Money Chaos Doesn’t Have to Be Forever

22:02Dave Ramsey:If you died tomorrow, how would your family keep the lights on, pay the mortgage, and buy groceries? If anyone in your life depends on your income, you need life insurance. But how do you choose from all the options out there? Well, it's actually really simple. Life insurance has one job, to replace your income if you die. That's the only job it needs. It's not good at anything else. Anything else it tries to do, it sucks at. So you need just good term life insurance. That's all I ever had. That's all I've ever recommended. 10 to 12 times your annual income is the amount of insurance, and the length is a 15 to 20-year level term, which means the premium stays the same.

22:40Dave Ramsey:If you want to learn more about this, use our free term life insurance guide. Go to RamseySolutions.com slash term life guide, or click the link in the show notes. Erin is here in Pittsburgh. Hi, Erin. How are you? Hi, I'm great. Thank you so much for taking my call. Sure. What's up? Okay. I am a realtor, and as such, my income fluctuates. I just started the EveryDollar Budgeting. I have the app. Here's my question. that since I started, I've put my business fees in with my household expenses and everything else. No. And now I feel like, yeah, I know. So I'm getting, I have an appointment at my credit union to get a separate account.

23:25But here's my question. Is there, should I get another budgeting? Should I just open up a different EveryDollar app or should I put those expenses in the current EveryDollar app or how do I budget this?

23:39Dave Ramsey:You could try to run it in the EveryDollar app. It's not really well designed for a business P &L and a profit and loss statement. And you really need a business P &L. So it's just something like QuickBooks or something like that. They're very easy softwares. And basically what it is, is it's all your gross revenues. The income you make in the real estate business goes into that separate new account. And the only thing you pay out of that new account is business expenses. So your realtor fees, if you buy signs or you buy, I don't know, anything that's a valid business expense associated with you doing your real estate business comes out of that account.

24:13Dave Ramsey:Nothing else. You don't pay any personal bills out of that account. Then what's left in that account is the actual profit on your real estate business. Okay, great. And what comes out of that account then, when you take money out of that account and bring it home, you need to set aside a fourth of it for taxes. Yeah. That's what I'm trying to If you pull$10 ,000 out of that account, you need to set$2 ,500 aside because you're supposed to be filing once a quarter your estimated taxes. They're called quarterly estimates, and you're supposed to be doing that as well. If you don't keep up with that, number one, you'll get behind the eight ball and have a big old tax bill, and it'll knock you down.

24:49Dave Ramsey:Number two, you're going to get penalized. So sit down with a tax preparer and get them to show you how to do your quarterly estimates. set up your separate account, run your separate business like you were running it for someone else, and then when you pull the profits out and bring them home, set aside a fourth of it, and that money all is coming home. So how much have you made selling real estate so far? I mean, it fluctuates. This year my net commission is around$45, and I estimate a little bit more. I also have some other income sources, so I'm just trying to tweak everything. It's all in a big pile.

25:28Dave Ramsey:Yeah, good. What are the other income sources? I teach part-time at a university, and I Uber, and I get some child support. Okay, all right. Well, child support goes straight into your account, no question about that. When you teach, is that a W-2 or are they$10.99 in you? That's a W-2. Okay, so you don't have any tax credit. So that money goes straight into your account. Okay. Correct. Okay, so that just goes, okay. Yeah, and your Uber's$10.99. What about the Uber? Yes. So should I put that in the real estate account? Yeah, I would just say this is my business account. I'm going to put my Uber income in there.

26:03Dave Ramsey:And I'd have two line items. You know, I have real estate income and I have Uber income. And so, you know, you can code the expenses. For instance, let's just use an example. If you were spending money on fuel to show houses, then we could have gasoline-R for real estate. and then we could have gasoline-u for Uber. Okay. And then you could be able to pull up the different expenses associated with Uber, the different expenses associated with real estate, but they're all still net expenses going right down the list there, and you'll be able to tell what's happening with your business. Yeah, question.

26:42How much are you spending? How many hours a week are you spending in the Uber? um i spend about 15 to 20 is that is that because you're running really tight financially yes this correct right now i am but it's also good income just i i've not income if you're not good income if you're selling real estate yeah i i want you to get out of that that's where i'm digging there because that time spent that time spent there could be spent in other ways and want to see you get out of that. I'm not sure that's the best ROI on your time, not to mention tearing the car up and everything else. So I understand if you're filling a gap temporarily, but you were saying that's going to change.

27:26What's going to change about your real estate business so that you're not Ubering? Well, I had a few sales that got pushed. It's usually a little bit more regular, but it's up and down. So sometimes I'm so busy, I literally can't eat and sometimes I have nothing to do and I'm just prospecting and not not earning anything so I'm trying to get more I've never really budgeted so now I have the every dollar app I have the great advice from you all and I have more of a sense of stability and consistency so I think that's going to

27:59Dave Ramsey:help me the more you can get a steady flow in your real estate pipeline the more your income is gonna be steady in your real estate pipeline it's gonna be a better income than Ubering. That's right. And now that you're budgeting, I love where your head's at. That's where you need to get to, to where you're accounting for downtimes, but you're actually prospecting, prospecting, prospecting, not in the Uber. That's where you want to get to, because you're going to see a much better pipeline and long-term results that way. Shane is in Texas. Hi, Shane. How are you? Good. How are you, sir? Better than I deserve.

28:31Dave Ramsey:How can we help? uh i just wanted some guidance um i'm getting ready to sell my home um got divorced in the last year and um got a little bit of debt a little bit of commercial debt a vehicle and student loans nothing terribly crazy for my income level but i just want to position myself best for being a homeowner again it was about maybe a year or so after i sell my house in the next few months so um just kind of looking what what has to do with that money uh so you're gonna get enough out of the house to be debt free i'll be i'll be pretty close um so currently i have about nine thousand dollars in commercial just credit card debt that um i paid about 10 of that down in the last year and then uh i'm currently on baby step two and then i've got a vehicle that has a note about 16 to 17 000 on it and that'll be paid off in just under two years.

29:28Still a new vehicle, reliable, and that's the main reason I've kept it. Plus, I'm not upside down on it right now. What is your end of time? About$125 gross.

29:40Dave Ramsey:Okay, and how much will you get out of the sale of the house? Anywhere between$20 to$25. Why would you not just pay off these debts? So that's my plan. I just kind of want to figure out if you had any guidance on where best to put it first because I'm not going to be able to pay off the total amount. Yeah, you are. You're getting$25. You only owe$16 in a$9. That's$25. Well, and I've also got a student loan that's about$16 ,000. And that's basically if I pay almost all of everything. My idea was if I pay off my vehicle and I hold the value in that for a while and then I also pay off the credit cards, then I'll just be making a student loan payment, which will be my lowest.

30:21If I do that, I'll be paying the least amount of money per month at minimum, and I can pay it off faster. But I didn't know if that was...

30:29Dave Ramsey:So if you don't have a car payment and you don't have the other loan, and all you got is a student loan, and you make$120 ,000 and you're no longer married, how fast are you planning on paying off$16 ,000 of student loan? I think I could probably pay that off within the year. Oh, no, no, no, no, no, no, no, no, no, no. That's horrible. That's wimpy. That's so wimpy. No, like four months. $4 ,000 a month. Yeah, that's also realistic. Yeah, it is realistic. Yeah, after that, I've also got three kids, and I pay child support as well. That's okay. You ain't got nothing else to do. Stop your 401k and pay off your student loan in four months.

31:07Dave Ramsey:And when the house sells, they immediately pay off the other two debts. There's nowhere to park the money because you're going to pay off the debt. It's going into your checking account, and you're going to write a check. Pay off the debts. And then in four months,$4 ,000 a month, dude, roll up your sleeves and get after it. It's tight. Listen, it's a new phase of life, a new chapter. Let's make the page clean. Okay. Don't screw around and go, oh, I paid off$900 in a year. That bull, that's nothing.

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32:49Dave Ramsey:Are you on track with the baby steps? Take a quick quiz for free to check your progress and receive a free personalized plan just for you. Simply head to the show notes, click the link entitled, Are You on Track with the Baby Steps? and complete the free quiz. Sharice is with us in Indianapolis. Hi, Sharice. How are you? Hi. Good. How are you? Better than I deserve. What's up? Well, I'm calling my husband and I. Well, my husband agrees. I want to add an addition to our house. We've been in our house 14 years, and our kitchen is tiny. Our house is large. We have a family of six, so we use all five of our bedrooms.

33:33And I have a home-based daycare, so we use a large living area as my business. And I would like to add an addition on the back of our house, which would give us the kitchen that I'd like. It would also bring our laundry upstairs, put a bathroom on for the daycare, so they'd have their own bathroom, and it would give us a four-season room, which would just give us more living space. The addition would cost us about$150 ,000, and I want to refinance to be able to do that. My husband is on board but says you would say no way.

34:17Dave Ramsey:Oh, how much debt do you have, not counting the mortgage? No debt. Good. How much money do you have, not counting retirement? About$15 ,000 as personal. The daycare also has its own emergency fund of$10 ,000. Okay. All right. And you're funding retirement now? Yes. Good. Okay. Sounds like you've got a pretty good plan overall. all. What's the home worth today? Today, it's worth about$375 ,000. Okay. All right. And

34:59Dave Ramsey:so are you in a neighborhood or on a piece of land or what? We are in a neighborhood. We're inside the city limits, but we're on a large lot. We have about three quarters of an acre, which is one thing that I love about it. If I drew a circle of three miles around your home, what's the typical house price in that three-mile circle? I would say, well, I found another home that checks all of my boxes, and it was selling for$875 ,000. I don't know an average price, but I would say that. No, that's not in a three-mile radius of your home, though. Oh, it is, yes. Oh, it is? Okay. So what do the houses on your street sell for?

35:49Between$300 ,000 and, I don't know,$500 ,000 or$600 ,000.

35:54Dave Ramsey:Yeah, I do. They don't sell for that much. It's between$300 ,000 and$450 ,000, isn't it, really? You're getting ready to overbuild the neighborhood, aren't you? Probably, yes. You're going to have a house that you would try to sell for$600 ,000, and people that are looking for$600 ,000 houses don't drive on your street. That's probably true. Yeah. That means you've overbuilt the neighborhood. So that probably means you need to think about moving instead of doing this. How's the daycare business? How healthy is it? It is very healthy. In what? Spitting out what? I stay full at all times. What did you make last year off of that profit?

36:32it uh daycare i made um like 60 000. okay um i guess dave where i'm going is is if are we doing this for the space are we doing this because the daycare is in the house and you know she wants a

36:51Dave Ramsey:kitchen um while we're doing it um it's a 150 000 kitchen and some other stuff got scope creeped um the um well i i um i have owned so many pieces of real estate and i grew up in a real estate guy's house my parents were in the real estate business so our furniture was trained to jump on the truck um we so i haven't i don't get as emotionally tied down to certain locations as some people um so to me it's just a house and so i think you might actually find something that It better serves your needs for$600 ,000 in a neighborhood that's$500 ,000 to$700 ,000 and maybe is a little more modern, too, and would be close enough that you wouldn't lose your daycare clients and those kinds of things.

37:44Dave Ramsey:I think that's out there. And before I overbuilt the neighborhood and did a renovation, and by the way, I've also done a couple of renovations while I was living in the home, and I'll never do that again. It makes me want to shoot myself. It's just sawdust and drywall dust everywhere, and everybody's mad all the time. The subs are mad because they've got to deal with the owners. The owners are mad because they've got to deal with the subs. And you're screwing around inside my house while I'm trying to wash my underwear. It's just awful. It's just awful. And I don't recommend it from a standpoint of that.

38:20Dave Ramsey:This is a massive undertaking. It's a big deal. And it's going to take a lot of your life away for a year or a year and a half while you do this, not to mention that when you're done, you've built a house that's kind of weird. And it's overbuilt for the neighborhood. So you're going to have a hard time getting good appreciation out of it and getting a good sale out of it. I would consider moving about 10 times out of 10 before I did this deal. um but yeah that's uh if you did refinance it the numbers we would tell you to go with are 15 year fixed on the whole mortgage cannot be more than a fourth of your household take-home pay if it's more than that then it's just off the table period you can't do it at all um and that's also going to be true when you move it's off the table you can't move so um Um, but, um, I, I, I think you're, you are getting ready to have another full-time job for a year on top of the full-time job that you have, which is renovation.

39:26Dave Ramsey:It takes up, it takes up so much of your headspace. You burn so many calories managing a renovation, especially one while you're living in it. And it's just a, it's just a deal. I, I can't recommend that to you. It's going to interfere with your business. It's going to interfere with your marriage. And when you're done, you're going to have an unusual floor plan on a property that you've overbuilt the neighborhood on. And I can't, I just don't think there's not much good here. The only good thing in the whole story is you got a new kitchen. Yeah. Have you all ever renovated a house while you lived in it?

39:59No. We've done little, we did a room over the garage, but it was, so I guess yes.

40:04Dave Ramsey:Yes. Yeah. But it wasn't like. It wasn't like a full blown to where it was like interrupting everybody's lifestyle. Yeah, Maul's daughter took her house all the way down, but they moved out and lived somewhere else for a year. Yeah, that makes sense. Because she took it so far down she couldn't work on it. I mean, she couldn't live in it. It wasn't habitable. But they did a massive deal, and it's almost like building a dadgum house. As a matter of fact, sometimes it's easier to build a house in terms of how much of your brain power it takes up and those kinds of things. So, yeah, folks, here's the deal.

40:36Dave Ramsey:So the best place, you've got a range of 10 to maybe 20 % price range of the homes on your street, the homes in your neighborhood. And be thinking about the illustration I just used when you're thinking about buying a home or you're thinking about doing a renovation. Dave, I want to put in a$25 ,000 pool. How many houses on your street have$25 ,000 pools? None. You're getting ready to spend$25 ,000 that you will never see again. That's a lot of swimming. Because that thing, you're not going to increase the value of the house. Now, okay, Dave, 60 % of the homes already have a pool. We're going to add a pool.

41:12Dave Ramsey:The pools are very nice in our neighborhood. And$25 ,000 or$50 ,000 or whatever the deal is, you can spend a million on a pool. But, you know, so does it fit the neighborhood? Otherwise, it's consumption. And you really can't justify consumption at those levels. You're better off to move. And so when you're buying a home, try to buy in the bottom 25 % of the price range. That is going to go up more. Because think about it. Everybody buying a$500 ,000 house wants to buy in a neighborhood that's$500 ,000 to$700 ,000. Nobody buying an$800 ,000 house wants to buy in a neighborhood that's$500 ,000 to$700 ,000.

41:59Dave Ramsey:so it's harder to sell and consequently does not appreciate in value as much and so you want the full appreciation and you want the ease of selling it and if you're in the bottom 25 percent of the price range in your neighborhood when you're finished with your renovation or when you purchase or when you do whatever that's the sweet spot but when you're in the top of the neighborhood or over the top of the neighborhood you're you could get stuck in the thing and if you build an unusual floor plan, you're just about guaranteeing you're going to get stuck in it.

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44:12Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey. Ken Coleman, Ramsey personality, number one bestselling author, is my co-host today. Ron is in Indianapolis. Hey, Ron, how are you? I'm good, sir. How are you doing today? Better than I deserve. What's up? Yeah, so I'm getting married in spring, and my fiance said I should probably give you guys a call for some advice. I have recently lost my job, and I am in a lot of credit card debt, and we're also trying to plan a wedding. So we're trying to figure out the best way forward. The question is, should I dig into my IRA account and take that money to pay off one of my credit cards or more cash flow?

44:59Dave Ramsey:What was your job? I was a construction project manager. And what were you making? About$75 ,000 a year. And why did you lose your job? Laid off. Why? I have no idea, to be honest with you. They're not making money? I got 12. No, I do have veterans' disability coming in. It's about$4 ,000 a month. No, I said they are not making money. Was the company you were working for hurting financially? I don't think so. They let a team of us go and said we just have to cut some costs. So I'm assuming. We didn't see the big picture. just commercial or construction construction i said commercial or residential i'm sorry oh um commercial okay all right cool and when did you get fired i got back in august so it's been about a month and what have you been doing since then i have been um going to school and applying for jobs like crazy.

46:12Dave Ramsey:Talk about the jobs you've been applying for and what you did. So I've been applying for more project management positions, specifically in IT, because that is my education background. And I've had a few interviews. I had one today that was pretty successful. So I'm hoping and praying that that goes further. Mm-hmm. Okay. And what's the schooling, and were you doing the schooling while in the other job? My current schooling, I'm getting a master's degree in information and communication. And yes, I was going to school while working that job. And you have no physical disabilities that would hamper you from doing this work?

46:57Correct.

47:01Dave Ramsey:okay um no i would not cash out your retirement i'd get a job i get six jobs and and then when you get a real job get rid of five of the six but i'd be working like a crazy man doing everything i could because you got to pay for a wedding and you got to keep the dog the thing afloat without starting to cash out your retirement you cash out retirement you're going to get hit with a 10 penalty plus your tax rate it's like borrowing money at 40 interest because you didn't get off your butt and go get a job. The good news is you are off your butt, and you have been looking, and you did get an actual interview, so that's great news.

47:35Dave Ramsey:So, yeah, you are moving your feet in the right direction, so that's the direction, that's the answer. And if you don't land something in the next two weeks and start working, like, for$75 ,000 or$80 ,000 or$100 ,000, then you need to be delivering pizzas and walking dogs and cutting grass and cleaning toilets or whatever you've got to do to start making some money. yeah but no don't cash your stuff out go make money okay go make money work work work doing something side hustles anything and get the wolf away from the door because it's causing you to uh think weird like your your whole question is based on i'm defeated and i'm not going to allow you to be defeated

48:19Dave Ramsey:when's the wedding again uh may 30th next year and who's paying for it We are. Okay. And how much is the wedding? We have cut it down to about$15 ,000. Good. Very conservative. And you've got how much in credit card debt? I have roughly$70 ,000. Okay. So$85 ,000 changes your whole life. Yeah. Yeah. And once I quantify it that way, you're a project manager, I start looking at it like a project. Okay, how do we go get$85 ,000? What must be true? And what period of time? And what's reasonable? And I'm going to work IT on the side, and I'm going to – oh, by the way, you should be doing that. That's what you ought to be doing, is get some IT stuff, some side hustle there.

49:10Dave Ramsey:Because all kinds of that, you can pick up a freelance immediately on contract work and start helping people with IT, whatever it is, whatever the hardware, software issues. But aside from that, I just set the goal. I put eight. It's like I'm building a building. All right. What's the bill? What's the process? Well, I need a budget. I need a plan and I need a schedule. And I'm going to plug the contractors, the subs into the schedule and I'm going to plug them into the budget. And then we're going to execute and push every domino. And when one domino refuses to fall, we're getting a new domino.

49:40Dave Ramsey:In other words, the sub doesn't show. We get a different one. He comes in and decides he's going to double his bid. No, that's not how this works. We have a bid. We're going with it. And we hold to the project and we push push push push push okay 85 000 in two years is 65 is i'm sorry 42 5 a year so 4 000 bucks a month right that's what i need above my living expenses and i'm out of this whole thing in two years i paid for the wedding and i paid off all the credit cards and that's not counting the fact that you're gonna have a dual income after may 31st i'm just making i'm just showing you an example just how do you eat an elephant a bite at a time but now we've got to go get the money to do that.

50:17Dave Ramsey:And that involves the getting employed. And if this is a big if, you can pause the master's program, I'd pause it. I don't know if you can, but if you can, I would, because that'll still be out there. And right now, everything now is about getting out of debt, paying this wedding, paying for this wedding. The master's degree is always going to be there. Creating a sustainable situation. And that means income. That's right. And so we need income, income, income. Here's what's going to be weird, Ron. As you add income to this equation, whether it's four side hustles combined to make a full-time job while you're looking for the full-time job or a full-time job plus four side hustles, as you add income, every time you add income to this equation, your confidence level is going to go way up.

51:01Dave Ramsey:And it's going to be associated with your level of activity. And then you're going to be much more appealing in an interview. Yeah, that's exactly right. Activity is absolutely the key when you get let go. There's all kinds of data out there about it's the same thing emotionally as losing a loved one. So you have to acknowledge that, wait a second, whether I was a group of people or not, and whether I did anything wrong or not, if it was just a layoff, in this case, it's an economic layoff or the company's economics, it still hurts. And so activity is the key. It's still feeling valuable because you are providing value and getting paid for it.

51:41Dave, you're absolutely right on that. That's the best thing one can do. Lick your wounds for a day or two at most, and then get back into it and stay active.

51:50Dave Ramsey:So let's give him a copy of both books of Ken's, or two of Ken's books anyway. The Proximity Principle, which will help you in the job search, and finding the work you're wired to do. take the assessment in that and verify that you're in the right field and that you're heading into the right mindset. And both of those are a gift to you, Ron. And we'll just call it an early wedding gift. How's that? Yeah, I'm going to fix this with income, not with cashing out my retirement. That does things for your heart, your soul, and your future. The cashing out the retirement does the opposite too.

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54:40Dave Ramsey:If you are tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free every dollar trainings. There are new trainings every week this month, and they're hosted by one of the Ramsey personalities. Whether it's Jade or Rachel or George, they're going to help you find thousands of dollars of margin using every dollar so you can get out of debt and you can start building some wealth. And you can ask any kind of question you want during the live Q &A. It's free. Sign up for free at RamseySolutions.com slash webinar. John's in Madison, Wisconsin. Hey, John, how are you?

55:15Dave Ramsey:Good afternoon, Dave and Ken. How are you doing today? Better than we deserve. What's up? Yeah, wonderful. So I either need confirmation of how I'm feeling or I need a kick in the shorts. My wife and I are trying to decide if I should quit working, well, kind of, at least for a time. So every weekend and during many work nights, I do admin, property management, and accounting and HR work for my wife's small business. And we have a few side hustles, mainly rental real estate. But during the day, I daylight as a manager at a construction company where I average 40 hours a week over the year, but that emphasis is on the average.

55:56Winter is really easy, but the rest of the year, I'm just running on fumes. Between my wife's business and our rental and remodel side hustles, I work 25 hours more just during nights and weekends. And I'm always behind. I feel like I need another five to eight hours a week to catch up. If I hire out all that extra that I do, we estimate we'd add about$83 ,000 in expense, more or less, depending on the project load. I make$120 ,000 a year with bonuses to$40 ,000. My wife makes between$400 ,000 and$500 ,000 a year, which has been lower because we've had four kids in the last five years, and she's been on maternity leave for parts of all of that.

56:39This year we're shaping up around$592 ,000. What does she do? She's an attorney.

56:45Dave Ramsey:And you're running the business ops side of the law office. Exactly right. Admin, HR, anything that's available. How many team members at her law office work for her? Five members, counting her. Okay. There's not a ton of HR of five people. Just payroll every two weeks. That's accounting. How much does your side work make, spinoff for you? For 2025, we're looking at$42 ,000. Okay. So if she paid someone$180 ,000 to be her admin, her office manager, and instead paid you to be the office manager, and you went down there and went to work for$80 ,000, and you made$40 ,000 with the side stuff, that's$120 ,000, and then she makes$400 ,000 to$500 ,000 on top of that, right?

57:39That's exactly right.

57:40Dave Ramsey:Okay. Okay. I just love working, and I don't like to admit that I don't have enough hours in the day, and I just don't know if I'm being whiny and ungrateful. Well, you did admit it. You just gave us a very detailed breakdown. Yeah. What you don't want to admit is you think you need a Superman cape or something, and I don't think that's necessary. What's the quandary? Why'd you call us? What would you rather do, be the office manager for the law firm, or do the, what's your construction work during the day? Which one do you like doing? I like doing the other one. I want to do the side hustles.

58:17I think that helps our life. You know, I can, we got four kids that, you know, in five years they'll stop destroying the house, but for the next five years it's hard to keep up with just the life, you know, laundry and eating healthy and all that stuff, but it feels like I shouldn't walk away. House husband was not in this equation until just now. No, no, no. That wouldn't be what I would be doing. I'd be doing the 25 hours of work plus the eight hours I think I need in addition to keep that up. Yeah, you're going to have an office at the law firm,

58:47Dave Ramsey:and you're going to get up and take a shower and go in at 8 o 'clock every day. Yes, exactly. And work there all day long. And from that home base, run the side hustle as well. And then both of you are going to go home at 530 to be with the kids. Exactly right. Okay. All right. Yeah, we're not working from home. This is not remote. You're going to go down there and run the freaking law firm, and it needs to be run much better due to you being there and become much more profitable. So you ought to be cutting expenses and help the other attorneys increase revenue, billable hours. Yep. Correct. Yep.

59:20Dave Ramsey:Okay. That's exactly what I want to do. And I wouldn't be at 8. I'd probably be at 530 in the morning and, you know. Yeah. Be able to be home earlier and do those things because right now the – I mean, you basically got two jobs. Which one do you want to keep is what it amounts to, and I think you've already decided. But I don't think you keep both. It's not sustainable, and there's no reason. It's not like you all got a shortage of money. Yeah. It doesn't prove anything. Listen, if you don't have a shortage of money, working 100 hours a week doesn't prove anything.

59:52That's what I got. It's kind of a paradigm shift to wrap the head around.

59:56Dave Ramsey:So I think, you know, let's commit to increasing the value of the law firm as a result of you being there. Commit to the side hustle becomes increased in value as a result of you being there more fully. And so you end up moving from$120 ,000 to, you know,$150 ,000 worth of value that you're adding to the equation. And then she's making the$400 ,000 to$500 ,000 and y 'all are killing it. Yeah, that's what I'm doing. I'd quit. All right. But I'm going to work down there. I'm not doing this from my bedroom with my slippers on. Yeah, I just sense that you're still struggling with this. You know this is right.

1:00:37What's holding you back? Something's there. It's a classic gazelle intensity and not knowing when to let off. You know, we we in the last five years, we charged into baby step five, six and seven. And how do we head off the gas? You know, this is it. Can I also say that I don't know that this is what you feel, so I don't mind being wrong, but I just have a hunch that you're a good dude and you believe in hard work and hard work is a part of not just your identity, but I would say your value system. and this feels to you like you're mailing it in while the wife is making big money and you're having a hard time with that.

1:01:17That's what I think is really going on. Am I right or wrong? You're very right. Yep. So, so I thought you should do this for a living, Ken. Yeah. Well, I've talked to a few people here. Here's what I think then. Okay. So thank you for being honest about that. What Dave laid out for you is not a guy who is mailing it in and letting his big shot wife, lawyer, bring home the bacon. That's not what we heard from you, nor is it what Dave prescribed. So the narrative needs to be, hey, I'm actually going to cut back on this other gig to immeasurably improve our life. And what I'm doing as the husband, as the man, I am making a massive change, which will also be a massive contribution.

1:02:02You believe that, I heard you say it. So that's what the focus is. So I get it. I completely see where you're coming from. But you've got to change your focus.

1:02:12Dave Ramsey:Yeah. I'm able to add enough value to this situation that it makes sense. And that's what it comes down to. And that's what we did. And I'm doing that. And I'm not cloaking this in some weird work-life balance crap or this is an excuse to be remote or all. It's none of that. This is not you hiding at all. This is you stepping into another thing, but much more fully. And, yeah, you got your lack of focus. You're probably not doing great at either job. And all of a sudden, when you start doing great at this job, I think you're going to see an increase in revenue and net profits anyway, whether it's reduced expenses or increased revenue on both the side hustle and the law firm just because you're freaking paying attention all day long and you've had a good night's rest.

1:03:00Dave Ramsey:Yeah. It's an old phrase. I think they made it one of those cheesy successory posters once. If you chase two rabbits, you lose them both. And there's some great wisdom to that. There's just only so much you can do with divided photos. I've never even caught one. What are you talking about? I know. Have you chased a rabbit and caught it? No. I've shot them, but I've never chased one down. I remember it was that quick. I know. I said it was cheesy, but it's an old phrase. A lot of truth. All right. Yeah, that's it. I mean, you can't. Tough to serve two masters. Yeah. We should say, if you chase two rabbits, you're going to be double frustrated.

1:03:36Dave Ramsey:Going to prove how slow you really are. Yeah. Oh.

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1:05:28Dave Ramsey:Our question of the day is brought to you by Y-Refi. You've tried budgeting. You've tried making minimum payments. Those defaulted private student loans are still holding you back. Y-Refi might be able to help. Learn more at YRefi.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey. Not in all states. Today's question comes from Hannah in Minnesota. I worked for a small business for 30 years until it was sold a few months ago. I still work for the company under the new owner. my former employer surprised me recently by telling me that because of the part i played in his success he will be gifted me 25 000 next month i am not his employee anymore so no taxes will be taken out i've researched this scenario but can't find an answer on how i deal with this when it comes to tax time is it called a gift or should i ask for a 1099 it is not really compensation in terms of me working for it i want to avoid tax problems if at all possible That's outside my expertise.

1:06:26What do you think on that one?

1:06:28Dave Ramsey:I would sit down with a Ramsey tax pro, an ELP, an endorsed local provider under the Ramsey Trusted Program, and get an actual piece of advice. My opinion, just reading this, is it's a gift. You don't have to do anything. Now, the gift is large enough that it does trigger a gift tax, but that's on him, not you. And so if he tries to claim this as an expense in his business, then that's compensation. It's not a gift. Because a business can't give a gift and write it off as an expense unless it gives it to a nonprofit, a 501c3, right? And so if you give a gift to an individual from the business, it is not an expense.

1:07:16Dave Ramsey:but that's not up to you all that's up to you is you got a gift somebody gave you$25 ,000 it's that simple uh I don't think it's taxable but you should double check with um you might here here's the problem if he claims it as an expense he has to issue a 1099 does it matter that this is probably coming from the proceeds it is it's coming from the proceeds It doesn't matter, but he still, he could claim it as a business expense and say, you know, I'm just paying out some of the old employees. Okay. And claiming it on 1099. If he pulls a 1099 on it, now you've got a compensation issue. Now you've got to pay taxes on it.

1:07:56Dave Ramsey:Right. But if he just simply sent you a gift, Merry Christmas from an individual to an individual because you don't work for him anymore, that's not taxable. Shockingly not. Yeah. Again, it is taxable on him if he hasn't done, hadn't got some tax advice on how he does this. So anyway, wow. Hannah's in Missouri. Hey, Hannah, what's up in your world? Hey, Dave and Ken. Glad to be on here. Well, glad to have you. How can we help? Yeah, so my husband and I are newlyweds. We've been married for just shy of four months, and we come from very different worlds when it comes to money. I'm a pastor's kid, number four, like no money in the family.

1:08:42And he's an only child and comes from a lot more money than I do. And we are still in that weird transition of just getting out of college, still young enough to be on parents' health insurance. And I'm wanting to find the best way as a wife to encourage my husband to become fully separated from his parents financially. I know that that's the healthiest, the smartest, the wisest decision, but they still are very much like, hey, you need something? Just call us. Give us a call, and we'll pay for it here. We'll pay for it there. And wanting him to stay on everything for as long as he can to soak up all the money he can.

1:09:23And I have not had that luxury. So I'm trying to find the best way to go about that conversation, I guess.

1:09:31Dave Ramsey:Well, I think there's two or three issues. One is them giving you cash or buying items for you. Two is staying on health insurance. Three is staying on their Netflix plan and their cell phone bill, furnishing a cell phone or something like that. That's the kind of stuff that people usually look at, you know, not getting rid of that, those kinds of things.

1:09:58Dave Ramsey:So what does he say when you talk to him about this? um sometimes he's like well they're just being nice like it's okay um if it's a really big thing that we need help with he's like well just let them help and i personally am just like uh hey we can go without and struggle through this without um having the extra help because give me an example of a big thing um for me it would be furniture um i'm used to living in an unfurnished house and let until you can get it right but they hear oh he wants a bookshelf or wants the couch or whatever, and they're like, well, let's just buy it. Let's just buy whatever he wants.

1:10:34And I'm like, well, no, we don't have the money, so let's just wait. And I guess that's an easy example.

1:10:41Dave Ramsey:Yeah, that does. That makes sense. Okay. And you've been married a year? No, just shy of four months. Oh, four whole months. We're not even married yet. When you say that to him, does he dig in as to asking you, why do you feel that way? I get why he says what he says, but I'm curious, does he lean in a little bit to understand where you're coming from? Yeah, he understands that why independence really matters to me. I think it's just all new to him. He lived with his parents up until we got married. So he had not been independent until about, he's 24. He had gone to college and they're just like, this is my baby boy.

1:11:19So let him stay for as long as possible.

1:11:21Dave Ramsey:And I'm like, well, the good news is they're very kind people. They're very generous people. they're not toxic about it they're just being overly helpful you're not describing bad people you're describing sweet people but they are violating boundaries and you guys are not able to have the dignity of a standalone house and you're missing that dignity yeah and they don't even realize they don't even realize they're doing that they're they're really these people are not But there's no malice in anything you've described. Yeah. Yeah. So I think you just continue to talk to him and say, honey, I'm not okay with us not having the dignity of a standalone situation.

1:12:04Dave Ramsey:The only way we need a couch in here is if we buy a couch or if there was a special moment and they said, okay, for Christmas, we're going to furnish the living room for you. Okay. That's an okay thing, but that's a Christmas. That's not just every time you had a wish, the stuff starts showing up on your porch. Yeah. We don't need that. I think it eats away at my pride a little bit because I'm used to being independent. Yeah, it does. It does. I'm not used to that. But I think you described that perfectly. I think you need to set your pride aside when it's an honest and a clear gift versus a pattern.

1:12:39That makes sense.

1:12:39Dave Ramsey:Like, for instance, Christmas. Or, for instance, they say, hey, the whole family's going on a trip next year. We're paying for everybody. Set your pride aside and go. Okay. That's right. If they want to pick up dinner, same deal. Yeah. Mom and dad, they're old. They got money. They want to buy dinner when they take you out. I buy dinner for my kids. My kids got plenty of money. But that's okay. I mean, you do some of those things, but those should be one-offs and individualized situations, not a pattern. And what you're dealing with is a pattern that your husband needs to respect your desire for some individuality, some dignity on.

1:13:20Yeah.

1:13:21Dave Ramsey:And so, honey, it's really, really important to me that we have our own Netflix account. It's really, really important to me that we have our own cell phone. And it's really important to me that when you turn 25, we move the health insurance. We've got a plan to do that and we lay it all over there. Until then, we can ride this one. It's really, really important to me that we just don't randomly get things from them every time we had a wish. sometimes some generosity in individual holidays or birthdays or gifts or trips or something. We can look at those things. But this pattern of they support us, I can't deal with.

1:13:54Dave Ramsey:It eats my guts out. And you can tell him that. He can hear that. Yeah. That's a good way to approach it. I like that. Yeah. So when I left home, I was more in your camp. and it was like, good luck. You're on your own. Sink or swim. You know, if you really get super hungry, call two days in advance. We'll have some spaghetti on the stove when you get here. But other than that, you're on your own, right? My wife, on the other hand, her family was more like your husband's family and very kind people, very generous, and a lot wealthier. And I couldn't stand it. He owned a market, a convenience market, and when we would go in at Thanksgiving, all the kids filled up their cars with gas.

1:14:42Oh, wow.

1:14:43Dave Ramsey:To go back home. And it drove me nuts, just like it's driving you nuts. But it's like that was a little gift, a little something. But they grew up going to the market and getting gas their whole lives because they owned a market. But now when you're 26, you should probably quit getting free gas from Dad. You know, it's like, golly.

1:15:30Dave Ramsey:John's in Minnesota. Hi, John. How are you? I'm doing great today. How are you guys? Better than I deserve. How can we help? That was great. I say I am currently dating a woman. We've been dating for two and a half years, and we plan to get married and all of that good stuff. And we've already talked about finances, and we're going to join them together, and we're on the same page about that. So that's all good. The question that I have is that we are both currently homeowners. She operates – we both operate businesses out of our homes. She has a salon built into hers, and then I do IT stuff 30 hours a week, and then I'm also a musician, so I play about three times a week as well.

1:16:07And so when we get married, obviously, you know, we only need one house. So I'm trying to figure out what to do. There's not enough room for me to office out of that house as well. She has four children. And so I won't be able to move all my stuff and all my music gear and all that fun stuff there. So I do currently have a roommate that's helping with the mortgage. And so my dilemma right now is just do I keep the house and continue to office out of it and have that space as well? Or should I sell the house? And then if I do sell the house, what do I do with the money and then rent an office?

1:16:45Dave Ramsey:So there's not room for you to move everything you do into her house with her salon and her four kids. That's correct. Yeah, there's not even enough bedrooms for all the kids. One of them sleeps in the big main room in the basement, has his own little corner, and he's happy. But, yeah, there's not even enough bedrooms for everyone to fit. Okay. what's your home worth? My home is roughly worth around$170 ,000, and I owe about$71 ,000,$72 ,000 on it, and so there's a decent chunk of equity in there. But I do also have an equity loan out right now to my ex-wife for$24 ,000, so it's probably down to about$22 ,000 now.

1:17:26Dave Ramsey:Okay. Okay, so what would, let's see, you do IT work from home? Yeah, so I'm a service desk tech, and so a lot of what I do is based out of the house. I get the tickets and kind of the first line response, and then we can remote into a lot of different clients that we have and help them. Otherwise, I do go on site, but I do need an office of some sort. And you don't need an office for your music? No, but I do have a lot of gear associated with it. I do a little bit of recording. Most of the revenue from the business comes from the actual performances, And so there's a small SUV's worth of equipment, essentially, that I also need to store and load and load all the time, too.

1:18:12Dave Ramsey:Okay, and there's not a garage room at her house for that? There's a garage, but it would need some substantial works in order to become a little bit more proof from the elements and stuff. We're in Minnesota. I don't know if you've been up here. It's a little colder in December here than it is in Nashville. Heard the rumor. Yeah. What is the mortgage on the house that you own? He said$71. No, no, what's the payment, sorry. I'm going somewhere with this. The monthly payment. What is that? The payment is$960, so it's not a large payment at all. And the reason I'm asking that is if you play this out the way you laid it out, I'm wondering what would it cost you to rent a small office space?

1:18:51So, yeah, I started investigating that, and in the downtown area here, it would be about$550 to get an office, and then it could be first floor and stuff too, and I would have 24-7 access to, so would I need to access it to load and unload gear for the weekend gig? Oh, so you could also store the stuff there as well. That's what they're telling me. I haven't had a chance to tour yet. Where I was going next, the next question I was going to ask you is, what's it going to cost you for a very small storage unit to store the stuff? I'm going to at least run through those numbers, if I'm you, to go, if I sell the house, clear my debt, and my expenses actually can go down, In other words, I'm not paying a mortgage anymore over there.

1:19:30Dave Ramsey:How much is your roommate paying you? $550. So your net out of pocket is about$400 if you keep the house. Correct, just for the house. But then, you know, double up on utility bills and all that if I rent an office. As far as I saw that they were communicating to me, I want to pay for Internet or your air conditioning or any of that fun stuff.

1:19:56Dave Ramsey:I think the office is a better play because I think it simplifies your life. I think keeping the old house is a more complicated thing, and it's going to take up more headspace while you're trying to learn to be married to a lady with four kids who runs a beauty salon. And while you're trying to run your business and everything, you've got one more thing to deal with, and that's roommate and all this other stuff. And I think it's the cleanliness of it, the simplicity of it, of being in the office, it feels really good. And that's kind of what I'm leaning towards as well, too. I've had the house.

1:20:30I find the papers with my brother and my father the day after I turned 18. So I think a lot of my hesitation is probably sentimental.

1:20:38Dave Ramsey:Yeah. Well, I mean, but it is, you know, we are turning the page to a different chapter in your life. You're not going to be a married dude. You know, and so married dudes have different things. Nothing wrong with that. This is true. Nothing wrong with that. Yeah, and I'm trying to let go of that side of it, too. And I'm working through the baby steps right now. I was up to my step one being complete, but I just had to get some unexpected car repairs and stuff. Not a whole lot. So, like I said, I do have a home equity loan. No, no, I got that. But, I mean, how much debt other than the house do you have?

1:21:13Dave Ramsey:$6 ,000. Oh, okay. Not very much at all. Okay, so you can clear that, too, by selling the house. Oh, yeah. This advances you into baby step three pretty solidly. Does she have any debt, not counting the house? She does. She has some credit card debt and stuff like that, too. Yeah, you guys combining your finances, cutting up her credit cards, and clearing all this debt with the sale of your house and moving into this office. Now I've got a whole other reason to do this. Yeah, sell the house. Okay. Yeah, and get out of debt, both of you. And you're both together, are now unified. And this is upon marriage, of course.

1:21:48Dave Ramsey:We're talking about all of this. And then we're combined and we're moving forward. Absolutely. Absolutely, that's the way to go. Lynn is in Ohio. Hi, Lynn. How are you? Hi there. Good. How are you? Better than I deserve. What's up? Well, what's up? My son, when he was around 18, co-signed for a car loan with a girlfriend at the time who is now an ex-girlfriend. Wow, that was stupid. It was really stupid, and I had no idea that this had happened because he didn't ask me about it before he did that, or I would have said no way. So now, of course, they've gone their separate ways. And she's not paying.

1:22:32Well, not very well. Okay. Is the car in his name or her name? I believe it's in her name.

1:22:39Dave Ramsey:Okay. Nothing he can do except talk her out of it. Um, well, we've tried that. I've tried to encourage her to refinance with another. You tried to encourage her to refinance or he did? I did. I've talked to her, but she has since stopped communicating with me. Well, no kidding. Who wants to talk to you? Right? You're completely interfering in something that isn't even yours. Boy child needs to grow a backbone and call his ex and get this straightened out. He hasn't seen his mama in. well i don't think she'll communicate with him either yeah well that's that's the only one she should communicate with because that's going to keep him from suing her but you got no footing in this he wants to file bankruptcy to get his name off no he doesn't file bankruptcy on a car that hadn't been repoed just because he's pissed at the ex-girlfriend let's let's just take stupid it and double it no no no no no mama you gotta stay out of this this is not your play boy child done made this bad he gets to work in it so um yeah he needs to call her up he needs to get an attorney and uh tell her that if the car is not sold or refinanced in 30 days that he's going to sue her and ask the judge to force her to sale the car because she's not paying on time and she's destroying his credit so wow but but you cannot this is not your job let me tell you what if she didn't hang up on you in the first 30 seconds you were talking to her there's something wrong with her she shouldn't have been i mean she should who are you calling me that's what she would tell you what this is this is that helicopter mom you know hey i'm trying to help out my boy yeah you know What are we doing here, man?

1:24:33This is the thing that's happening in this generation.

1:24:36Dave Ramsey:The parents are showing up in places that if our parents would have shown up in. A buddy of mine got himself into a mess when he was that age, and he called his dad, who was an old Marine sergeant, and he said, Dad, what do you think I ought to do? And he goes, if you're big enough to get yourself into this, you're big enough to get yourself out. Call me and tell me how you did it. That's right. I'm going to finish my glass of sun tea. Talk to you later.

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1:26:10Dave Ramsey:welcome back to the ramsey show in the fair winds credit union studio i'm dave ramsey your host ken coleman ramsey personality and number one best-selling author is my co-host today thank you for joining us america michael is in seattle hey michael what's up in your world Hi, Dave. I'm a single parent with disabled children, and I have about 15 ,000 in Sally Mae loans and 80 ,000 in government student loans on the save plan. and I've done Baby Step 1. I'm doing the EveryDollar app and that's going well and I've been getting my hands on your advice and on your podcast about student debt and how to try to improve that and I'm just looking for some advice on kind of what to do here.

1:27:09Dave Ramsey:Okay. You said you had your single dad of disabled children. Tell me about that. Yes, sir. So I take care of them, and I take care of their needs, and they have medical appointments throughout each week that I take care of. What is the nature of their disabilities? um intellectual disabilities um neuromotor disabilities all four of them disabilities that uh all of them yeah all of them have a have a variety of of disabilities wow and you have full-time custody um i have um yeah full i have full primary for full primary custody Well, I mean, does that mean you have them all the time or what's that mean?

1:28:05Yeah, I have them. I have them most of the time. I don't have them for a few weeks in the summer and then I split Christmas and spring break.

1:28:21Dave Ramsey:What do you make? What do you do for a living? I work as a care coordinator, so I help people get into assisted living homes. I help people get on a variety of Medicaid waivers, and then I help them get disability supports. And I currently am at an hourly rate, and I'm working part-time. But as I build my clientele, it moves to a commission. And it seems like the commission is actually a pretty good commission. Like, for example, part-time commission is about$5 ,000 a month. Full-time commission is closer to$8 ,900 a month. But I'm not there yet. Who's watching the kids when you're working?

1:29:12They're at school. They're at school, and then after school, they're watched by family. Okay.

1:29:24So what is the – I'm just sitting here listening to this, and it feels like you need more money. You need to make more money. Yeah, I need to make more money. What's the long term? What's the long term? You've got a lot going on, but let's just assume that you could snap your fingers and do the thing you wanted to do and make more money. What is that?

1:29:41Dave Ramsey:At 8 ,900, when you get to that point, are you going to be okay? I feel like I would, yes. It's a good job. There's a lot of potential for growth. It takes four to five years to really learn it, and I've been doing it for about a year, part-time. Why are you only part-time?

1:30:08because I'm taking care of taking care of the the children's you know well then how would you be able to be full-time I'll say that again sorry how how are you going to be able to move to full-time um i've been i've been um uh slowly adjusting my or increasing my hours i've been able to um uh work work a little bit at night uh work on the weekends from home well you told me you told me just a few minutes ago that the kids are in school and then when they're not in school families watching them. So that would tell me that you have time to work full time.

1:30:59They, I have, so, so they get to school about, they get to school about 930 and then they're out of school about 430. And I commute, I commute an hour each way. And so I'm working Tuesday through Friday from about 1130 to about 430. And then I need to pick them up by 530. So that's my work schedule. Okay. So what glares to me is we need to get a job locally or two jobs, talk to family. I mean, you've got to really step this game up here. The work situation you have is not helping you. In four to five years to be able to make that? you got to make way more money than that well beyond four to five years from now.

1:31:51So you need a new professional plan is what I'm trying to push at you.

1:31:54Dave Ramsey:So are these children adopted or biological? Biological. Okay. And is there a prognosis to be self-sustaining as adults, or will they always need care?

1:32:11One of them will probably always need care.

1:32:14Dave Ramsey:One. Okay. Yeah. So I don't know the answer to the equation unless there's some way you can do some of the work remote and some from the actual office that allows you to be there as much as you're trying to be there. And I don't know. You've got two things pulling at you that are both very valid things. And one of them is very valid is to make enough money to clean the mess up and have a sustainable life. And two is to take care of these children. and you're a great guy trying to figure out how to do both and I don't have a great answer for you but bottom line is what Ken said earlier and you already knew that before you called Michael is this is a math problem and it's an income problem and so what can we do?

1:33:02Dave Ramsey:How can we shift around how we're caring for these children or who's caring for the children or whatever, what can we do to get you in a position that you can make your 8 ,900, and that means you're working full-time instead of part-time? And I don't hear how you're getting there right now. But, yeah, it's a terrible paradox to be stuck in between this. But it's also one that, you know, you've been appointed to solve this. and so you've got to create some income while providing this care and I don't have a magic wand I don't know where to tell you I wish I did I know if there's anybody I wanted to help today it was you man what a thing yeah I would just say simplify this we've got to find something from 9 30 to 5 30 we've got to get a job that doesn't require me to drive two hours a day there are some things that can be changed here, which will make this far less hectic for you because you already got a hectic life.

1:34:06So simplifying so that you can then maximize your income is the goal here. Without us giving you super specifics, that's the goal. So I'm thankful that the kids are in school, thankful that you got family to support you. That does give you a chance here, even though I'm sure it feels really, really hard.

1:34:24Dave Ramsey:You can get out of this. It is about arranging life in such a way that you can make a living.

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1:35:59Dave Ramsey:Mary's in Colorado. Hi, Mary. How are you? I'm doing well. Thank you, Mr. Ramsey. Thanks for taking my call. Sure. What's up? So I have a whole life policy, and I've been paying on it for the last five years. It's got a cash value around$35 ,000 currently, but I pay$792 a month. I was looking to see about canceling that and cashing it out. The only problem is the reason I ended up with the whole life policy was I had life insurance through my employer. The employer did a relocation. I left the company, and I had it converted to a whole life due to medical cancer diagnosis previously. So I couldn't qualify for any term life at the time.

1:36:57Dave Ramsey:Are you single? No, married. Oh, okay. All right. And what is your income? My income is$50 ,000 per year. My husband is$150 ,000. Okay. And how old are you, too? 44. Okay. All right. And do you guys have any nest egg built, any 401ks or anything like that? Yeah, we have 1.5 in retirement, 500 ,000 liquid investments, and then our home is paid off 1.5. Okay. So if you had no life insurance and died, your husband can probably struggle through, given that he's got$2 or$3 million in$150 ,000 income. time. Yeah, we originally got it because the kids were really young at the time, but now five years later and they're...

1:37:57Dave Ramsey:Well, my point is you are self-insured. The purpose of life insurance is to replace lost income in the event someone is dependent upon your income. No one's dependent upon your income. If you die, your husband's got$3 million and$150 ,000 income. Did I miss something? No, but he, I mean, I guess if that happened, um, I was previously staying at home, so he would then want to, you know, maybe make adjustments in his income, maybe not work, take care of the kids until they're grown. Yeah. But he's got$2 million. Correct. Yeah. I think he'd be okay. We're only 44, so we still have to. I wasn't saying he was going to quit forever, and I wasn't saying we were going to drain the account, but my point is that your little whole life insurance policy is irrelevant financially, mathematically.

1:38:53Dave Ramsey:Agreed? Yeah. So don't keep getting screwed by these people then. Cancel this thing. Cancel it, and then I don't— Take the$800 and build wealth with it. You don't need term insurance. You don't need insurance. If he loses your$50 ,000 income mathematically, he's okay. I'm sure he'll cry, but mathematically he's okay. Yeah, we would rather take that$792 a month and invest it in our stock. Yeah, absolutely. You'll make a whole lot more money. If you had been doing it for the time you've been doing this, you'd have a whole lot more than$35 ,000. Agreed? Agreed. And, well, at the time, we didn't have this, you know, we didn't have that net worth.

1:39:44Dave Ramsey:I know. Over the last five years, we've paid off our house and, you know, done other things. Yeah, you've done a really, really good job, Mary. You guys are in great shape. You don't need this policy. Okay. That's what I'm saying. Well, thank you. Do you understand why I'm saying that? Yeah, because we're self-insuring with our investments now. and kind of things have changed in terms of the need for it. Just cancel it and put the$35 ,000 in a good investment and put the$800 a month into a good investment and quit getting screwed by these people. It's wonderful. It's a wonderful thing to get rid of these people.

1:40:23I got nothing to add. I mean, you just have to realize the math on this and go, wait a second. So here's the thing.

1:40:29Dave Ramsey:When you're 30 years old and you have no money and a bunch of debt and you have three little kids, you need term life insurance to cover the loss of your income because your family is dependent upon your income to eat. But fast forward 20 years and you're 53 years old and you have$2 million in your 401K and your house is paid for and the kids are grown and gone, your need for life insurance has gone away because you got out of debt and built wealth. And so no one needs life insurance their whole life. Hello. That's why they call it whole life. You know why they call it whole life? Because they want a commission from you their whole life.

1:41:08Dave Ramsey:That's why they call it whole life. Not because you need it for your whole life. If you need life insurance your whole life, it's because you did a crummy job with money. Because you got none when you're old. You got a big pile of debt and no money saved, no investments when you're old. Because you didn't do a good job with money. And then you will need life insurance to bury you. And that's about it. But, you know, the purpose of life insurance is to cover your family while you can't, as soon as you can, quit buying it. Life, whether it's term life or whole life, but certainly whole life. But this product is just nuts.

1:41:45$792 a month. Yeah.

1:41:48Dave Ramsey:And$35 ,000 is all it's healed. That's it. I mean, it's just horrible. It's just terrible. Just can you imagine what would have... Yeah. Anyway. Yes, yes, yes. You did good, Mary. and then cancel the policy. Dalton in Detroit, Michigan. Hey, Dalton, what's up? Hey, how's it going? Better than I deserve. How can I help? I'm in an interesting situation because mathematically this shouldn't work and historically this shouldn't work. So I have a home. I've got about$190 ,000 equity. Me and my wife were looking at buying a second home as a rental unit. So I go and to get a home equity line of credit, which this doesn't make any sense to me, but the bank will give it to us at a 5.1 % interest versus getting a mortgage on the second home, it would be a 6.25%.

1:42:37So typically your HELOCs or your home equity line of credits are going to be greater interest.

1:42:45Dave Ramsey:Not necessarily. Not over investment property because investment property is more risk for the bank than your personal residence is for the bank. Gotcha. When they got your personal residence, they got you by the neck. Yeah, that was my question, is if I use a home equity line of credit and then something happens to the rental home, I don't want to lose my primary residence. Yeah, you will. Versus if you mortgage that property in an LLC, you can only lose that property. No, they can sue you for the deficit. You're personally, LLCs can't sign for a mortgage. You can put the property in an LLC's name, but you're still liable for the stupid mortgage.

1:43:25Dave Ramsey:and if the house doesn't sell for enough at foreclosure to cover the mortgage, they're going to sue you for the deficit 100 % of the time. So they'll still come take your home. So overall, that's the reasoning for these interest rates, which is I guess why you called, but you're going to get something more than you called for, and that is don't do this deal. You don't have the money to buy a rental, and you shouldn't buy one. So the home we're looking at is about 75. Like there's three options, and we have about$90 ,000 cash. It's in Detroit and the area that's being revitalized. I'm sorry, you have$90 ,000 in cash and the home is$75 ,000?

1:44:05Right, but it's in the revitalization area of Detroit, and so typically it's been appreciating the area. Do you have to spend money on it after you buy it? I'd have to spend about$15 ,000 to$20 ,000. Okay, so why don't you just pay cash for it? Because that is our, like, that's our nest egg for... Oh, because of the risk. Any repairs to, yeah.

1:44:32Dave Ramsey:Yeah. So you're trying to ignore the fact there's risk by borrowing money, and instead you're adding risk by borrowing money. That's true. This is a form of financial denial. Denial's not just a river in Egypt, buddy. Yeah. You're trying to hide this from yourself and act like it didn't happen. Please don't buy this house. I can't stop him. He's going to do it. Forget it.

1:45:23Ha, ha, ha.

1:45:53Transcription by CastingWords Ramsey trusted insurance pro who will only get you what you need at the best price. Go to Ramsey solutions.com slash insurance, Ramsey solutions.com slash insurance.

1:46:20Dave Ramsey:Randy's in Missouri. Hi, Randy. How are you? Oh, I'm absolutely peachy. How are you? Better than I deserve, Brandy. What's up? Um, I am trying to find the way with as much grace and kindness and love as possible to get my mother-in-law on her feet and out of the camper in our backyard. Whoa, cousin Eddie's in the backyard. And it's your mother-in-law. Wow. How long has she been there? Yeah. Three years. In a van down by the river. Oh, my gosh. Wow. So how did this come about? Well, we moved here from North Dakota in 2001. We did the same thing. Spent three months in a camper on my mom's property, but we're on top of employment and housing right away.

1:47:16And we're in a home in three months. We purchased our first home. And we've got five kids that we did it with, too, by the way.

1:47:23Dave Ramsey:um so you spent time on her property no my mom my oh your mom okay my mom yeah and a camper and yes with five kids and yes but we're at my mom's place she had them in the house at the time they've got 20 acres plenty of room to run around play in the pond and so you were there for how long three months okay and then you bought a place of your own and how did your mother-in-law end up on to your place. So she waited to follow us down because it was a single mom only child situation with my husband and her. And she was about a year and a half after she did it. She was like, oh, I think I'll do that.

1:48:03Sounds like a good idea. It worked really well for you. She came down, was in the camper. Here she is. And I don't know how to broach the conversation at this point. Well, it's not with her.

1:48:16Dave Ramsey:It's with your husband. Yeah, I've had that with him as well. And he struggles. He's the problem, not her. She's the symptom. Yeah. He has a hard time telling his mom, Hey, I love you, but it's time to... Shocking. So basically, this lady didn't really even ask permission to move on the property. She just kind of told you all she was doing it. No, no, no. It was a conversation, but we expected her to be quicker about it and do similar to what we did. Did you have an agreement that she would be quicker about it? No. I mean, to be completely fair on our end of things, no. No, y 'all just said, okay, you want to come down, put the camper back there.

1:48:57Dave Ramsey:That's okay. And that was the whole discussion. Yep. And no one's ever corrected her. So she actually doesn't think she's doing anything wrong. uh i mean i i have i lost my mind on her once i said to not so nice thing so i'm trying to go about it more politely this time how long ago was that a year and a half oh no no wait no that wasn't a year and a half i did that no it was a year and a half and your husband couldn't have been thrilled with that either yeah no because he was there when i started it he walked away and put his hands off him so now you're a year and a half removed from you lost your mind on her number one she didn't move number two your husband didn't force the issue and number three you're more pissy now than you were then actually i'm less pissy um wow i would that's fast pretty heavy on the pissy category but yeah all right so the uh on the on the pissy spectrum but the uh How old is she?

1:49:58Dave Ramsey:63. And she has no money? Yes. Nope. Okay. So what makes you think she can move into it? Why do you think she can move into a sustainable situation when she has no money? She's working, kind of, I think. I mean, I know she works part-time cleaning houses, and that's part of my issue. So I work in a middle school. I'm a paraconfessional. And over the summer, I'm home all summer. And I was kind of tracking, like, how often are you leaving? What are you doing? And she's got cleaning jobs that she does, but it's not very much. I think max 20 hours a week. Yeah. And I don't know how to broach with, like, I don't know how to say it lovingly.

1:50:43You can't. I don't want it to be gone.

1:50:45Dave Ramsey:You're way up on the pissy spectrum. So you can't say anything lovingly. Oh, I am not. Yes, you are. There's nothing loving going to come out of your mouth. So, and besides that, it's not your job. It's your wimpy husband's job.

1:51:01Dave Ramsey:You can't. See, you enjoyed that too much. You can't do it. No, I didn't enjoy that. Because it won't work if you do it. No, there is nothing you can say or do that's going to work. The only thing that's going to work if you want her to move is for him to have a conversation that says, Mom, I'm going to help you get a place, and you're going to have to get your hours up and um by by the time christmas gets here you're going to be hanging uh your stockings in another place or whatever it is i don't care what the date is but he needs to sit down with his mom he needs to have a conversation we were not planning to do this forever um and we need to look at a timeline where you i'll help you get things going and uh let's figure out an apartment and let's get the camper sold or let's find you a little piece of ground and let's get your hours up so you have a sustainable life.

1:51:51Dave Ramsey:She's not asking you all for money, is she? No. Okay. And I've, which one of my suggestions to him was, I think that we should ask her for rent. No, you don't want her to stay. No. Don't ask people for rent that will pay it. Okay. Okay. Fair enough. My thing was after X amount of time of asking for rent, saying, okay here's a lump sum you just wanted something that felt righteous in this whole deal and so you don't want any i'm not going to help you with that at all i'm just going to be practical and look that your husband has to handle this and he has to sit down and have a personal quiet conversation with his mom and if he doesn't have a backbone he can run down to all walmart and pick one up on all three and sit down and go mom uh we got to get you a thing that's a better life for you than a trailer in my backyard.

1:52:42Dave Ramsey:Now let's figure out where we can get you a place and let's figure out how many hours a month you got to work to get that done. And I'll help you with your budget. And even if he, you know, and I'll help you get the trailer sold. So you got some money to move and so on, but you do not want the budget. I'm sorry. She won't accept help with the budget. She knows what she's doing with it. She will. If your husband sits down and says, mom, if you don't do this, you have to leave anyway. She has asked us for help and recommendations on things like, what do I do with my car? And then when we give her legitimate recommendations, like slaps them all down, I have come up with lists of low income and senior housing, different apartments and said, Hey, here's some good options.

1:53:23Hey, here's some good options for this. Here's some good options. You haven't heard a thing I said. I have. You came up with all these options.

1:53:33Dave Ramsey:You are the wicked witch of the West in her eyes. She does not want anything to do with any suggestion that comes out of your mouth. You need to quit. Stop. You need to stop doing this. You're no help. You're a problem. You're not a help. Your husband, however, needs to take the list that you came up with and go sit with his mother without you around. You don't even need to be in the county when he does this. Like four counties over at happy hour while he handles his mom. You cannot fix it. She ain't listening to you. She hasn't listened to you in a decade. I can promise you. She's had it with you like you've had it with her.

1:54:12Dave Ramsey:This is not you have no grounds for persuasion with this woman. She does not think you have her best interest at heart. You know why? Because you don't. No, not at all. And we don't think you're a bad person. We just hear a person who's exhausted. You're over it. You have none of those left to give. And quit trying to fix this. All right. Yeah. The only way you're going to fix this is install a backbone in your husband so baby boy deals with his mommy. That's what's going to have to happen. The only thing you can do. And then stand back and watch, and hopefully he'll wander over there and get it done.

1:54:45Dave Ramsey:Probably not at the speed you would have. But that's your only shot, Brandy. You can't come up with any more solutions. That's a marriage problem. You and your hub's got to get together because you're a couple cocktails away from a Jerry Springer episode.

1:55:01And, you know, none of us are above it, but I think you were on your last nerve, and I get it.

1:55:07Dave Ramsey:It's funny, though. It's hilarious. Yeah. Goodness gracious. Yeah. Hey, by the way, that's a good recipe for everybody, regardless of how pissy you are, okay, or how far up the pissy spectrum you are, is how about you let the do not fix the in-laws. Let the blood relative of the in-laws do the fixing, and you stand back with suggestions way in the distance. And don't let them even think the suggestion came from you. That's always a good idea.

1:56:20Dave Ramsey:Our Scripture of the Day, Romans 13, 1. Let every person be subject to the governing authorities, for there is no authority except from God, and those that exist have been instituted by God. PJ O 'Rourke said, giving money and power to the government is like giving whiskey and cars to teenage boys. True statement. Yes, it is. If you're buying or selling your home, it's a big deal. You will want an expert. Oh, yeah, rates are coming down. It looks like boys and girls. You're going to want somebody in your corner if you're going to list that house or sell that house that is an expert in real estate, not someone who got their license three weeks ago and is your aunt sally bad idea bad idea yeah ramsey trusted program is the only way to find a top agent you can trust make your home a blessing not a burden you can compare agent profiles interview them choose the right one to work with among several that we have vetted for you find a local ramsey trusted real estate pro for free at ramsey solutions.com slash agent or click the link in the show notes.

1:57:25Dave Ramsey:Kevin's in California. Hi, Kevin. How are you? Hi. How are you doing? Better than I deserve. What's up? Yeah, I had a question. I got divorced a few years ago. My spouse used to handle the finances, so I'm kind of a late bloomer financially. I'm going to be – I got about a year to go at my work before I'm eligible to retire and get a pension. and basically I would be making the same money with a combination of the pension and my Social Security as I am making now. How old are you? I'm 63. Okay. So you're going to retire at 64. Yeah, I was hoping to. I mean, I might still do something else, you know.

1:58:07Dave Ramsey:What do you make? I make about$66 ,000 a year. Okay. And what are you going to do with the rest of your life? um well i have that gee i didn't think of that i would like to you know spend time with my my kids and and you know do something i mean i definitely want to work or do something positive and um just also be able to pay my bills um i i do have a house uh i owe 418 000 on it it's worth about a million. I have a$60 ,000 HELOC and a$10 ,000 credit cards. And my question is, when I retire, do you think it's okay if I pay off the HELOC and the credit cards with money from my IRA and 457 plan?

1:58:56Dave Ramsey:How much is in there? Combined, let's see, I have$136 ,000 in the 457 and$56 ,000 in a Vanguard IRA. So you only have$200 ,000? Yeah. Okay. All right. I would maybe want to work a couple more years and build that nest egg a little larger. It's a little scary, small. Yeah. And yeah, definitely. And I think during that time, you need to pay off the HELOC. And during that time, you need to pay off the credit card. Cut up the credit card tonight. But I would get on a written budget with a set goal of how much nest egg I could build in two years and be debt free. Because you've got another problem here.

1:59:40Dave Ramsey:You've got a$418 ,000 mortgage. And that is not something you want to carry into 90 years old. We need to have a plan also to get that mortgage paid down and off. It could be a five-year plan or a six-year plan, eight-year plan or whatever, but you've got to develop some way to get rid of that mortgage because that thing's going to destabilize your retirement. Yeah. I do have hopes of putting in a junior ADU in my bonus room. My brother is a contractor, and he's going to do that for me. I would just have to pay for the materials, which we estimate would be about$10 ,000. What about selling the house and buying a$600 ,000 paid-for house?

2:00:22That's a lot.

2:00:24Dave Ramsey:Yeah, and then you'd be debt-free going into retirement. I think I might go that direction rather than trying to look for a roommate. I don't really want to retire with a roommate. That's just, ew, gross. That's how we started our lives in college. I don't want to end them that way. I agree. I agree. Oh, man. Yeah, I think you've got to think the math part through a little more, and that's probably going to lead you to work a couple more years and pile up your nest egg, clear the debts, and then say, okay, when I retire, I'm going to sell the house. I'm going to move near the kids. Maybe you're not near them now.

2:00:59Dave Ramsey:And into a$600 ,000 paid-for property or whatever your equity is that you can get out of the house. But if you can go into retirement with$300 ,000 or$400 ,000 and a paid-for house, that's a whole different sense of solid ground than you've got with a$418 ,000 mortgage and a $200 ,000 in a stake. Yeah, and including that math, Dave's right. I would extend the amount of time working, but I'd also begin thinking about what does that next chapter look like? Because you said you still wanted to do something. That's very normal. but I would be looking at what would be really enjoyable work that I could do after retiring from day job one and still make some decent money for the sole purposes of continuing to contribute to your retirement.

2:01:44Dave Ramsey:Yep. Casey's in Boise, Idaho. Hi, Casey. How are you? Hi, Dave. I'm well. How are you doing? Better than I deserve. What's up? I have a question for you. So my husband lives in Canada, and I am here in this space. I am planning on moving there in the next few months. I'm trying to get a current job transfer with my company into a similar position so I can have an income when I move there. Thankfully, we're in a position where he can support us if not. And we've laid it all out, worst-case scenario, where we can't afford everything we want and still have$4 ,000 at the end of each month to put into savings.

2:02:25but what we're trying to decide to do right now is between renting and buying a home. So that's just kind of where we're at.

2:02:33Dave Ramsey:I would rent for one year. Rent for one year? Okay. Get everything settled and stable and learn how to be married. Okay. Okay. That's helpful. And, yeah, and I have my house in Idaho, too, and so we're planning on renting that out and probably hold on to that. No, I just sell it. Use that money to buy your house in a year. Okay. Okay. Got it. That's helpful. Okay. Perfect. See how all this feels very clean. Yeah. Yeah. And that was kind of like my thoughts on it. And we've gone back and forth on everything on like, should we buy? Should we rent? And we've, you know, played it all out. And we're just like up in the air.

2:03:18Even a conversation we had 30 minutes ago.

2:03:20Dave Ramsey:I think the, how old are you two? um i'm 32 and he's 30 both first marriages yes both first marriage okay it takes a year to get to know each other well enough to figure out which house to buy wisely okay it takes a we always laugh and say it takes a year to know how close to your mother-in-law to buy yeah right but that may not be the case but i mean that's a joke but the point being And you will know stuff about each other and have insight into this relationship one year later that you do not have today. Okay. Okay, that's very helpful. Okay, that's something I didn't even consider. It'll cause you to pick a better house and a different house.

2:04:02Dave Ramsey:Absolutely. Than you would pick today. And so there's actually a biblical standard for that, for those of you that are people of the book.

2:04:13Dave Ramsey:in the Old Testament when the kings went out to war if a person had been married they were not allowed to go to war in the first year they had to stay home and be a husband they wouldn't let a newlywed go to war and it takes a year so it's good stuff fun, fun, fun, good for you sounds like an exciting adventure you've gone into it all sounds positive and good and upbeat That's fun stuff, fun stuff. But if you can, because if you buy a house with your boyfriend, which is who you are right after you got married, versus your husband of a year, it's a different conversation. Right. I mean, 20 minutes after you're married, it's a boyfriend still.

2:04:58Dave Ramsey:Yeah, you've got to figure out what we're bringing into this thing. The other thing we didn't really hit on is we caution people about being long-distance landlords. And now you're talking about in another country. So having a house in Idaho while you're living in Canada just creates a bit of an onion there that can unravel in a not-so-fun way. Yeah, and it just puts more pressure on a brand-new marriage. That's what I meant by cleanliness. It's just crisp and clean. I like it. I just like things simple. That's the people that build wealth. They keep things clean, very focused, very simple. Everything's not disorganized and chaotic and bifurcated and everything else.

2:05:35Dave Ramsey:There we go. Good show, Ken. Well done. Thank you, sir. That puts us our The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:07.