Stop Avoiding The Hard Truth About Your Finances

10:22Dave Ramsey:Are you sick and tired of working so hard but having nothing to show for it? Well, that's most people. Normal. You don't want to be normal. Normal sucks. Normal's broke, right? You don't have to live that way. Our Every Dollar Budget app helps you find extra money every month and builds you a personalized plan to get out of debt, become wealthy. In just 15 minutes, you're going to find thousands of dollars in hidden margin, and you're going to feel like you got a raise. You do not have to live this way. Oh, by the way, the whole Ramsey plan's built into it, and we walk you through it. It's like having one of us in your back pocket.

10:55Dave Ramsey:Don't live normal. When you can live like no one else. Start every dollar for free in the App Store or at Google Play. Check it out. Andrew's in Atlanta. Andrew, what's up? Hey, how's it going, Dave? It's really nice to talk to you. You too. How can we help?

11:12Jade Warshaw:Well, me and my wife are trying to decide if we should sell our rental property to pay off our debt. So in 2024, my income was around$105 ,000, and hers has stayed consistent. But my income dropped down to about$85 ,000 last year. And we had this house built when I was making a little bit more money, and we have our rental property. And we're just looking to see if it's a good decision to sell it and pay the debt or if we should just go with the snowball effect, like the snowball program.

11:47Dave Ramsey:How much debt? Yeah, how much debt?

11:50Jade Warshaw:We've got about$90 ,000. It's actually about$87 ,000 if you include everything.

11:57Dave Ramsey:And how much of that is cars?

12:02Jade Warshaw:About$65 ,000 of it is cars.

12:04Dave Ramsey:Oh, wow. $65 ,000? Yeah.

12:08Jade Warshaw:So I have a truck in her car.

12:11Dave Ramsey:Yeah, and what does she make?

12:13Jade Warshaw:She makes$48 ,000 a year.

12:15Dave Ramsey:Okay. And so you have$135 ,000 income, right? Did I get that right? Yeah, I did. Yes. Maybe a little bit more. Maybe$140 ,000. Okay.

12:27Jade Warshaw:How much of the$65 ,000 is the truck? $40 ,000 of it is the truck.

12:34Dave Ramsey:What's the rental property worth?

12:37Jade Warshaw:It appraised last year at$265 ,000, and we owe about$160 ,000 on it.

12:43Dave Ramsey:Okay. She got$100 ,000 in equity, roughly, not counting fees and miscellaneous. And what's your home worth?

12:51Jade Warshaw:The one we live in right now appraised at$410.

12:54Dave Ramsey:And what do you owe on it?

12:57Jade Warshaw:$328.

12:58Dave Ramsey:Okay. All right. Cool. Okay. If you did not have$100 ,000 in debt, would you be looking to sell the rental property anyway?

13:12Jade Warshaw:No, no. I look at real estate as kind of a long-term investment, something that...

13:20Dave Ramsey:I mean, how long have you had the rental property?

13:23Jade Warshaw:So we've had it for six years.

13:25Dave Ramsey:How are you doing as a landlord? Are you good at it?

13:29Jade Warshaw:I think pretty well. Yeah, I mean, we've only had two tenants. This last tenant's been there for three years. It's actually been relatively pleasant. We kind of live out a little bit away from the city, so it's been relatively nice. When your income went down, did it affect the amount of your mortgage on your take-home pay? Is that where this is stemming from? Well, I think cash flow just kind of died when my income went down. Right.

14:01Dave Ramsey:It exposed the stupidity of these car purchases. So, no, I wouldn't sell the rental property. I'd sell both cars.

14:10Jade Warshaw:Yeah, because what's the payment on those combined?

14:12Dave Ramsey:I'd get two$5 ,000 or$10 ,000 cars that are cash, and then I'd plow my way through with$140 ,000 income, plow my way through the little bit of debt that's left, and keep the rental property. Because it's going up in value, and that stupid butt truck isn't.

14:29Jade Warshaw:No, no. I use the truck in my line of work.

14:33Dave Ramsey:I'm not making an excuse.

14:35Jade Warshaw:The cars are three-quarters of the debt. But how great would that feel for those to be gone? It would feel good. What would I do in a situation that they're upside down? I mean, what's the best route? How much upside down are they? Well, the truck's not upside down. That's the first one to go there. Yeah, the car is probably$10 ,000.

14:56Dave Ramsey:You're not going to do it.

14:57Jade Warshaw:I don't think you're uncomfortable enough. I think that you had some discomfort.

15:01Dave Ramsey:So here's the thing. You had a$100 ,000 pile in the middle of the table. and instead of buying a rental property you went and bought cars if you keep the cars that's what happened if you don't keep the cars you say i bought a rental property with my hundred grand but you're deciding right now between the two based on this and um you know you you've already you've already dipped your toe in there twice since we've been talking to you about keeping this truck trying to figure out a reason to keep the truck trying to figure out if i'm you i listen I got a great truck. I got a Raptor R. It's one of my favorite cars.

15:37Dave Ramsey:I'm a truck guy. Loud breadneck muffler. I love it, man. It's incredible. And I'm with you on owning a truck. I'm not with you on trading a truck for a rental property. No, no, no, no, no, no. Rental properties go up in value here in the Atlanta market, for God's sakes.

15:54Jade Warshaw:You also got to play best and worst case scenario. Have you ever had to make a decision and you're scared of it worst case scenario he sells this truck he hates having the eight or nine hundred dollars a month back in his pocket and he says you know what i didn't like that i'm gonna go get

16:09Dave Ramsey:the truck i'm gonna go back and sell the rental property and then go back yeah that's the i mean truly you can actually upgrade in truck if you did that if you if you decide owning this truck is a better idea than owning the rental property um which i'm not in agreement with we were telling you up front. But she's right. Sell it and test our theory.

16:29Jade Warshaw:And if you hate having that cash back in your life, then get it back. Go back in debt.

16:37Dave Ramsey:Sell the rental property and go buy your car for cash. And then you can undo this at any time.

16:42Jade Warshaw:That's true. It's very good.

16:44Dave Ramsey:Yeah. I would get rid of the cars, both of them, and see how my life feels. And after 90 days, if you think, oh, Ramsey's full of it. It's like, I think I joined a cult. Then sell your rental property and take the money from that and go buy some cars. Because it's the same thing, dude. It's the same thing. But at least you could test the theory. That's a good point. I like that. Test the theory. Try this stuff for 90 days. And if at the end of 90 days, you hate it, you'll never go back.

17:11Jade Warshaw:You've been on the air for 30 years?

17:13Dave Ramsey:Never had anybody go back.

17:14Jade Warshaw:No one's ever called back and said, Dave.

17:16Dave Ramsey:I hate you.

17:18Jade Warshaw:Because you made me debt free?

17:19Dave Ramsey:Because you told me to sell my car and I don't have an$800 car payment, so I hate you. That call I've not gotten. Now, I've got a lot of people that hate me for a lot of reasons.

17:26Jade Warshaw:That's saying something.

17:27Dave Ramsey:But I mean, there's a long list of reasons to be pissed at Dave. And they're out there on the internet. Just type in Dave Ramsey sucks. It goes for days. I'm sorry. But that's not one of them.

17:38Jade Warshaw:Listen, we let calls through.

17:40Dave Ramsey:I sold my car and I am debt free and I hate Dave Ramsey is something we have never heard once.

17:47Jade Warshaw:I've never even seen. I might go on the break and look on social media and see if there's any sort of hashtag about that. I guarantee it's not.

17:53Dave Ramsey:No, there's not. There's not. And our social media team would have already told me. Yeah. I don't want to look at it, but I'm afraid they do. And so - Yeah, testing it is good. Yeah. And here's the same thing with paying off the house. Those of you, I have$150 ,000 in my CD and I owe$100 ,000 on my house. Should I pay off my house? How many times have we taken that call? Oh, yeah. Like five million times. And I'm like, pay off your house. And if you hate it, you can go get a mortgage. And same thing you did. Just test it. Test it. And you know what? Never. I've never had anybody write me hate mail.

18:24Dave Ramsey:Dave, I paid off my house. I hate you. I've never had that one time. Now, there's a lot of people have all these theories about this. Dave Ramsey tells people pay off their house and they're not going to be rich because of it. But then there's all these tens of thousands of millionaires that are millionaires because they paid off their house and took the mortgage payment and went and became millionaires. And there's one sitting in front of us right now from Houston. Yes.

18:44Jade Warshaw:Yes. Let me tell you. Yeah. Hello. I had a guy, he had a pile of stocks and a bunch of debt. And you know, we would say, if you have stocks, sell the stocks, use it to pay off the debt. He didn't want to do that because he'd had the stock for quite a while. He had it since he was 18 years old. And I said, listen, I said, try it. I said, take a portion of the stock, just take a portion of it and pay off a portion of the debt and see how you feel. And he said, I never considered doing that. It was in his mind, it was an all or nothing deal. And because it was all or nothing in his brain, he chose the nothing.

19:17Jade Warshaw:and so if you're on the fence just try it and you want to know what he got a hold of me later and let me know it felt so good i sold the stock and i ended up paying off the rest of the debt

19:28Dave Ramsey:just i know lots of pastors that have said try tithing for six months if after six months you think that tithing is to your local church is wrong i'll give you a money back guarantee on it none of them have ever had anybody ask for their money back wow

20:09Jade Warshaw:If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian Healthcare Ministries is a great option to think about. CHM is not health insurance. It's a health cost-sharing ministry, a biblical, community-based way for Christians to share each other's medical bills. That means no enrollment deadlines, and you can choose any doctor or hospital you want. That kind of freedom is big, especially if you're self-employed, between jobs, or you just need something that fits your budget better. CHM has been around for decades, faithfully serving the Christian community.

20:45Jade Warshaw:And many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby steps and trying to steward your money well. And right now, CHM's offering new members a 50 % credit towards their first month of membership. Get started at chministries.org slash budget and use promo code Ramsey. That's chministries.org slash budget and promo code Ramsey.

21:27Dave Ramsey:Christian is with us in Fort Worth, Texas. Hi, Christian. How are you? Good. How are y 'all? Better than we deserve. What's up?

21:35Jade Warshaw:So I am a college student, and I do have a little bit of credit card debt, but I also have a pretty big tuition payment coming up in June because I'm looking to transfer schools, and I don't know the best way to go about this. Saving up for the tuition? Yes. How much is it? So my tuition in June will be$15 ,000. Oh, boy. You have the money? Yeah. Yeah, I have$11 ,000 saved up because I do work two jobs, and I'm a full-time student, and my credit card debt is about$2 ,400. And so I don't know if it would be better just to throw$2 ,000 at the credit card debt than take a little loan out in student loans or save up to$15 ,000 the rest of the way and then pay that and then pay a little more of the credit card debt when I can after I make the payment.

22:19Dave Ramsey:I would pay for the tuition and cash and not use debt ever again.

22:24Jade Warshaw:Yeah, because I've been paying for cash the last year for school. I pay about$1 ,800 a month.

22:28Dave Ramsey:So why$15 ,000 a semester?

22:34Jade Warshaw:So it's an online degree, and so I'll start in June and make the payment, and then I'll be done by next June, because I already have my associate's degree, and then this will be an online course to get my bachelor's in biomedical sciences. Okay, so you're making this payment, and then when's the next payment due before you finish in June? Or that's it? online, it would just be just this one payment. I don't know if the advisors have told me as well. It's just the one payment. I don't know if they do payment plans or not. Okay.

23:03Dave Ramsey:So you're prepaying for the entire year? Yes, sir. Okay.

23:07Jade Warshaw:And you said you have$11 ,000 saved, so you're just solving for the$4 ,000, right?

23:11Dave Ramsey:Yes, ma 'am. And he can have the$4 ,000 by June. Yeah. So pay cash for the tuition. So here's the thing. The trick to getting out of debt is to vow never to borrow again. Again, you already have debt, so let's just let that sit there, pay minimums on that, and save up and pay cash for this tuition, and then work on the debt beyond that. Now, if you're doing online, are you going to be working full-time at that point?

23:36Jade Warshaw:Yes, sir. So I work full-time as a certified medical assistant and also bartender on the weekends.

23:42Dave Ramsey:Okay, good. So that's where all this money is coming from. So you're going to have the money to live during this year while you finish this up and go ahead and knock out the credit card debt. Yes, sir. Look at you. Look at you. Well done. Yeah. Yeah, I wouldn't fool around. I'd pay cash for the tuition, not have anything lingering from that decision, and then the old decision that's still sitting there, come back and attack it as quickly as you can once you've got$15 ,000 in the bank.

24:07Jade Warshaw:Do you know why, Christian, we're telling you not to go into debt?

24:12Dave Ramsey:Further. I do not know. No.

24:15Jade Warshaw:Okay, let's talk about that. So because you've considered, obviously you've considered that you used it for credit cards. You considered it as a solution for your problem right now. The reason Dave and I are telling you, hey, draw a line in the sand, no more debt going forward is because debt eats at your ability to build wealth over time. It steals your hard-earned income and causes you not to be able to do things like invest, not to be able to do things like pay cash for emergencies. And that is a vicious cycle. That is why we're on the air is because it creates a vicious cycle in people's lives and they can't get ahead.

24:48Dave Ramsey:Yeah, exactly. Well done, sir. You are working your way through this. I like you. Well done. It's good to find people that work hard and achieve their goals as a result. Quinn is in Philadelphia. Hi, Quinn. How are you?

25:04Jade Warshaw:Hi. I'm so excited to talk to you and Jade. So my question is about my employer who's telling me that I owe them about$17 ,000 due to an error that they made with overpaying me over the past year and a half that I recently uncovered and brought to them. Oh, boy.

25:23Dave Ramsey:You figured it out. Yes. And they want you to repay them.

25:29Jade Warshaw:That's correct. And what? Yeah. What did they say? When do they want the money by? so they want the money um by the end of this fiscal year which is july but then um it's actually october because that's when we get our bonuses um so the error was i came back from maternity leave in uh september 2024 um i wanted to start work at 9 a.m instead of 8 i'm a physician and um getting there at 8 was just too hard we have four kids um and so it was really just a couple days a week. I went from a 1.0 employee to 0.95 or like 95 % effort, basically. I didn't notice the change on my paycheck. Back then, I really wasn't paying attention to anything.

26:13I was the typical doctor out of school with Doc Ides, came on a fellowship, thought I could, you know, spend and have them if I wanted.

26:20Dave Ramsey:So what's your total income now, Doc?

26:24Jade Warshaw:So my husband and I together make about$420. I'm at$440 prior to the change. Yeah, I didn't notice on my paycheck until recently. Last July, we came back from our fourth vacation, and I couldn't pay off my credit card at the end of the month. And that's when I found you, read the Total Manning Makeover, convinced my husband, although I feel like I'm still convincing him some days. But we're actually two weeks away from paying off all of our debt except our house. Wow. And going from two to three, yeah, about$80 ,000. So the$17 ,000 accrued over the course of how many years? About a year and a half.

27:11Jade Warshaw:About a year and a half. September of 2024, yeah.

27:13Dave Ramsey:So it's about$1 ,000 a month, but your income's substantial. You didn't even notice it. Yeah, so it's not, it's$1 ,000 a month, isn't it?

27:19Jade Warshaw:I mean, I'm probably going to get a bonus about that much. I'm just like, I'm still upset about it because it is so much money. And like right at that time, I'm going to be going from step. We're going to get out of step three in the summer. And that bonus would really help us like kickstart steps four, five, and six. So I'm having a meeting with them next week. And I'm just hoping you can give me some advice going into the meeting. I'm wondering if I should talk to a lawyer ahead of time or just wait till afterward. or if I have any leg to stand on. I am highly productive. They measure doctors' productivity based on how many patients you see.

27:57Jade Warshaw:And I've looked back, and there were many months that I was over 100 % productive, basically seeing more patients than I had slots for. Yeah.

28:07Dave Ramsey:So here's the thing. You can ask an attorney. I don't think you have a legal case. So I don't think that's the lens through which I would open it. If you want to gather the information, it won't hurt anything. But ask an attorney to learn that because I'm not one. I'm trying. OK, so if I had a highly compensated and I do, I do have highly compensated folks on our team. And we made a clerical error that was amounts to five percent of their income or 10 percent of their income. OK, here we would say, oops, we screwed up. Right.

28:54Jade Warshaw:Yeah.

28:55Dave Ramsey:And I wouldn't and I wouldn't ask for it back. OK, because I'd be embarrassed that we screwed up. You didn't steal the money. You didn't deceive anyone. Quite the opposite. You're the one brought it to their attention. attention. Hello. And so I would just say, hey, you know, I think it would be if I'm in the meeting, I might say something like, guys, if you look at my productivity, it's well beyond 100 percent, which is very unusual on your staff. I brought this error to your attention. You probably would have never found it if it wasn't for me. You made the mistake. You should be embarrassed.

29:48Dave Ramsey:And you should consider just waiving this for all of those reasons. And now you probably don't be quite that belligerent.

29:59Jade Warshaw:I was going to say.

29:59Dave Ramsey:But I mean, but that's the message. You know, okay, let's, let's, you know, I'm going to be sitting with my boss and say, okay, boss, I'm one of your top guys. I brought you the error, and I wondered if you would consider being embarrassed about making the error and just waive it.

30:18Jade Warshaw:You think? Yeah. Listen, I think they should. But only you know.

30:23Dave Ramsey:I think it's a morale, an employee morale, a highly productive. Because finding another doctor to replace you when you leave over$17 ,000.

30:33Jade Warshaw:The thing is, though.

30:34Dave Ramsey:And they don't know that's not going to happen. it's going to cost them a lot more than that to fix the mess they made here if they hold you to this because you're going to remember this forever. And the first time some other group comes knocking, you're going to be thinking about$17 ,000 instead of$817 ,000, which is what the deal. I mean, don't be stepping over dollars picking up nickels.

31:00Jade Warshaw:Yeah.

31:17Jade Warshaw:buying a home is one of the biggest financial decisions you'll ever make but too many people base the decision on opinions or what the market is doing that week churchill mortgage has been

31:27Dave Ramsey:our trusted partner for over 30 years because they do things the ramsey way a lot of people think buying a home starts with going to a bunch of open houses. But if you're buying a home the right way, you start with a budget and a trusted guide like Churchill before you even think about house shopping. Churchill will show you the real numbers, not what a bank will approve. Buying before being ready is how people end up house poor and stressed out.

31:55Jade Warshaw:Churchill will tell you the truth and they won't push you into more house than you need. And once you understand what you can actually afford, you can move forward with clarity and confidence.

32:05Dave Ramsey:So if you're ready to buy a home, choose the right guide and stick to a plan. Go to churchillmortgage.com and get started. That's churchillmortgage.com. This is a paid advertisement.

32:15Jade Warshaw:NMLS ID 1591. NMLS consumeraccess.org. Equal housing lender.

32:33Dave Ramsey:Bridget's in Savannah, Georgia. Hi, Bridget. How are you?

32:37Jade Warshaw:Good. How are you doing?

32:38Dave Ramsey:Better than I deserve. How can I help?

32:41Jade Warshaw:Yeah, I was calling because my husband and I recently paid off about$24 ,000 worth of credit card debt.

32:48Dave Ramsey:Good.

32:48Jade Warshaw:And yeah, we're very excited about it. But that frees up about$600 to$700 a month for us. and we still have some medical debt that we were, of course, considering, you know, just quickly paying that off. But my sister actually lives overseas and we haven't seen her in two years. And I've since then had a whole pregnancy and a baby. So I would really like to be able to go over there and see her and introduce, you know, her niece to her. She can't come over here due the visa reasons, but I didn't know if that would be a bad idea and we should just continue with, you know, going with the medical debt route.

33:32Jade Warshaw:How much medical debt have you got? About$6 ,000. How quickly could you have the$6 ,000 paid off?

33:39Dave Ramsey:You've already paid off$24 ,000.

33:43Jade Warshaw:Yeah.

33:44Dave Ramsey:It's not like you're not going to see your sister for seven years. We're talking a handful of months.

33:49Jade Warshaw:Yeah. Yeah, the thing with paying off the credit card, a large majority of it was due to a good tax return.

33:57Dave Ramsey:No, no, no. There's no such thing as a good tax return. A tax return is when you overpay your taxes and they give you the money back with no interest. That's not good. How big was the tax return?

34:08Jade Warshaw:About$10 ,000. Good Lord. What's your household income? My husband breaks in roughly$4 ,800. and then I do a few contractor jobs and roughly bring in between$1 ,200 to$2 ,000.

34:24Dave Ramsey:How in the world do you end up with a$10 ,000 tax return on a$50 ,000 income?

34:31Jade Warshaw:I'm not entirely sure. I'm not either. My mother-in-law does taxes. She has a tax business and was able to figure it out for us. But I do know we had a very high-risk pregnancy, and our son was admitted to the children's hospital for a few days that same year. So I'm not sure if that had anything to do with it. I don't know. Okay, stop.

34:55Dave Ramsey:Number one, you need to get your crap together, and you do need to know. Someone else taking care of your taxes is how you end up not paying the proper amount of taxes, and you have no idea what's going on. I don't mind having someone prepare my taxes, someone does my taxes, but I'm going to understand how my tax bill works and why. And you need to understand this because if you have$10 ,000 too much coming out of your check every year, that's$833 a month that should be in your check this next month because you should change your W-4s so that you quit over withholding out your ears. and that will help you clean up the$6 ,000.

35:37Dave Ramsey:No, honey, you should not go to Europe until you pay your$6 ,000. You should roll up your sleeves and finish the job. It's not like we're saying don't see your sister for four years. It's four months.

35:51Jade Warshaw:Bridget, this is what I'm concerned about. I'm concerned about when you told us you were very excited that you cleared out the existing credit card debt at$600 a month, but then you very quickly let us know that that was an anomaly. and that let me know that you are not really ready to go on this journey, and I want to talk about this for a second, because when you decide you're going to work the baby steps, you have a moment in time where it's like, I have to, I'm setting the bar for what gets passed, right? I'm setting the bar for what my lifestyle must be for this to happen, and there's going to be a lot of things that are going to try to compete with the priority of paying off debt, but you have to set a clean bar.

36:31Jade Warshaw:We don't do anything. We're cutting our lifestyle. We're not taking trips right now. And you're so early in the process and you had an anomaly of a win, but you're already thinking about taking trips and you've got 6 ,000 to go. I would really encourage you to lock in because if you take a trip to Europe, then something else is going to pop up and you're going to go, ah, let's do that. And then something else is going to pop up. And before you know it, you've been kicking the can down the road two years. So that's why this is so important.

36:55Dave Ramsey:And if you emotionally rationalize and justify decisions that you know in your brain are wrong, when you start doing that with your voice, that's when you know you're getting ready to do something stupid. Because I do it. Because the drama queen that lives inside of our brains, all of us have one. We'll just – it sounds like a beagle chasing a rabbit. You know, it's like, whew, whew, whew, whew.

37:26Jade Warshaw:I've heard that, yes.

37:26Dave Ramsey:You know, it's just like your voice octave goes up and you're like, well, I haven't seen. And all of a sudden you sound whiny. I do it to myself. I hear it in my own voice sometimes. I'm like, you are a whiner.

37:38Jade Warshaw:Go back and look at any purchase you had buyer's remorse over and replay went over in your brain.

37:43Dave Ramsey:Exactly. The little whiner came out.

37:45Jade Warshaw:Yes.

37:45Dave Ramsey:And like, I deserve it. I work so hard. And I tell myself, you work so hard. You work so many years, you've paid a price.

37:52Jade Warshaw:I deserve it. I deserve it.

37:54Dave Ramsey:As soon as you do that, and I'll guarantee you, your octave always goes up one. Everybody does it. We all do it. And Bridget, you're doing it. So don't do that. Drop your octave back down and be like a grown up and go, you know, I still got to clean up this stinking mess I made. And then I'm going to go see my sister.

38:13Jade Warshaw:Yeah, flip the script. Let it motivate you to get there faster. Yeah.

38:17Dave Ramsey:But you do whatever you want to do, Bridget. But you called and asked us, and we're always going to love you enough to tell you the truth. And we're not telling you anything we haven't told ourselves, and we're not telling you anything we haven't told 5 ,000 other people before you called. It's fairly predictable what's going to happen when you call the show. We're going to love you so much that we're going to be very truthful or even brutal with you when you call here. And that's because we want you to win.

38:43Jade Warshaw:And in the end of the day, you'll have a better trip for it.

38:46Dave Ramsey:The whole Ramsey brand is about trust because you trust us because we love you enough to tell you the truth.

38:50Jade Warshaw:That's right.

38:51Dave Ramsey:And, you know, that's what this whole thing is about. And, you know, and then you get to hear the other side of it sometimes. And, you know, the young guy that called last week, I don't know if you were on, I think Rachel was on the air with me. And he said, I called you when I was 22 years old. And you said, if you will do these four things exactly, and don't argue with me, do them exactly. You'll be a millionaire by the time you're 30. He said, I'm 28, six years later, and I'm a millionaire. And I called to tell you that.

39:16Jade Warshaw:I love that.

39:17Dave Ramsey:And it's like, he said, I did exactly what you said to do. I didn't argue with you. Yeah. And he goes, and I got there two years earlier and you said I would. And I want to ask you about this other thing. And it wasn't a whining thing he was asking about. It was a legitimate question. But that was the preface to his question he was calling in about, though. That's cool. Yeah, that is very cool. If you do this stuff, because we want you to be that story. Absolutely. Absolutely. And that, you know, live like no one else so that later you can go to Europe when you want.

39:44Jade Warshaw:And it's true. He said it and she'll have a better trip for waiting and doing it the right way. But when you start to do the things we teach, the way that we teach them, no holds barred, you do. You go faster than you thought you were going to go because momentum is on your side. And it's like the moving sidewalk at the airport. And that's my favorite part of it.

40:03Dave Ramsey:Yeah, you're walking along and you're walking under your own power. And God looks down and says, oh, you're faithful with the little things.

40:10Jade Warshaw:100%, yes.

40:11Dave Ramsey:If you're faithful with the little things, I'm going to give you more to manage. And so you're walking along and then all of a sudden you're moving like you're moving on the sidewalk faster than you're actually walking. So you're walking, but it's also moving under you, and you end up arriving at the point faster. Because when you're faithful with the little things, 100 % of the time, he gives you more to manage. And please don't expect for him to give you more to manage when you're unfaithful with the little things. Disorganized, chaotic, immature, impulsive. When you're all of those things, and now we're not fussing at Bridget.

40:38Dave Ramsey:We've moved on from Bridget. Yeah, we've moved on from Bridget. Just in case, Bridget, we're not preaching at you, but preaching to all of us.

40:44Jade Warshaw:But don't you think, Dave, that's the secret sauce behind this? Because I can say when Sam and I were paying off$460 ,000 of debt, looking at the Ramsey plan and going, you know what? This is biblically based. That means I can ask God, hey, help me do this. Yep. And then I can get a yes.

40:58Dave Ramsey:Yep.

40:58Jade Warshaw:Because it's based on what he wants me to be doing anyway.

41:01Dave Ramsey:Yeah. God, your word says the borrower is slave to the lender. And then Jesus said, it's tough to serve two masters. So help me, Lord.

41:09Jade Warshaw:Help me out.

41:10Dave Ramsey:Help me get out of this. And give me some work to do.

41:13Jade Warshaw:Here's the thing I was going to say.

41:14Dave Ramsey:Give me a raise at work. It's not going to be a check in the mail.

41:16Jade Warshaw:It's going to be work.

41:18Dave Ramsey:This is not a random. The duck is not going to fly in the window already cooked. But he will take you duck hunting and let you get a duck. Yes. And so then you get to pluck it and you get to cook it and eat it. So expect the blessing to come in the form of more work. More opportunities, more work. Because the diligent prosper. You know what diligence is? That's excellence in the ordinary. Excellence every day. That's diligence. And those are who prosper. That's who gets a raise. That's who gets the promotion. That's who the competitor comes along and steals. If you work in a toxic environment where they don't reward diligence, someone will look over there and go, well, you look at that.

41:56Dave Ramsey:And they will hire you away, and you'll make more money than you've ever made in your life because you were diligent. Hmm.

42:23Jade Warshaw:Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

42:31Dave Ramsey:You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

42:39Jade Warshaw:Yeah, and that's why you've always said that having term life insurance from Xander is essential because it protects your family if the worst happens.

42:46Dave Ramsey:Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance.

43:02Jade Warshaw:Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet.

43:16Dave Ramsey:Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Xander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the money's still showing up. And that's why Xander is our go-to. They make it super simple to get the right coverage at the best price. No pressure, no upselling. I've trusted Jeff Zander and Zander Insurance for over 25 years, and so has my family. So don't wait.

43:48Jade Warshaw:It's fast, it's easy, and it could make all the difference.

43:50Dave Ramsey:Go to Zander.com or call 800-356-4282. Protect yourself, protect your income, protect your family.

44:08Dave Ramsey:welcome back to the ramsey show in the fair winds credit union studio jade washall ramsey personality is my co-host today roman is in atlanta hi roman how are you hey i'm doing okay how are you doing better than i deserve what's up so i inherited a hundred thousand dollars and i'm

44:28Jade Warshaw:I'm likely going to get$60 ,000 more when the house sells. I paid off my$30 ,000 of student loans already. Good. I just turned 23. I graduate in May. Wow. What's your degree in, Roman? I'm doing film and focus on documentary.

44:45Dave Ramsey:Good for you.

44:47Jade Warshaw:That's kind of led me down this path to where I've been looking at government a lot, like involved in government documentary a lot and i'm trying to get myself in a place where i can attend law school in 2027 and i plan to work and save and tell them and i'm just like i have family who's advising me to put like my money in like 50k and a cd and like 10 and a ross and like five percent liquid investments or five and liquid investments and my bank is trying to get me to invest it with their financial advisors but i'm just not sure to do with that money knowing that i'm going to have that big expense of law school coming up how much is law school going to cost well i mean if i can i'm aiming for uga which would only be uga is only 60 000 in total it's 20 000 a year to attend that uga but um i mean this is only a year away what if you just let it sit in the high yield savings account until you need it and i'm i i did have somebody to do that too so i i just don't know i just don't know like i can tell you why i would do that I would do that because knowing that this is really short term, I wouldn't want to mess around with any risk of investing it.

46:01Jade Warshaw:I'd want to keep it pretty liquid because you're going to need it. I mean, you said this is 2027? I'm guessing.

46:08Dave Ramsey:Yeah, if I applied now, it'd be 2027. You've not been accepted yet?

46:14Jade Warshaw:No, I still have to take the LSAT, and I've been studying for that. Okay.

46:19Dave Ramsey:So here's the thing. You have two pretty big hurdles to go to UGA. You're going to have to score well on the LSAT because UGA is tough to get into. And they have to accept you. Right. So there are two big blockers yet before this actually happens. So we don't know if it's going to happen or not until we cross those two mountains.

46:42Jade Warshaw:And you've probably got some backup schools there, yeah, that you've considered and the prices of those. There's a lot of good schools in Atlanta, too, like John Marshall and whatnot.

46:54Dave Ramsey:That you can afford to pay cash for with this money. So you have$130 ,000 cash laying around between all of these events. Did I understand that right? After you paid off your debts?

47:05Jade Warshaw:Well, the$60 ,000 is still in a house that hasn't been sold yet. Yeah, but it'll sell.

47:12Dave Ramsey:It'll be selling sometime. I mean, it's up for sale, right? Mm-hmm.

47:16Jade Warshaw:Yeah. Okay.

47:17Dave Ramsey:Yeah. Good. Okay. Well, the other people are trying to be, your family's trying to be helpful. Your banker's trying to be a banker. So asking a banker what to do with money is like asking a dog if it's hungry. So no, we don't. They're 100 % of the time they have an opinion, and it's put it with me. So no, we don't need a banker's advice on anything. No, thank you. Mom and dad mean well. And, yeah, a Roth IRA with$7 ,000 of this is not going to keep you from having the money to go to law school. If you're filing a tax return and making at least$7 ,000, that's not a bad thing to do. It's not going to make or break your life.

47:58Dave Ramsey:The best investment, Roman, that you can make is to attend law school and pass and then pass the bar. That's a better return on the$60 ,000 than if you invest it in mutual funds or real estate. Okay? So the$60 ,000, you're investing in the best investment I know of, which is you. Right. And so I want you to just, like Jade said, just protect this money. And does it kind of feel calm to do nothing? I think doing nothing is a really cool idea. Just park it in a high-yield savings. Super boring. I don't have to worry about being sophisticated. I simply got the money sitting there making a few points while I get ready to go to law school.

48:47Dave Ramsey:Ta-da. And then just go have a good night's sleep.

48:52Jade Warshaw:Yeah, that does sound nice, Agen.

48:56Dave Ramsey:And then just tell everybody else, thank you for loving me. And I've just decided what I'm going to do is concentrate on law school. and when I get out of law school, I'll be a lawyer and I'll make money and I got plenty of time to build wealth with that. Because$60 ,000 or$80 ,000 is not going to make you wealthy anyway, Roman. Right. I mean, they didn't leave you$6 million. They left you$60 ,000. So it's nice. I'm glad you got some. Right. But everybody's acting like you hit the lottery or something. Like this is going to be your big break. You did, but it was like a small ticket, you know. So just calm, calm, calm.

49:37Dave Ramsey:One of the things having too many choices in front of us, it gets confusing and anxiety goes up. Is that right?

49:44Jade Warshaw:Yeah.

49:45Dave Ramsey:So when I narrow my choices down and go, decision has been made, I'm going to do nothing on purpose. That's my decision. I'm going to park it in high-yield savings, super boring. I'm not going to lose it. It's going to be sitting there when I pass the LSAT, get a good score and get into UGA. And then I'm going to head to Athens in the edge of the mountains of beautiful North Georgia. And I'm going to be a lawyer.

50:09Jade Warshaw:Yeah, that's right. Yeah. Doing nothing doesn't mean you're not being 100 % intentional. You're still being very intentional.

50:15Dave Ramsey:You can intentionally do nothing. But the power of making a decision when there's too many decisions in front of you is the stress and anxiety drops immediately.

50:24Jade Warshaw:Yeah.

50:25Dave Ramsey:Too many choices is very stressful. And so I just go, no, no.

50:30Jade Warshaw:You know, I think that's what happens when people look at their money and they think, should I be paying off my debt? Should I be investing? Should I be saving for kids college? Should I be paying off my credit card?

50:39Dave Ramsey:And then when we just say, don't, do this.

50:42Jade Warshaw:One thing at a time.

50:43Dave Ramsey:And then do this. And then do this. Their stress level goes down and they go execute. Yeah, it's a plan. Yeah, it's a plan. Work the plan. Work the proven plan. And so the proven plan here, Roman, is the best investment Roman can make is in Roman. and that is in training your brain so that it is more eligible for more income.

51:02Jade Warshaw:Yes.

51:03Dave Ramsey:And that is not dropping$100 ,000 in an independent film that you decide to go make. That's not what I said. Okay. I got a degree in film. No, but it's not what I said. Yeah. I did say invest in a track record. I mean, you know, if you want to be a lawyer and you want to be a good lawyer, you can make a good income as a lawyer. That's a good thing. And Lord knows we need some good lawyers because there's plenty of dumb ones out there. So, phew. All right. Don't get me started.

51:34Jade Warshaw:I feel like you almost went on a tangent. That's okay.

51:36Dave Ramsey:I just self-edited right there on the air.

51:39Jade Warshaw:That was a good job, Dave.

51:40Dave Ramsey:Good move. Yeah. So, guys, anytime you're a college student or you have a college student and they say, I have the money for tuition, should they invest that instead of a mutual fund? Always tuition. assuming they're studying something that is marketable. Don't get a degree in left-handed puppetry or German polka history. You'll be a barista. Okay, that's not what I'm saying. What I am saying is get a degree that's usable in the marketplace, and the knowledge that you put in your tool belt will make you valuable in the marketplace. That is the best return. The increased income over the remainder of your life when you properly do education on something that's relative in the marketplace is the best return on investment there is.

52:54Jade Warshaw:you've worked too hard to get control of your money just to let strangers control your data think about it just about every time you sign up for a newsletter grab a coupon code or start a free trial your personal info like your name email address phone number and more gets scooped up and sold by data brokers here's the deal freedom isn't only being debt free it's also being free from companies cashing in on your data and that's where delete me comes in delete me's privacy experts find your personal info on these shady data broker sites, they get it deleted, and they keep it gone. It's like having a digital cleanup crew that scrubs your online life.

53:30Jade Warshaw:So you get way fewer of those spam calls, creepy texts, and scam emails that make you wonder how they even found you. Guys, the less noise in your digital life, the more time you have for what actually matters. Because when you protect your privacy, you protect your peace and your freedom. So go to joindeliteme.com slash Ramsey to get 20 % off their annual plans and take back control. That's joindeleteme.com slash Ramsey.

54:10Dave Ramsey:Matt's in Philadelphia. Hi, Matt. How are you?

54:13Jade Warshaw:Good. Thanks, Dave and Jared, for taking my call. Sure. I got a quick question. I'm wondering when I should hire for my business. I'm a small mechanic, work on like ATVs and motorcycles, dirt bikes, stuff like that. And I've been in business for about 15 years. Kind of, I feel like I've hit my max. I can't seem to get out of the groove of making the same each year. So I don't know if I should hire or if I should be doing something else. Are you turning away work? No, I'm taking as much work as I can. And in the past two years, I've actually opened my business up to repair for customers to bring their machines and I can repair for them.

54:58Jade Warshaw:I used to just buy machines to come up and resell them. And that was such an overhead. And if they didn't sell for months, it's just a lot sitting around. So I opened it up the past two years to work on other people's machines, charging$75 an hour. And, you know, it trickles in and out. You know, I always have three or four machines I'm working on for customers. So if you hired someone, what would they do? I would like them to do the basic stuff, like clean machines, you know, quick, just go over the machine, tell me what needs to be done on it, and then we can order parts. Or if they need to order parts, just the stuff that you don't really have.

55:38Dave Ramsey:Which would allow you to do more machines, but you don't have more work.

55:42Jade Warshaw:Right, right. Right, and so I just, I don't, out of the past two years.

55:47Dave Ramsey:Can you get more work?

55:49Jade Warshaw:That's what I guess I'm trying to figure out how to get.

55:52Dave Ramsey:Yeah, okay.

55:53Jade Warshaw:I opened a Facebook page and, you know, started advertising that way and just getting my name out there, but, you know, it's just still slow. Have you, and you're raising your prices at the correct rate over the past 15 years? Yes, like I said, I've only really started working on customers' machines over the past two years, and I started at 55, and now I'm up to$75 an hour. Okay, so yeah. So it's up there. You know, most big shops are like$110 an hour. So I'm under, I guess I'm under what big shops are charging,

56:23Dave Ramsey:but it's just me, so. Okay, the big shops are dealers? Right, right. Okay, is there any independent non-dealer shop competing with you?

56:35Jade Warshaw:There is one that's like 10 minutes from me, and his shop rate is 95, but he turns away a lot of work. interesting wonder if he would send it to you i that's that could be a question i could look into

56:49Dave Ramsey:yeah i just stopped by and have a cup of coffee with him go i understand you're turning away work

56:53Jade Warshaw:i'll take it right should i offer him something like that sure i'll buy you a steak dinner every so often and in the meantime i'd also be studying if you send me two million dollars worth of work

57:06Dave Ramsey:I'll send you on a cruise. But, yeah. But, I mean, you know, I don't know what this amounts to. But, yeah. But you don't need to hire someone and then both of you end up bored. Right.

57:21Jade Warshaw:Then you're losing money because you're paying him, but you're not making any more yourself.

57:25Dave Ramsey:You need to be making more money as a result of having hired the person. And that person is either because you're making money on the work that that person is doing or you're making money on the work that you're doing that you weren't able to do because they're doing work you used to do. Either one. So, you know, like our guy, our CFO, our chief financial officer does not create revenue here, but he keeps me from having to do all that so I can create revenue. And that's what you're talking about. So you need to create, but there needs to be revenue on the other side of the equation to justify hiring.

58:00Dave Ramsey:And yes, right, I would work on growing the business so that you do need the help so you can get some scale to it. Because today, when you're a solopreneur like this, Matt, you're incredible. But for 15 years, you've just owned your job. That's different than owning a business. You know you're on your job when if you don't show up, the income stops. That's you own your job. But if you own a business, if you don't show up and the income keeps coming in, people keep working. So like when I'm not here, Rachel and Jade do the show, right? And so the revenue keeps coming in and I'm not here. So I own a business then.

58:38Dave Ramsey:But if it's just me on the radio or on the podcast and then I don't show up and there's no podcast, there's no revenue, then I just own my job. And so that's different. But the first step of business, and I'll send you a copy of my latest bestseller. It's called Building a Business You Love, and it's the five stages of business. You're in the first stage of business. You've just been there a long time, 15 freaking years. So, but the first stage is the treadmill stage where we feel like we're stuck on a treadmill. We got no one to delegate to. And you just run, run, run, run, run, run, run, collapse on the couch every night.

59:10Dave Ramsey:What'd you do today? I don't know, but I did a lot of it. I'm really tired. And so that's treadmill stage. And, but, and it's fun stage. It's an exciting stage. You do have control of your destiny. It's a nice, it's a fun part of that. And, but then when you start hiring people to do work when you're not working, oh, now life starts to get good. But assuming you get the right people and you won't the first time, you'll have to fire them and get new people. But you'll finally find people that actually work, and they're out there. There's not many of them, but they actually work. And then you'll start to grow the business.

59:41Dave Ramsey:So hang on. I'll have Christian give you a copy of the book, Building a Business You Love. Jason's in Toledo. Hi, Jason. How are you? Hey, good. Great to talk to you, Jay and Dave.

59:52Jade Warshaw:Hey, so I'm trying to help guide my parents on their finances and helping clean up some things. Did they ask you? The basic question is, hello?

1:00:01Dave Ramsey:Did they ask you?

1:00:03Jade Warshaw:Yes, they did.

1:00:04Dave Ramsey:How old are they?

1:00:06Jade Warshaw:They are both 79.

1:00:07Dave Ramsey:Okay. How old are you? I am 54. Okay, good. Okay, then it's possible they'll listen. That's why I was asking. Okay, good. Appreciate it. Yeah, when you answer questions people didn't ask, then sometimes, you know, it's not helping. Okay, so you're helping them. They're 79 years old. Yep.

1:00:28Jade Warshaw:And the question is, should they pay off their home equity loan that they have or continue to pay that payment so that they have the cash that they have in retirement? They only have about 100 grand just so that they can have that on hand for medical emergencies. They'll probably never pay off the home equity loan before they pass. But then those, you know, that would come out of the proceeds of their house.

1:00:56Dave Ramsey:What's the home worth? Probably about$250 ,000. And how much is the HELOC? So there's about$50 ,000 left on it. Okay. And that's the only debt, or is there a mortgage as well? That is the only debt. Okay. And the only money is they have$100 ,000? That's correct. And what's their income?

1:01:20Jade Warshaw:They're fixed on Social Security about$44 ,000 per year, and we did a very detailed budget with them, came to about 40 per year in expenses, so that's close, but they think that they can maintain that long-term with Social Security, but that's all they got. Wow.

1:01:39Dave Ramsey:Tight, very tight. Yes. Yeah, I agree. I would not use the 100 and only have 50 at 80 years old to pay off a$50 ,000 loan, But I really am scared that loan is very destabilizing for the situation. So I do want to come up with some thoughts on how to get rid of it anyway. But no, I would not use 50 % of the little bit that they have to clear this little bitty loan.

1:02:14Jade Warshaw:Do they have any other assets that they could sell?

1:02:20Dave Ramsey:Not really of any significance, no. There's not a lake lot? No, unfortunately not. Okay. All right. Are you the sole heir?

1:02:35Jade Warshaw:No, I've got a couple of siblings. Okay.

1:02:42Dave Ramsey:What's the financial condition of you and your siblings?

1:02:47Jade Warshaw:We're decent. Decent. I don't know that any of us are in a position to, you know, find together and pay that off for them.

1:02:55Dave Ramsey:I would love for each of you to throw in 17K and it to go away. Yeah, I don't think that that's probably going to be happening, unfortunately. Okay.

1:03:05Jade Warshaw:How's their health, your parents? It's okay. They're not like in dire health, but it's not great either. Yeah. My thought behind what Dave said is you probably stand to inherit the house. so it's money that you would get back.

1:03:19Dave Ramsey:Yeah, that's the reason I did it. But if they can't come up with the cash, it doesn't matter. It's not like the money's going away. It's going away for a short period of time until they pass and you sell the house. Yeah, I would sit right where you are. But if you can figure out a way to pay it off, also I would. I would get rid of it because it's more destabilizing than your words make me think you think it is. Thank you.

1:03:58Dave Ramsey:If you run a business, you already know this. Bad information leads to bad decisions. And right now, AI is everywhere. But AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP and more than 43 ,000 businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on, it's built in. And it connects everything that runs your business. Accounting, inventory, customer data, all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting.

1:04:54Dave Ramsey:If your revenue is at least seven figures, go to netsuite.com slash Ramsey for a free product tour. That's netsuite.com slash Ramsey.

1:05:20Dave Ramsey:Well, my least favorite subject.

1:05:24Jade Warshaw:Let me guess. Taxes.

1:05:29Dave Ramsey:Taxes. Just saying the word kind of pisses me off. But, you know, I just don't like it at all. But we're going to talk about it because you guys ask a lot of questions about it, especially this time of year. So, Jade, when are taxes due? someone asks, and what if I'm late?

1:05:48Jade Warshaw:Well, they're due on April 15th. That's the date. But you shouldn't be late because if you think you're going to be late, just file an extension. That's what I would say.

1:05:56Dave Ramsey:But even if you file an extension, the taxes are still here.

1:05:58Jade Warshaw:You still got to pay them.

1:05:59Dave Ramsey:If you don't pay them on April 15th, the penalties and interest begin. Oh, yeah. So the extension is not on payment. The extension you file is on the paperwork, on the actual filing of your taxes. So you can file an extension to file your taxes, but you should pay them anyway. Pay what you think they're going to be. Yes. They're going to start penalizing you that day whether you file an extension or not. Tax deduction versus a tax credit.

1:06:24Jade Warshaw:I like this. So a deduction, that's going to lower your taxable income, whereas a credit would lower the overall amount that's due. I like to think of a credit like a coupon. $30 off.

1:06:35Dave Ramsey:Yeah.

1:06:35Jade Warshaw:50 % off.

1:06:36Dave Ramsey:Yeah. And not many things are tax credits. Most things are tax deductions. That's right. So a tax deduction is$10 ,000 deduction means you reduce the income that is taxable by$10 ,000. And so if you're in a 25 % tax bracket, that then would save you 2 ,500 on your taxes because you don't pay taxes on$10 ,000 worth of income at 25%. So that's a tax deduction. And that's 99 % of the time what we're talking about around here. Occasionally, there's something that gives you an actual tax credit, which is dollar for dollar. $10 ,000 tax credit reduces your tax bill by$10 ,000. That is 75 % better than a deduction.

1:07:22Dave Ramsey:But yeah, not many of them out there, but there's a few things that you get tax credits for. Okay, this one blows people away. It does. The number of people that don't understand this is like everybody. How do the tax brackets work? Yeah.

1:07:34Jade Warshaw:So the tax brackets, they're a progressive system. So there is a range of income that is taxed at a certain amount. Your entire income is not taxed at the same amount. A higher bracket never means that you're going to pay that tax percentage on your entire income. So if you've never done it, go through and you can Google the tax brackets for the tax year and you can see how it's broken down.

1:08:01Dave Ramsey:Everyone pays the same amount of taxes on the first$25 ,000. Everyone pays the same amount of taxes on the first$50 ,000. Even if you make$2 million, the first$50 ,000 is taxed exactly the same. And so as you go through the bracket, when you jump a bracket, it does not jump your entire income by that percentage amount. Only the amount above that last bracket. Okay? And so it might be that you have$5 ,000 above a bracket. That's right. And so it's hardly anything.

1:08:37Jade Warshaw:That's so good because a lot of people are like, I don't want to make more. I don't want to be in that bracket. That's crazy talk.

1:08:42Dave Ramsey:Well, there's not a 100 % bracket yet. So of course you want to make more because you get to keep it. There's not even, I mean, I think the max is what, 30 something percent. So you still get to keep 70 cents on every dollar no matter what you make. So go make more. Shut up. Yeah. Now, so how much to set aside if you're self-employed?

1:09:02Jade Warshaw:All right. You always want to take 25 to 30 percent, set that aside for income taxes, and just know that you'll likely need to pay quarterly taxes. I like to do a quarterly estimate, set that aside. That way, Uncle Sam has his cut.

1:09:14Dave Ramsey:Yeah, the quarterly estimate is a one-page document. How much were the revenues for my business, how much minus the expenses for my business equals the profit for my business times tax bracket. And you have to pay that once a quarter if you're self-employed. If you don't, you're going to get penalties and interest on that after the first year. First year, they give you a pass, which also leads people into doing stupid stuff like not paying their taxes. But you need to do your quarterly estimates, and it's really not rocket surgery to figure this out. It's not that hard. so you just sit down and go okay the business made a hundred thousand dollars and we spent ninety thousand dollars so our taxable income is ten thousand dollars on the profit and we're in a twenty five percent bracket so i'm going to set aside twenty five hundred dollars and i'm going to send that in to the uh you know in in with my quarterly estimates and then that's has the same effect at the end of the year as those of you that have a w-2 job where you're withholding automatically out of your check.

1:10:20Dave Ramsey:The only difference is you actually have to send the money in, which pisses you off more. And so, because you actually know that you're paying taxes. When you have it withheld from your check, it's out of sight, out of mind. You don't think about it. So about a fourth, about a fourth of your profits. So if you're running a business, you're on a separate checking account, whatever's left in that account, if you pay only business expenses out of that account, which is what you should do, and you only put business income in of that account, which is what you should do. What's left in there is profit.

1:10:49Dave Ramsey:And so if you pull$5 ,000 out, you should set aside$1 ,250 and only pull$3 ,750 into your checking account and set aside$1 ,250 so that when you're ready to do your quarterly estimates, you're ready to do your quarterly estimates. Standard deduction versus itemizing.

1:11:09Jade Warshaw:All right. So that's usually people's question, what should I do? And the answer is whatever is going to lower your taxable income more. For most of us, the standard deduction is where we're going to sit. If you're just normal W-2, not much going on but the rent. I mean, if you're a married filing joint, that's$31 ,500 that they're deducting. And so that's where most people sit. Now, if you own your own business and there's a lot going on and maybe you're working with a tax professional, they might say that itemizing is the way, but most people are going to fall in that standard deduction because it's easier, often higher.

1:11:40Jade Warshaw:Only itemize if your expenses exceed that standard deduction amount.

1:11:44Dave Ramsey:Yeah, exactly. Because you need, you know, that$31 ,500 married filing jointly. If you don't have that much in write-offs for whatever reason, then you're better off. And here's how silly it is now. With this huge amount of standard deduction now, this$31 ,500 is way high. It's now 91 % of Americans do standard deduction. Now, if you do standard deduction, you are not writing off charitable giving. You are not writing off interest on your home mortgage. That's right. Because you're taking a standard deduction and you're not itemizing. You only write those things off if you're itemizing. That's right.

1:12:20Dave Ramsey:And so you say, I'm keeping my home mortgage because I get a tax rate.

1:12:24Jade Warshaw:There you go, Dave. You lied.

1:12:27Dave Ramsey:You lied to yourself. You didn't get a tax break because 91 % of you did the standard deduction. Life changes that affect taxes.

1:12:36Jade Warshaw:Yeah. So like I was saying before, most of us can maybe file our own taxes if we're doing normal W-2. But if you've had a major change, maybe you got married, you had kids, you got a new job, you bought a home, maybe you entered retirement, all of those things definitely can affect your taxes. And after major life changes, just go ahead and review, adjust your withholding, decide if it's now good to work with a tax professional versus filing them yourself.

1:13:01Dave Ramsey:Yeah. And that ends up, you know, why are your refund changes is those things. It's stuff like having a kid, buying a house, starting a business, stuff like that. Those are pretty big old divorces, deaths, all those things like that. Anything that's going to cause your refund to change. Now, if you're constantly getting a refund, you need to remember Santa Claus does not live in Washington, D.C. That is not free money.

1:13:26Jade Warshaw:That's not the Disney fund?

1:13:27Dave Ramsey:That's not the Disney fund. Walt Disney doesn't live there either. No one charitable lives in Washington, D.C. everyone in Washington D.C. wants your money they're parasites they're a tick on the butt of America they're parasites they're sucking the blood out of you and so do not think you are getting a blessing from Washington D.C. if you got a refund honey it's because you had too much of your money taken out of your check and then they send you your money back at the end of the year with no interest on your money that's what a blessing D.C. is that's what a blessing the IRS is So you get$3 ,000 back.

1:14:04Dave Ramsey:All that is is$3 ,000 of your freaking money because you had$250 a month, too much taken out of your check. Change your W-4. Stop having refunds. No more refunds. And it's so easy to do. Correctly calculate your withholding. Oh, I used the IRS tables. Wait a minute. You just assumed the IRS was competent? Well, that was a dumb thing to do. It's like saying the DMV is competent. No. No, you run your taxes out. You figure out what your withholding should be and get the proper amount withheld.

1:14:38Jade Warshaw:A way to do that is look at your last tax refund, divide it by 12, go on your W-4. There's literally a line on there that you can decide what your withholding is. Change it.

1:15:19Dave Ramsey:Well, we wish we could get to every call around here, but we can't. If you've got a money question and you want it answered the way we would answer it, Go to our website at RamseySolutions.com and use the Ask Ramsey tool. Ask Ramsey is our free AI tool that's built and trained only on Ramsey. So here's the way AI works. AI is pretty simple. It's going to regurgitate, spit out only the data that you put into it. Whatever data set you put into it is how it's going to make the answer. So if you're so stupid that you're Google and you put Reddit in the data set, then you're going to get stupid butt answers like Google's giving you out of Reddit.

1:16:03Dave Ramsey:But if you only put Ramsey, like three years of this show, all the transcripts into the AI tool, all of Financial Peace University, all the books that we've written, all the articles that are on our website that we, the way we believe, the way we teach you into the tool, then guess what? That's the only data set it's got to work from, so it will answer the question exactly better than we would answer it here on the air because it's the culmination of all that data, and it's free, and it's blowing up, y 'all. People are hitting it like bing, bing, bing, bing, bing, bing, bing. Have an argument with your brother-in-law.

1:16:38Dave Ramsey:Bing, bing, bing, bing. Ask Ramsey. I mean, this is what Dave and Jade would tell you right here. Ask your question today, RamseySolutions.com. Click the Ask Ramsey tool. You're going to love it. It's completely free. Paul's in Tampa. Hey, Paul, what's up?

1:16:54Jade Warshaw:Hi, sir. Thank you, Jade. And Dave, you're a blessing to our nation. Really appreciate it so much.

1:16:59Dave Ramsey:Thank you.

1:17:00Jade Warshaw:I have a question. I see a couple principles that you've talked about are in opposition in my life. I'm nearing retirement. I have the money to buy a boat in cash. We live near the water. it is going to be more than half of our annual income in boats, motors, wheels, etc., which you say not to do. On the other hand, we have the money in cash, and if it were to burn in the middle of our living room, it wouldn't be the end of our world. What's your net worth? About$4 million. Wait a minute.

1:17:39Dave Ramsey:So are you counting the income that that$4 million would be creating? Or just your little, you're just counting your 401k and real estate.

1:17:49Jade Warshaw:And the boat money is separate.

1:17:51Dave Ramsey:No, that's not what I meant.

1:17:52Jade Warshaw:He's saying to make the rule work.

1:17:55Dave Ramsey:Number one, you're right. When you're in a no income, low income portion of retirement and a huge net worth, that rule does not apply. The half of your income in boats and motors and motors and wheels, that rule does not apply. So if you're worth$10 million and all of your investment income is rolled back into your investments and you don't count that income in the equation, and so you're living on a$70 ,000 pension or something, but you're worth$10 million, then we don't apply that formula. Okay? But if you take all of your net worth and use the income off of your net worth, the formula would probably work.

1:18:35Dave Ramsey:But we don't have to do that. How much is the boat?

1:18:39Jade Warshaw:About$400 ,000.

1:18:40Dave Ramsey:Okay. And you have$4 million. So it's 10 % of your net worth.

1:18:44Jade Warshaw:Correct.

1:18:45Dave Ramsey:And what is your income? How old are you? It'll be 60. 50. And you're retired.

1:18:53Jade Warshaw:60. 60. Okay.

1:18:57Dave Ramsey:And what is your income?

1:18:59Jade Warshaw:Right now it's about 250.

1:19:04Dave Ramsey:Okay. Yes, I would buy that boat. Okay. But that's based on the ratio into your net worth and based on the fact that you're – and again, if your net worth was$40 million and you made$250, you know, you still could not buy the boat if we only used the 50 % of your income. But most people were not dealing with a net worth that's substantial when we apply that formula. So, yeah, I would buy this boat for sure. It's a sweet boat. What is it?

1:19:38Jade Warshaw:it is a trawler a 40 foot trawler ah triple engines or quadruple double engines double what what horsepower yeah so slow with the trawler it doesn't go very fast oh okay all right and uh what brand it's uh great harbor oh yeah okay yeah and you're you're what on

1:20:00Dave Ramsey:the intercoastal waterway?

1:20:03Jade Warshaw:We have access, yes.

1:20:05Dave Ramsey:Okay. All right. Wow. Yeah. Good for you. Yeah, I mean, you're in a position to do that. Because. After all this hard work. Yeah, yeah. The bottom line is the reason that the decision makes sense is the other rule that you used is, if I burn that much money in the middle of the floor, would my life change? And the answer is no. and that's because your net worth so high, not because your income ratios are correct on this. And so that's, if we were doing it off your income, you know, we'd be going, okay, $100 ,000 if you burn that. But if I'm in your shoes, I'm buying that. Me too. Yeah, that's what I would do.

1:20:44Dave Ramsey:If you want a boat. I mean, that's a lot of money in a boat, But it's a small percentage of your net worth is tied up. And trawlers go down in value, too. Just like cars. Just like, I mean, 100 % of boats go down in value.

1:21:01Jade Warshaw:What's maintenance on a boat like that a year? You know?

1:21:04Dave Ramsey:No, I don't. But it's the docking fees and the insurance and the gas or the fuel, probably maybe diesel. But I don't know. It's something to, I'm sure he's considered that. Probably pretty substantial, but it's not hundreds of thousands on that because you don't need a crew and all that on that thing. So he's the crew, 38 feet long. I mean, it's not. So, yeah, but that's, yeah, when you get into a thing where like Zuckerberg shot pulled up the other day. Yeah, Rachel was putting that up on her Instagram, right? You know, that sucker's got like 59 people or something on it. Uh-huh. Yeah, just the daily rate to keep that thing running is a small city.

1:21:46Dave Ramsey:True. Yes. But that's a different world. But again, as a percentage of his net worth, it's nothing. Nothing. He's one of the wealthiest guys in the world. So it's a 300-foot yacht that's probably worth, I don't know, a billion or half a billion, something like that maybe. That's nothing for him, though. Yeah. But again, he's got hundreds of billions.

1:22:06Jade Warshaw:Yeah.

1:22:07Dave Ramsey:And this is a half of one of them. You know, I mean, it's hard to get your head around when you're like regular people. But it helps you if you just go, it's ratios. Percentage, yeah. Look at the ratios. What ratio is this? What percentage of this? And it keeps you from saying stupid stuff. And here's what stupid people say that are envious. And I actually have said it, but I hadn't said it in 35 years.

1:22:32Jade Warshaw:Yeah.

1:22:32Dave Ramsey:About 35 years ago, I quit being that stupid. But no one should ever dot, dot, dot, dot, dot. That's redneck envy. Okay. That's trashy. No one should ever have a car that nice. There's starving children somewhere like your car caused children to starve. Would you shut up? Unbelievable. Of course you should get that car.

1:22:58Jade Warshaw:Yeah.

1:22:58Dave Ramsey:You live like no one else. Later you can live and give to the starving children like no one else. But these over-saved people that think they're Jesus, they're going to tell you that the only car you can drive and still be holy is a 93 Camry. And that's the car of the evangelical. Anything beyond that, any car beyond that is not holy and you're overspending and you're not a good steward. Oh, bullcrap. It's actually not a Camry. It's an Accord because Jesus said it. They're all in one Accord. Dad joke. Okay. Anyway. All right. I'm going to let that slide, Dave. Just keep that one going. Just keep on moving past that.

1:23:40Dave Ramsey:All right. But yeah, but seriously, I mean, the judgment of other people's decisions. Yeah. Would you please manage your life? It's like a full-time job to manage you. It's like, you know, the person in your mirror is a problem, child. Work on that one. Instead of working on fixing everybody else's spirituality. reality. Jeez, some of you people. So yeah, that's the problem with stuff like this.

1:24:06Jade Warshaw:Yeah, it's a very small percentage of his life.

1:24:07Dave Ramsey:So when I look out there and I see Zuckerberg's yacht, I go, not a big Facebook guy, but man, he killed it. Good for him.

1:24:16Jade Warshaw:Well, I mean, how mad can you really get? Because how mad can you really get? You're probably on Meta somewhere. You're probably on Amazon.

1:24:23Dave Ramsey:I probably paid for a few days of that thing to operate.

1:24:26Jade Warshaw:Yes, that's what I'm saying.

1:24:27Dave Ramsey:With the Facebook ads that Ramsey buys. So it's probably my fault. You know? But money well spent, Mark. You know, it's like you're living life large. And so, but I mean, there's nothing wrong with it. Yeah. Honestly, I've never had, you know,$300 billion. So my mind can't get, my emotions can't get my head around that. But it is throwaway money for him. And that's what we keep talking about here. You know, work hard so when you're old, you don't have to work at McDonald's. You're not a Walmart greeter.

1:25:29Dave Ramsey:welcome back to the ramsey show in the fair winds credit union studio jade washall ramsey personality is my co-host today kelsea is in seattle washington hi kelsey how are you

1:25:42Jade Warshaw:i'm good how are you doing better than i deserve what's up so I have a question for you of course um and I guess I'll just flat out say it I feel like I either was or am being financially abused and I can't really tell I'm very confused We have a very complex financial situation. So where would you like me to begin?

1:26:16Dave Ramsey:How old are you? I'm 37. And how long have you been married?

1:26:22Jade Warshaw:Seven years.

1:26:23Dave Ramsey:Okay. And what's your household income?

1:26:29Jade Warshaw:I'm not really sure.

1:26:31Dave Ramsey:What is complex about your financial situation?

1:26:36Jade Warshaw:so we have a lot of debt and but i guess we do have a lot of equity and we have numerous businesses and we just have money coming in and out and i'm just living on one credit card that is constantly maxed out and i never have access to cash um why don't you have access to cash um i'm not sure i have asked to be put on the account um my name isn't on anything and i have been asking and he seemed willing but we were waiting um because i never got my name changed because we got married during covid uh so i did get my name changed finally my last name and then And so he was telling me that he was waiting for that.

1:27:29Jade Warshaw:But now it's changed. You know, my name's still not on anything, none of the properties, none of the accounts. So he just he tells me that the financial situation is so complex that I just wouldn't understand it, which frustrates me because I'm very organized. And I have always paid bills on time. Do you have children together? Yes. We have a blended family of five. We have two 18-year-olds, a 16-year-old, and then together we have a four-year-old and a five-year-old.

1:28:10Dave Ramsey:Do you work outside the home?

1:28:13Jade Warshaw:No. Because you used to? Yes, before we got married. What did you make?

1:28:22Jade Warshaw:It depends. And I used to make, I would just say on average, I used to make like$5 ,000 or$6 ,000. But then there was a time where I switched jobs, so I was making significantly less.

1:28:37Dave Ramsey:What did you do for a living?

1:28:41Jade Warshaw:So I was a nursing assistant. And then I did some other...

1:28:46Dave Ramsey:How does it feel when someone says you're too dumb to understand this?

1:28:50Jade Warshaw:it's really frustrating because I know because I have been homeschooling our kids as well since we got married so I mean I'm really organized you have to stay organized to have this many kids in homeschool frustrated frustrated is a word that describes when you're trying to do a task and you can't get traction on the task yeah I don't know that that's the right word to describe what Dave asked. Yeah.

1:29:15Dave Ramsey:When someone says you're too dumb to understand, that's demeaning.

1:29:23Yeah.

1:29:23Dave Ramsey:So I can't think in 43 years I've ever told my wife she was dumb. I think that would make me dumb. I think that would make me pretty dumb.

1:29:32Jade Warshaw:I think he just said it was very complex.

1:29:35Dave Ramsey:No, it's too complex for you to understand, darling, but I got it because I'm the smart one. He's an arrogant butthole.

1:29:44Jade Warshaw:So we have about$4.3 million in equity.

1:29:51Dave Ramsey:How do you know?

1:29:53Jade Warshaw:So last year, I really started pressing. I wanted to have transparency and clarity on our financial situation. And I slowly have been asking questions and putting stuff together. So let's go back there. When you say slowly, is the purpose of the slowly for your own understanding? I'm just building this mentally piece by piece. So I'm understanding it. Or is the purpose of the slowly, I can only ask him so many things at once before he shuts me down. So I'm just going to do a little bit here, then wait five months and do a little bit here. Tell me the purpose of that. Or is it a little of both?

1:30:33Jade Warshaw:I think it's a little bit of both. if I did sit down and ask a list of questions, I'm sure he would tell me.

1:30:40Dave Ramsey:Okay, did you sign a prenup?

1:30:43Jade Warshaw:No, I didn't.

1:30:44Dave Ramsey:Okay. You've got to decide how much of this you're willing to put up with. You've already put up with way more of it than you should have, I think. So if it was at my house, this would be over today. We're going to sit down and go, Bubba, you've got 24 hours to put everything out on the table, and I'm going to understand every bit of it, and it's your job to make me understand it, and I'm going to have access to all the accounts in the next 24 hours, or I'm going to go see a divorce lawyer, and I'm going to have a$2 million net worth because I'm taking half of this crap.

1:31:15Jade Warshaw:But we have$2.9 million in debts and loans.

1:31:20Dave Ramsey:I thought you said you had equities of$4 million.

1:31:24Jade Warshaw:Even still.

1:31:25Dave Ramsey:Do you know what equity is?

1:31:29Jade Warshaw:I guess I didn't. I just figured that I would subtract the loan amounts and the debt amounts.

1:31:35Dave Ramsey:The amount of the value minus the loans is the equity.

1:31:39Jade Warshaw:But honestly, that's a little bit beside the point. The point, the biggest point is...

1:31:45Dave Ramsey:I'm taking half of it.

1:31:46Jade Warshaw:Yeah, because you're not being treated with respect.

1:31:48Dave Ramsey:Because I'm getting a divorce because I'm tired of you screwing me over and treating me this way.

1:31:53Jade Warshaw:Well, also, I think the biggest dynamic is I had come to realize that he's not paying for my needs, but so he has a daughter from a previous marriage that he adopted, or actually it wasn't a marriage, it was an engagement.

1:32:12Dave Ramsey:It's not got anything to do with this.

1:32:14Jade Warshaw:No, it is.

1:32:16Dave Ramsey:No, it's not. Because you need to know everything that's going on in the next 48 hours.

1:32:22Jade Warshaw:that he's been giving her large amounts of money on the side that I was discovering. That's the whole point.

1:32:30Dave Ramsey:He's been doing a lot of crap. And you're going to find out more. That we're not going to put up with anymore, starting today.

1:32:37Jade Warshaw:But I did confront him about it.

1:32:39Dave Ramsey:Oh, you're just useless. No wonder you have this problem. You can't stay on task. I'm trying to give you a simple thing. The simple thing is the overall way you're being treated needs to stop immediately. And then you go down these different rabbit holes 14 times. I can't even have a conversation with you. No wonder.

1:32:55Jade Warshaw:The first question you asked is, I don't know if I'm being financially abused. The answer is yes. Help me figure that out.

1:33:01Dave Ramsey:Yes. The answer is yes. And yes, you should do something about it. And not one off every little stupid thing you're talking about here. It's the overall thing. A hundred percent of everything that's going on, I'm going to know it and I'm going to have a vote in it starting today. Or I'm going to see a divorce attorney.

1:33:19Jade Warshaw:Yeah. And here is Kelsey. We're on your side. We're trying to be on your side because we agree that the behavior you're talking about.

1:33:26Dave Ramsey:But you're like a dog chasing its tail, girl.

1:33:27Jade Warshaw:Yeah, you're worth more than that.

1:33:28Dave Ramsey:You're circular with this. You can't even have a discussion about it. I think you've been living in this toxic mess so long that you're clouded on. Everything's just circular. No, it needs to be very clean and crisp. And either we get this healed or we end this. You decide. That's what I would do if I were in your shoes.

1:34:05Dave Ramsey:you work your butt off for your money but your money's never going to return the favor if all you do is hope for the best if you're ready to learn how to make your money work for you check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options so you never have to invest in anything you don't understand. Head to RamseySolutions.com slash SmartVestor to get connected. Ramsey Solutions is a paid non-client promoter of participating pros.

1:34:41Dave Ramsey:Learn more at

1:34:42Jade Warshaw:RamseySolutions.com slash SmartVestor.

1:34:53We use a couple of terms around here that sometimes are confusing, so let me clarify

1:35:01Dave Ramsey:them. We use the term financial infidelity, which is when someone lies to their spouse and hides financial things like debt. And so it's a breach of trust like sexual infidelity is. But the fact that we call it financial infidelity does not really put it in the same category as sexual infidelity. Sexual infidelity is much more traumatic. Both are a breach of trust. One is a less traumatic breach of trust. But we use the term to describe the fact that it's a breach of trust. Another term that we use around here is financial abuse. Probably not accurate a lot. Okay? Abuse is like domestic violence when someone's beating the crap out of their spouse.

1:35:59Dave Ramsey:That's real abuse. Okay? So financial abuse, where you don't have access to the numbers, is not as traumatic as actual abuse. And so when we use the term financial abuse, it's not real abuse. It's a descriptive term to say, you know, you're in a situation where you're not being treated right. That's different than abuse. But in our culture today overall we have taken some of these words and we've used them so flippantly that we forgot what they actually mean And so anytime I disagree with someone I call them a narcissist Well, you need to actually understand what a narcissist is before you say that Because just because someone hurts your feelings doesn't mean they're a narcissist And just because you we use the word abuse doesn't mean to that it's descriptive of what is going on at the trauma level Okay, yes, it's a toxic and horrible marriage, a bad relationship.

1:37:05Dave Ramsey:That's way different than real abuse. So we're guilty of participating in overstating, over-dramatizing some of these things like financial infidelity or financial abuse as if it was as bad as infidelity or real abuse. It's not. Okay, so when you call us up and say, am I being financially abused? It's way different than if you call us up and say, my husband's hitting me. Totally different reaction here because different parts of the way you deal with trauma in those situations is completely different from a psychological viewpoint, from Dr. Deloney's insight and input on this. Way different. So if you call me up and say I'm in an abusive, physically abusive relationship, I am not going to shame you.

1:37:58Dave Ramsey:I'm going to walk you out of that and get you some help immediately. Because shame is one of the tools that's used by physical abusers. But if you call me up and say, am I being financially abused? and then you give me 16 different stories, I'm going to call you out on your inconsistency. And that's not me abusing someone that's being abused. Because they're not actually being abused. They just don't have insight into the money and don't know what's going on with the money. So it's not actual freaking abuse. But it is a toxic, horrible marriage. And yes, she does need to stand up and put an end to the bullcrap.

1:38:39Dave Ramsey:But that's just basic relational advice, not someone that is actually being abused. Now, if she's actually being abused, she's going to get a different reaction from us on this show. And so if you don't like how I handled the last caller, kiss my butt and go listen to a different show. Okay? Because that's the way we do it here. We love people, we love people well, and we tell them the truth. So that's how that goes down. All right, Duke is in San Francisco. Hi, Duke. What's up?

1:39:10Jade Warshaw:Hi, Dave. Hi, Jade. Thanks for taking my call.

1:39:12Dave Ramsey:Sure. How can we help?

1:39:14Jade Warshaw:Yeah, so about three weeks ago, I got caught up in all the tech layoffs, and I lost my job. And I have enough cash to pay off my mortgage, which I was planning to do in November anyway, but now I'm wondering if I should just hold on to that cash. Yes, for now.

1:39:29Dave Ramsey:How much were you making, hon?

1:39:34Jade Warshaw:See, last year was$600 ,000.

1:39:37Dave Ramsey:Whoa. Wow. What do you do in the tech world?

1:39:41Jade Warshaw:I'm a web engineer, mostly focused on digital accessibility, which is making sure software works for people with disabilities.

1:39:47Dave Ramsey:Yeah, big deal. That's a big field. Okay.

1:39:51Jade Warshaw:So what do you have?

1:39:52Dave Ramsey:What's the outlook for the new position? Well, it's kind of a rough job market for what I do right now,

1:40:00Jade Warshaw:so I don't know how long it would take, but I'm also contemplating on stepping out on faith and starting my own business.

1:40:05Dave Ramsey:Doing what?

1:40:08Jade Warshaw:Same work, consulting

1:40:10Dave Ramsey:I wouldn't step out on faith, I'd step out on facts Okay But I mean you know how to do what you're doing Do you think there's a market for it That you could build up enough consulting gigs To make anywhere near what you used to make?

1:40:25Jade Warshaw:It'd probably take me a while to get up to that amount But yeah, there's more than enough work I think

1:40:30Dave Ramsey:Okay, and do you plan to live in San Francisco?

1:40:35Jade Warshaw:I don't think I'll be able to stay here too much longer.

1:40:38Dave Ramsey:Okay. Then why would you pay off the house? Let's put the house up for sale.

1:40:42Jade Warshaw:Well, that's certainly an option that I hadn't thought about. If you're leaving, you don't need to keep it.

1:40:49Dave Ramsey:Yeah. And then that changes the whole formula, right? Because you may be buying a property that's twice the size and half the price in a different market, more affordable market. Yeah. you're in one of the most expensive real estate markets in the world you know that right yeah yeah and so if you're gonna i don't know where it's best for you to operate this consulting

1:41:11Jade Warshaw:firm from i was gonna say what's your timeline for making that choice on whether or not you're gonna step out and do your own thing versus continue to search the job market i give myself probably about two months okay before i need to start looking again yeah you need to start looking now, what are you going to do?

1:41:29Dave Ramsey:Sit on your butt until then? What do you mean?

1:41:32Jade Warshaw:No, I needed to take a break. Okay, so how much money are you sitting on?

1:41:37Dave Ramsey:Well, you got a break. They just gave you one. But while you're on break, look for a job, honey. I mean, for real. Anyway, that's what I would do. Set yourself a timeline. And what I would do is nothing with the money, to answer your question. And say, okay, for the next two months, I'm going to look for a job. If I don't land something, I'm going to launch the consulting firm, and we're going to move from San Francisco to fill in the blank of the name of the city. And that means the house goes up for sale that day. But in the meantime, yeah, you might land something there and stay in Silicon Valley, right?

1:42:06Jade Warshaw:Yeah, you could do that. Or my whole thing, if I were in your shoes, I would set a timeline. If you're going to take a break, I guess that's your business. But I would set a timeline to say, if I haven't found, if I want to look for a job, but haven't found one by XYZ date, this is what I'm going to pull the trigger on the next thing that I want to start on my own. And in the meantime, you could start doing research on that just so that you're using that time very, very wisely. That's what I would do. It sounds like you have plenty of money laying around to kind of take a little bit of time on this, but I wouldn't get reckless.

1:42:40Dave Ramsey:Yeah, exactly. Yeah. Good, good, good question, Duke. I'm sorry you lost the great job. I'm really glad that you had a great job like that and so you know what it feels like to make 600 a year that's pretty incredible and i'm really glad that you'll know what that feels like again someday either as owning your own thing or staying there and um just working for a different shop now and so forth but yeah wow wow and um it's pretty incredible that uh well that's that's awesome so yeah you got the good news is you got options because you've done a good job of putting things in place to do that.

1:43:16Jade Warshaw:He sounded like a single guy, too. He didn't sound like there was anybody else's.

1:43:20Dave Ramsey:The words he was using didn't sound like, yeah. But yeah, he's been working all the time.

1:43:25Jade Warshaw:Exactly. Sounds like he's been working day and night. 24-7.

1:43:28Dave Ramsey:Yeah. And then all of a sudden it came to a screeching halt. There we go. Wow. Yeah. So that's the thing. Yeah. So when you're in the middle of a storm, yeah, wait till the storm passes to do permanent planning.

1:43:41Jade Warshaw:I think so, yeah.

1:43:41Dave Ramsey:In the middle of the storm, you do temporary things, which is like he said, hold on to the cash. We're not going to pay off the house because we may not be staying in the house. You don't know what's going to happen. That's right. Not be staying in the house. Might be staying in it. Once the decision is made that we're staying here, then I would pay it off.

1:43:56Jade Warshaw:Yes, I would too. Quickly.

1:43:59Dave Ramsey:Yeah. If you say, all right, I'm staying here and I'm going to open the business. Okay. Or I'm staying here because I just landed on another job making$400 in Silicon Valley and we're staying. Okay. Either one of those is fine.

1:44:10Jade Warshaw:Yeah. Very cool thing to pay off the house in San Francisco.

1:44:48Dave Ramsey:You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com slash insurance.

1:45:30Dave Ramsey:The Ramsey Show question of the day is brought to you by Why Refi? defaulted private student loans don't define you, but dealing with them does. Y-Refi helps you refinance into a low fixed rate payment that you can afford. So you take control of your money and you get back to work on the baby steps. Go to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

1:45:56Jade Warshaw:Okay. Today's question comes from Alex in Florida. They say my reoccurring bills are paid for on my credit card, which I also use to buy things throughout the month. I pay the balance in full before the date is due. I'm retired in my 50s with a net worth of 1 million and I have no debt. I drive a 15-year-old Nissan. My question is, if my goal is simplicity and convenience, what's wrong with using my credit card for monthly spending and recurring bills? The balance usually runs between$1 ,500 and$2 ,000. Nothing crazy because I live very frugally. Okay, so if I look at this question, my thought is you're probably doing it for the points.

1:46:36Jade Warshaw:You didn't say why other than simplicity, but there's gotta be something linked to that. And so I would say if there's a points argument here, I mean, if you just did the math, it's really minuscule. I mean, we're talking about$15 ,000 to$2 ,000 per month if you look at points. Maybe that's 300 bucks a year, you know,$330 per month. So there's really no financial gain there is that would be my first thought towards that. But I think what's really going on is, and I'm saying this out of love, but they won, like they got you because that whole industry, what they want to do is move your mindset from being independent to dependent.

1:47:22Jade Warshaw:And they got you because you've decided that in your mind debt equals getting ahead?

1:47:28Dave Ramsey:My goal is simplicity and convenience when in reality I use a debit card for my recurring and I use debit card for purchases and that is more convenient and more simple.

1:47:40Jade Warshaw:That's what, yeah.

1:47:41Dave Ramsey:Because I don't have to pay a bill at the end of the month.

1:47:43Jade Warshaw:Yeah. If you think debt equals simplicity, they got you.

1:47:47Dave Ramsey:Even if you're paying it off at the end of the month and not in debt, you know, if you're paying off in full, it's still not the simplest way. The simplest way is a debit card.

1:47:56Jade Warshaw:Yeah. The studies show that if you use a credit card, you will over time spend 10%, 30%, in some cases, depending on what it is that you're purchasing, up to 100 % more using a credit card. Things like fast food, things like entertainment, you are up in that high percentage of how much more you'll spend.

1:48:19Dave Ramsey:Yeah. And I don't think this guy is going to be in that super high percentage because he's a frugal guy. So he's like 10 to 15%. But if you're just doing your normal purchases, you're going to spend a little more. But the big thing is you're paying it off at the end of the month anyway. So what's the difference in a debit card? Oh, one extra step. It's not as simple.

1:48:36Jade Warshaw:That's why I said it's a mindset thing in his mind.

1:48:39Dave Ramsey:They got you. They got you. That's right. They talked you into believing this was smart somehow. And then you defend it with all of your numbers, but you're, you're, you know.

1:48:46Jade Warshaw:Yeah. I don't think I'm going to talk you out. I don't think I'll be able to talk you out of it because I think they got you.

1:48:51Dave Ramsey:Yeah. I think, I think they got you. But yeah, your argument is invalid. It is not simpler or more convenient than using a debit card.

1:49:01Jade Warshaw:Nothing is easier than I get my paycheck and I take my paycheck to pay for my things.

1:49:06Dave Ramsey:Yeah. Well, or I use my debit card. I mean, like a lot of my utilities on stuff, on odds and ends, like personal stuff, like utilities automatically hit the debit card. Or some of the odds and ends. And I don't have to do anything. It hits his credit card and he has to pay the bill off at the end of the month. I don't have that extra step. So it's not simpler or more convenient.

1:49:27Jade Warshaw:And I want to say this because I think that this is a very subtle thing that's worth saying. This guy, do I think this guy is going to end up in debt? No. Is he going to end up on the side of the road? No. I'm not being a fatalist in any way. He's going to go about his life. He's going to be fine. He's going to retire. No problem. My problem is the mentality of it. The borrower's slave to the lender. So at the end of the day, I want to be able to have as much freedom and autonomy in my life to know, hey, I actually went out in the world. I made a living. I didn't have to depend on a system of debt to keep me afloat or make me feel like I was something.

1:50:02Jade Warshaw:That's all it is. But that's a big thing.

1:50:05Dave Ramsey:Agreed. Margie's in Dallas. Hey, Margie, what's up?

1:50:08Jade Warshaw:Hi, thank you for taking my call. Sure. I've had a lifetime of bad decisions and have sucked myself into a hole in debt. And I'm debating whether to file bankruptcy to try to settle some things out of pocket myself when my house sells. I'm going through a divorce and I know I'm getting 50 percent equity. And I just don't want to continue making bad choices. So I just kind of need some guidance as to what route I should take and where I should prioritize.

1:50:37Dave Ramsey:How long are you married?

1:50:39Jade Warshaw:30 years.

1:50:40Dave Ramsey:Oh, baby.

1:50:41Jade Warshaw:That's tough.

1:50:42Dave Ramsey:Wow.

1:50:46Dave Ramsey:I'm sorry. A lot going on with you. A lot of pain. How much debt do you have, Margie?

1:50:55Jade Warshaw:Total for myself, not include, my husband and I have always kept our finances separate. So just my debt, including the mortgage, because my name is on the mortgage.

1:51:08Dave Ramsey:Your debt, not counting the mortgage. What do you have?

1:51:10Jade Warshaw:Okay. Well, it's$609 total minus$343 for the mortgage, so whatever that means. I've got$108 in unsecured credit cards. I have$137 ,000 in student loans. And I know bankruptcy won't erase the student loans, so I'm stuck with that. And I'm good with that. I got that. I'm going to pay that. So I'm sorry. That is heavy.

1:51:37Dave Ramsey:Yeah, that's just a lot. And what do you make?

1:51:41Jade Warshaw:$87 ,000.

1:51:43Dave Ramsey:Okay. And how much equity will you get from the sale of the home?

1:51:48Jade Warshaw:So the house would probably sell for$440 ,000 to$480 ,000. We owe$343 ,000. And so my half, I'm thinking after closing, would probably be about$50 ,000.

1:51:59Dave Ramsey:Okay. Well, bankruptcy is not going to work for you because when you go to file, There's two types of consumer bankruptcy. There's Chapter 7 and Chapter 13. Chapter 7 is the clean slate where the student loans are not bankruptable, but the credit cards get zero. And in order to file a Chapter 7, you have to pass what they call a means test, meaning they look at your income and any assets that you have. And when they see you have$50 ,000 and make$87 ,000 a year, you're not going to pass the means test. So you're going to be forced into a payment plan in Chapter 13, which is five years, 60 months of paying payments on the credit cards.

1:52:47Dave Ramsey:You can put the student loans in there, too, but they get paid in full. The credit cards can be paid all or a portion of in Chapter 13. In your case, they're going to get most of it anyway. So are you delinquent on the 108 on credit cards?

1:53:02Jade Warshaw:Yeah, I stopped payments in January. that was part of being able to afford an attorney for the divorce and so honestly my thought process where I wanted to do is wait for the sell of the house and then just start calling creditors and say hey this is what I got

1:53:21Dave Ramsey:I think you can probably settle the credit cards for the 50 or something like that if they went seriously delinquent they're not seriously delinquent yet But it'll be a year and a half while your heart is broken over a 30-year marriage ending. And you're trying to get a fresh start. You're going to have a lot of work to do here. I've got another idea. The Guardian litigation people that we work with, this is what they do. They negotiate with them when you're in default. and they're very, very good at it. I just had lunch with the CEO the other day and was listening to their whole process. And I think they can take care of you and we'll help them do that because you are in a pinch.

1:54:16Dave Ramsey:All right. And so we're going to, we'll hook you up. Christian is going to get in touch with them and hand, hold your hand and walk you right into them. And I think they can walk you through this because you're not going to qualify for a chapter seven. It's going to put you into a 13. And so some kind of a payment plan or settlement process is going to be better for you outside of bankruptcy. It's going to be more efficient. And it doesn't require all of your emotions to deal with the anger and the crap that the collectors are going to throw at you if you do it yourself. And if I'm in your shoes, I don't need that right now because your heart's already breaking.

1:54:55Dave Ramsey:So hang on and we'll help you with this, hon.

1:55:23Dave Ramsey:Dave Ramsey here. Most people stay stuck with their money because they're not paying attention to it. Most people are living paycheck to paycheck, stressed out and broke. Don't be most people. You work way too hard to be broke and feel broke, and you deserve to have something to show for it. That's why we built the Every Dollar Budget app. It gives you a personalized plan for your money that shows you how to free up extra money every month and use it to beat debt and build lasting wealth. Plus, you get real coaches guiding you through your plan step by step. Look, most people hearing this will just keep hoping something changes, but not you.

1:56:03Dave Ramsey:You're ready to make change happen, starting now. Go download EveryDollar in the App Store or Google Play and start for free today.

1:56:26Dave Ramsey:Our scripture of the day, Proverbs 21, 21, whoever pursues righteousness and kindness finds life, prosperity, and honor. Warren Buffett, you only have to do a very few things right in your life so long as you don't do too many things wrong. Guys, Ramsey is taking over an entire cruise ship. That's right. One of the top lines, Holland America, fancy, fancy cruise line, not the cheap ones. This is a 2 ,500 people coming together for the ultimate debt-free celebration. If you're on Baby Step 4 and beyond, you're out of debt except the house, and you're working on getting your pasture emergency fund, working on getting your retirement built and getting the house paid off all that and or even beyond anywhere this is for you we're not asking you to spend money while you're on baby step two and go on vacation with us but we don't but let me tell you we'd love to have you on this all the ramsey personalities are going to be on there for seven days including me my wife sharon will be with us the entire time we're going to have new wealth building teachings we're going to join the world's largest debt-free scream we're going to watch live episodes of your favorite ramsey shows be taped right there and so much more.

1:57:41Dave Ramsey:So you get all kinds of opportunities to deal with every one of us, and we're going to be all over the place. We did this last year. It's going to be one year from right now, be in March of 2027. It is well, it's not sold out, but it's getting close already. So if you want to go, click the link in the show notes or go to ramsaysolutions.com slash events to book your cabin. Laurie is with us in Salt Lake City. Hey, Laurie, what's up?

1:58:09Jade Warshaw:Not much, Dave. I'm so excited. Thanks for taking my call.

1:58:13Dave Ramsey:Sure. How can we help?

1:58:15Jade Warshaw:So here's my question. I think we went to a stupid university and made a mistake, and I'm just wondering what you would do in our case.

1:58:21Dave Ramsey:Wow. What happened?

1:58:22Jade Warshaw:We bought our home about a year ago, and when we bought it, we understood it was seller finance. But the day we went to sign the paper, like, we didn't hire a lawyer in advance. That was probably our biggest mistake. Like, when we got there, it turns out it was more of like a seller take back. Like, they didn't give it to us with their money. They are using the loan they previously had. I did not realize that was, like, weird. So would you be concerned if you were me? Like, would you go refinance right now?

1:58:51Dave Ramsey:I don't understand. What do you mean they're using the loan they previously had? What do you mean?

1:58:55Jade Warshaw:They didn't pay off the home with the money that we gave them. Okay, so we paid, like, a$1 million home. We paid$750 ,000 but still owed that extra$300 ,000-ish, and they just kept the loan they previously had. So they're not financing it out of their money.

1:59:13Dave Ramsey:What is the balance on that loan?

1:59:17Jade Warshaw:So the balance on their loan is$320 ,000, and we owe them$380 ,000. So we borrowed$60 ,000 from them, and then the overall balance is$320 ,000 on the house.

1:59:27Dave Ramsey:Has the house been put into your name?

1:59:30Jade Warshaw:Yeah, we have the title. So that's right. I thought we were all above board, but then I looked at it today online, and it said it was a seller take-back loan. And I was like, I've never even heard of that before.

1:59:41Dave Ramsey:That's something I made up on TikTok. I've been doing real estate 40 years. I've never heard that phrase. So seller take-back. What this is is an illegal loan, though, because when the mortgage company finds out, and they will, when they discover, for instance, that the homeowner's insurance that has to be reported to the mortgage company is not in the seller's name, it's in your name?

2:00:07Jade Warshaw:And it's in their name still. How can that be?

2:00:10Dave Ramsey:Did you put the house in your name or not?

2:00:14Jade Warshaw:Yeah, the house is in our name.

2:00:16Dave Ramsey:Then they cannot have insurance on your house. I can't buy insurance on your house. It's not possible.

2:00:23Jade Warshaw:So would you refinance like now?

2:00:25Dave Ramsey:Yes.

2:00:26Jade Warshaw:Okay. Okay.

2:00:27Dave Ramsey:Because here's what's going to happen. If that is a standard mortgage that's laying on the house, in paragraph 17 on that mortgage, it has what's called a due on sale clause. Due on sale means if that seller sells the house, that mortgage becomes due in full. And that seller has sold the house. And when they discover it, they're going to call that loan. And they're going to demand that seller give them$320 ,000 in 30 days. And if they don't, they're going to foreclose on the house that you thought was yours. Right. But it's not got... But you have recorded a warranty deed into your name. Is that right?

2:01:08Dave Ramsey:At the courthouse.

2:01:09Jade Warshaw:Yes. Yes. And that's where I thought we were legal. You are legal.

2:01:14Dave Ramsey:You are legal. You're just vulnerable because the seller is either a shyster or a moron or both. Okay. Okay. Because they don't understand that you cannot keep a loan in place with a due on sale clause in it. And all current modern mortgages have a due on sale clause in them. If you got an FHA loan from 1972, it does not have a due on sale clause on it. But they don't exist anymore because they've all been paid off. That was 50 years ago.

2:01:51Dave Ramsey:So back in the day when I first started in real estate, in the late 70s and early 80s, we had all kinds of FHAs laying around that you could assume without a due on sale. But those have been gone for 50 freaking years, okay? So anyway, this thing, if you pulled up their mortgage deed, okay, the trust deed in most states it would be, you can, if it's a Fannie Mae, a standard conventional loan, you just flip it over to you see paragraph 17, it will say due on sale. If the title is transferred, it becomes a balloon note, and it's in default, they call the whole loan, and the seller does not have the ability to pay that loan off.

2:02:33Dave Ramsey:And so they're going to get foreclosed on, because the lien is still on your property. You're going to end up losing the property. So you need to get this refinanced and get these shysters or morons or whatever they are out of your life as fast as you can. And you need a standard$380 ,000 mortgage and pay them off or$400 ,000 mortgage or whatever you got to go get to get them paid off as fast as you possibly can. How long have you had the property in your name?

2:03:01Jade Warshaw:A year.

2:03:02Dave Ramsey:Good. Because it's going to take 12 months before they'll look at appraisal versus acquisition. Okay. And so now they can look at appraisal. And I assume the house is worth more than when you bought it.

2:03:14Jade Warshaw:Probably. Yeah.

2:03:16Dave Ramsey:So you guys have any money? You obviously put down everything you had, right?

2:03:21Jade Warshaw:We did, but like over this last year, we saved up$100 ,000. So I was just thinking we'd put some of that toward trying to.

2:03:28Dave Ramsey:And if you can just get like your credit union to give you a$300 ,000 mortgage.

2:03:34Jade Warshaw:Oh, okay.

2:03:35Dave Ramsey:You know, just easy, just something quick, right? Or call Churchill Mortgage, and they can help you walk through it. But I would get this out of these people's names as fast as you possibly can. And for God's sakes, get the homeowner's insurance in your name. You have$700 ,000 of equity if this thing burns down that's going to go to them. Oh, wow.

2:03:59Jade Warshaw:That would be awful.

2:04:00Dave Ramsey:Yeah. Yeah, because the homeowner's insurance is not in your name. And by the way, you can't have insurance. Insurance law is basic. You have to have an insurable interest. I do not have an interest in Jade's house legally. Right. So I can't go be buying insurance on somebody else's house.

2:04:16Jade Warshaw:So they can't buy insurance on your house.

2:04:19Dave Ramsey:This house is in your name. Their insurance policy is not valid. So they're not going to get the money. You're going to end up with nothing. Nobody's going to get nothing because the insurance company is going to go, you didn't own the house.

2:04:32Jade Warshaw:Yeah. Is that illegal? If something like that happens. It's not illegal.

2:04:37Dave Ramsey:It just invalidates the policy. So the insurance company is going to go, no. No, I'm not. We're not writing a check for a million dollars on a property that to the to the people that are not our client and our client doesn't own the property.

2:04:52Jade Warshaw:Right. So it's this whole.

2:04:53Dave Ramsey:So it's not worth the paper it's written on. Oh, that's a mess. It's useful, useless. So there's so much wrong with trying to do what is effectively called a wraparound mortgage where they wrapped around the old mortgage and they carried back 60 and they wrapped around the 320 for a total of 380. You can't do a wraparound mortgage where there's a due on sale clause. And I promise you there's a due on sale clause on that. I promise you there is. So, yeah, that's what you get into. Ouch. Scary, scary, scary, scary. Yes, get refinanced as soon as possible. And go buy insurance on your property today.

2:05:32Dave Ramsey:Go buy homeowner's insurance today. Forget that they've got it. And no, we're not paying them for it. Oh, that's terrible. Because paying their policy is ridiculous. but that's why they didn't want to change the policy because when you change the policy names out it tells the mortgage company that we've sold the house and it activates the due on sale clause that does sound a little shifty well it's just dumb it's somebody doing real estate on tiktok that puts this hour of the ramsey show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus .