Stop Chasing Payments and Choose Freedom

27:40And so the thing you're missing here is there's always a day after the party. Right. And in between those days after the party, you live like this is the last party that's going to happen. Right. And if you go back to 2020, if you had not have just gone bananas, if you had lived just a regular ridiculous life, you would have taken a whole bunch of vacations and gotten some nice cars. You wouldn't have bought your kids brand new ones that depreciated 20 % the day they drove them off the lot. But your kids would be fine. Y 'all would be fine. And you'd have$200 ,000 in cash in the bank. I don't know.

28:19You're killing me. Okay? I know. This is you. And listen, this government shutdown is going to happen. And then you're going to be like, dude, we can live off my check. And you're going to pay all this off in three months, which is all it's going to take, or maybe two months for you guys. And then you're going to be like, boat's in the harbor. And you're going to go down there and you're going to start this whole thing over again. And then one of y 'all is going to get laid off or one of you is going to get the call that, hey, go to the hospital because one of your kids, like you're going to get those calls.

28:44And so let this be the final time. Yes, 100 percent. I think it's a lot easier to tell to my wife if we can say we can live off one of our checks and take the other one. No, no, no, no, no. There's a layer beneath that. You're not you're not hearing me. the greatest thing you can give to your wife is to say hey for the first time in our marriage i want to act like grown-ups that's the hard thing for me carlos i know we're joking around having fun because listen i love a great trip like it's fine like like the things you're saying a nice car nice trip those are not bad things they're awesome things but you're doing it out of order and you're doing it in a level of impulse and a little bit of just kind of of immaturity and so there's you know dave always says that children do what feels good of adults devise a plan and follow it like there's a level of growing up and and to say this to carlos you have two kids in that do you are your kids still in the house all three kids are still in the house yeah the college one has a year left and the other that's fine that's fine yeah yeah but i'm just saying like what are you setting for them the example yeah i'd rather set an example of hey we have a level of limits and boundaries because that's what money we have to with money like that that is part of the name of the game we can always make more and all of it that's great it's not a scarcity mindset mindset but we have to live within our means because that creates a level of peace and stability so when i get you know furloughed and i'm and i don't get a paycheck we're totally fine and guess what we can still go on the royal crib because we have no debt and we're able to save up and like we have a great income but we're living with a level of reality and there's a little bit that you guys are just like, oh, that feels right.

30:21Let's just go, go, go. And what scares me is you both sound like that, you and your wife. Usually there's like one boring person in the marriage that doesn't want to spend or do anything and then you have the partier. But both of you, I mean, that's what it's going to take, Carlos, for you guys to buckle down and just say, hey, we are going to live on less than we make significantly. You can live off half of her check, by the way. Clean up this lease, clean up the car and the credit cards, cut up the credit cards, and we're going to live life differently. I don't know if you're going to do it, Carlos.

30:48I don't know. I want peace for you. I just can't want it more than you want it for yourself.

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32:11If you are wondering if you are on track with the baby steps, well, you can find out. You can take a quick quiz to check your progress and receive a personalized plan just for you. Just head to the show notes if you are listening on YouTube or podcasts, and you can click the link titled, Are You on Track with the Baby Steps? And complete the quiz. All right, let's go to Martha. She is in Florida. Hi, Martha. Welcome to the show. Hi, thank you for having me. Yes, absolutely. How can we help? Yes. So, I am just wondering if, you know, if I should file for bankruptcy or not. Oh, man. What's going on?

32:55What's happening? So, we've kind of overwhelmed ourselves, mine and my husband, and about 90 % of the debt is mine. Okay. And, you know, it's pretty bad. What does that mean? Tell me what that means. What's the debt? We, you know, we have about, like, including his debt with mine, we have about$20 ,000 in credit card debt, about$12 ,000 in personal loans. I have about$15 ,000 in collections. Is that credit card collections or medical debt? That's medical. Medical, okay. They have, I have about$15 ,000 in student loans. and I know that doesn't go away with bankruptcy, but we have$16 ,000 in car loans.

33:45Are those two separate cars, Martha? No, it's just one. One car. We have one car that's paid off. Okay, wonderful. Okay, keep going. And then we have our mortgage, and our mortgage is about probably 70 % of our income. Your payment, your mortgage payment is taking 70%. Okay. And for the house, how much is the house worth? It's right about$285 ,000. Okay. And how much do you have left on the mortgage of that? $277 ,000. Okay. So it's basically a wash. Yeah. There's not much equity. We haven't lived here not even a year yet. I gotcha. And how much do you... We were talking about selling the house, but then we looked at our contract, and since it was a USDA loan, we can't sell the house until we lived here a year.

34:35Yep. Yep. And when will a year hit? What month? Uh, December. Okay. Coming up. You can put on the market right now and put a 30 or 60 day contingency. You can't afford a house if it's 70%. Yeah. I absolutely 100 % agree with you. And my husband is just like completely not interested in selling the house. Well, he wants to like get rid of all of our other debt and then keep the house. Okay. So those are two separate conversations. Yes. We need to get rid of the debt regardless of the house payment. But if your house payment for sure is more than 50 % of your income, but we even say 25 % of your income.

35:13So, no, you have too much house. So your husband needs to understand the math. I mean, you can't live your life with 30 % of your income. That's what it ends up being. So, no, you guys have too much house. You bought too much house. How much do you guys make a year? I currently, you know, do DoorDash and Uber, you know, because I am a full-time student. but I am also starting a job in January. Okay. How much will you be making a year in the job in January? It really depends. It's a tipped worker's wage, so it really just depends. I worked there a few years ago, and I was making around$30 ,000 a year.

35:51Okay. And how much does your husband make? He makes$56 ,000, and he works two jobs. Hold on. You're going to school. What are you studying? I'm going for social work and so you're going to get a degree that you've paid a bunch of money for but you're going to go back and make the same exact money you made two years ago without that degree no I just I don't have my degree yet so I'm still going to school for it I know but when you get this job I graduate in May oh okay so you're taking another job in January that's going to hold you over until May to make it yeah okay okay and then when you graduate in May Martha and you start a position what on average do you think you'll probably make if you are using your degree and you're in it for social work?

36:34I looked in the average in my state is about$50 ,000 a year. Okay. Well, you're not bankrupt. You guys have a massive mess on your hands. Do not fall bankrupt. Yeah, no. It's going to take some significant sacrifice of time and energy for you guys to clean this up. So it is very doable. And so what I want to start with is there's a couple of highlights. If the car, do you know if you Kelly Blue Book, the$16 ,000 car, how much you could sell it for? I have. Kelly Blue Book says it's about$3 ,000. It's$3 ,000. Yeah. When did you, did you guys roll over bad equity from another car into this loan?

37:22I did not. I bought it out. I had a clean slate when I bought the car about three years ago. For how much? How much did you buy it for? I got it for about$18 ,000. My interest rate is pretty high. What is it? I think it's about 18%. Did you buy it at one of those corner markets? No, I bought it through CarMax. Yeah. Okay. Martha, did you, when you looked on Kelly, did you look at kellybluebook.com? Yes. And did you do dealer trade-in or did you do like an individual, selling to an individual? I did individual. There's no way it's depreciated. I just don't think it's$3 ,000. What kind of car is it?

38:05It's a 2013 Nissan Pathfinder, but it has a lot of miles on it. Because when I bought it, it had about$80 ,000. And in three years, we've gotten it up to$150 ,000. My husband, you know, he works out of town and he also delivers pieces part-time. Yeah, I don't know. Okay, well, I would do some homework digging there because if you can do, gosh, if you could sell it for even, I don't know,$8 ,000,$9 ,000. I mean, I don't know. It may be a wash. You may be stuck with it. The medical, the collections from the medical debt, have you contacted them at all? um i did contact them to get you know how much i owe like everything i owe um but i haven't set up like any payment plans with them yet okay um but you know it's almost to the point where you know they are contacting me either you know yeah bad yeah most bad debt credit card debt for sure and sometimes medical debt you can actually talk them down significantly sometimes pennies on the dollar depending on what it is what's it through is it a collections agency that has it right now Yes.

39:11Okay. So, yeah, I would tell them, like, hey, I have no money. I cannot pay this$15 ,000. And they may settle it with you, Martha, for$5 ,000. I mean, I don't know. Usually you have to have cash to do that. Yeah, you would. You would. But I'm just saying, like, you want to be able to get to a position where that is at least the one debt. That and the car were the ones I was trying to kind of finagle for you to see what we could figure out to get out of this. But usually debts and collections you're able to negotiate. So remember that. So that$15 ,000 hopefully can get significantly down. And if you actually get them to a place where they will take that payment and you've negotiated, get it in writing.

39:49But that's what I would do. So I would just start, honestly, Martha, with the baby steps. And you guys, I mean, your income isn't, you know, terrible. I mean, if you're making$30 ,000 starting in January,$86 ,000. But the house is a pain point. You have, what John said, put it on the market. You have to. Like, there's no way you guys can afford this house. And Martha, I've done this. I bought a house and we had it sold within 10 months because I got into it. And that plus my student loans, plus my car note, it was overwhelming. And it was a hard conversation. My wife cried when I said we have to sell this house.

40:23I moved us into a residence hall apartment. I mean, it was, it was, I was, and I was the associate dean of the university and I was, I was embarrassed for myself, but that's what we had to do. Cause we had a math problem and underneath your math problem, you have a relationship issue, which is you need to be able to tell your husband, I'm not safe here. I don't feel good. I don't feel safe in this house. We owe too much money. I'm getting buried by this thing. And if he looks at you and says, I don't care, then y 'all need to address that issue. Cause y 'all are going to, it's going to take both of y 'all pulling in the same direction to get out of this mess.

40:56Absolutely. Yeah. So getting, getting the household, which I know is a feat that's going to be, you know, hopefully I think we're seeing on average, it's about 60 days on the market, but I mean, I'm praying for you guys by February. Hopefully you have an offer on the house. You have a new job and you're like, you guys are starting this process. And then, and then Martha, I would just start working my way down the debt snowball and I would be paying off the personal loan, the student loans, and then going to the, to the car and then to the credit cards. But don't be digging yourself into a hole while trying to get out.

41:28So you guys need to stop the debt. You got to, you got to cut up the credit cards. You got to be done. But I would look into that car and then I would be saving some cash to see if I can settle on the medical debt because I really think you can.

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43:21Welcome back to the Ramsey Show and the Fairwinds Credit Union Studio. We are taking your calls at 888-825-5225. Up next, we have Christopher on the line, and Christopher is in Florida. Hi, Christopher. Welcome to the show. Thank you for having me. Absolutely. How can we help today? My question is, I have$10 ,000 worth of credit card debt. I'm wondering if I should use money from an old retirement account, a 403B, to pay off that credit card debt. No. No. What have you done with that 403B, the old one? Have you rolled it into another fund or an IRA, or is it still there with your old company? It's still there with my old company, and I just moved in July, so I'm settling into the new company right now.

44:13Gotcha. But if I can explain, a year ago, I was at$32 ,000 of credit card debt. Nice. Congrats, bro. Yeah, I paid it all off before I moved in July. Okay. It basically came on because I had a car repairs that I needed to make$12 ,000 of disaster anyway. Okay. But then I paid it all off. I took a second job. I paid it all off. I moved to Florida and then I had$10 ,000 in repairs for my house. Okay. And I had to put that back on the credit card. Okay. Because I didn't have a savings. I didn't have a savings yet. Yeah. Because I had just paid it off. Yeah. So I'm sick and tired of being sick and tired.

44:59Yeah, going back. I hear you. Totally, totally. How much money do you make a year? I'm at$100 ,000 in salary. Okay, perfect. Okay, can I challenge you on one thing, Chris? And this is going to be key to you getting through this. I want you to say the words not I had to do this stuff with this house. I want you to use the words I chose to. because i know i had to it was repairs uh damage to a sewer i could not do anything with the house rent it out sell it or anything unless i made this repair right but to but to john's point you could have you could have paused taken on a second job saved up 10 000 over two to three months and then gone back and done the repair you see what i'm saying like it's just i mean you could have though like that like yeah but just the point in the moment because it was it was sewage backing up I was in a desperate situation.

45:53Totally get that. I hear you. I needed to get this. I totally get that. But the key to, I think you and I both, we both, and Rachel, we live in a culture that says everybody else has to come rescue us and everybody else is the cause of our challenges. and I want us just to sit in the driver's seat of our own lives and say, I had an emergency. I didn't have any money. I chose to deal with this right away. I had sewage backing up in my house. And when they dug in, it was a wildly bigger deal than I thought. And I went and borrowed$10 ,000. Just shift. It's not about blame. It's not about being evicted.

46:33It's none of that. It's just about you saying, I did these things instead of these things happened to me. And so I had to go. So it's just that tiny little shift because then you're in the driver's seat of your own life about what you're going to do next. And 80-year-old you, would you go borrow$10 ,000 at 30%, 35 % to pay off this credit card? No, I wouldn't. Okay, so if you cash out this 403B, you're borrowing that money at 20 % taxes or 30 % taxes plus the penalty. You're borrowing that money at 30-something percent. Okay. So in my mind, I was thinking that money is making me 10 % return every year.

47:17And the credit card is at 15%. So you're actually flipping it on me, which I'm grateful for, because I was thinking I'd be saving 5 % over the next however long it takes. You'll be pulling that money. How much is in that 403B account? It's$42 ,000. Okay. So you'll probably get, what,$30 ,000? No, you wouldn't get that much. But you get 25, 28? Probably, yes. Yep. And so just do the math on how long it would take you to earn that back. In the account, yep. Yeah, so what I would do, I would meet with one of our SmartVestor pros in your area and figure out a way to get that 403B out because not keeping retirement, and this is true for a 401K, when you leave a job, you want to just roll it over to an IRA so that you have full control and it's out of the company that you used to be at.

48:09So I want you to roll that over. But to John's point, not touching it. It's not worth the taxes and the penalties. And then and then getting yourself in a position where you not only pay off this credit card debt, but then you bump up that to that emergency fund as soon as possible. And that urgency is what causes the second job. The urgency is what cuts the lifestyle and all of it. And, you know, not to belabor this point, Christopher, but it's just a good example, just to say out loud again, is we get so many calls on this show with exactly what you were saying at the beginning of like, I had to do this.

48:41And what we force people to do, and again, it's either, well, my car broke down. I had to go get a car payment because I have to have a car. Or I was going to college. I didn't have any money saved. So I had to take out a student loan. You know, whatever the cause is that causes us to go into debt, we hear one line of thinking, meaning that there's no options. And when you feel like there's only one singular option, this is the only thing I can do. Debt is going to be the route that's just right there and available. And so what we want to push people to, not just you, Christopher, but people listening, is when you get backed in a corner of a situation and thinking, this is the only way I can do this.

49:14The only way is with debt. That's it. That's the only way. I'm going to push you for options A, B, C, and D, because there's always other options. But when you feel like there's only one option, we usually don't make a great financial decision. Can I just call this out, Chris? This is the worst. You busted it for a year to pay off 30 grand. And you've got to be tired, right? Yeah, you're so frustrated. And I mean, I was working in a ministry job and took a job waiting tables at night. Yeah. Right. Which, which, by the way, you shouldn't have to do that. You're serving people all day long and to pay your bills, you got to go to another job.

49:54Like that stinks, man. Like we'll sit here with you on that. Well, the good thing is, two good things is this change in job really boosted my income. Excellent. It made me move across the country. And then I do have a renter that's coming into the house the first of the month. And it's actually one of those situations where I feel like I'm also helping her out to get on her feet. Cool. And so I know that everything is working out, but it's, you know, looking at the options of, Do I go and find another serving job? Yes. Do I go and drive for ride share? For three months. Or a couple more. It's going to be miserable.

50:33And then just make a plan right now. We're talking to you right before Halloween weekend. Make a plan that February 1, you owe nobody anything ever again. Yeah. Christopher, with your new job, how much? Are you single? I'm single. Okay. And the job boosted my income. I'm so glad. So have you done a written budget? I have much more. Okay. Have you done a budget? Yep. Okay. How much extra do you have? I did a budget and I have. Wonderful. How much extra? And I did, I mean, I changed my lifestyle to, you know, I shop at Aldi. I don't go out to eat. No, it's perfect. You're crushing it. So how much extra do you have per month with just your normal job?

51:09Just the new one? 2 ,800. 2 ,800. Okay. So that's what's crazy about the math is I'm like, oh my gosh. You know, if you go and you make an extra, let's just say 2 ,200 a month, you know you're at you're at five thousand you'll have this paid off in two months so which is the holidays which sucks but maybe you get better tips because but november december and then like what john's saying and then keep doing it for two more months rack up another 10 grand to set aside for your for your emergency fund and then you can actually start saying okay now i feel good four months for the rest of your life i go back to my normal job but i'm going to keep my income limited to get that three months yeah back on and then you just pick back up but yes within five months Christopher, your life could look different.

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53:29One of the best ways to spread the word about this show to be able to help your friends and family and other people, even around the world, is just sharing it. Whether it's on your social, maybe you subscribe, you comment, whatever you can do to help spread the word. That is so, so helpful. And even on some platforms, even like YouTube, if you are commenting or subscribing, it helps the algorithm to get the show in front of more people. And so you are our best way to spread the word, honestly. So we are so grateful for you all that listen and watch. And we're praying that this show helps you. It's why we do it every single day, hoping to give somewhat good advice.

54:05Right, John? Somewhat. We're trying. And to be able to help when it comes to your life and your relationships, your career. And so just continue to help us do that by liking, subscribing, and sharing the show. we appreciate you. All right, let's go to Kristen in Arkansas. Hi, Kristen. Welcome to the show. Hey, how are y 'all? We're doing great. How can we help? Yeah. So me and my husband have been working really hard to get some of our debt paid off. We work a bunch of side jobs. And I'm trying to figure out what the best way it is to deal with our friends. If they get upset, if we're busy, or if we don't, say we're not going to spend the money on a weekend trip or something like that, because we're too busy, you know, working to try and get out of debt.

54:47Yeah, and when you say that they're upset, what does that mean? That they miss you guys and they're like, oh, man, we hate that you can't come? Or is it like, come on, y 'all, y 'all are being crazy? A little bit of both, probably. It's kind of like, you know, one of our friends has said, like, hey, I'm just trying to figure out a free time again so that we can hang out. And it's like they get it, but they're also like, they're quality time people, and so they just want to also just spend time with us. How old are you guys? I'm 30 and my husband is 27 okay so this is going to be the question the answer to the question beneath your question and that is this you're at an age and it stinks it's the worst when the friendships that served you really well in your 20s start to thin out and really change yeah and it comes somebody's going to have a baby and you're going to find out they're like a weird little league parent or someone's going to get like a doodle and call themselves a pet parent or you're going to get like, you're going to be the weird cult people that like start paying off your debts.

55:49It's just like when you just start, the values you have begin to emerge in a weird new way. And the people that were by your side in your twenties, there might be 10 of them. You'll suddenly look up in 30 at 35, there'll be two. And it just stinks. It's just hard because here's the deal. I had buddies when me and my wife started doing this and they of course they made fun of me, that's what friends do but they also were my chief supporters in whatever weird thing me and my wife wanted to do you know what I mean? If you find friends that are getting on to you because you want to have peace in your life and have freedom in your life and they want to make your journey about them then they may not be your friends down the road or if you just have some buddies that are like do we miss you?

56:34Can we come hang out? Here's what my buddies did. They would grab whatever was in their fridge and we'd come over once a week and we would just hang out at my house and have dinner. We wouldn't, didn't go out. They'd be someone to bring over a half bottle of wine they had left, a half eaten casserole. We'd make tacos and it costs no money, but it was just a way for us to all hang out because for a season, me and my wife couldn't go on vacations and we couldn't do weekend stuff or we'd go camping. We didn't do some camping together because it was so inexpensive. But it's just about being honest about your values.

57:03And maybe it's, it's, it's, they're saying with their actions, like, we're not, we might not be friends long term. Yeah. And Kristen, this isn't forever either. I mean, how much longer do you guys have? Oh, gosh. Probably a couple of years. Okay. How much debt do you guys have? Let's see. We have, do you want mortgage or just non-mortgage? No, non-mortgage. $162 ,000 non-mortgage. Okay. Is that student loans? What is that? That is credit cards, some medical debt, student loans. We have a rental property and a land loan. Okay. How much do you guys make a year? Our take-home every month is$4 ,900.

57:48Okay. Yeah. So when you guys map this out, what are you finding from a timeline perspective? so we're even working like side jobs and we probably bring home an extra like three to four thousand dollars a month doing that and so um y 'all are gonna have to sell some stuff yeah what's the what's the rental property how much is that it's 40 000 um it has probably about 5 000 it's been in remodel and it's probably got about five thousand dollars left to finish it okay and then how much you're gonna sell it okay how much could you sell it for Well, we're either going to rent it out. No, you need to sell it.

58:25Y 'all can't afford it, Chris. Yeah, you're not in a place to be landlord. Yeah, you don't need to be a landlord. So how much, once it's finished, how much could you sell it for? Probably$70 ,000,$80 ,000 maybe. Done. Is the hope. Okay. Yeah, because that's going to give you money then to turn around and throw at this debt too. So no, I would get rid of that. What about this land loan? Are y 'all living on this land or do y 'all just buy your dream property? Pretty much about our dream property. We want to build on it eventually. Okay, sell that too. You can't afford it. How much is that? It is$75 ,000.

59:00It's a 15-year loan. Okay, yeah. Y 'all need to unload some of this stuff. Yeah. Yeah. If you sold$75 ,000 and then you sold$40 ,000, that's at, what,$110 ,000, plus you got another $40 ,000 from the equity in the home that you just fixed up. Yeah. I mean, yeah. You're free. Yeah, we're hoping to have all of our cards paid off at the beginning of the year and then start putting the extra to the rental house to get it finished and either, you know, to get this hold and give us a lot more breathing room. Yeah. And my husband's also supposed to get an increase in pay. That's great. Yeah, y 'all have just done a couple of things out of order.

59:44The things y 'all have done are not necessarily bad. You know, buying a rental property, buying a piece of land that's just out of order. You guys have student loans. You got medical debt. you're having to work extra jobs to keep all of this it's not worth it it's not worth it because you can do all of that again Kristen that's the other thing think about in 10 years when you're 40 40 you're still young and fun and great and you can do those kind of things you know what I'm saying like it's not like it's a now or never thing and so you guys in your late 20s being 30 just get some margin financially and that's what I would be chasing as John always has what do you say?

1:00:20I'm solving for peace. Solving for peace. And listen, I want land. My quote made such a difference in Rachel's life. She couldn't even remember it. But I'm always solving for peace. Here's the thing. I want land so bad. So bad. Like not healthy bad. And I can't afford it right now. And we're saving like bananas for it. But like I don't have the money for it right now. And what I don't want to do is mortgage my anxiety. I don't want to mortgage my stress in my house. I don't want to mortgage my time away. I want to just exhale and say, I really want this thing. And I got a target for how much I want to save up.

1:00:57And I'm just going to keep doing that until I got it. And sometimes like for you, it's a side hustle. For me, that's an extra speaking gig on the road or it's me taking some more or whatever. But like we're in the same boat. I really want this. I can afford it right this second. And that's okay. It's totally okay. But you need to hear if you sold that land. That's what I'm trying to figure out. Yes. Y 'all are free. Y 'all are free. If you sell this land and sell this house and you pay off these cars, y 'all are free. Because your credit card debt is what? $4 ,000 or$5 ,000? It's$16 ,500. $16 ,000.

1:01:29Okay. And how much is the medical debt? Like$1 ,500. It's not much. Okay. So that, yeah, that can be cleaned up. Yeah. So you guys, technically, if you think about it, once this house sells and the land sells, you guys have$16 ,000 of credit card debt to clean up. And then you could do that. Golly. in, you know, six months or something. No, you're making extra$4 ,000 a month. You can do it in four months, three months. Well, that's the goal. It's like, with how much extra we're making with our side jobs, the goal is to have time off. I know, Kristen, but that was, okay, let me just, I do want to, just because I love you.

1:02:02So I'm like, it was not your goal because you guys were like, well, we may rent it out. Oh no, my husband, you know, we bought our land. Like these weren't options at the beginning of the call, but John and I just freed you guys, freed you up. So you have to make some decisions of what, Or you're going to be doing this for so many years, and it's not worth it. It's not worth it. You're going to wind up pregnant. One of y 'all is going to wind up needing to go back to the hospital. One of your parents is going to get—like, it's just life is going to happen to you. Yes. So, again, these things are not bad.

1:02:31I want you to have land. I really do. I just want it to be yours, not a bank's. Yes, exactly. So get an emergency fund in the place. You guys start investing after you pay this off. Then start saving some money on the side. And, yeah, and find some land. and I mean, it may be five or six years, but that's okay. It's great. That's okay. But just do it slowly and with cash, Kristen. So I know you called about your friends, but we're your friends too. So we just gave you some advice. Your friends are right on this one.

1:03:15you

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1:05:06Our question of the day is sponsored by Y-Refi. If you didn't take out private student loans hoping to default, but life happens, and Y-Refi will not shame you, they'll help you explore a real plan to get back on track. Head to Y-Refi.com slash Ramsey to find out more. That's the letter Y-R-E-F-Y.com slash Ramsey. Not available in all states. All right. My husband and I are 45 and 43 years old. We've been married for one year and following your suggestions, we combined our money together. This was uncomfortable at first because both of us had financial trauma in our previous relationships. Good for you guys.

1:05:46Not for having trauma, but for feeling that and then going to do the next right thing. It's amazing. However, we trust each other and it's been great. We feel closer together because we are making shared decisions around money. Awesome. We make around$250 ,000 a year combined and we have over a million dollars in assets. Amazing. We own previous homes, which we are using as rental properties, and we have opened an investment account together. Our question is, we're both recovering from alcoholism, seven years sober for me and eight for him, and we're both still active in AA. should we do anything to protect ourselves if the other person relapses?

1:06:24It sounds like y 'all are doing those things right now, which are we're talking about hard things. We're putting past traumas on the table and we're acknowledging them. And then we're choosing to go do the next right thing. Y 'all are staying in AA, which means you have sponsors. You've got people that are walking in life with you. It sounds like y 'all are doing those things. And so if you were sitting, if this couple is sitting with me, Rachel, if Lindsay was sitting with me and her husband, I would ask, usually this question comes up when something's starting to feel wobbly. Yeah. And so I'd want to know what's the basis behind this question.

1:07:01But as far as two people who have trauma in your past, who have struggled with substance abuse in the past, y 'all are doing all of the right things. And man, I would hug both of them if they were sitting there. I'm proud of them. Incredible. And so I guess the next question I would ask is what are you trying to do to protect yourselves? The only other thing I could think of is if you have somebody that meets with y 'all every year that goes over your finances with you that would serve like a buddy or a financial advisor, starting to get some professionals in your corner, because now y 'all are stacking up some serious money.

1:07:39And anytime somebody's been in recovery or someone's in recovery and you start getting this kind of money, I always want, like, make sure you get somebody else that's walking alongside you just because it gives you so much more resources to get yourself in trouble again. But it sounds like these guys are doing awesome. Yeah. Because I, there was a book I read and they talked about this, how in recovery specifically, if you get too comfortable, you start to feel like we're good and money can do that. So to your point, you start to stack up a level of financial comfort and you're like, Oh, we're good.

1:08:11Like I feel safe and good. And then you stop doing the things that got you that's it to be in recovery so yeah but the fact that they're still in aa yes um this would have been my first recommendation if y 'all said we're we've been sober for seven or eight years i would say go go back start going back to meetings right and go together go together and maybe share a sponsor or whatever like whatever i don't think you can share sponsors but um lindsey i'm i'm i'm blown away i'm blown away well done y 'all the work y 'all are doing so great so great good for you all right let's go to justin in north carolina Yeah.

1:08:41Hi, Justin. Welcome to the show. Hey, how are y 'all doing today? We're doing great. How can we help? So, long story short, I'm on baby step three. I think I'm about to hop right into baby step four. Congratulations.

1:08:59So, what I'm wanting to know is how aggressive should I be on paying off my mortgage versus investment towards retirement at this moment? Oh, you hate that house payment now, don't you? I do. How big is it? How much do you owe? Well, right now I owe around$210 ,000. Okay. How much do you make a year? Okay, so I do have a salary and I also make VA disability. So right around now I'm around$90 ,000. Okay. Perfect. Are you married, Justin? I'm married. You are? Okay. Does your wife work? right now i've been able to drop her down to about two days a week to stay with the little one yeah great yeah how many kids do you guys have so just one one little girl oh sweet okay well we always say when you're moving past baby step three you're going from one to three which is intense i mean you are full on i mean it is sacrifice going going going and then baby steps four, five, and six, we move into intentionality, meaning you want to fund 15 % of your income into retirement.

1:10:07So you guys start, you know, opening up, you know, two Roth IRAs if you haven't already, if your work offers a 401k. So start some of that investing, 15 % of the income. And then I would open up a 529 for the little one and put some money in. You don't have to be too aggressive with that right now because I know you guys want, you know, you're filling those house payments. So So I would get with your wife because my guess is she may not be as motivated to pay this off as quickly as you are. Is she as gung-ho as you? Well, actually, I had this talk to her about a week ago, and I think she's on board.

1:10:45Okay. Well, if she's on board, that's great. I mean, you guys are both adults, so you can make a decision to say, yes, we're going to throw everything else at the house, and we're still going to just go, go, go. We just don't want you to burn out because when you pay off your mortgage, that's a long game. Most consumer debt can be paid off two to three years, where the mortgage on average is anywhere from eight to nine years. So it's just a longer game. And we want you to be able to enjoy your life during that, too, right? You've worked hard. You are not being irresponsible by, you know, upgrading a car if you need to, going on a trip.

1:11:16So I do want you guys to enjoy this life. But again, you both together, if you both agree, hey, we're still going to buckle down and throw this at the house, you can. I mean, George Campbell did that. John, I feel like you were that. I would say if it's going to go beyond two years, if it's beyond possible, how old is your baby girl? She'll be two in December. Okay. Here's what I would hate. I would hate for you to wake up and she's seven and you've worked seven days a week and you missed some of the magic moments. You missed all the magic moments. Right. And if you told me, hey, between my salary my wife's salary, we could have this house.

1:11:58If we just sucked it up for 24 more months and we could just blow through this thing or 18 months, I would say in my house, that's what we did. If you're telling me it's actually, we could just go full steam ahead. It's gonna take five years. I would tell you, man, slow down. You've done an amazing job. Amazing job and enjoy a little bit of your life a little bit and still, and be a little, double up on your payments or pay an extra two a year or an extra three a year and shave off big chunks of that mortgage but um man there's something about enjoying life yeah dad's been there on saturday mornings when they can at soccer games yeah and it's one thing when it's freaking credit cards and car loans and all of this you know but your mortgage i'm like it's it's your home um and so the and it's obviously a much larger debt usually and so it is gonna take that time so i would say just be realistic about where you guys are because how much consumer debt did y 'all pay off in baby step two oh lord y 'all yelled at me about a no dude i promise it's not worth worse than most of us you you yelled at me in a good way what is it oh how much you pay off so i pretty much lived it up in my 20s i turned 30 this year i've had boats cambers trucks you name it excellent and it just got to the point it just got to the point where it was fun.

1:13:20Yeah. How much did you pay off? I realize I'd say about 70 grand. That's amazing. I'm proud of you. That's incredible, Justin. I'm proud of you. Yeah, so my point is, is that you guys have already done an incredible feat of paying off$70 ,000 of consumer debt. You have your baby step three. You have a fully funded emergency fund. What you guys are doing is incredible beyond what the average American is doing. So if you've done those things, check that off. Be proud of yourselves. Be funding some retirement on the side. Be thinking about college. And then throw some extra at the house. That's great.

1:13:54But again, like John said, please don't go and work 80 hours a week just to get this thing paid off. Just slow down. Be intentional. I want you guys to have a plan. And you can have more of an aggressive plan. And even the mortgage calculator, if you go to RamseySolutions.com, plug in some of those numbers. I'm like, you can see how quickly this can get paid off by just throwing a few extra payments a year. Like it's crazy how quickly it fast forwards the process. So do some math around it. Take a breath, celebrate. I want to celebrate you, brother. You did well. Well done.

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1:15:38Up next, we have Isabel in Illinois. Hi, Isabel. Welcome to the show. Hi, thank you so much for taking my call. You're so welcome. How can we help today? So my question is, how do I find a margin within my very small income with about$6 ,000,$7 ,000 in debt? Which I know may not sound like a lot, but again, it's more so my very low income that I'm coming up. Sure. Yeah. How much are you making a year? Uh, I'm making about 27 to$30 ,000 a year. Okay. And what are you doing? Um, I work for a small company, um, roughly paycheck wise, I get about$2 ,066 a month. Um, and again, it's just kind of paying down my debts to get to where I want to be financially, as well as securing a home down the line and everything of that sort.

1:16:43So, Isabel, you said you're working for a small company. What are you doing? Are you doing sales, admin? What's the position? Basically a receptionist for a countertop company, which does okay, but, again, it's not corporate money. No, for sure. Are you married? Do you have kids? I do. I do. I'm not married, but I do have a partner. Okay. No kids, though? Yes, kids. I have a toddler and one on the way. Okay. Oh, congratulations. Thank you. And toddler goes to daycare? What does toddler do during the day? Okay. So that's probably a chunk, too. How much are you paying in that? I'm paying roughly$800 a month for healthcare.

1:17:29Okay. And how much is your rent? um that's another issue um our rent went up significantly uh last year uh going into this year so we ended up i could not budget my my income to the rent rent was about 1900 a month for a one bedroom um and i did not find that feasible with my income plus my partner's income So we ended up moving in with my parents to kind of lower all of our costs down. So that's where it's at now. I do pay bills within my parents' household, which roughly around with my bills roughly sums up to$800 a month in bills. And is the partner paying as well? Not at the moment. So what really took a toll on us financially regarding rent and why we had to move in was because he has his own business.

1:18:33Unfortunately, with the business, he's a mechanic. I'm really not sure, but more of a performance. He fixes engines, motors, transmissions, all of that stuff. Is he making any money, Isabella? No. So what had happened was... Hold on, hold on. Let me stop. Yeah. Like what you need right now, like what happened is important, but not right this second. And so let me say it like this. You all two were in a boat and the boat hit something, something broke, an old weld popped loose, somebody shot a hole in it. Right now, y 'all are drowning. And you're the only one with a bucket. And it doesn't matter what happened to that boat.

1:19:17what matters is y 'all need to swim to shore okay so he had a business whatever happened didn't happen doesn't matter he's got to get up today and go knock on doors and every single mechanic shop i walk by has a sign outside that says we're looking for asc certified mechanics everybody every single shop looking for mechanics he's got to go get a job two jobs he's pushing yes he does do that he has a part-time job right now but most of that income is going to repay all of the loans that he got for the business itself because we don't want to bring that into if we ended up buying purchasing a home getting married all of that stuff what happened with his business really did put a lot of financial burden on us yeah yeah how much does he owe his business owes roughly eight thousand dollars nine thousand dollars from what we've been able to pay down um that completely drained our savings okay so he only owes nine thousand dollars is that right isabel right okay that's not a ton of money yeah he can go he can go drive uber eats and make yeah two to three thousand do you understand he could have this cleaned up So you have a, if I were you, and I don't want to paint this picture, but it's about like, this is, if I had a toddler, one on the way, and the guy I'm doing life with had a major financial thing that wiped out, you said our savings.

1:20:55So I don't know if you put money towards it. So you gave him money. There is, there's a lot of, there's zero security. There's not a lot of safety in all of this. And so a part of me, you guys have co-mingled so much with kids living together and all of it and money. Um, Isabel, just for you and just to make this as clean as possible, I would be separating everything and he needs to go and do door dash and be at night and be a mechanic during the day to John's point. Um, and I know that the business, that whole thing, I'm sure his self-esteem, I'm sure everything's just terrible. Like I bet he does feel a lot of guilt, shame, who knows, but he has to continue to provide for kids that he has.

1:21:36Do you know what I'm saying? and a girlfriend, a fiance, whatever it is. So he needs to go do all of that. You then, Isabel, yeah, I would be for your sake and your debt, it's not a lot either. I know it probably feels very overwhelming like what you're saying with your salary. I'm thankful that you have a place to land when you have family in town. That's such a gift being, you know, having two kids and you're doing this. So I would be looking, Isabel, at from a salary perspective to up your salary. because, man, I mean, you're at the cusp with two kids on poverty level. So I would be looking for something like$36 ,000, something that you can do that's going to be bringing in more money.

1:22:20And ideally, it's a primary income position. And so I would be thinking through family, friends, people that you know, anything that you can start to do to, yeah, open some doors. I'll send you Ken's book, Find the Work That You're Wired to Do, because he has a great assessment in there. And so Jenna will pick up. We'll send that copy to you. And I want you to really start dreaming and thinking through this about, like, what do I want my life to look like? Not just in the next nine months, but what do I want it to look like in the next nine years? You know, what do I want to do with my life? And I'm hoping together, I mean, I pray that you guys get married and you guys, you know, flourish and do all the things because you guys have built a life together.

1:23:01but my hope is that you're in a position where you feel good about that. Yeah, you're not going to feel good until he starts acting like somebody you can anchor into. Right. And here's what this looks like. Is this his baby on the way? Yes. Okay. Both of them are his, yes. Then this is what this looks like right now. He got knocked down. His business fell out from under him. He wasn't good at it. Whatever. It doesn't matter. It looks like him waking up at 4 a.m. every day and Ubering people to and from the airport until he starts work at 8 o 'clock. And he is a mechanic from 8 to 5. And then he gets off and he has dinner with you and the young one.

1:23:41And then he goes back out into the world and does DoorDash until midnight. This is all of human history. Men have had to go work like crazy to provide for their family. and$9 ,000 he can have that cleaned up in no time but he's got to say my two kids and my future wife are worth it one year two years of just working myself until I weigh nothing I'm costing myself sleep all that he has a major priority and like Rachel said man you also have to begin to visualize a world where he doesn't do that, which means you're going to have to go earn some more money. And you're going to have to put yourself out on the market, which is going to feel weird.

1:24:25You've got a baby coming. It's going to be hard. People are going to judge you. All that. Who cares? None of that matters. You all have a real math problem, but underneath that you all have a security problem. Whew.

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1:25:59welcome back to the ramsey show in the fair winds credit union studio i'm rachel cruz with john deloney and we're answering your questions so you can give us a call at 888-825-5225 Up next in Wisconsin, we have Olivia. Hi, Olivia. Welcome to the show. Hi, thanks for having me. Absolutely. How can we help? So my question is, what is the best way to manage or organize a single 529 plan that would cover multiple children? Yes. Okay. Was this passed down to you or how did you receive it? yeah um it was the 529 plan that my parents set up for me and then i didn't use all of it so they just said that it is they're using it towards grandkids when they're ready nice okay very cool question do you remember how much you had left in it when you finished college and i go i don't need that and how much it is today?

1:27:00Today it's about a hundred thousand dollars and the kids are 15 months and the next one's due in January. Oh well congratulations. How long have you been out of school? About five years. Five years okay how much was left in that 529? I guess it's only had five years of growth. So probably how much was that? I don't know exactly how much was when I got used the last of it. Well, yeah, well, that's one of the great benefits of the 529s. It can be passed down through family for educational funds. So what I would probably do, Olivia, is get hooked up with one of our SmartVestor pros in your area. And you can't open a 529 until second baby is born.

1:27:44So I probably would just wait so you could do it all in one meeting so you don't have to go back and do two meetings. But yeah, you can go and set two up under your both girls names. And then that SmartVestor Pro will be able to help you bring the funds down from your name and you can disperse it within family members. So they'll be able to take that and fund it. And you'll be able to see, you know, how much you may obviously probably put a little bit more in the first kid versus the second, because the second will have a few more years to be able to have some growth. but that should be plenty.

1:28:16I mean, honestly, you could probably just check that off. I mean, talk to your Smart Investor Pro. Ours, we sat with ours and we do every January and he ran out the calculations of tuition as it continues and you're like, oh God. So do some numbers, some projecting, but that's what's great about having an investment professional in your corners. They do all of that. They're able to look out and project, not even from like a market perspective, you know, with average rates of return, but also what tuition is going to do to make sure that you guys have enough. But you have a massive head start, which is wonderful.

1:28:50So, yeah, I would just get with an investment professional and they can help transfer those funds. All right, let's go to Ashley in Key West, Florida. So nice. Hi, Ashley. Hello. Welcome to the show. How can we help? My situation is kind of unique. My husband is active duty military, and we have found ourselves in a very unique situation. We were up in Pensacola, the panhandle of Florida. We owned a home there, and we got orders to come to Key West. And the cost of living down here is astronomical. Our house has been on the market since April, and we're now going into November. The house in the panhandle?

1:29:36Correct. We've had no movement at all on it. It's being shown three to four times a week, but we've had zero offers. We've lowered the price twice. We've done updates, incentives for buyers, and it's just nothing is happening. And between our mortgage and our rent here in Key West, we're paying out over$8 ,000 a month between the two things. Because I'm still having to pay someone to maintain my pool on the home, the yard, the lights and the water is still on. And then everything combined is actually like$79,$80 something. What's your real estate professional telling you? Well, he told us about a couple months ago to put it up for rent also.

1:30:24So we did that. And we've also had no movement on it being rented. We actually made our mortgage on the house is$3 ,000. Well, when we originally bought it, it was$2 ,100, and it went up to$29 ,000 because of property taxes. in that area. We have not a very ideal rate because we bought it in 2023 when the rates were real high. The average time on market right now is two months, 60, 62 days. What is your real estate professional saying is the challenge? Because it sounds like it's... It's being shown. People are looking at it and they're interested in it. That's what's interesting. Have you run comps in the area to see is it overpriced?

1:31:09It is actually lower than the comps in the area. It's just for whatever reason in that Pensacola area, no one is buying and no one is selling. But my other issue is, you know, we both we also have credit card debt and we have two car payments and we make good money. She's going out in payments. Correct. OK, how much do you guys bring in a month? oh gosh I didn't write down the monthly I did I did it by year for y 'all okay you can go ahead yeah what um so together um we both make 135 a year is that before tax that is um before tax okay okay um and the apartment that you guys are in now how much are you guys paying per month so we're actually on base so it's taking my husband's basic housing allowance it's like an allotment that comes out of his paycheck.

1:32:08Okay, so y 'all aren't having to pay for rent right now? I thought you said that rent's astronomical. It is. So our rent, so the Navy subcontracts out their property management. So they are taking$4 ,568 per month for us to live here. $4 ,000 on base? Yes, that's correct. $4 ,568. Gosh. So could you move somewhere else? Did you get a one-way room apartment, take your lounge? So there are no apartment complexes down here. That is the issue with Key West and service members coming down here. There are no barracks. There are no places for military members to live. I did actually Google this morning.

1:32:54I went on Zulu so that I could get some examples for you guys. An average 3-2 is between$6 ,500 to$8 ,000. Yeah, that's a 3-2. What's a one? What's a one bedroom? Like a survival house? Around$4 ,000,$3 ,500 to$4 ,000. For a one bedroom apartment? Correct. Wow. I mean, like, this is, you know. Yeah, totally. No, I hear you. Okay, so the cars. Tell me about the cars. How much do you owe on each of those? So on my Armada, I owe$20 ,000. My monthly payment is$550 ,000. Okay. My husband's F-150, he owes$18 ,000, and his payment is$575 ,000. Yeah, I mean, that's over$1 ,000 going out in just that, in just car payments.

1:33:40And then we have$30 ,000 worth of credit card debt. Okay. And then we actually, last week, as crazy as it sounds, had to take out a Coast Guard mutual assistance loan in the amount of$2 ,500 because my transmission, something failed on my transmission. Now, that loan is 0 % interest because it comes from. Yeah. Yeah, I don't care about the interest. What I would say is I would look at seeing if you guys can sell these cars and get two$5 ,000 cars, even if you have to take a small loan for the difference, just to get this$1 ,000 freed up. Because that's going to help you a ton. Cut up the credit cards and you guys have to draw a hard line in the sand and say, no more debt.

1:34:27No more debt. And it's going to take a little while to dig out, but I'd be working extra doing what you can. And get a new real estate professional. Go to ramsysolutions.com slash real estate.

1:34:46Hey guys, it's Rachel Cruz, and I've got great news for you. The Ramsey Christmas Cash Giveaway is here. We are giving away$500 every week, plus a grand prize of$5 ,000 in cash. Listen, you can enter daily to boost your chances of winning, and there's no purchase necessary. Just go to RamseySolutions.com slash giveaway. That's RamseySolutions.com slash giveaway. Good luck, you guys.

1:35:30Hey, real quick. We were just talking about this off air, Rachel. if if you went and bought a ton of house during the like not during the pandemic but after the pandemic right or if you went and followed your neighbor who does really well or followed somebody at your local church whatever and they bought a property like a beach house like this last caller or they bought a lake house whatever in 2023 2024 and you're like yeah i want to do that too somebody's gonna pay the piper on that deal man yes and it's one of those things that we keep i don't know man dave's been beating this drum forever and now we're picking up the the the drumsticks and beating it too but it's like it's not a statement on the greater economy if a whole bunch of people went and bought two and three million dollar houses or bought this and then this um and then now they find themselves in a stuck position my heart breaks for that last caller who got new orders, had to move, and now they can't sell a house here.

1:36:29But people flock to these places and they bought a second and a third and a fourth house and they mortgaged it here. Man, it's a mess people are finding themselves in. Yes, yeah. Keeping your life financially simple, you guys. It's boring. It's not exciting. But it brings peace because you're not trying to play this game where you're juggling this and then we're going to pull it out of here and this and this. We've just heard so many stories recently kind of of that happening and people are hitting the wall is what it feels like. And I'm heartbroken for this military family who just got moved and that house won't sell.

1:36:57Yeah. But everyone in the neighborhood bought their third house. I don't know. It's just, I hate it. I hate it. I hate it. Yep. Boring is not flashy, but boring is peaceful. Yes. Boring is peaceful. And the same is true just with investing. When we talk about like. It's boring. It's boring. Invest 15 % of your income in two 401ks and Roth IRAs. Everyone's like, boo. Boring. Let me go do something fun and exciting. Buy real estate with cash. Boring. Boring. Yeah. But man, I'm telling you, yes, it takes some patience for sure in this, but you're doing it the right way. You're not building a house on sand, right?

1:37:28Like it is strong and the structure's there because it's real money. You're being wise about it. So everyone slow down and feel it out. All right. Well, everyone also needs insurance and it can be hard trying to find pros who aren't looking to make a buck and agents who know their stuff. And with Ramsey Trusted Insurance Pros, you will never find a sleazy business or slimy salespeople because they're all interviewed, they are vetted, and they are coached by our team to make sure that they are market experts and have your best interest at heart. So go to RamseySolutions.com slash coverage to find the type of insurance that you are looking for and connect with a Ramsey Trusted agent.

1:38:08Or click the link in the description if you are listening on YouTube or podcast. All right, up next, let's go to Susan in Florida. We've had a lot of Florida calls. Hi, Susan. Welcome to the show. Thank you so much for taking my call. You are so welcome. How can we help today? I have been a caregiver for three handicapped family members for 28 years. Wow. I have dumped all my retirement into taking care of them, which was over half a million dollars. and I need to know how I go about rebuilding my financial life as I have none right now. I have no credit. I owe no one anything, but I need to know how to build my stockpile of funds so I can have some kind of retirement because I know I will have no one to take care of me.

1:39:06Yikes. Are these three family members still living? Yes, they're here now in the house with me. I have two mentally handicapped brothers, one who now is crippled, one who is going through prostate cancer, and I have my 90-year-old mom who has severe dementia. Oh, wow, Susan. That's a lot. Do you have support with SSI? Yeah, and I had a wonderful life before this. I worked for one of the richest men in the world. I had my own corporate jet. I was making great money. My dad passed away, and I stepped in, and I had left home when I was 14. Well, you're a saint. Do you have, I mean, have you explored things like, excuse me?

1:39:52I haven't done anything truthfully. How old are you, Susan? I am 66. Or 66, okay. I want you to explore SSI benefits for your brothers. Yes, we do have benefits coming in. I have them on a program called CDC Plus. Okay. So I am now, they kept telling me I couldn't get paid as the caregiver because I was a family member. But I found this program through another woman who had a handicapped daughter. Okay. And I'm getting paid, but I've only been getting paid now for like seven years. Okay. What about for your mom? Is she on Medicaid? She's on Medicare only. They kicked her off of Medicaid for some reason.

1:40:39So that's where part of my money went to paying her medical bills as she got older. Well, here's what I'm worried. I'm worried that because of your wild and amazing generosity, you're going to find yourself in a hole and unable to take care of yourself, much less take care of them. Right. Because I'm going to say the truth. At this point, I'm at burnout mode. For sure. Everybody has always called me superwoman and they say, my God, you run on rocket fuel, you know, and I'm getting to the point where I not only can't do it, I don't want to do it. And that's okay. Rachel and I are right there with you.

1:41:31We get that. Totally get that. But the greatest thing you can do for them, the greatest thing you can do for them right now is make sure you've got a plan for yourself. Right. I just hired a part-time caregiver to come in and help me. Are you? Okay, good. Yes. Is there any income, Susan, from whether it's the caregiving position or anything else that you're doing that you're bringing in money? I am making very good money. I have available to me$170 ,000 a year that I can take for myself. but at this point like I said I'm on burnout and I need to hire people and I'm paying$30 an hour for caregiver okay yeah so what I do have money available to me and is that is that 170 like a retirement package that will be ongoing or what what happens no that's the money I get paid from the program to take care of them okay I hear you okay to take care of only two okay mom doesn't get anything.

1:42:40So I'm still paying all her costs. Okay. Well, 170 grand a year is a chunk of money if you have no bills. Is your house paid off? My what? Your house. No, it's not my house. It's my, it's in my mom's name, but I'm paying the mortgage and I have$80 ,000 left on the mortgage. Is it left to you in a will when she passes? Will it become yours? It's in trust. She put it in a trust. Yeah. For the three of us. Oh, for the three, you and the two brothers. Yes, because the lawyers need somebody to make financials. Yes. Okay. Yep. Okay. Well, I would probably sit down with a lawyer because they're going to need even like a special needs type of trust.

1:43:29I mean, there's some ways to go about this estate planning to make sure that because they're living with you, making sure, obviously, that I'm not trying to write them out of the estate or anything like that or her will, but to be wise about how to divvy all this up realistically. Do you see yourself ongoing, Susan, to be with your two brothers or are you hoping maybe to find someone? I will never, ever give up on them. Never. Yes. So you're going to plan on living with them and then just maybe supplementing some help throughout the day. Okay. You know, I honestly, Susan, would probably sit down with an attorney.

1:44:02Is your mom, I know you said she has cancer. Is she? She got dementia. Oh, dementia. Oh, it's your brother that has cancer. She can't make any decisions. Yes, okay. The trust was made before she declined. Okay. So think up for that. Yes, good, good, good. Do you have a good estate attorney? Do you guys, that you're working on? No, I've never been to an estate attorney. Okay. You know, I may reach out to someone in your area, honestly, Susan, because I would have them look at not only the income that's coming in, but some things that you can do around to help your brothers. And there might be some way to shuffle some money that's actually going to be good for their best interest that you're going to be able to help them.

1:44:39And then with the real estate and everything on top of that, what that looks like, because if you can prove that you've been paying a certain level of mortgage, you know, there might be something that you guys can do in that. I just want you to be set up like what you're saying really well, but$170 ,000 a year is wonderful. I would just budget really specifically how many hours a week you can supplement some help with that, the mortgage payment and all of it, to make sure you don't run out of that money.

1:45:18you 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 smart vester program smart vester 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.

1:45:54Learn more at RamseySolutions.com slash SmartVestor.

1:46:15Well, in the lobby of Ramsey Solutions on the debt-free stage, we have Rebecca here. Hi, Rebecca. Hi. How are you doing? It's so amazing to be here. Oh, we're so glad that you're here. We love a debt-free scream. We are so glad. So where are you from? Wake Forest, North Carolina. North Carolina. Beautiful part of the country. It's amazing. Amazing. Okay. How much debt have you paid off? $207 ,000. Oh my gosh. Making what kind of money? A hundred to 130. Okay. And what was the, or what amount of time? How fast did you do this? 91 months. 91 months? I love it. Not that you counted exactly. I love it.

1:46:53Wow. Okay. What was the$207 ,000? The house. Oh my gosh. You did it. I did. You paid off the house. congratulations wait did anyone else help you no but hold on um i've been reading the news a lot and single people can't do what you've done so clearly you've made all of this up right no never single people can't work really hard and grind and scratch and claw and do this oh they can if they truly want it golly dude unbelievable funruiner.com that's amazing okay so um tell me How much is the house worth? I think the last estimate I saw was like 390. 390. Okay. Oh, good for you, Rebecca. Okay. So what happened?

1:47:37Was that eight years-ish, right? Seven and a half. Seven and a half. Okay. I'll give you that. Tell me what happened seven and a half years ago that you were like, I want to. I was a first time home buyer. So long time listers might remember that back in 2016, my siblings and I were at your old studio doing our debt-free screams all in the same day. Oh my, I do remember your family. I'm not kidding. Cause y 'all all did it. So like that was me. I was debt free at that point. Okay. And I followed the baby steps, did my three, my three B. Um, and by the time I was ready to start the qualifying process for my mortgage and buy the house, I wasn't quite at the like FICO score disappeared.

1:48:20So I was in this weird limbo of, they wanted to pull it, but then like stuff was falling off. So it didn't look good. So then they had to do the manual underwriting. And I had saved up my 10 % down payment and, and my emergency fund within 14 months. Oh my gosh. And by 16 months I had signed the paperwork buying the house. Oh my gosh. So it just started happening. Yes. It just started happening. And then once I signed the paperwork for the house, I had done my budget before I even bought the house of what can I afford? How much extra could I put on it? The bank obviously qualifies you for way more than you really probably want or need or should have.

1:49:03And it was so great. I worked with an ELP that I had worked with previous realtors. I thought I had wanted a historic house because my grandmother had a Victorian. I thought that's what I wanted. There were two realtors that just completely shut me down. Didn't even want to show me historic homes. And the realtor I work with who was an ELP. Yeah, one of our Ramsey trusted pros. One of the random busy pros, Rob Parton, he was so great. And he showed me historic houses so that I could see what I was getting into to be like, maybe that's not what I want as my first home. Yes, yes. There's some work to be done.

1:49:36There is some work to be done or what previous owners might have done to change the house that it's not really then what you want because it's not what you were expecting. Interesting, yeah. It looks one way and then you go in and you're like, yep, this isn't the one. And I got him to understand that if you showed me the floor plan first, that might just shut it down right there. We don't even need to go see that. so finally you know I got off I didn't want the historic house anymore he showed me the house I ended up buying and it's been amazing so far but it is so important to have the emergency fund in place first because three years into the house there was a mouse on the first floor and I saw him come up through the floor vent from the HVAC system oh no so that led to me calling an HVAC person to go in the crawl space and there was work that needed to be done on the HVAC and then while he was down there, he's like, hey, do you know your water heater's leaking?

1:50:26And then you got to get that fixed. And then you have to get that fixed too. And you're a homeowner, so you're paying for all this. It's coming out of your pocket. You're the maintenance person. You have to pay for that. But I had the emergency fund in place and I still had enough room in my budget that I was able to replace the emergency fund within the next few paychecks after those two things came up. And it's just so nice. It's such a good point because people want to rush into home ownership, which we want that a part of people's plan obviously like it's wonderful but when you have no money and you have payments and debt and everything and then you go buy a house on top of that it just magnifies so much so you're you're like yeah you doing the steps perfectly did exactly what it was supposed to do where it's supposed to be more of an inconvenience when things come up than this total crisis yeah and um when I first started I was doing 12-hour night shifts and I was you a nerd what do you do um at the time I was working on the manufacturing floor for a pharmaceutical company.

1:51:21And I was confusing some of my coworkers because they didn't know which rotation I was on because I was doing overtime. And then COVID happened and that kind of burnt me out because as an essential employee, you had to work no matter what. And then if other people were out because of the COVID protocol, other people had to fill in or there was extra work that you had to get done on your shift. And so finally in 2022, I got off of night shift and I got off of the floor. So now I'm an eight hour Monday through Friday person, which I never thought I would like, but I do. Yes. Good quality of life there.

1:51:56Yes. And my salary did drop a little bit when that happened because I lost the shift premium and overtime and the built-in overtime that I could get. But it has been such a nice change. Yes. And they're so glad. And there were other compensations of my bonus compensation went up. My stock compensation went up. So good. And that was one of the things I did was the company gave us stock as part of our compensation. And some of my coworkers would look at me like I was crazy every time I cashed it out when it vested. And they're like, what are you doing? And I was like, I have other things I'd rather spend that money on than hope that it goes up.

1:52:36Oh my gosh. Okay. So what was the hardest part during these eight years? Cause that's a long time. It was a long time. And I think the hardest part was learning the intensity versus intentional. Yes. Because coming out of baby step two, doing the 3B, going into this, I was still on the intense. Uh-huh. And I was like, I don't need to start enjoying some of this and making it worth it. And so then finally in like 2023, 2024, I was like, okay, I can see the light at the end of the tunnel. Um, I can slow down a little bit. I was definitely a nerd and had my AM schedule in a spreadsheet. I believe it.

1:53:11And I've been talking to you for about two minutes. I'm like, Rebecca, she knows. Oh, look, there it is. So I actually, that's the like the pretty cleaned up version of it. As I was doing it, I had it broken down by like years of like, if I put this much extra on it, I would be done by this year, this year, this year, this year. Let me jump in. If there is a single person listening to the news and, And here's the reality. Buying homes is expensive. It's hard. It's a mad house. What would you tell that person who just feels hopeless? There is hope. You just have to want it bad enough, like I said, to find the way to make it work.

1:53:52Don't buy more than you can afford. Sometimes you have to go further out than you want to go for your commute. Sometimes you might need to start in a smaller house than you might originally want and work your way up. I was lucky enough that this was back when the market was a little bit better. And I have a good salary that, you know, my starter house is actually the house I just want to stay in. I don't want to move, but there were other properties available that were smaller and more reasonable that I could have, you know, started as a starter home instead. Dude, this is, you're amazing. Incredible.

1:54:26Rebecca, so proud of you. Good to see you again. After all these years, how fun, I bet your family's so proud. They are. Yeah. My dad kept saying like, has it been paid off yet? I need to brag. I need to brag. And I was like, and my dad was so great too, that there were things that I wanted to do project wise in the house. Um, and he's a mechanical engineer and very handy. So he would come help and with some sweat equity. Okay. Well, let's do it because it's well worth it. The scream is well worth it. Okay. So we have Rebecca, uh, from North Carolina paid off$207 ,000, which is the mortgage making a hundred to 130 ,000 and did this in seven and a half years.

1:55:06All right, girl, count it down. Three, two, one. I'm debt free! Dude, it's amazing! So good. So good. Rebecca, man, that's it. That's the story. That's what you do, you know? And seven and a half years later, you got no payments in the world. Nothing. Well done, Rebecca. I know your parents are proud, and we're proud of you, too.

1:55:42I'm out.

1:56:20Our scripture of the day comes from Philippians 317. join together in following my example brothers and sisters and just as you have us a model keep your eyes on those who live as we do alice cooper said drinking beer is easy trusting your hotel room is easy but being a christian that's a tough call that is rebellion yeah james alice cooper james stop trashing hotel rooms act like a christian it's harder he was a metal what did you say he was he's one of the he's one of the legendary metal singers of all time is he part of a group Alice Cooper that was the name of the band oh but that's his name too I listen to Taylor Swift so I'm running through my dude Alice Cooper I'm sure I've heard his songs he rules dude same as same as Taylor Swift just same just all in the same in the same genre I'll take it alright let's go to I got all are just shaking their heads at me.

1:57:21It's fine. It's like, I don't know what world you live in sometimes. I think we live in the same world. I have no music world. We sit by each other. I have no music. Genuinely. It's like Taylor Swift and Backstreet Boys. That's it. I'm going back in February. What? Give me like pop 2003 and I am in my prime. Give me that. Okay. All right. All right, let's go to Sarah in Washington, D.C. Hi, Sarah. Welcome to the show. Hi. I will try to cut to the chase. My ultimate question is, should we rent or buy? My husband's active duty. I can do the Army. We move a lot, but it's never been overseas. We just found out we have an opportunity, a sliver of a chance that we might need to go overseas.

1:58:16it would be in Belgium. It would be for NATO. So usually in that case, we would consider living on post, but there is no post there. It would be, we would have to live in the community. We have rented houses. We've been married since 2020. So about five years, we have moved eight times in that course of action. We've been spooked a couple of times. The first house we rented, We were in Missouri. We were paying rent on time, never late. We got an eviction notice in the mailbox one day. The homeowner was not paying the mortgage. We were paying them rent and they weren't paying the mortgage. Oh, geez.

1:58:59That was the first time. And then we've moved a couple of times since then while we were in North Carolina. We liked the house we were in. I was pregnant with our daughter, our second child. and we signed the lease to stay in a house and then two months later into the lease the owner decided to sell. So we are a little worried about renting in a place. Yeah, you've been burned is what it feels like. We took a call earlier from a veteran's wife who they had bought a house and they were settled in and then they got transferred to another part of the state and they've been sitting on that house for months.

1:59:35And paying two mortgages. A crazy rent and a mortgage. So as much as y 'all have been burned in the past, which I hate, it's still the better financial move for you guys, especially if you're going to be overseas and you're not going to be there long term probably, right? Yeah. He has seven years before he's up for retirement, the 20-year mark. And you guys still have been moving multiple times. Yeah. Yeah. So I would not, Sarah, just because, and especially overseas, I would just rent. Because, you know, number one, you don't know when you guys would be, you know, transferred out. and also you don't even know what part of the city ish you would even want to be in because do you guys have do you guys have kids little kids yeah four and two okay yeah so i would even want from a i mean and i would tell you this if you're moving to a new city let alone another country to know like okay this is like the area i want to be for grocery shopping and for the kids and school and i don't know all the things that life is you know you could get stuck in a really crappy situation, a crappy side of town that you're like, no, we do all of our life over here.

2:00:41And we moved over here. We didn't know. So from a location perspective, I wouldn't buy. And then also from the investment side, because again, it's so short term and you need, I mean, at least four to five years for a house to be able to kind of run its mark, you know, after all the closing costs, all the stuff that you pay and whatever the market's doing at the time, just to actually gain some equity to make it somewhat smart financially. So, um, so no, Sarah, if I were you, I would, uh, definitely rent, but thank you guys so much for your service. That's a, that is a dedication of how much you guys have been moving and sacrificing.

2:01:15So thanks. Thank you to both of you. Well, and like, I think it's an important thing. We talk a lot about, um, how grateful we are for the servicemen and women who are enlisted, but for every service person who's enlisted, not for everyone, but for many of them, there's also a spouse. This has to pack up and move. And there's little kids that have to pack up and move at a moment's notice, often at great cost, financial cost. And so it's an honor to talk to everybody. What I have found in this situation when somebody is getting moved a lot is the temptation to make a decision that feels like I'm putting roots in the ground of some sort.

2:01:55And like you mentioned, it wouldn't be wise to go buy a house in a country you don't know anything about and you don't know how long you're going to be there. And so what we want to do is to create, where can we create roots in an alternative way other than in a mortgage? And so coming up with concrete family rituals is often a thing you can do. We never deviate from Monday mornings or from Sunday nights or from an evening meal together, whatever. But we're going to create home in these regular practices that we never deviate from. And we can carry those to all these different rent houses and across the country.

2:02:31This becomes home for us until we can anchor into a geographical location. But it's not as rooted as a home. This is our land, but it is something that gives you some anchor point. No, that's a good point. Just the consistency to have the normal same. All right, let's go to Katie in Washington State. Hi, Katie. Welcome to the show. Hi, thank you. Yes, absolutely. How can we help? My husband and I are in disagreement. We're in baby step two, and we have a daughter that just started college, and he kind of thinks we should focus on getting out of debt ourselves before we help her, but I'm terrified for her to even touch debt at this point, so I don't want her to take out any student loans.

2:03:17I'd rather cash flow it, but I know that would kind of slow down our debt-free journey. So you're missing option three. All right, and you're not going to like it. But can I tell it to you anyway? Of course. All right, here's the umbrella principle. Whenever you feel like you're forced into an either-or decision, that's when people make bad choices. Or choices that, I don't want to say bad, but they're not helpful. It's when people get themselves in trouble. And so whenever I feel like I have an either or decision to make, then I always want to force myself into a practice of putting four or five imaginary variables on the table that prove to me that I don't have to do this one or this one.

2:03:59So you've backed yourself into a corner, which is either our daughter takes out debt and falls right into the same trap we're trying to get out of, or we continue treading water so that she can go to college. So option three is you all sit down and have a honest, direct, loving conversation. That is, we are not in any way going to support you taking on debt. Look at us. We're living that reality right now. And we don't have the money. And so we're going to be in Washington State and we're going to, I'm making this up. I don't know if they got it, but you're going to participate at least in your freshman year.

2:04:41Free community college. In the free community college. Or you've got to start right now applying for every single solitary scholarship possible. And maybe, Katie, how much debt do you guys have left? We have about$150 ,000. I have consumer debt, or does that include the mortgage? That's just consumer debt. Okay, yeah. Well, yeah. So, I mean, I'm a little bit more on your husband's team that you guys clean this up in. And for her sake, like you said, still talking to her and having that conversation. but where can she go to school that's really inexpensive, which may mean changing, right? She may be in the middle of a semester somewhere, but.

2:05:18Is she in school or she a senior? She's currently in school. She's a freshman in college this year. We paid for her first semester and we're getting ready to pay for the second one. Okay. So I've worked in colleges for years. Every semester parents had this hard conversation with their kids, which was we can't afford this past this year and we're sorry and we're heartbroken. Here's the truth. We're going to change it. Yes. And that's some big time decisions and it takes a lot of maturity, but it's the wisest path, Katie. All right, John, great show. Always fun hosting with you, everyone in the booth.

2:05:49Thank you. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.