Quit Sabotaging Your Finances And Build Wealth

21:42Dave Ramsey:One of our favorite things is when people share their stories of how they're winning, and we just got this amazing review on the EveryDollar app. Love this app. It makes it super easy to budget with my husband. We've implemented this practice since our wedding day, and we've had zero money fights because there is full transparency. There's that word again. And we're on the same page. Guys, that's amazing. And you know what? You can do this. You can take control of your money. You can change your family tree. You can live like no one else. And all the data says the couples that work together are the ones that build wealth the fastest and the highest probability of actually becoming millionaires.

22:19Hmm.

22:20Dave Ramsey:Go download our EveryDollar budgeting app for free. It'll show you everything you need to do in the App Store or Google Play. Haley is in Houston. Hi, Haley. How are you? Hey, Dave. How are you? I'm good. Good. What's up? I have a question for you. So I've been with my boyfriend for a little over six years, and I graduated in December 2023 with about$160 ,000 in student loan debt. I've paid off a lot. I have about$90 ,000 left. Thank you. So you're what, 24? I'm 26. 26. Okay. And what's your field of, what's your career? I'm a nurse. Oh, good for you. Okay. And so you've got$90 ,000 left, all right?

23:12Mm-hmm. And my boyfriend makes$250 ,000 a year, but he does not want to propose until I'm completely debt-free. Interesting.

23:24Dave Ramsey:You're not going to like me. If you were my daughter, you know what I would tell you? What? Dump him. yeah i mean he's a great no he's not no he's not no he's not he's he's making you prove your worth based on money yeah to him you're having to buy your way into this relationship nope you're a princess and you deserve more than this the reason i've been able to like uh put like majority of my paycheck towards my loans is because he does pay for all our rent Oh, so you live together? Yeah, we live together. So you're already married, but you just didn't admit it. Yeah, it does feel like we're married.

24:11Gosh.

24:12Dave Ramsey:So what's his incentive to get married? None. And this, let me just say this, Haley, and I'm saying this because you're going to have relationships after this and you're going to learn from this. And there's people who are going to watch this call and learn from this. this is precisely why uh one of the reasons why living together before marriage is a it's a bum idea it's not a good idea because what happens is you start to make bad relational decisions based off of the financial gain and based off of the pressure that you've already put on yourselves it's a lot easier to walk away from a messed up relationship when he lives over here and she lives over here and we just get together when it's time to go on our dates it's a lot easier to go you know what, this guy's a bum, I'm going to walk away.

24:56It makes it a lot more difficult when suddenly you're in the same house and then you're splitting the bills and then he's paying for the rent. It makes it very hard to make the natural transitions that we would have made if we had not applied that amount of pressure.

25:09Dave Ramsey:And so you move forward in a toxic, unhealthy relationship because you chose to share an address. Anyway, now you're not going to do it. I can tell by the way you're talking. So here's the thing. We love people getting out of debt. You know that. And why do we love people getting out of debt? Because we love people and we want them to be able to prosper. And your number one wealth-building tool is your income. You have a fabulous career choice. As a nurse, you'll always be employed and you can always work as much as you want to work. You can work 80 hours a week or you can work 20 hours a week.

25:40Dave Ramsey:As a nurse, you'll be able to do that the rest of your life. And you can make a pile of money. All we tell couples to do is to be aligned, be in agreement on how money is going to be handled. Now, he is in agreement that he hates debt. You're in agreement that you've hated debt, and you've been working it down. Okay? But then he has put up a false block here. I'm just telling you, I love you, and if you were my daughter, I'd tell you not to marry this guy. and because I think this is a false premise, you're aligned on what is important. You're aligned on, okay, we don't like debt. We're going to avoid debt.

26:25Dave Ramsey:We're going to get out of debt. And that's not – people have asked me since I came on the air here 35 years ago, should I marry someone with debt? And the answer is always yes, as long as you love them and you're aligned that we're getting rid of the debt. If you have zero debt, but one of you loves debt and hates saving and the other one loves saving and hates debt, you're going to get a divorce later. The number one cause of divorce in North America today is money fights and money problems. And guess what this is? This is a money fight. Yeah. You're just not having it out loud. You're having it in your head.

27:01Yeah, that's right. Now, what could be going on, and I'm going to allow a little space for this. He could just be an idiot today and he just needs to learn a little bit about what it means to be in a relationship and what it means to handle money together. You said one thing that might cause me to go. I wonder if I brought this to him and, you know, saw a premarital counselor, if we can get on the same page, is it seemed like he was willing to help with the debt. Now, you guys aren't married yet, but in a married relationship, it seemed like he was willing to help. but he was helping in the wrong way.

27:38And so that's the only thing that makes me think he might possibly simply be misguided because he said, oh, I'll pay the rent.

27:44Dave Ramsey:You could go to a marriage counselor, a pre-marriage counselor, and say, look, let's get aligned on this or we're going to end this. Yeah. But if at the end of the day, the answer to the question is, I won't marry you. Yeah, then yes, we have a problem. Until you pay off your debt. The question's answered. You value that more than you value me. see you later alligator yeah holla after a while crocodile you'd be gone yeah i mean i'll be done with this i'm just not doing this absolutely yeah what do the cool kids say see you felicia or something bye felicia bye felicia yeah that's the cool kids like 20 years ago the cool kids right yeah that's gonna i'm gonna remember that forever dave that was great see you later felicia get off my lawn okay i'm that guy all right charisma is in california hey charisma what's up hi hey um oh gosh i'm kind of nervous to talk to you this is amazing well we're glad you're here how can we help um i am currently working the debt snowball as of right now i have paid off$10 ,000 of debt in the last six months on a$50 ,000 income.

29:00Good for you. Well done. Yeah. No child support, nothing. All myself.

29:07Dave Ramsey:Cool. How can we help today? I have currently been paying off a credit card debt that I have, and I finally sorted through some collections that I have from my second child's pregnancy. my pregnancy with her. How old is she now? She will be two in June. Okay, so these bills are two years old. Okay. Yes, and I have notices from collection agencies. However, most of them have not, like I just have mail. They have not really tried to call me. There's nothing that shows up on my credit report. There's no other, like, anything. It doesn't have to show up on your credit report for you to owe it. You went in the hospital, you had a baby, they sent you a bill.

29:57Dave Ramsey:Is the bill accurate? Yes. Then you owe the bill. Okay. Now, how much is it? Give me an example. There's a few of them. There's a few of them. Give me the big one. The biggest one. Okay, the biggest one is$12.94. Good. Okay. I want you to save up$200 and I want you to call them. And I want you to say, I'm a single mom. I make$50 ,000. I'm so broke I can't pay attention. I do want this off of my list, though. It's$1 ,294 is the bill I have in front of me. I have$200. If you'll take that as settlement in full, I will send you the$200. Okay. And they will scream and yell and call your names and then they'll take it.

30:44Okay.

30:45Dave Ramsey:Get it in writing or don't give them money. and do not let them have electronic access to your checking account. Send them a prepaid debit or a wire or something else. But no access to your checking account and no money until it's in writing that the$200 is settlement in full. It might take$300, but you can get rid of that one. You can get rid of these at 20 cents on the dollar on average.

31:34Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

31:42Dave Ramsey:You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die.

32:18Disability insurance steps in while you're alive but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet.

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33:06Dave Ramsey:Protect yourself, protect your income, protect your family.

33:26Dave Ramsey:Shelly is in Tampa, Florida. Hi, Shelly. How are you? Hi, I'm so happy to be on with you guys today. I have a question for you regarding anxiety over money, and that's kind of recent for me in the last five years. Okay. Anxiety over not enough money, too much money, piles of money scare you in the middle of the night? It just is a fear of handling money. We live very comfortably. We have absolutely no debt. My husband makes a great living for us both. Our kids are getting settled. A fear of messing up? Maybe that's it, but I can handle paying bills, and it's kind of been my responsibility during the marriage because he's very taxed with his job.

34:28But even incoming checks or things that come in, I'm just very anxious and it's gotten to a point now where and he knows this so you get a check in the mail

34:41Dave Ramsey:and that makes you anxious yes it's strange have you always been the one that kind of handles the day to day of the money or is that a new role for you no no I've always handled it and I've always done fine with it It's only in the last five years. Are you in therapy for something else? No. If you had to link it... Although I would... What would you say this is linked to? Yeah, if you had to link it to something, maybe the way you grew up, something that happened at this time in your life or in your childhood, what would you say? I would... I link it to kind of since COVID. It's become very magnified for me.

35:30Okay. so uncertainty and we yes yes i would say uncertainty i try not to listen to all the noise i i call it noise but it is noise that you can listen to a million different things and i try to just walk forward being very stable listening to for you you guys for example and my husband's very very stable and everything um as far as okay so i would do a couple of things

35:59Dave Ramsey:is, I don't know the answer. I'm not a therapist. I wish Dr. John was on with me today. I'm sorry, sorry. I mean, I wish he was on with you. Yeah. Anyway, I wish he was here. But I'm not trying to throw you under the bus. But the, because we're not qualified to do therapy, but, and he is. But the, so I'm going to send you a copy of Rachel's book, Know Yourself, Know Your Money. And I'm going to send you a copy of Dr. John's book on anxiety. Yeah, Redefining. Redefining Anxiety. Because he says anxiety is your friend because it's an alarm bell going off warning you about something. Okay? I see.

36:41Dave Ramsey:And he teaches to solve for peace so that the alarms can go off. In other words, if the fire alarm's going off, we don't want to take out the batteries. We want to put the fire out. Sure. Because the fire alarm is actually my friend. It's keeping me from burning the house down. That's what anxiety is doing. It's keeping you from messing up. And so he sees anxiety as your friend because it's saying, get out of the street. A car is coming. That's anxiety. It's fear, right? And so I don't know if there's an actual thing here, but it could be. So I'm going to send you both of those books. I want you to read through them.

37:16Dave Ramsey:The second thing is I want you to get on a detailed budget on every dollar, and I want your taxed husband to look over it with you and the two of you together approve the budget together. Okay. That won't take a lot out of him. Then when you're writing the checks, you're not making all the decisions and writing the checks, meaning you're not emotionally carrying the weight of the management of the household. You're simply the check writer. Okay. We as a team sat down and looked at every dollar and said, this is where our money is going to go. Then it doesn't require any anxiety at all for you to simply execute what the team has already told you to do.

38:02Dave Ramsey:In other words, if the CFO and I sit down and say, these are the bills we're going to pay this month, and we hand them to a lady in accounting and she writes the checks, she has no stress at all. Sure. Because she's not worried about it. I told her what to do and she did it. So you and your husband are the CFO. You're going to decide what to do, and then you're going to be the lady in accounting that writes the checks. And that's a different level of stress because right now they're intertwined. And each time you write a check or deposit a check, you're also making all the decisions. So each of those transactions is carrying the weight of the whole household, and it shouldn't be.

38:42Okay.

38:42Dave Ramsey:Is that logical? That's very logical. In his defense, he has tried. I'm not asking. I wasn't throwing him under the bus. I don't think he's a bad guy. Okay. I just want him to help. I just wanted to make that clear. Yeah, but he starts helping today. Yeah, the day-to-day, you're right. 30 minutes a week. 30 minutes a week, he looks at the every-dollar budget, and we make our decisions of where our money is going to go, and then the rest of the week you execute submit payment on the website. Okay. And that's really easy for you then. And so when a check comes in, that decision is already made. Before the month begins, we know that check is coming in.

39:21Dave Ramsey:And if an unexpected check comes in, well, then we have a celebration and we sit down together quickly and say, what are we going to do with this extra money? And we decide that towards our current needs and our future wants. Understood. Yeah, and I think that's kind of lowered a lot. And I guess the last thing is start setting some saving and investing goals, because I can promise you when you have a million dollars in a mutual fund, your stress level, your anxiety level is lower than when you're broke and can't pay your electric bill. Well, that's just it. We do have a great net worth. You have a what net worth?

40:01We have a great net worth. What's that? What's a great net worth? It's probably just south of$10 million. Okay. Shelly, I can tell you some things practically. And again, Dr. John's not here, but I can tell you some things that I've done. Because what you're saying, the things I've heard you say, they're so vague. It's like, ah, I'm just afraid I'm going to ruin everything. And it's very hard to solve a vague problem. But what you can do is spend some time in writing down exactly, try to get as specific as you can. What am I actually afraid of? Am I afraid that, you know, if I take this check and use it for something fun, it's going to cause us to not have enough money to pay the mortgage.

40:41Therefore, you know, snowball effect. Right. Write down what it is. And then you can actually have a clear solution to the problem. If you keep it vague, there's never going to be a solution. And you just get to keep spinning your wheels. So try that. It has worked for me.

40:53Dave Ramsey:Yeah, details. If you can push facts out onto the page, facts are your friends and they will cause your brain to calm down. Yeah. You know, John talks about in a trauma situation, what are the actual facts versus what are all the things that are spinning up? Yes. What drama narrative is spinning up in the trauma? And I don't know, there's something happened somewhere, probably, maybe your childhood or somewhere, but there's something associated with this. And I want to know what that is if I could figure it out. That's why I think Rachel's book, Know Yourself, Know Your Money, might be a thing.

41:29Dave Ramsey:She talks about the different kind of households we grow up in where the toxic views of money or high stress around money. I mean, if you saw your mom crying every week over money, then you think that's kind of how things are supposed to be. You're supposed to cry every week over money. I got$10 million, but I'm still crying every week over money. And, you know, I don't know what it is. I have no idea. But I appreciate your question. It's an excellent question. A lot of people do struggle with that. More than anything, though, they struggle with this feeling of inadequacy, like I'm not competent.

42:03Dave Ramsey:I'm not good at this. I'm not good at math. I can't do money because I'm not good at math. Well, the math is like seventh grade, fourth grade, somewhere in there you learn the math. It's really not difficult. I mean, if you pass your driver's test to drive a car, you can do the math. It's not that hard. but it's intimidating if you categorize it over there as like some kind of mythical thing. That's right. And it's just, you know, I promise you I can teach a 12-year-old how to do this stuff and even ones that aren't good at math. So it's just, it's doing it and developing a little bit of a rhythm and a practice and a confidence and in your competence and then your stress level just goes down with that.

42:44Dave Ramsey:It's a great question though because you're not the only one feeling this, I promise you. Might be the only one with$10 million failing it. No, I'm kidding. Hey, thanks for the call.

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44:41Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Jade Walshaw, number one bestselling author, Ramsey Personality, is my co-host today. Stephen's in Oklahoma City. Hi, Stephen. How are you? I'm good. How are you today, sir? Better than I deserve. What's up? Hey, I've got a lot going on financially. I inherited some money when my dad passed away a few years ago. And it feels like I've just kind of jumped from one disaster to the next with it. And really just haven't had any peace since then. I've got some rental properties and things like that that I've spent a bunch of money on that are just eating me alive.

45:22And I'm debating on selling them and just being done with it. Okay.

45:27Dave Ramsey:So how much did you inherit? I inherited, I'd say,$750 ,000 between cash and stocks and then another$750 ,000 in equity in a business. Mm-hmm. Okay. What's the status of the business? The business is still there. My uncle, who owns 50 % of it, is kind of like taking over it or taking it over. And he's just robbing my brother and I blind. I helped my dad run it for a long time before he passed away. But my wife and I had a daughter, and we figured it was best to move closer to my mom and her family, which is back up here in Oklahoma. So I stepped away from it. And now that I've stepped away from it, you know, it's it's the it's made the same amount of money every year.

46:23And the profit, like what my end of it is, just keeps going down and down and down. And my brother's keeps going down and down. And, you know, my brother and I are really debating on forcing him to sell it or suing him or something. Because, I mean, we've had a financial audit and it's pretty clear he's he's taking a lot more than he should be. And I just don't have the bandwidth to deal with it anymore.

46:44Dave Ramsey:Why not?

46:48Freaking$750 ,000 gets you some bandwidth, dude. Yeah, I know. I know. It's just I don't have any help. There's a problem. My brother's not interested.

46:58Dave Ramsey:Why do you need help? Hire an attorney. Go sit down with your uncle and go, this is over. We're selling this. I'm tired of you screwing me. It's a 10-minute conversation. Yeah, and I tried, and he starts yelling, and it feels like it just had to go through attorneys the whole time. Well, that's fine. That's the whole point. You want to yell? I'm going to sue your butt. Well, the judge will help you with this. You can't screw me anymore. I'm done with you screwing. You think you can yell at me and that makes you okay to screw me? As a matter of fact, that makes you less likely to be able to screw me.

47:31He just is under the impression because, you know.

47:34Dave Ramsey:You're wussing out, dude. I went to college. You're wussing out. Yeah, you're correct on that. It's just, I don't know. It's just I hate having drama in my family. Okay, then get a piece of paper and sign the thing over to him and walk away from your money and quit your whining. Yeah. Either fix it or give it to him. But don't just stand there and get screwed and like it. Yeah, I definitely don't. So I guess that would be the solution to that. I'd do one or the other. Make a decision. Either walk away from it or punt him. personally i'd take great joy in punting a crook why are you scared of him i don't know he's just the last member of my dad's son's family left yeah which means he should the last thing he should be doing is screwing you i know that's what it feels like too i did it's really made me angry because i grew up with a guy who was almost like a second father and then like you know the second no you're not angry you're afraid yeah i think you're scared of him you're afraid he's going to yell.

48:38Yeah. I mean, it's just unfortunate because it's not how I used to be. And then as soon as the numbers got as big as they are now, it's like I just don't trust myself to make a correct decision anymore on this.

48:50Dave Ramsey:Well, I mean, you trusted yourself to run the business with your dad, and you know how to run the business, and you know what's right, and you're just, for some reason, you're unwilling to address this guy. What's your brother say? Your brother knows, right? He's a wuss, too. Yeah, no, he's just, whenever I was running it, after my dad passed away, I stayed down there, and I did it on my own for a while, and I didn't have any issues. And then I had my daughter, and I told my brother, I said, hey, if you want to come here and fill my role, you're more than welcome to. And he said he wants to just keep being a mechanic and getting a check, and I said, fine, but it's going to be a problem.

49:28And I knew it was going to be a problem.

49:29Dave Ramsey:Okay, so what the other$750 ,000 in cash and stocks, did you say you lost that also? No, I've still got probably a quarter million in stock and cash left, and then probably, I don't know,$200 ,000 in equity between two properties. But the properties have been—I thought I was going to be real estate baron, and I bought a duplex, then I was going to live in one side, rent out the other, fix it up, and I ended up buying it in the worst neighborhood in town. House got broken into, car got stolen. And that's not a good place to raise a two-year-old. So we moved out of that, and it's just been one disaster tenant after another.

50:09And I make good money at the job I have. I work full-time. How long ago did you buy that duplex? Two years ago. Can you just sell it? Yeah. I've just got people in there telling me, oh, don't sell it. Property only goes up. People are idiots. They're not in your life. They did not experience the things that you just listed off.

50:30Dave Ramsey:There's no joy around this duplex. Sell the stupid thing. It's been a major point of contention between my wife and I. She wants it gone, and I think I'm finally on board with her. You're not exactly a man of action. You're kind of like a glutton for punishment. You're listing off all these horrible things, and we're suggesting, hey, just get them out of your life. But for some reason, you want to cling to them with a kung fu grip, and we're telling you, just let it go, man. Some of the duplex. Listen, there is such freedom in making decisions and taking action, even if it's wrong. But right now, you are completely captive to all these things that you feel like are happening to you, and they're not happening to you.

51:11Dave Ramsey:They're just happening, and you're doing nothing about it. So you need to become a man of action starting today. Ready, set, go. When you get off the phone, call a real estate agent. Go to RamseySolutions.com. get a Ramsey trusted real estate agent, put the stupid duplex on the market. When you hang up from that, call an attorney in the town where your uncle lives and tell him to call your uncle and yell at your uncle because turnabout's fair play. And we're getting ready to take you down. We're going to take your underwear, uncle. We're going to take everything you have. We're going to clean out your house.

51:46Dave Ramsey:You get nothing. We are taking you to the ground. You're going to sell this place and write me a check for my half, a fully audited portion, or I'm going to bankrupt your yelling butt. I've got a whole new thing for you. And turn that attorney loose. Hire an attorney that you don't even like because they're so mean. And turn that guy, take him off the leash, and say, sick him. You're going to have to do some stuff, man. You're standing around watching your life go by like it's someone else's life. You need to step into this thing and punch a few things and take some action, and all of a sudden your stress level will go down and your confidence level will come back up.

52:23Dave Ramsey:even if you screw this up it's going to be a whole lot better life than you have right now. I don't think he can screw it up. Any worse than it already is? No. Light him up. Light him up. I can't think of anybody who sold a duplex and then was like, oh let me get it back. In a bad neighborhood where they stole the car out of the front yard. Right, yes. Oh I wish I had that back. Yeah. Never has been said. You can't mess this up.

52:54Thank you.

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54:40Dave Ramsey:Well, tax season is upon us. Yuck. To get free checklists and guides that'll help you with your filing. Free. Go to RamseySolutions.com slash taxes. Paul is in Columbia, South Carolina. Hey, Paul, what's up? Hey, Dave. Appreciate you taking my call, sir. Sure. How can we help? I've got a real estate question. I am looking to buy a lake house, and I have found a house that pretty much checks all my boxes. I've called the listing agent and got some information from her, and I think I'm at the point now where I either need to enlist the help of my own real estate agent or get involved in a dual agent agreement with her.

55:22And my question is, what are some advantages and disadvantages of being in a dual agent type of scenario? And would a dual agent scenario benefit me in any particular way?

55:37Dave Ramsey:Well, typically what happens, and it's technically negotiable, but the typical transaction is, say, 6 % commission. the person bringing the buyer gets half of that and the person that has the listing gets half of that as the real estate agents go if you are uh if the agent that has it listed does the contract with you the buyer she or he gets both sides of that so they get the entire commission obviously i assume you knew that and so um uh the only advantage might be that since he or she's getting paid a lot more that they're going to work really, really hard to get this deal done. They got twice the incentive to get this closed, right?

56:23She's already working very, very hard because there's a lot to unpack with the owners. And I just figured that if we entered into a dual arranging agreement, it would remove one link from the chain of communication. It could turn into a pretty complicated sale.

56:38Dave Ramsey:Why? Well, the owners are in their mid-80s. They live well out of state. I think they live in Maryland. She said their cognitive skills are on the decline. They have a reverse mortgage on this property. They are supposedly upside down. I don't know how you could be upside down in a reverse mortgage. It's impossible. It seems to be their financial situation seems to be headed for a short sale or maybe even a foreclosure, she said. Oh, wow, okay. I guess it's possible because the property could have declined. Is it in disrepair? It's not pristine, but it'll take some work to update it and fix a few things.

57:22Dave Ramsey:So do you have any reason why it would have gone down in value 35 %? Because reverse mortgages are supposed to cap out at 65 % loan-to-value. you yeah i don't really know anything about reverse mortgages other than they're terrible yeah i mean 65 maximum though so it means there should be 35 equity unless the property went down in value uh by 35 they wouldn't be upside down that's what i'm confused i don't know okay so it doesn't matter she's still got to untangle that barrel of fish hooks anyway and dual agency simply means that she has a responsibility to both you as the buyer and a responsibility to the seller, which morally and ethically she does anyway.

58:08Okay?

58:09Dave Ramsey:You're not, you know, if you're a member of the board of realtors, you're supposed to represent all parties in the transaction with ethics. In other words, you don't set out to screw the other side in any case in the real estate business. It's against ethics. You get you thrown out of the board of realtors for one thing. gets you sued for another thing. And so you just can't, you know, just because one party or the other is paying, getting paid does not remove you from ethics and your fiduciary responsibility. So if she's got the mental capacity to work through all of their complication, meanwhile getting you on contract and you and her ganging up on this thing, there's no downside to the dual agency.

58:52Dave Ramsey:It just adds another cook in the kitchen if you bring your agent in at this stage. Well, she's already working very hard to get all this information out of the seller. So, I mean, she would probably be interested in keeping more of the commission, to be quite honest. Yeah, well, I'm sure she would. Yeah. So there's no issue with that. And honestly, she should have done that before she put a stupid thing on the market. So it's kind of incompetent. But, I mean, how are we going to sell this house that I have for sale? That's a question you would ask before you put a sign in the yard. yeah well yeah like i said they're they're in their 80s and they're old and grumpy and and uh i just it could turn into a mess for her yeah not sure you're gonna get this house it sounds like yeah i'm not sure we're gonna get these you know this the ski ropes and it got a lot of knots in it maybe a while you'll be standing on the boat untangling this puppy um i don't know it's possible but um you know i i don't see a upside or downside either way for you that's dramatic so you're working with her, you think she's got it on the run, I would just go with her, honestly.

59:57Dave Ramsey:I mean, but if you're out there just wandering around, you're starting to look for a house and you want to get a buyer's agent, that's very standard in today's world. There's nothing wrong with that either. A lot of our Ramsey Trusted Real Estate agents have a buyer's agent on their team. And that's a good thing. All they do is represent buyers. That's all they do. And that's a very clean transaction. You're not questioning who's getting what. This guy is my guy. That's your guy. But they still both have to operate from ethics. They still have to tell the freaking truth, you know. And so there's a lot of discussion around the aid dual agency thing in just the last few years with some antitrust lawsuits and things that came through.

1:00:43Dave Ramsey:But overall, you know, if you're dealing with good people, they're supposed to do the right thing anyway. and that is legally and, you know, from the Association of Realtors, all of that is all guiding all of that. All right, James is with us in Los Angeles. Hi, James. How are you? Hey, I'm good. Thank you. How are you guys doing? Better than we deserve. What's up? So I want to see if it makes sense for me to sell my car. I owe about$11 ,000. Well, it's a little complicated. It's worth about$9 ,000 to$9 ,500. I owed about$11 ,000 on the car but I actually did something kind of stupid and I consolidated my debt into a personal loan and that included my car so you technically owe nothing on the car so technically I do have the title and you have a$9 ,000 car and how big is your debt consolidation loan?

1:01:39$27 ,000

1:01:40Dave Ramsey:and what's your income? I make about$4 ,400 a month Mm-hmm. Okay. I would not sell that car. Okay. Unless you just hate it. It would just make more sense to keep it. Yeah. It's not out of control. Right. I mean, the main reason why I was thinking about it is more for, like, the monthly expenses for the car that I have, you know, without the payment, say, like, gas, insurance, things like that. If I were to get something cheaper that was better on gas. Like what? But it probably wouldn't. Well, I was thinking, like, so right now I have to budget about$500 a month for gas because I commute for work.

1:02:18You know, if I were to get, say, something more fuel efficient, you know, I could maybe cut that in half. But it might be that I'm just trying too hard, you know, I'm trying to move stuff around.

1:02:31Dave Ramsey:I don't know if you're going to cut that budget in half. I mean, what are you driving? What kind of gas guzzler is this? uh it's not really a gas guzzler it's a ford edge so it's an suv uh i mean you know right now our gas is about six bucks a gallon over here you know so uh you know and then i do commute about 40 miles each way to work so about 80 miles a day total yeah i mean run out some actual miles per gallon and do that sixth grade word math word problem thing you remember that one and you know And if I had one that was, I mean, what are we going to buy that's going to have half of that?

1:03:08Dave Ramsey:I don't know if you're going to get half of that. Right. Okay. I really don't. I mean, you know, if you could buy a car of exact the same value and cut your gas bill in half and you love the car, that's fine. Sure. But the actual$9 ,000 car is not killing you in out of$27 ,000. You've got other issues there. Yeah, for sure. Yeah. I mean, yeah, I was thinking, like, if I could sell it, you know, get something for, like, four, put, you know, move some of the, you know. Yeah, are you married? Over to the 27. Is it just you? Okay. Just me. Yeah. I don't think that's your problem. I think you're right.

1:03:47Dave Ramsey:You're chasing the wrong thing. Instead, what I'd be looking for is extra income and other places I can cut in the budget. That's a good point. I think there's easier ways to get the$250 back. Yeah, because if your car was$20 ,000, I would have sold it already. But it's not that big a number in the ratio of the rest of your numbers to where it doesn't change your life, you know? A lot of times we're talking to somebody, the car is killing them. And so selling the car changes their life.

1:04:35Dave Ramsey:Murphy's Law means if something can go wrong, it will. And it usually happens when you're not prepared. That's why a big part of what I teach is staying prepared for whatever curveballs life throws. Have a fully funded emergency fund, buy term life insurance, and get a will from Mama Bear legal forms. Because the last thing your family needs is trying to figure out what you wanted after you're already gone. I've seen families torn apart because no one wrote things down. A will spells out exactly what you want to happen after you've passed away. No questions, no court dates, no family fights, just clear directions and peace.

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1:06:00Dave Ramsey:The Ramsey Show question of the day is brought to you by Y-Refi. Defaulted private student loans don't fix themselves, but you can fix them. Y-Refi helps you refinance into a low fixed rate payment that fits your budget. So you can get back on the baby steps and move forward. Go to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states. All right. Today's question comes from Andre in California. He says, I have a 401k that will be maxed out within the IRS limit before hitting the recommended 15 % invested. Will that be enough or should I invest the remaining percentage in a brokerage account outside my work-sponsored 401k?

1:06:44So Andre is referring to Baby Step 4. In Baby Step 4, we tell folks that they need to be investing 15 % of their gross income every month into a 401k. If they have a Roth 401k, even better. And so obviously, this guy is a high income earner. The max this year is$24 ,500. So if you're able to do that, no problem. You're making over$160 ,000 a year. unless you're over 50, then the limit goes up to$32 ,500, which means he'd be making over$200,$215. So yeah, I probably wouldn't go straight to a brokerage. I'd probably see if I could do some backdoor Roth IRAs first. One for you, one for your wife if you're married.

1:07:31And then from there, if you have access to an HSA, I'd probably go there next and max that out. And then if you still have money, then I'd go to the brokerage account. That's the way I would do it.

1:07:41Dave Ramsey:Good advice. I like it. So, you know, if you did a backdoor Roth IRA, the way that works is you invest in an after-tax regular traditional IRA, not a pre-tax, an after-tax traditional IRA. And this year, that's$7 ,500, okay? And you can do one for your wife and one for you. And then as soon as you make that investment instantaneously, you roll it to a Roth. And you can do that regardless of income limit. So I did one. And I have done one every year for many, many years. And my wife, every year. I do it in January. Put$15 ,000 up. Boom, boom. And here we go. Actually, I can do$8 ,000 because I'm old.

1:08:25Dave Ramsey:$8 ,600 now. $8 ,600 this year. That's right. So I max them out, whatever I can put in there. That's the most you can do with a backdoor IRA. If you want to get super fancy, you can do a brokerage account beyond that. I don't know what your income is. We don't have that, and we don't have your age, Andre. But let's say you're making$600 ,000 a year, and you're trying to keep the government's hands off of as much as you can. You could do a backdoor Roth IRA, and you can also do a mega 401K backdoor if your company has a Roth 401K. Now, it doesn't even have to have a Roth. So what you can do is you can put up to$72 ,000 into your 401k in a year.

1:09:06Dave Ramsey:But anything over the 24-5 or the 32-5 or if you're over 60, it's 11-2 going on. Anything over those limits, you can go after tax 401k, a 401a it's called, and then immediately roll that to a Roth just like the regular backdoor. So that's called a mega Roth or a mega backdoor. and so you could do even more. I don't know if I would fool with all of that. It's a lot to screw with every year. But the big thing is just make sure you're investing money. So, you know, if you max out your HSA, you did the regular individual IRAs and then you did brokerage beyond that, you'd be just fine. Yeah, yep. You'd be just fine.

1:09:49Dave Ramsey:The good news is you're making a lot of money and you're saving a lot of money. And so you're going to be very wealthy and that's how the formula works. Betty is in Fort Worth, Texas. Hi, Betty. Hi. I just have a question. We have a 33-year-old daughter who has five kids. She got married, well, she got pregnant when she was 18 and then 19, and it's been an on-again, off-again relationship for 15 years. Are they married? Yes, they are married now, but he can't keep a job. They moved across country last year because he had an opportunity. He lost that job within three months. He's on his third job already, and they've only been there a year.

1:10:38The problem is we have no debt. We're doing great, and I like to help them out as far as the kids. I don't send mom and dad money, but if the kids need something, I like to help out. What's an example of something they need? School clothes. Maybe if they want to go to a movie. You know, it's nothing elaborate. I get taken to the book fairs. I'll send money. She sends me the link, so I know the money is going to the book fair. Sometimes I'll send her some cash for gas.

1:11:21Dave Ramsey:What size nest egg do you all have? I'm sorry? What size is your nest egg? Well, we'll be right into a million real soon. Okay. And how much money are you giving her a month, average? Oh, I'd say$100 ,000, if that, because my husband's always on me. Because we're talking about a couple of thousand dollars a year, maybe. Maybe. Does she ask for it, or you just see the need and step in? Sometimes. She'll do both. She'll send me an Amazon link and say, you know, the girls need this. Do you mind buying it? You know, that kind of stuff. Or sometimes I might door dash pizza to them just because I want to.

1:12:00Dave Ramsey:Yeah, and so your question's what? My husband's tight. And he feels like I'm enabling them. And I don't want to enable them because somehow they've got to come out of this somehow. I mean, they get a big tax return, obviously, if I kid, but they go through it because they have no common sense. Not whatsoever. If they were doing what you would consider well in life and you're still the grandma, do you think that you would still sometimes send them a pizza because you're thinking of it? Do you think you would still take them to the book fair? Do you think you'd still want to go back to school shopping?

1:12:39Because the things that you're describing, my mother-in-law does, and we don't need it. She just likes to do grandma things. And in her mind, those are grandma things. So is it the same for you or does it feel different? No, it's the same for me.

1:12:54Dave Ramsey:Yeah, I think your husband is tired of your son-in-law being a bum. He is, and I get it. Yeah, I get it, too. I get it, too, but I don't think it's any reason to quit doing what you're doing. I don't think what you're doing is enough money that it's enabling anything. If you were sending them$1 ,000 a month cash, I'd call you out on it. But you're not. When they moved, you know, they had put the money down for the house and then they didn't know they had to put a down payment down. And so we had to scramble and go get fifteen hundred dollars, you know, so they could do that, which they paid us back.

1:13:32He has never just given the money. Never. He makes them pay everything. Yeah, I think there's two issues. I think there's two issues that you're blending together. I think there's the grandma moves of those little things that you spend money on that you like to do. And then there's the whole issue of, like Dave said, you just don't like the son-in-law. There's this whole issue over there. I would try not to blend them together because I think it'll take the joy away out of the grandma things.

1:14:00Dave Ramsey:The$1 ,500 for them not having a down payment or whatever is a completely different discussion than we had early in this phone call. Yeah. So I don't even put those in the same category. They're in different buckets. I might have sided with your husband on that one. I would have just said, hey, you guys made your bed, figure it out, because you seem to be just constantly screwing up everything. So I'm going to let you figure this out. I'm going to let you fly until you hit the rocks or learn to fly. And so in the meantime, though, if you buy your grandkids a little bit of school clothes and a pizza, you have not enabled the workless, shiftless father.

1:14:39well i mean what point can he change you need to talk to god about that one i think that's a matter of prayer he could change tomorrow you just have no control over it deciding to work hard is just

1:14:53Dave Ramsey:a decision yeah and deciding to actually show up at work and be pleasant while you're at work so you keep your freaking job that's a decision right take a bath brush your teeth all these kinds of things these are decisions that some people can't even figure out how to make in today's world. But that's a different thing than what we're talking about. What you called about at the beginning of the phone call, I would defend you on. And I preach against enabling on this show harshly, but that's not enabling. That's just buying your grandkids some stuff. And it's partially because your grandkids' parents aren't bright.

1:15:38Thank you.

1:16:06Dave Ramsey:Leland is in Oklahoma City. Hi, Leland. How are you? All right. How are you? Better than I deserve. What's up? So I've got a question. I'm 22 years old. I started a business last year, and it's kind of just went backwards on me where I'm to the point now where I've got a piece of equipment that I'm sitting here staring down the barrel of a gun where they're basically probably going to have to kind of repossess it the first of April. So you started what kind of business, hon? um custom dry fertilizer spreading business okay and so you bought a what what is the equipment it's a applicator that applies dry fertilizer on fields and what how much do you owe on it uh 178 000 my annual payment on it's 40 uh 40 000 a year and everything's just went backwards I'm confused why they would loan a 22-year-old$178 ,000 on a piece of farm equipment.

1:17:09Well, because I had a way to get into the business, and then since then it's just went backwards since then. I had the money for a down payment, put the money down. How much did you put down?

1:17:22Dave Ramsey:$12 ,000. But still, I mean, were you in the business already? I've been in the agriculture business all my life. You're 22? Yes, sir. Yeah. Okay. All my life is not long. Well, I've been doing it ever since I could. I know, honey, but I'm talking about what moron loans you$178 ,000 with a$12 ,000 down payment when you're 22 years old. There's nothing that says this deal should have happened. Leland, you can't turn around and sell it? I've been trying to. I've tried selling it with an auction company, but they wanted me to put$100 ,000 up front before they'd even sell it. Yeah. And so you had grand plans of spreading a lot of fertilizer.

1:18:11Dave Ramsey:What happened? I put my name out within a 100-mile radius, and the farm economy the way it is, fertilizer prices are high, and there's not a lot of people doing dry. They're all going different routes. Cool. I'm sorry. This is scary, isn't it? Yeah, it definitely is. It's definitely scary to be sitting here in this position. It's just been haunting me ever since. I guess. All right. Well, I went broke when I was 28, and I had more zeros on the end of my stupidity than you do. So I got you beat. Right. Because this was straight up stupid. And the guy that loaned you the money deserves to lose$100 ,000.

1:18:56Dave Ramsey:Whatever company did this. What's the name of the company? I can't remember off the top of my head. You owe them$178 ,000 and you don't know the name of the company? Well, I do. It's on a piece of paper at my house, and I don't have that information in front of me. You bought it at a dealership, didn't you? What brand is it? John Deere. Yeah, I guess so. So you don't know John Deere incorporated the money? No, no, absolutely not. Okay. All right. And my plan was, you know, do 10 ,000 acres a year. That can be done extremely easy. And I found out the hard way that it has not been near as easy as what everybody said it was supposed to be.

1:19:39Dave Ramsey:So the moral of the story is we don't borrow money to start businesses because things never turn out exactly the way they're supposed to in business. That's the real business. And so that's a lesson that sadly you have learned. The only good news is you learned it at 22. I learned it at 28. so I had the rest of my life to not do that stupid mistake again, and you have the rest of your life to not do the stupid mistake again. So the next time you have a bright idea and someone wants to loan you money to do your bright idea, you tell them no, right? Yes, sir. Okay, good. All right, so we've learned our lesson.

1:20:10Dave Ramsey:Now let's walk through it. I'm so sorry, hon. So I do not know a way around this because I don't know your world. I'm still just sitting here aghast that someone Loans you that money? Loans you$178 ,000 to spread fertilizer There's just so many fertilizer jokes that I could weave into this But Yeah, I will respect myself They just roll off the mind right now But anyway, the spreading of fertilizer is pretty thick here But the

1:20:47Dave Ramsey:So let me tell you what I think is going to happen and how you can handle it. Okay? I think you're going to get repoed at the first of the month. I don't know how to tell you to stop that with anything that's reasonable. One thing you could stop it with is a Chapter 13 bankruptcy, or a Chapter 11 bankruptcy even in this case, but that's a pipe dream because the business idea is dead and there's no way to revive the cash flow. If you could revive the cash flow starting two months from now, you know we could delay the repo and put it by putting it into a bankruptcy but i wouldn't do that here because i think this business idea is just a swing and a miss right so i think they're taking it at the first of the month okay then what's going to happen is they're going to sell the piece of equipment for x number of dollars at that same auction and then they're going to come knocking on your door for the difference it's called the deficit okay so let's play pretend Let's play pretend, and it's$178 ,000 owed, and they sell the piece of equipment for$100 ,000, and they come see you for$78 ,000.

1:21:53Dave Ramsey:You're 22 years old. You don't have any money. Right. That's where we're going to be. It's probably going to be a year before they knock on your door wanting the difference. It's not going to be soon. No. Okay? And when they do, normally what happens is they push you and push you, and the person files bankruptcy, and they get nothing on their$78 ,000 in our example story here. However, you have a year to prepare for this battle, and were you to save up during this coming year by working your little tail end off$25 ,000, and you offer them$25 ,000 as settlement in full on the deficit, they'll probably take it because they're used to getting nothing.

1:22:39Right.

1:22:40Dave Ramsey:We settle deficits on car repos at 20, 25 cents on the dollar every day. I've not done it much on farm equipment, so I don't know that world, but it's probably pretty close. And the reason we're able to settle those deficits at that is because they very seldom collect anything. Usually the person files Chapter 7 bankruptcy, they get a big goose egg, zero. Especially when you look at it through the creditor's eyes, not to put you down, Leland, but looking at it from the banker's perspective, I'm trying to get money out of a 23-year-old who's broke. The likelihood of that's close to zero. Right.

1:23:16Dave Ramsey:So if he stands up and offers me$25K, I do a little happy dance and take it if I'm the banker. You follow me? Correct. So what are you going to do for a living now that your life is starting over, sir? I mean, I'm pretty much self-employed and don't have a college degree. What are you going to do for a living, sir? I'm going to farm. You're going to farm? Whose farm are you farming? Some friends. You're going to work on a farm? Yes. For someone else? Yes. And what does that pay? It just depends. sometimes$25 an hour, depending on who you're working for. Okay. All right. And then ask yourself, what do I want to be doing when I'm 32 that I'm a millionaire and it's not$25 an hour work?

1:24:08Dave Ramsey:I'll help you with that. Yes, sir. And it's not going into that$178 ,000 to spread manure? Oh, no, this was dry. I'm sorry. Yes, sir. Okay. But anyway, you see the point. So you've got to figure out what am I going to do next? Because one of the things that I discovered when I went bankrupt, because I couldn't turn it around the way I think you actually can turn it around, if you'll work like a crazy person and stack cash and keep your living expenses very, very low, I think you can scratch up some cash and settle the deficit when they do come after you one or two years from now. Don't call them.

1:24:43Dave Ramsey:Wait for them to call you. And in the meantime, build a war chest. And then settle it. In full, in writing, settlement. moment and I think you can get through this I really do and then you can just look at this in the rearview mirror is that dumb thing I did when I was 22 I I can look at my life in the rearview mirror that whole series of dumb things I did when I was 28 yep you can you guys paid off um you know hundreds of thousands of dollars because of dumb things you did in your early 20s a lot of stupid things yeah and so it's you know you're talking to the choir here okay singing to the So, but I do want you to develop a future and a plan that doesn't involve a Hail Mary.

1:25:24Dave Ramsey:You threw a Hail Mary into the end zone and got intercepted. Don't do that again. Learn, learn from the mistake and we'll walk with you. Anything you need, Leland, you call me. And if you want to save up that money and when they mess with you, you call me. I'll tell you, I'll walk you through it. I'll show you how to negotiate with them.

1:26:07Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Jade Walshaw, Ramsey personality, is my co-host. Abigail is in Norfolk, Virginia. Hi, Abigail. How are you? Hi, how are you, Dave? Better than I deserve. What's up? So, I am calling you today at the behest of my 10-year-old son, who is also a huge fan, with the question of how can I be financially secure, my family be financially secure, and get out of debt when my husband is dragging his feet and not willing to participate. I'm kind of disturbed that your 10-year-old son is involved in that discussion. Right.

1:26:58Well, I have been very open. Pretty disrespectful towards his father. Yeah. He's not the only one. I have four sons. And I've been very transparent, not sharing everything, obviously, with them about our financial situation. But we have lots of discussions about what is or isn't in the budget and what has been happening and what needs to happen. And I do now have an 18-year-old and a 20-year-old son who are actually making great decisions. but my situation over the past year has really been very, very difficult as I've had funding cuts and been ill and needed surgery and with this December recovering from surgery worrying about how we were going to pay the mortgage.

1:27:56Okay.

1:27:58Dave Ramsey:All right. Please don't put that burden on your 10-year-old. Oh, no. His shoulders are not big enough to carry that. Yeah, I have not put it on him. Well, he said for you to call and discuss this with me, so that's what you said. Yeah. Tell us about what's going on. Why have you and your husband not sat down with a marriage counselor yet? We've been sitting down with a marriage counselor for a year. Good. Are you making progress? Um, very, very, very small baby steps. There's a lot of issues in our marriage, as you probably would guess. Right. Um, every type of infidelity, um, including the most recent issue actually discovered by the 10 year old.

1:28:48Um, and, uh, um, so, uh. I'm sorry, what did the 10-year-old discover, darling? He discovered my husband's infidelity last year.

1:29:02Dave Ramsey:With a woman? Yes. Yeah, through text messages. Y 'all are a hot mess. What is your 10-year-old doing in your husband's texts? Oh, he intercepted them on his iPad because it was connected. It was a completely innocent thing on his end. And I'm just, I, oh boy. It was very traumatic. It was very traumatic. So the answer to your original question is you can't. How do we move ahead financially and build wealth and build stability? You can't. Yeah. Until you work through a lot of these dysfunctions. And you have so many major dysfunctions going on that you've mentioned that minor baby steps are not enough.

1:29:48Dave Ramsey:So I either need my therapist to put it into gear or I need a new therapist. because I'm not going to exist in this environment very much longer. And I'm certainly not going to allow my child to exist in this environment very much longer. So we've been in therapy a year and making baby steps, but just the other day he discovered infidelity. Did I get that right? Yes. Take this as a grain of salt because I have no letters behind my name, But it sounds like there's a lot of things probably in therapy that are supposed to be happening and they're not happening on his end. She can't control that. So she's looking for something she can control, which is probably the baby steps feels like something that's within her control.

1:30:34That's what it sounds like. And this is, to your point, Dave, so far down the list of things to me.

1:30:40Dave Ramsey:I can't give you great hope that you're going to become financially prosperous and efficiently work through the baby steps to get out of debt and into wealth. in this environment. So the environment has to change for you to be able to win, hon. And I desperately want your 10-year-old to have a new environment. I agree. This is very disturbing. And so, yeah, if I'm in your shoes, we're going to turn up the heat in therapy or we're going to call this. We're going to end it. and if there's recent infidelity while we're in therapy on the marriage I don't know what your percentages are from recovering from that but they're low and so I don't I've never personally dealt with that so I just don't know but honey you got a lot of things that are hurting you got you got a lot of wounds a lot of open open wounds right now that are just gushing and you guys need to get some help through that stuff before you can even talk about the financial stuff.

1:31:48Dave Ramsey:So guys, here's the thing.

1:31:54Dave Ramsey:Personal finance is 80 % behavior. It's 20 % head knowledge. Behaviors are affected by our spiritual walk. Behaviors are affected by our relationships. Behaviors are affected by our family of origin. How much fun did your dysfunctional family put in dysfunction? Yeah. And so, you know, all of that, right? What did you come from? Where are you going? What soup are you sitting in right now? And those things affect your ability to build wealth more than the mathematics do. The mathematics will correct themselves if you can get functional human beings to function functionally. Yes. Yes. You know, I mean, you know, it's it.

1:32:42Dave Ramsey:I mean, so marriages that don't work very seldom, that aren't working well, almost never create a solid financial situation. Very rarely. Very rarely. Okay. Yeah. And people who are, you know, one of the things we've dealt with, I've been doing this for 40 years, is 100 % of addicts have financial problems eventually. Because it's a dysfunction that it costs money, whatever the addiction is. And so 100 % of them end up here. But when we're dealing with the money, we're not really treating the problem, we're treating the symptom. The addiction is the problem. If you're dealing with a divorce and a marriage that's falling apart, that's the problem.

1:33:27Dave Ramsey:The money issues are the symptom. Yep. And so you can't fix the symptom. You have to fix the problem. You can cut a dandelion down with your lawnmower, but it's going to grow back with three more next week. So the only way to get rid of the dandelion is out by the roots. Pull it up. You got to go to the problem all the way down, right? And then the dandelion's gone, and that's what they are. And so when I went broke, it was a reflection of my lack of character, my lack of maturity, my lack of a quality spiritual walk. And, you know, I wasn't like some kind of pristine human being that just did the math wrong.

1:34:07Dave Ramsey:It never works that way. It never works that way. So, you know, anytime you're struggling with money, you always want to go to the source and go, what is causing my behavior change or my behavior to be dysfunctional? that's why I'm having money problems. Yeah. It's a foundation you have to build on. The foundation has to be stable.

1:34:55Dave Ramsey:You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options, so you never have to invest in anything you don't understand. Head to RamseySolutions.com slash SmartVestor to get connected. Ramsey Solutions is a paid, non-client promoter of participating pros.

1:35:31Learn more at RamseySolutions.com slash SmartVestor.

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1:36:23Dave Ramsey:Karen is in New Jersey. Hey, Karen, how are you? Hey, Dave. I've been better. Okay, what's up? I'm just calling because I wanted to know, because I know I listen to your show a lot, and I know that you talk to people just not just about finance, but how to kind of like deal with issues. So my husband recently took out money out of, well, I say or. It's his 401k and a HELOC loan for more mortgage, but without my knowledge, and then ended up getting scammed out of that money. How do you rebuild from that? How much money was it, and what did he use it for that he got scammed out of? um so it was it was like uh close to a hundred thousand i know i know i listen um what did he do with it basically it's kind of like he was giving it to this um under an ear close um person who said that they were in our online bank that said that it was investing invest in it to get a return.

1:37:47How did you find out? Did he tell you or did you discover it? He came to me. No, he came to me and he told me. It took him, you know, a little. But he came to me and he told me. Yeah. Wow.

1:38:02Dave Ramsey:When did he tell you?

1:38:09A little while ago.

1:38:13Dave Ramsey:Yeah, I know. I'm sorry. I don't know what a little while ago is. Yesterday or six months ago? No, no, like a month ago. Okay. All right. And what is your household income? What do you make and what does he make? We make over$100 ,000. Okay. Was the 401k, did he take it all out of there? Did he cash it out? He must have borrowed against it. Yeah, he borrowed against it. Okay, and how did he take out a HELOC without you signing for it? It's on your personal residence. Yeah. No, the HELOC I knew about. I just didn't know he was going to be borrowing from it. Oh, you knew it was open and you had signed for it, and then he just drew on it.

1:38:57Right, exactly. I got you. I got you. Okay. Yeah, and that's first because I knew that.

1:39:00Dave Ramsey:Okay, so there's two problems. Yeah. One is we're out$100 ,000, and two is you no longer trust your husband because he lies. Yeah. And yeah, I think that's the harder part. Oh, it is the harder part. You're right. Good, good, good observation. Yeah. So what are we doing to rebuild trust, respect, to keep you from killing him in his sleep? I'm kidding. I'm kidding. That was a joke. Don't kill him. No, I'm serious. Are y 'all sitting down with a marriage counselor? Not, not yet. It's been a month. I know, I know, and it's something that... It's not going to get better. You're getting progressively pissed.

1:39:46Yeah, what's the holdup? Yeah. He's not ready yet. He's not ready? What are you saying?

1:39:55Dave Ramsey:He ought to be on his knees begging forgiveness. Not only did he lie, he was stupid with the money. Yeah. He got scammed by Nigerian Prince. Come on. I know. I know. And he's still walking around like this is okay? Yeah, that's a problem. You didn't make him realize he needs to be sleeping with one eye open. I'm trying to give a lot of grace. No, you don't need to give grace until there's repentance. I hear no repentance. No grace, no repentance. No repentance, no grace. These go together. I was stupid. I will never lie to you again. I have screwed up beyond belief. Please don't leave me, good woman.

1:40:35Dave Ramsey:These are the words that should have come out of his mouth as soon as he uttered the fact that he'd screwed up and gave$100 ,000 to the Internet Nigerian Prince. Oh, my God. Yeah, I know. Like, he has, but he's sorry and apologized. But he's not ready to make it right. Because those are just words. That's just lip service. Right? The actions are what make it better. Dr. Deloney says behavior is a language. So I want to make it right, and I want to figure out how to rebuild trust in this relationship. and so we're going to sit down with a marriage counselor and this is you talking to him tonight and we're going to do this within the next seven days or you're going to have another problem with me.

1:41:15Dave Ramsey:I'm not going to be here because I can't trust you. You're a liar. We have to start there and rebuild. That's tough, man. Okay. Yeah. So, I mean, you have to go to ground on this and start from solid. And then you put systems and processes in place where you agree. Okay? I'll give you an example. I used to do lots and lots and lots of real estate deals that my wife never knew about, not because I was hiding them from her, but because she was playing Southern Belle and said, whatever you want to do, honey, you just do whatever you do down there at the office. That's okay. And I did, and I screwed up Christmas.

1:42:02Dave Ramsey:I messed up everything. I lost my butt. And so one of the things I've learned from that is that I no longer make any major financial decisions without my sweet little southern passive-aggressive bell wife involved in the decision. Okay? And so we don't buy trucks. We don't buy boats. We don't buy houses. we don't buy commercial property to develop which i bought one the other day drove her down there in the truck we sat on the dirt and looked at it do you think this is a good idea she said yes this one's going to work we don't make decisions unless we make them together that's a new system that went in place after dave was stupid you have a new system that goes in place he don't make any more decisions without you knowing what the flip's going on and you being in agreement that's a system that's in place that helps you begin to trust him gradually over time again.

1:42:59Dave Ramsey:This is major. This touches the same nerve in your relationship as if he'd had a sexual affair with another woman. It's the same level of betrayal because he lied about$100 ,000 and then on top of that he was stupid about it. And then on top of that he acted like he's the one that has to be ready to fix it. I have to be ready. I'm not ready to go to a counselor. I got you ready. come on man yeah no you need to you need you guys need to be in marriage counseling yesterday and they can guide you a good one can guide you through the process of transparency being in agreement before we move forward on anything ever again the rest of our lives that was 30 almost 40 years ago that i went broke and i still to this day not because i'm in repentance about it but because it's a good way of living your life.

1:43:55Yes, absolutely.

1:43:56Dave Ramsey:The right way to live my life is I have a better life when Sharon and I are aligned and in agreement on things. I make better quality decisions. She makes better quality decisions. When we do these things together, we don't just come in and announce, I just invested heavily in a Nigerian prince on the Internet. Yeah. You're killing me. You're just killing me. Because the questions you have to ask yourself if you're in her shoes is, if it hadn't gone wrong when would he have told me or would it have just been this thing and then you have to ask when somebody lies like that you have to ask yourself well what else are they lying about those are the two questions when he got to a million dollars is that when he was going to leave right yeah it's tough that's tough I don't envy that situation one bit but the ball's in her corner now Karen we're mad with you and for you because we want healing to happen there and the beginning of healing is repentance.

1:44:53Dave Ramsey:I'm sorry, I goofed up. What do we got to do to make this right? That's repentance. Repentance is I'm walking the wrong way. I stop and I walk the other way. I do a 180. He's not doing that. I'm not ready. I got you ready.

1:45:39Dave Ramsey:Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:46:33Dave Ramsey:in the lobby of Ramsey Solutions on the debt-free stage David and Penny are with us hey guys how are you we're doing pretty good how are you doing better than I deserve where do y 'all live So we live about an hour north of Salt Lake in a tiny little town called Hiram, Utah. Oh, fun. Very cool. Yeah. Well, welcome to Nashville. And how much debt have you paid off? $336 ,834.12. Love it. How long did this take? Two and a half years. Whoa. And your range of income during that time? So we started at$200 ,000, and by the end of it, we were making$250 ,000. Nice. Cool. What do you all do for a living?

1:47:11Dave Ramsey:So I'm in the military, I'm in the Air Force, and she's working for a defense contractor. Wow. Well, thank you for your service, both of you. Incredible, guys. So I'm going to guess and say that kind of debt in that type of town in Utah might have been in your house. No. No. No. No. That was 13 years of bad choices. Holy smokes. That's everything from school loans, credit cards, cars. HVAC loans, cars. Wow. Personal loans to pay off the credit cards, which were just more credit cards. Yep. This just got very interesting. Wow. It makes me kind of sick. So what happened two and a half years ago that your life turned completely upside down or right side up?

1:47:53So I was at work and I really did not enjoy my job. And I was listening to just YouTube on my headphones, wondering what in the world I'm going to do from a day to day basis. And your show popped up. and it became kind of like a therapeutic thing just to listen to people who had more credit card debt, who had it worse than us. And like, hey, yeah, we're not that bad. I mean, we have$86 ,000. Compared to Ramsey callers? That's not who you want to compare to.

1:48:20Dave Ramsey:Exactly. And then all of a sudden I started getting the debt-free people. And I was like, wait, no, you can't live like this. Like, that's normal. You need a credit score. And then I started, you know, actually listening. I'm like, okay, maybe we can do this. And I went home and I looked at my finance stuff because even though he was over it, it was just completely separate. It was a mess. And I was like, wait, I think we can actually do this. And I paid off my first credit card. And I was like, oh, my God, I think we can do this. And I went and I got a side job as a janitor scrubbing toilets out of college on a weekend to start putting more money towards it.

1:48:59So I was making$100 ,000 a year working with people. And they're like, you make how much? I'm like, yeah, I know. Just trust me. We'll get there at the end of this. And then I showed it to him on one of my lunch breaks. I was like, hey, can we please just look at this together? And showed him that there was a path forward out of this. Which was amazing because I didn't see any path forward. Every night would be just up in the night, pacing, worrying, stressing. Wow. There's no way to get out of it. And then she showed it to me. We took the numbers. We broke them down. And I'm like, oh, wow, this is really doable.

1:49:32We can do it. Wow. And that day we canceled every single credit card without hesitation. Nope. They all went that day. I think they were all done before the lunch break. And then we started paying. How did you feel right after? Scared because it's just a different way of being it. But you know what? In two and a half years, we have not had to use any sort of debt product. And it's been amazing. And I've slept every night. You've slept like a baby, I bet.

1:49:57Dave Ramsey:Never once stressed again. So same amount of debt, but going down. Yep. but you had a plan and you could see a light at the end of the tunnel. That's not an oncoming train. We hit it hard. Next month we started selling anything we can sell. Just sell it. Get rid of it. We don't need it. Yeah, so we bought an older home and we were in the middle of a bunch of home renovations and those all came to a halt. So one of my most excited things is I'm going to get baseboards because we haven't had baseboards in years, but now we can afford it. Yes. And this woman has a low bar for happiness. Yes. Baseboards.

1:50:32Dave Ramsey:And that was part of what we did when we were trying to get no debt. We could tear down everything in our house to get everything ready to do projects. Because that was free. It was free. So we have at least half the house is just bare walls. Which is torn up. Yeah, ready. Ready to be remodeled. Well, that'll motivate you. Yeah. That's very interesting. So cleaning toilets, that's probably one of the most extreme side jobs. Yeah. What else you got, David? Did you do anything crazy? Not as crazy as that. I took an assignment that put me away from everyone for a year. So we actually had to live in two separate areas.

1:51:07She was living there in Utah. I was having to live in the middle of Southern California doing a job that was going to help us continue, make more money, continue just bringing our life down to as low as we can. And I didn't drive for a whole year. I biked 14 miles back and forth to work every day. Oh, my gosh.

1:51:22Dave Ramsey:Just trying to make sure we can save as much money as we can. Yeah, because you guys did this fast. Yeah. I mean, you lit into it. But here's what's interesting. I want you guys that are watching this or listening to rewind it at some point to when they were talking about when they both sat down and looked at it. And he said, I saw a way forward. If you watch, you can see their faces change just talking about that moment that hope came. Hope is so powerful. It really is. One of my favorite quotes by you is hope deferred makes a heart sick. And that was us. I mean, we were living financially just separate.

1:51:58it, even though our bank accounts were together, we weren't talking about it. We didn't have goals. We didn't have dreams. It was just, what can we do to get to the end of the next paycheck? And now it's not like that anymore.

1:52:08Dave Ramsey:I saw a way forward. That was your word, David, I believe. I saw a way forward. Yes. And you look at the math and you went, for the first time, I see a way out. And that just makes me cry. I mean, that's so powerful because when you see that, then you can run. You can run. I mean, I don't care how tired you are. You can bike 14 miles. You can do anything. You can clean toilets. Oh, wait a minute. You did. Yeah. Hello. And so, you know, I mean, you can do because you see a way, you know, if you're just doing those things to exist, that's completely different than seeing a way out. And I'm so proud of y 'all.

1:52:44Dave Ramsey:Well done. So who was cheering you on? So that's the weird part about this. I grew up extremely poor. like seven people on$10 ,000 less a year, we were on welfare. So it's not like we ever had a ton of money given to us. And his grandma actually cheers us on and she believes in us and she's taken these principles to heart. But outside of just having like below average earning family members, we didn't really have a ton. We just had each other to feed into this whole process. We learned to live life for ourselves. Yeah. To make something better for us, for our kids. Yeah. Well, you did change your family tree for sure.

1:53:29Dave Ramsey:Oh, yeah. Wow. I mean, you knock out$337 ,000 in two and a half years, folks. That's$150 ,000,$170 ,000 a year only making$200 ,000 to$250 ,000. I mean, they're living on beans and freaking rice. I'm not eating rice anymore. We can't eat rice anymore. Ever. I don't ever want to see no rice no more. Wow. I love it. you just had two really amazing transformations the one is going from separate separate money and having things separate to just deciding one day ah we're gonna put it together and then from you your background and just deciding i don't want to i don't want to be like that no i i could not bring myself to live like that i can't put my kids through that i can't have them worrying what's going to happen when it comes time for mom and dad to retire so yeah it's just this is it well Well, they've had a front row seat to watching Heroes in Action, though.

1:54:26Dave Ramsey:I mean, they watch you do whatever it takes to win. You pay a price to win, and you win at it. And they watch it. You've changed their lives by the example you set, not to mention the mathematics that are going to be going to them now. Because you're going to be multimillionaires now. Well, you know what's funny is through this whole process, it was, hey, can we do something this weekend? Yes, if it's free. So we did a ton of hikes. We went to the library a lot. So now if we go to buy something, my oldest one will be like, can we afford that? Do you have money for that? Is that in the budget? She'll call us out.

1:54:59Wow.

1:55:01Dave Ramsey:Well, again, and so that's going to affect who she goes on a date with when she's choosing a husband someday. She's going to go, no, I don't think you're right. No, I'm not doing that. The second they pull out a credit card, I hope she gets up and walks out the door. Or you'll help him out. Or grab some scissors and get across it. I love it. Wow, amazing. You guys are great. I'm so proud of you. Very, very well done. All right, David and Penny from Utah. $337 ,000 paid off in two and a half years, making$200 to$250. You guys are amazing. Count it down. Let's hear a debt-free scream. Three, two, one.

1:55:39We're debt-free! Yeah!

1:55:44Dave Ramsey:Woo-hoo-hoo-hoo! This is how it's done, boys and girls. Hope in action.

1:56:15you

1:56:20When I talk to people on The Ramsey Show, 90 % of the problems I hear come down to one thing, not having a plan. They're not living on a budget. They have no idea where their money's going. Money is just happening to them instead of them happening to their money. And guys, that is so normal, but it doesn't have to be normal for you. And that's why I want you to go download our EveryDollar budget app. EveryDollar not only helps you tell your money where to go with a budget, It also builds a plan to free up extra money so you can pay debt off faster and start building wealth. And the best part, your plan is completely personalized to your life.

1:56:58It's the same advice that you would get if you called the show. And it's right in your pocket. So don't keep living normal. Go download the EveryDollar app, answer a few questions, and get your plan today.

1:57:25Dave Ramsey:Our scripture of the day, 1 Corinthians 16, 13 through 14. Be on your guard. Stand firm in the faith. Be courageous. Be strong. Do everything in love. G.K. Chesterton said, there is only one certainty in life, and that is nothing is certain. Facts. We'll go with that. Kyle is in Nebraska. Hey, Kyle, what's up? Hey, thanks for taking my call. Sure. How can we help? So with my current job, housing is provided in my salary. So in approximately, give or take, eight to ten years, I'll probably leave this job and take a job in which I will need to have my own home and purchase it. So the question really is, is there an advantage one way or another to take out a mortgage now and pay on that during this time and pay the interest and possibly rent that house out while I'm here or just wait and stack up cash and when I leave this place in eight to ten years, just use that as the down payment towards the home?

1:58:36Dave Ramsey:What do you do for a living? I'm a rancher. I'm a rancher. Gotcha. Okay. Yep. Are you single or married? Nope, I'm married. Okay. And what does she do? Married, and right now just, okay, right now, stay-at-home mom. She raised the kids, but in a couple months, she's going to take a full-time job, which is going to double, basically double our annual take-home pay. My take-home pay right now is about$40 ,000. Okay. You're very wise to start planning this because a lot of people in your situation, when the housing arrangement ends with the job, they seem to be surprised. And so I don't know why, but they are.

1:59:17Dave Ramsey:And so you're very wise to look out there into the future and say, I've got to get ready. So there are two possible things that you can do. One is, like you said, take a mortgage out and buy a home. It probably will not be the home you live in. I would not recommend that. I would just say, what is a good rental property? a good price range, a good location that's going to go up in value. And we're going to do that with the idea of getting it paid off during this seven-year period of time. By the way, the people following the total money makeover baby steps and becoming baby steps millionaires eventually typically pay off their home in about seven to eight years.

2:00:01Dave Ramsey:And so your schedule kind of fits with that. All right. So we're going to put a renter in it. We're going to have a little bit of a mortgage, and we're going to pay it off as fast as we possibly can, seven years or less. So when this happens, you sell that house, take the money from that, and buy a home that you live in, okay? Because you will have had the increase in value during that seven years. You'll have to do some repairs to it when the renters move out, some repairs to it while the renters are there. But you'll have the hassle of being a landlord and all that, and that's part of the program.

2:00:33Dave Ramsey:But you're investing money that's going up in value. Okay? Yes. That's one way to do it. Another way to do it is a lot simpler and will give you about the same result is sit down with a financial calculator with your SmartVestor Pro by finding them at RamseySolutions.com and say, how much do I need to put in a good growth stock mutual fund per month to have the equivalent of a house price seven years from now? And so I want$500 ,000. And how much does that mean I need to put away on a seven-year schedule? And basically, you pay yourself a house payment into mutual funds. And they will be growing at the typical rate that the market grows, around 11 % or 12 % during that time.

2:01:19Dave Ramsey:So you're getting all that growth. And you're, of course, adding to it each month. And you just have in your budget a house payment. But you're paying yourself a house payment. So when you leave there, you look up, there's the half million dollars that you planned on or whatever the number is that you want to aim at. That feels like the simpler path. Yeah, that's an easy one. Sure. Okay. Yep. So either one of those will get you there. But you are going to have to allocate time and effort and money to this starting today, or you're going to come up short when you make this transition. Yeah. Ashley's in Birmingham.

2:02:00Dave Ramsey:Ashley, how are you? Hi there, I'm doing all right. How are you? Thank you for taking my call. Sure. What's up? Well, actually, I wanted a little bit of advice on, because my husband and I, we've been together for 21 years, married for 19, and we've been very lucky to stay, you know, like, you know, out of debt since we had paid off our last home. But it got to where, as the years went by, things got to where it was just practically unlivable. So around this time, my Uncle Billy had passed away from COVID. And I was like his next of kin, but his, you know, I don't want to go into it, you know, too much.

2:02:41But just in short, his girlfriend was, you know, still a large portion of my inheritance. and when all that was said and done and I was having to pay her a large sum of money, I only had, you know, a portion of the stuff that I've got to be able to do. I'm sorry, how did you have to pay his girlfriend money? Right. We went through a media—what it is, is she was claiming to be common-law lost, and she was— So you got the money from the estate, and then they made you give it back? house uh yeah i had to uh we went through a mediation she was wanting to keep the house and pay me fifty thousand dollars and um and yeah but i mean you were living already okay

2:03:24Dave Ramsey:and then he died and you got the money from the estate and she came at you and you ended up having to give some of that up in mediation oh yes i gave her seventy four thousand dollars no you gave And it was over$74 ,000 that Uncle Billy had given you shortly before that at his death. Yes, and it didn't go well at all. Okay. But that doesn't cause you to be in debt. No, but the thing is, well, the reason why I'm kind of going into debt is because I've got, we had to get a loan to renovate his grandparents' house because, you know, We could no longer live in our old home because it was getting to the point where it was just unlivable.

2:04:09And it had already been paid for. But what happened was my husband's grandfather offered to let us have the house that him and his wife lived in when they were first married 69 years ago. And he was giving us the house, you know, but we would have to renovate it. So we had to take out a loan for like$40 ,000. Now we're kind of suddenly like going into debt. And I've still got to pay. What about the old house? What about the other house that you and your husband? Oh, it was like a mobile home. It wasn't no house. Understood. But what happened to it? It was just in shambles. I mean, like the roofing is really bad.

2:04:47It's just, I mean. Okay. So you were living in the mobile home. It turned into a wreck. You were given a home, a family home, but it needed to be renovated. How much debt did you take out to renovate it?

2:04:58Dave Ramsey:$40 ,000. $40 ,000. And we don't even know if that's going to be enough. it, but we're trying to make sure. What's your household income? Well, only recently I got a better job because I was only making. What's your household income? Well, now it was more so like 43 ,000 for him. And last year I only made like 14 ,000 and something. So you don't work much. Okay. Sounds like you need to be working more. We need more income coming in this house. And then you guys are going to have to start happening to things. Everything in this story happened to you. You didn't happen to anything. Dr. Stephen Covey says in the book, Seven Habits of Highly Effective People, that highly effective people, one of the seven habits is they are proactive.

2:05:43Dave Ramsey:They happen to things instead of things happen to them. You act like all this happened to you. No, you chose to take a family home that you did not have the money to repair. And so you chose debt. You could have chosen to dump the trashy trailer and rent an apartment and had no debt. You could have chosen that. I hope to God that Grandpa put his house in your name. If you're putting$40 ,000 of your borrowed money into his house, that would be double stupid. So don't do that. Get it into your name. And you guys are going to have to start happening two things. Now you happen to this$40 ,000 by working like crazy people.

2:06:24Dave Ramsey:Both of you work six jobs and live on beans and rice. Get this done and then pay cash for any more renovations above the$40 ,000 that you're doing. Don't put another$40 ,000 in debt on this house. You can't when you only make$40 ,000 in the year. You've got to stop this. And Uncle Billy's story had nothing to do with any of this. Except that you thought it was going to bail you out. That puts this hour of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace. And that's to walk daily with the Prince of Peace, Christ Jesus.