What the world is going to be. Right. So it's when you can make decisions for your home in a vacuum, you guys, that is worth it every time. All right. Let's go to Doug in Tampa, Florida. Hi, Doug. Welcome to the show. Hi. How are you guys? Hi. We're doing great. How can we help? So I've got a question. We have some stocks that were given to us here recently, and I guess over time they've done pretty good. They're three energy stocks, but we're looking to make the most out of it for the next 15 years until we get close to our retirement age here.

1:32:26What should we do? Should we sell these stocks and put them in the mutual funds that we found that are getting close to 10 percent, or should we just let them ride?

1:32:37Rachel Cruze:Are they three individual stocks? three individual energy stocks okay so yeah i'm not a fan i'd sell those before the day's over of individuals yeah i mean because because all your eggs are in one basket versus a mutual fund you're gonna have 90 to 200 stocks or if you even if you just did an index fund for the s &p 500 right it's across all 500 companies there's just something about that diversification that gives you such safety and you're right and the market's done well i mean when you look over i we did the the math with dave on the show last week it was like up a hundred percent over the last four years five years when you look at all of it combined like it's just it's wild what the market's doing and to put all that risk on just three companies doing well um i wouldn't take that bet doug so yeah i would sell them move them to either great mutual funds um or even i mean you could just do an index fund to open up a brokerage account with you know vanguard or fidelity or how much are they worth?

1:33:38I'd say right now, probably take out out of our total stock, take out the kids college stuff. We have about three, three 50.

1:33:47Rachel Cruze:Okay. So you know what? That's enough that I probably, I would sit down with a smart investor pro. If you go to Ramsey solutions.com, you can find one in your area and actually look for a long-term game plan for that amount. Right. If it was like 10, 15 grand, which I knew it probably wasn't going to be, you could do something simple. But I probably would sit down because they're going to be able to look at different funds, the best ones to put you into. And even, you know, things like, you know, tax loss harvesting. Like there's some there's some elements at that amount of money that I would want on my side.

1:34:17Rachel Cruze:And a financial advisor can help you with that. So check out a SmartVestor Pro, Doug. Yep. And I would get those moved.

1:34:37Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:35:30Rachel Cruze:up next we have kelly in denver colorado hi kelly welcome to the show hi there thank you so much for taking my call yes absolutely how can we help so i am going through a divorce um sorry and it's okay thank you um so i so right now i'm keeping the house um but i'm also uh paying will be paying uh 4400 a month in spousal maintenance and what is that yeah uh alimony okay oh okay so to my uh in order to keep the house because you decided to keep it so you it's the equity the split okay okay um yeah that was part of the the negotiations um and the reason the main reason i wanted to keep the house is my daughter i have a 10 year daughter it's her neighborhood she has a best friend across the street a great school system and just you know really trying to keep that stability for her during this whole process um unfortunately i feel very underwater uh every not maybe not very but 500 to a thousand dollars underwater every month.

1:36:51And so I'm wondering if I should try to keep hanging on in order to give my daughter that stability. I do have a pretty good emergency fund. Or if I'm just, you know,

1:37:06Rachel Cruze:if this is just a pipe dream and I'm. Let's get some numbers real quick, because I think there's a deeper probably element to this that I want John to speak on. But OK, besides the forty four hundred that you're paying a month how much is the mortgage the mortgage with taxes and insurance is 3 ,800 3 ,800 okay and how much do you make a month um well so my my gross is 175 ,000 a year but I'm only I'm only taking home around 5 ,700 after the spousal maintenance and then after health insurance. That's not taken directly out of your check though, right? I put it into a fund. Okay, but how much income hits your bank account, just income, without anything being taken?

1:38:00Rachel Cruze:After taxes, what hits Kelly's checking account? After taxes, I hit $5 ,600 a month. But you make$175 ,000. Plus the$4 ,400. So you make about$9 ,000 or$10 ,000 a month. Correct. yeah okay yeah okay are you counting that in the 175 no she makes 175 and she she gets 4600 plus the 50 whatever 5500 she just said okay so she gets about 10 grand a month yeah um yeah so yeah so that would leave you because i would want you bringing in about 12 great um do you see your income going up at all? I work for the federal government, so we're not expecting to get raises this year, but in the next couple years, I would expect to get some raises.

1:39:00And the other thing is right now she's in an after-school program, you know, daycare.

1:39:09Rachel Cruze:so in another year or two she wouldn't need the app when she hits 12. So in my head I think, oh, I can hang on. I can do this. I know. When I find the numbers. I know. I know, Kelly. I'll put this in the top three or four worst conversations I have with people, okay? and because we only have a few minutes I'm going to be pretty direct but I know what I'm saying carries a lot of weight okay one of the most not one of the most common thing I hear amidst a divorce when there's kids involved one kid five kids whatever is this statement some sort of this statement I want them to have stability whatever stability they can possibly have right And I get that sentiment, and I would be the exact same way in the situation with my two kids.

1:40:11But the reality is everything she knows, your daughter, is gone. It's not stable. And trading moms, what she needs more than anything on the planet right now is a sturdy mom who has peace in her chest. And not the after-school program. am. She's 10. She's got a best friend. Like, I can't tell you the name of my best friend when I was 10. Right? Like, so all, and by the way, I've got a 10 year old right now. I got a 10 year old daughter and she's got best friends. I get it. Right. But the most important thing she needs right now is a mom who's anchored after the world y 'all knew doesn't exist anymore.

1:40:59and so instead of saying what do i have to sacrifice including financially emotionally psychologically spiritually so that she can have some illusion of things are just going on as they used to be i want to i want you to first ask yourself what do i need as the adult in this house to be well and whole and that everything in her life is going to be a derivative of of you solving for that. And so it sounds like if there's a condo or an apartment in that area that you can live in for two years and make that sacrifice that maybe that's the deal, but man, it seems pretty untenable to just have that much of your income out the door every month before you can even go to the grocery store.

1:41:47Right. Yeah. Yeah, no, it's, it's been, And I mean, it's weighs on my mind pretty much all the time. I know. It's terrible. Yeah. And here's what I want. I want a 10-year-old daughter who's really mad at her mom, who's upset, throws 10-year-old tantrums like they're supposed to, who says all the things right now. And then I want that same 10-year-old girl snuggled up next to her mom over Christmas break on a couch that is yours in a place that is yours. at a place where you can breathe. Yeah. You know what I mean? Yeah. No, the whole thing is, you know, not what you picture in life. No, I hate it.

1:42:34I hate it. I hate it. I hate it for you. It breaks my heart for you. It breaks my heart for that little girl. I hate it.

1:42:41Rachel Cruze:I know, Kelly. And you're such a great mom. Yeah. I mean, honestly, doing what you can in such an out-of-control situation to try to create what you believe is the best. And I think when we do that, sometimes the unintended consequences are these other things that start to drag and weigh on us. And, yeah, and, you know, and I'll say it from the math side, a thousand bucks a month underwater, like that's a lot, you know. And your emergency fund, if it starts to have a small leak and there's nothing replenishing it, that's eventually going to run out, you know. And so you kind of get to this point where the reality is going to hit at some point.

1:43:20Rachel Cruze:And I would rather you do, if there is a decision to be made, which I think there is, do it at a place of strength where it's your decision to make and you're not being forced out by a bank. Or you know what I mean? Like down the road if something dramatic does happen. Do you have, how much is in your emergency fund? I have$50 ,000. $50 ,000. Okay. And how much equity is in this house? If you sell it, what would you walk away with? So that's part of the problem. It's underwater right now with the market. So I don't have equity in the house. I would just be walking away. How did they appraise the house being underwater and you still have to pay him$4 ,400 a month?

1:44:03Rachel Cruze:Well, the$4 ,400 is... Because of your income? Correct, the income. And there's a whole...

1:44:16He was not working, so, you know, I guess it's roles. reversed. Not quite a stay-at-home dad, but not working either. So if you sell the house, does this alimony go down?

1:44:36It wouldn't go down for at least the next two years because it's kind of a locked-in rate. If that's the case, I don't know if you're going to find rent in Denver.

1:44:48Rachel Cruze:You may not have a choice, but to stay in it until the equity is built, which will be probably another four years, Kelly. So I would find a way to cut expenses and hold on and try not to dip into that emergency fund too much until the market semi-recovers and you have some equity in the home.

1:45:17you spend hours researching before making a major purchase like a home or car but it's also a good

1:45:23Rachel Cruze:idea to put in the work searching for the right insurance coverage to protect your biggest assets I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com slash insurance.

1:46:01Rachel Cruze:One of the biggest mistakes that people make is thinking that they can skip having a will because they're too young. They're too healthy. They just don't need one. Maybe they don't own a lot of stuff. So they're like, oh, it's not a big deal. But a will helps protect your family. It gives clear instructions and can keep your loved ones from having to guess what you wanted during a difficult time. Like if you could imagine someone passing away and then trying to figure out what to do with all their stuff. and a will gives guided instructions, you guys. It gives a clear path. I talked about this yesterday with Jade, but I want to say it again on this hour today.

1:46:36Imagine you're 21, you live in an apartment, and you're thinking like I would have thought at 21. I don't need a will. I don't have anything. I have a guitar and like an old couch, right? But imagine something happens to you and you pass away and your mom can't go in your apartment and help pack up your clothes. Your dad can't come in with one of his friends and help move your couch out because they're not allowed in the apartment because the apartment has to turn it over because they're just different adults now. Give your family the benefit of just being able to grieve you and not also having to fight for you after you pass.

1:47:15Every single buddy who's an adult needs a will, period. End of story.

1:47:19Rachel Cruze:So go create one, you guys, and go to mamabearlegalforms.com. and if you're not sure where to start you can text quiz to 33789 and we'll help you figure out what option is best for your situation but mama bear legal forms.com they're amazing where i went this is where i went state specific wills like they are awesome so make sure to check them out all right let's go to theresa in tulsa hi welcome to the show thank you guys so much thank you for your time and your wisdom sharing with everybody absolutely thank you how can we help today? Well, I'm kind of starting late in life here to understand all this stuff.

1:47:58My husband is in his mid-70s and I'm in my late 60s, but I've been trying, I got all your dad's

1:48:05Rachel Cruze:books and I've been reading them, but I have a question about the emergency fund. It says, best place to put in a simple money market. I don't understand where to go or what to do, if that's at the bank or if I have to go to a planner. I have it right now in a no penalty CD, but I just have to change it until December because it was better percent interest at the moment. But it's not liquid, so I've got to get back to liquid. I understand that. So I'm just trying to understand. I don't understand all of this stuff. So I'm going to see if you guys can help us out. Dude, you're awesome, Teresa. I was going to say, I first applaud you.

1:48:51Rachel Cruze:Not many people in their 60s want to change the way they've been doing stuff. I'm proud of you. That's awesome. Yeah, that's amazing. Well, I'm very scared. I do believe it's all gods, and I want to be a good steward and leave it where it needs to be, you know, deal with what I'm supposed to. Well, you called the right place. We're going to help you get unscared. Is that cool? We're going to make it real simple for you. Yep. So I think one thing to remember, and for everyone listening, this is kind of a good teaching point for everyone, is that your emergency fund is not an investment. You want to see it more like insurance, right?

1:49:25Rachel Cruze:So the percentage of what you make, yes, on it, it doesn't really matter as much. Because if we were going for high interest, we'd be putting it, you know, in the market, right? And so that's one thing to remember. Or also for CDs, yeah, they're not ideal for an investment or an emergency fund because you usually have to let them mature before you take some money out. You said that there's a no penalty one, but easy access to the emergency fund is huge. This is a big point. You don't want it too accessible where it's sitting in your checking account and you might spend it, right, accidentally.

1:50:00Rachel Cruze:And so keeping it in its own separate account. So that is where in the book, yes, he probably did write about a money market account. And the funny thing is the things that have become more popular in the last couple of years, it's very similar to a money market account. It's called a high yield savings account. And so you're parking money in this. And again, I know it's not an investment. So I'm kind of like speaking out of, you know, both sides here. But it's better to have your money in something that's just growing a little versus a traditional savings account. So with a money market account or a high yield savings, you can put your money somewhere.

1:50:32Rachel Cruze:I mean, you may earn 3%, probably around what you're making in your CD, honestly. but you're able to transfer money account to account within that. It's very easy to get to. Even some money market accounts, you can write checks out of it and a debit card comes with it. You have a limit usually on your transaction, so you don't want to use it as a checking account, but if you needed to get to it quickly, you could. So Teresa, if you hang online, Christian's going to pick up and he's going to help you get to Fairwinds Credit Union. They're an amazing partner of ours, I've opened up accounts with them because you can have up to 10 high-yield savings accounts with them.

1:51:10Rachel Cruze:And so that is where I would put your emergency fund, Teresa, is with Fairwinds. And it's very easy to set up. If you go to their website, Christian can help you get to that. It's fairwinds.org and go to slash Ramsey and set that up. But I would take money out of that CD and I would put it just in a high-yield savings account. And again, your fully funded emergency fund is three to six months of expenses. And so that's the number you're shooting for there. And so I'll say this, Teresa and Rachel, you can tell me, John, this is, this is dumb, is my home's emergency fund, like the, if something happens and I need money today, I have no idea what the interest rate is because I know me and that if it had, I've got money in a high yield savings account, right?

1:52:01And I've got college savings. I got that stuff. But as for that account, I know if it had an interest rate attached to it that I knew and watched, and is it 2.9 or 3? I would spend waking hours going, well, is it? And I have to remind myself, that's not the point of that money. That point of that money is every day of my life, we're having a good time. So in my house, I have my checking account in a bank and we opened another account under that same heading, under me and my wife's heading, and it's there. And I can't use my debit card out of it. I've got to stop and open my laptop and move it from one account to another, which takes like five seconds to do.

1:52:40But for me, I don't even, for that, especially that initial thousand bucks, but for my three to six month emergency, dude, I just can't get my head in that stuff. It gets too complicated for me. I don't want to mess with it. I just want that safety. You get what I'm saying?

1:52:54Rachel Cruze:Teresa, do you guys have consumer debt? you and your husband no our house is paid for oh wow ours everything's paid for everything's in savings and in checking right now i did check with a high yield savings at my bank and they said you have to you can only start it with 60 000 oh good grief that's thousand cd but no no no Teresa yeah no that's wild that's crazy no yeah yeah no no no no i think i think fairwinds is like 500 bucks or something. Yeah. No, no. You're, that's, that's wild. That sounds like they're trying to take advantage. I don't like that. Yeah, that makes me. That feels odd. Everybody tells me something different.

1:53:33Sure. And I don't have the internet, so we're computer illiterate. Even better.

1:53:39Rachel Cruze:That's why I was like, you know, that's why you're so awesome, Teresa. She has no. Well, I'm trying and I do depend on my kids once in a while, but I try to do it. I still try to do it. Oh, that's the best. Okay. Well, I'll say this then for you, Teresa. I love Farron's, but they are an online bank. They have partners around different credit unions in your area that you can go and get cash from. But I would say this, if that's not your cup of tea, then I would find a brick and mortar. That's insane what that bank quoted you. I would go down the street in there in Tulsa and find a credit union.

1:54:15Yes.

1:54:15Rachel Cruze:If there's a credit union in Tulsa that has a high yield savings or a money market, that's great too. If you just want to do it in person, I totally, totally understand that. And I want you to walk in there and say, I just want a high yield savings account and I want to put$25 ,000 in it, which is three to six months for me and my husband or whatever that number is. And if they start trying to sell you other stuff, just say, I just want this. And if they try to sell you more stuff again, say thank you for your time and walk out. You're in the driver's seat, sister. You have a paid for house. You've got cash.

1:54:45You are the boss here. Okay? Okay. You are in a position of major strength here.

1:54:52Rachel Cruze:How much do you guys have saved, Teresa, overall for retirement? Well, actually none. Well, I mean, we do now. I mean, just in the last few years, we inherited some money. But most of it is in savings and, of course, the CDs. Okay. Yeah, well, getting that. Overall. I'm sorry. No, go ahead. Overall. Well, in the CDs, there's roughly$77 ,000. And that's including the emergency fund. Okay, that's great. Well, and I would say any type of investing too, check out SmartVestor Pros. You can go to Ramsey's, well, you don't have the internet. Ask your kids, look up RamseySolutions.com and find someone in your area for investing for the future, Teresa.

1:55:37Rachel Cruze:That's your next step.

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1:56:47Rachel Cruze:Our scripture of the day comes from Philippians 1-9. And this is my prayer, that your love may overflow more and more with knowledge and full insight. Maya Angelou said, do the best you can until you know better. Then when you know better, do better. Oh, I like that. All right, let's go to Gina in Los Angeles. Hi, Gina. Welcome to the show. Well, hi. Thanks so much for taking my call today. Yes, absolutely. How can we help? Well, I am getting very close to retirement age. My husband's already retired, and we're looking at our savings and investments and wondering whether we should leave a certain amount of money in an annuity we already have.

1:57:30Rachel Cruze:no i wouldn't yeah no i wouldn't you can get much better rates of return um less fees everything i mean the only annuity that i would i would never i wouldn't personally do one but some people are so freaked out by the market they kind of want that guarantee would be a variable annuity that would be the only one if you were to do it but i i wouldn't gina um so you guys have one currently, you said? Yes. Okay. How much is in that? It's$190 ,000 with a protected income of about$258 ,000. $250 ,000. Okay. And what other money do you guys have saved? Oh, we've got the rest of our money is in IRAs, 401ks, and high interest savings.

1:58:21And so that's about another, I don't know, about$1.2 million.

1:58:27Rachel Cruze:Okay. And what the annuity, I'm just curious, your thought process when you guys opened it, was it just to diversify and have just another element? Or were you nervous about the market? Or what caused you guys to get it in the first place? Yeah, it was kind of to do something else. The market was a little bit nutty a couple of years ago when we did this. and we are working with a financial advisor in a private company who suggested it be a safe place and then we could start drawing against it as soon as next year. So that would be an additional safe guaranteed monthly income. Okay. Yeah. I mean, you guys are fine everywhere else.

1:59:10Rachel Cruze:I just wouldn't. I mean, I'm just going to tell you again what I would do and I wouldn't. And I would probably just open up an index fund, take that money out of the annuity and put it in. And just know that there's some great commissions. I'm not saying your financial advisor's wrong in this, but there's a lot of high fees. There's commission, a lot of commissions on annuities. And again, it kind of taps into more of that fear mentality. You know, we had a lady call in. She was like in her early 90s, John. This was a few months ago. And she just was scared to death. and I was hosting with Dave and I remember he was like, you know what, just do your annuity.

1:59:46Rachel Cruze:You're fine. You just need to sleep good at night. You know, you're fine. But in your 60s, that's 30, that's a good 30 years idea. You know, hopefully 20 years of great growth that the market has been doing. I mean, you can look at it historically and yeah, there are some ups and downs, but overall, um, yeah, I, I wouldn't, I don't see a need for it. If you'd had that money in the market the last five years. It would have gone a hundred percent. That's what we were saying earlier. It would have gone crazy in a great way. So I think you can just make more. I think your money can make more than it's in an annuity personally.

2:00:18Rachel Cruze:All right, let's go to Elsa in Houston, Texas. Hi, Elsa. Welcome to the show. Hi. My question is that I need to figure out if I need to sell my house or maybe get a cheaper car. About a year and a half ago, my ex-husband had to lower child support and then it took time for that to go through the court system. Finally, that happened. I only found out about him lowering the child support after I signed the agreement for this house, after I sold my other house. That was cheaper and more reasonable. So I'm trying to figure out how to keep from going under basically. Okay. How much do you make a year?

2:01:05Rachel Cruze:um 50 53 000 a year myself okay and how much is uh your mortgage payment a month 1850 1850 okay and how much is the child support uh i got a lump sum so i kind of budget it for about a thousand dollars a month and that'll last for the next couple of years when basically my daughter graduates. Yeah, that was going to be my first question is how much longer is this going to be a part of your life? Because if you bought a house, even on a 15-year note, and your kid's older than three, this money runs out, right? Yeah, exactly. I have a pretty good 401k, but I have credit card debt because of going back to court, basically.

2:01:58on all the attorney fees. So I'm kind of stuck. I'm not sure what to do. Yeah.

2:02:04Rachel Cruze:I mean, the house is, it's a lot for your income. Yeah. Even with the child support,$1 ,000, it probably is. How much is the house worth? Probably$220 ,000. It's a brand new house. Okay. And how much... Equity. Yeah, what did it go for? Is there anything or how long have you been in it? I've only been in it for a little over a year. It's a brand-new neighborhood, and it's not finished yet, so I'm not sure it would sell right now for any more than what I owe on it. Okay, okay. Are you underwater every month with just your life? Yes, and it's very stressful. And I do have also a car payment, and I'm kind of trying to decide if I need to sell that and get a cheaper one and just pay the difference.

2:02:58Rachel Cruze:How much do you own the car? Around$34 ,000. Oh, gosh. And it's like$500 ,000. Okay, yeah. Yes. Okay, so just as a point of reference, we recommend that your car or cars in a household, but for you, a single car with your single income is no more than half of your annual take-home pay. So that would sit you around the$25 ,000 car at the high end, okay? are you underwater on the car a little bit yeah okay and what other debt do you have um just the credit cards basically how much is that that's around 20 000 some of that is mostly zero percent okay um so gosh i mean elsa honestly i would probably talk to a real estate agent.

2:03:55Rachel Cruze:We have some great trusted pros in your area. And I want to go to RamseySolutions.com and find someone. You can look at different profiles and talk to a couple, one that you're comfortable with. Tell them your situation. And I'm just wondering if you can get out of this house just unscathed and try to find, you know, even renting. Rent it. Elsa, I'm telling you this from the bottom of my heart. I don't think you're going to do it, but I'm just telling you because I love you. You need a season of a two-bedroom apartment. And because you owe so much money in depreciating asset in your car and credit cards.

2:04:37You know what I'm saying? Like this is, like I'm just trying to imagine the stress you've been through with divorce, with being a single mom, with now suddenly like underneath you, they cut the child support. Like you need peace more than anything else, more than a fancy car, more than a fancy house. Yep.

2:04:54Rachel Cruze:Man. And then Elsa, I would go down to a credit union and see if they can give you a loan for maybe six grand and whatever the difference is on the car, maybe two or three grand, throw it at that and then go. And I would just get a crappy car and let that be done. Like it's amazing when you start to kind of see, and these are big changes. I know I can just say this like in a sweeping two minute segment with you. but if you can find rent for 1200 bucks and you have close to 4 000 left over and you have no car payment because you have that beater car you start working to get this this credit cards cleaned up right and you throw an extra you know 2 000 at that it's done in two months like you you start to see the light at the end of the tunnel with with a plan but it's going to be a pretty intense plan after a pretty intense life situation that you've walked through with this divorce so it's It's going to be a lot.

2:05:50Rachel Cruze:And I know I just probably threw a bunch over the fence of what to do to get out. But honestly, that's what I would do. Because what John's saying, you can't keep at this clip. You're going to continue to go deeper and deeper in the hole. So I'd find good people on your team, people that are going to root for you. Find a great real estate agent to give you the real numbers, the real comps, and look at a real situation of what you could do to get out of the house. A real private sale number for your car. Yes, all of it. I mean, yep. Oh, I'm so sorry, Elsa. We're cheering for you, though. Call us back if you need us.

2:06:23Rachel Cruze:Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.