Stop Being Normal, Attack Your Debt Now!

25:11Dave Ramsey:Frugality won't make you wealthy. It is one of the things that will cause you to build margin and the margin will make you wealthy, but you can't frugal yourself into rich. You can only frugal yourself into survival and you live in a cave, collect lint and only come out on triple coupon Thursday. And so that's frugality, but there's no life in there. And so that's the$500 car thing. And so you've been very wise in that sense, but I want you to just harness that energy and focus it now and systematize it. And that's called managing money, not just cheaping. Cheaping is good for a while to get you where you need to go.

25:52Dave Ramsey:You're going to be a great dad. You're going to be a great husband. You're a good man. I'm glad you called we want to help you and your family you hang on we'll have them pick up and get you going on this carson's in provo utah hi carson speaking of frugal what's up hey how's it going i'm doing great how are you better than i deserve how can i help yeah no i loved hearing what you're saying before i guess my question is um how do i know if i'm being too frugal or too cheap um i i love kind of what you talk about giving and i think that's something that i could be a little better at, but I just feel like sometimes I'm a little too frugal or a little too cheap.

26:26Or the people around me think I'm mad.

26:28Dave Ramsey:Well, you live in a cult. You live with people around you that overspend. And so if a congressman says you're being too frugal, that's not an indication you're frugal. It's just an indication you're on track. So broke people make fun of your finances. That's okay. So that doesn't bother me. What bothers me is you're wondering. So are you married? I'm not. I'm 24. I just started my first full-time job, and I'm making pretty good money. What's pretty good money? I'm making$85 ,000 a year. Good. What are you doing? I'm a computer, well, software developer. Good. Good for you. Give us some examples.

27:07Let's say Dave and I go to lunch with you. Give us a couple of examples where we might think you're too frugal. What is your best guess? if i didn't offer to pay if i chose or like made some comments about if the most expensive thing on menu is you know ridiculously expensive or if i chose maybe like the cheapest thing on the menu

27:28Dave Ramsey:as well obviously i don't know that's uh i don't that's not jumping out that's just somebody that's being aware yeah i i think you may be beating yourself up yeah i think you're doing okay on that yeah here's the thing there are three things you can do with money and you should always do all three things to be psychologically and spiritually mature. You should always be generous. So when you're at lunch, regardless of what you order, I want you to leave a nice tip. Those people work hard. Okay. The second thing is you can enjoy money and I want you to get some joy from money. I used to work for a guy that was trying to help me build wealth.

28:05Dave Ramsey:And he said, Dave, I want you to build enough wealth that you read a menu from the left to the right. Most people spend their whole lives looking down the price column to choose what they're going to order. I want you to order what you want to order regardless of the price. And that means you've built enough wealth that it doesn't matter what you have for freaking lunch. Okay? And so I want you to enjoy your life within reason. And, you know, so generosity, enjoy, and then investing. And I want you to be systematically investing. So if you're giving money and you're enjoying money, you're doing no investing, you're out of balance.

28:38Dave Ramsey:If you're investing and you're enjoying money, but you're not doing any generosity, you're out of balance. You follow me? So any of that is a three-legged stool. You've got to get all three legs to sit down on that stool. And I'd be working on that and practicing. You're good at living on less than you make. That's a natural gifting. My wife is the same way. My wife has leftovers in the refrigerator, and we're multi, multi, multimillionaires. It makes no sense at all. Okay? But they're there. and then tells me how great they are over and over and over again just to try to sell me on them. After 43 years, she's still trying to make this sale.

29:16Dave Ramsey:Her natural gifting is frugality. Some people's natural gifting is generosity. Some people's natural gifting is they love saving. They get a high from investing and watching their mutual fund account grow. So lean into that. Enjoy the ride. but make sure you're doing some things that feel a little bit like you're spending too much. That's you enjoying your money while you're being generous, while you're investing. And if you're doing all three, you're going to be okay. That's right. Quick question. Would you describe yourself as fearful or hopeful with money? Will? Oh, me. I'm sorry. Oh, my bad.

29:57Dave Ramsey:I pushed the wrong. Carson's already on hold. I put him on hold. Yeah. Here's what I was going to get at. I think people have to, it's a great point you made. You got to ask yourself, is my natural default because of the environment I grew up in or the experience that I've lived to this moment? Both your environment and experience is what shapes the way you see any issue and certainly money. So ask yourself, is my default, my natural penchant towards fear or is it towards hope with money? And there's no wrong answer here. But when you can see that, then you can go into the roots of this and go, why am I naturally fearful about money?

30:35Or why am I tending to be a little bit more hopeful, a little bit more optimistic? And that's really key to kind of know yourself. When Rachel wrote her bestselling book, I'm looking at it, number one bestseller, Know Yourself, Know Your Money. I thought it was very insightful to understand.

30:48Dave Ramsey:Let's do that. I think it'd be a great gift. Give him a copy. Carson, hang on. We'll get you a copy of Rachel's book. I think it'll help you with this whole discussion. Really good. Yeah, very good.

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33:05Dave Ramsey:If you're tired of living paycheck to paycheck and feeling like you can't get ahead, you think you're stuck, you're not. Join one of our free every dollar trainings. There are new trainings every week this month, and they're all hosted by one of the Ramsey personalities. It is Rachel or George or Jade will be teaching you about how to run every dollar. We're going to show you how to stick to a budget and even find the average is$9 ,560 worth of margin. Of the people that have done it in the last 90 days, that's the average, using every dollar. We've got a new improved version of this, and it is blowing up.

33:40Dave Ramsey:You can get out of debt, start building wealth, put you on the plan you hear on Ramsey all the time. And you can ask questions at this webinar during the live Q &A, so it's a little bit like this show, only it's easier to get in. Sign up for free at RamseySolutions.com slash webinar. Jane is with us in Florida. Hi, Jane. How are you? Hi, I'm good. How are you? Better than I deserve. What's up? I had a question about what you would think for our situation. We just bought a small business using an SBA 7A loan. I'm sorry. Say that again. And I didn't hear the first part. It got garbled. Oh, I'm sorry.

34:18I was just asking what you think we should do in our situation. We just bought a small business using an SBA 7A loan. And we live in a very high cost of living area, my fiance and I. And we're considering buying a house versus renting, considering that we have this new debt with us. So what do you think we should do?

34:40Dave Ramsey:You both signed an SBA loan together and you're not married? We're about to be married, yes. When? This year. Friday. Got it. This is very dangerous. How much is the SBA loan? Around$700 ,000.

35:02Dave Ramsey:How old are you two? I'm 28. He's 29. What is this business? It is a blue-collar service business that does very well. It's a specific area that it services, and it's a necessary service. Have you opened? Yeah, we took over two weeks ago. Oh, someone else had it, and you bought it? Yeah, yeah, yes. What's the annual profits on this business? Growth last year was over a million. The owner last year paid himself from$350 ,000. Jeez. And you paid$700 ,000 for it. Okay. Correct.

35:50Dave Ramsey:And you're both working at full-time? I have a job. Making what? And he's working$100 ,000 around there. Okay. And so hypothetically, your household income is$350 ,000. Well, he's not going to pay himself as much. You know, I mean, you have a profit in the business of$250 ,000. Right. Yeah. That's a profit. Mm-hmm. Even if he doesn't pay himself, he paid himself. It's profit. It's taxable income. It's got to come somewhere. If it's not a salary or not, it comes to you at the end of the year. Mm-hmm. You're going to pay taxes on it. You might as well take it home. Okay. Right. So you make$250 there,$150 with you.

36:27Dave Ramsey:That's$350. You owe$700. No, I would not buy a house. I would rent a cheap one-bedroom apartment, and I would pay this crazy butt loan off that you got yourself into in two years or two and a half years. Well, that's what we're doing now. So good. Good. I would just stay right where you are. And I also think that you're extremely vulnerable when you did this without being married. And so you're not going to do it, but you should get married immediately. Yeah. Yeah. And by the way, we've taken this call many, many times where an unmarried couple gets into a business and the relationship goes kaput and then it's nasty.

37:02I want to make sure that our audience understands why you're so certain about that. We hear that over and over again.

37:09Dave Ramsey:We get it. When everything doesn't work out exactly like you planned, which is every time. It never works out exactly like you planned. It might be better than you planned. It might be worse than you planned. But it never works out exactly like you planned. So, folks, here's what you've got to think through. Ken's right. What we see is what causes this, okay? So here's an example of things that have come in over the years. Now, this is pretty macabre, but it's actual phone calls, okay, over the 30 years of doing this. they're in the situation that that young lady is in and he gets t-boned and is in a wheelchair can't speak can't move now what oh or he gets killed now she owns a business with her future mother-in-law because there's no will of course and his half of stuff does not go to a fiancee under Florida law unless there's a will that states that it does so you need that done by the end of the day um but yeah you end up um and you didn't really like the mother-in-law you just loved the son-in-law you just loved the son that's all you loved and so you were but now your partner is with her and she's not going to work there by the way but she wants her half yeah and you got to go down there and work full-time because you are about to get foreclosed on by the SBA if you don't.

38:39Dave Ramsey:All this stuff happens all the time. And so the other thing that can happen is you go in there and you take it over, and it runs better than you thought it would, and you're able to pay the loan off in 18 months instead of two and a half years. That would be an awesome thing. I hope that for you. I hope that's what occurs. I hope it's better than you thought it was. But, yeah, this thing of running a business, there's three rules of business. It takes twice as long as you think it's going to. It costs twice as much as you think it's going to. And you're not the exception. Those are the three rules of business.

39:09Dave Ramsey:And I've experienced them in depth over 35 years of running Ramsey. So I'm not the exception either. And so I have to plan everything out for worst case scenarios. And that's certainly A, not borrowing money, and B, certainly not borrowing money with someone I'm not married to. The same thing applies to buying a house with your sweet little fiance. say. Don't do it. That's right. Well, see, they're living together now. A more common scenario, too, is that he gets under pressure. He's never run his own business before. And I got to tell you something, folks, that's a whole different enchilada. And if he gets super stressed, the relationship starts to break.

39:48You just called him an enchilada? I said, no, not him. I said, being a business owner. He will change.

39:53Dave Ramsey:He will change form. He will. And you hope none of this happens. But that's why we're not, you know, the sky is falling. This isn't chicken little advice. This is a lot of experience. Don't ask Sharon Ramsey about Dave Ramsey going broke version versus Dave Ramsey today version. You won't like the discussion. Yeah. Because she will tell you the truth. Yeah. It's not pretty. I'm just saying. Yeah. I agree with you, Dave. Get to the courthouse, get a will. Let's get this stuff. We jumped into this massive partnership, but we didn't really cover it all the way around. Yeah. That's what concerns us.

40:23Doing things in the wrong order.

40:25Dave Ramsey:Get your head taken off. It's pretty simple. Right. So, you know, the data's there, folks. The data's there. It's not simply a moralistic argument, although you could make the argument on that basis alone. But it's not simply that. There's legal implications, financial implications. All of these things roll into these discussions and running out your worst-case scenarios. So, no, I would not buy a house. And add to the problems that you have already. I would run like my hair was on fire to get these problems cleaned up. One thing I want to do, I want to ask a question on behalf of our very large audience here we didn't discuss.

41:03I'd love for you to give them a fundamental – if you're going to buy a business, how much you should spend based on revenues. I don't think they overpaid. I don't think they did either.

41:13Dave Ramsey:If they got a good buy. If the numbers are what they think they are. If they're due diligence when they're signing up and going through the books. That's right. They actually did that. I mean, because here's the thing. You're buying a business. The owner will tell you this is what our books say. I don't care. What do the tax returns say? Yes. What do they file taxes on? Well, we didn't report everything. Oh, so you're telling me you don't have integrity. Okay. And now I'm supposed to believe your books. No. I think I'm going off the number on the tax return. What you're willing to pay taxes on is your real profit.

41:47Dave Ramsey:What you actually have to pay taxes on, that's your real profit. Well, I have depreciation schedule. Yeah, you also had the expenses by the item that you were depreciating. So that's bull crap. And so help you with the math on that. There's no depreciation on anything that you didn't first pay for. That's how that works. So anyway, I want to see what the real bottom line is, what the real taxable income is. And based on that, I'm going to do a multiple of three, four, five, somewhere in there is going to be the valuation of that small business. And that's after a manager is paid to run the business.

42:22Dave Ramsey:if you're an absentee owner. This is The Ramsey Show.

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44:21Dave Ramsey:live from the headquarters of Ramsey Solutions it's the Ramsey show where we help people build wealth do work that they actually love and create actual amazing relationships Ken Coleman, number one bestselling author, Ramsey personality, and host of the new hit on the Ramsey Network, Front Row Seat. And you need to check that out if you haven't checked out that podcast. It's a long form interviews with some of America's best and brightest and some of the world's best and brightest, as a matter of fact. And you had Gary Sinise on the other day. Yeah. You know, what a great actor, probably one of the most respected men in Hollywood and really probably the most respected servant of our men and women who have served in the military.

45:07He's got a great heart for veterans, does incredible work, of course, on the backs of probably one of the most beloved characters in movie history as it relates to our military characters, and that's Lieutenant Dan, and doing great work. He's a good friend of yours, and came in, and we had a great time.

45:21Dave Ramsey:Yeah, he's moved to this area a few years ago, and we've got to be friends, and genuinely the kindest, gentle guy. Very humble. Yeah, yeah. You guys will love watching that interview. It's great. So check it out. And the Jimmy John interview has been going zoom zoom absolutely it's huge feedback on that as as we really had a hunch that it would because a the guy knows what he's talking about when you go from offering three sandwiches with used equipment to selling for 3.3 billion dollars you should probably listen to this guy he's got the american dream figured out he did it and did it well and one of the kindest talk about kindness and generous yeah yeah yeah unbelievably generous he shoots the whole theory that billionaires are evil people to pieces he really does he's pretty funny about that I thought he would be more bombastic to that answer.

46:09Dave Ramsey:It was a good answer, though. Yeah, yeah. He was starting to heat up. Yeah, he was. But he caught himself. He did. He did. You know, I just feel sorry for him. They're just not smart. It's like, yeah, that's good. Oh, my gosh. Check it all out. It's called Front Row Seat with Ken Coleman. It's on YouTube and on podcast anywhere great podcasts are sold. You'll be able to pull it up, watch it, listen to it. You will get great information and inspiration. And that's what we do here. Alex is with us in Texas. Hi, Alex. How are you? Good. How are you? Better than I deserve. What's up? I'm a newly led, just wanting to get your opinion on the best way to join finances.

46:45Cool.

46:46Dave Ramsey:How long have you been married? I got married in July, so just a couple weeks. Oh, look at you. Way to go. How old are you guys? 27 and 28. Okay. That's a very important question, and the reason it's very important is 30 years of doing what we're doing, we know that very few couples have a high quality marriage and build wealth without combining their finances. And as a matter of fact, which one of the things we found in the millionaire study where we're studying millionaires, 83 % of millionaires said they were working hand in hand as a team with their spouse, both had a vote, both were pulling the wagon together, and that's how they became millionaires.

47:28Dave Ramsey:So it's a great question. Now, the question is how to do it. From a tactical standpoint, your monthly income, pretty simple, one checking account. All the money goes into one checking account. That number, that monthly income number, goes at the top of the budget. And the two of you sit down together and have a budget committee meeting. And you say, okay, before the month begins, we're going to have$3 ,273 or$8 ,642 or whatever the number is. this coming month. That's what we're going to have. Now let's spend all of those dollars, give every one of those dollars a name in the every dollar budget, and we both agree to it.

48:14Dave Ramsey:There cannot be any money left over. It has to go into savings. It has to go into generosity. It has to go into a debt. It has to be spent on groceries. It has to go to something. Every dollar has to have an assignment exactly to the penny. No leftover squash money. No need. If you want to put it in savings put it in savings i don't care and then call it you know call it my emergency fund whatever you're doing with it do it on purpose and do it together is that what you're asking um yes but also so we have some debt i just wasn't sure i've seen how some people say do like 95 all in one account you each get like five percent for fun money squash money whatever yeah some people are broke so don't listen to some people yeah yeah some people got an opinion about everything.

49:00Dave Ramsey:And so, and they're wrong. So no, I wouldn't do any of that. The thing is this, you're going to attack your debts together. It's for better, for worse, for richer, for poorer. And the old marriage vows from the Book of Common Prayer say, unto thee, all my worldly goods I pledge. So we're truly joining everything. He got you and your debt. You got him and your debt. You got him and his income. He got you and your income. And now we are we, not you and me. Okay, perfect. And I have one other question, if that's okay. Okay. We do have a daughter. She'll be two. And we're trying to find out the best saving option for her future.

49:46Dave Ramsey:Okay, that would be a 529 plan for her college. And you don't need to worry about that until you're out of debt. Have your emergency fund in place. And that will be called the Baby Steps. I'm going to send you guys a wedding gift. It's called The Total Money Makeover. It's our best-selling book. We've sold 14 million of them. America's greatest coffee table coaster. And so it's sat there on people's coffee tables for years, and they don't read it. But I'm going to send you one. It's got the baby steps in it, and people that follow those baby steps show you exactly how to do it. They become wealthy, and they get out of debt, and they learn to work together.

50:21I'm going to add a little wedding gift as well, Dave, since you've got me in the spirit of giving. Rachel Cruz wrote a great book, number one bestseller, it's called Know Yourself, Know Your Money. And this is the advice I want to give you. Dave gave you great tactical advice. But you two are learning how to truly live together. And one of the most important things you'll do in your marriage is learn how to manage money together. And one of the reasons I want you two to read this book together is because you both need to know, based on your experience in life with money and then your environment, the way your parents talked about money, that's all shaped you.

50:57And then you guys are wired a certain way towards money. And knowing how you guys are wired for money, which this book will teach you, and you'll be able to really grasp it. It's a great book for young couples that are getting started. Because if you two can understand each other as you go into the budgeting and into the baby steps, I think it'll make it so much more. I think it's a great book for every young couple to read.

51:19Dave Ramsey:So we'll give you that book as well. Yeah, I agree. And Rachel wrote it actually out of the pain of her and Winston learning to work together. And because they're very different. Rachel's got a little bit of her father in the sense that this abundance versus scarcity, I've always thought I could out earn my stupidity. And Rachel definitely goes along with that. And Winston, on the other hand, is very methodical, very careful, and is a saver. And is very wise. And so the two of them working together have woven that together over a decade plus a marriage into a wonderful marriage. Yeah, that's absolutely right.

51:55Dave Ramsey:And so that's good advice. And you learn to work together. Larry Burkett used to say, opposites attract. If two people just alike get married, one of you is unnecessary. Typically, a spender attracts a saver. Typically, abundance attracts scarcity. Typically, you know, the nerd that likes details attracts the person who is not that concerned about details and would much rather have a party. And so the free spirit. So the nerd and the free spirit, the spender and the saver, the scarcity and the abundance, all these things are typically opposites. And you need each other. You learn from each other.

52:32Dave Ramsey:You add spice to the gumbo from each other. One's not right. One's not wrong. But learning to work together, as Ken's pointing out, is absolutely vital. Thank you.

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54:28Dave Ramsey:Mel is in Nashville. Hi, Mel. How are you? I'm good, Dave. How are you? Better than I deserve. How can I help? Oh, hey. So I am set up with trying to figure out what I'm doing. I have no clue what I'm doing, just to be honest. I'm trying to get on a plan to get out of debt, and I don't really know where to start. And the last year has been awful. I have about approximately probably$25 ,000 in credit card debt and also include the personal loan. But about a year, well, a little over a year ago, I lost my husband. He passed away. And ever since then, like, I was doing actually trying to do a little bit better before that happened.

55:23and I was starting to get things paid off, and then I went right back into the cycle of just using my credit card for everything and just trying to stay afloat. And I still have two kids at home, so I'm trying to navigate all of that, and I'm trying to get there just without crying.

55:40Dave Ramsey:So how old are your babies? They are 10 and 15. Okay. And what do you make? What's your income? Before taxes, it's almost 60. Okay. All right, cool. How old are you? I'm 44. What do you do for a living? I work in insurance. Okay. All right.

56:09Dave Ramsey:Well, there are several touch points that help you get control. Okay. Okay. Some of them are emotional, spiritual, psychological. Some of them are mathematical. Okay. Math is we get our income up, looking at some side hustles that you can do with babies at home. And we get our out go down and we make the money that we have behave. And that's called a budget. The money that you have is not behaving. It's living from desperation to desperation because you are. Right. When you're scared, and you're scared, I can hear it, you get desperate, and every time I get desperate, right after that, I get stupid.

56:57Yeah.

56:58Dave Ramsey:And that's what piles up, and then you feel stuck, and then shame comes, and all those other things. So all that's the emotional part, and the psychological part, and the spiritual part, okay? But the good news is you actually make enough money to live on. You don't make a ton of money, but you can probably figure this out. What do you owe on your car? Actually, I don't. Oh, good. That's good news. So$25 ,000 in credit card and student and personal loan. What are the debt? That's it. What do you owe on your home? Nothing. It's paid off. It's paid off. Well, we live in a trailer, but it's paid off.

57:41But it's paid off.

57:42Dave Ramsey:You don't have any house payment. paid off right no mortgage yeah that's good that's good okay so no mortgage is a good thing and 25k in credit card and you make 60 this is doable okay right um and so i tell myself i'm like it's doable i don't know why i can't well because because your heart was broken you lost your husband and you were struggling okay and that's just normal human stuff so what we've got to do is help you put together a system to live on the money that you have and we're going We'll put you on the every dollar budget, and we're going to get you a Ramsey coach, and we'll pay for all of it, okay?

58:17Dave Ramsey:I'll take care of you. Make sure you get up and get running here. You can do this mathematically. But the first thing is you've got to change the way you look at it and the way you think about it. Of course we're going to get the credit cards out and cut them up. They've been such a blessing. Not. Not. Okay, so we're going to stop using the stupid things. We're going to have a plan to eat and pay the lights and make sure the water is on. And then we'll start talking about how we can pay off this debt after we've met our basic needs in the household. But if you've eaten food, if your family has food and your family has lights and water and you've got gas for your car to drive to work, you make plenty of money to do all that.

59:05Right.

59:06Dave Ramsey:And so we've just got to make the money behave. And then we can start using some of it after we've taken care of Mel and her kids. Then we'll use some of it to start taking care of the stupid banks and get them out of your life. Forever and ever, amen, never go back. Yes. Okay? So that's what we're going to do. So we can show you exactly how to do this, but you're just by yourself, and it's what I would be doing if I lost Sharon. I'd be just flailing around a little bit. Yeah. And you're just kind of flopping around, you know, and it's just going everywhere and you're just running and going and you're tired and you're stressed.

59:47Dave Ramsey:Is that, am I, is this true? Am I telling the truth? Yes. Yes. Very much. Okay. All right. Are you in a good church? I am. Yeah. Good. I am. Does your pastor know you're facing all this? Yes. You sure? Yeah. I mean, they know, I don't know if they know how bad I've been the last few months. Yeah. Probably not. Yeah. You need to tell your people that love you. Yeah. Because the book that I read and the book that you read says we take care of widows. Okay? So give your congregation and your pastor the opportunity to do what they're called to do. Okay? And Ramsey's going to do that too. Ramsey's going to set you up with a Ramsey coach, free of charge, sit with you, help you put together your budget, and then coach you, and then also hold you accountable.

1:00:41Dave Ramsey:That means they're going to be mean to you and make you do it. You're going to freaking do it, okay? Yes. And Mel, listen, this is really doable, and I want to just throw a number at you, not that you have to take on you, but I just want to show you something. If you were to make an additional$2 ,000 a month and you put every nickel on that towards this debt, you're talking about getting out of this in a year. Now, I'm not saying you have to do that, but I want you to catch, because we're going to give you all the help, but I want you to be able to see that what seems insurmountable to you at the start of this call, you can actually knock this out.

1:01:19and you've had horrible change thrust upon your life by losing your husband, but you're still here and your kiddos are still here. And this is not going to be fun, getting a budget and cutting out credit cards and not relying on it. It's not going to be fun, but you've already had a horrible season.

1:01:35Dave Ramsey:It's going to be more fun than the hell you're sitting in right now. That's exactly right. You can get through this. I just want you to hear that. You can actually get out of this. Yeah, this is very, very doable. And you hang on. We're going to put our arms around you and help you make sure you do it. you get on the phone with a Ramsey coach as soon as you get hooked up with one, sit down with them. They're going to take, we're going to take care of you. And we're going to make sure you get on that every dollar budget to stay on it. And you let your pastor and your community know where you are and that you, they may not need to give you money.

1:02:04Dave Ramsey:They may just need to love you. That's okay. I'm not saying you're a charity case because I don't really think you are. But if they want to give you some money and put towards this, wouldn't make me mad, but it depends on the congregation, how they work and all that. But, I mean, more than anything, they just need to love you. That's right. You know, you don't need to do this by yourself. Life, it's not good that man be alone, you know, when you do these things together. You picked up on something, and she broke when you said it, and you were right. You mentioned the word shame. You've coached so many people one-on-one on the air.

1:02:36How does shame hurt us in times like this when we're trying to jump out of debt? Because you've experienced it personally. Yeah. Just talk about shame.

1:02:44Dave Ramsey:It's the great lie from the pit of hell. is what it is. It makes you, people, when they get in a situation like that when you're broke and you can't pay your bills, you think, and you're screwed up, you think you're the only one. Right. And it turns out if you've got your act together, that's when you're the only one. Right. Most people are broke and out of control. Most people don't have their crap together. 78 % of Americans say they live paycheck to paycheck. That's eight out of ten houses on your street are broke and out of control. So don't let anybody whisper in your ear called the devil and say you're not worthy because you're broken out of control you're just a normal person normal just sucks that's all you don't want to be normal normal sucks bad so the it's the great thing i used to think when i went broke i was the only one on the planet earth that was that stupid and when i started telling my story it's like everybody's like yeah me too me too me too me too me too it's like everybody raised their hand said i've been i've done stupid i was stupid i went broke too david i went broke in real estate just like you I kept hearing it over and over and over.

1:03:47Dave Ramsey:Now for 30 years, I've heard it everywhere. Normal is this. You just don't want to be normal. That's the trick.

1:04:15정말 preset turn camera

1:04:35Dave Ramsey:Today's question of the day is brought to you by Why Refi. If your private student loans are in default and you feel stuck, you're not out of options, Y-Refi specializes in helping borrowers like you find real solutions with low fixed rate refinancing. Start from zero and go. Go to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not available in all states. Today's question comes from Victoria in Texas. My 14-year-old son wants to allocate some of his earned money to online gambling. He says, everyone, and this is in all caps, at school does it. Please help me explain to him why it is 100 % wrong.

1:05:20Ay, yi, yi. How old is your son, your youngest? My youngest is 17. I got a 17 and a 19. So I will answer it as if they came to me and said, dad, everyone is doing it. First, I'd start with, I can't help but hear my nanny's voice right now. used to say to us, if everyone's jumping off of a bridge, would you do it too? You know, that's just old school, you know, and I'd start with that. Then I would say, all right, let's look at gambling. And I actually would come to it with numbers. I'm a little bit of a data geek. And so I would actually go pull real numbers on this particular type of online game.

1:05:57Let's say it's sports. Okay. And I would show the rates of success on this and let the numbers talk for you to some degree. Second, I would explain gambling as a whole and how it does not pay off. And I would say, just because they live in your house, if they're going to do something that you are philosophically or spiritually or whatever you want to say opposed to, what I would tell them, my son, is if you're going to do that and you're going to go around me and not honor the advice I'm giving you, you and do something so stupid, then you are not going to receive these blessings from me. Now, that may be too harsh.

1:06:41Dave, you may disagree with that. But I would take a pretty strong stance after I've made the numbers case and make it very clear. I don't believe in this. I think this is foolish. And this is against the values of my home. And therefore, there are going to be consequences if you do this. And then they got to learn the hard way.

1:06:59Dave Ramsey:Yeah. Everyone at school that is male and 14 is looking at pornography. Not everyone is gambling. That's a good point. He's lying. He's overstating. He's being a 14-year-old using hyperbole. Okay. And 14 - and 15-year-olds are interesting beasts. They're very interesting. I raised a few of them. At our house with teenagers, we went with the Andy Andrews approach that we are not trying to raise great kids. We are trying to raise kids who become great adults. And so at that stage of their development, the process that Sharon and I used was pretty simple. Because inside of every 14-year-old, there are two people, a 34-year-old and a 4-year-old.

1:07:54And so I would ask them, which one am I speaking to, Sybil?

1:07:59Dave Ramsey:Y 'all don't remember Sybil with multiple personalities. It's an old show from the 70s. Okay, but yeah. Which one am I speaking to? The four-year-old or the 14-year-old? If I'm speaking to the four-year-old, I'm simply going to tell you what to do. And you're going to mind because I'm older than you and I can make another one that looks just like you. You will behave. Period. You will do exactly what I say for your own good because I love you. I don't care if you have a feeling. It doesn't matter to me. You're simply going to do what I say. If you're four years old, that's how we deal with it.

1:08:35Dave Ramsey:Now, I'll be gentle and kind, but at the end of the day, I'm in freaking charge. You're not. The inmates don't run the asylum. I'm bigger than you. I have more power than you. You're simply going to mind me for your own good. You're not going to play in the street. You're not going to touch hot stoves. You're not jumping off of waterfalls. You're four. you're not driving cars you're four we're not having a negotiation with a four-year-old however if you want to be an adult and sit here and talk about this i will talk to you like an adult instead of a four-year-old if that's the case then i would do exactly what ken's saying here's the data since the internet opened when i started this show people used to call me with addictions all the time when we started doing financial coaching in 1992 we've been dealing with addicts ever since 100 of addicts have money problems there's no exceptions that's the nature of being an addict okay when i started addiction was alcohol and drugs the number one addiction in America today being treated as pornography online has exploded it.

1:09:49Dave Ramsey:It's huge. Porn online makes more money than all professional sports put together in America today. It's vastly profitable, and it's everywhere. It's ubiquitous. Keeping a 14-year-old away from porn if they have a phone is impossible if they have connection to the Internet. and it is the fastest growing addiction. It's destroying the sexual function of young men for an entire generation. The second, and we see them in our office every day here, where they've lost everything. They've lost their families. They've lost their homes. They've lost their jobs. They've lost their careers because they're addicted, just like when they were doing cocaine.

1:10:35Dave Ramsey:Same thing. And son, this is the truth. And son, here's the other truth. The second fastest growing addiction in America is online gambling. Do you think DraftKings can afford all of those ads because everyone that bets on DraftKings won? No, they can afford all those ads because everyone that bets on DraftKings loses. That's why. The bookie always wins. The house always wins. Period. It's a statistical fact. It's how gambling works. And if you're so stupid that you don't understand that, then you can understand this. Gambling is a tax on people who can't do math. Walk into the lobby of the Bellagio.

1:11:18Dave Ramsey:Walk into the lobby of the MGM Grand, and you will see some of the greatest architecture. You'll see light fixtures that cost millions of dollars, and it's all built on house money. You people gave them the money to build it. that's how it works it's a mathematical fact so son if you're 14 i'm going to explain these facts to you and so i don't want you to be involved in it by the way honey i'm not involved in online porn and i'm not involved in online gambling i sadly spoke with a 32 year old the other day that's run up six hundred thousand dollars in sports betting he makes 180 a year he's going to lose his marriage and his two little babies and his beautiful wife are going to leave.

1:12:06Dave Ramsey:And there's nothing he can do about it because he can't stop himself. He's addicted. So why would I let someone that I love be engaged in that? Sweetheart, I love you. There's no chance I'm going to let you be engaged in things that will destroy your life. By the way, you're not doing cocaine either, even if everyone's doing it. By the way, you're not doing crack either, even if everyone's doing it. By the way, you're not going to drive 110 miles an hour and act like you're a speed racer or something out here because everyone's doing it. You're going to do things in this house because I love you that benefit you.

1:12:42Dave Ramsey:This does not benefit you. And so you're not doing it. Now, if I can convince you and persuade you as an adult, I will persuade you as an adult like I just did. Yeah. Here's some data. Here we go. UC San Diego, new study, 96 % of over 700 ,000 online gamblers. That's a big sample size. 96 % lost their money. That's all of them. I mean, nobody wins. You want to play the 4 % game? It just doesn't add up. What that makes you is an idiot. 96%. Yeah, if you want to be an idiot, if you want to join the 96 % of losers, That's how I talk to a teenage kid. Or I get entertainment from it. That's the classic joke.

1:13:27Dave Ramsey:Yeah, whatever. You work all week and you get entertainment from losing the money that you worked all week for. At those rates, you might as well buy a donkey and go try to mine for gold. Get yourself a pan. So the deal is I'm going to try to convince you you're not doing it, but I'm going to try to convince you and persuade you if you're willing to talk this through with an adult with me and you're going to understand why you're not doing it. if you don't want to do that and you want to just throw a fit and be a four-year-old, I'll just simply tell you you're not doing it. We don't negotiate with idiots.

1:13:58Dave Ramsey:Not when they live in my house.

1:14:32Dave Ramsey:Coordinating a Financial Peace University class is a great way to stay motivated on your own baby steps journey. While you get to encourage other people as well. That's pretty fun. And when you lead a class, you get access to the Financial Peace University lessons. the premium version of every dollar, plus additional content and perks for free for an entire year just for leading a class. We're going to give it all to you. Plus, you also get support from a community of other coordinators, our team of experts, and tons of free resources to help you lead the class. So far this year, we've seen over$75 million in debt paid off and money saved in the Financial Peace University classes.

1:15:11Dave Ramsey:If you've got a passion for serving others, this is a great way to help others experience the life change you've seen yourself. Go to RamseySolutions.com slash FPU and get your first class set up or click the link in the description at RamseySolutions.com slash FPU. We'll help you get going. Will is with us in Ohio. Hi, Will. How are you? Hey, Dave. Thanks for taking my call. Sure. What's up? So until about a year ago, we were living in a single wide trailer to save money, pay off debt, and we paid off about$60 ,000 in debt. We bought some land to hopefully build a house on in the future, but then we found black mold in our trailer and had to move out.

1:15:50So now we're renting. And between the rent and the land payment, that's destroying our savings, and we're kind of struggling here. So I'm wondering, should we sell this land that we plan on for the future and want and keep renting to pay other debts off? Or, you know, we've got some family that's offered us land to build on for free. but houses are so daggone expensive now. I'm not sure what to do. Okay.

1:16:20Dave Ramsey:What's your household income, sir? About$120 ,000. How long have you been married? 10 years. Okay. What's the land worth? It's worth about double what we owe on it right now. It's worth about$120 ,000. And you owe$60 ,000? Yes, sir. Okay. All right. what would happen if you sold the land and took the$60 ,000 in cash that would be in your pocket and used that as a down payment on a house? That would be a heck of a down payment, yeah. It's real good for commutes. We like the land. I think it's an emotional connection to it, you know. But there are some other houses in the area we could look at. Yeah.

1:17:03Dave Ramsey:I mean, you just buy a house and then, you know, later on do a land deal, right? After you get some things going, get the house going up in value, start getting it paid off. You make good money, but you're kind of trapped right now. You can't really afford to build on it. Right. And you said it's destroying your savings with the payment and the rent. And so putting those two together and a down payment off the land and that buys a house, that makes a lot more sense as a first step. It's not necessarily a permanent decision. You know, it's always funny when you're buying a house, it feels more permanent than it is.

1:17:37Dave Ramsey:Yeah. That's why people say stuff like, I bought my forever home, which is a load of crap because it's never your forever home. There's only one forever home. That's heaven. And other than that, you're going to move. So this idea, I'm never moving again, that's just not true. Unless you're 85, you're probably moving again. So, you know, and you may even be moving again there to the nursing home. But anyway, so something's going on. Anyway, you're moving again. So anyway, it's not a permanent deal. Buy your house. Sit there five, six years. Save up some more money. take the equity you make on that property with the equity you put into it and start talking about building a house and buying you a piece of land at some point.

1:18:16Dave Ramsey:But, you know, it's called a starter house, right? Yeah. What's your total debt? We've got about$100K in debt,$20K on a student loan,$20K in a car, and$60K on the land. Okay. All right. So you've got that$40K in debt. Good call, Ken. I drove past that. I went straight to the real estate deal. Yeah, I need you to clear that stuff, too, and that makes this discussion harder. What's the car situation? $20 ,000 debt on the car. Is it worth more than you owe? No, it's probably worth right about that. It's fairly new. What's the car payment on it? $400 a month. Okay. Yeah. Again, the way we answer questions here is what would I do if I woke up in your shoes?

1:19:11Dave Ramsey:I'd sell the car and the land. And I'd take five grand, go buy me a car to get back and forth to work. And I start talking about buying a house and get these student loans paid off. And now we only got 40K to put down, not 60. But anyway, but we're still doing a starter house deal. We're going to do a 15-year fix where the payment's no more than a fourth-year take-home pay. And you don't have a payment in the world then, dude. and not a student loan payment not a car payment not a house payment not anything and uh at this point i mean not land payment not anything and and you're gonna put 40k down and um yeah i'm gonna go buy a house that's what i'm doing uh in that situation and then i'm gonna the emotional tide of the land i get i've got a uh piece of ground over here not far from where i'm sitting right now that's um i go over there and shoot guns ride four wheelers and everything with the grandkids all that stuff and i love that piece of dirt i have an emotional connection to it i understand what you're talking about i don't want to sell it um but you know what's the best thing for my family long term you know that's a lot of money to shoot guns so um you got to think about what you're doing and what what what is more important than something else in my case i'm not saying that's what you're doing with it, obviously.

1:20:28Dave Ramsey:Okay, Chris is with us in Cincinnati. Hey, Chris, how are you? I'm fine. How are you? Better than I deserve. What's up? I have a question. I have got about$45 ,000 to$50 ,000 in various debts. I think about$15 ,000 in credit card debts and about$22 ,000 or so in student loans and then a couple of other things. And I have been contacted by this debt consolidation or debt reduction company. Run away. Run away. Quickly. What's your household income? About$25 ,000 a year. $25 ,000 a year? Yeah. How many hours a week are you working? Oh, you're on Social Security. How old are you? Yeah.

1:21:35Dave Ramsey:How have you got a student loan debt? Well, I went to this community college. I started about 10 or 12 years ago. And then at one point, I was a little short of money, so I signed up for some student loans. for a total of about$20 ,000. What did you used to do for a living before you retired? Computer programming. Actually, I'm looking for a job doing that again. I think that would be helpful. Yeah, because I enjoy doing it, and it pays good. No, here's the thing. The debt consolidation doesn't work because it doesn't change anything except the interest rates. Your student loan interest rate is so small it doesn't matter.

1:22:23Dave Ramsey:Your credit card debt is so small you're going to pay it off fast anyway, once you get this new job. And so that's why I'm saying run away, because they're making you a promise that if you just take this pill, everything will be okay. No, you don't need to take the pill. You need to just make everything okay. So the way we work that is we list your debts, smallest to largest. We pay minimum payments on everything but the little one, and let's do something to get some income coming into this house and approaching it that way. But credit cards and student loans as you approach your 70s are, So, yeah, those got to be cleared up because it's taking all the fun out of your life, I bet.

1:22:58Dave Ramsey:That's just no fun at all. Yeah, Dave, you and I were talking about this during a commercial break several shows ago. We were on together and we were seeing what the call was coming up next. And I said to you, I said, I'll bet you this lady, because she was in her 70s, got a student loan when she was in her early 50s. And it came true. Now, I've taken this call a lot and I've seen it a lot where, you know, people would call me on the old Ken Cohn show. and they'd say, hey, I tried to transition at 50 or whatever. And I just want to say this. We're anti this idea of just going for a student loan just to get a degree without any kind of focus as to why we're getting it.

1:23:37But, Dave, I want to say if you're in your 50s, there is no scenario by which you should ever take a student loan. I'm going to go that hardcore on that. Let me go hardcore.

1:23:47Dave Ramsey:If you're breathing, there is no scenario by which you should take out a student loan. I agree. Yeah, yeah, yeah. But just what is happening? We're seeing this happen a lot, where people think they're going to change their life midstream with a student. Or downstream. That's possible, too. I like what you did there. I see what you did there.

1:24:24Dave Ramsey:We've all done dumb things with money. I've done them with zeros on the end. One of the biggest mistakes I see people make with money is not having a plan for it. You've got to have a plan. You've got to be intentional, and you need to get a budget. You have to tell your money where to go so you're not wondering where it went. Our budgeting app, EveryDollar, helps you do just that. It's the easiest and fastest way to make a monthly plan for every dollar you've got coming in and going out. Now's the best time to get started before the ridiculous holiday spending season gets here and sucks you in because you didn't have a plan.

1:24:57Dave Ramsey:Don't let that happen. You're done making that mistake. Go download every dollar for free in the App Store or Google Play today.

1:25:17Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing

1:25:33Dave Ramsey:relationships. Ken Coleman, Ramsey personality, number one best-selling author and host of the Ramsey Network's hit, Front Row Seat. He's my co-host today. Be sure and check that show out. The phone number here is 888-825-5225. Sarah's in San Francisco. Hi, Sarah. How are you? Good. How are you? Better than I deserve. What's up? So I have kind of a unique dual job situation. I'm a property manager and a teacher. So basically what that means is I live at a property and I get to live here for free in exchange for doing housework. You name it, I've probably done it. Dog care, pet care, laundry. I mean, I designed a golf cart one time.

1:26:14It's really random. So I don't have to pay rent, which is incredible. I've been doing this for about four years for really, really affluent people. but the household that I'm currently with, there's a lot of secrets that I unfortunately have to like carry with me of really terrible things that are happening. And I just don't know how to weigh, like, should I leave and start paying rent somewhere or should I stay and just kind of like push down the gross feelings and continue saving money? Wow. Life is too short to be feeling gross because of somebody else's behavior. Yeah. So, yeah.

1:26:57Dave Ramsey:You've got to leave. Now the question is, how do we leave smart? So what are you going to do with your life now? Now that you don't work in there anymore, what are you going to do? I mean, I feel like I could save so much money for a down payment on a house if I stayed since I'm fully profiting my income. No, no, no. We've already established you're leaving. Okay. Are they doing illegal stuff? No, they're just like cheating on each other and like stealing alcohol from me. It's just really like bad. Stealing alcohol from you? Yeah. And then they blamed me for it about a year ago. Blamed you for stealing your alcohol?

1:27:39So they drink a lot. They're trust fund kids. All they do is just like drink and party all the time. And about a year ago, they thought I was stealing alcohol. until I found out one of them was an alcoholic. Oh, okay. Sarah, if you're representing your position in a court of law and Dave and I are judges, you're not doing a really good job. You keep giving us multiple reasons as to why you should be running from these spoiled brats. Listen, the amount of money you're saving is not worth the toll it's taking on your life. True or false? This is probably true. Well, then there you go.

1:28:10Dave Ramsey:How old are you? I'm 23. Okay. And now what are you going to do with your life, 23-year-old? I mean, I can move really anywhere I want. You're right. I'm a teacher, so I can move wherever. Do you want to stay as a teacher? That's what we're trying to figure out. No, she's a caretaker. No, she's a teacher and a property manager. Oh, you teach inside the home or outside the home? Outside the home, just like a public school teacher. So you have a teaching certificate? Yeah. A four-year degree? Yes. And you're still currently teaching, if I understood you correctly, right? Yes. Do you have any money at all?

1:28:44um i the only debt i have is my car loan i said money thousand dollars you have money yeah like six grand in my savings and like okay all right leave load up the car load up the car

1:28:58Dave Ramsey:and move what city do you want to be a teacher in because you're leaving and it's not san francisco i'll help you it's not san francisco right where what city do you want where did you grow up i I grew up in Oregon, which I'm sorry I would never go back there. Okay, that's fine. We've established one state you're not going to. Two states. We've got 48 to go. The state of San Francisco and the state of Oregon. You are not going to those two states. Okay. Now, where else are we going? You're 23, have wheels, have$6 ,000. We're going to move and get a one-bedroom apartment and be a teacher. Ta-da!

1:29:35Dave Ramsey:Just like that? Just like that. You're like a free person and everything, And this is America, not Russia. It's awesome. Where do you want to live, kid? Where's your next adventure? Even though it saves me a bunch of money. Where's your next adventure? You're leaving. Or go do this again somewhere else, but not for alcoholics. Go to the state where you want to be. You're going to end up getting sued or put in jail for something one of them do. You know evil is in the house. You can smell it. It's in the air. Get out of there, girlfriend. Now. I'm going to go. Now. Where are you going? What city?

1:30:17Dave Ramsey:I want to know. What's your next adventure that makes you smile? Where have you always wanted to live? Oh, gosh. Florida's pretty great. Head out. Load up the truck and head to Beverly, kid. Yeah, no income tax. State income tax there. That's great. Florida's good to their teachers, too. Yeah. And you can property manage for sane people in Florida if you want to save up money for a house. You keep coming back to how much money you're saving as if you can't reproduce this somewhere else in a much better situation. You've become a prisoner to this situation because you're only looking at how much money you're saving as if you can't do it anywhere else.

1:30:57That's true. I know.

1:30:58Dave Ramsey:That's why I said it. Okay. So here's the deal. Okay. I want you out of there before Labor Day.

1:31:09Dave Ramsey:You have 27 days. Ready, set, go. This is your old Uncle Dave, old ugly Uncle Dave who loves you, telling you, ready, set, go. Set yourself free. You are free. Leave. Let these fine people know that by the end of the month, we're going to load up the stuff and go. And if they want you to go sooner, oh, good. Oh, good. get in the car, put your crap in the car. You can put all your crap in one car, can't you? Yeah, basically. Load up the car and drive to Florida. What city in Florida do you want to live in? I like NASCAR. Daytona's pretty cool. All right. Daytona is a neat little town. And affordable, by the way.

1:31:58Dave Ramsey:It's a neat little town. Yeah. Head on over there, kiddo. Not that far from Boca, and there's some rich crazies there, too. That's a good point. Who's your favorite NASCAR driver all time? Oh, I've been watching a lot of documentaries lately, but I just got to go with probably Kyle Bush. Okay, so I want you to channel your inner Kyle Bush and drive from San Francisco under the speed limit. We're not trying to get you to break the speed limit. He's aggressive. I want you to go all the way to Daytona. And when the sun's coming up, by the way, at Daytona, you can still drive on the beach. I want you to drive out on the beach and sit there and smile and go, I am 23, have money in my pocket.

1:32:39Dave Ramsey:I can be and do anything I want in the greatest land the world has ever known. I don't have to put up with a couple of cheating, drunk, trust fund morons, and I'm gone. How's that feel? It feels good. It's scary, but it's good. It's scary, but it's an awesome scary. It's like bungee jumping. Go!

1:33:02Dave Ramsey:We're pushing you off the bridge. I don't know if you felt it or not. Yeah. This was our answer 20 seconds in. We were into this answer 20 seconds into the call. Now you're ready to do it. Go do it. We love you and we want you to have a great life. You're not going to have a great life staying where you are. As a matter of fact, your life's going to go downhill pretty quick if you stay there. You know in your deepest inside, God's spirit inside of you is telling you to get away from the evil. He's telling you. Listen to him. And then we told you too. Listen to us. then there's the fact that two trust fund babies are stealing your alcohol and blaming you for it how bass backwards is that

1:34:07Dave Ramsey:It's way too easy to put off making a will. And believe me, I've heard every excuse in the book. But not having the time is one excuse we can kick to the curb right now. Because these days, most folks can make a legally binding will on their laptop between loads of laundry. If you're wondering if you can make your will online or if you need a lawyer, we have a quiz to help you figure that out in less than five minutes. Just go to RamseySolutions.com slash Will's Quiz. RamseySolutions.com slash Will's Quiz.

1:34:55Dave Ramsey:Buying or selling a home is a big deal, and there's a lot of opinions out there about the real estate world. If you don't believe me, just open up your social media. There's a lot of opinions, and opinions are like armpits. Everybody's got them, and most of them stink. They really don't know what they're doing. Everybody's got an idea. Everybody's got a course on TikTok. Everybody's got something you can get into. Listen, when you've got all this drama, one thing you know about drama. Here's how you beat drama. Facts. Facts are your friends. If you want to know the facts about real estate, you can simply go to our website.

1:35:32Dave Ramsey:We've got all the market trends on there. You can tell exactly what's going on, and then you can make your decision. Are house prices going up? The answer is facts, yes. Not quickly, not a lot, but they are going up. They've gone up every single month this year. That's a fact. Interest rates are low. The average 15-year fixed rate is 5.95 right now. In any stretch of history, 6 % or less has been considered a low interest rate. It's just tough for it to be a low interest rate when you're coming off of 2 and 3. And some of you still have a recent memory of that, so it makes it feel like it's high.

1:36:17Dave Ramsey:It ain't high. High is 14. High is 10, 12. This is not high. So you can start to figure this out and look at actual trends. Go to RamseySolutions.com slash market or click the link in the show notes and we'll get you helped out. Colin is with us in Missouri. Hey, Colin, what's up?

1:36:40Well, so my grandmother that I haven't really talked to in years, it's been estranged from my father and I'm recently estranged from him and all that. just recently offered the other day to pay off my credit card debt. I never told her how much. Just told her I was going through your steps to get out of debt. And she said, oh, well, I'll help you so you don't have to pay interest. I'll pay off your credit card sorting. Pay me back. And I'm over here like, I don't feel comfortable taking money from her.

1:37:10Dave Ramsey:I would take it if it was a gift, but it's not a gift. It's a loan. Yeah, it's a loan. It's a loan. No, no. No, thank you. I'll pass. Yeah. So estranged and estranged and estranged. There's a lot of estranged going on in your family. The last thing you need to be doing is owing one of them money.

1:37:30Yeah, that's kind of how I felt, not only just for the fact that I'm not sure how tough she's going to be on making me pay back this debt to her, but just I don't personally feel comfortable taking money for family.

1:37:44Dave Ramsey:Well, I mean, if she has$2 million and wants to give you$25 ,000 to pay off your credit card debt as a gift, we'll talk about it. That's fine. That's one thing. No strings attached. But this is not that. This is you loaning money. No, we do not loan money to family. We do not borrow money from family. You will change the quality of the relationship, and you guys have trouble with quality of relationship in your family anyway. Yeah. Don't add to the character. I mean, you've actually reestablished a relationship with this lady that you have hardly ever known, and don't ruin that. Yeah. Do you still have doubts about this?

1:38:27I mean, I never really considered for more than like three seconds for accepting the word. Okay, well then your voice sounds like you're like, yeah, well maybe. That's what I'm picking up on. Are you afraid to tell her no thanks? Kind of. I knew it. I knew it. Yeah, but here's the deal. Let me help you with that. I'm sorry to cut you off. Let me help you with this, okay? You just seem to say, grandmother or whatever you call her, I really appreciate that, but I need to take care of this myself. I got into this mess. I need to get myself out of this mess. Dave and his team are going to help me get out of this mess, and I'm reestablishing this relationship with you, and I just don't think it's a good idea for me to be in debt to you when I'm already in debt over here.

1:39:15So I appreciate the offer, but I just want to build my relationship with you and just move on. I think it's going to be okay. All right. And by the way, let me say this, and I want Dave to weigh in here. She may not like that, but I doubt it. I think she's making this gesture because I think she wants some reparation. She wants to repair. And I think she's trying to make a good gesture here, and I think she'll be okay with that.

1:39:40Dave Ramsey:Dave, do you see a problem with that approach? No, it's the only way I would do it. I think you just go in kindness and say, it's me, it's not you, it's me. Yeah, yeah. I could tell, yeah. I need to pay off my debt because of the way I feel and the guy I look at in the mirror, Granny. But thank you, Granny. You're very sweet. I appreciate the offer. It's very kind of you. It's kind of hard to pass up, but I'm going to because I need to do this for me, what Ken said. And just blame it on you. And that's the truth, by the way, too. But the last thing you need is weirdness between family that already has its old boatloads of weirdness.

1:40:13Dave Ramsey:Estranged and estranged and estranged and then not estranged and then estranged. There's a lot of strange. And so, yeah, just stay away from it. And that's a, you know, don't muddle this up.

1:40:27So, yeah.

1:40:29Dave Ramsey:I think she'll receive that well. Maybe. And if she doesn't, then that's another signal. It doesn't matter. That's right. That's another signal that you shouldn't have done it. Yeah. The last thing you want to do is be owing money to people that get weird when you start talking about money. So it's a bad idea. Megan's in Vermont. Hey, Megan, what's up? Hi, thank you so much. So my husband and I are on baby step two. We started off at$200 ,000 in debt. We're at$172 ,000 in debt as of now. I need some help with my car situation. So I'm a road warrior. I do 60 ,000 miles a year, and my car is unfortunately out of service.

1:41:09It's not fixable at this point, so I'm borrowing my mother-in-law's extra car for the time being. But I'm wondering with the amount of mileage that I do and how much I'm on the road, what is the best way for me to go about purchasing a new vehicle that's going to be reliable?

1:41:28Dave Ramsey:You guys don't have any money. no we're throwing everything at our desk and you're down to one thousand dollars you're doing it the way we teach yes what's your household income it's 250 000 excellent okay all right that's good news what do you do i am a home repair salesman okay excellent okay cool all right um How long can you use this borrowed car? A month, two months? Probably six weeks. I'm on week two right now. Okay. Another month then. Okay. Yes. All right. Well, I'm going to tell you what to do, and then I'm going to tell you what to do long term, okay, and how to think about this. Here's the thing, okay?

1:42:19Dave Ramsey:So the first thing I would do is answer your question. Let's let the pressure off. I would stop your debt snowball and save up$10 ,000 in one month and pay cash for a$10 ,000 car. Okay. All right. And what you're looking for is a car that is ugly and low miles and has a lot of life left in it. An old Camry, an old Honda, a Ford, maybe an old Chevy of some kind. but that's what you're looking for something that's got a lot of life left in it but it's not pretty because no one buys home repairs from you based on your car that's true okay now then let's talk about a principle for road warriors for everyone listening including you whatever you let's pretend you've got unlimited money and you're out of debt we're a couple of months or years down the road from this discussion I think it's fair to say that when you put 60 ,000 miles a year on a car, whatever you are driving, you are destroying its value.

1:43:28Dave Ramsey:Agreed? Absolutely. Miles destroys a car's value. That's a fact. That's a statistical fact, okay? So a two-year-old car with 120 ,000 miles on it is a piece of crap, all right? A four-year-old car with 240 ,000 miles on it has got no value. You've wrung all the value out of it. So the question is, and when you destroy the value of a car, you're destroying the value of what you paid for. And so from a business perspective, what you want to drive is the least expensive car that will get the job done. Now, let's define get the job done. It's got to get there, number one. Number two, it's got to get there with reliability.

1:44:07Dave Ramsey:And number three, it's got to get there with a reasonable level of comfort. So you're not driving a freaking Dodge Neon. You'll be in the chiropractor's office. Okay? So what is the cheapest car that's reliable and reasonably comfortable? Because I'm in it all the time. And that's a$12 ,000 to a$15 ,000 car. And I don't care what you're making or how rich you are. That's all you ought to be driving. Because if you buy a$50 ,000 car, a$100 ,000 Escalade, you're going to destroy$100 ,000 in three years.

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1:45:36Dave Ramsey:in the lobby of ramsey solutions on the debt free stage lee and liz are with us hey guys how are you doing great dave how are you better than i deserve where do you live Tampa, Florida. Oh, fun. Welcome to Nashville. And how much debt have you two paid off? $260 ,781.51. Love it. How long did that take? Just about six years to the day. Cool. And your range of income during that time? We started at$181 ,000. Our best year was$215 ,000. And then I became a stay-at-home mom when our son was born. And we ended up at about$133 ,000. Cool. Very cool. Good for y 'all. What do y 'all do for a living? Lee is a police officer, and I was a certified nurse midwife, and now I'm a stay-at-home mom.

1:46:19Dave Ramsey:I love it. Very cool. Good, good, good. So six years, 261. Did you pay off your house? We did. I love it. Looking at weird people. Very cool, y 'all. So what's the house worth? The house is worth$512 ,000. Very cool. And how much is in your nest egg, your 401k's and stuff? About$570 ,000. Ha! Millionaires! Woo-hoo! Baby steps millionaires. I'm proud of you. How old are you two? 36. 36-year-old millionaires in Tampa, Florida with a paid-for house, ladies and gentlemen. Let me introduce you to Lee and Liz. Way to go, man. Thank you. That's so fun. So fun. Excellent. So did somebody give you like$300 ,000?

1:47:00Dave Ramsey:No. No. No. You just went and got money and lived on less than you make and all that. So six years ago, tell me the story. How did you get introduced to this Ramsey stuff? Well, we had been married and in our house for about a year and a half and we were making a lot of money. We were making extra mortgage payments. We were investing, doing a lot of different things all at once, but didn't have any shared goal or vision. and then Lee found the podcast and listened to the audiobook of the Total Money Makeover one night during one of his night shifts and came home and shared it with me. And I was really concerned that I wanted to be a stay-at-home mom, but I wasn't sure if we would be able to do it with the mortgage payment.

1:47:41So we got on board. We were doing some dumb stuff like chasing credit card points and paying it off every payday. So we quit doing that, got on a written budget, and started attacking the mortgage. And the bulk of it was paid off in the first three years. And then when I stayed home and left my six-figure job, it slowed down. But even still, we surpassed our goal by about 13 months.

1:48:08Dave Ramsey:Wow. Good for you. Well done. So your big motivator, your why, was for you to be home. That was our plan all along. That's why we scratched, clawed, and did all the things we did, right? Yes, sir. Overnights, night shifts, overtime, extra duty, whenever we could pick up at the time. We just did it. There were some days where somebody was always asleep, and we would cook. Or we were both at work. Or we were both at work. We would high-five, and then one of us would leave, and the other one would leave shortly thereafter. So we just worked. All so we'd be home. That's a good why. Yes, sir. It's a good reason.

1:48:44Dave Ramsey:You've got to have something that is bigger than the pain. that makes you go do it because you sacrifice deep. It's hard to believe that as a police officer for 13 years, 10 of that was on night shift or swing shift. So here we are. And now you don't have to do that. No, sir. You're a millionaire. Yes. So you get to work the shift you want to work. Yes, sir. And you've been there long enough. You probably do get to choose now. That's correct. Yeah, I love it. Very good. Very good. And you got the shift you want, which is mommy shift. 24-7. There you go, babe. I love it. That's good. Very good.

1:49:18So I want, I think a lot of people listening and watching going, how in the world did you walk away from a six figure job and still finish? I want you to answer this. I think some people are going, how'd you do it? So how'd you still finish ahead of schedule when you lost that big income? The grace of God. I think, um, anytime we were, we were worried, it was like the budget just made sense by the end of the month. Um, and, And I had paid off some of my nursing school loans before we got married and then went to grad school debt free. So if you're a nurse out there thinking you want to become a nurse practitioner, you can absolutely do it without going into debt.

1:49:59And that helped a lot knowing that anything that I earned was going towards the mortgage.

1:50:06Dave Ramsey:Yeah, there will be some months where we would we have a goal to pay to pay down the mortgage and then we would surpass that. We would say, okay, let's do X. And we would do double that because of just either the paychecks would come in or just all the work. Like I forgot how much we worked. And then the paycheck would show up two weeks later on a Friday and you would go, well, I guess we're doing more. By the way, signs you know you're working really hard is you forgot how much you made. That's a great sign. You're like, wow, I actually worked a lot last month. And when we first got started, we were like, man, every dollar is not for us.

1:50:41We have an irregular income. We get paid every two weeks. It's not lining up on the monthly budget. So if you're out there and struggling with the same thing, just stick with it. Give it a couple months. Keep practicing. Keep plugging away and chunk up those big balances. Because when you're doing a big mortgage or a consolidated loan or something like that, every year we would look at our plan and say by the end of the year, we want X number on that balance sheet on New Year's Eve. And some years we made it. One year I totaled our car, so we had to cash flow it, and we didn't make it that month.

1:51:16One year we made it by July.

1:51:18Dave Ramsey:Yeah. That's fun. So how does it feel? Paid for a house, you're a millionaire, you're 36 years old. It's pretty cool. It's surreal still. Was it worth it? Absolutely. Absolutely. Because you guys went crazy for a while. Yeah. That's awesome. Yeah. Because people always ask us, you know, I don't know, man. I think I want to live my life. Well, you can do anything you want for the rest of your life now. And we also did live life, too. I mean, being on Baby Steps 4, 5, and 6 and doing those simultaneously and following the program, we were still able to cash flow home repairs, go on vacation, and do the things we talk about when you're on those Baby Steps.

1:51:59and so we we did it and just stuck to the plan pretty cool was that the breakers in the picture

1:52:07Dave Ramsey:the dunces are oh okay okay i thought i couldn't tell yeah just got a quick look on it when it flashed in front of my peripheral vision there but yeah wow good for y 'all nice vacation good good good for you wow what do you tell people the key to being a millionaire by the time you're 36 exist? Being consistent, being content, and working hard together, even if you're not seeing a lot of each other. Also, the tracking your net worth was big for us, because yes, you can see some of the debt going away on the house, but then you would also, we would also see our net worth rise, and so, and having a goal, we would like to have X by the end of the year, and once again, sometimes...

1:52:49Dave Ramsey:Because you're simultaneously paying off the house and putting money into your 401k. Yes, sir. Yeah, because you're doing baby step four, five, six, yeah, which is what you're supposed to do. And so tracking the net worth, it doubles the equation. And it helps me because I'm the natural spender. So it helps me to kind of see the end. It was hard in the beginning for me to see$260 ,000. I was like, well, I'll just work hard at the end. She told me, no, you should work hard now because in the end, it will literally fall off a cliff. Yeah. And that's what it did. Yeah. Wow. I love it. You just learned to say, yes, dear.

1:53:23That's such a great example there. What did you guys learn about each other in your marriage as a result of this serious commitment? I think how much we are willing to sacrifice for each other and how much humility we can have and just choosing that over and over again.

1:53:45Dave Ramsey:I'm proud of y 'all. Thank you. And I know your parents are here bragging on you and cheering you on. I got to meet them earlier. And you brought the kiddos with you. Bring them up. Let's introduce them with their ages and names. The reason for doing this, they need the T-shirts that say, I'm the why. I'm why they did this. Oh, my goodness. So names and ages. We have John Edwin, who's two and a half, and Maggie, who's 11 months. Ah. So they're too young to even know how big a hero their parents are. You're old man and old lady Vanderbilt. You got the whole thing started right here. That's awesome, man.

1:54:21Dave Ramsey:I'm proud of y 'all. Thank you. Well done. Very well done. You changed everything. Very cool. Very cool. Very cool. All right. Lee and Liz,$261 ,000 paid off in six years, including putting money in their 401K. They are now Baby Steps millionaires at 36. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah.

1:54:50Dave Ramsey:Love it Aren't they fun What rock stars man Absolutely amazing

1:55:19Thank you.

1:55:51Dave Ramsey:This podcast is brought to you by the Lord of the Rings. Walk in it. J.P. Morgan said, The first step towards getting somewhere is to decide you're not going to stay where you are. Well, that would be true. Here we go. Tyler is in Reno, Nevada. Hey, Tyler, what's up? Hi, Dave. So I'm just going to kind of jump right into it. Recently lost my job back in the middle of July. we used our emergency safety fund that we had to make sure to build a cover and such. My question is... You used your emergency fund for what? For our other utility bills and such to catch up on. We were a little bit behind.

1:56:38And so my question is, my 401k from my previous job now, since I got fired, do I withdraw my 401k to cover the other debt that we have?

1:56:54Dave Ramsey:No. Or should I not? No. If you withdraw money from a 401k before 59 1⁄2, you're going to be charged a 10 % penalty plus your tax rate. And so you're going to be charged the equivalent of about 40 % interest. So, Dave, would I borrow money at 40 % interest to pay off my debt? Of course the answer would be no. So mathematically, that is suicide. So how's the new job hunt going? It's going good. Right now, I currently serve for the Army National Guard, so my leadership was able to put me on orders to keep income coming for my family and I, which I think to them that it is helping a little bit. But other than that, the biggest thing that is wanting to, what was wanting to do the withdrawal is our car loan, which we still have a pretty good amount of balance, and I just wasn't sure whether...

1:57:53Dave Ramsey:What's the balance on your car? About$7 ,000 left. That's not bad. Okay. So what does the, they put you on orders. How much money does that amount to? uh every two weeks it's roughly 2200 okay does that preclude you from doing anything else uh no i mean i typically it's like a um full-time job with the army national guard which the orders is only like three months for three months only so the end of september is my last month that they will help me. And then from there, I let the fire and get me. What Ken and I are trying to understand is they put you on$4 ,400 a month, which is very nice. That's awesome.

1:58:39Dave Ramsey:But you're going in and working every day at the Guard? Yes. Okay. So you have a full-time job until the orders run out in three months. Okay. Correct. So you're going to go get a job, right, for the end of September? Yes, I've actually applied for a few jobs. I'm just waiting to hear back. There is one in particular that I am hoping to get more than anything because it's right around the corner from where we live, and the pay rate is actually pretty decent. It would help us keep afloat. I just wasn't sure to make a drastic move now or kind of hold off. What would be the drastic move? The 401k.

1:59:26Dave Ramsey:No. Oh, we've already established. No, we're not doing that. That's not a drastic move. That's a dumb move. Okay. What were you doing where you were fired? What worked? What happened? I was in a manufacturer warehouse and had a forklift incident, which bent a pole. and from there on I got suspended from the job, because they do like a urination test and breathalyzer just like a normal policy job normally does. And from there I was suspended, waited for about a week and a half, and then when the time came they called me, say I was terminated from the incident and never really gave me a more depth explanation.

2:00:14Dave Ramsey:So there were drugs in your system? No, not at all. Okay, so you just ran a forklift into a pole, and they don't do that from a safety perspective. They fired you. Correct. Okay. Cool. What were you making? I was making total, because I worked a lot of overtime over there. So I was at around$77 ,000 a year. Okay. And how long have you been driving a forklift? Five and a half years. Okay. And one incident? Yes. What happened? Give us the short version. That's a little weird. Yeah, just one mistake? You weren't paying attention? What happened? It simply was just a mistake. I was just exiting out the roll-up door at the half at the warehouse and checking my left and right as I normally do.

2:01:06And as soon as I started to accelerate, I just turned a little bit while looking at the same time and ran into a pole. from there on suspended me and they ended up firing me well the reason i'm digging into this is because you know there's you can get paid really nicely and you were getting made uh you were making good money i would get back into that field if i could i don't know what this thing is around the corner that would be ideal but i would i would be looking at multiple options in that

2:01:32Dave Ramsey:space where you had experience before yeah if you have the ability to operate heavy equipment there There is a tremendous shortage of heavy equipment operators. And so I'd be looking in the bulldozer backhoe world as well as the forklift world. There's a tremendous shortage. Mike Rowe, our friend from Dirty Jobs and I were talking about the other day, he said he's got one guy in Phoenix that would hire 22 people right now today, but he can't find them. Yep. That have experience and can run a piece of equipment, in other words. That's the thing. So that's what I'm looking for there. Mm-hmm. And so, yeah, you just need to get the next thing lined up.

2:02:11Dave Ramsey:As far as the 401K goes, Tyler, what you're going to do is get with a SmartVestor Pro. Go to RamseySolutions.com, click SmartVestor, and sit down with the one there in Reno, or one of the ones there in Reno, and they'll have the heart of a teacher, and they'll show you how to roll it over from your old job into an IRA. There will be zero taxes. You pick a couple of three mutual funds like we teach, four types of mutual funds, growth, growth and income, aggressive growth, and international, and you roll it into that. You only have a$7 ,000 debt. Don't borrow money at 40 % interest, which is the effect of taking money out of your 401k and getting a 10 % penalty plus tax rate.

2:02:52Dave Ramsey:So don't do it. Roll it over. It's called a direct transfer rollover. Do not have the old company send you the check. have it go straight to the investment. They do not withhold. If they send it to you, they're required to withhold 20%. Now you don't have 100 % to roll over. It creates a problem. So get with your SmartVestor Pro today. Jump on that website today, RamseySolutions.com. Get your SmartVestor. They'll help you do a direct transfer. Write that down, direct transfer, rollover. But do it before HR sends you a check from that other place because you don't want them sending you a check.

2:03:32Dave Ramsey:You want the check sent by direction of the new IRA directly into the IRA. That's the direct part of this transfer. The other thing I would challenge you with, Tyler, is you mentioned you were working some overtime, a lot of hours at this previous job. So let's go. You've got the National Guard paying you. Every hour you can work. I would set a goal to try to pay this$7 ,000 off before you're done with your guard duty, this next mission. I think that's doable. And it's certainly, if it's not, you're going to get a long way there. But you can do this with extra work, selling stuff. No reason why you shouldn't be able to knock that seven grand out.

2:04:07Dave Ramsey:Yeah. And we, you said, so I would assume your wife is working. If not, she could be as well. So there's no reason for us to have a shortage of money in this house. You make enough with your guard duty and with whatever else you can do. And then leaning into the next job and moving right ahead. There's no reason for you to be behind on utilities again. So it changes your life when you stay in control of these things. Very, very good question, sir. Sorry you've been through that. Sounds like you're going to be okay. It might end up being a blessing. You might end up making more at the next gig.

2:04:40Dave Ramsey:You may look back and give those people a great thank you for the bent pole in their warehouse. They could put a little sticker on it. It says Tyler was here. That puts us our The Ramsey Show in the books. We'll be back with you before you know it. in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace Christ Jesus

2:05:25Thank you.