Make Sacrifices Today To Achieve Your Financial Goals

8:10Dave Ramsey:What you don't want to do is get paralyzed and throw up your hands and say, oh, this can't be done because it can be done. What it is going to require is not a single answer. There's not a single silver bullet. It's turning the knobs, all of these knobs at one time. The extra job, the church, the long-term thinking with money, the daycare arrangements, the family help. All these knobs can be turned just a little bit. Then all of a sudden we start to get something that's sustainable until we can get our income up long-term. And that's where you've got to get to. It's not going to be a singular answer.

8:42Dave Ramsey:And being paralyzed and giving up is definitely not going to be a good answer.

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10:44Dave Ramsey:Deanna's in Pennsylvania. Hi, Deanna. How are you?

10:48Rachel Cruze:Good. How are you?

10:49Dave Ramsey:Better than I deserve. What's up?

10:52Rachel Cruze:So my question for you, my boyfriend and I graduated college last, I graduated last August. He graduated last December. Combined, we had a little bit over$100 ,000 in student debt. Okay, you're not combined.

11:08Dave Ramsey:You're not married. So how much do you have?

11:11Rachel Cruze:I had 60, and he had about 55, 60, right around there.

11:17Dave Ramsey:Oh, okay. Cool. All right.

11:19Rachel Cruze:Yes, yes. And then I'm set to pay mine off in December, and he's set to pay his off in December. Wow. So we're going to be student loan-free within just about a year. Good for you. So, yeah, so planning long-term-wise, we're looking to probably get engaged in the next year and a half. So one thing that we are talking about is combining finances after we are married. And we are looking at what to invest in once we get to that point. The next year is going to be saving up. We're planning on having around$50 ,000 to put as a down payment on a house. We don't want to really buy anything over like$150 ,000.

12:04Rachel Cruze:and then double up our mortgage payments and pay off our house as quickly as we can. But the one big question I had with all of this is I own my own marketing firm. So I cannot invest in a 401k where a company would match it. So my question to you is, would it be smart to open something like a Roth IRA to start investing in now so that we can be millionaires when we retire?

12:33Dave Ramsey:Good for you. Well, it sounds like you're doing a lot of planning. Congratulations. And, of course, let me clarify one thing before I go back to that question. The house we're going to buy is after you're married, too, right?

12:44Rachel Cruze:Yes, correct. Yep, we would not be combining finances or purchasing. Or buying a house together.

12:49Dave Ramsey:It's very, very dangerous to buy a home with someone you're not married to. Okay. All right. So now, so it's pretty simple. At that point, let's say you're married, you're out of debt, you have an emergency fund, and you buy a home with$50 ,000 down. You're at what we would call baby step four at that point. And that means you start putting 15 % of your household income away towards retirement. And then you work your budget and you have a life. And any money you can squeeze out of it, you throw at the house and pay the house off early, which was your plan. And that's how you outlined it. Okay, so then that brings us to how do we do 15 % of our income?

13:30Dave Ramsey:Yes, I would start with two Roth IRAs. One of you each have one. You could start that now for that matter. I was going to say, yeah, absolutely.

13:38Rachel Cruze:Well, after the debt's paid off. Okay.

13:40Dave Ramsey:Yeah, once your debt's clear. Yeah. Yeah, and you can just sit down with a smart investor pro, which is the people that do help our listeners do investing. And they've been vetted by us, and they have the heart of a teacher, and they'll teach you. You have available to you a couple of things with your marketing firm that you can also do as Roth. Okay. You can do a SEP IRA, a Roth SEP IRA, Simplified Pension Plan it's called. Now, do you have any employees in your marketing firm?

14:12Rachel Cruze:No, nope, just me.

14:14Dave Ramsey:Okay, then that's very easy. So you can put up to 16 % of your income with a formula. It ends up actually being about 13 % when the formula is applied. But you can put a bunch of your income aside in a SEP IRA, S-E-P-P, Simplified Pension Plan, okay, and Simplified Employee Pension Plan. Now, warning, if you do hire people later and they're with you more than two of five years, whatever you put in that year that they've reached that point, you would have to put in the same percentage of their income. So it works really well for a solopreneur like you, but it doesn't work well for a small business that has five employees, okay?

14:51Dave Ramsey:You also, in addition to that, can do a simple IRA, which is a 401k for small businesses. Okay. And you can set it up. It's$15 to set the account up. They're very inexpensive to set up. To set up a 401k in a big company like ours is tens of thousands of dollars a year in administrative fees. But for a simple, it's designed for small businesses. Now, again, warning, if you have that and you hire someone, you're required to match the first 3 % of what they put into their IRA if you have that simple program going. But point being, there's two types of ways you can get money in, and you actually can do both of them technically.

15:36Dave Ramsey:And three, if you include the Roth IRA. And do the Roth. And do the Roth. So you'll be able to get to your 15 % very easily. Make sure they're all going in good growth stock mutual funds, and they're all Roth, which is tax-free growth.

15:48Rachel Cruze:Yeah. And then your husband, once you guys get married, can be investing as well in a 401k if he's at work, too. So you guys will be tackling it from multiple different areas, which is great. But yeah, I appreciate the plan. And maybe you guys fast forward up the engagement. You know, I'm a fan. If you know you're gonna be engaged in a year and a half, go ahead and shorten it.

16:07Dave Ramsey:Like Rachel did.

16:08Rachel Cruze:Start the process. Get the ball moving.

16:11Dave Ramsey:Rachel and Winston came and said, we want to get married right now. I know. We were young. Okay. All right.

16:16Rachel Cruze:No, we waited. you waited about 10 months no 10 months but i'm like yeah yeah there was no good job deanna though um but honestly very impressive you guys just fresh out of college just in the last year have a plan to pay off the debt knock it out looking forward to the down payments thinking about investing all of it i mean you are in a perfect position and time in your life to to start all of this. So congratulations.

16:43Dave Ramsey:Bobby's in Texas. Hey, Bobby, how are you?

16:46Rachel Cruze:Hey, Dave, how are you doing, sir?

16:47Dave Ramsey:Better than I deserve. What's up?

16:50Rachel Cruze:I had a question. Is it okay to pause building the emergency fund and set up a revocable trust and a special needs trust? No, you don't need to.

17:02Dave Ramsey:You can fund those with a beneficiary of your life insurance, and the kid doesn't need a trust unless you die.

17:13Rachel Cruze:Well, the thing is, is my life insurance is really what I was worried about. Like if something was to happen to me and my wife, like we have a beneficiary, but...

17:24Dave Ramsey:Well, make the beneficiary, make a portion of the beneficiary go to the special needs trust, and then the child is funded for life out of your death. But you don't need to fund it while you're alive. You need to go build wealth while you're alive, and that will take care of the child later, and you won't even need life insurance to do it.

17:42Rachel Cruze:Okay. So just finish the baby step three, and then you said don't set up a revocable trust at all?

17:49Dave Ramsey:No, I would just set it up only upon death. Special needs trust has no value while you're alive. It's for taking care of a special needs child if you're not there to do it, and you have to fund it with some money. And if you don't have money, you fund it with life insurance upon your death. But if you stay alive and you fund it with money, and you say, I got a half million dollars in mutual funds 20 years from now, and you say, that is earmarked for this special needs child to be cared for throughout their life. That goes into a special needs trust upon my death. But until I die, I'm going to take care of them.

18:22Dave Ramsey:You see what I'm saying?

18:24Rachel Cruze:Yes, sir.

18:25Dave Ramsey:So you're taking on a bunch of paperwork and paying lawyers crap you don't need to be doing right now. You just need to go get out of debt and make some money and go ahead and do the life insurance today where it's named into the special needs trust and your will says the special needs trust is formed upon your death. And so upon your death...

18:43Rachel Cruze:Do you have to do paperwork, though, in order for that to be...

18:46Dave Ramsey:Your will does it. Your will dictates that the trust is formed upon your death. And so, poof, there's a trust now. You die, poof, there's a trust.

18:54Rachel Cruze:But who creeps?

18:56Dave Ramsey:Where does it come out of thin air? Whoever the executor of the estate is.

18:59Rachel Cruze:They have to go form it then.

19:01Dave Ramsey:Yeah, but it's not hard. I mean, it's two pieces of paper. Okay, okay. But you've got to put money in the thing for the kid to be okay, which is your real motivation, Bobby, which makes you a great dad.

19:13Rachel Cruze:What kind of life insurance do you have, Bobby? Between me and my wife, we're looking at like 1.7.

19:19Dave Ramsey:Good. That's great. And so what I would do is sit down, if you're working with a SmartVestor Pro on your investing, I'd sit down and say, how much would I need to put in an account, you know, invested in mutual funds to take care of this child? with$50 ,000 a year take care of this child? Probably. So half a million dollars. So you could say of the 1.7, 500 ,000 goes into the Special Needs Trust on the beneficiary statement. So you redo your beneficiary clause on your life insurance immediately, and you do your will immediately to say Special Needs Trust is formed, the Bobby Special Needs Trust, and the Bobby Special Needs Trust is funded with$500 ,000 from the beneficiary of this life insurance policy upon my death.

20:01Dave Ramsey:and then the child is taken care of, which is your goal because you're a good dad. But you don't have to do all that crap right now. It can all be formed and done upon your death. What you do have to do now is do your will and change the beneficiary.

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21:25Dave Ramsey:Rachel is in North Dakota. Hi, Rachel. How are you?

21:29Rachel Cruze:I'm fine. How are you guys doing today?

21:31Dave Ramsey:Better than we deserve. What's up?

21:34Rachel Cruze:So we just started the baby steps. We're on step number two, and this is literally our second month. In our first month, we ended the month with a surplus of almost$3 ,000. Wow. Oh, good. But my question is, I have a variable income, and my husband does not, and we have just over$9 ,000 in our savings. And so I was wondering, we have four children, so I wasn't sure if we should just keep that and then use whatever extra money we're finding every month to pay down the debt or if we should use the savings that we have already.

22:13Dave Ramsey:90 % of the time, we're going to tell you to use the savings down to$1 ,000. How variable is your income?

22:21Rachel Cruze:It's pretty extreme. I'm a wedding photographer. So in the summer months, I can make, you know,$12 ,000,$13 ,000 a month. And then come December, almost nothing. So I also own a studio that brings in some small income as well. We rent out to other photographers. So I can make anywhere from$1 ,000 to$3 ,000 a month off of that. And that's 12 months a year? Correct. Okay.

22:47Dave Ramsey:So, I mean, so your bottom is$1 ,000 to$3 ,000, your worst month.

22:52Rachel Cruze:Correct.

22:53Dave Ramsey:And what's your husband make?

22:56Rachel Cruze:My husband makes, each paycheck is$4 ,700, so just over$9 ,000 a month.

23:06Dave Ramsey:Okay. All right. Very good. Very good.

23:08Rachel Cruze:And how much of the, when you guys do your monthly budget, Rachel, how much does it take to run your household, would you say? um so my fixed expenses and with our like additional variable expenses like pets and miscellaneous home stuff is just about 9 000 so it just clears his checks okay so if you make zero you guys run the house okay you just don't have extra correct then why would you need savings to

23:36Dave Ramsey:had that? Just because you're a nervous mom?

23:40Rachel Cruze:Yeah, my kids are small and, you know, we get broken bones and fingers all the time. So it's just, you just never know.

23:49Dave Ramsey:But you have like health insurance.

23:53Rachel Cruze:We do, yeah, through my husband.

23:55Dave Ramsey:Yeah. And if you go to the emergency room and they send you a bill the next month, you have some wedding income to pay a bill.

24:02Rachel Cruze:Correct. And he

24:06Dave Ramsey:under a thousand in that yeah that's good so yeah i i think you are um it's wise to be a good mom and say i got four kids and it worries me it adds to my fear for us to be down to a thousand i don't have any problem with the wisdom of that but the actual math is telling us that that you're probably

24:28Rachel Cruze:don't have a problem because and how much debt do you guys have left rachel oh yeah we we have um $40 ,000 in consumer debt, and then on top of that, just our home.

24:39Dave Ramsey:But in baby step two is the only plan we're going to have$1 ,000 in the account.

24:44Rachel Cruze:Because, yeah, I was going to say, I mean, with your stuff.

24:46Dave Ramsey:So you're going to be done in like eight or ten months.

24:47Rachel Cruze:Yeah, exactly, right? Yeah. Yeah. My husband actually gets a really big bonus in March every year. It's usually$18 ,000 or$19 ,000. That'll finish it for sure. Oh, perfect. Yeah. Yeah, so according to your plan, we should be done in like April or May the latest.

25:06Dave Ramsey:No, you'll be done in March because you're taking$8 ,000 according to our plan of your nine and putting it on your debt today.

25:14Rachel Cruze:Okay. Oh, God! Oh, God! Spend it up a few months. I heard her take a breath. I'm just going into like my slow season. Yeah, I get that. You guys can eat on your husband's income.

25:31Dave Ramsey:You may not reduce debt. And if you had a horrible month, the worst thing that could happen is, is that a child breaks a bone, the HSA is used, and the$9 ,000 supports your family, and you brought in zero, and you're still okay. You didn't even touch the$1 ,000 small starter emergency fund. That's your worst case scenario. So, and you're just not, that's all that's not going to happen at one time.

25:55Rachel Cruze:Yeah, and it's so fast. Like if you guys had 140 of consumer debt, I think, you know, and it's a longer period, there's going to be more time for something to happen, a bigger emergency. But this is such a short period of time. You know what I mean? I almost would just knock it out because you just think about all the debt, all the payments, all the interest, everything that's happening. And if you can start chopping off a bunch of that stuff really quickly, which is what the debt snowball does.

26:19Dave Ramsey:And if you're just a little bit scared, it motivates you to do it even faster.

26:23Rachel Cruze:Oh, yeah. I, my last month, I brought in almost 8 ,000 last month. Um, just because I was, I've been binging you every single day. So it's like, and you're, you're, you're fired up, you're fired up.

26:35Dave Ramsey:And, and if you're a little bit, and if you add that fired up, just a little bit scared, it'll push you. And, uh, and I don't think you're in danger. I would not tell you to be, put your children in danger. Okay. I love your kids. I don't want that to happen to them. And I'm not asking a mom to be irresponsible.

26:49Rachel Cruze:Yeah.

26:49Dave Ramsey:And we're not asking to live on a thousand dollar emergency front for 10 years either. We're asking for five or ten months.

26:55Rachel Cruze:And the truth is, from a percentage standpoint, the amount of emergencies that come up that you can't pause the debt snowball and wait two or three months to be able to save up to pay off that emergency and then go back to the debt snowball. That happens sometimes. But people have the ability to pause it if something happens. Almost never. But most of the little things that come up that people use their starter emergency fund for is smaller than$1 ,000. But yeah, I mean, it's definitely like takes the breath out of you for a little bit, but you can do it. You guys can do it.

27:26Dave Ramsey:It's a good thing. Yeah. Rachel, I will tell you this. You've done a great job of analyzing your situation. You know your numbers. You have a plan. You're running it in your head. And the detail of the question you asked indicates how leaning into this you are. So I really think you'll be done by March. just my experience is the people that the people that are paying attention and focused and they're going on every little thing they're doing every little we're binge watching meaning i'm gathering this information i'm going to do this and we're going to put you in the brand new every dollar which is going to hold your hand and make sure you're doing exactly what you're supposed to be doing it's going to give you step by step through the baby steps while you're doing the budget it's incredible the what we've done with this financial applicant app it's it's off the chain So hang on, and we're going to give that to you as a gift.

28:17Dave Ramsey:You guys make plenty of money. You're going to be just fine, and you're going to be so stinking wealthy at the end of this story. It's unbelievable. This is so fun. Great job, Rachel. Good for you. David is in Minnesota. Hi, David. How are you?

28:31Rachel Cruze:Oh, I'm doing fabulous. How are you?

28:33Dave Ramsey:Better than I deserve. How can I help?

28:36Rachel Cruze:So I got an interesting one for you. After a couple of years after I lost my job, I'm living in my friend's house while I get on my feet. I just got back into truck driving. Well, now he's going to sell the house, and I came up with three plans on what I'm going to do next. Either I buy a house, and I don't really have any money for a down payment. I just finished paying off my last credit card today, or I rent a place, but I'd rather prefer to own. Or the third option, and this is something I'm leaning towards, is living out of my semi-truck.

29:08Dave Ramsey:How old are you?

29:09Rachel Cruze:It's a complex. I just turned 30.

29:12Dave Ramsey:And I take it you're single.

29:15Rachel Cruze:Correct.

29:15Dave Ramsey:And how long would you do that?

29:20Rachel Cruze:Since I'm not going to have a credit history starting today, since I don't have any other debt or credit cards or anything else, I don't know how much of a down payment I'm going to need for a house that way the bank doesn't care what my credit looks like. So I'm thinking probably at least one or two. Oh, okay. So if you drove a truck and lived in the truck for two years

29:37Dave Ramsey:and stacked cash as a single guy and made that your home, I think that's amazing. Yes, I would do that.

29:45Rachel Cruze:Okay, because a friend or two of mine, or I should say my sister, thinks that it's a little crazy to live out of my semi-truck.

29:53Dave Ramsey:Well, your sister's married and has two kids.

29:56Rachel Cruze:How did you know? Wow. No wonder why you're so good at this.

30:05Dave Ramsey:That was a guess, but yeah, that's funny. But I mean, she has a different life than you have. If you told me you were married and had two kids, I wouldn't tell you to do this.

30:12Rachel Cruze:How often are you on the road, David?

30:15Dave Ramsey:24-7. He's driving over the road.

30:16Rachel Cruze:I know, but how often, though? Every day? Almost. So my schedule is I can be home every weekend, but every now and then I will drive through a weekend just to make some extra money.

30:29Dave Ramsey:Yeah, you're doing long haul runs. Yeah. And you got a sleeper cab, right? Yeah, I'm in the Midwest. You got a sleeper cab?

30:36Rachel Cruze:Correct.

30:36Dave Ramsey:Yeah. Have at it, man. Go see America at Stacks and Cash.

30:40Rachel Cruze:Maybe for the year. You say two. A year, maybe two. Would I do this for two decades? No.

30:46Dave Ramsey:No, I wouldn't do it for two decades. You need to come, you know, build a life at some point. But for a couple years and get some money stacked up and get some distance between you and whatever's been chasing you, yeah, do it, man. Do it.

31:10Dave Ramsey:I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable yeah and what's so hard is I feel

31:23Rachel Cruze:like one of those especially the ones that I'm like oh it's terrible air people that call in and their spouse has passed away suddenly and they don't have life insurance. We actually took a question of a lady and she had three kids pregnant and husband didn't have life insurance. And I'm like, I can't even imagine, or even if it was opposite, right? If a mom passed away, there's a dad with kids and trying to figure out how am I going to afford childcare? How do I, how do I outsource some stuff that maybe she was doing? And it just takes the grief and the sadness of something like a sudden death to a whole new level.

31:56Rachel Cruze:Like when you have to think through how am I going to pay my bills? How am I going to eat next week?

32:01Dave Ramsey:Yeah, in the middle of all

32:02Rachel Cruze:that grief. Like it's just, it is, it's terrible. And so life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Xander is the place that Winston and I actually get all of our life insurance. And we keep re-upping it because I'm like, I just want it there. Like there's something about that safety of knowing that you have money if something suddenly happens.

32:22Dave Ramsey:And it doesn't cost much because Xander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say, I love you to my family by taking care of them and taking the time to put this stuff in place. It costs us stinking pizza.

32:37Rachel Cruze:It really is. So that is one thing to do to say, I love you to your family.

32:41Dave Ramsey:So we've used Xander for all of our family's needs for insurance for many years, including, of course, term life insurance. To get a free quote, go to 800-356-4282. That's 800-356-4282 or go to zander.com.

33:24Dave Ramsey:Everybody needs insurance, but it can be hard trying to find pros who aren't just looking to make a buck. With a Ramsey Trusted Insurance Pro, you don't have to deal with slimy businesses or slimy salespeople because they're all interviewed, vetted, and coached by us to make sure they're not only market experts, but they have your best interest at heart. Go to RamseySolutions.com slash coverage to find the type of insurance you're looking for, and then we'll connect you with a Ramsey trusted agent in that area. Or click the link in the description and we'll help you out. Carly is in Arkansas. Hi, Carly.

34:01Dave Ramsey:How are you?

34:02Rachel Cruze:Hi, guys. I'm good. How are you?

34:04Dave Ramsey:Better than I deserve. What's up?

34:06Rachel Cruze:Thank you guys for taking my call. I'll let you know I'm pretty nervous. I really look up to you guys and appreciate what you all do.

34:11Dave Ramsey:Well, thank you. How can we help?

34:14Rachel Cruze:So for some context, I'll be 20 this month and I'm getting married in January. Congratulations. Thank you. So my soon-to-be husband and I are trying to plan our future and just make sure that we follow the Ramsey way. I've kind of hopped on the bandwagon that my mom has put me on the last couple months. My biggest question is that I have an$85 ,000 inheritance and a brokerage account. I haven't touched since I've gotten it, but when we think about putting a down payment on a house, I just don't want to. I'd rather pay cash. So I'm thinking, you know, we put that brokerage account down on the house, but we want to save for the next four to five years to add to that house fund.

34:57Rachel Cruze:And I'm just not sure what kind of account to put that in. Do I put it on top of the brokerage or an HYSA? Are you wanting to use the 85 Carly for a down payment and then pay the house off quickly? Or you're wanting to save that 85 plus a lot over the next couple of years to pay cash for a house? The 85 plus the rest to pay cash. Okay. So you guys won't buy a house for a few years, and where do you keep saving that money until you buy is what you're asking.

35:22Dave Ramsey:So who has the brokerage account?

35:26Rachel Cruze:Well, I do, but we will.

35:28Dave Ramsey:No, I mean, is it with a company that is doing all of your investing, or you just parked it there because your grandmother had it there, or what?

35:36Rachel Cruze:It's with my finance guy, so with the company, I believe.

35:41Dave Ramsey:Okay. All right. So if you were with one of our Smart Investor Pros or with your financial advisor, if it's someone you trust, it should be in a good growth stock mutual fund. And that's what it's in.

35:51Rachel Cruze:Yeah.

35:51Dave Ramsey:And you should add to that. Not a high yield savings account pays a fourth of what the mutual funds are producing these days. So, no, you want to get you want to get a full ride.

36:02Rachel Cruze:Because it's going to be a couple of years, Carly. if you guys were going to put a down payment or something and you were saving for, you know, six months, you know, that would be fine to just to do like a high yield savings if you were starting over, starting new, but something long term like that, then yes. Yeah. You got a three

36:17Dave Ramsey:to a five year window. You got plenty of time to ride the market up and down and watch what it's doing and do, you know, be and be perfectly safe doing that. So, yeah, I would sit down with that guy and make sure that you feel good. Both of you and your fiance, soon to be husband, feel good about the account that it's in, what's the brokerage account invested in, and I want to understand that. And once I understand that, say, okay, the purpose of this is I'm thinking about pulling this money out in three to five years, and I'm going to be adding some to it for a down payment. Is this okay? Is this safe?

36:48Dave Ramsey:And they're going to talk you through it and walk you through it, and then you make the decision if you want to leave it exactly there or not. But I think you probably do. It sounds pretty good. And I really like that you're showing a lot of maturity because a lot of 20-year-olds that get married, they want to buy a house five minutes later. And I love that you're willing to take a breath. And we want to save up even more. We're talking about buying completely debt-free. That's pretty incredible to think about. Yeah, it's amazing. How about that for a cool goal if you're 20?

37:19Rachel Cruze:Yeah.

37:19Dave Ramsey:That's a pretty cool goal.

37:20Rachel Cruze:But, I mean, she's starting with 85, which will be 100 soon. You know what I mean? Like, it'll start snowballing for sure with the interest and then adding to it. So, well done, Carly.

37:30Dave Ramsey:Ashley's in Washington. Hi, Ashley.

37:32Rachel Cruze:Hi, Dave. Hi, Rachel. How are you guys?

37:35Dave Ramsey:Great. How are you?

37:37Rachel Cruze:I'm so good. Thank you so much for taking my call today.

37:40Dave Ramsey:Sure. What's up?

37:42Rachel Cruze:Well, so my husband is looking to switch jobs. I know he's feeling a lot of pressure and stress about this because it would be a pay cut for our family. And in the past, I've proven that I'm not able to stick to our proposed budget. But my husband's current job is really stressful, and I would love for him to be back in a role where he loves the work he's doing and with a company that's morally in line with who he is as a person. I want to be able to sit down with him tonight and give him the reassurance that he can make this switch and it will be better for our family, that I'm on the same team as him when it comes to budgeting and our future.

38:20Rachel Cruze:And I'm just really looking for some guidance on this.

38:25Dave Ramsey:Okay, to start with, you guys have a wrong assumption. The only way my husband can do something he loves with people that have a value system that's aligned is if he makes less money. Why the flip? Why don't he go make more money with people that I like doing something I love?

38:44Rachel Cruze:Well, I mean, this job came up. I know, and it sucks. Yeah.

38:51Dave Ramsey:It's not a dream job. It's a nightmare job. I'm going to take a pay cut because I'm stressed instead of going and looking for a pay increase in a better setting.

39:01Rachel Cruze:Okay, that's fair. That's fair. So just a little bit of background. We're completely debt-free. We have our house paid for. Our current net worth is about$1.7 million. His gross annual income right now is$160 ,000. he would it would be 121 000 but here's the deal we would get to see him more so right now with the

39:28Dave Ramsey:job that he's in why not take a job making 180 where you get to see him more

39:37well just okay so with his job he's a paramedic okay paramedic okay yep he's a paramedic and

39:44Rachel Cruze:And right now he works for a flight company and he's a manager. So he's in administration. He really wants to go back to doing medicine, and I really want to be able to support him in that.

39:56Dave Ramsey:I do too. But this natural human tendency to assume that in order to go do the thing I love doing, it has to mean I get paid less, it's faulty logic. I do what I love doing. I get paid more every day. Right. yeah so i mean you know is there a different way to skin this cat yes there is and so let's take that off the table but i really want to challenge you all on this thought train because it's um you know i want to support my husband and he takes a 60 pay cut so he's happy a bull no no i i'm not going to support that now i set that aside now let's answer your question though hon about uh what the the you want to be able to talk about sticking to a budget right right yeah yeah how can she do that right well what's what's his take on all of this ashley i

40:48Rachel Cruze:want to know from like the job perspective the budget all of it what's his level of involvement and conversation and effort and everything yeah so he is the one that found you like he found dave ramsey a few well probably 10 or 15 years ago and when josh and i got married he was like i really want to do this um so from the start we've been working our tail off to save um to pay off our house to get rid of all of our debt yeah and you've done a great job i was gonna say yeah 1.7 million so the budget ashley at this point because you guys are in baby step seven and we still say to budget regardless of your baby step but you guys you're gonna have a little bit more flexibility um to move within the budget versus someone who's trying to find a thousand dollars and they're cutting stuff and they're going right.

41:42Rachel Cruze:So you're going to, it's going to be a little bit of a, it will be some discipline to make sure that you guys are tracking transactions, that you know, where your money's going, but even the detail of the budget can kind of expand a little bit. Does that make sense? You don't have to be as rigid. So what I, I mean, so yeah, Winston and I, like we have a category for home where like all of our bills for the house go subscriptions. Anything we buy for the home, we have a line item for that. Like throughout, you know, if it's random stuff that we need for the house. Food's a big category. Lifestyle's a big category.

42:12Rachel Cruze:So we have big categories in our every dollar budget. And then within those, you guys can go as specific or as broad as you want. But the point is, is that within every dollar, especially when it's connected to your bank, you're able to track those transactions and just stay on top of, hey, here's the amount of money we said we'd spend in these big categories and we're going to stay within those limits. And so it just takes some time and discipline to get that as a new habit, but totally possible Ashley totally possible

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43:42Rachel Cruze:Savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market.

44:03Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host, Rachel Cruz, number one bestselling author. Ramsey personality, my daughter, is my co-host today. Nicole is in Mississippi. Hi, Nicole. How are you?

44:18Rachel Cruze:Hi, Dave. How are you?

44:20Dave Ramsey:Better than I deserve. What's up?

44:23Rachel Cruze:So I'm having a bit of a dilemma. Excuse me. I'm a little nervous.

44:26Dave Ramsey:It's okay.

44:28Rachel Cruze:My fiancé and I, we get married next week on Friday.

44:32Dave Ramsey:Oh, congratulations.

44:34Rachel Cruze:Coming up. Yes, very soon. We are excited about that, but I am still in the mindset of my dad, his dad sort of thing. um my my dilemma is um i'm having a dilemma with using my 800 i'm on baby step one to throw at my credit card that i am behind on and my minimum is half of my take-home pay so it's half of what i make in a month that's what my minimum is and that is the only card what is your minimum That's$2734.

45:12Dave Ramsey:What do you owe on this credit card?

45:15Rachel Cruze:$13 ,000.

45:17Dave Ramsey:And you have a$2 ,700 payment on$13 ,000? Yes. I fell behind for a few months, and then it's just interest added on, and it's becoming unbearable.

45:35Rachel Cruze:So that's not the normal minimum payment.

45:38Dave Ramsey:It's all the back payments.

45:40Rachel Cruze:Yes. It's normally around$300 or$400.

45:44Dave Ramsey:Ah, that sounds more like it. Okay.

45:46Rachel Cruze:Yeah.

45:46Dave Ramsey:All right.

45:48Rachel Cruze:And you bring home, what,$5 ,000,$6 ,000 a month? About$5 ,000, yes.

45:55Dave Ramsey:And you're getting married, and he has how much debt?

45:59Rachel Cruze:He has about$40.

46:02Dave Ramsey:And you only have$13? Or you have a car and everything else, or what?

46:07Rachel Cruze:So together we have about$79 ,000 worth of debt.

46:12Dave Ramsey:Okay, which means you have another 20-something other than this 13?

46:16Rachel Cruze:Yes.

46:17Dave Ramsey:On what?

46:20Rachel Cruze:It's personal loans. I owe a family member. It's various of other things.

46:27Dave Ramsey:Okay. And so your household income is about 80, right? Your income, and what's his?

46:33Rachel Cruze:um so my income is about like i said that's five thousand and his is about the same a month as well your take-home pay yeah okay yes all right so you're that's 120 000 take-home pay

46:47Dave Ramsey:and so you're probably making 150 or so okay all right um and we need to pay off 80 overall So really, you don't really have a minimum payment of$2 ,700. You have a single payment of$2 ,700 to get current.

47:09Rachel Cruze:Okay.

47:10Dave Ramsey:Right? Because the next month it won't be$2 ,700. It'd be$300.

47:15Rachel Cruze:Well, if I don't pay on it, if I don't get caught up on it.

47:19Dave Ramsey:If you pay$2 ,700, the next month your payment would be$300.

47:23Rachel Cruze:Yes, that's correct. That's what I'm saying.

47:25Dave Ramsey:Okay. So what I would do is just call a credit card company and ask them to roll that in and reset your payment.

47:33Rachel Cruze:Well, I called them. I don't have a problem saying their names, Capital One. I called them, and they said that there's nothing that they can do.

47:40Dave Ramsey:Okay. And then there's nothing I can do. You're not going to get paid. How's that? You get nothing, honey, if you don't work with me because I got no money. I can't pay you$2 ,700. I can pay you$300 if you want to reset the payment. That's fine. And probably I need to talk to your supervisor because apparently your two brain cells aren't rubbing together. This is how you talk to Capital One. What's in your wallet? Stupid. You know, I mean, come on. Of course they can roll that in. They do it every day, all day long. But you got some junior bird man on the phone up there in a cubicle, right? And so you got to nail them.

48:19Dave Ramsey:That's what you have to do. And then catch them up anyway, because you've got to get the whole stupid thing paid off. And remember how they treated you the next time you get ready to whip out that card or do any business with this company.

48:31Rachel Cruze:Oh, no, I'm done. Yeah, cut the stupid thing up and let them know that we're done.

48:38Dave Ramsey:We're breaking up here. You aren't all you were cut out to be. I don't care which particular movie star gives me financial advice on your stupid commercials.

48:50Rachel Cruze:oh god so it would it would hurt me to close it and doesn't matter doesn't matter

48:57Dave Ramsey:doesn't matter you close or not you still got exactly the same problem so that's true yeah so you know here's what you can i just call and mess with them and just you know be be um start out

49:08Rachel Cruze:you're nice nicole you got to kind of hype out your hype up yourself and then end up nasty before

49:15Dave Ramsey:you get off yeah get ready to dial the nasty up pretty quick as you're on the phone if their brains aren't working because sometimes apparently they aren't. And so, you know, now then the trick is it doesn't matter because in the end of just a few months, you're going to have a zero balance on this because you're going to get paid off. Because you make$120 ,000 after you get married and you all need to clean this$80 ,000 up fast. And one of the first orders of business is this credit card because it's probably one of the smallest debts you all have. Right?

49:44Rachel Cruze:Yes.

49:44Dave Ramsey:So we're going to list that in the debt snowball, smallest to largest, and I'm going to pound their face in. And it's going to sound like$2 ,000 a month or$3 ,000 a month, regardless of what their minimum payment is. Your minimum payment is, I want you morons out of my life forever. Okay? And I'm teaching you to be a little bit angry about this because that's a good thing. That'll push you through this and cause you to just pound their face in with the math as you're doing your budget. You're going to take that Capital One, take that Capital One, take that Capital One. 30 years ago 35 years ago american express called sharon and asked her why she would stay with a man that wouldn't pay his bills and i'm still pissed 35 years later i'm still pissed i would still find that guy if i could find him you know because she called me crying at work like i'm thinking the same thing right and so oh my god these guys they're just they're just ridiculous

50:43Rachel Cruze:ridiculous companies and nicole for you and your husband i mean make this a year the first year of marriage it's a crusade and you guys are working extra at night like i mean you're just you're high-fiving in the middle of the night because you don't see each other i mean like make it really be done with it like get really really aggressive with this and then it's done forever and then for the rest of your marriage you guys have no debt you have your whole income no stress it's a beautiful thing and so the more intense you guys can be in this first year and if you guys want kids later even before the kids like this is this is the time to do it so if you don't pay them 2700 and you pay them 2100 because they're first thing on your debt snowball and that's all you squeeze out of the first month's budget or a thousand or you pay them a thousand whatever

51:24Dave Ramsey:you pay them i don't care then the next month you pay them a bunch more and the next month you pay them a bunch more i don't really care what they think it's irrelevant just just pound what sucks

51:34Rachel Cruze:is the is the interest right you get 26 on this amount you know it's on the whole thing i know

51:40Dave Ramsey:It's on the whole$13 ,000. Yeah, that's true. Period. It doesn't matter. The interest is the interest until you get it paid off. It's just so high, though, with that credit card. Yeah, get it knocked out. What's in your wallet? God, money now because I don't have you people in my life. Yeah. Yeah. Oh, man, I tell you what. I spent the first part of my career doing a dumb thing. I would bring in people we were coaching, and I would call and negotiate with the credit card companies and set payment plans for the people we were coaching. and it taught me to hate credit card companies because they're so moronic.

52:17Dave Ramsey:And I'm still, it still rings in my brain. And just, because I just know the conversation she had. It just pisses me off still.

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54:02Rachel Cruze:That's BetterHelp, H-E-L-P dot com slash Ramsey.

54:22Dave Ramsey:The all new Every Dollar is here and it is a game changer. Watch the premiere on our YouTube channel and you can see the app in action. Hear how folks are finding thousands of dollars in margin in just 15 minutes using every dollar's new features, which, spoiler alert, basically we're going to guide you through the entire Ramsey plan as you do your budget. You're going to have prompts and encouragement and lessons, and it's all tied into this. The whole thing was working together like never before. It's budgeting with the Ramsey plan showing you holding your hand. You cannot beat this. Imagine how much you could find in this thing, thousands of dollars in just 15 minutes to put towards your money goals.

55:09Dave Ramsey:Check it out on our YouTube channel. You don't want to miss this. Jamie's in Fort Worth, Texas. Hey, Jamie, how are you?

55:16Rachel Cruze:I'm good. How are you?

55:17Dave Ramsey:Better than I deserve. What's up?

55:20Rachel Cruze:Okay. So I have been religiously listening to you and your team every single morning on my drive to work, which is about an hour and 15 minutes. and I have had gazelle intensity by myself. So I've tried introducing it to my husband, and the problem is that we've sat down and we have looked at a budget. I have the every dollar. I am still working on assigning every dollar, but I've got the app for him where he's doing it. we have about$95 ,000 in consumer debt together. We're a blended family. He has three. I have three. And the problem I'm having is that I am wanting so badly to get out of debt, but I am the primary like breadwinner because he's in a roofing business.

56:24Rachel Cruze:And well, we've had some issues with getting Ruth approved and it's just been really slow. So there's a lot of inconsistency like with his paychecks coming in and it's causing a lot of resentment like on my part and probably toward him to where like we went to counseling and we had to have an agreement to where I could only talk about the budget for an hour on Tuesdays and an hour on Friday. So that's kind of where we are and I just need to know what to do to move forward so when we can be a team together and how am I supposed to do this? Jamie, can I ask, is the resentment from you coming from that he's not fully on board with the plan and you guys together are like, hey, regardless of who's bringing the income, this is what we're doing.

57:17Rachel Cruze:We're paying off debt as fast as possible. Is that the resentment or is it that he can't seem to keep an income because the work is so wacky and you don't really know what's going on there. Yes. Yes, that's what it is. Because he's got a child that's in college and then the other one has already graduated, but I'm like, well, you guys can't afford it. Well, it is when you can't afford to pay all the bills that he came in with. Then now I'm responsible for those. And so I You mean he's paying his kid's college tuition and not paying his own bills oh he well right i paid everything last month i paid he's got about four thousand dollars that go out to his kids and their college and car payments and insurance and child support and all of that and isn't able to contribute to our house so in the month of September we have no money coming from June.

58:19Dave Ramsey:How long have y 'all been married?

58:21Rachel Cruze:Well, actually we will be married one year on November the 4th and I wanted to go on our anniversary trip to the money and marriage in Nashville and I was like, I know that we're in debt, but I feel like this is an investment in our marriage because we need it and he disagrees with me. I was like, well, I can pay for that. But he said he'd rather go on a cruise, but I'm not doing it.

58:49Dave Ramsey:I think you need a new marriage counselor because the marriage counselor said that you can only talk about a budget two hours a week, and a budget isn't even the problem.

59:03Rachel Cruze:Yes, I agree.

59:04Dave Ramsey:So that was you getting smacked into the corner by a marriage counselor as being unreasonable trying to ask him to be reasonable with his contribution to the household. That's not a budgeting problem. That's a values and income problem. It's a priority problem.

59:19Rachel Cruze:That's a priorities problem.

59:20Dave Ramsey:I'm choosing to put$4 ,000 in a college student's car payment instead of taking care of my new wife. That's a problem. That's not a budget. That's not you talking about Ramsey or you talking about a budget issue. That's a problem of respect and who's, you know, you guys, he didn't ask you about that. He just declared you get nothing and you have to feed me this month. That's not a budget problem. And so I think your marriage counselor is a weenie. I think you need to get a good, strong marriage counselor that will sit down and talk to both of you clearly about your priorities and your communication over those priorities.

1:00:08Dave Ramsey:And you guys did a lousy job of setting this up prior to marriage, because this is a barrel of fishhooks you both walked into, and you did no planning about it.

1:00:18Rachel Cruze:That is correct.

1:00:19Dave Ramsey:Yeah, and so you're reaping that right now, and it's just harsh. I'm so sorry. But, yeah, you can have two free tickets to come to Marriage and Money. Yeah, we'll give it to you. We'll give them to you. But I also don't want you to think that that's the answer to your problem. You need more than a marriage and money weekend that Ramsey will give you. You need in-depth crisis marriage counseling. You have not even been married a year, and this thing is unraveling rapidly and before my eyes as you talk about it. It's really scaring me for you guys.

1:00:55Rachel Cruze:I feel that also.

1:00:56Dave Ramsey:He's so checked out in what his new wife's needs are that he's not even dealing with it.

1:01:03Rachel Cruze:And that it's, again, Jamie, you're not being unreasonable, right? No. Do you know what I'm saying? Like, you're not crazy. Like, the fact that you're like, this feels off. This doesn't feel right. I don't feel supported. I feel like I can't believe he's paying all of this money that he's barely making all the way over there, like, where he can't even contribute to our own household. Like, I mean, it'd be different if you guys were making a crazy amount of money and you were debt free and you guys both chose to still support the kids while they were in college. Right. Like that, if that was agreed upon idea as your new marriage, but it's so splintered right now.

1:01:35Yeah.

1:01:36Rachel Cruze:And then you're kind of getting the short end of the stick. I agree. So what is it?

1:01:43Dave Ramsey:What kind of a business is he in?

1:01:46Rachel Cruze:He's in the roofing business. and he doesn't make money in roofing.

1:01:52Dave Ramsey:Why?

1:01:55Rachel Cruze:He doesn't want to go and knock doors anymore. He's 54, and he has some people that work underneath him. He basically works off of referrals because he's been doing it for so long.

1:02:11Dave Ramsey:But he's not got enough business. No, he is correct.

1:02:15Rachel Cruze:I have told him he needs to find something else, so we just had a conversation yesterday. And I don't care what you do. Either if you're not going to be working, then I need you to help more around the house. I need you to pick up kids. I need you to drop kids off. No, that's not really an option.

1:02:37Dave Ramsey:That's just, I mean, you really didn't mean that.

1:02:42Rachel Cruze:I think she's craving something I want him to go work something

1:02:45Dave Ramsey:some kind of initiative I want him to go make some money

1:02:48Rachel Cruze:well I do and I do too I think that's what he needs to do

1:02:53Dave Ramsey:and take care of his obligations which includes his kids and his wife and you take care of your obligation which includes him and your all's life going forward your kids you guys really need to get back to another marriage counselor and get in touch with your church and ask them to have a good, strong marriage counselor that can guide you guys through this. And you're going to have to have a reset, a solid reset on the expectations of this going forward and then live into those. And two hours of budgeting a week doesn't fix this. And again, I'll give you two tickets. I don't even think you'll come.

1:03:33Rachel Cruze:Yeah, Jenna will pick up. We'll give you guys some.

1:03:36Dave Ramsey:Yeah, we'll call. I hope you come. We'll put them at will call. and we'll make arrangements right now on the phone. You hang on and I'll make arrangements for you.

1:03:42Rachel Cruze:We can email them to you or something.

1:03:43Dave Ramsey:Yeah. Yeah.

1:04:08Thank you.

1:04:19Dave Ramsey:Samantha's in San Diego. Hi, Samantha. How are you?

1:04:22Rachel Cruze:I'm doing well this morning. How are you, Dave?

1:04:24Dave Ramsey:Better than I deserve. How can we help?

1:04:28Rachel Cruze:So, forgive me, I'm a little bit nervous and I feel all over the place, but I am trying to make some future decisions without making bad decisions for a future wedding. And we had a lot of big changes this year. I got married and I bought a house. So I would love some day of wisdom.

1:04:49Dave Ramsey:Okay, a future wedding, but you got married. I got lost.

1:04:54Rachel Cruze:Yeah, I was hoping you'd catch that. So my husband and I, we've been together for five years. We lived with some family on property for a little while to save for a house. we found a house a little bit sooner than expected. So we decided that the best thing to do would be to get married, get this house, and we would save for an official wedding later on. I had heard you say that would be a good decision to someone on the show at one point. So it felt right for us. It's better than some of the other stuff you could have done in that situation.

1:05:27Dave Ramsey:So I'm with you. Yeah. Good.

1:05:30Rachel Cruze:Thank you. I got Dave's good old match.

1:05:33Dave Ramsey:Check.

1:05:34Rachel Cruze:survived that one okay we are 25 debt free we bought our house and we are having this wedding on a cruise ship in march with family and we have about thirty five hundred dollars that we need to just save and pay off for that cool well you can do that by march yes we can um we also are i just It's got the EveryDollar app, and I'm looking at, like, margin, and it's stressing me out like crazy. My husband is like a turtle in a hurricane, and it's like, we got this. A hurricane.

1:06:14Dave Ramsey:Well, at least you married a stable guy.

1:06:17Rachel Cruze:And I'm like, is this guy real? Because he sounds like Dave Ramsey, so he's never read your book. Are you the hurricane?

1:06:30Rachel Cruze:oh my gosh he is going to love that that's so fun i never heard a turtle in a hurricane i've

1:06:36Dave Ramsey:heard a turtle on a fence post but i never heard a turtle in a hurricane that is a great one i will use that all right so he's not worried what is your household income so we bring in eight thousand a month okay and he's not worried because he thinks you can have thirty five hundred out of 8 ,000 between now and March.

1:06:55Rachel Cruze:Yeah.

1:06:56Dave Ramsey:Okay. And why are you worried?

1:06:59Rachel Cruze:I have been a hurricane prior to meeting him. And this whole talking about money and having an app where we see every time we go to the store and Starbucks has been new. It's revealing. It is. And it's so scary.

1:07:16Dave Ramsey:Yeah.

1:07:17Rachel Cruze:No,

1:07:17Dave Ramsey:No, it's just uncomfortable and awkward. It's not really scary. It's very certain.

1:07:22Rachel Cruze:Yeah.

1:07:23Dave Ramsey:Yeah. It's revealing. It ouches. It touches places I didn't want people to see. Yeah. Oh, but ouch. Yeah. I got you. I'm with you. That makes sense.

1:07:32Rachel Cruze:We became, we became, I became, I never, I had debt prior to the relationship. He never did. So I worked really, really hard and he helped me and so did you guys. Oh my gosh. So we're here now and I want to make sure I don't put myself back in that boat. I know I won't.

1:07:48Dave Ramsey:Good.

1:07:49Rachel Cruze:But.

1:07:50Dave Ramsey:How about we won't?

1:07:52Rachel Cruze:Yes, I know we won't. Yeah, you and the turtle work together. With a big picture, I'm like the worry wart on the turtle. Like, how do we save? How do we invest? How do we have family? How do we do all this?

1:08:05Dave Ramsey:Well, number one, just like you did before, how do you eat an elephant a bite at a time? Okay, so you lay out a game plan, and you look at every dollar together, and you say, if we only spend x and y on those two things we will have the money to go on the cruise and do the wedding if we blow the budget we will not have the money to go on the cruise and do the wedding so let's lay out the plan and stick to the plan so that our best life ends us on a cruise in march doing a wedding and then all of a sudden everything calms way down but what ends up coming is a lot of no's because you have to look at yourself and go, no, I can't do that because I'm going on a cruise in March to do a wedding.

1:08:48Dave Ramsey:Oh, no, we can't go over there because we're going on a cruise in March and doing a wedding. Oh, we're not able to join you tonight. I'm sorry, because we're going on a cruise in March to do a wedding. And all of a sudden, all those no's start popping up, and that's what you're not used to. And that's okay. That's a new thing. It's a new thing for you. That's okay.

1:09:05Rachel Cruze:Samantha, when you guys did the every dollar budget for the household, how much do you guys spend on essentials? Do you know? Off the top of your head, how much it would cost to keep everything running, like food, electricity, mortgage, all of it. $5 ,000? Yeah, and that's with, like, because we have animals and things need to do that. $3 ,000 a month margin. Yeah, you could do that in, like, two months, Samantha. So I fear that maybe the wedding wasn't the, like, fear. It's after that and the next big goal. he's confident that there's going to be an add-on to our house and save up and pay for it just like you're doing the wedding and he wants to do some real estate at some point and i just i don't have any of that wisdom so it's okay let's let's just do one thing at a time let's

1:09:58Dave Ramsey:let's build a little bit of confidence by doing the actual saving and the wedding and we've combined our finances and we're working together and we have a plan that we are going to stick to to hit our goals these are new words used to be me me now and i yeah and now it's we and us and um and you know and then first we'll get the uh first we'll get the cruise wedding out of the way and then we'll start talking about okay how much is the add-on and what's that going to cost and then let's build some wealth because someday we'd like to do some of it yeah it's just it just It's just you just chip away at it one little thing at a time, one little thing at a time.

1:10:37Dave Ramsey:And you keep laying out the numbers and the numbers will guide you right through it.

1:10:41Rachel Cruze:It's too, Samantha. Remember, like none of this is urgent. I mean, the wedding to a degree in six months. Right. So we want to save for that. But the house renovations, the invest, all of that, like you're OK. You guys are good. Right. So nothing has to happen tomorrow. So give yourself some of that kind of grace and patience in it. Because I'm an urgent person, too, Samantha. I'm wired more like you. So I totally get it. I'm so glad I got you today. Yes. No, I get it. I really do. And the good thing about our turtles, because Winston, I feel like Winston's a turtle too, is that they love Excel and spreadsheets and stuff.

1:11:15Rachel Cruze:And they'll map out every year of like, hey, here's how much we could save per month to get this goal of this rental house or whatever the thing is. And you really lean in on their strengths. And then you're the fun. My turtle, yeah.

1:11:26Dave Ramsey:Yeah, you totally have to do t-shirts for the cruise, the hurricane and the turtle t-shirts. Maybe, you know, with a little bride bouquet and the whole bit on the –

1:11:36Rachel Cruze:I hope you all don't get a hurricane on the –

1:11:38Dave Ramsey:No, I told – I said T-shirts. No, I know. The hurricane and the tortoise. I'm just saying it out loud, though. We don't want a hurricane on the tortoise. And now I present you, hurricane and tortoise.

1:11:46Rachel Cruze:Oh, my gosh.

1:11:46Dave Ramsey:This is so great. This is so fun.

1:11:48Rachel Cruze:It's good, Samantha.

1:11:49Dave Ramsey:You're fun, Samantha. You're fun. Thank you. And you're going to do great. You're going to do better than your feelings are telling you because you've never done this successfully long enough to build confidence yet. and uh rachel is on the other side of that in that she's got a decade plus of successfully working with winston and she's right winston is more of the tortoise uh than the hare and uh he's very steady very predictable doesn't do drama and um and so they've they've had a decade of working together and that has now you've got great confidence in that yeah maybe the first day you

1:12:23Rachel Cruze:didn't yeah and sure and the and the beauty too of all of this that you guys will learn in marriage but it reflects in your money, is you do. You get to be yourself. You still get to be fun, Samantha. You get to lean and have the blessing of having a spouse who is different than you and has strengths that you don't have. And then you're going to be a gift to him because you're going to have strengths that he doesn't have. So it really is this yin and yang. And I think that's the beautiful part of it is that when we say working together as one, I think some people freak out because they think, oh my gosh, I'm going to lose who I am and all of this stuff.

1:12:54Rachel Cruze:No, you be who you are. And the beautiful thing is your values are aligned. You guys know where you want to go in general together. And how you get there may look a little bit different, right? But those are the conversations you get to have as a couple. And so leaning on each other and that, I think, is beautiful.

1:13:09Dave Ramsey:Turns out turtles have fun, too.

1:13:12Rachel Cruze:They do have fun. We help them have fun, though. We create a little chaos to create the fun.

1:13:20Dave Ramsey:I've never heard of it. Winston's like, Rachel's job is she's the fun girl. That's Rachel's job.

1:13:26Rachel Cruze:And our premarital counselor, I'll never forget, looked at him and was like, wow, she's pretty urgent. And I was like, I am. I am. I'm an urgent person. So I get it, Samantha. I totally get it. Y 'all are going to do great. You're going to do great.

1:13:39Dave Ramsey:The hurricane and the turtle. This is great. The great radio.

1:13:55Thank you.

1:14:30Dave Ramsey:Dale in Missouri. Hey, Dale, what's up in your world?

1:14:34Rachel Cruze:Oh, not much. How are you guys doing?

1:14:36Dave Ramsey:Better than I deserve. How can we help?

1:14:39Rachel Cruze:So, you know, the holidays are right around the corner, and my wife and her family have quite a few traditions for Christmas time, and they are starting to get rather expensive. For example, we each get a book from Santa, like a children's Christmas book from Santa, and there's about 12 of us. And we have stockings, which averages about$1 ,000 to$1 ,200 total. And then we have gifts for everyone. There's about, again, 12 of us for that. So my question is—

1:15:17Dave Ramsey:I'm sorry. Sorry, go ahead. Children's books for 12 adults?

1:15:23Rachel Cruze:Adults, yes.

1:15:25Dave Ramsey:Her family. Is this her brothers and sisters? So it's her sister, her father, and her sister's children.

1:15:37Rachel Cruze:And now one of her children, her sister's children, has their own child. So now there's a baby.

1:15:44Dave Ramsey:Okay, so this isn't your all's children or your grandchildren? No. Okay.

1:15:49Rachel Cruze:And so my wife was really big on her grandparents. She has fond memories of Christmas at her grandparents' house. They did the same traditions. She just wants to continue those traditions.

1:16:07Dave Ramsey:How long have you all been married? It will be 15 years. So you've done this for 15 years? Yes.

1:16:15Rachel Cruze:Okay, and are you buying books? Is everyone buying 12 books or is it one book per person? So it's one book per person, but it's usually my wife and I and her sister that are kind of responsible for all the books. Well, I mean, it's 12 children's books.

1:16:36Dave Ramsey:It's not a lot of money. What's the big deal?

1:16:38Rachel Cruze:Well, there's about$30 a piece. So, I mean, yes, it's not a lot like it's$360, but the books are not a very big traditional. So they're kind of, I don't want to say a waste, but I am. They're kind of a waste because we just, we look at them for like 20 seconds and then they just go away. And then we go on to the next thing.

1:17:04Dave Ramsey:Okay, so the purpose of the books, I'm just curious because I don't understand why all these adults are getting children's books for 20 seconds. What is the purpose of the book? It's just a tradition they've had. I know, but I mean, when they were children maybe, but I don't know. Once you're 40, you don't really need a children's book. What's the— Right. That's my question is— Well, I wonder, I mean, if she was on the phone, why would she tell me that they're still doing this?

1:17:30Rachel Cruze:It's because it's just what they've always done. I know, but I mean— Well, I know, but it's just that's the tradition is everyone gets a new book for Christmas. It's a Christmas book tradition. Okay. All right. And it has like a little note from Santa in it.

1:17:45Dave Ramsey:Well, those are hard to get, but okay.

1:17:49Rachel Cruze:And so that's one thing. And then we have stockings where people can spend$200 to$300. And it's most, again, my wife and I and sister for all the stockings. So they put like$200 or$300 in each stock.

1:18:05Dave Ramsey:So what is your all's net worth?

1:18:09Rachel Cruze:Not enough for$200.

1:18:10Dave Ramsey:No, what's your net worth? No, really, what's your net worth?

1:18:14Rachel Cruze:You mean like total?

1:18:15Dave Ramsey:Yeah, like how much do you have in your retirement accounts, your house paid for, all that kind of stuff?

1:18:19Rachel Cruze:So the house that I paid for has got about$100 ,000 left.

1:18:22Dave Ramsey:And what's it worth?

1:18:24Rachel Cruze:It's worth$200.

1:18:26Dave Ramsey:Okay, and what's in your retirement accounts?

1:18:28Rachel Cruze:So retirement, we work with a pension.

1:18:35Dave Ramsey:So you don't have any retirement savings?

1:18:37Rachel Cruze:Well, I do. I have$100 ,000 saved up. And what's your household income? Roughly about$210 ,000 a year.

1:18:47Dave Ramsey:Okay, and this whole thing is like$3 ,000 we're talking about, right?

1:18:50Rachel Cruze:Well, yeah. Well,$3 ,000 for like the stockings. Well, the books are$300 ,000.

1:18:57Dave Ramsey:So, I mean, it's like$3 ,000 for the whole thing, give or take.

1:18:59Rachel Cruze:Yeah. And then there's gifts also that we also do, which could also be another$3 ,000 or$4 ,000.

1:19:06Dave Ramsey:Do you all have children? No. Okay. So this is the whole Christmas then?

1:19:12Rachel Cruze:Right. The problem is that we don't really put aside for this, even though we know it's coming everywhere. You make$200 ,000.

1:19:22Dave Ramsey:It's$3 ,000. It's 1.5 % of your income.

1:19:26Rachel Cruze:Yes. I know that, but my wife and I, I'm not going to throw it all on her. My wife and I like to—we're not good budgeters, I would say. And so my question is—

1:19:41Dave Ramsey:Well, I guess the thing is this. I do think just from a marriage communication standpoint that, you know, this thing has continued to go on, and some of it's frankly doesn't even make sense but at least you need to understand from her why this is three thousand dollars worth of important yeah because it's no longer three thousand dollars worth of important to you probably never has been actually no in the whole 15 years but now you've just been going along with it the stockings is that is crazy though the amount of

1:20:15Rachel Cruze:money you're spending on stockings like you can get some great stocking stuffers and some reasonable small things and it doesn't have to add up to a thousand dollars honey you know i understand this

1:20:24Dave Ramsey:is important to you and i'm willing to do it simply because it's important to you but you also need to hear it's important to me that we use a little touch of common sense on this

1:20:34Rachel Cruze:well i think the biggest problem dale is you guys aren't do you have no planning with your income you guys aren't good budgeters you already said so it feels like you're flapping in the wind and it's like this here and it's kind of freaking you out because y 'all don't have control in general And I really think if you guys lived on a written plan, if you guys, we'll get you the EveryDollar app, but you both, if you both lived on a budget and you knew exactly where your income was going and you both stuck to it.

1:20:59Dave Ramsey:This is not that big a deal.

1:21:01Rachel Cruze:I don't think it would feel as out of control. I think it feels out of control as a picture of your entire financial picture. So genuinely, I would.

1:21:08Dave Ramsey:You're choosing to pick on the one thing that you can pick on while the whole thing's out of control. Rachel's right. So let's get the whole thing in control.

1:21:17Rachel Cruze:and then make some adjustments.

1:21:18Dave Ramsey:We can use this as a jumping off point for the discussion for that. But I think it's also individually on the budget, it's okay to talk it through. I mean, we've done that inside of our family and even with our extended family because I have three kids who are married and have eight grandkids. And so there's 16 of us and eight adults. And every adult buying every adult something got out of hand. And it just was dumb. We all have the money. Just draw names. But everybody, we just said, we're going to draw money. It's just more fun for us to not have to go through all that. It's exhausting. And less, you know, less trying to figure out what Bill wants, you know, or what Winston wants.

1:21:57Dave Ramsey:It's just a lot. And how do you buy something for me? Because anything I want, I just go get it. So how do you buy something for me? I know, it's always hard. So hard. It's impossible. So, you know, it's just, you know, that whole thing is just, we need to just, so we just dumbed it way down. And we're going to concentrate on the kiddos and the adults.

1:22:15Rachel Cruze:We draw names as adults.

1:22:16Dave Ramsey:But it's one thing. I mean, it's not like eight things, right? So that's okay. And just calm the thing down.

1:22:22Rachel Cruze:And I'll throw this out there. Dale, like they don't have kids. So this is their family.

1:22:27Dave Ramsey:It is her family Christmas.

1:22:29Rachel Cruze:And it's her family Christmas. So there is a level of.

1:22:32Dave Ramsey:He's over it. It's her family Christmas. He's done with children's books for adults.

1:22:40Rachel Cruze:That's my question is how you get. No, how you don't run out of books. I guess they don't have to be Christmas themed.

1:22:46Dave Ramsey:Well, Rachel, we could help them. There can't be like. We could probably make them a discount if they want to buy a batch of Rachel Cruz children's books.

1:22:52Rachel Cruze:Yeah, but I don't know if they're Christmas themed children's books. That's what I'm saying. I'm just curious how they get so many.

1:22:57Dave Ramsey:I could probably add a note from Santa to them. I don't know. I know Santa. Yeah. I'd probably get them if they bought a whole box, a whole case of your books. Pull some strings. We could probably do that. I bet we could get the old guy to help us out.

1:23:07Rachel Cruze:Maybe we'll save Dale's Christmas this year with that, Dale. Oh, man. That is hard, though.

1:23:14Dave Ramsey:Hey, it's the holidays. It's a good time to talk about it. Now's the time to talk about it, not December 2nd.

1:23:19Rachel Cruze:Yeah, we're in October. It's great. Yeah, this is the time.

1:23:22Dave Ramsey:By the way, all of you need to, speaking of Santa, he says to make a list and check it twice. So you need a Christmas budget. You need to make a list of who you're going to buy for and put a dollar amount beside each name and total that number and set that dollar amount aside. We used to do that in cash in an envelope, and on the outside of the envelope was the list of people and what we were going to spend on each person. and then that cash runs out of that envelope, Christmas be over, baby. That's it. This is what we're spending on Christmas. That's it. Ding, ding. We're done. Because it's a never-ending merry-go-round otherwise.

1:23:57Dave Ramsey:And you just keep hitting the submit button on your cart. You have to stop that.

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1:25:02Dave Ramsey:Don't settle for living normal with money. Start every dollar for free by downloading the app today.

1:25:21Dave Ramsey:welcome back to the ramsey show in the fair winds credit union studio i'm dave ramsey your host rachel cruz ramsey personality number one best-selling author host of the rachel cruz show is my co-host today she's also my daughter open phones at 888-825-5225 jenna is with us in Indianapolis. Hi, Jenna. How are you?

1:25:44Rachel Cruze:Hi, I'm good. How are you?

1:25:45Dave Ramsey:Better than I deserve. What's up?

1:25:48Rachel Cruze:All right. So I just recently found out that I am inheriting about$50 ,000.

1:25:54Dave Ramsey:Wow.

1:25:55Rachel Cruze:Yes, definitely a blessing. Who passed away? My grandmother.

1:26:00Dave Ramsey:Oh, I'm sorry.

1:26:02Rachel Cruze:Thank you. So I am just, I'm 25, and I do have a lot of student loans, as well as a car loan. I have about$95 ,000 in total debt. $65 ,000 of that is my student loans. I am just a little bit confused on where to put it all because I don't want to throw everything at my federal loans. So I'm just kind of confused about where to go with all of this. I'm curious, why would you not throw it at your federal loans? Because I was approved for the public service loan forgiveness. That's a scam. And so I don't think so.

1:26:45Dave Ramsey:One percent of the people that apply for that end up getting it. Okay. Yeah, I wouldn't set my life up on that.

1:26:51Rachel Cruze:And you get stuck in a situation that you may want out of, and you feel like you have to stay in it.

1:26:55Dave Ramsey:Ten years, everything has to go exactly perfect, including the federal government doing their job. and those things never go to heaven. That doesn't work. So, all right, aside from that, so what do you make a year?

1:27:09Rachel Cruze:About$60 ,000, give or take.

1:27:11Dave Ramsey:What do you do?

1:27:13Rachel Cruze:I'm a nurse.

1:27:14Dave Ramsey:Oh, good for you. That's a wonderful career for building wealth and getting out of debt, by the way. You have tremendous control of your destiny in that career. So you can add hours. You can add an ER shift on the weekend, make a pile of money. You've got all kinds of options at your disposal. So good for you. Good choice.

1:27:30Rachel Cruze:Jenna, what was left? You said the 65 is student loans. What was the other 30?

1:27:34Dave Ramsey:A car loan? Card and credit card.

1:27:36Rachel Cruze:Yeah. Car and credit card. My car, I have a car loan for 28 and then just a credit card that has$1 ,400 on it. Okay, perfect.

1:27:46Dave Ramsey:All right. So what are you making as a nurse?

1:27:51Rachel Cruze:About$60 ,000 a year, depending on if I pick up or not. It's about$4 ,000 a month.

1:27:57Dave Ramsey:You must have just started. um yeah i've been a nurse for two years okay all right because you probably could be making 80 if

1:28:03Rachel Cruze:you just blink okay um well and i'm in indiana so it's a little bit well i mean you're if you're

1:28:10Dave Ramsey:in indianapolis you're in a major metro market that you're being okay yeah all right um what we teach and what we have lived in our family for the last several decades is the fastest way to build wealth and stability is to become debt-free because when you don't have any payments, you have control of your wonderful income opportunities to build wealth with. And that's how the math ends up working. And so we've taught people to get out of debt so that they can be generous and so that they can build wealth. The first step, however, of getting out of debt is not borrowing any more. And so if you got a$95 ,000 inheritance and paid everything off, but continued to go into debt, you'd be right back.

1:28:58Yeah.

1:28:59Dave Ramsey:We can't do that, okay? Just like you can't have a patient that's doing something that's causing a health problem, you guys fix it in the hospital, but then they go back to doing the exact same thing, ended up in exactly the same health problem again, okay? Same thing, right? So you have to change your habits that got you here. Like, I don't borrow money for cars anymore, I'm cutting up this credit card, and I'm going to get the EveryDollar app, and I'm going to live on a decent written plan where my wonderful income will cause me to finish off the rest of my student loan debt and get me completely clear because if I don't have any payments, I can build serious wealth.

1:29:36Dave Ramsey:And that would be my goal for you if I was doing that. Now, if I'm in your shoes, that means I'm going to pay off the credit card in the car and I'm going to put the rest of it towards the federal student loans. And I'm not even going to have any fun with it. And I got to ask you then, if you did that and you are committed to never borrowing again and living on a plan, would that make your grandmother smile?

1:30:02Rachel Cruze:Yes, definitely.

1:30:04Dave Ramsey:Which is one test I always use about inheritance. The person that left it, I need to honor them by handling it in such a way that they're in heaven smiling. Okay? And so, in other words, if you did something irresponsible and frivolous with it, she would not be smiling.

1:30:26Rachel Cruze:Correct.

1:30:27Dave Ramsey:Yeah. And that's how I tested out against my, am I doing the right thing with my grandmother's money that she left to her prized nurse grandchild that she's so proud of.

1:30:38Rachel Cruze:And what's wild, Jenna, have you done a written budget? Do you know how much money it takes to run just your household, whether it's like rent, lights, food? How much do you live on, do you think? I do a written budget. However, I've had some recent changes. I've been living at home for a while, but now I'm moving back. So monthly, I think it probably would cost me about$2 ,000. Okay. And how much is your car payment a month? It's$560. Okay, perfect. So that's what's crazy is you just got a raise of$560 a month. And with that, I mean, you could be banking$2 ,500 a month just in what you're doing right now.

1:31:19Rachel Cruze:That's not even overtime and all of it to get the rest of that$45 paid off. So it is. You start to really see this.

1:31:25Dave Ramsey:So if you jumped in and picked up some ER weekends, which you can make double, triple time on if you watch what you're doing, you can, in addition to whatever you're doing in your other 40 hours, you could get this all paid off in a year.

1:31:37Rachel Cruze:Yeah.

1:31:38Dave Ramsey:That would be pretty cool.

1:31:40Rachel Cruze:The only thing that I was considering at first is that my private loan has a higher interest rate than any of my federal, and I pay almost$300 a month on that.

1:31:48Dave Ramsey:Okay. How much is the private loan?

1:31:51Rachel Cruze:It's$23 ,000. Oh, perfect.

1:31:54Dave Ramsey:And isn't that the next smallest one anyway?

1:31:58Rachel Cruze:The highest one is$31 ,000, the car is$28 ,000, and then the private loan is third.

1:32:04Dave Ramsey:Yeah, but you have enough to pay the private loan and your car. Mm-hmm.

1:32:08Rachel Cruze:Yes. So do you think I shouldn't? And the credit card.

1:32:11Dave Ramsey:I think you can pay all three of those. Okay. I didn't have them broken apart. I just heard student loan. Okay.

1:32:17Rachel Cruze:Yeah. That's incredible. Yeah. So then what would be left would be the federal.

1:32:20Dave Ramsey:So, I mean, you don't quite have enough to do all of it, but you might have two grand left on the private, and you'll knock it out in a month or so. And pay off your, no, your car is the one that will be left. I'm sorry. You're going to knock out smallest to largest is how we list them. So the credit card, the$23 ,000, and the$28 ,000, right?

1:32:39Rachel Cruze:uh yes okay okay and then jenna how how much is your private student loan payment every month 300 um it's yeah the federal i have had it set to the lowest which i need to change because i'm not even but that's what's crazy jenna is this what this money can do i'll be 800 860 yeah yeah which is great that that gets thrown at the federal debt and then working extra and you get this

1:33:04Dave Ramsey:snowball going really quick yeah that's what i'm saying i think you can be out in a year you're really going to change your cash flow position. You're going to please your grandmother, honor the inheritance that she left you. And because all of us that have children and grandchildren love them and want to see them prosper and live a sustainable, mature, smart, wise life and all of those things is what we're talking about. You're doing good. I'm real proud of you.

1:33:30Rachel Cruze:Well done.

1:33:41Thank you.

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1:35:02Dave Ramsey:Larissa is in Ohio. Hi, Larissa. How are you?

1:35:06Rachel Cruze:Good. Thank you so much for taking my call, both of you. I really appreciate your time.

1:35:10Dave Ramsey:Sure. What's up?

1:35:13Rachel Cruze:Everything. Okay. So I'm wondering if my situation is one of the kind of rare cases where you would suggest that I should sell my house to pay down debt. And if not, then what should I do?

1:35:23Dave Ramsey:Okay. How much debt do you have, not counting your house?

1:35:28Rachel Cruze:Around$500 ,000 or$600 ,000.

1:35:31Dave Ramsey:Whoa. On what?

1:35:35Rachel Cruze:My husband's school loans are$80 ,000. My school loans are$45 ,000. We have a debt consolidation loan for$45 ,000. And two cars that are ridiculously like the worst thing you've ever heard. I'll tell you if you want to hear it, but I don't think you want to hear it. You might die.

1:35:50Dave Ramsey:Just give me the total. Okay.

1:35:52Rachel Cruze:The total owed$67 ,000 on mine,$62 ,000 on my husband's.

1:35:57Dave Ramsey:Yeah, you're right. Okay.

1:35:59Rachel Cruze:And the big thing, I think the main reason I'm calling today is we owe the IRS$56 ,000. and they want to put a lien on our house because we owe over$50 ,000.

1:36:10Dave Ramsey:Yeah. What's your household income?

1:36:15Rachel Cruze:I'm about to go back full-time making$111 ,000, and my husband usually would be making around$120 ,000, but he was just laid off at the beginning of the month. And that's another part of the story is we have no emergency funds, so we're rocking it over here.

1:36:29Dave Ramsey:Oh, gosh.

1:36:30Rachel Cruze:I'm so sorry.

1:36:31Dave Ramsey:So normally you would be at like, I mean, if you get everything going again, you'd be at like$230 ,000.

1:36:37Rachel Cruze:Yeah.

1:36:37Dave Ramsey:And the house is worth what?

1:36:40Rachel Cruze:It's probably worth between$770 ,000 and$800 ,000.

1:36:45Dave Ramsey:Okay. And what do you owe on it?

1:36:48Rachel Cruze:$628 ,000. Okay. My worry there is like after agent fees and closing costs.

1:36:55Dave Ramsey:Yeah, you're not going to get enough to clean up the mess. Yeah, I think it would help us with the IRS.

1:37:01Rachel Cruze:and maybe to pay out the cars, you know what I mean? The negative equity in the car.

1:37:05Dave Ramsey:How do you end up owning the IRS,$56 ,000?

1:37:08Rachel Cruze:Oh, man. So me and my husband, we've been married 22 years. We had three kids, very young, super broke back then. So we were on, like, Medicaid, food stamps, everything like that. We just never had money, right? Then kind of, like, out of nowhere, when he graduated college and then I kind of landed in my career, we started making money out of nowhere, and we didn't realize that we weren't getting enough taken out of our checks, yada, yada. So one year after another year, after another year, it was like, we owed$12 ,000. We're like, what? I guess it's just tax bracket. I don't understand this. Next year, like we owed$20 ,000.

1:37:40Rachel Cruze:We're like, why is this happening? I don't get it. So genius me. This year, I finally met with an accountant who told me that I wasn't getting enough taken out of my checks. Also, I have like a side business where I design and develop websites and stuff. So I haven't been doing good at prepaying those taxes either. So it's like, It's just a big hot mess of garbage that, you know, it's like a teenager and an adult body. I think this year it was like 30.

1:38:05Dave Ramsey:Okay. All right. So, well, what you have is a series of crises. Yes. And you really have to probably work on three of them at least at once. and sadly the house won't fix them.

1:38:26Rachel Cruze:Right.

1:38:27Dave Ramsey:So, you know, what's your husband do for a living? What's his career?

1:38:32Rachel Cruze:He's a software quality engineer.

1:38:34Dave Ramsey:Great. Okay, so he's very employable. Yeah. Okay, why did he leave?

1:38:41Rachel Cruze:He was in like an 18-month contract and they didn't renew it.

1:38:44Dave Ramsey:Okay, just doing contract work. Okay, which is another time you didn't pay the IRS.

1:38:50Rachel Cruze:Well, I mean, it was a W-2.

1:38:51Dave Ramsey:Oh, a contract W-2. Okay. All right. Anyway, so the good news is he probably can lean in, put a smile on his face, a pep in his step, brush his teeth, and get a job pretty quick. Yeah. Okay. Because this is a pretty employable situation. All right. So number one crisis, reemployment. Okay. Number two crisis, the IRS. you need to get on Ramsey solutions.com and talk to one of our tax endorsed local providers one of the people we endorse in your area and they will be able to get on the phone and negotiate with the IRS a payment an installment payment plan with no lien and even if they put a lien they won't do anything with it because they don't want to pay six hundred and twenty eight thousand dollars for a house.

1:39:42Rachel Cruze:Yeah.

1:39:43Dave Ramsey:They're not going to do anything with your lien. So what you don't want them doing is lianing your checking accounts and cleaning out your bank accounts because that would be disastrous. So you do need to get them on a payment plan. And of course, part of that is you really do have to source this all the way to the bottom and make sure we sit with your tax person. And if you need a new tax person, you can get them at Ramsey as well. Sounds like you may. and make sure you've got the right amount coming out of your taxes and that you are doing your quarterly estimates on your business. And you file those and you file that money on time.

1:40:18Dave Ramsey:Once a quarter, you're supposed to figure out what your profit is and pay tax on it.

1:40:22Rachel Cruze:Yeah.

1:40:23Dave Ramsey:That's the law. And you're getting hammered with penalties and interest in addition to them coming after you for the balance, okay? So they get after you on that stuff, on that$30 ,000. They're wearing you out. So, you know, get on top of that with your systems and your processes because you're not dumb people. You're just highly chaotic and disorganized. Yeah.

1:40:49Rachel Cruze:I keep saying we spend money like teenagers, you know, like the way you've been doing that.

1:40:53Dave Ramsey:That's another subject I'm coming to in a minute. But but you're just out of control. I mean, there's like no off button here. This frenetic. There's no plan. And so what I'm telling you to do is get very systematized and nerdy about this, like I hired you to straighten out these people's finance. Only these people is you.

1:41:13Rachel Cruze:I actually did a literal PowerPoint presentation and Excel sheet before I called you guys to understand what my picture was.

1:41:20Dave Ramsey:Good. That's a really good start. It's the first step, actually. I'm looking at the map, and the little red arrow says you are here. I want to get over there, and now how do I get over there, right? So that's what we're talking about. So job, get the IRS under control first with a payment plan and with proper withholding and proper filings of your quarterly estimates. Then we'll begin to pay them off as quickly as we can. And then we come to the cars.

1:41:50Rachel Cruze:Yeah.

1:41:51Dave Ramsey:They're both going to be sold.

1:41:52Rachel Cruze:I'm ready to get rid of them. Oh, you have to. You have to. We have negative equity. I don't care.

1:41:56Dave Ramsey:This is absolute freaking insanity. If you look up crazy in the dictionary, you're going to see a picture of these cars.

1:42:04Rachel Cruze:I was expecting you to say that. I thought you were going to say me, but okay.

1:42:07Dave Ramsey:No, no. I mean, this is just because it's killing my friend Larissa. Yeah. My friend Larissa, these cars own her.

1:42:16Rachel Cruze:Yeah. Well, it adds up to what you guys make a year, you know?

1:42:19Dave Ramsey:I mean. Y 'all don't make nearly enough to have those cars, even if you paid cash for them.

1:42:24Rachel Cruze:Yeah. I think like our situation is that like we've never been late on a car payment on our mortgage, which is are you going to try to justify this to me please don't no no i'm telling you that's why we thought we were okay yeah i know you could afford the payment irs thing made me look at it yeah you get what i'm saying yeah that whole dump you realize when you look at these cars that

1:42:40Dave Ramsey:they're a glaring not just a dave ramsey thing or a rachel cruz thing they're just a glaring math thing yeah yeah i mean they're just pointing to you guys like you said we spend money like teenagers you know and so you need to get you a couple of you know reasonable vehicles very cheap like five six thousand bucks a piece and you guys use your 230 000 income to clean up this freaking mess so you get your life back because you're not having fun yeah this is highly anxiety inducing yeah and

1:43:14Rachel Cruze:when he gets a job back you know you guys are making great money like insane so the the quarter million dollars a year will clean this mess up yes yeah you guys can do that and then if you could imagine making that amount of money and actually keeping it and it not going out in payments you know and you guys trust me that's all i imagine what if you didn't have any payments

1:43:32Dave Ramsey:but a house payment yes and you made a quarter of a million dollars a year oh my goodness you

1:43:39Rachel Cruze:would have money yeah i can't imagine it and then you can move from a six thousand dollar car to a

1:43:45Dave Ramsey:twenty thousand dollar car and pay cash is even though that's an incredible income you still have

1:43:48Rachel Cruze:to live within that income because even with that great income you guys were living beyond it right

1:43:53Dave Ramsey:so they're just sit down look at each other level neither one of us are in congress right we can't spend like this anymore it's been like a drunken congressman i mean it's out of control drunken congressman well they say drunken sailors but i like sailors right you know sailors bless their hearts they're probably way fiscally responsible compared so um even with alcohol involved

1:44:44Dave Ramsey:Hey, George Camel here. So you're thinking about buying or selling your home.

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1:45:35Dave Ramsey:Ramsey Show, question of the day, brought to you by Why Refi. Defaulted private student loans can drag on for years, But Y-Refi helps borrowers explore custom refinancing with a low fixed rate and a payment you can actually manage. Go to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not in all states.

1:45:58Rachel Cruze:Today's question comes from Camilla in Indiana. She said, I'm trying to wrap my head around the commission method of giving money to kids. I have two who are five years apart. My oldest is 16 and the younger one is 11. should they have individual lists of tasks or should there be one big list that they both work off of on this on a first come first served basis should give save spend be mandatory part of this participation regardless of what age and how do you recommend i must i can't recommend age out of it so for the 16 year old i would just expect them to be helping around the house in general.

1:46:39Rachel Cruze:So there's not necessarily a chore list. They're just becoming an adult. And so they're going to be doing adult like things. And so whether that's cleaning the kitchen, picking up, helping with cooking and laundry, like whatever that is for you, they just are part of helping run the household. And and then I mean, I plan to do with what you guys did is that 16 that they should have their own checking account and the amount of money you would normally spend on them, whether that's clothes, friends, gas, whatever it would normally be, you just give them that set amount of money and they have to manage it.

1:47:10Dave Ramsey:With your oversight.

1:47:11Rachel Cruze:Yes, but they have to be the ones to say, I'm going to spend X shopping, but then that means I don't have that money to spend for gas in my car. And so if the money runs out, they either get a job or they wait till the next month because they have no more money to spend. And then the 11-year-old, yes, I would do a chore based payment kind of plan. So they do have chores listed out that they do and you pay them on there. And then in that, yes, the give, save, spend method, I would definitely have them do because it's a great – getting all three of those is great.

1:47:44Dave Ramsey:I like the age out part of her question. So let me reframe exactly what Rachel said and give you the exact same answer. But let's look at it as an evolution. So you teach children how to handle money age appropriately. We don't send the three-year-old to the salt mines. We might send the 16-year-old. No, I'm kidding. But you expect more and teach more sophistication and detail and brain challenge to 16-year-olds than you do 3-year-olds. You know, if you say clean up your room to a 2-year-old or a 3-year-old, we all know that have had kids that that means I'm going to do about 80 % of the work.

1:48:25Dave Ramsey:He's going to put a few toys in the box and he gets a lot of high fives as being the best room cleaner that god has ever made Way to go. You're amazing and here's a dollar For cleaning up your room. That's one of your chores, but we all know they're not real good at it They're not competent. That's not the point The point is to begin to make an emotional connection between work and money money creates work creates money and I know 54 year olds that don't know that lesson. So it's good to teach children that work creates money, even if it's a tiny little thing, like picking up four toys. Okay. Then we move on to something a little bit more complicated.

1:49:04Dave Ramsey:You got to feed the dog. You have to clean up the toys yourself and you have to empty the dishwasher and you're seven or eight and you can accomplish these horribly complicated, ridiculously straining tasks. And the drama that goes with all of that is unbelievable. And then you get paid a dollar a piece for doing those all week or whatever the agreed amount is. And if you don't feed the dog and I have to, you do not get paid. Commission is work, get paid. Don't do the work. Don't get paid. By the way, ultimately, I mean, we'll let that go on for a week or two, but I'm just not going to do anything.

1:49:41Dave Ramsey:It's not an option. You're going to learn to work because my goal raising children was not to raise great kids. It was to raise kids that became great adults. And so my job is to make sure you brush your teeth so you have some, so you're somewhat appealing to the opposite sex and you leave my home later. Okay. That's the idea. Okay. So I'm trying to get you out of here. That's the goal.

1:50:03Rachel Cruze:And what's funny too, I would say majority of kids, not all, because some kids are not motivated by money.

1:50:08Dave Ramsey:No.

1:50:09Rachel Cruze:But we have found most. Now I will say I am a free spirit as a mom, so I'm probably not as rigid as I should be. I'm a little bit more like unload the dishwasher and I'll give it. It's not my kids literally created their own. They just showed me yesterday their own chart for letting the dog out in the morning.

1:50:25Dave Ramsey:Amelia is more organized than you are.

1:50:27Rachel Cruze:And then what's so great about it that genuinely, yeah, she like she should. Gosh, she's going to take care of our estate. She's gonna be great. And so but she but she's our saver. And so you actually watch them participate. And when they earn money, what they do with it, I'm going to show you this picture. I'll text it to the team and they can put it up if they want later. But it's funny. We went to Target literally this weekend before I was in Chicago and they got to bring their money to spend. Cause I, cause I don't do it all the time. Cause they just always want to spend the money they make.

1:50:54Rachel Cruze:So I'm always kind of put it off a few weeks. So we went and my oldest, it's like, she looks through, she looks through and she's like, I just think I'm going to think I'm going to keep it. I don't see anything I want. And then my middle, she bought like literally eight things. You see that Caroline? She like couldn't, She couldn't handle everything. She spent every, every cent basically.

1:51:15Dave Ramsey:She looks exactly like you at that age. I know, I know.

1:51:18Rachel Cruze:But it's great because I'm like, yes. And at that age, parents, like it is, it's an amazing thing when they do something for themselves and something big. I mean, they unload the dishwasher. They do, they take out the dog and all of it.

1:51:27Dave Ramsey:If you have done that along and you've taught them to work, give, save and spend age appropriately, by the time they get to 16, you can talk about, we're going to turn this over to you. I'm going to watch over your shoulder and make sure you do it properly and I'm not going to control you but I'm going to allow you to make mistakes but I'm also not going to let you be out of control with your checking account but you're going to learn to manage your work your fun your spending and your saving and you're going to do and you're giving and you're going to do all of it yourself and I want you to feel the whole thing a little more like an adult so So then the age out comes.

1:52:09Dave Ramsey:OK, if they've been doing that three years or two, I think we did it with 15 up to about 18 under your control and direction. Progressively, you should need less and less control because you're teaching them to lay out this how much you got for the month. How much of it's going to go to gas? How much of it's going to go to fun? How much of it's going to go to generosity? How much of it's going to go to this? And, you know, you need to lay out a budget for this so it doesn't just escape you like everybody else. All right, so if you've done that for three years, then when they left and went to college, did the exact same thing, only we didn't even look at it.

1:52:42Dave Ramsey:By then, they knew what to do. This is how much you get a month for college expenses. And we're going to pay tuition, and we're going to pay books, and we're going to pay housing. Or if you had housing, maybe we put that in the amount, either one, whatever it was. But this is what you had to work with. We're going to put that in your account. If you want more than that while you're at college, get a job because that's how much we're going to give you. and then it's enough for you to you're going to have a good time and you can have a good life you're not going to be driving a brand new bmw you're a freaking college student that's broke and so you're going to be going doing this and you got you know college is paid for and even your living expenses is paid for up to a reasonable amount past that if you want 175 pair of shoes you're gonna have to get your butt into a job okay and that's you know because i I ain't paying for that.

1:53:28Dave Ramsey:And that's then they all four, all three. I'm sorry. There's three of them went through school. I don't know about that other one, but that other one took off. But the other one, but the other three, they went through school in four years. And the number of times I got a call that said, dad, I need money between all three of them going through four years of college was precisely zero. Now, we did have a time or two. They came home and said, hey, here's the actual reality of this budget. It's getting pretty tight. Can we consider doing a raise on it? And we did do that a time or two. But I've got an emergency.

1:54:03Dave Ramsey:I overspent. I goofed none. So they aged out. And then when they graduated, got married, started their own lives, they already knew how to do life. So we trained them progressively as they evolved from three years old to 23 years old. And, you know, got in more detail with it and gave more and more responsibility. So if you've got a 16-year-old Camilla that's brand new to this whole thing and you dump this on them without you teaching them and spending some time talking through these concepts, you're going to have a disaster on your hands. Don't do that. Don't put$1 ,000 in a 16-year-old's account with no boundaries.

1:54:41Dave Ramsey:That thing is just – you're just going to piss away$1 ,000 instantaneously and get no lesson out of it because the goal here is not the money. The goal is to learn how to do generosity, saving, proper spending, and work. If you teach those goals, they learn those principles, they'll find their own money as adults.

1:55:51Dave Ramsey:This podcast is brought to you by The New York Times. hey folks don't just set goals in 2026 learn how to reach them the 2026 ramsey goal planner is here it's packed with monthly content from jade rachel and dr deloney help you stay on track with your money your faith your relationships and follow through on your goals we sell this out every year and it's almost sold out now as a matter of fact but there's still a couple of well done, we turned the creatives loose and said, have fun in your sandbox, and they killed it. So it's one of the more expensive things for us to create, and yours is$49.97 while they last at RamseySolutions.com.

1:56:34Dave Ramsey:Slash store or click the link in the show notes. Rylan is with us in Utah. Hi, Rylan. How are you? I'm doing well. How are you? Just the same. How can I help? I'm 22 years old, and I just graduated college.

1:56:52Rachel Cruze:shortly after I moved back home. But during my time in college, I was able to save around$60 ,000. Wow. Dang, how did you do that? I started a clothing business and ran that all through,

1:57:07Dave Ramsey:well, I started in high school and then ran it all through college while I was studying.

1:57:10Rachel Cruze:Dang, that's impressive. Good for you, man. Good job. Way to go.

1:57:13Dave Ramsey:Like new clothing or what were you doing? It was hoodies.

1:57:17Rachel Cruze:So we, yeah, we had a hoodie brand. and then marketed it through all the short-form platforms. You said had.

1:57:25Dave Ramsey:Have you quit it?

1:57:26Rachel Cruze:I haven't quit it yet. Okay, good. The income is pretty variable, and I just started a new job.

1:57:33Dave Ramsey:Good. What do you make of your new job? $65 ,000. Good for you, man. $60 ,000 in the bank, graduated from college,$65 ,000 income, and a hoodie side hustle. Way to go, man. You're killing it. Thank you. Thank you. So my question was, I'm at home.

1:57:51Rachel Cruze:and I have the opportunity for the next year to live at home.

1:57:55Dave Ramsey:Yeah, you don't need to do that. You're a man.

1:57:59Rachel Cruze:And then I also have kind of been getting the itch to move away. Good. And start my own life. Scratch it. And so I just kind of wanted to get your advice on if I should continue to keep investing money or move.

1:58:12Dave Ramsey:Okay. Scratch the itch, man. Fly and be free. Listen, here's the thing. You have done so many things that are mature beyond your age. You've started and run a successful business. You've saved$60 ,000. You graduated from school. You got a legitimate, solid first-entry job coming out. What's your degree in, by the way? I got it in business analytics, so I'm a consulting analyst. I'm not shocked. Okay, that's just wonderful. So everything in your story is so solid and so mature. And yet what you're going to find is when you buy your own milk and your clothes don't jump up onto the hanger magically, but without you putting them there, your life is going to even get further along in your maturation and your development.

1:59:04Dave Ramsey:And so the Ryland that I'm talking to now will be a substantially different man one year after he's completely on his own, paying his own bills top to bottom. And he swings by and tells his mom he loves her occasionally, but he does not live there and she does not buy his food or his clothes or iron his shirts.

1:59:24Rachel Cruze:Yes. Amen. and when you go on dates you don't have to be like well uh i guess we gotta end this because mom and dad are home and i can't bring you home right i'm not kidding there's something very like yeah all of it so you're it's good it's good for you yeah that's that you're you're you man you got so many things well done though rylan i bet your parents are so proud i bet they are i'm proud of

1:59:48Dave Ramsey:you and i'm sure they are and uh it's not my point is it's not just a math thing there's things that are going to happen in the spirit realm and in the psychological realm for you that far outstrip what little amount of money you could save on rent. So go be the best version of you for the next three years, man. I love it. I'm proud of you. Jake's in Texas. Hey, Jake, what's up? Hey, what's going on? Better than I deserve. How can we help?

2:00:19Rachel Cruze:Thanks for having me on. Called in to see if it was appropriate or what should I do first before purchasing a higher-end timepiece. Cool. What's the watch? Looking at various brands, the typical Rolex, Panerai, Omega, I haven't really narrowed it down, but kind of feel guilty.

2:00:44Dave Ramsey:You're thinking about a budget of what,$10.20, Ren?

2:00:48Rachel Cruze:10-ish.

2:00:49Dave Ramsey:Yeah, okay.

2:00:49Rachel Cruze:Would be right. It's my first one. Good for you. I'm guilty spending that much money on myself.

2:00:54Dave Ramsey:I don't feel guilty spending it on you if you've got it. Do you have any debt?

2:00:59Rachel Cruze:We've got a house, a car, one of the cars that's free and clear, and then no other debt besides that. Well, I got to fess up. We owe$700 on a mattress that I could pay off right now.

2:01:11Dave Ramsey:How much do you owe on the car? No, you don't need to buy a$10 ,000 watch. You have a car debt. Okay. You're broke. What do you make?

2:01:20Rachel Cruze:This year I will eclipse$400. Good God. Commission. What do you do? You know, anywhere. I'm in the mortgage industry.

2:01:31Dave Ramsey:How long have you been in the mortgage industry? 19 years. Wow.

2:01:37Rachel Cruze:How old are you, Jake?

2:01:39Dave Ramsey:I'm 41.

2:01:40Rachel Cruze:Okay.

2:01:41Dave Ramsey:So why, pray tell, if you made$400 ,000, do you have a car debt?

2:01:46Rachel Cruze:I don't know. I could pay it off, too.

2:01:48Dave Ramsey:Good. You have the money in the bank to pay it off? Yeah. How much money have you got in the bank?

2:01:55Rachel Cruze:We are approaching 1.2 in total cash assets. Okay.

2:02:01Dave Ramsey:You're not talking about retirement.

2:02:06Rachel Cruze:Six or 700 ,000, that's retirement. The rest is post-tax, 529s, stocks, bonds, cash, just various.

2:02:16Dave Ramsey:Okay. Well, it's ludicrous to borrow money on a mattress. I can't imagine what you were smoking that caused that. And it's almost as dumb to borrow money on a car when you have the money sitting in the bank to write a check and pay for it. So, I mean, you did call the Ramsey Show. You know that, right?

2:02:33Rachel Cruze:I'm aware. I'm aware. I knew you were going to beat me up a little bit.

2:02:36Dave Ramsey:All right. So, yeah, I would go buy the watch to celebrate paying off the car and the thing and to celebrate my newfound debt freedom that I'm never going to do this again because I make too stinking much money and I have too stinking much money to be buying things with debt. But, no, if you make$400 ,000 and you're debt-free except your home and you have half a million dollars in non or$700 ,000 in non-retirement cash assets laying around, you can do a$10 ,000 watch.

2:03:05Rachel Cruze:How much is left on the mortgage, Jake? We owe$290 ,000, and the house is worth$750 ,000. Why don't you go ahead and pay it off, too? Yeah, get the house paid off.

2:03:15Dave Ramsey:Go ahead and pay it off, too. That scares me. So hear me out. Why does that scare you?

2:03:20Rachel Cruze:Because he's a mortgage broker. My income's not$400 ,000 every year. It's been a good year.

2:03:24Dave Ramsey:Yeah, unbelievable year.

2:03:25Rachel Cruze:It goes up and down, you know. Yeah, but I mean, it would scare me less.

2:03:30Dave Ramsey:I mean, if I had no income, I would rather have no mortgage. just the feeling of having the cash yeah it's a feeling and it's a you're in the mortgage business i'm trying to get into paying a mortgage off i get that but you know but yeah i if i woke up in your shoes sir i would be a hundred percent debt free and wearing a ten thousand dollar watch by the end of the month okay car house mattress god and everything that's where that's exactly where I would be. And then I'd be on a written game plan.

2:04:04Rachel Cruze:And then you make a crap ton of money.

2:04:05Dave Ramsey:How fast can you, because here's the other thing. If you're just a tiny bit afraid about having less cash assets, it'll motivate your butt to do more deals. Yeah.

2:04:16Rachel Cruze:Well, and with that income, which I know you don't get that every year, Jake, but like you can replenish the cash very fast.

2:04:22Dave Ramsey:Yeah. You built it pretty quick. So yeah, you've done a really, really good job. I will tell you in general, you don't need to feel guilty when you can spend the money and it's a small percentage of your world and in general that's the answer to your question yes but i gave you a lot of detail to go around that of all the things i would do but you did ask and you did call this show so that that's exactly what i do you've done very very well don't i i i ran into this because you're a great salesman and salesmen sometimes run into what i did i tried to out earn my stupidity for a while just lay it in place a system work the stinking system man and then go make a pile of money and apply it to the system.

2:05:00Dave Ramsey:You're doing so good. That puts us our The Ramsey Show in the book, so 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.