Set Money Goals Your Future Will Thank You For

8:12Dave Ramsey:And a community college for free or almost free is not a bad thing. All those credits will transfer. You get a lot of your basics out of the way if you're going for a four-year degree. And the kid is not, you know, no one knows where you went to school. All they know is where you graduated from. And even then, they don't really know that. They don't care.

8:32Rachel Cruze:And that's going to be a hit to the ego, in a sense, of going from private school in Manhattan to a community college. But it's long-term, it's the smart decision, Jennifer, for her long-term as well, so that you don't rack up student loans.

8:44Dave Ramsey:But your family's going to have to change your priorities, because y 'all are way out of whack.

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9:53Rachel Cruze:Because when my kids are old enough, I want them informed, not overwhelmed. And right now, you can get a 30-day free trial. Just go to worldwatch.news slash Ramsey or use promo code Ramsey to get started. That's worldwatch.news slash Ramsey.

10:25Dave Ramsey:Jamie's in St. Louis. Hi, Jamie. How are you?

10:29Rachel Cruze:I'm doing good. Thank you.

10:31Dave Ramsey:Good. Sorry, I'm kind of nervous.

10:33Rachel Cruze:I really didn't think I'd get on the show.

10:35Dave Ramsey:Well, surprise. Here you are. You'll be okay. We've never lost a patient. What's up?

10:40Rachel Cruze:I won't let Dave be mean to you, Jamie. Well, I just recently finished listening to the Total Money Makeover and been listening to Georgia's books. And it's really got me motivated to make changes.

10:56Dave Ramsey:Good.

10:56Rachel Cruze:And I just kind of want to keep that motivation going. We've already, like, eliminated$200 worth of subscriptions we've had.

11:04Dave Ramsey:Good.

11:05Rachel Cruze:We do live on one income. and I'm just, you know, it's giving us higher aspirations for the future, but I'm just wondering how we keep that motivation going and keeping that larger goal from kind of demotivating us in our current situation.

11:21Dave Ramsey:Feedback loop. The psychologists tell us that if we can see and feel traction towards our goals, we can keep going. When you don't feel like you're getting anywhere, when you feel like the only light at the end of the tunnel is an oncoming train, everyone quits. So you can go through a long journey as long as you can measure your progress and sense it with a feedback loop. And so that's one of the reasons we want to do something like a debt snowball where we list our debts smallest to largest and we attack the smallest one with a vengeance because when we knock that one out, it gives us positive feedback.

12:01Dave Ramsey:Oh, this might work. And then you knock another one out. Your hope level continues to increase, and as your hope level increases, you're willing to sacrifice deeper because it's starting to work, you know, and things are starting to move in the right direction.

12:18Rachel Cruze:Yep, absolutely. Jamie, what is your situation? You keep saying that. How much debt do you guys have? So we're married, and we have four kids, and we live on about$55 ,000 a year. Okay. And we're currently about$23 ,000 a day.

12:39Dave Ramsey:Okay. Well, that's tough but doable. But two things tell me immediately when I hear that situation. One is a detailed budget in every dollar you're going to feel like you got a raise because you've got a large enough family that there's a level of chaos. Yes. Yeah, that's just normal. I mean, you would be weird if you didn't. If they're all regimented little Stepford children or something, you'd have a weird bunch of kids, right? And I said, there's a chaos level when you've got four kids. And so it goes with the territory. And so you guys have to force some order and some organization to the money side of the equation.

13:20Dave Ramsey:And that's also going to add some order to the rest of the thing while you're doing it. You can't keep from doing that. And then the second thing that comes to mind is$55 ,000 is low. What's your career and what's your aspirations there? We need to get your income up, man.

13:34Rachel Cruze:I am a floor installer. How old are you? I'm 34.

13:41Dave Ramsey:Okay, when you're 44, what are you going to be?

13:47Rachel Cruze:Probably the same thing.

13:50Dave Ramsey:Probably not a good plan.

13:53Rachel Cruze:Yeah.

13:54Dave Ramsey:Nothing wrong with being a floor installer, but maybe you need to own a floor installing contracting company and they work for you.

14:02Rachel Cruze:Or you're the leader of the division of the company who is doing it. You know what I mean? Like, yeah, what are the climbing the ladder, so to speak, of how do you want to keep advancing is going to be big, Jamie. And again, I'm 65.

14:18Dave Ramsey:Your knees are going to be hurting when you get there.

14:22Rachel Cruze:Yeah. No, I totally agree. Yeah. Well, Jamie, for you guys, I'm just curious, the debt that you have, what was it,$25 ,000,$22 ,000? What is the smallest debt there? It's primarily just one. It's the work van that I have.

14:41Dave Ramsey:The what?

14:44Rachel Cruze:The work van that I have.

14:45Dave Ramsey:A work van. I misunderstood you. Okay. So you do?

14:50Rachel Cruze:Do you run your own company? uh no it's just it's a private company it's just me and and another guy so so i mean there is growth to be had still wait a minute i mean you and the other guy

15:07Dave Ramsey:do installing together and you're you're independent contractors you own your company

15:12Rachel Cruze:i don't he he's the owner i'm his employee why do you have why do you have a van why do you have the van debt?

15:24Rachel Cruze:Because I'm slow. I'm sorry. It was, I just, I was just a bad decision kind of.

15:34Dave Ramsey:Okay.

15:34Rachel Cruze:I just did it so that I could try to make more money. Okay. Okay. Because I would have my own vehicle. And I would also help with making more progress, in the company.

15:50Dave Ramsey:There's two of you. Yeah. Yeah. So, okay. So rule number one is we don't buy vehicles on debt. Rule number two is we don't buy vehicles, period, for someone else's company. We buy them for our own company. So I want you to take this van and start doing some side hustle work that doesn't compete with your current boss, but that allows you to make some extra money here and there, utilizing the skills that you have. And let's take this van and start talking about how someday you're going to be self-employed and make a whole lot more than you make now. But let's start moving that direction because this van is a big, big debt with your income and with four kids.

16:30Dave Ramsey:If you didn't have that van payment, you probably wouldn't even have been calling. But the good news is you're learning. You're growing. You've already gone through a couple of audio books. You're calling us on the air asking. You're open. You're not being belligerent and prideful about this. You're saying, I want to learn. I want to learn. and you're the kind of guy we help all the time and we love helping you we're glad you're here proud of you for taking those steps those are big steps 34 years old four kids van payment you go i got to learn something new this isn't working good for you good for you because you do if you keep doing the same thing over and over you keep getting the same result and um you know it's pretty predictable so you know so what we got to do is we got to think about how your career unfolds over the next 10 years and how this van fits into that and how we get the van paid off.

17:19Rachel Cruze:And I do think a budget, honestly, Jamie, in your situation and for you and your wife to be on the same page and you guys have a plan going forward of where the income is going, because that will be tight with four kids to be on that. And so I think it's even more important, right, for you guys to be looking at every single dollar and you've already cut$200 of subscriptions, which is amazing. And so, you know, just continuing to look at that lifestyle and just say, okay, where can we pull back to throw extra money at this van? Because if you didn't have the van payment, to your point, I'm like that margin.

17:55Rachel Cruze:It would change everything. Yeah. The margin helps so much when you look at the monthly numbers, but well done, Jamie. And you and your wife get on the same page. You guys do this together.

18:02Dave Ramsey:Jamie, if you've made mistakes with money, that makes you over 12 years old. every walking person has made mistakes with money i have a phd in dumb i've done things that make what dumb things you've ever done look horrendously smart i mean i have done some stupid stuff in my life the trick we all have to learn is to not do the same dumb thing you know figure out what's dumb never do that one again figure out what's dumb never do that one again figure out what's dumb never do that one again and if you keep doing that when you get to be my age they call you wise because you've quit doing so many dumb things that there's not much left to do but some smart things.

18:39Dave Ramsey:And you really do get a whole pile of that behind you. And so if you've made a mistake, there's no reason to shame yourself about it. You know, just go, hey, I made a mistake. I didn't know. That was a dumb thing. Doing a dumb thing doesn't make you dumb. Doing a dumb thing three times in a row makes you dumb.

18:54Rachel Cruze:And you know what I think, Jamie, because you started the call with just like, gosh, it could feel discouraging as we start climbing this mountain. You know, how do you not be discouraged? just knowing the season of life you guys are. And I'm just assuming because of your age and the four kids, you guys got little kids at home and it's just, there's a lot happening. And you're in the day-to-day so much, that grind, or that's how I feel as a mom sometimes. I'm like, it's just one day at a time, one day at a time. And for you and your wife to go out, Winston and I do this once a year, we call it our dream date.

19:22Rachel Cruze:It sounds kind of cheesy, but we just say, we put money off the table. We've done this for years and we just look ahead. We usually do like a 10 year look ahead and we say out loud how old our kids are going to be in 10 years, how old we're going to be. And what do we want to do within those 10 years? When we get to that age, what kind of house do we want to live in? Where do we want to live? Where are our kids going to be in school? What kind of bucket list trips maybe we've checked off? Big financial goals. Like just dream, like get out of the day to day, get out of the overwhelming numbers.

19:51Rachel Cruze:And you guys together just start this like refreshed, looking at the future together and just dream and have fun.

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21:34Dave Ramsey:David is in Phoenix. Hi, David. How are you? I'm doing well. I love you guys. Thank you. You too. How can we help?

21:43Rachel Cruze:I spent the first two decades of my adult life pretty income-driven in terms of my lifestyle. I'm married. I've got four kids, but we never really saved or invested too much. And I was also kind of in living for me mode and some knuckleheadery and personal sin led to us needing to sell our house and use the equity that we had built to pay off some of the consequences of my actions.

22:20Dave Ramsey:And here in the last two years or so, the Lord has really given me a second chance in a lot of ways.

22:31Rachel Cruze:That's a special thing. It really is. And so now for the last, I don't know, 18 months or so, we've been renting, so we're not homeowners anymore. but I've got a small business that is doing increasingly well. My income is doing well, and our mindset is now very much shifted,

22:59Dave Ramsey:and we're trying to very much aggressively save and invest and sock away for retirement. But certainly with an eye towards some of what we're socking away right now, being the nest egg to help us enter the homeownership market again. However, I guess my question is, you know, we've talked about kind of a plan here of in the next 18 to 24 months,

23:24Rachel Cruze:maybe purchasing a home again, but we would be using most of the investment and savings that we have set aside as the down payment,

23:35Dave Ramsey:probably for something like that. We're fairly comfortable in our renting situation.

23:41Rachel Cruze:And so I guess my question is, as aggressively as I'm able to sock money away right now, does it maybe make sense for us to postpone that decision for a few years and not purchase a home in the next one and a half to two years, but maybe six or seven years down the road? I'd love your thoughts.

24:03Dave Ramsey:Congratulations on the turn you've made. Thank you. Obviously a complete 180 in your whole life. And I can just tell from a quick version of your story. And very, very cool. Rent is patience.

24:23Dave Ramsey:And then the question is, what are we being patient for? And your question, the way you posed it, is the right way of looking at it, I think. And that is, you know, is it worth it to delay until we can do this with even more downstroke? And at some point, that becomes a personal choice, okay? A first-time homebuyer, we tell folks, you know, when you're out of debt, are you guys, David, out of debt?

24:51Rachel Cruze:We're getting close. I owe my parents$10 ,000, which should be knocked out here in the next couple months.

24:56Dave Ramsey:Okay. And what are you making in this small business?

25:01Rachel Cruze:Well, it's hard to put my finger on it because it's only been around for 18 months and it continues to grow. So in 2025, the gross revenue was about 320, and my overhead was about 8%.

25:13Dave Ramsey:What is it year-to-date?

25:17Rachel Cruze:Year-to-date, gross revenue is about 300 in the first six months of the year.

25:23Dave Ramsey:It's on a hockey stick curve then. Good. Okay. Yeah, my overhead is about 5%. Yeah, okay. And so good for you. Congratulations. Obviously, the Lord is blessing the new direction of your life. That's cool.

25:40Dave Ramsey:Well, again, with a new homebuyer, we just say put 5 % down, whatever, or more. As much as you can put down as a better. Anything that's not in retirement savings is your down payment. Throw it at it. And 15-year fixed where the payment's no more than a fourth of your take-home pay. You've got a couple of moving targets here. One is you've got the moving target of Phoenix Real Estate, which has a tendency to shoot up. We've had a couple times in my memory of Phoenix having a bit of a bubble. It got really, really hot there, no pun intended. And it may again. And, you know, I wouldn't want to be on the other side of that.

26:25Dave Ramsey:I'd want to be riding that up if that were happening. So that's variable number one. variable number two is you've got this hockey stick business that's going up into the right in the right direction and you're going to be able to do a completely different house two years from now what you could do today uh if that thing continues to uh grow that at that rate and uh and and do so reasonably so you might choose a completely different house so i'm going to try to balance those two things against each other how fast is the market increasing how fast is my business growing and then and and so how long am i going to have patience with this good situation with rent and stack cash um i'll give you a guess i i would not be outside a three-year window to buy if i were in your shoes now i pay cash or i can't buy so i couldn't do any of this but i'm talking about the things that we recommend here on the air 15-year fix it's the only debt that we don't yell at people for, okay, is a house.

27:22Dave Ramsey:It's the only one. And a 15-year fix where the payment's no more than a fourth-year take-home pay, and you put as much as you can put down. So just past the entry-level first-time homebuyer is someone probably in your situation where I'd love to see you have at least 20 % down because you could avoid private mortgage insurance, which is about$75 per month per$100 ,000 borrowed. It's a lot.

27:44Rachel Cruze:That's one of our goals for sure.

27:45Dave Ramsey:It's a lot. And so avoiding that. And then beyond that, everything we're doing is, OK, we're either increasing the price of the house because we've got more and more and more money or we're decreasing the debt on the house that we buy because we've got more and more and more money or some of each.

28:01Rachel Cruze:How old are you guys, David?

28:04Dave Ramsey:I'm 41.

28:05Rachel Cruze:OK, so, yeah, you guys, I didn't know. Yeah, I was going to say if you're getting close to that point of retirement, then investing was going to be important. but you guys have plenty of time, so that's great. You sound more mature than a 41-year-old. I don't know why, David.

28:21Dave Ramsey:I thought you were older. It's the mileage in the story.

28:25Rachel Cruze:I've been through a refining fire. Yeah, there you go. There you go. But, yeah, I had two to three years in my head to rent and then to buy. So I think that's what you guys didn't shoot for.

28:34Dave Ramsey:I would not recommend a five-year play in your situation with the variables you gave me. And it feels like one year feels a little desperate. Okay. Does that make any sense?

28:47Rachel Cruze:Yeah.

28:47Dave Ramsey:I mean, we've probably got about 200 set aside right now in investments and a SEP. Well, you're not using your SEP. We're not using your SEP.

28:57Rachel Cruze:No, no. I would be not touching that. So primarily the brokerage accounts. How much is in the brokerage account?

29:07Rachel Cruze:I've probably got about 130 in there right now.

29:10Dave Ramsey:Okay. So if you took 24 months and added to that, that's not a bad plan. Yeah. That's what it feels like to me. But renting in the interim is just patience. We've got to get a couple of these changes have time to cook up in your life. Your life is completely changed. And every segment of your life has changed. Every compartment, department of your life has changed. So holistically, you are a life that has changed. And so awesome. That's power. And I want some time for those seeds to germinate and sprout and take advantage of them if I'm in your shoes.

29:52Rachel Cruze:Yeah, have some settling.

29:54Dave Ramsey:Yeah. What I don't want people to do is wait too long because you're lacking in hope or go too fast because you're somehow desperate and you're like freaked out about real estate. And so neither one of those are good motivators. So instead, just a wise, you know, I'm the tortoise, I'm plotting, and I'm plotting while I'm plotting on how I'm going to pull this off. And I think you're going to be just fine, David. I think the house is going to be a natural next move in the next 24 months or so, and you're going to make a good decision. I think you got a little you know you're like me you got a lot of your bad decisions in your rear view mirror and that's a good thing that puts you in a good place

30:38Rachel Cruze:well done David

31:08so

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32:42Dave Ramsey:Thinking about our last call or getting back into the real estate market after a life change situation, you for sure in any situation, if you're in the real estate market, want to have a pro in your corner. Someone that's high octane, high protein, and knows what the flip they're doing. Didn't just get their license three weeks ago and they're at your church or wherever you met them. No, no, no, no, no, no. Nothing wrong with being in the church, but they need to actually be selling a lot of houses or they don't need to be listing yours, okay? We do not endorse real estate agents unless they're high octane, high protein, high volume producers.

33:18Dave Ramsey:And they get it done and they do it the Ramsey way. That's why we call them Ramsey trusted because we vet them and we obviously don't let everyone into that recommendation program. If you want to find a Ramsey trusted real estate agent that has your best interest at heart and you can find them for free, go to RamseySolutions.com slash agent or click the link in the description. Rose is in Austin. Hi, Rose. How are you?

33:46Rachel Cruze:I'm doing good. Thank you for taking my call.

33:48Dave Ramsey:Sure. What's up?

33:51Rachel Cruze:So I'm almost done with baby step three, and I'm looking for any tips on how to move from gazelle intensity to taking my foot off the brake.

34:03Dave Ramsey:You mean to just move to intentionality from intensity.

34:08Rachel Cruze:Yeah, I'm just a little concerned on going backwards if I, you know, take my foot off the brake. So fear is the number one thing you would say is driving.

34:18Dave Ramsey:You mean your foot off the accelerator?

34:21Rachel Cruze:Yes.

34:22Dave Ramsey:Oh, okay.

34:22Rachel Cruze:It's okay. We're going to try to brake. Just making sure I understood

34:24Dave Ramsey:what we're talking about. Okay.

34:26Rachel Cruze:We're going to try to brake a little bit.

34:27Dave Ramsey:Yeah, we need to brake a little bit.

34:29Rachel Cruze:What was your situation, Rose, before you started doing all of this? The gazelle intent paying off debt and everything. Yeah, so I actually have been able to move out on my own, get my own place before I was living with roommates, so on and so forth. I've paid off about$23 ,000 worth of consumer debt. And now I'm finishing up that emergency fund. I do currently work seven days a week between my primary job and my side hustles. So I'm concerned on if I take away that side hustle, if I don't have any margin in my budget. You know, I'm a little nervous there.

35:11Dave Ramsey:What does the math tell you? If you take away the side hustle, what does your budget look like?

35:16Rachel Cruze:I can do it, but it's going to be a little tight. Okay.

35:22Dave Ramsey:Do you have to take away all of the side hustle? Can you take away half of it?

35:27Rachel Cruze:I could. I should. My side hustle is waitressing, so I work nights and weekends.

35:33Dave Ramsey:Yeah, so you could work not as many nights and not as many weekends, and then give yourself a comfortable margin until your budget gets to where you're really comfortable with it. So you don't have to go from zero to hero. You can just go from, or hero to zero. You can just go from gazelle and dial it back and go, okay, instead of a full-on sprint, we're going to go to a jog. okay and then if that works you can slow down drop the side hustle altogether if you want i mean but if you want to if you want some if you want some emotional proof that this is okay

36:08Rachel Cruze:then just back off your number of shifts yeah and do you see your primary job rose um going up at all that income over time like i just wonder in two years if that margin is filled with just your your career versus the side hustle. Yeah, definitely. I'm currently the company I'm with, I do see a career with them. So since I've been with them, I've seen growth in my income. So I don't see that being an issue. Okay. Yeah. Cause that would be ideal, right? That you work in your 40 hour a week job and that sustains your lifestyle. You don't have to have that second job, but maybe for a season still while you're transitioning baby steps and just for your comfort level.

36:47Rachel Cruze:Yeah. I mean, I think that's what Dave said earlier was great. Just if you're going,

36:51Dave Ramsey:If you're going super, super fast down the interstate, like 130 miles an hour or something, those white lines are coming at you really, really fast. And then if you slow down to the speed limit, it feels like you're crawling. And so that's kind of the emotion that you're feeling when you do this because you've been busting it. I mean, you've been going 80 hours a week. And just to go down to 60 is going to feel like you quit emotionally. Yeah. And that's different than the math. So Dr. Deloney always talks about, John always talks about, when we're dealing with something like this where there's a fear, facts are your friends.

37:31Dave Ramsey:And so let the math calm your soul.

37:35Rachel Cruze:Yeah. And Rose, your money habits are different today than they were when you started this a few years ago. You're not the same person. And so I would start leaning in and trusting the Rose that has created great habits, that has found herself on her own. She's budgeting. She's paid off debt. Like she, she knows what to do. She knows how to live on less than she makes. I mean, all of that, that's who you've become and being confident in that part of you, I think is important too. And you have to have the numbers work, right? So yes, I would say for a season, if you still need some margin, keep part of that side hustle going just to give you some comfort there.

38:08Rachel Cruze:But ideally you can phase that out as your main career goes up.

38:12Dave Ramsey:David's in Indianapolis. Hi, David. How are you? I'm doing well. Thanks for taking my call, Dave. Sure. What's up? So my question, my wife and I, we've been together for six years.

38:25Rachel Cruze:And we've, over those six years, always been comfortably financially, but we've talked a lot about budgeting pretty much once every six months or so. We have a discussion on we should sit down and really budget. But we never get to the actual budget part that allows us to track moving forward. We kind of look in the rear view and say, okay, we're doing all right, and then talk about we should try to cut back here, try to cut back there. But it never actually – rubber never meets the road, so to speak, where we have a budget that we execute against moving forward. So I wanted to get your thoughts on any practical tips to kind of implement that and move forward in a way that makes it effective for us.

39:08Dave Ramsey:You know, you're battling one of the hardest things that I think Americans battle, and that is doing nothing or handling money poorly. You could still have a pretty dadgum good life. And, you know, it's almost like you need to have a crisis to wake your butt up, you know, because everything's just kind of going OK. Yeah, that's there's nothing, nothing to kick you off the truck. That's where we're at. Yeah. And so when I'm facing something like that, I just try to look in the mirror and sit down. Sharon and I sit down and go, OK, there's not a crisis here, but we're going to create one. We're going to emotionally decide that we're pissed about this.

39:48Dave Ramsey:We're not living like this anymore. You know, you don't have to have a heart attack to decide it's a good idea to get in shape. You could just look in the mirror and go, hey, no more donuts, Bubba. you know that might be me talking to me by the way but um you know so you know i mean that right

40:05Rachel Cruze:yeah that okay so i yes yes and amen dave gets pissed i was thinking on the other end is to instead of because for a lot of people yes they have this like crisis moment and their past catches up with them and they have to change immediately or it's going to continue what it's been doing right your past hasn't necessarily caught up with you right you don't have great money habits, but it is what it is. So I would say, let the motivator be your future. And you and your wife sit down and be like, the money we are letting out of our hands without, because we're not being intentional, we're losing our future selves.

40:37Rachel Cruze:Like the 60 year old version of us is going to be so pissed at the 30 version of us. Oh, they're pissed again.

40:42Dave Ramsey:Wait a minute. Shoot.

40:43Rachel Cruze:Dang it. Man, man, maybe I am more like you than I want to admit. No. Okay. So yeah, The future, we want to be able to do X, Y, and Z in the future. Like this is where we want to be and let the future be the motivator of your goals, right? So you guys have to look ahead and say, what do we want our life to look like in five years, in three years, in 10 years?

41:07Dave Ramsey:Regret is a nasty disease. And all of that, yes.

41:10Rachel Cruze:And David, seriously, the every dollar budget is going to be everything for you guys. I literally just tracked my transactions this morning and Winston and I, we talked about our July budget, but it takes us five minutes now when we talk about it because we've been doing it for 16 years. So what I would say to you guys is what we used to do is literally put it in your calendar on your phones or set one of those reminders on your iPhones and just say 830 tonight. And we're having a 20 minute discussion about the budget and do that two or three times a week. Seriously, do it a lot at the beginning.

41:41Rachel Cruze:So you guys get in the rhythm of just looking and talking and looking and talking.

41:44Dave Ramsey:And sticking to it.

41:45Rachel Cruze:Yes, but you have to change that habit. And then as it goes on, you don't have to do that as much, obviously.

41:51Dave Ramsey:What's your household income? So base is around 215 and then usually around another six days of the year. So I would just ask the question to myself. I would say, if I had somebody working for me that made 215 and they handled money the way this guy does, would I fire him? Well, please don't ask God to bless you if you're going to be mediocre in the handling of your money. He wants excellence. So be excellent. You know, treat this like it's your job. And you guys are not dumb people. So sit down and put it all in the budget. Y 'all all talk about it. And then by God, stick to it. And then you're going to go through about 90 days of back and forth to get it all figured out and get the rough edges out.

42:30Dave Ramsey:And then you'll start winning.

42:32Rachel Cruze:Yes, and you do all of this for the goal.

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43:56Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Adam is in Syracuse, New York. Hi, Adam. What's up? Hey, Dave and Rachel. How are you guys doing? Better than we deserve. What's up? How can we help?

44:10Rachel Cruze:So a little bit of background. I'm 26. My fiance is 27. About two years ago, we bought a house from my grandfather. Got a pretty good discount on it. Two years has passed. Now we have about$200 ,000 in equity in the house. um and we're planning on getting married soon we've been thinking about just eloping and then we have a wedding date already set for november 5th of 2027 um i have 55 000 worth of debt currently she doesn't have any debt right now um and we're thinking that if we get married soon that we just sell the house, possibly pay off my debt, and then either rent for a little while or buy a lower-priced house.

45:08Rachel Cruze:And I'm just trying to, I feel like I'm more on the fence of actually doing the renting, and I feel like she's just not, she's a little more on the other side of it.

45:19Dave Ramsey:What do you make and what does she make?

45:22Rachel Cruze:so i just got a pay increase of about 20 000 i'll be making 70 000 now she makes mid 80s probably about 86 okay so you have you have how much debt 50 000 55 55 what's it on adam so 26 on a car loan and then 30 on student loans okay

45:51Dave Ramsey:Okay. Well, the proper way to answer this is pretending that you all get married this weekend. And then this is what I would do. But I would not do anything else together until you're married.

46:09Okay.

46:10Dave Ramsey:You quit paying people's bills that are your roommates. And I don't care if it's your fiance or not. it's still your freaking roommate because you don't have any legal ties whatsoever. And one of you just walks off or one of you, something happens to one of you or something like that. And those things happen in life.

46:30Rachel Cruze:Yeah. There's no repercussions. There's no protection.

46:32Dave Ramsey:So you're just, you're very, very vulnerable. So yeah, if you want to do a celebration in November of 27, that's fine. But I'd be married by the end of the weekend. Happy 4th of July. Woo hoo. Fireworks. Okay. And so here we go. birthday and adam's that's right uh anniversary on the 250th anniversary we got married and so um yeah and whose car is the 26 000 it's my it's my truck yeah i'd sell your truck i wouldn't sell your house okay uh to to give a little more background on the house the house was built in

47:09Rachel Cruze:1918.

47:10Dave Ramsey:You don't like the house?

47:13Rachel Cruze:We love the area and the property that we have, but we're not huge fans of the house itself. Okay, so if you were going to move anyways, that's one discussion. I would not move because of the debt, but if you guys don't like the house and you want to do something living-wise differently regardless of the debt, then that's a totally different discussion.

47:32Dave Ramsey:Yeah, but in that case, I would sell the house and buy a different

47:35Rachel Cruze:house, and I'd

47:37Dave Ramsey:still sell the truck.

47:38Rachel Cruze:And I'd still live on one of your incomes for the next year after you get married and just pay off the debt or sell the truck and then live off one of your incomes for six months.

47:46Dave Ramsey:You want to keep the truck, you need to pay it off inside of a year and a half and the other debt too and keep the house. And then when that's done, then we'll talk about selling the house and moving to a different house with the equity. But selling the house to get out of debt is...

47:59Rachel Cruze:We rarely recommend that.

48:00Dave Ramsey:No, almost never. Only in extreme situations where somebody's really going to be broke. But there doesn't need to be an hour house and an hour anything because you're not married. It's very, very dangerous. Don't do this, folks. So yeah, you do what you want to do. But if I were you, I'd be married by the end of the weekend and have a wonderful anniversary that we can always remember was the 250th anniversary of the United States of America. And there we go. Hee-haw. And you can make jokes about fireworks on your honeymoon the rest of your life, right? Okay, yeah. Anyway, have some fun with it.

48:38Dave Ramsey:But, yeah, because, dude, y 'all have been everything but married for a very long time. You talk like an old married guy. I mean, you don't even sound like, you know. So you really do need to get this stuff in the right order so that somebody doesn't get burned here. Christina is in Cincinnati. Hi, Christina. How are you?

49:01Rachel Cruze:Hi, I'm good. How are you all?

49:02Dave Ramsey:Better than we deserve. What's up?

49:05Rachel Cruze:Well, praise Lord for that. So my husband and I are working baby steps four through six, and we were just curious on balancing working the steps at the same time. So we have a plan built as we work all three, but we were just curious if we should be prioritizing working one more aggressively than the other.

49:25Dave Ramsey:Well, four is set. It's 15 % before you move on. 15 % of your household income going into retirement. That one's set. And then the only vacillation is between things that we want to do in the household because we're at intentional rather than intensity stage. Or do we need to save up and move up in car? Do we need to be saving up for a vacation? Those are kinds of competing things, right? And then, you know, age and aspirations of the kids for college, you know, it's a completely different discussion about maybe step five. if you have two people in high school versus two two-year-olds or two three-year-olds or something, right?

50:06Dave Ramsey:How old are your kids?

50:08Rachel Cruze:We have just one daughter, and she's one.

50:10Dave Ramsey:Okay. Well, there's no panic about Baby Step 5. And so if you, in that situation, wanted to just do something that was representative of having touched that base, meaning we're going to put$100 a month or$200 a month or something in a 529 just to get started on it, uh it's not really enough but it'll get us started and then we're going to concentrate on knocking out the house that's what a lot of people do in your situation yeah or you look up and when the

50:36Rachel Cruze:kids seven eight and be like okay what what's tuition looking like now and what yeah how aggressively do you know do we need to be saving for this then but yeah i wouldn't be concerned but i would open one and start putting a little bit of money just to say going just say i did i'm

50:51Dave Ramsey:on baby step five yeah and you don't have to be putting a lot in there uh and then attack the house. That's what most people do. What are you all trying to do? What are you thinking, Christina?

51:00Rachel Cruze:Well, so we do invest currently in a 529. We opened it pretty much after she was born, like the next month. And I think I'm in a unique situation. We're planning for life, but I actually work at a university. And one of the benefits that we receive is that dependents can attend for free. Now I have to be employed at the time of attendance. So that's why we're kind of planning for life. But I think that's kind of what we're trying to balance. And then I know you guys talked about the 15 % for baby step four, but with Roth IRAs, we're actually coming in closer to 19 % of our household income.

51:33Dave Ramsey:I wouldn't do that. Okay.

51:35Rachel Cruze:So we should kind of readjust that to 15 % to apply either to five or six.

51:40Dave Ramsey:Until your house is paid off. Yeah.

51:42Rachel Cruze:Okay. Perfect. Yeah. And I wouldn't, I think you said it, Christina, but I agree with you on planning more of life happening because I don't want you feeling like you have to be stuck in a job for 18 years. Right. If you just for your kid to get free tuition, right, Christina, in five or six years, it may look different. So when you do say. I almost made it.

52:01Dave Ramsey:They fired me when they were 17. Yes, that's right. No, I've actually gotten that call. Oh, man. Wow.

52:09Rachel Cruze:But good job, you guys. Yeah, you're doing great. Being a young family and doing this.

52:11Dave Ramsey:You're going to be in such good shape. You really are doing great. Well done.

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54:24Rachel Cruze:Today's question comes from Brett in Kansas. My wife and I are currently paying off$80 ,000 of debt. At what point can we start to budget for a little bit of fun? We have been working nonstop to pay this off and want to add some fun money to the budget. Oh, it's a great question. And$80 ,000, that's a long track, right? Depending on what you guys make. could be a couple of years. And so, you know, one thing that we have found that helps a lot of families when there's a lot of debt, a massive amount of debt, is after certain debts are paid and you guys look up and say, okay, after we climb this mountain or after we do this, when it comes to the numbers, just to have like a breather to find something that you, not expensive and not, you know, that's going to cost you guys a lot, but like what's one thing we can do to enjoy ourselves that we can look forward to.

55:17Rachel Cruze:And sometimes that's like something for free, right? That you just plan and you're going to make this thing special. But I would say to be able to piece it out, when you look at the whole thing, I feel like it can be very overwhelming. But when you find these milestones within the$80 ,000 journey, that's helpful. But also the math is the math. And the deeper you sacrifice, the more money that goes to this debt, the faster you are going to pay it off. So if you go and take a trip or something, let me pay off in debt. That's not, it's not going to work. Not going to work.

55:45Dave Ramsey:I can never tell when someone asks a question this way, whether they are just whining, like, wham, get over yourself. Or whether they really have been going like a hundred hours a week and they really haven't even bought a jar of mustard.

56:02Rachel Cruze:I mean, you know, like what part of the spectrum is this?

56:05Dave Ramsey:What extreme are they on?

56:06Rachel Cruze:Right.

56:07Dave Ramsey:If you're on the whining side and you're just, oh, grow up, shut up. Fun is not defined by spending. You know, if you're on the other side, yeah, do what Rachel said. Set yourself a milestone and go, okay, we're going to go buy Chick-fil-A with coupons. And that's our big woohoo when we, when we knock out that particular debt. Okay. Cause we've not been out to eat, but we're going to go do that. But you know, what's interesting is, is that we define fun as with money. When can we do something fun? When you do something fun. It just doesn't necessarily require money. But it's like the only way we can have fun is if we have money spending going on.

56:50Dave Ramsey:Well, that's not true. We all know that's shallow and not accurate. So don't define fun as necessarily spending. So let's go throw the frisbee in the park. that's fun the one we've already got you don't go buy one the frisbee okay and whatever i don't care but you know is you know but we define fun as i want to go on a cruise you know and no you can't do that you're broke and eighty thousand dollars in debt if that's what you're talking about no uh but if you're talking about i'm gonna well that's where you have to get creative because

57:24Rachel Cruze:i do know you know have fun is it's okay to have going to the movies it's going to the zoo with the Like all of this costs money to go and do experiences or to go do something for a lot of things. But what you're saying is exactly right. Find the joy in life. Like when you can do that, contentment starts to build and that gets magnified as you build wealth too, which is an amazing characteristic to have. So, yeah, what are the things that you can do? Is it game night? You know, as a family, is it going on walks? Like go do something. Go live your life and have a great life. It doesn't have to cost a lot.

57:56Dave Ramsey:Yeah. Yeah. I mean, think about families that never, that lived in a time when you could not purchase fun. I mean, you were stuck with family monopoly. You had to play monopoly with your family. That was the only thing you could do because, I mean, jigsaw puzzles, you were stuck with that. Remember COVID when you were stuck in there with your family and you couldn't do anything? Because people found a way to spend money then anyway.

58:19Rachel Cruze:Online shopping.

58:20Dave Ramsey:Stacks of wine bottles outside their doorway. But anyway, yeah. But be careful how you define fun. That's a good point, yeah. Eve is in Memphis. Hi, Eve. How are you? Hello. I'm fine. Thank you for taking my call. Sure. What's up?

58:38Rachel Cruze:So just a bit of background. My husband and I, we have been in education for years, I mean our own education, and have followed unpredictable work moving internationally and really genuinely not having a savings margin for a lot of our adult life. And so we don't really have a habit for that. And we're wanting to get on the same page for that. But I grew up watching my dad go bankrupt twice from day trading on borrowed house equity. And that makes me scary, wary of risk. And my husband had the opposite background of growing up pretty humbly and family saving and very boring savings accounts and bonds.

59:19Rachel Cruze:And I feel like now he's going in the opposite direction. He's drawn to crypto and IPOs, and he feels like he's older, and he's had to wait so long to have the margin to invest that he wants a fast return. And he is reasonable, but we're both scientists. We like to see the full picture and get a full understanding, and I feel like I'm lost with trying to figure out everything. And with his hours, he doesn't have time to sit down with people.

59:41Dave Ramsey:So I think it's a good idea with his hours that he sits down with you and he sits down with people because he's getting ready to make some huge mistakes.

59:50Rachel Cruze:Yeah, I just feel like when I do the research myself, he listens, but I'm not confident enough to explain it back to him clearly. He wants it like an extinct.

59:58Dave Ramsey:Okay, well, so let's pretend for a second. Let's pretend that we actually, because you sit down across the table from both of you and say, Hey, husband, your parents had it wrong. They never invested. They only saved. You have to invest. And by the way, Eve's parents obviously had it wrong. They day traded into bankruptcy twice with the home equity. And both of those things are influencing these decisions in a toxic way. And then you add to that, he's decided he's going to be desperate and rash, which when I'm desperate and rash because it's coming at me, I'm late, I'm late to the game, I'm late to the game, so I have to play catch-up.

1:00:47Dave Ramsey:I'm going to swing for the fence. I'm going to try to hit home runs only. You're going to strike out. As soon as I get that desperate, the way your husband is sounding, I get stupid. And it sounds like he's getting stupid. Crypto's stupid. It's a stupid swing for the fence. Okay? Day trading, stupid. It's a swing for the fence. But also, not investing and instead just saving like his parents does is stupid. So, Rachel, your book, we've got to send it to them. Know Yourself, Know Your Money. Because their family of origins are really impacting this.

1:01:22Rachel Cruze:Yeah, of the fear and the motivation of what's going on. But then you've got to get beyond that, Eve. And I would want to know from him, like, what is that motivation? Like, I know I understand that he feels like he doesn't have enough time. But if you guys ran out numbers in an S &P 500 to see where you guys would be. Because how old are you all? But I'm 40. He's 48. Okay. So I'm just curious to say like, yeah, in the next 20 years, if you did the safe route, pretty much guaranteed, what are we going to have? So income and like net take home right now is about$11 ,000 a month.

1:02:01Dave Ramsey:Okay. And so what if we put away$2 ,000 a month?

1:02:06Rachel Cruze:That's what I kind of want to do. And I think where I think he's like, we could, we need to rerun some numbers of budgets. We've got some money getting freed up now. We have a kid who was in private school who's going to a public high school. So we have margin. I can see the margin coming. We've agreed we're going to save up the emergency fund first.

1:02:24Dave Ramsey:Eve, if you put$2 ,000 a month in just an S &P 500, which is an investment in the stock market, but it's not a day trade and it's not crypto, okay? The average annual rate of return of the stock market in the United States since it began is 11.8%. If it averaged 11 % and you put$2 ,000 away from age 40 to age 67, you'd have$4 million.

1:02:51Dave Ramsey:That's what you should be doing.

1:02:52Rachel Cruze:We have things to consider about as well. So I think we haven't been saving for college yet. I think we kind of need to look. We need a succinct, relatively succinct way to see what are the investment strategies, What are the ways to do this and what point we should think about?

1:03:12Dave Ramsey:And that requires sitting down with someone that knows something that you all don't know.

1:03:16Rachel Cruze:Yeah, check out SmartVestor at RamseySolutions.com and sit down with a financial planner who gets excited about watching your money grow, right? They're not anti that kind of thing. They're pro all of that. And look at the big picture and it's wisdom. And I feel like that's what's scaring me about his decisions is it feels immature. It does not feel wise. Thank you.

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1:05:14Dave Ramsey:Bill is in Austin, Texas. Hey, Bill, what's up? Hey, Mr. Ramsey and Ms. Cruz. I appreciate you guys taking my call. Sure. How can we help?

1:05:23Rachel Cruze:So I'm trying to get on the same page with my girlfriend here, and we're trying to start saving money. I want to obviously start planning for our future. I think we just can't get on the same page. Every time I bring up finances, it often turns into a confrontation. So I'm just trying to figure out the best way to go about it and show her what we're looking at financially because we've really never sat down together and looked at it as a whole. I just want to see what you guys have in mind based on finances. We've been dating for two and a half years. Okay. How old are you guys? I'm 26 and she's 28.

1:06:04Rachel Cruze:Okay.

1:06:05Dave Ramsey:Okay. And so when you start talking about, you know, someday when we're married, we're going to combine finances and this is what it looks like. It turns into a confrontation. What does that mean?

1:06:16Rachel Cruze:So basically, like, I obviously want to start planning for our future and stuff like that. And I've told her that. And she doesn't want to obviously take any steps to start planning for our future because we're not married. Now, I know, obviously, you said not to, you know, get into houses and cars and stuff together until you're married. And I've already made that mistake. But... Wait, wait, wait, wait.

1:06:40Dave Ramsey:You've already made that mistake. You bought a house together?

1:06:45Rachel Cruze:yes i worked for a home builder i don't care you bought a house together make sure i understand what you're saying yes sir and you bought cars together um i own mine outright and then i'm on

1:06:59Dave Ramsey:yeah i'm on hers as well yeah and so and you're shocked that this woman doesn't want to talk to you about money anymore until you marry her of course she doesn't well yeah i just you know

1:07:12Rachel Cruze:she's tired of waiting on you i know i just want to feel like it's gonna be you bought a house i think that marriage flips the switch you know and then it's like all right well now we have to

1:07:25Dave Ramsey:you bought a house that's not like a little small step like this isn't like we shared coupons at costco you bought a freaking house man okay so and then you bought a car for her and it's in your name and she feels insecure about you talking about the future without a ring on her finger. Well, no kidding, dude. Yeah.

1:07:50Rachel Cruze:This is you. I've been thinking about, you know, yeah, I know. I've been thinking about, obviously, marriage and stuff. It just scares me because I'm like, I mean, we've been basically married, but how do you

1:08:01Dave Ramsey:how do you scared about marriage after you bought a house together?

1:08:06Rachel Cruze:Because a house is not a lifelong commitment. So I know. Yeah, I just don't want to feel like it's going to put the switch in her mind that, wow, okay, now we're married. Now we need to save money. It's like, why aren't we saving money right now? Okay, so is the saving the money the tension point that you're wanting to put money away and she just wants to spend? Is that one of the tension points? Yeah, it's a tension point on that. She owes money back to the IRS. So I'm trying to tell her, hey, you know, this can really screw us, you know, in the long run if they start garnishing her wages and everything like that.

1:08:42Rachel Cruze:So, like, we've got to get on top of that. She's making minimum payments, but, like, we need to start, you know, taking it more serious.

1:08:49Dave Ramsey:And, you know, I'm trying to— All right. I'm going to quit beating on you. What would I do if I were in your shoes? The two of you need to schedule a meeting with a marriage counselor this week. and I want you to begin pre-marriage counseling and decide if you're going to get married and if you can align enough on your finances in order to spend your life together. And then you either need to pull the plug on this thing and sell the house and the car and go on your merry way or you need to get married as soon as you can get aligned. And I'm talking a month from now. You're going to make a decision.

1:09:29Dave Ramsey:because you're trying to handle all of this while she feels like she's dangling on the end of a hook like a worm over a bass. And she's tired of it. She's tired of it. And she doesn't know how to focus. You're not in a seat to tell her what to do about anything. You're just the boyfriend. Yeah. So you guys cannot, you know, you can't go. If it's your wife, the two of you can sit down and go, hey, the two of us, we're going to attack this IRS thing because this is going to screw us. So your statement would be correct then. But you're trying to make a statement from a position of –

1:10:08Rachel Cruze:Of power that you don't have.

1:10:09Dave Ramsey:A position of seat that you're not sitting in.

1:10:11Rachel Cruze:Yeah.

1:10:13Dave Ramsey:Yeah. I'm just trying to – I know. You want everybody to be on the same page. I pay for the house and everything.

1:10:19Rachel Cruze:I pay for everything, you know, for the house. I pay for the house. I pay for my car, water, trash, and everything that comes to the house. I pay for auto insurance. What does she make? I care for everything. What does she make? She makes$3 ,000 per month, and then she makes commission, depending on sales that she makes.

1:10:36Dave Ramsey:So in your pre-marriage counseling, if you're going to go do what I tell you to do, you guys need to sit down and do a mock budget that says if we were married, we would put all of our money on the table, and here's what we would do with our money. We would pay the house payment. We'd pay the car payment. We'd pay the IRS. We would eat, and our money would be shared, and we would make decisions together that are wise and going forward. But you're starting to regret, you're starting to resent her for not carrying her half of the load, and yet you signed this deal up. Yeah. You made this mess.

1:11:11Rachel Cruze:And Bill, I would also leave with a lot of humility, too.

1:11:15Dave Ramsey:Yeah.

1:11:15Rachel Cruze:I feel like, you know, you're pointing at her, you're going to screw this up, if you're just doing minimal payments. And it felt a little, I understand what you're saying. you have an urgency, but the urgency can come off as very shameful and down-putting and you have it figured out and she doesn't. And do you know what I mean? Like the, the, the emotional intelligence of, I think a healthy marriage is both sitting down and be like, okay, what are, what's your desire? Here's my desire. Here's what I'm thinking. Here's the story that I've made up in my head, Bill, is that you think I suck with money and, and I have to get this right for you to marry me to make me worthy of marriage.

1:11:50Rachel Cruze:Am I not worthy now? I don't know. Like there could be so many things attached to this. And you guys got to walk through all of that. I would before you get married.

1:12:00Dave Ramsey:I would go to a pre-marriage counselor today and I would get to the down issues. And let's see if we can get aligned and then very, very quickly get married or let's start taking this thing apart.

1:12:13Rachel Cruze:Because if I'm her, my car is attached to this guy. My home is

1:12:18Dave Ramsey:attached to this guy yep i make three thousand a month yep and here he is oh the irs here he is

1:12:24Rachel Cruze:telling me what i need to be doing now after he signed me up for all this he still he still resents me because he has to pay for everything yep and i do i and and if i i don't know there there would be a lot i think there that she may not even realize i don't know but um and she feels she feels hung out to dry you know and no she don't want to talk about the future with you because

1:12:44Dave Ramsey:the president with you sucks. Of course not. I mean, it's not good. But it's all good intent. No.

1:12:50Rachel Cruze:Well, Bill, Bill is, I hear you, Bill. Like, because we have some people that they're so hardcore with, I mean, obviously not our principals, because he went and bought a house and, of course, but like, people are so good. I mean, their motivation is good. If like, I want to save money, I want to be responsible. And I want these things, but you end up coming off very unattractive, very controlling, kind of shameful. when you do it out of order particularly yeah yeah so there has to be a lot of humility in this and and you guys need to get on the same page and she's going to be different than you too bill when it comes to money she might be a spender always and you may be the saver always and that is the dynamic which is beautiful and in marriage you need each other so that's a good thing she doesn't need to turn into you but she does need to be a responsible adult too so i hear i hear that's it That side of it.

1:13:35Rachel Cruze:Oh, man. Bill, put a ring on it. If she's the one. If she's the one.

1:13:41Dave Ramsey:The only shot you've got at this is not continuing like it is. And it's not just go get married this weekend either because you've got a mess. You don't know what you're getting into. So you guys need to get some good coaching, some good counseling from a good marriage counselor and settle in and get married very quickly as soon as you can. Yeah, make a decision. You guys are 26 and 27. Because she's dangling on the end of a hook and she's tired of it. I promise you that's what's going on. I promise you. And, you know, that's the way it is. Open phones at 888-825-5225.

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1:16:29Wow.

1:16:31Dave Ramsey:I mean, no car payment? No MasterCard? No American distress? No discovered bondage? no fleeced vehicles no student loan that's been around so long you think it's a pet what do we feel like to have no house payment no payments what could you do if you were out of debt anything you want how fast you'd become wealthy I mean baby steps millionaires get there fast fast. If you follow the baby steps, it's the fastest way to get out of debt and become wealthy and outrageously generous. If you live like no one else, later you can live and give like no one else. If you want to learn how to do that, the EveryDollar app will teach you everything you need to do, and it'll put you on a budget to help you do it.

1:17:32Dave Ramsey:You are in control of your life and your budget, so why don't you do something with it? You track your progress, you You get personalized recommendations. You get coaching for your situation. You do it the Ramsey way on EveryDollar. You can start it for free in the App Store or Google Play. Paige is in Denver. Hi, Paige. How are you?

1:17:51Rachel Cruze:I'm doing all right. Thanks so much for taking my call.

1:17:53Dave Ramsey:Sure. How can we help?

1:17:55Rachel Cruze:So my husband was recently, his position was eliminated after several years with a Christian organization. And so we are, he's actively looking for a job, but we have some medical debt. I have a child that has a chronic illness, so we have monthly bills for his care. And so I have a little less than$3 ,000 in medical debt right now. We have four months reserve. We do not have any debt except our home. But I'm trying to understand that. How much is the four months reserve?

1:18:26Dave Ramsey:How much money is that?

1:18:28Rachel Cruze:I have about$15 ,000 right now. How long ago was your husband laid off? He was let know in April. His kind of contract ended this last month, and now he's been given two-and-a-half-month severance. So he's known about this for months upon months upon months.

1:18:47Dave Ramsey:What type of work was he doing in the ministry?

1:18:52Rachel Cruze:Christian education. So he's been actively looking and applying for jobs. So hopefully, and there are a few things that he's got on the horizon, in. But we have these medical bills, so I'm trying to figure out how to pay those off the best. I understand, like, the snowball method, and I was going to try and start with the smallest amount. No, that doesn't work. None of that works.

1:19:13Dave Ramsey:Right now, everything's on hold until he gets a job. Right. Are you working outside the home?

1:19:19Rachel Cruze:I do. I just, I work with the same organization, and so I'm looking for some other options. I think it's possible that my position feels a a little precarious right now as well.

1:19:31Dave Ramsey:That's probable.

1:19:33Rachel Cruze:Right. So, yeah, we're just trying to figure out. I've called the medical. I've called billing for all of the medical bills. It doesn't matter.

1:19:40Dave Ramsey:It's only$3 ,000.

1:19:43Rachel Cruze:Right. You could write a check today, but I'm not going to. Right. That's my question. What do I do? How do we move on from here?

1:19:52Dave Ramsey:We wait, and we go get income, both of us go get income now.

1:19:57Rachel Cruze:Okay.

1:19:59Dave Ramsey:Now, was he teaching, or was he in administration?

1:20:03Rachel Cruze:He was in administration.

1:20:05Dave Ramsey:Does he have the ability to start doing online teaching as a side hustle starting tonight, ready, set, go?

1:20:13Rachel Cruze:Sure. Do it. Yeah, I mean, I think, yeah. Sign up.

1:20:16Dave Ramsey:Start being professor to some online classes tonight. You can sign up for those immediately. And income will start coming immediately. I want him to load up on that.

1:20:26Rachel Cruze:While he's looking.

1:20:27Dave Ramsey:And turn the television off or throw a brick through it. No wasting time right now.

1:20:33Rachel Cruze:Sure. Okay.

1:20:34Dave Ramsey:No wasting time. Income. I want some interim income until he lands the next gig. Because until then, we're in limbo. And limbo is scary as crud, isn't it, Paige?

1:20:44Rachel Cruze:Indeed. So what's, yeah, because he was laid off in April, right? And you said that you all had two months of severance.

1:20:52Dave Ramsey:No.

1:20:52Rachel Cruze:Okay. So you're ending. Yeah. So you're calling at the end of, at the beginning of July when the severance is. No, he was paid out. So he was paid out through his contract, which was the end of June. So now we are starting the two and a half month. Okay. That's good. Okay. So you have July and August of severance.

1:21:09Dave Ramsey:Which the way I look at that is if he lands something this week, that's two and a half months signing bonus to the next gig. Yeah. Right.

1:21:17Rachel Cruze:Great. Right.

1:21:18Dave Ramsey:It's flush money. It's gravy money. It's extra money. And we write a check, pay off the. And but so what you've what you're dealing with, and it's a fair thing that you're dealing with, though, is my child has an illness and I've got this financial stress and we've all or, you know, he's lost his income. I'm probably going to. So you've got a lot of angst in the air. and what I'm trying to do is get the

1:21:46Rachel Cruze:get something controlled

1:21:47Dave Ramsey:the faster some kind of money starts coming in even if it's not the permanent solution the lower your anxiety goes

1:21:59Rachel Cruze:okay yeah and we have we've met our out-of-pocket deductible for the year so and that is part of his severance he'll be they're going to cover COBRA for us through the end of the year So we're not going to incur any more medical bills.

1:22:17Dave Ramsey:Well, you're probably going to get a health package at the next place, and he's probably going to land that in the next 30 days. Right.

1:22:22Rachel Cruze:And he's working hard to do so. It's just a tricky time.

1:22:26Dave Ramsey:Yeah, it's just scary. Until.

1:22:27Rachel Cruze:It was tricky, right?

1:22:29Dave Ramsey:We're walking the Grand Canyon on a freaking tightrope. I mean, this is scary.

1:22:33Rachel Cruze:Yeah. Yeah.

1:22:34Dave Ramsey:And so I think you're going to be okay. I don't hear anything that panics me, but I can relate to your anxiety. And I think your anxiety is valid. Right. But I don't, I don't want it to be my activator. And so what we're going to do is we're going to protect the 15 ,000.

1:22:52Rachel Cruze:Yeah.

1:22:52Dave Ramsey:But the answer is we don't pay the 3000, pay the 3000 today, protect the 15 ,000, protect the severance, cut everything out of your budget, go to beans and rice, rice and beans. You're not going out to eat. We're not going to celebrate the severance check, you know. unless it's with water and cereal, right? I mean, so we're going to – the storm is here. We're putting plywood on the windows, and when the storm passes, we'll take the plywood down. Sure. That's what we're doing.

1:23:20Rachel Cruze:Yeah, and we feel like we've kind of – we've been taking those steps. I think it's just a matter of do I call these medical companies and say I can't do it? Just let it run.

1:23:29Dave Ramsey:They're useless. They don't care.

1:23:32Rachel Cruze:That's what I'm finding. It's been really frustrating.

1:23:34Dave Ramsey:Yeah, you're not talking to intelligent life.

1:23:39Rachel Cruze:So we just let it sit until something lands and then pay it off.

1:23:44Dave Ramsey:They'll use the fact that you called and try to turn on your honor and turn on everything else to get you to go ahead and pay it. They'll shame you, won't they?

1:23:55Rachel Cruze:A hundred percent, yeah.

1:23:57Dave Ramsey:That's what they do, yeah.

1:23:57Rachel Cruze:We've had, I mean, already somebody say, well, we won't make another appointment until you pay this bill. And I've said, but I am like, I have been making, we've been making.

1:24:07Dave Ramsey:Well, I won't make another appointment with you anyway. I'm tired of you people. I think we'll go somewhere else. So I can, I can handle that.

1:24:17Rachel Cruze:It's just a trick. We just feel like we've been in this tricky place. And so I've been trying to decide, do I just write a check? What medical professional actually said that?

1:24:24Dave Ramsey:Was that a collector or the actual administrator in the office?

1:24:28Rachel Cruze:No, it was a billing department.

1:24:30Dave Ramsey:Yeah, that's bull. They don't have control of the appointments. That was complete BS.

1:24:37Rachel Cruze:So it sounds like we are just the best thing is to hold tight.

1:24:40Dave Ramsey:Exactly.

1:24:41Rachel Cruze:Really?

1:24:41Dave Ramsey:I'm just trying to give you some information that normalizes where you are to where it doesn't feel quite so sketchy. Yeah. So the billing department doesn't make appointments. They're full of crap. They were just trying to collect a bill, and they make up stories, and they shame, and they do whatever else. So heck with that. And, yeah, he gets a job. But he's got a game on. I mean, get part-time income, short-term income, long-term income, income, income, income, income. Both of you. Like your hair's on fire. Because the faster you stack cash, the lower your stress goes and the better he interviews.

1:25:17Dave Ramsey:When you walk into interview and you're scared to death for your house being foreclosed on, you don't interview as well as when you walk in with cash stacked in the bedroom. You walk different and you talk different. Your octave is different in your voice. Everything changes. You have zero swagger when you're desperate. And you don't want to do that because you're not attractive hire at that point. It scares people when you're scared. So that's why I'm telling you, go get some income, and it'll help him close the deal on the permanent upgrade, and he'll probably get an upgrade in his job. Wow.

1:25:55Dave Ramsey:Sorry you guys are facing that. We're on your team, though. We're here to help you. If you need us again, you call anytime.

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1:27:41Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host, Rachel Cruz, Ramsey personality. My daughter is my co-host today. Johans is calling us from Australia. Hey, Johans, what's up?

1:27:57Rachel Cruze:Hello there, Dave. Not much yourself?

1:27:59Dave Ramsey:Better than I deserve, sir. How can we help?

1:28:02Rachel Cruze:That's great. Dave, I have a basic question here for you. I'm a carpenter apprentice, and me and my wife have a yearly income of$71 ,000. and$1 ,500.

1:28:22Rachel Cruze:We are struggling to make ends meet at this stage. Over the last 12 months, we've been dipping into our savings just to try and stay afloat. And one of my concerns is involving car insurance that I have from my youth and if I invest it prematurely. Mm-hmm.

1:28:48Dave Ramsey:Okay. So do you have debt?

1:28:55Rachel Cruze:Well, yesterday morning when I called first, I thought no, and then after thinking about it, I do. I have a step-pay account with Cornwell, which is a small credit card. It has about$400 on it. I mainly use it for fuel. and the only reason I opened it up is to pay an electricity bill. And then I have a personal loan from my dad of$3 ,000 and then I got a month-to-month phone plan paying my wife's phone. Yeah, that's just utilities.

1:29:34Dave Ramsey:Okay. All right. And so$71 ,000,$72 ,000 coming in. So$6 ,000 a month. And how much is your rent or your mortgage?

1:29:47Rachel Cruze:We are renting. It's$440 a week, sir.

1:29:52Dave Ramsey:So$1 ,800 a month. Does that sound right?

1:29:55Rachel Cruze:Correct. That's correct.

1:29:57Dave Ramsey:Okay. And I don't know the tax rates and so forth in Australia. Out of$72 ,000 a year, how much do you get taxed?

1:30:07Rachel Cruze:So that's the net income. The tax. Oh, that's net of tax. That's net.

1:30:14Dave Ramsey:Oh, good. Okay. All right. So we've got$6 ,000 a month to operate from. We've got about$2 ,000 going out in rent. Actually, it leaves us$4 ,000 to do everything else with. Does that sound correct? Yes, sir. Okay.

1:30:29Rachel Cruze:Where would you say it's going? Is there one big expense or is it a bunch of little things?

1:30:39Rachel Cruze:For the majority, there's a bunch of little things. The biggest expenses here is obviously groceries, which counting up the average groceries we've spent the last few months on a month-to-month basis is about$1 ,700. Because we've got two kids as well as three pets, so nappies and baby wipes and stuff like that can get quite pricey here. And then And for work, because I have to travel out of town quite often, I've been spending a minimum of$150 a week on fuel. And then utilities are the other big one. It's about$600 every three months for power and about$200 every three months for water. So that's$800.

1:31:28Dave Ramsey:So what has changed dramatically in the last year that put the pinch on?

1:31:35Rachel Cruze:So we were living in Stanfield, a small country town, and we moved about 13 months ago. We moved to a bigger city for my job, which increased the rent and just about everything else, to be honest.

1:31:55Dave Ramsey:Yeah, cost of living is higher there than it is out in the country. Yeah, that makes sense.

1:31:59Rachel Cruze:Does your income go up for the move? It did, but my wife isn't currently working. She's a stay-at-home mom. She's got a bunch of undiagnosed medical issues that we're trying to sort out.

1:32:13Dave Ramsey:Is she working in the other place?

1:32:17Rachel Cruze:No, sir. So that didn't change. Well, she receives a state income, like handling payments.

1:32:28Dave Ramsey:Right.

1:32:28Rachel Cruze:So with my pay going up, her pay from the state went down dramatically.

1:32:36Dave Ramsey:So you ended up netting less by moving or netting more between her going down and you going up?

1:32:44Rachel Cruze:We ended up netting slightly less by moving.

1:32:48Dave Ramsey:And your cost saw went up?

1:32:52Rachel Cruze:Our cost of living went up dramatically, yes.

1:32:55Dave Ramsey:Can you move back?

1:33:00Dave Ramsey:Can you go back to where you were? You were better off before the move.

1:33:04Rachel Cruze:I was, definitely. Unfortunately, that's not really an option for us at this stage.

1:33:11Dave Ramsey:Because of your job?

1:33:15Rachel Cruze:Yes, sir, because of my job. I'm doing a carpenter apprenticeship, which is a four-year-based job.

1:33:25Dave Ramsey:How far into the four years are you?

1:33:29Rachel Cruze:I mean, just over a year now, sir. Okay. So you've got three more years of that. And then what does life look like after that? Well, life after that, I'll obviously be qualified, and I want to get a few more building certificates behind my name so I can eventually grow up, like, eventually move on in my career.

1:33:53Dave Ramsey:Okay.

1:33:54Rachel Cruze:But after three years, does your income jump? after i finished my apprenticeship yes sir it jumped to what uh about estimation about 25 to 30 uh a year net okay so you almost it's like you guys have three years of this way of life yes yes yeah which i yeah no no you're good you're good you're good um which is a good thing because at least you have an end date that you're like, okay, hang on the 1700. If we can cut that to 1300, like, right. If you can just find these small cuts and it's going to strain, it's going to strain you guys. It's not going to be fun.

1:34:35Dave Ramsey:Yeah. Maybe even rent something cheaper than what you are. Uh, I mean, I don't know anything you can do to get closer to balance, nothing you're describing. Your current situation is a difficult situation to prosper in, but it is an okay situation to hang out in until we finished the apprenticeship. It's like saying, you know, in the States, we'd say you're in college for three years more. And when you get out of college, well, then you go, then your income goes up. Now we go into prosperity mode. But right now you're just paying a price to go win with this apprenticeship. But I think I'm going to look around and go, you know, finish up her diagnosis so that you can figure out what she's struggling with and then what opportunities she's got to create some kind of income that might be better than the state income.

1:35:22Dave Ramsey:That's probably not hard to do.

1:35:24Rachel Cruze:Then what she's making.

1:35:25Dave Ramsey:Once she's got some health, her health back. And then anything you're allowed to do while in the apprenticeship as a side hustle, I'd be picking up. And anything I can do to cut my expenses like rent and other things, I'm going to do that. But if you don't do much, if you don't have much progress, as long as you don't go backwards.

1:35:44Rachel Cruze:Yes. The dipping into savings is where I would say make it a goal to don't do that, right? From an income, expenses. And it's just for three years, right? For three years, this is what this has to look like. And then, oh my gosh, it opens up. 30 grand changes your life.

1:35:59Dave Ramsey:It sure does.

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1:37:20Dave Ramsey:Nick is with us in New York. Hi, Nick. How are you? Hi, guys. Thanks in advance for your help. Sure. What's up?

1:37:29Rachel Cruze:Okay, so here's my problem. My wife, she's been to a number of different dentists, and it's been an evolving problem. Not evolving. the same diagnosis for a number of years, but we haven't really known what to do about it. Basically, we've seen a few dentists that have all said the same thing. She needs to have like a total mouth reconstruction and it's phenomenally expensive. We don't have dental insurance. It's out of pocket. The quotes are from like$70 ,000 to$150 ,000 that we would either, I mean, I don't know what to do about it. I don't know. I mean, technically I could take money out of my retirement and pay for it.

1:38:06Rachel Cruze:We do have quite a big emergency fund that could probably pay for it, but that leaves us wiped out then. My preference is to figure out a way to pay it incrementally, like$20 ,000 a year or something like that. I just don't know how to go about it. I'm not really sure. My inclination would be to get a bunch of credit cards. How much is in your emergency fund? Like$80 ,000.

1:38:32Dave Ramsey:Okay. All right.

1:38:34Rachel Cruze:And how urgent is the surgery?

1:38:36Dave Ramsey:What is the, I mean, there's obviously a tremendously painful thing. It's going to be awful. No, I mean, currently she's in pain, right?

1:38:49Rachel Cruze:Well, yeah, I mean, like basically her bite has collapsed, so her teeth hit each other and the enamel wears away, so she gets a lot of cavities. Her teeth are all loose from sort of hitting each other incorrectly. Oh, gosh. So it's not fun. And she can't bear the idea of spending all this money on the out-of-pocket on, I want her to get it done because I want her to be happy and healthy. But I also, it's just a huge amount of money. She doesn't work and I'm a freelancer and it varies. It varies from about$140 ,000 to$200 ,000 a year. So, I mean, theoretically we could tighten the belt and probably pay for it this year.

1:39:30Rachel Cruze:But that would be really. Could you cash flow some of it and take some out of the emergency fund? Yeah. Yeah. Well, I could pay for the whole thing out of the emergency fund, but then that puts the emergency fund to zero, which I understand is the point of the emergency fund. Or cash flow some of it and take it down to$20 ,000, right? Cash flow the rest of the surgery.

1:39:50Dave Ramsey:Okay, so when I run into something like this, the biggest problem is that I feel like I don't know what's going on, and I've got to figure out enough of what's going on to make a wise decision, okay? Right. So far, you've gotten this wide variety of solutions from 70 ,000 to 150 ,000, right? Right. And so that alone, if I'm in your shoes, that throws up red flags for me. And I says, okay, I've got to understand what the difference in 70 and 150 ,000 is. Why is that there? Is it because the dentist is, you know, one of them is a Bentley salesman and one of them is a Chevrolet salesman? Why is that?

1:40:43Dave Ramsey:Because that's true in dentistry. There's a wide variety of the way people approach things, the techniques that they use, the machinery that they have, the equipment that they have, how much they think of themselves, how much practice management has gone into jacking you up. And it's all over the place in the world. And who their clients are. And who their clients are. Yeah, exactly. So I'm going to – I mean, on something like this, you know, it could be that she goes to Kansas City to get the work done instead of New York City. I'm trying to advocate. Trying to find a cheaper dentist in a smaller market.

1:41:18Dave Ramsey:And it's not cheaper in quality, but it's just someone that has a more commonsensical approach to this.

1:41:24Rachel Cruze:It's a different clientele than New York City, you know what I mean?

1:41:26Dave Ramsey:Because this is a big enough thing that it's worth a few plane tickets and a few hotel stays if you saved$100 ,000.

1:41:35Rachel Cruze:Have y 'all looked at that, Nick, as an option? Did you price out other areas of the country? I have. I mean, I haven't taken it to, like, going to Des Moines yet. But, like, I have, you know, like, I've looked in a bunch of different places, and one of the cheaper ones we found is in Florida near Miami.

1:41:56Dave Ramsey:That's the$70 ,000 option. I want to know why it's cheaper, and I want to learn enough about this to do this. So, you know, like one of my buddies about two years ago was diagnosed with cancer. And the good news is he's doing great, but he didn't know anything about cancer. And now he's a good gum cancer expert. You know, because he's just studied it because he had to to stay alive, you know, and and to understand the treatment options and the protocols and the prognosis. And when someone says stage two or three, what do they really mean? And we hear all that stuff, but you suddenly matters when it's you like, you know, the definition of major surgery is surgery on me.

1:42:37Dave Ramsey:You know, that's that right. And so this is all of a sudden it matters. So I'm going to learn a lot more, and I'm going to do that because I want to gather enough information to make an intelligent decision and also to not get screwed over by an industry that doesn't mind overcharging.

1:42:57Rachel Cruze:Right.

1:42:58Dave Ramsey:And the dental industry has a component to it. Not everyone, but there are members of it that don't mind overcharging. right and so i'm gonna learn about all of that and um and uh hey you know what i'm gonna uh put you on hold i have been endorsing a dental operation in dallas texas just outside dallas texas in granberry granberry dental for almost 20 years on a local on a local dallas radio station endorsement and i know those guys and i'm gonna put you on hold and we're gonna connect you with them and just let them let them teach you and let them put in a bid god help us if that's what we

1:43:40Rachel Cruze:want to call it right um or at least let them give you advice as like a third party i do i do trust

1:43:47Dave Ramsey:those guys i've known them a long time right and if i had to do something like that that'd be that'd be one of the people i would talk to anyway so okay i just made a national ad out of a local but But anyway, hang on and we'll get you set up with that. So I want to learn because I until I understand enough of the basic components of this, I am cynical and I worry about getting screwed. Me too. Once you get that, once you get that settled, you write the check out of the emergency fund.

1:44:20Rachel Cruze:Use the emergency fund.

1:44:21Dave Ramsey:And you get your wife's health back. OK. Yeah.

1:44:23Rachel Cruze:And then you guys build it back.

1:44:24Dave Ramsey:And then just build it back.

1:44:25Rachel Cruze:Well, yeah, because$80 ,000 may be too much anyways. And you guys can always go to three to four months. Do you know what I mean? It won't take you forever to build it back.

1:44:34Dave Ramsey:But even if you use 70 of the 80, if that ends up being where you are and you're down to 10 and you rebuild and your wife's got her health back and this whole thing is in the rearview mirror. It's worth it. That's how I would do it.

1:44:46Rachel Cruze:Okay. All right. That's very helpful.

1:44:48Dave Ramsey:But I'm not doing it except in the context of all the other stuff we said for the last five minutes. Okay?

1:44:54Rachel Cruze:Yeah, it's true.

1:44:54Dave Ramsey:In other words, I know what's going on. And so because I don't have any doubt this lady has issues, okay, because she's had multiple people look at it. But I have had customers over the years that said, you know, the doctor told me if I didn't have this$20 ,000 dental surgery that I wasn't going to have my teeth. And then they go to three other doctors and they go, no. You're fine.

1:45:18Rachel Cruze:Yeah, yeah, yeah. Totally. And she's obviously gotten multiple opinions over enough course of time.

1:45:23Dave Ramsey:But that's the first thing is you start to get enough other people looking at it to call BS on the others. So but and yeah, that's true in anything. Whether if I'm dealing with a legal matter, I'm not going to just accept one lawyer that says you're screwed. I'm like, no, I think I'm not. Yeah. I think you're not my lawyer.

1:45:45Rachel Cruze:But that's a part of life of big decision making anyways. Gather information. multiple options. When you're shopping for a house, have multiple ones that you're looking at. Car shopping, go drive multiple before you buy. You know what I mean? That's a wisdom play anyways, and especially something this high dollar with health attached to it. Yeah, you definitely want to make sure that someone's not just outpricing you because they're in Manhattan, and they can. Because if they can, they're doing it, you know, but if you can find something else, well, worth it. Well, I hope it goes well, Nick, for you guys.

1:46:17Dave Ramsey:One airline ticket save you 20 grand.

1:46:18Rachel Cruze:Yeah, and I hope that, yeah, her health and all of that, I hope it stores up because that has to be not a fun thing to live with on a daily basis.

1:46:26Dave Ramsey:I have the pain tolerance of a, oh, nothing. I've been in intensive care. A little baby girl, yeah.

1:47:03Dave 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.

1:47:51Dave Ramsey:Well, you can't control the market, but you can control how you invest and if you invest with confidence. Two years ago, we did for the first time something we've never done. I opened my personal investing playbook and went through some of my real estate purchases, how I decide that. I went through how I decide about any investment, the ones I've decided to stay away from and why. and George Campbell and I put that together and did that as a virtual two-night event called Investing Essentials. We've only done it two times. We're going to do it again, the third time, September 1st and 2nd, my playbook and George Campbell.

1:48:32Dave Ramsey:That simple. And we're going to go into taxes, navigating wills, and building a lasting legacy as well. A little basic on the estate planning stuff. Tickets start at$199. Get yours today at RamseySolutions.com slash events, or click the link in the show notes if you're listening on podcast or YouTube. Kim is in Dallas. Hi, Kim. How are you?

1:48:57Rachel Cruze:Hey, Dave. How are you? I'm good.

1:48:59Dave Ramsey:Good. What's up?

1:49:01Rachel Cruze:Just a quick question. I'm in a program to purchase a home. It's no down payment, no closing costs, no PMI. The catch is there is a lien on the home for five years, and each year you're in the house, it goes down. But I'm completely debt-free. I have about six, seven months of savings. Did I focus more on building up my retirement or getting a conventional loan or going continuing the route that I'm on?

1:49:30Dave Ramsey:Is this some kind of a government first-time homebuyer program or what?

1:49:37Rachel Cruze:no it's it's a legitimate program um no i didn't ask that i said is it a government

1:49:42Dave Ramsey:first-time homebuyer it's a private company it's a private company i guess you can call it private i don't know it feels feels like a government first-time homebuyer program no it's i don't want to say the name but it's they help a lot of people get into homes it's It's a nationwide program. Okay. Yeah, and it's an actual program.

1:50:12Rachel Cruze:It's been pretty successful from what I've been seeing. Okay. Well, it doesn't, it feels very risky.

1:50:21Dave Ramsey:Just say the name.

1:50:24Rachel Cruze:It's NACA, N-A-C-A.

1:50:26Dave Ramsey:N-A-C-A, okay. Not familiar with them, okay. All right.

1:50:32Rachel Cruze:But leans on homes and nothing down.

1:50:35Dave Ramsey:Nothing down, no PMI. All this scares me, okay? And it scares me because if something happens during the five years, you could really end up seriously trapped here. And the other thing, I don't know the program, so I don't know details.

1:50:50Rachel Cruze:Neighborhood Assistance Corporation of America. It's a nonprofit to help own our, yeah.

1:50:54Dave Ramsey:Yeah. But anything that sounds too good to be true usually is, is my experience. And this sounds a little wacky. Agreed?

1:51:06Rachel Cruze:I really don't agree because I know someone that's in one of their homes.

1:51:10Dave Ramsey:That's highly unusual, wouldn't you say?

1:51:15Rachel Cruze:Well, to a point, but they used to have the PMI, and then they removed PMI and did the lien requirement. And what it is, it's a$25 ,000 lien, and each year you're in it, it reduces by$5 ,000. So you have to be there at least five years.

1:51:31Dave Ramsey:What price range?

1:51:33Rachel Cruze:I'm looking at probably about up to$250 in my area.

1:51:38Dave Ramsey:And they're only taking a 10 % lien?

1:51:43Rachel Cruze:Well, that's just me. In other areas, you could be a million. It just depends on where you're at.

1:51:50Dave Ramsey:Mm-hmm. Okay.

1:51:54Dave Ramsey:I'm not going to say anything disparaging about them because I don't know anything about them. And I don't know enough to tell you to do it or to not do it. My tendency in general is to say, I'm going to buy, if I don't have any money, I probably shouldn't be buying a home. Because that's going to put you into a pinch. Because home ownership on a monthly basis is more expensive than renting. Like your air conditioner breaks. And you don't have a landlord to fix it. You be the landlord. Your roof goes out and you've got to put a roof on the thing. You know, the hot water heater blows. The stove goes out.

1:52:33Dave Ramsey:And welcome to owning a house. The more stuff you own, the more repairmen you have to know. And so if you're moving to this, you don't have any money. And no, I would not be investing while I'm doing a nothing down home deal. Absolutely not. I'd be stacking cash as high as I could stack it.

1:52:51Rachel Cruze:Get a big emergency fund.

1:52:52Dave Ramsey:To make sure I had a massive emergency fund. And in general, and again, I don't know enough about this to tell you not to do it. It sounds like you're going to do it no matter what I say. So I don't know exactly why you're calling. But in general, I'm going to say get a 15-year fixed rate conventional Fannie Mae loan. Put down a down payment, 5%, 10 % on your first time. You don't have to save up 20 % to buy. and if you don't have the money to start working towards that you probably don't have the money to own a house yet and it's time to do something with your career that's where I would be more

1:53:29Rachel Cruze:nervous from what I can tell it it's it sounds like it takes months and months and months of documentation stuff to even apply to be part of it so I think they do their their work on the front end to make sure that whoever's applying you know so there's probably a legitimate case for it Cam But getting into the home isn't what I'm as worried about for you. It's more maintaining it and not letting your home keep you broke. Like that's what we don't want either. You want your home to be a blessing and not a curse. And so I would just be...

1:54:03Dave Ramsey:Habitat for Humanity has a program that's not dissimilar.

1:54:06Rachel Cruze:Yeah.

1:54:07Dave Ramsey:Okay. And it's a known, a much more known entity. Yes.

1:54:11Rachel Cruze:And that's kind of what this is.

1:54:12Dave Ramsey:And so it sounds like it's modeled somewhat after that. Yeah. And Habitat for Humanity puts people into homes that can't otherwise find a way to get into them. But they have had a problem. The dirty little secret is, and it's not their fault, but people get into the homes and then still don't go and save money. And they've had a problem with people get into a home and they go buy a big screen for the wall. And then they go buy something else for the house and they go buy something else for the house. and they've got payments all around them then that they wouldn't have had had they not bought the home.

1:54:46Dave Ramsey:Right. And so they've had some issues with people actually losing their Habitat for Humanity home because they didn't have good, healthy financial habits when they went in. But Habitat does a good job. They're a good organization. So if it's modeled after that, I was thinking that's what she was going to say. But and then I could have at least more intelligently done something. Because we've done all kinds of stuff with Habitat helping them.

1:55:12Rachel Cruze:Well, and I just want to, yeah. And it sounds like, too, there's always a time limit to this. Whenever you get boxed into a time limit, that's like student loan forgiveness, right? If you go work for 10, you know, it's all these things that are long term of what you're committing to. You have to keep that in mind because I don't know what it looks like if, Kim, you have to sell in three years and get out of the program. What does that mean? You know, so I would know all of that information as well.

1:55:37Dave Ramsey:It sounds like it's pro rata forgiven. You know,$5 ,000 a year for five years on the$25 ,000 is what it sounded like. If that's the way it really works, then at least you know what you're up against. And you hope the house goes up in value that much. Right, right. And you hope you don't have a bunch of repairs that you can't afford to do.

1:55:55Rachel Cruze:But get that emergency fund, Kim, in place.

1:55:58Dave Ramsey:You got to have the emergency fund in place. And no, you don't need to be thinking about investing until this deal is settled.

1:56:03Rachel Cruze:Get a six-month emergency fund.

1:56:04Dave Ramsey:Pile, pile, pile money up and have a nice, fat, juicy pile of money to offset the fact that you've not anticipated what all this entails and what you're getting yourself into. So, yeah. If it was a straight-up government. Here's the weird thing, Rachel. Five years like that, if you don't have that lien, that five years goes by so fast. If you do have that lien, 73 ,000 things happen during that five years. It just ups the stress. It slows down the calendar. It goes real fast if it's free and there's no constraints and no liens. But man, when you're trapped in there, it just doesn't. It doesn't feel that way.

1:56:49Dave Ramsey:Wow.

1:56:50Rachel Cruze:I hope it works out for you, Kim, though. I do too. Because we do. We want everyone to be a homeowner. But again, we want it to be a blessing, not a curse. So having some cash for when things go wrong is going to be really important in your situation.

1:57:06Thank you.

1:57:33Thank you.

1:57:44Dave Ramsey:Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke. Not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our EveryDollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change.

1:58:20Dave Ramsey:It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the App Store or Google Play.

1:58:47Dave Ramsey:Our scripture of the day, Philippians 317. Join together in following my example, brothers and sisters. And just as you have us as a model, keep your eyes on those who live as we do. Margaret Thatcher said, don't follow the crowd. Let the crowd follow you. Karen is in Cleveland, Ohio. Hi, Karen. How are you?

1:59:09Rachel Cruze:Good. How are you doing? Thanks for taking my call.

1:59:11Dave Ramsey:Sure. What's up?

1:59:13Rachel Cruze:I recently found, I'm 65 years old, and I recently found out that my husband lost all of our retirement and all of our money. And I ultimately ended up getting a dissolution because he gave me the house. I have no debt, basically, but I have a$300 ,000 house. I had to get a job and have a little bit of alimony, a little bit of Social Security. I have about$70 ,000 for money that my mom left me, and I'm just wondering how to move forward. Do I sell the house and invest the money?

1:59:51Dave Ramsey:Wow.

1:59:52Rachel Cruze:Oh, Karen, I'm so sorry. Yuck. You said you're how old? 65.

1:59:58Dave Ramsey:How long were you married?

2:00:00Rachel Cruze:15 years. He's 59.

2:00:02Dave Ramsey:What did he do with the money?

2:00:05Rachel Cruze:He retired at 54 and took a lump sum. And then because he dabbled in the market, he decided to do that full time. And I managed the daily budget and he managed the retirement money. And what I did not know is that he moved his retirement money into his trading account. And last year he went all in on something and lost about$500 ,000.

2:00:30Dave Ramsey:Whoa.

2:00:32Rachel Cruze:And so he left and then he came back. And when I found out we lost the rest of it, I told him to get a job, and he left again. Oh, Karen.

2:00:43Dave Ramsey:So what do you make of your career?

2:00:47Rachel Cruze:I retired a while back, many years ago. So I've got, because I'm 65, I don't want to start a career again. So I'm a receptionist, and I'm bringing in about$1 ,600 a month.

2:01:05Dave Ramsey:Other than your broken heart, how's your health?

2:01:09Rachel Cruze:It's okay so far. I mean, my plan is to maybe work for another 10 years. I'll have to.

2:01:21Dave Ramsey:Okay. Is the house paid for, Karen?

2:01:23Rachel Cruze:It is. It's paid for, okay. He had me take my Social Security early, so I don't get as much there. And my 401K is gone.

2:01:33Dave Ramsey:That was part of what he lost?

2:01:35Rachel Cruze:Mm-hmm.

2:01:35Dave Ramsey:Wow. Well, we lived off of it for a while while he was investing because I was older and I was 59 and a half.

2:01:43Rachel Cruze:So you could take it without penalty, yeah. Yeah.

2:01:48Dave Ramsey:So you got$70 ,000 and$300 ,000 and a$25 ,000-year job. Okay. Yeah.

2:01:58Dave Ramsey:How we got here doesn't change the answer, although it just adds to the emotion of everything for sure. But I'm still going to say I'm going to set$20 ,000 of the$70 ,000 aside as your emergency fund. I'm going to sit down with a SmartVestor Pro and invest the$50 ,000. And do you sell the$300 ,000?

2:02:21Rachel Cruze:But what's the history on the house? The history?

2:02:27Dave Ramsey:I mean, how long you owned it?

2:02:29Rachel Cruze:Yeah, we've owned it 14 years. It's in pretty good shape.

2:02:32Dave Ramsey:Okay. All right.

2:02:37Dave Ramsey:I mean, if we're only doing math and all we're trying to do is just maximize everything, regardless of the emotion or regardless of just quality of life. You know, you go buy a$150 ,000 condo and you take another$150 ,000 of that house and you put it in good mutual funds. Now you've got$220 ,000 at$65 ,000. Now at$70 ,000, that$220 ,000 will be a half million if you don't add anything to it. So, yeah, I'm probably doing that.

2:03:10Rachel Cruze:Go get a condo or something.

2:03:12Dave Ramsey:And then the second thing I'm going to do is I'm going to reset your narrative in your head of, I'm 65, I don't have time for another career. Yeah, you do. You've got plenty of time. In the world we live in today, things spin up so fast and make so much money so quickly. I would not take somebody as bright as I'm talking to and make them only a receptionist because I'm 65 for the next 10 years and I make nothing. Instead, I'd try to figure out a way to go make some money. And I think you've got chops, girl. I think there's some stuff you can do. What was your former career? I was a medical lab technician making about$50 ,000, which is pretty intense of a job and hard to start over in.

2:03:58Rachel Cruze:He's supposed to be giving me$1 ,000 alimony. That's not going to change your life. Well, I don't know if it's going to be guaranteed either. Besides that, he's not dependable.

2:04:06Dave Ramsey:Yeah, he's not dependable. You can't project where you're going to end up with that.

2:04:12Rachel Cruze:So if I rent, I mean, the alimony is going to pay my rent. No, I'd go buy something,$150 ,000 to$200 ,000.

2:04:17Dave Ramsey:I'd go pay cash for a$150 ,000 condo.

2:04:19Rachel Cruze:Yeah. And the condo fees.

2:04:22Dave Ramsey:Yeah. But, you know, you got$150 ,000 freed up when you do that. And invest it will be good. To add to the$50 ,000, you know, then you got$200 ,000. And that will grow to a half million dollars by the time you're 75. Or by the time you're 72. And you'll be adding to it during that time. And so you could retire in a very good shape. um, you know, in your early seventies, but the, the, the, the variable is if we could triple your income. Right. And that changes, that changes the math on this dramatically, um, and increases the probability of a good outcome. And the bad news is you're by yourself.

2:05:04Dave Ramsey:The great news is you're by yourself. You don't have to convince anybody to do this, but you, and, um, you, you, you know, Now, all the baggage is in the rearview mirror. That's why they call them an X. Wow. I'm so sorry.

2:05:19Rachel Cruze:I know, Karen. That's horrible. Horrible thing to go through.

2:05:23Dave Ramsey:So, yeah, gang, we talk about this all the time, combining your finances and having full transparency and full decision-making as a paired thing. Both of us know everything that's going on. Both of us know. And so that gives us checks and balances when we do that. Yeah.

2:05:42Rachel Cruze:And I can hear in my other year, people are like, this is why you don't combine, yada, yada, yada. It's exactly why you do combine.

2:05:52Dave Ramsey:Because you're looking over his shoulder, and the first time he day trades, you shut the whole thing down.

2:05:56Rachel Cruze:Yeah, well, if you're looking at the details, is what you're saying. But he took her, they had money combined, and he took her 401k.

2:06:03Dave Ramsey:Yeah, but they weren't combined in their operating of their household.

2:06:06Rachel Cruze:Okay, 100%. That's what I'm saying, is I can hear someone say, oh my gosh, that scares me. I want to keep my stuff over here to protect it, to make sure that he doesn't touch it. But what I'm saying is you have to. That's it.

2:06:18Dave Ramsey:Yeah.

2:06:18Rachel Cruze:That too. Yes.

2:06:19Dave Ramsey:If you can't sit down together and both of you talk about everything in the going on with your money, you shouldn't get married in the first place. Not talking about her. I'm just talking about in general terms.

2:06:30Rachel Cruze:Yes. And it's easy in a marriage just to let one person, you do this, I do this. And that's kind of what she said. I did the monthly budget. He did the investing. And you both have to be doing both as well.

2:06:44Dave Ramsey:But George just did fresh research, and it was amazing. It used to be a lower number. But he found that if a person day trades consecutively for 24 months, 97 % lose money.

2:06:59Rachel Cruze:I believe it.

2:07:01Dave Ramsey:That's all of you. That's stupid.

2:07:04Rachel Cruze:And all eggs in one basket. He put everything in one thing, and it went down.

2:07:08Dave Ramsey:Every time I drive down that road, a kid throws a rock at my car. You know, I'm not driving down that road anymore. I mean, 97 %? That's not even a statistic. That's just a fact now. So just day trading is stupid is what that means. And so as soon as somebody says that, all of your bells and whistles and alarms need to be going off and going, no, no, no, no, no, no, no, no, no, with a capital H, no. We're not doing this. No. Wow. I'm sorry Karen. I'm sorry you went through this. We're not preaching at you or shaming you in any way. It's other people listening just to be aware of you guys. These are the reasons, situations like yours are why we get so hyped up against some of the things that happened to you.

2:07:53Dave Ramsey:Yeah. That's what it amounts to. Wow.

2:07:56Rachel Cruze:Karen, call us back if you need us though. We really are. We're cheering you on. We'll help you any way we can.

2:08:01Dave Ramsey:Wow. Absolutely. That puts us out 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.

2:08:34you