My Parents Just Told Me I Owe Them $114K

27:10It didn't perform well. I didn't like it. I actually pulled the money out of that and ended up buying three single family homes that I now lease to people. So my current plan has been to use the rental profit, you know, live off my base pay for my day job, use the rental profit to pay down the student loan debt. But I really hate making all these payments and it's eating up all the money I make every month. You didn't buy the rentals in cash? I paid for them outright. Okay. Yeah, three single family homes outright. What are they worth? Let's see. One's about$300. One is worth about$250. The other, I would say high twos, low threes, kind of at$290 range probably.

27:58What do they cash flow totally? Every month? One rents for$1 ,800, one rents for$1 ,900, one rents for$2 ,000 a month. After homeowners insurance, property taxes, maintenance repairs, about$37 ,000,$38 ,000 a year. Okay. And what's your base pay? Or how much are you bringing in from your job? From my day job, my base pay is$70 ,000 a year. um and before taxes and then i just got a a bonus it's like a one once a year bonus uh recently to uh ten thousand dollars i mean if you like these properties you paid for them in cash if they're cash flowing i would just use your income and the cash to pay down this ninety seven thousand dollar bill i mean if you wanted to sell one of them off you could but i have a feel i mean it's just you, right?

28:56There's no family? No wife? I'm a single guy. I'm 30 years old. I live in an apartment. Yeah, no wife and kids. Not even a dog. What do you have in savings? What's your cash position right now? Let's see. In savings, I have about$93 ,000 in a savings account and about $20 ,000 in a checking account. Well, you buried the lead, man. You could pay off your debt today. Constantly. My worry is I would like to get into a primary residence and own a house that I live in. So that's another hesitation I have. Okay, that's two different things. There's a time and place for that, but it's once you're completely debt-free and you have a fully funded emergency fund.

29:38And think about it. Once you don't have these student loans, it's all pure cash flow. So you can save up a down payment real quick. And I might change my advice on that now that you throw the fact in that you want to get a personal residence. I might say, yeah, take the cash that you have, pay off the student loans, and then I might sell one of these properties to free up some cash. So you've got to, you've re-upped your emergency fund and now you have cash to come in and buy whatever house you get for you. That needs to be in cash. So maybe you're selling two of these properties to have what it is that you truly want.

30:10And maybe that leaves you with one rental property. Because what I wouldn't want for you to do is to put a mortgage on your personal residence. and now you've got rent people living in paid for houses and you're not even living in a paid for house, right? So maybe you sell off two of these to get what you want. I'm not mad at that. It's all about your timeline or urgency. If you really want your own home, then I think you might go, hey, I'm going to sell one of these because I don't want to have to save up for the next three or four years. That'll speed up the process. You have a lot of options.

30:39You've done a lot of things well, but you sort of became a landlord by default because some dude told you it would be a good idea. And so the good news is you have options, my friend.

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32:30Kelsey is in Austin, Texas up next. Kelsey, welcome to the show. Hi, thanks for taking the call. So I'm working the baby steps and I just need some advice. I am a real estate agent and so all of my income runs through my business account. I have an S corp and I like to keep about three months of my payroll in there just to like keep my anxiety levels at a lower level, just in case like a month is slow or a deal falls through. I'm a single mom with two kids. So I guess I'm just wondering if that amount in my business account would be enough to consider as a starter emergency fund or if I should have that starter emergency fund in a separate account.

33:08So I like that you're doing that. The only change that I would make is this is not an emergency fund. So whenever you're a person who's on irregular income, whether you're in real estate or just anything that has those major opportunities for fluctuation, it is smart to keep a month's worth or two months worth, whatever you feel like you absolutely need aside. Yeah, just in case something happens, a deal falls through or it gets pushed later. And that way you can continue to live your life. But that's not your emergency fund because your emergency fund is there for the things that emergency funds are there for, something that's completely unforeseen, something that's completely necessary and something that is completely urgent, right?

33:53That's your roof, your car falls apart, that kind of thing. This is just part of your budget. This is just part of, in many ways, it's just an extended cushion for you letting your budget adjust to a regular income. So I would not, to clarify, you can have this money here, maybe you take half of it and you have a month and a half. Only you know how much your income truly fluctuates and what you actually need there. But maybe there's some of that that could also go towards building a dedicated emergency fund. Okay, yeah, I could definitely at least start the$1 ,000 just to have that there and then put some towards debt, especially once I have things like under contract, it feels a little safer.

34:33How much debt do you have? I have$46 ,000. Yeah. What kind of debt is that? so 22 of that is credit cards from just putting my head in the sand after a divorce and then uh 13 ,500 on a car and then my ac went out over like thanksgiving so i had to put that one on a loan so it's 10 ,000 on that ouch okay so do you have a business checking and a business savings account separate from your personal i have like i run the profit first model in my business account So I have a couple of accounts in there. So I stash a little bit away every month or every closing for profit. And then I have a personal checking.

35:17Okay, good. So they are separate. Yes. You're not doing this all from one bank account. No. Yeah, I finally got all that in order a couple years ago. And how much do you have across your personal checking and savings that's not tied to your business? Sorry, can you repeat that? How much do you have across checking and saving in your personal life? oh i am i could probably have well i would have a thousand dollars in savings and then personal is just obviously i pay myself every month so i pay about six thousand in payroll every month so the good news is once you start paying down so if you do six thousand in payroll what do you have 18 stashed aside is that what you have in your business i like to stash 20 just because like with the payroll there's taxes associated with it so it works out to be about months Do you really feel like you need three?

36:08I feel like you could get, I mean, only you know, I'm not trying to push you because I know that this is your sole thing. But if you don't need three, I would knock it down a bit. And then the other thing is, the good news is once you start paying off this debt, the amount that that needs to be, because that should be a bare bones budget, not like your bells and whistles budget. you'll be able to knock that down because once you pay off the 10k that's a payment you don't need to make any more out of your budgeted money once you pay off the car that's a payment you won't need to make out of your budgeted money so as you're paying this debt down you're also able to reach over and pull a little bit of that extra does that make sense and that can then also go towards your debt payment my debt payments are like 600 a month and then i think it's going to go up in June as long as I mean I'm gonna try and get the smallest credit card knocked out before you know before June but then in June the AC loan like it was zero percent for the first few months and then it'll be 10 percent so it's gonna go up a little bit so what's your current plan to pay off all the debt what's the timeline and how much can you throw at it a month I am throwing at it as much as I possibly can I'm doing extra side hustles on the nights that I don't have the kids and like just trying to throw everything at it.

37:27I just have gotten a little, I mean, this was my first month actually doing a budget in every dollar and like I thought I had it all planned out and then, you know, things happened that I didn't account for. And so I was like, oh man, I kind of missed the mark this first month. Well, it takes a couple of months. I mean, just to be honest, it takes three months and some to really lock in. The first month is experimental, truly. And then after that, you kind of start learning your behavior and you should be locked in in the next 60 to 90 days for sure. I would have a game plan to go hey my goal is to put $2 ,000 a month toward the debt minimums plus extra that gets me out of debt in 23 months once you start doing that kind of math that shows me that you're serious about getting out of debt because now you kind of know the benchmark you know if you're ahead or behind instead of just well hopefully I'll have some extra to throw at it if life doesn't get crazy you need to pre-decide hey no matter what happens this is what we're going to do and then we'll shift everything else around it the nice thing about real estate is if i have like you know an extra closing it can knock out a really big chunk of yeah when's your next commission check do you know my next commission check is that what you said yeah when is that coming in uh tuesday woohoo how much is that gonna be yeah um it'll be six thousand okay okay good so you have your month covered and okay good i i like this okay so it sounds like you've got it set up like you've got the the system set up.

38:50It's just now letting it start to work for you. Yeah. Hopefully you can start making progress soon and every dollar will definitely help. Jenny is in Miami up next. Jenny, what's going on? Hi, thank you for taking my call. So I'm a little nervous. My question is me and my husband, we have about 500 ,000 saved. We've been saving for a home for quite some time. the issue is that we don't have much in retirement i'm 40 he's 45 so i'm like really debating here if we should really put as much toward a home or we should allocate some towards more towards the retirement account um so that's kind of eating at me because we haven't bought yet we we're looking at the moment but that kind of doesn't worry me doesn't worry him much but me it does are you guys investing at all right now um honestly no like i i have because i work for a hospital so um i believe it's a four three b so there is money in there without me having put anything in there as of yet um 18 18 000 i believe or 19 for me and i think on his it's maybe 3 000 he just started contributing to that okay what do you guys make a year uh well this last year uh gross was both of us did overtime about on 148 uh thousand awesome okay and what's this house going to cost?

40:13We're trying to stick to$600, but it is Miami. So it's definitely difficult, but we're trying to stick with that, even if it has to be some repairs or anything like that. So we also have to consider those things as well. Sure. And you're renting right now? What's your rent cost? We're renting$1 ,400. Okay. We've been lucky. Yeah, that's amazing with your income. That's fantastic. And I'm thinking through this. You have$500 ,000 to put down. Does that include your emergency fund? Do you have a separate emergency fund from this$500 ,000? So that's everything. That's everything across the board. We wouldn't put all that.

40:47We would definitely leave our emergency fund. We have about$40 ,000 would be left at minimum for the emergency fund. So we put$460 ,000 down on a$600 ,000 home, for example, or$650 ,000. So you have a$150 ,000 to$200 ,000 mortgage, which is very reasonable for Miami. and the good news is you're going to be able to pay that off fast. So here's the deal with the, should I put it toward retirement or not? I would suggest you guys start investing 15 % of your$150 ,000 income today. Okay. And then put as much down on that house as you can, and here's the simple reason. It reduces the amount of mortgage you need, which in turn reduces the mortgage payment, which then frees up way more money to pay down the house early, to live your life in the meantime.

41:32And so it's a good middle ground play right now because you guys are 40 and 45. And so my guess is you end up paying this house off in the next seven years max. And the good news is if you keep doing what George said, as you're investing 15%, if you invest 15 % of your income starting now, a little over$20 ,000 a year, you're going to have$2.6 million in retirement if you retire at 65. That's calculator numbers. That's not an opinion. And so that's the truth. The faster you get the house paid off, then you can max out investing. You'll be making more by then. I have no fear that you guys are going to be just fine if you become completely debt-free and then you invest all of that margin you create.

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43:39Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Camel, joined by Ramsey personality, Jade Warshaw. open phones at 888-825-5225. Sarah is in Memphis up next. Sarah, welcome to the show. Hello. Hey, how can Jade and I help? Hi, my question is, how should I be investing to build wealth, but also to leave an emotionally abusive relationship? Oh, gosh. How long has this been going on? this relationship has lasted going on four years are you safe right now yeah absolutely it's no it's no physical abuse or any of that but it's just too toxic for me to stay i feel like i'm not evolving are you guys living together yes okay okay so what's your timeline on what on exiting the premises um it's not like i would say i want to leave with definitely within the next like six months six to eight months okay tell me what you think tell me what's precluding you from going now because when you say how can i build wealth wealth is different than i need first and last month's rent to be able to get into my own apartment wealth is like a 10 20-year journey.

45:03And so right now, it's, hey, what is the next step I need to take? What is the minimum amount I need to leave this situation? We'll get to what's later. My dilemma right now is I did have roughly like$10 ,000 saved. I've recently paid off my car and got rid of absolutely all my debt. I'm waiting on my title in the mail. I currently have about $8 ,000 left in my account. The reason I didn't, my lease was up. The reason I moved in with him because my income at my job is quite low. I only make$17 an hour. So I was a little bit worried about getting an apartment just due to the requirements. Okay.

45:40And so I'm trying to figure out if I should be like investing with the$8 ,000, like maybe buying a quadplex. No. Living in one. Okay. Like that's what I'm trying to figure out. Let me say this back to you. Let me say this back to you and make sure I've got it. So you've got zero debt at this point. You've got$8 ,000 cash,$17 per hour. What's that equate to a month? What do you bring in after taxes every month? I think around like$2 ,300. Okay. So no to your thing about investing. Right now, cash is your friend. You need liquid money because you're trying to get a place. I would, in the$17 per hour, are you working 40 hours a week or are you part-time?

46:26How many hours do you do? Um, yeah, I work a little under 40, maybe like 36 hours. Okay. Okay. What kind of work are you doing? Um, medical assistant. Okay. So are you wanting to stay in that field? No, I'm currently looking for jobs to expand my income right now to hopefully, like, build my savings account. Well, yeah, I'm saying, are there, you know, the next step rung on the ladder in the medical world from assistant to XYZ? Can you move up in the field and place that you're in right now? Or is this it? No. This is it. I've tried. Do you know what – I think a lot of your skills would transfer in the medical field to other assistant work because you could be an executive assistant and go make$70 ,000,$80 ,000.

47:14Okay. So I don't want you to just limit yourself going, well, this is the only thing I can do. You've got to think about what skills can transfer. And I'm going to give you – our friend Ken Coleman has a great tool and resource called Find the Work You're Wired to Do, and it comes with a Get Clear Career Assessment. And that will actually lay it all out for you. And so that will help you immensely. And then on top of that, do you have any community right now, friends, family nearby? No, that's the problem. I don't have anyone to, like, you know, stay at their house for a set amount of time or help me out in this situation.

47:46So it kind of was like this was kind of my only option. Well, I'm wondering, can you get a roommate? That's what I'd say. I'd be looking at rent in your area and what you can and think about it through the lens of a roommate. It's like, OK, who can I split this with? Because I think if you can get a roommate and I'm not saying you live like that forever, but this is just for you to get out of a toxic environment to your to your own point and to get someplace where it's a split cost. That's what I'd be looking for. That's the research I do tonight. Have you done that? Any research on apartments?

48:16I've already I've already tried that. option and yes I have been looking for apartments honestly the the roommate situation probably is unrealistic in my case I don't have anybody I was looking about renting a room like the Airbnb or something like that and how much does that cost like um I haven't gotten prices yet I was thinking about doing that as of today that's why like maybe I should call first yeah I think that's a good that's a good starting point uh see see what it'll cost you I mean cheap the cheaper the better cheap and safer are the two things that you're looking for and it's just you right yes okay okay i know you don't have people close to you in your life but i would jump on some local facebook groups and you can see their photo their name and say hey can we meet at this coffee shop and see if this is a good fit so i know it's a scary step but it's a much safer step than than the situation you're in right now and the truth is you can't afford an apartment on your own right and so that's the next step and then we can work on the work and career piece to get that income up.

49:17But right now,$2 ,300, you can survive if you can split a two-bedroom at$600, $700,$800. And so that would be my next step is roommate followed by income. And do you have a separate bank account separate from your partner? Absolutely, yeah. Okay, good. And they don't have access to it? They don't know your passwords? Do you have like shared location services on your phone? No, I'm pretty good. I'm pretty clear to exit if I can figure out what I can afford, but I just wanted clarity on if I should be focusing on investing and that should be my way to move out. I would not invest a dime. So in the steps you'd go, hey, I don't have any debt.

49:54Now I need a fully funded emergency fund of three to six months of expenses. And then I can begin investing. But right now we need some stability and a foundation. So you're, you're close. If you can get your income up and get in a safe situation with where you're staying and get the emergency fund, now we're cooking with gas. Now we have the recipe to build wealth because right now one emergency could tank you and now you have no money to build wealth with okay so you're you're doing all the right things i would not wait six months sarah i would be gone by this weekend yeah once you find an airbnb or once you find a roommate in many ways i think your chances are better um well they're both the same thing if you rent a room on an airbnb you have a roommate and this is somebody that you don't really know very well and you're up in their place.

50:41But the good news is you can, if it doesn't work out, you could easily move to someplace else versus a roommate, I guess you'd be locked in lease wise. So I kind of see what you're doing there. I think for you, the ultimate thing is the price on it because usually in order to make progress, we don't want rent to go over, you know, 25, 30 % of our, of our take home pay for you. That's a very low number at 2 ,300 a month. So talking like 600 bucks. Yeah. So you're Yeah,$600,$700 range. Luckily, you have no debt way to go on that. But that's what I'd be looking for if at all possible. Okay. Okay, gotcha.

51:19I understand. Thank you. You bet. You're welcome. I'm wishing you the best getting out of this situation. Jade, when it comes to abusive situations, it's so easy to tell yourself, well, it's not that bad and I can just wait another six months. I'll be okay. You never know when people are going to shift into another year. That's my thing. Yes. You need to get out. And she's taking all the right steps on the financial side. She's got no debt. She has separate accounts from this partner. She's got some money in the bank. Now is the time to go. Don't have some random arbitrary number. Once I have$12 ,000, then I'll feel comfortable.

51:56That's you justifying why you're going to stay in the situation. You need to be out. And if you need to call a hotline, you need to get in a women's shelter, you do whatever you need to do to get out of that toxic situation, Sarah. We're rooting for you.

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53:55Sarah is in Boise up next. Sarah, what's going on? Hi, thank you for taking my call. Sure. Um, so I'm in crisis mode and my question is, how do I manage my husband's business since he had a stroke about a month ago? Oh my goodness. What is his current health? Um, physically he's doing very well. Um, it was a large stroke and somehow physically he's good, but the area of his brain that was most affected affects his reading, writing, understanding of spoken language. and ability to speak accurately. Sarah, I'm so sorry. So he's not available to consult with. Yeah, I mean, your life flipped upside down overnight.

54:43Yeah. Wow. So what is the pressing thing that, like, I got to figure this out tomorrow? He is a business owner, and he has one employee. He does, my husband does pretty much everything for the business, and his employee is not able to take over. What kind of business is it? Essentially, it is a pilot school. Okay. Is there a physical location? Give me a picture of all the things tied to this business. So he has several airplanes that are housed at a local airport, and he pays leases to have slots for those airplanes and hangars. And so he pays those leases by check every month. He has an employee who is not getting paid because my husband's not here to run payroll.

55:45Do you have any knowledge of all of that? Is this something you could even step, even if you wanted to, you had the capability. Is this something you could go, all right, I can figure this out. I can pay the bills. I can handle payroll. I know enough of who to contact to figure out what to do. My problem is we don't have power of attorney or anything set up, so I don't have access to his business finances. What I do have is a wad of cash that he keeps around, and I can pay the leases by cash until he gets out of the hospital. Until you can do it through the business. And can come home and can do it through the business.

56:29Yes. Wow. So he's still in the hospital? Yes. And he'll be there for the next one to three months. So I just need to keep it going for a few months until we see where things are going to land. And he has enough communication ability. You know, he's been trying to communicate to me about his work. But there's a lot of guessing at what he's trying to say. He can't get at specifics. so I'm just trying to keep things going as he's recovering and hoping that we'll be able to talk about it in a few months I just don't want everything to fall down yeah is this your only source of income no I make a good income and I can cover our personal expenses good how much are you making significant 150 ,000 okay okay so the biggest concern is there could be leases piling up that are past due and you wouldn't know you to receive you wouldn't be receiving them because they might be in his email or something that's password protected right correct um okay i did get a bill in the mail from a mechanic okay and so i could just call them but i can't pay it out of the business i can either pay it by cash or out of our personal accounts do you guys have any money saved you guys aside from the business we have about $2 ,000 left.

57:54I've used$3 ,000 of it on business expenses so far. Okay. Yeah, I would kind of start. This is very tough. You're not lying that this is a tough situation. I would start by compiling as many folks as you can. I would sit down with the employee and I'd be like, what do you know? Tell me anything you know. If there's any numbers for anybody that you have, please give them to me. And I would just start trying to, you're almost a detective on this trying to figure out the mechanic. I'd contact them and say, do you know of any, tell me what you know, and just derive as much as you can. Because you might find, yeah, I know you said there's no power of attorney, but you might find out that maybe he was working with somebody that was just kind of helping him with some of the accounting or some of the numbers.

58:39Okay. And then the next thing I'd be talking with the doctors and saying, what's the timeline for us to understand his recovery, what can we expect in the next couple weeks regarding speech, those sorts of things. Do you have an estate planning attorney? No. Okay, I would contact one today and say, hey, what are my options here? Because one option, if he can't understand or communicate decisions right now, then you likely need to go to court to request guardianship or a conservatorship. and so the judge would have to grant you legal authority and if he is able to you might have a shot here to get that power of attorney so the estate planning attorney can help with that step and that's a big step that unlocks a whole lot for you to be able to manage and run this business and just keep it stable as you know just get the bills paid is the employee are they aware that hey you you're not going to get a paycheck there's no money coming in to pay you with yes yes i've let him know that I don't have access to that.

59:39And he said that he will do everything that he can and continue working. And that if he reaches a financial point that he can't continue, then he'll just get a second job and keep doing his part of the business and logging his hours because he knows that we will make good on it. And also look into, since your husband's been paying him, if you know even what bank your husband's using, if you can get with an attorney and say, let's go to the bank, let them know what's going on so we can get access into this account. I think there's those things that I would do to just, I mean, obviously you're in a situation where this person cannot verbalize what they need.

1:00:20So working with the lawyer to get access is going to be what you're going to need to do. Are you a joint owner on anything? Would you use that cash? Okay, so let's pretend, let's play that out. Let's pretend you get with a lawyer, you go down to the bank, they're like, oh, okay, we see what's happened. Yes, you're obviously legally married, whatever, whatever. you get into the accounts, then I'd work with, then I'd be hiring somebody to say, help me understand what we have here. Is there money? Can you look back? Can we now look at a past tax return to find out kind of what the situation is with the business?

1:00:50Then from there, you can decide, is this something I can keep up? Is this something we maybe need to sell? By then you've heard from the doctors about recovery. So there's part of this, it's kind of like a puzzle that has to come together for you to decide, is this going to be something that you're going to keep? Or is this something that needs to be sold. And maybe in the distant future, he can reopen this again based on his knowledge, but not based on the previous business. Okay. Yeah. Man, I'm sorry that this is happening. This is really tough. You've got a new full-time job of just trying to track all these things down.

1:01:24And it's not a fun thing to deal with. It's not something anyone could even plan for, Sarah. So I'm so sorry you're going through this. I'm glad that you at least have an awesome income on your own and can cover all the bills. Do you have any margin each month just on your income alone? We are still paying off our personal debts, so all of our margin is going into that. How much debt do you have between personal, the business, everything? Well, I don't know about the business debts. I don't think that there's any business debt, but as far as personal debt, there's a car loan for $34 ,000. Okay.

1:02:05And a credit card for$2 ,000. I would look into selling that vehicle if you can, you know, even make what it's worth. You know, if you can get$34 ,000 for it, do you have another vehicle? Yes, but it needs work. How much work? I don't know. I don't know anything about mechanics. Okay. But I'm just wondering, if you can sell that. Before this happened, my husband told me it was unsafe to drive. Okay. Well, I would do some homework. You can jump on Kelly Blue Book website and find the private party value for that car. You'll just type in the VIN number for the vehicle and answer a few things. It'll tell you what the car is worth.

1:02:41And if you can sell that, you free up that car payment. So what is that car payment every month? $500. So you just get$500 of breathing room. And now we can, if the repair is$1 ,000, great. Let's go ahead and do that. That is well worth it to free up$500 a month forever. And so there's all these pieces. You have a lot of variables that are in your control, and that's all you can do right now is focus on what you can control and bring in all the community you can find, bring in all the professionals and experts at your disposal to help you through this. You do not have to do this alone. I'm wishing you the best navigating your husband's health issues, the business, and just the grief of what the next chapter of your life looks like.

1:03:23Thanks for the call, Sarah.

1:03:30Thank you.

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1:05:05Up next, we've got Jennifer in Memphis. Jennifer, welcome to the show. Hi, thanks for having me. Absolutely. What's your question today? My question is, how best do I approach a conversation with my husband who recently purchased a home as an investment without telling me? Had no knowledge, didn't know it was a plan. It came up fast, I guess, and called me after he did it. And my question around that is how best to approach that conversation? Do I approach it from a financial perspective of understanding, can we do this, or more so in the fact of the personal side? I'm struggling being a numbers person, focusing on the financials rather than the emotional side.

1:05:59So that's my question on how best to approach that. When did this happen? Yesterday. Oh, listen. This takes impulse purchase to a new level. This is wild. I applaud you. The fact that you had enough self-control to be like, I'm not going to even mention this. You've held this to a radio conversation. I applaud you because I would have been like, what? So good job. That's great. How did this all come about as far as him telling you, like, what happened here? Well, so long story short, this is his goal. He's good at it. The man has a 2 % error rate in life, which frustrates me. He's got a 100 % error rate with his marriage.

1:06:43Yeah, well. How mad are you? On a scale of 1 to 10, how much does this just, like, hack you off? You know what's surprising? Because normally it would, like, I'd lose it. the fury is not my normal fury. Okay. So I'm trying to like listen and go, is this an opportunity to have a discussion? Because we do struggle with his impulse control. Okay. Because he is a very smart person. The fact that you're not shocked by this tells me there has been a pattern of this your whole marriage. This is the biggest. Usually I'm involved, but we've done some pretty high stakes investments that he researched. He's smart.

1:07:21So he's not impulsive, I wouldn't say. Hold on. He has a high risk threshold and you trusted it. Jennifer, he's impulsive. He bought a house without telling you on a whim. Well, it wasn't a whim. So come to find out, he's known about this. He's researched it. It was an auction. Okay. How much? $750 ,000. Oh, man. Was it cash? No. We have very good net worth. um what is it my net worth yeah about two to 2.1 million is it all real estate or is some of that can you tell us what that is yeah majority real estate we have very very good equity in our home um and then uh we have an investment in some land that's in high uh very nice area so it's it's worth quite a bit.

1:08:21And then we've got some other assets. So our cars are paid off. Okay, good. What debt do you guys have? So when I say they're paid off, we do have a loan on one of them. So I shouldn't say that. We do have a loan on one of them, but it's going to be paid off here soon. So total debt is$798 ,000. And that's including this? $698 ,000. Well, now it's double that because there's a$750 ,000 mortgage. Does that include the new one? No. What's the mortgage on that? The new one? Well, so we haven't closed on a loan yet. But it was$750, right? Yeah. Okay. Okay. So the first question you asked was, do I approach this from basically the dollars and cents side or the emotional relational side?

1:09:08I would go, the dollars and cents side is kind of like goes without saying. I think I would go first for the emotional relational side, since honestly, that's the most important problem at hand is if you're going to do these approaches, I understand what our history has been. The point is not to insult intelligence here. The point is to say that I'm part of this marriage. And when we make decisions like this and I'm not included, I feel like I'm not a voice that matters. That's what you're telling me is my voice doesn't matter. and I need to know, is that how you actually feel? Because that's the way you're acting.

1:09:47So I would make him understand that what you're feeling is not consistent what you think his intention towards you is. Does that make sense? And that that's not going to work for you going forward. So I would get pretty strong on this because in my mind, and I'm not trying to project onto you, But in my mind, if you can call me right after the deal, you could have called me right before the deal. Right? It's the same amount of time. Nobody, you know, and I understand it was an auction. Yeah, but he wouldn't get it. Because he texted me, actually. That's how he told me. I think he legitimately didn't think he'd get it.

1:10:28But this is not a Pokemon card on eBay that I bid on. I went, oh my gosh, babe, I won. But the fact that he was even going to an auction means I have the intent to purchase something. and once the auction starts, here's the truth. Once the auction starts, sure, you could be like bidding and be like, I don't have time to text, I'm bidding. But when you knew, I think I'm gonna go to an auction today, that's the time you email and go, I'm thinking about going to an auction today. Here's the property I'm thinking about bidding on. If we get it, here's the extent that I'm willing to bid to. What do you think about that, right?

1:10:58That's a conversation that should have had. He knows that, go ahead and remind him of it. And I would just, I think Jennifer, for you, you're going to have to decide how serious you're going to be about this because to George's point seems like there's been a bit of a pattern and it's not to say that he's not a smart guy or doesn't it hasn't had great luck or great outcomes with his knowledge I'm not saying that but it's not put you in a place of mattering and you do matter and that's the part that needs to be figured out here now we can go back once that's deciphered now we can go back and talk about okay keeping this house what's it going to turn into all that stuff but first and foremost how much do you matter in this relationship when it comes to our money i think that's where we've struggled our whole lives i'm risk averse and he's obviously risk taker and we've always struggled with the fact that he he does do his research he does he's but jennifer that's not the problem you being risk averse and hit that's not the problem that's just you guys having personalities.

1:12:01The problem is your vote weighing and mattering when it comes time for the rubber to meet the road in a decision. That's the piece. So don't, your challenges, because I can, like I said, you're very, very patient, but your challenge is going to be when you have this conversation, not to get bogged down in those minutiae, right? Because that doesn't matter. It doesn't matter how smart he is. It doesn't matter how risk averse you are. None of that matters. What matters is, do I matter? Does my opinion matter? Because so far it has not. And that is not okay with me going forward. And if this continues to go forward, here's what that's going to look like on my end.

1:12:43That's what you have to decide. And that's a firm conversation. So that's my advice to you. And again, I can't say it enough. Has nothing to do with smarts or not smarts. I don't care if he won the lottery this is still financial infidelity I mean think about if this was a person you went well he didn't cheat on me impulsively he's been talking to this girl for months that doesn't make it better does it no and so if he knew he was looking at this house he should have said hey you know I've been looking at this property I think it could be a really great investment here's what I'm thinking you guys aren't communicating at all when it comes to money.

1:13:25I mean, my wife and I don't make purchases over$500 without talking about it first, let alone$750 ,000. Yeah. And I don't, I don't make anything without asking. Um, I think again, this is the first time he's done without telling me. It's always been, he's brought it to me and then I tell him no. Which is why this is, which is why you gotta put the line in the sand on this, because what you don't want is for this to be seen as, oh, that wasn't that bad. I could maybe do this again. This is you putting your stake in, putting your line in the sand. Hey, do you earn? Are you a contributor of money in the house?

1:14:04Okay. I just wanted to check on that. I think that's the hard part. We have substantial annual income. And he uses the debt, obviously, to build wealth, and he has. Fine, fine, fine, fine. All of that. Fine, but you need to make sure he understands and you need to understand too, this is not a money conversation. Has zero to do with prior success. You cannot let the conversation go in that direction. It's about respect on your name. That's it.

1:15:07Well, Jade, we just took a call where the husband bought a house without telling his wife. Unreal. Pretty wild. And you know, buying or selling your home is a big deal. It's the biggest financial decision you'll ever make. And with all the clickbait headlines and conflicting data out there, it's hard to know what is actually happening with the housing market. So we are here to make the latest trends easy to understand. We've seen mortgage rates dip, which is nice. We had 30-year for the first time in a while, it's under 6%. Yeah. And 15 years, been dipping down along with it, which is nice. So if you want to learn more about the housing market trends and get free tools to help you buy or sell with confidence, go to RamseySolutions.com slash market or click the link in the show notes if you're listening on podcast or YouTube.

1:15:53All right, let's get to the phones. John joins us in Portland up next. John, welcome to the show. Good afternoon, gentlemen. I'm Miss Jade there. Thanks for including me in that. I was concerned. I was happy to be called gentlemen. You're a hoot on the show. I enjoy listening to you guys almost every day. Oh, thank you. How can we help? So I'm looking to get engaged with this young lady that I've been dating about nine months. And I'm just getting into figuring out her financial situation. And it's really a freaking mess to be an understatement here. Oh, boy. So she's co-living with her mother, her sister that is married, her other sister that is married, and of course herself.

1:16:46And they've all co-signed signatures and such and incomes to be able to afford and purchase a home together. Whoa. Six of them? So they're all in the deed. They're all on the mortgage. Right. They're all in this mortgage. And then there's a food truck business that they run as a family business and there's other incomes. And then there's private and business credit cards all mixed together. And my girlfriend's credit score is tied to all of these as a co-signer and to auto loans that she's also tied to. Oh, boy. OK. So I'm going, okay, so if in six months, if I was hoping for a spring or summer wedding here, that I cannot join finances with over$100 ,000 of small debts and a house that I have zero equity or input in.

1:17:37I don't think she has equity in any of those things. She's been coaxed into signing as a cosigner and all of those things, but does not have equity in any of those things. How much of this does she understand? It sounds like you are well-versed in the world of finance, and I'm worried she just is like, oh, I didn't understand all this. I just signed because it was family, and I thought it would all work out. I don't know if she understood the weight of when you sign a – co-sign a loan like that, how much are you on the line for? I don't think she really understood that. She doesn't understand that if they all default, that it all reflects on her and that she could be the one that's responsible for all of it.

1:18:19Correct. So there's another curveball here. One of the sisters has cancer, and so her and her husband aren't really working. And so they're kind of like soaking up some out of the household. They kind of pull their money together in the house. And her mother wants to go back to Mexico. So she's Mexican, but I don't think debt companies can chase you and collectors can chase you once you're on the other side of the border, kind of an idea is from my understanding. So her mother is, you know, obviously participated and created some of this debt. And I think that they're all going, oh, well, now she's found this nice guy.

1:18:58In other words, me. Okay. Let's not go. What do I do with this? Let me go back to what I think is the most important things first, because there's a lot here. I'll try to tackle some of them. I know George will tackle some of them. So first things first is the conversation where you're kind of getting her to understand your fears around this. And then and only then if she's in a space to move forward, here's what I would say is the ultimate goal. The goal is to find out first, hey, this mortgage situation, who can buy you out? Like who can buy out your portion so that you can get your piece? and can we get folks to refi and get you out of this?

1:19:46Because that's the only way is to refi this mortgage so she's not on it. So that must happen. It must happen. Same thing with these auto loans. This is, it's just so serious. So that conversation of her understanding that, that's why I say that's like paramount to this entire thing working. Because after that, she's gonna have to have some serious conversations of, I need to refi the mortgage. I need to refi these auto loans. And I need to find out how to get my name off of these credit cards. Because if I were in your shoes, I don't think I would move forward with marrying her until that's done.

1:20:26Because you are going to get – it's a horrible way to start off your marriage. Period. It's just going to cause problems. I agree. Is she willing to essentially be exiled by her family? You know – Does she want out of this? Or is she like, no, everything's great. I like everything that we're doing right now. She honestly has confided in me that she's very stressed about the financial situation because I explained to her a lot more the depth of like, you don't have equity to play with as a bargaining chip. It's not even about equity. You're only stuck with the liability. It's not, yeah. It's not even about the equity.

1:21:01I think that that's burying the lead a little bit. The biggest, the thing that you guys have to be most concerned about is the risk on her life. when these people stop being interested in paying, especially because there's so many involved. It's very easy for Bob to go, you know what, I'm not working in this season. It's okay, five other people are paying it. Mom goes to Mexico and goes, good luck, guys. Now what? Now she's on the hook for everything and collectors are coming after her and suing her. And that's what she's up against right now. Yeah, that's the thing you need to be laser beam focused on is the risk.

1:21:36Forget equity. Forget any of that other stuff. It is risk, risk, risk on her head right now. And so to start to reduce some of that risk, I looked at it like, yo, you guys need to sell these cars. Because one of their cheapest car, they are at an 18 % interest rate on it. And so I was like, you guys cannot be paying$750 a month on a 2018 Nissan Pathfinder. Yes, you're right. They need to sell it. They're underwater. They're underwater by 5K on that one. They got offered eight for it. I was like, sell it, but they don't have any money to pay off the loan so the dealership will take the car. Then whoever it is that's driving the car needs to see if they can get a loan for the difference.

1:22:19And they need to be selling it private party. The dealership's always going to give you a super lowball offer. Correct. Yeah, they have to have their margins. So they might actually be able to sell it for what they owe on it if they sold it private party instead of going to the dealership. the people who screwed them over to begin with. I think they owe just about even with KBB on the vehicle. Do they need it to get from A to B? No. So I'm a mechanic for a living. I was like, look, I'll find you a Toyota Camry that needs a water pump and a timing belt for$1 ,500. Put$80 of parts in it and ship it, and you guys can have reliable transportation.

1:22:56Who's is it? Is it the sister? I can get you transportation in a week. Is it the sisters? No, this is what my girlfriend drives, and her mother and whoever else needs the car. So, okay, so it's your, for all intents and purposes, it's your girlfriend's car. Correct. So what you need to do is you need to go with your girlfriend and say, hey, we're getting a loan. Once we find out KBB, if there's a difference, we're getting a loan for the difference. And then we're going to sell this and you're going to get your mom and your sister to agree to that immediately. Is that the case for both cars, by the way?

1:23:30Yeah. So there's a 2024 Dodge Ram 1500 Laramie that they have. They're paying about$1 ,000 a month for on the payment, and they owe$38 ,500 on it. And it got appraised the dealership last week for$34 ,000. And who's the main driver? That's one of her brother-in-law drives that mostly. And he's currently not working, so I don't know how he gets the privilege to be driving the vehicle. Are they all, like, chipping in to cover all of these payments? Correct. They kind of just pull all their money in a pot and pay bills out of that. And some months they have enough for all the stuff. Okay. Okay. I'm going to be straight up with you.

1:24:09There's so much toxic codependence happening here. Well, well. Oh, yeah. Yes, yes. But I think what you more so, like we can look at it on the outside and say toxic codependency. But it sounds like it could be a cultural thing of this is just how we survive and this is what we're used to. your work is cut out for you and I don't know if you're going to be able to win this battle my friend this is deep deep deep deep deep this is going to be a part time job for you just to help her she's going to need to pull her credit report and go line by line and go how do we get you off of this how do we get you off of this explore all the options and then she's going to have to fight with the family and be excommunicated for ditching them in their time of need and I don't know if you want to be the guy who's responsible for that

1:25:10Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. Jake joins us next in Madison, Wisconsin. Jake, welcome to the show. Hey, thanks for having me. Absolutely. What's going on? So I am in the process of building myself a house and looking for some guidance on if I should take the 15-year mortgage option where the payment is about 31 % of my monthly pay. Or should I take some of my six-month emergency fund and try to get that down to like 29 %? Or is there some other route I should try to pursue? Cool. What's the house going to cost?

1:25:59Total, what we're tracking at right now is about$380 ,000 all said and done. Okay. And how much are you going to put down? So I've already put about$180 ,000 down of my own money to get the project started before I even went to the bank. How much more do you need to get it percentage-wise to where you want it to be? uh i believe it's close to 20 000 which i do have uh that would just be most of like i said a six month it would be most of it what would it take your emergency down to as far as months uh about two okay the most i would personally be comfortable with is three months if you're like hey i'm gonna take three months of the fund out leaving three months in there and i'll restock it once we move in, you're going to be okay.

1:26:47And so that's not on fire. And if it's 29%, nothing is on fire because the truth is your income will go up over time. Sure. Right? And so that percentage will go down. Yeah. And the other thing is when we talk about the 25 % parameter, which for everyone listening, we tell people, hey, if you're going to buy a house, do it once you're out of debt with an emergency fund, you've got a solid down payment and make sure that you get a 15-year fixed rate conventional loan where the payment is no more than a quarter of your take-home pay. But when we say that, you've got to remember this is after tax, but before other deductions.

1:27:22So we're not going to include the 15 % in retirement. We're not going to include the healthcare premiums. It's just after tax. So have you done it based on that math? I would say not entirely. I was doing it more so including the 15 % that I would have in retirement and all that. Okay. Because then my guess is once you redo the math, you'll go, oh, It's actually like 20 % of my after-tax income, but before the deductions. Yep. Okay. Good. That makes sense. So you're in great shape, man. I'm proud of you. How did you do this? So I had a house on 30 acres previously that I sold for quite a bit more than I owed on it.

1:27:58I was able to take those proceeds, pay off my car, and then my parents were kind enough to let me and my girlfriend live in their basement while we're building this house. And basically every month that we've been there, I've been able to set aside quite a bit of cash to get the savings muscle down. And you're completely debt free? Yes. Fantastic. Man, green lights over here. Congrats on the new house. I hope the build goes smoothly. Hope it's on time. Is it on track so far? Yeah, we're about three months ahead of schedule. Wow. We're some technically now in general contractor. My dad is helping me with that.

1:28:36He's like an inspector, so he's got all the certifications for that. So I've been able to do a lot of it myself. Got cost savings all over the place here. Yep. Cost and time savings. Time savings has been the big one for sure. Yeah. Well, congrats, man. Super excited for you. Appreciate it. Best of luck with the big move and finishing the construction. Thank you. Yeah, I appreciate the insight and the discussion. Happy to do it. That's what you want. That's a good best case scenario right there. Good for him. I'm happy for him. If you're arguing about is it 28 % or 25%, it's the right argument.

1:29:09Yeah. Versus most people just go, well, we just needed a house, and it's 54 % of our take-home pay. We're like, oh, my goodness. This is a hard one to crack. All right. Nora is in Nashville up next, right down the road. What's going on, Nora? Hi, George and Jade. I am just calling because – sorry, a poor person tries to call me as soon as I'm on the school. Who could be more important than us? Put him to voicemail. Nobody is more important, unless it's my husband or my kids. Truth. Yeah, you're right. There's a lot of people ahead of us. So I came to the event, and actually, Jade, you gave me your book.

1:29:46Nice. I'm the one who asked the questions. I gave it to you from the stage? From the stage, and I gave you a hug. I remember you. Yep. Great. Yeah, yeah. So it lit a fire, and the next Tuesday we joined Financial Peace University. Yay! Yay! So we're trying to get our emergency fund together, and things are so tight. But I just started selling stuff on Facebook Marketplace. And so since the 14th, I've gotten$230.52 together. Way to go. Way to go. And I'm still selling stuff. Someone's coming at like 4 o 'clock to get something else. Got to take that call. So once I get that$1 ,000, I was looking at the EveryDollar app, and it looks like I should pay my IRS debt first before I attack my smallest debt.

1:30:39Yes, ma 'am. Is that true? Yes, ma 'am. Okay. How much is the IRS debt? It's$2 ,266. Good. Good. Yeah, that's one debt that always jumps to the top of the list no matter what, because it's just such a volatile situation to be in. And so we want to get you out of that as soon as possible. So, yeah, that or if you had, you know, back rent or back mortgage, those things would jump to the top of the list. How much other debt do you have? So we have about$62 ,500. And, yeah, that's it. Great. Great. So what can we help you with? Was it just the IRS thing or was there something else? Well, I mean, I make good money, pretty good money.

1:31:27Like my husband and I together make about 117. But I've just been really irresponsible, like I said, at the event. And it's just trying to get my behavior on track. Have you seen some traction? I have. I haven't used my credit cards. I haven't been on like Klarna or PayPal paying for. Did you cut up the credit cards? Cut all of them up. Great, great. Now do you want to know what I would help if I were in your shoes? If I had a problem with impulse spending, things like buy now, pay later, Klarna, I would do a couple of things. A, I would start with my phone because that's usually the thing that speaks to us the most.

1:32:08Obviously, unsubscribe to all the ads. I would take Amazon off my phone. I would take those apps anything that's an app I would take it off my phone that has the ability to purchase things with just so it's not talking to me all day long you know I have been unsubscribing to the emails that get sent from all the places that I've bought from before I'm like okay let's just unsubscribe from all this it gets addictive when you start to go look how many inputs are just trying to get my money from me it's pretty wild and I'd set up notifications that notify my spouse when money is spent both ways. So you get the little text when a transaction comes out of the bank and so does he.

1:32:50It's just an added layer of accountability and transparency because it's easy to go through the drive-thru when you're thinking, oh, I can just go through, I'll get these fries. So-and-so probably won't see it. I can get away with it. But if you know their phone is going to light up with the notification,$5.95 spent at Wendy's, then you're less likely to do it. Oh, that's my favorite. I get all the transactions texted to me. And so I'm always texting my wife. What's this? What was this about? Or usually it's more like, what'd you get at McDonald's? Oh, yeah. Have you had your, looks like you had your break today.

1:33:24Did you get some for me? That's always, you have enough for the whole class? Yeah. That becomes a fun discussion once you're not broke and out of debt. So we're rooting for you, North. Thank you so much.

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1:34:45The Ramsey Show question of the day is brought to you by Y-Refi. You don't have to stay stuck in defaulted private student loans forever. Y-Refi helps borrowers take back control with affordable refinancing options that actually work. Learn more at YRefi.com slash Ramsey. That's Y-R-E-F-Y dot com slash Ramsey. not available in all states. Okie dokie. Today's question comes from Vince in Rhode Island. He says, my wife and I are buying a used car, but instead of paying cash, we're thinking of leveraging the debt considering we can get a low interest rate. We'd invest the$30 ,000 into Vanguard funds and contribute more each year to fund a family cabin down payment.

1:35:27We're in our authorities have over 200 ,000 in 401ks, no other debt, have an emergency fund in place and a steady income. Does this sound like a good plan? No. Here's my thing. You're doing so much right. I think it's just a patience issue because you've done, like you said, there's no debt. You've got the 401k set up and you've got the emergency fund squared away. Why divert? Why abort? the plan and go into this lifestyle of debt for a vehicle that you can pay cash for. Pay cash for the vehicle that you want. And then from there on, yes, go ahead and invest for this cabin down payment. Why can you not do both and do both of them the right way is what I would say.

1:36:17George, you got me? Yeah, I'm just like, I'm so confused. I'm like, what? You would invest the 30K that you would have spent on the used car, but then you've got a car payment, so now your income's locked up there, just invest what you would have paid for that car payment in paying cash. Easy, easy button. You can do all of it. And if 30K feels like, oh, I don't want to sink that into a car, maybe rethink buying a$30 ,000 car. Get a cheaper car. You can do both of these things. You just need to do them both the right way. And you can do them both almost simultaneously. You just need to do them both the right way.

1:36:49Yeah. Get the car. Invest. You guys are in baby step four, so you're investing 15 % of your income and buy the card in cash, and then any extra money you can save up or even invest for that cabin down the road. It can all be done. Just do it in the right order. Don't go backwards. Don't go backwards. Please do this, please. Thanks for the question. David is in Los Angeles up next. David, welcome to the show. David, you with us? Oh, yep. I'm here. Hey, how are you all doing today? Doing great. so my wife and i were going to like plan to get pregnant later this year and uh when we do eventually have a baby um i'm going to need a new car right now mine only has two seats and i'm probably going to need something with at least four um i was looking at getting a used ev because the prices on them are pretty attractive at least compared to a normal gas car but the one thing that has me worried about them is the amount of depreciation that they get hit with every year it seems like I depreciate way quicker than a gas car and I just wanted to know is that something that I should be factoring into like my car buying decision or should I just completely ignore the depreciation and go for whatever car fits me are you paying cash yes I would pay cash yeah okay what's this car going to cost what exact car are you looking at because I think the appreciation it really depends on the make the model now EVs obviously it's think about iPhones.

1:38:07How many people are in the market for an iPhone 8? Yeah, not many, right? And so the price is going to be a lot lower, because everyone wants the latest and greatest technology. And so EVs can have a steeper depreciation, especially when, you know, Elon's changing the price in the model every day. And you're like, Oh, man, I just paid 30 grand for it. It's only worth 20 now. So that is something to think about when it comes to resale value. But if you're going to drive the thing for a long time and you pay cash for it, you don't have to worry as much about depreciation. Okay. Yeah. I do typically drive my cars for a while.

1:38:41Um, it's just like my car right now has barely appreciated at all. I got a pre COVID pandemic pricing spree. So, um, you know, that, that's kind of working in my favor right now, but, um, being able to get out of it whenever I want to just seems like a really nice option to have. And I feel like I'd be a little more trapped with an EV if I did go that route. What are you looking at? I'm looking around$25 ,000,$30 ,000 to spend on a used one. Okay. And what, can you give you like a make and model you're looking at? Sure. Yeah. I'm still looking around a little bit right now, but right now my front runner is probably one of the Hyundai Ioniq 5s.

1:39:19They seem to be some of the best deals out there, at least for the used ones, in my opinion. Okay. And have you looked at the depreciation on them? Those specifically? I have, yes. So currently they're like, you know, about half the price that they were new. And I've done some research online and they're still forecasted to lose another half in the next like five or so years. Yeah, that tracks. Have you looked at Tesla as well to compare the depreciation? I have. I'm not a huge fan of the Tesla just with everything buried in the screens and stuff like that. So I was trying to go for a more traditional car.

1:39:52Some analog controls and things like that. Yeah. Yeah. Yeah. Yeah. I mean, I've experienced this because I've purchased EVs now. My last two have been EVs. And looking at that appreciation really just hurts your soul. And then I have to remind myself, who cares? Do I like the vehicle? It's paid in cash, so I can never be underwater on it. And yes, I'll take a lick when I go to sell it and go, oh my gosh, I paid so much more for that. but that's the nature of cars they are just boxes that exist outside and go down in value and you'll find that with any car but evs can depending on the make and model go down in value a little faster because people want the latest and greatest and especially if it's it hasn't kept up with technology and so that's the key you just need to know going in there's pros and cons okay so yeah don't treat it as like i'll save so much money on gas treat it more as like this is the kind of car that I enjoy driving and I should go with this.

1:40:49I never use the math to justify it. I just go, I enjoy it. I like not having to stop by a gas station. That's just me. Yeah, that does seem like a huge perk in my opinion. That really seems nice to be able to come down to your car every morning and have a full charge and full tank to go wherever you need to. I still have to go to the gas station to fill my wife's car because I'm a gentleman and a scholar and I get brand points. I might be in the same boat, yeah. She's got a gas car that I would probably still need to fill up every now and then. Yeah. That was the compromise. She was like, I don't feel good about having all EVs just in case you want to have the ICE car, but I think you guys are on the right track, man.

1:41:26The fact that you're paying cash, you guys are debt-free, you're investing. Cars just become a thing, and now you can buy a more enjoyable one that makes sense for your family. Perfect, yeah. Thank you so much. Yeah, I wish you the best starting the family, man. That's a big step. Austin is in Salt Lake City up next. What's going on, Austin? Hey, guys. I got hopefully two questions if you got time. I'll make them quick, but if not, my main one, my wife and I are also preparing to have a baby this year and currently maxing out our HSA. I'm just wondering, should we use the HSA to pay for health care expenses like that?

1:42:04Or if we can, should we cash flow them and let that HSA continue to stay invested and build and do the whole save the receipts and put down the line type of a deal? So I'll say this. That's what Dave Ramsey does. Dave Ramsey has never touched his HSA. He maxes it out every year and he cash flows it because he can. And so if that is you and you're in the case to do that where you go, hey, we can cash flow it. It's not going to bust our budget to do that. We can max it out. Then, yes, keeping the majority of it invested is always going to be beneficial. And like you said, a lot of people don't realize, hang on to the receipts and you can reimburse it later on.

1:42:41And that money will show up in your bank account. So it's pretty cool how that works. Yeah, I agree. Jade may have different thoughts, but... Nope, that's what we did. That's exactly what we did. Okay, cool. That's kind of what I was thinking, but I just wanted to take your guys' opinion on that. And if you got time for another quick one, I just got married over the summer. So we've been married about seven months now. And we've combined our finances, combined our lives and everything. I already had a house and our vehicles before we went into the marriage. I'm just wondering, should I, is there a way or do I need to get her on the title of the house or on the mortgage or like on the title for the cars?

1:43:21Or does that really matter? It's not really necessary. Technically, it's going to roll over to her anyway as your spouse. If something were to happen to you, if it were something that she was like, I just feel better about this, then you could. Yeah, nothing's on fire here. So if it just makes you guys feel more united, awesome. But there's no, like, this is really going to benefit us in this explicit way. It's not really the case. You guys have, you know, legal protections as a married couple. And so you're doing all the right things, man. I'm proud of you guys. Wishing you the best with this baby.

1:43:59Very exciting. Thank you. Two calls in a row. Look at this. I know it. That's the best thing you can do, I think. It's outside of the baby steps. But we tell them, hey, there's no baby step to have a baby. If you want to start a family, go for it. Go get it. And you'll work even harder to sacrifice to take care of that little one. And it's a good time.

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1:45:51Marie joins us up next in Charleston. What's going on, Marie? Good afternoon, guys. So my biggest question, I'm a single mom with three young kids. I was widowed in 2023. three. And I'm just, I have a limited budget because we are currently living just on social security survivor benefits. And I'm trying to go to school, get a certificate so I can add to that once my four-year-old's in school. So I'm trying to right now with where I am, knowing I probably won't be out of school until next year, trying to figure out what my wisest steps are going forward. I've never been good with money, and I just want to do better for them and for our situation.

1:46:39Well, that's a great why. That is what's going to fuel this journey, is those three little ones that you're taking care of. What's their ages? My youngest three are eight, six, and four. Okay. And what's the certificate that you're pursuing? health information technology and what's on the other side of that what job are you aiming for i'm kind of looking for something that keeps me uh the ability to have flexibility in remote so that's one of the reasons i chose that path okay and are you cash flowing this certificate are you able to pay for it all uh i'm actually able to get it through financial aid so it's pell grants i'm able to get through all of it with pell grants great when will you be finished uh i think it's not this coming december but the december following okay so you've got two i have a potential to do to go into like an internship that or like to where i can do on the job kind of clinical type training at the hospital and make money through a portion of that okay okay so end of next year and then in the meantime we're going to be living off of these survivor benefits, which is how much per month?

1:47:47So right now I take in about$52 ,000 a year, $52 ,700 a year. Okay. Is that enough to cover all of your bills? It is. And I do have quite a bit of credit card debt that I was left with because of my late husband's... Was your name on them? Opened a bunch of credit cards in my name. Oh, okay. How much? Yeah. Right now, without my car, I have$27 ,000 left in credit card debt. And then what about with the car? With the car, total of, it's just under$70 ,000. I had to get a new car this last year. Your car is$43 ,000? It's a 2022 Subaru. What's left on the loan? It's$33 ,000. $33 ,000 and some change.

1:48:40Goodness, that's a huge portion of your yearly income. It is, it is. And the thing that I do have going forward is I am in a relationship with someone that it is leading to a marriage. And he's encouraged me to not try to, because if I tried to sell that, I'd be really upside down at this point. I wasn't wise when I bought it, and I'm clear about that. But my financial situation will drastically change once we're married. I just, I'm with the Dave Ramsey plan that you don't combine those things until you're there. Are you engaged? So I'm trying, not yet, but it's hopefully this spring. Okay. Okay.

1:49:19So it is, it is in the, our conversations is a very active topic. We're just, I need to, there's a aspect of this that I, being that I haven't always been financially responsible, there's a percentage of me wanting to do this and struggle. I need to feel the struggle. Yeah. I don't want you. I don't. I don't want you. I don't think you're in a position just yet. And I hope you get there. But I don't think you're in a position just yet to like ride on this. And I don't think that you are. I just want to caution you against thinking about, well, in the future, I'll have this financial help because this is leading to marriage.

1:49:52Because you're not even at engagement yet. So I just want you to be really focused on what you are doing. And how upside down are you on the car? I'm not quite sure I just got it in June of last year I know that as of right now once my because I'm living rent free I'm able to live in a home that my mom owns and I just pay utilities okay so that is a huge help I check on the car I check on the car immediately I'd go on Kelly Blue Book see what the value is and the private party value not trade-in because that will make it seem like oh my gosh I'm 10 grand under I would never sell it but if you can save up the difference with the margin you have because you're living rent free.

1:50:31Maybe you're$5 ,000 underwater. Okay, well, let's come up with$10 ,000 in savings. Five will cover the difference on a loan and five will get you something to get from A to B. Now, maybe you get a nicer car, but it doesn't need to be a$33 ,000 car. It could be a$20 ,000 car. Those are still safe and reliable, even for the kids. It's not a death trap. Don't let anyone scare you into thinking that or even yourself. That's usually how we justify it. Well, I had to get a new car. The kids, you know, you got to have something reliable. Less debt is the goal. You got to get a$40 ,000 car. Less debt is the goal.

1:51:03Yeah, what's the payment on that? Right, right. The payment is$6.55. Yeah. That would rock your world right now. It would change your life. Right. It definitely could, for sure. I do, like, the man that I see, him and his youngest daughter come over and eat all the time. So he does throw me$500 a month for groceries because he does care. So that does help some. So like right now, without what he does help me with, my disposable income after paying my debt, which is$1 ,700 a month, and my just fixed expenses, like my bills, is$822. Leftover disposable, I have$1 ,800 left over without his help. And that goes towards your smallest debt?

1:51:49the 1800? That's what I'm asking because I have I know I have to have my I haven't even started my emergency fund yet and I know that that's like number one step number one. So with the 1800 let's put it practically to to with the 1800 I take a thousand aside this month when you when you're left with that margin a thousand of it put it aside savings account done and done baby step one knocked out then you have eight hundred dollars to look over at the credit cards and go what's the smallest credit card. And so what's the smallest balance you have on one of those credit cards? I mean, I have something as low as 123 up to 5 ,300.

1:52:27Great. So we're going to knock out quite a few of those. Yeah. Knock them out all the way up to 800 bucks. And then if there's any other margin left out that, or that money that comes through at the end of the month, just go ahead and throw it at the next credit card. And you're really going to do that. Um, Marie, until these credit cards are knocked out. I do like the idea so, so much of you getting in a cheaper car because knocking that out is going to make this journey feel so much more feasible for you. Plus, it's going to free up money. Like I said, even if you go from a$33 ,000 car to a$23 ,000 car, that's still going to free up money for you.

1:53:04So please just be willing and open to do anything to lower the debt, if that makes sense. And our parameter around cars, just so you know, is that everything with wheels and motors in your life shouldn't add up to more than half of your annual income. And so we're well over that. Right, and I understand that. And so even if you could... That's before I really started listening and being active. Oh, sure. I'm just saying in the sense of keeping the car, it's still too much of your world depreciating in value every day. And so I know it feels like, well, I'm already underwater. Well, let's cut it off right here and not be more underwater.

1:53:36Because if you did that right now, you said you have how much total consumer debt? total consumer debt is 69 000 okay what's the extra nine because you said 27 000 on credit cards 33 on the car that's 60 uh is there more i don't know that's the student loans student loans okay because right now i'm doing the math for you 1800 bucks and you have 69 000 it's going to take you 38 months you're talking over three years at this rate that's a long time yeah i mean that's That's the thing for me is I want to, I have zero retirement. I was a stay-at-home mom for 10 years. Right. So I have zero retirement.

1:54:16And, you know, unfortunately he passed. And because of the way he passed, he had life insurance, but we were two months shy of being getting the payout for that. So I've been kind of trying to float up for two years now. Well, you've done a great job. And I finally am to a point. You've done a great job. Keep going. You got to, the car is a huge part of this because I don't want this to take three years. I have a question on the car. So what if I don't have cash to buy a new one? You'll just go over to the credit union and you'll get a loan or you'll go to the bank and get a loan for the difference.

1:54:48At this point, just remember, going down is worth it. So get you a loan for the difference, however you need to get that done.

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1:55:58Our scripture of the day, Isaiah 41.10. So do not fear, for I am with you. Do not be dismayed, for I am your God. I will strengthen you and help you. I will uphold you with my righteous hand. Simon Sinek said, when in doubt, be yourself. There you go. That's good advice. If you've got a good personality, Jade. Sometimes I'm told, hey, don't do that. Don't be yourself. Don't be that vulnerable. Be a different version of yourself. Austin is up next in D.C. Austin, welcome to the show. Jaden George, thank you for taking my call. Sure. How can we help? Yeah, so between my wife and I, I have about$142K in consumer debt.

1:56:49And a huge fork in the road right now. Now I've got a toddler and a kid on the way to do this summer. So very precarious situation. And just trying to decide if I should do a single filing for Chapter 7 or go another route. I really don't want to do Chapter 7. But if I have to, if it makes the most sense, then I will. But I thought I would call you guys for advice first. Well, how much money do you guys earn? uh well um right now we only make about 78 total which is well below the median okay the median what like off median income median household income for my area well who cares about that is that both that's not the reason you guys are in this situation austin yeah the median is like what eight 79 80 okay you're two grand short of the median The problem is we're$142 ,000 in consumer debt.

1:57:51So break this down for me so we can see if there's a way out of this faster. Yep. So myself, I have 72 to my name and then another, well, it's actually$181 ,000 if you include student loans. Tell us the debts and what they're each worth. So student loans, X amount of dollars, cars, X amount of dollars. Yeah, so student loans is$39, car is$17 ,284, and then everything else is personal loans, personally guaranteed loans, and personally guaranteed credit cards. Okay, and how much is that amount?

1:58:36um we'll do some napkin math here uh so minus the car so if you subtract 17 from 142 that's all of the personally guaranteed loans and credit cards. Okay. All right. So you're talking about, I mean,$125 ,000 between them? Mm-hmm. Okay. What was it for, a business? Did you have a failed business? What is this, all of these personally guaranteed loans and credit cards? Well, yeah, so the dream was basically to, you know, retire the wife from the military. and um you know i i went about it completely the wrong way obviously and you know i just dug myself into a hole doing um business centers um you know airbnb and then uh you tried an amazon store and then after the layoff last month uh we ended up having to live on the revenue from the amazon store um so i'm not able to pay off any of the consumer debt that i used to get the amazon store um so um that's where we're at now and um do you still have this this property that you were doing airbnb on it was a i made the mistake of doing rental arbitrage last year dude how much tiktok have you been watching well this is like by the book every tiktok like business hack scam out there yeah you know they sold me a dream and i got you know i own up to that and it was it seemed like a good idea at the time when um you know my my father-in-law died and i was just really trying to find a way to make as much money as possible to retire my wife and so what is she doing now but i just went i went about it completely the wrong way yeah listen i think i think you ought to that at this point you've got to just say that's in the past I think you realize that it was erroneous and I think you're ready to go the right direction so the 78 ,000 of income is that both of you combined or is it just you working since she's pregnant

2:00:49um both of us combined right now since she's full-time um active duty and um I'm still in the process of getting work, I'm trying to get a certification for cybersecurity down the road. What are you earning? What portion of that is your income today of the$78 ,000? What portion of that is yours today?

2:01:13Of the$78 ,000, what portion of that is mine? Yeah. What do you bring in? I'm doing some side gigs in the meantime before school starts or if I get accepted. So monthly, every month, how much money do you bring in every month? How much money do I bring in? Probably, if I'm being realistic, probably between 1 ,000 and 2 ,000 right now, doing side gigs with media and stuff like that. Okay, so that's our biggest issue is I know that you're doing a certification for cybersecurity. How much of your day does that take up?

2:01:49So I'm not doing it yet. The program would start in March. Okay, so I'm cutting you off a lot because I want to get to solutions and I don't want to fluff around on this. All right, you need to get a job instantly. Any job, any job, not side gigs. You can fill in space with side gigs, but I want you to apply for anything that you think you could possibly get. I want you to make a list tonight. Your job tonight is to make a list of anybody you know that might know somebody that's hiring, that has an uncle that's hiring somebody, whose father-in-law is hiring somebody. and I want you to put the word out.

2:02:25I need to work immediately. I need, I need connections. If you know anybody and that, I mean, you're going to be like a dog on a bone trying to get a job because you can't make a thousand. You can't make 1500 bucks a month. Now your wife seems like she's kind of carrying the bulk of that. But like you said, there's a baby coming in the summertime. So her, she's getting her, her situation of working is getting more and more precarious as the months go on. So this is your number one deal. The issue is we got a toddler at home and I need to get a job that I'll make enough to qualify for accounting assistance.

2:03:00So that's kind of the bottom end right now. It's like I would love to get a job. So you're saying you need to limit your income in order to get assistance? No, what you need to do is find a friend because you're in a community. You need to find a friend that's like, hey, I need help watching with the baby sometimes because I need to go over here. If there's family in town, this is you reaching out to everybody you know, because what I don't want is free to file bankruptcy. That's what I'm getting at. Once you file bankruptcy, that is you losing all control. That is somebody else stepping into the situation and saying, you're going to sell this.

2:03:33You're going to do this. You're going to pay this amount and you're going to do this amount. And you can't bankrupt on the student loans. They're going to take the car. And so a lot of this is not going to solve the major problems. And you'll be able to do those things. we can look at this and say, why don't we just look at it and go, okay, here's what we're going to do. We're going to pay this. We're going to sell this. We're going to do, you can look at it and do that and not decimate your financial life in seven years. And you personally, right? Are you guys renting? Yeah. What's that? Are you renting?

2:04:05Yeah, we're renting right now. Okay. How much is your rent every month? $2 ,500. And that's steep for the income. is your wife going to continue to have income when she has the baby? Yeah, maternity leave, so guaranteed income. Okay, good, good, good, good. At least we have some stability there. And then how much is she bringing in on her own? Is that another three or four grand a month?

2:04:32After taxes,$6 ,300. Oh, great. Great. So once we get you working, I mean, right now, when you guys pay your bills at the end of the month, are you in the green or are you in the red? You should be in the green.

2:04:47It's really close. If we pay all the minimums, I think we're, if we're not breaking even, we're probably at a couple hundred dollars deficit. Okay. So we're going to give you every dollar because I want to know, I want you to know exactly how much money you have and how much, exactly how much money you're spending. That's going to give you a lot of peace, just seeing the numbers there. And then you can say to yourself, okay, if we're in the green right now, at least we're kind of safe for a moment. We're not operating in the red. Everybody else can wait, right? It can wait until you get a job.

2:05:21It can wait until you, because you're giving them the minimum payments. But once you get that job, it's attack mode on this debt. Smallest to largest debt snowball method. You got to fight, man. Don't give up now. That puts the sour of the Ramsey show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.