Take The First Step Toward the Life You Want

24:55What would the phone call sound like from 58-year-old you calling this exact same show? We would be fine because the house is going to be paid off in a few years, and it's worth over a million dollars. And so we're good there. I could always go back into real estate. Another thing is with his line of work, because he's a foreman, he's already doing a lot of computer stuff. and so he's really not doing quite as much service stuff and he would be fine going into the office as well. He's kind of had opportunities there. So I mean, I think where there's a will, there's a way. Well, we shouldn't have a lot of debt by then.

25:31I'm just saying we're not doing like a ton, like some people are like uber focused on saving for that retirement. And I'm like,

25:38Rachel Cruze:I'm more of like the mindset it's going to work out. We're having such a fun life. You are the, you are the glass half full woman I've talked to in a long time. You're like, your husband. This is your job. It's like, listen, he'll be great. We will be fine. It is going to be fine. Okay. Here, here's what I see on the show. Ruth, nothing is, nothing is on fire. Okay. You guys, you're crazy. Everything you're saying is on fire. Stop it. No, let me finish. Let me finish. Let me finish. What I'm saying is, no, listen to me. I'm being honest. I don't think anything is necessarily on fire right now.

26:11Rachel Cruze:You guys are, you are spending a lot, but you're, you're not going deeply in debt. You guys have a plan to pay off the home, all of it. But what I'm telling you is what is mediocre right now is any level of intentional planning with your money, which means you're going to get a mediocre retirement. Everything's going to be just mediocre. That's it. That's it. So what I would do is I would look to say, okay, we're funding, you're putting probably$14 ,000,$15 ,000 into retirement. He said you're funding both of your Roths. So I would double that. I think you guys with your income, you'd need to be putting$30 ,000 away in retirement specifically.

26:46Rachel Cruze:Okay. That's your goal. And if you guys do that, then here's something else Ruth to be thinking about is the generosity piece, right? With money, you can give it, you can save it, you can spend it. You guys are great spenders. You're mediocre savers at best. So you need to be saving for future Ruth. You need you because when John asked you that question, the best answer would be, I mean, if he's 59 and a half and loses his job, we're fine because we're have$3.2 million or whatever, right? Like you're, you're going to be able to know because you've planned, you are intentional. You know, what's happening.

27:18Rachel Cruze:You don't right now, Ruth, you're just like, I don't know, not many goals, just enjoying life. Right. And not all of that is bad. It just has to be balanced with, in my opinion, more long-term planning and goals. You and your husband need to sit down and say, what are we shooting for? What do we want? We want to pay off the house in seven years, not 15, like to get on a plan and actually execute some of this. and then the generosity piece too. But no, I don't. Okay, so John, tell her why she's on fire and her whole, she's going to be broke and it's going to be terrible. Real quick, just real quick, the house is actually going to be paid off in three years.

27:53Rachel Cruze:Okay, great. And it's worth over a million dollars. Chris, good for you. I think you're doing great. I think you're doing great. You two spenders just go on a cruise together and just, this is what it's like hanging out with Rachel. Vacation Ruth, I bet it's super fun. I bet vacation Ruth is madhouse. I bet it's awesome. Here's what I'll tell you. I'll tell you the same thing back when I was seeing clients, what I would tell somebody who sat down and said, hey, I've been married for a long time, but I met the secretary and we have this great connection and I think it's going to be awesome. And what I would always say is, I will be here right now when you're thinking about it and I'll be here when you have the affair and I'll be here when your marriage explodes and I'll be with you through the divorce.

28:35So I'm telling you right now, Ruth. This goes so dark. I know. Oh, she said, we can't make this dark. And I was like, hold my beer. I'll make it dark. But here's the thing. I will be, I hope to, unless I get fired for some weird reason. I hope to be here when you're 59 and I will be here to take your call. Cause, cause, cause think about this. You have a million dollar house. That's amazing. It's amazing. Okay. That's so good. Y 'all paid it off. It's appreciated. Great on this beautiful farm in North, North California. It's awesome. Everything is great. And if you think about that, you've put, it's like buying one single stock that's worth a million dollars today.

29:12Everything in your life is counting on this working. Everything in your life is counting on your husband not having, being in the trades, not having an accident. Everything is hoping that in 20 years, AI hasn't taken 99 % of the IT jobs away. Everything is hoping that our kids' lives are as magical as our lives. And so you are, like, on the scale of risk, you've put everything on one side, and there's so many variables out there.

29:41Rachel Cruze:Can I – Ruth, do you know what y 'all have in retirement? Zero. No, she said they fund their Roth IRAs. I thought you said you didn't have anything in savings. Yeah, we do have our Roths. We've been investing just the past few years, reinvesting them. But, you know, my husband also has a retirement account. How much do y 'all have in retirement, Ruth? Altogether, how much? What's the number? I don't know. I don't know. Okay. Is it half a million dollars or is it 50 ,000? No, it's like 50 in our Roth, maybe 60 in our Roth, and I don't know what his retirement is. They don't match or anything. So she said it's not real great, but I, like monthly about, I don't remember what it is.

30:21I feel like that's how y 'all roll. It's either really great or not too great.

30:26Rachel Cruze:I'm going to assume this because I need this on my side of the argument. You do have just cash sitting in an account for savings, like for an emergency fund. Stop. Stop. Do you, Ruth? Yes. Yeah. How much? How much? Good. We have$40 ,000. Great. Oh, Ruth, I'm telling you. Y 'all need to drain in the spending. You need to be investing more, Ruth. You gotta be intentional. You gotta be intentional. You gotta follow the baby steps, what you're doing. But you're almost on baby step seven. Their house is almost paid off in three years. You need to be funding more in retirement. You guys need to be more generous.

30:57Rachel Cruze:Just find something to give to and have some goals, a five-year goal for your money and where it's going, and then enjoy your vacations. It's fine.

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32:37Rachel Cruze:Up next, we have Ryan in Phoenix, Arizona. Hi, Ryan. Welcome to the show. Hello. Thank you for taking my call. I appreciate it. Absolutely. Thanks for calling in. How can we help? So I have a question. I read the Baby Steps Millionaires, But I've been having a hard time getting my wife to buy into reading the book and helping me, you know, go through those babysits together. She does have a we have an account together. Right. We have the same account. But I know that she has her own account where all of her earnings go to the account. And then she just transfers that a certain amount every month to the joint account.

33:20How long have you been married, man? 14 years. 14 years.

33:25Rachel Cruze:How much does she make and how much do you make? I make net income a month is like$6 ,200 me. And I don't know how much she makes. I just know that I receive, she deposits$1 ,000 every two weeks into her account. So sometimes people read and they hear about the Baby Steps or they read Total Money Makeover or Baby Steps Millionaires and they're inspired financially. sometimes they read this and it's revealing. Oh, me and my wife have been sharing a home and a bed for 14 years, but we are on different planets when it comes to our life. I don't know how much money she makes, how much money she has.

34:06We are running parallel tracks inside the same house, right? And the challenge is often people try to solve that conversation with, you need to budget better or we need to share one account and you need to stop doing this. and the only way I've seen people be successful is in that situation like what's happened to you is is you reading this and you're like oh I want this outcome I want to baby step my way to financial freedom right security for me and my family but it's revealed a really big fissure in your marriage a crack like a like a canyon in your marriage the only way I've seen that conversation be successful is not talking dollars and cents it's you sitting down with your wife And maybe for the first time, being honest about what's inside your chest.

34:51You saying, I feel like we're running some parallel lives. I don't know how much you make. I want us to be united in our dreams together and our money together. And we're not connected here. And that's where, that's the meat of the conversation. That's a vulnerable conversation because she could look at you and say, I'm not doing that. I don't want that. And then you're going to have to deal with that. I mean, you're talking at a value point, right? This is a foundational question. And the only way I've seen it be successful is if you go first and you say, hey, here's what I'm feeling here. We are not together in our life.

35:25We're running two different lives under the same roof. And I want us to start uniting our marriage, start uniting our vision for our life. Does that make sense? Yeah, it makes sense. It makes sense. I mean, so the other day I had to use my credit card to buy groceries. So it was a bad situation. I mean, it made me feel very sad. And I know that she, like, I feel guilty asking her for money because I know she probably has money. And it just made me feel sad. You know, I'm like, it breaks my heart for you that you, you have a marriage that you've built over 14 years. You've co-built for 14 years where you feel shame for asking your wife for grocery money.

36:13Yeah. Right? If you called me and told me she's your ex-wife and she lives down the street or in another town, then that, what you just said, would make sense to me. The fact that y 'all, y 'all have kids too? Yes. Yeah, y 'all have created humans together. And the dynamic in your relationship is, it's worrying to me.

36:34Rachel Cruze:Have you felt this disconnect to her, Ryan, for a while? Or how kind of lopsided this is that it's not really a marriage, It's more just like a partnership and a business feel. That's how it feels. Yeah. Sometimes. Yeah. Is she open to this like unity conversation or does she just not give a crap with what's going on inside your heart and mind? Yeah, I've been trying to, I've been trying to talk to her about that. I started with, I started with, hey, let's sit down. Let's talk about doing things together. We need to start planning for the future. We don't have a college fund for our kids. We need to be ready for a financial emergency where, you know, maybe I lose my job.

37:24You lose your job. We need to be ready for those things. I didn't give a specific dollar amount. I just said, you know, we need to sit down. And her response was like, no, I don't want to talk about that.

37:34Rachel Cruze:Did you ask her why? She's tired. I did ask her why. Yeah, she just told me it's because it's all about money with you. and so if it I would I would attempt the conversation again and I would change two things number one I would tell her I got a babysitter for the kids and I got us um reservations at a restaurant or I want to take us to this place and I also want you to know I have I've I've beat you down about money I've just talked about money money money money for 15 years and I'm going to own that I'm sorry I want to have a different conversation underneath money about you and me building a new marriage together.

38:11And that way you're acknowledging up front her chief complaint. And you're, and if you've got other things, if you tell her, if you're a worrier, if you are an overspender, if you always have had a scheme for the last 14 years, and this is just another scheme she thinks you're having, um, whatever it is, go ahead and lay that on the table first. When you invite her out to breakfast or you invite her out to dinner and put that on the table.

38:36Rachel Cruze:Yeah, because the money problems, they are the symptom of this marriage that is not really intact, right? A wife and a husband that are not connected. And then once that starts happening, then you realize, okay, working on the same team is much easier. And some people find it the opposite way, Ryan. They end up working on money together and it helps their marriage, right? So it can be either door, but something has to start moving. And it's for the sake of you guys, right? You've committed yourselves to each other forever and you're thinking, okay, I want more in this. And so there is that vulnerable place to be, Ryan.

39:13Rachel Cruze:And I think that, yep, having that conversation and framing it the way John just outlined, I think is great. And sometimes people in a marriage, they try to exert power by saying, this is my money and you can't see it. You can't talk to it. You can't tell me what to do with it. But sometimes that becomes the way, like marriage dynamics, like he's talking about, happen over time because somebody feels like, I have to. You're always beating me down about money. You spend wildly, and I'm going to make sure me and the kids are going to be okay. Yeah, and so who knows how this dynamic got here. That's helpful in a therapy session to go all the way back in time.

39:53But, man, right now we have to solve today's problem. Today's problem is we are not connected, and we got to reimagine how we do life together. And I'm going to go first and own what crap I've brought to this thing.

40:03Rachel Cruze:That's right. Well, and I would say too, just to have like a moment of like, okay, I'm not saying we have to do this, but can we just for a second, put numbers out and just see what happens? Like, how much do you bring in? How much do I bring in? Let's put it, let's look at our bills. Let's look at our debt. Like, where could we be financially if we just went all in together and use both sources of income to get us where we want to go financially, right? And not to like threaten her about it, but it's like, okay, I'm not saying we have to do this today, but let's just look and see what this picture, he can't even pay, you can't even pay to picture Ryan from a financial perspective going forward, because you don't even know how much you guys have to work with.

40:41Rachel Cruze:and there's obviously something that's a little bit off because you couldn't even pay for food for yourself. And so whatever that$6 ,000 is being allotted, you need to be looking at that, looking at your expenses. And again, you guys together look and say, here's how we're gonna run our household. Here's the money we have coming in for our household. Here are the bills, here are the expenses, here are the goals. Here's what I'm scared about. Here's what you're scared about, right? You get it all together. And when you can do that, and her not feel cornered or shut off because she's feeling that way for some reason.

41:15Rachel Cruze:We don't know why, but that's there. And this conversation, let's be honest, does not always end well. Yeah. She may say, this is my job and this is my money. You're responsible for the house and for the bills and for the kids and for the food. This is mine. And then you got a choice to make. I'm 15 years in. This is the arrangement. I'm going to be sad and heartbroken, but I'm going to do the best I can with the marriage I got in front of me. or I'm going to leave. But trying to always be banging your head against a pretty solid brick wall is just a recipe for, it's going to implode at some point.

41:50So I'm going to choose reality that I got in front of me. I don't like this situation. It is what it is. Or I'm going to get out of the situation. And I hate to distill it down, but that's often where people find themselves.

42:00Rachel Cruze:100%. And sometimes, Ryan, if you do get in a situation with both of you and you keep hitting that wall or you keep feeling like we can't move forward, bringing in a third party, seeing if there is a great counselor in your area, a therapist. Just to sit down for a couple of sessions and kind of rehash some of this with a third party is also really wise.

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43:36Rachel Cruze:Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm Rachel Cruz here with Dr. John Deloney, and we are taking your calls at 888-825-5225. First up, we have William in Houston. Hi, William. Welcome to the show. Hello. Thanks for taking my call. Absolutely. How can we help? I was calling because I was recently laid off after 30 years with the company. I'm sorry. How many years? 30 years. Oh, my gosh, dude. Hey, can I just say, I'm sorry. That's hard, man. That's a lot. Yeah. It's like a marriage. Oh, my gosh. Thank you. There's some psychology research about this. It's a job loss like that impacts your body like the loss of a loved one.

44:22Yes. I can, yeah. That's a heavy betrayal, right? That sense of, I got betrayed. Yeah, dude, I'm sorry, man. Yeah, so my question is, my wife, she wants me to, she said I should take off like six months and just relax and just get my head together before I go looking for something. And I was just wondering, do you think that's a good idea or not a good idea? I think it's, yeah, Rachel, you hop in. I think it's, I think, broadly speaking, no, it's not a great idea. And here's why. you're going to sit inside this grief and inside this betrayal, and those stories will take hold inside of you. Now, what I would say where she's right is maybe for six months, you don't jump back into a full-time, I'm going to give my entire mind, body, soul, and spirit to a thing, and I hope this is the next 30 years.

45:18Maybe you go get a job at a grocery store. Maybe you go get a job at a coffee shop there in Houston or something. Right. But like, I'm going to, I'm going to work. I'm going to have to get up and go do a thing. I'm gonna have to shower every day. I'm gonna have to shave every day. I'm going to get back into a routine where I'm providing value to a thing, to a group, to a customer. But I'm going to also not just throw my heart and soul back into a thing again. Right. I got you. So if you call me, let's take it away from work. If you call me and said, my wife of 30 years just walked out on me. should I just take six months off and stay inside my house, draw the windows down, and just sit here for six months?

45:58I would say absolutely not. I would also tell you don't just jump back into another relationship. So it's a both and.

46:06Rachel Cruze:William, would you financially be okay not working for six months? Yeah, financially we'll be fine because my wife said that I'm overly obsessed with the numbers because we had a high savings rate before I was laid off. So we have about, between brokerage and retirement, we have about$2.4 million. William, lead with that next time. Yeah, take six months off. So good, William. Yeah, I mean. Not planned. Don't take six months, but you know what I mean. Yeah, I'm with John. I'm like, I think being idle for too long is not good, just for you. But if you don't want to go back 40 hours a week, but you got something that you go to, you know, two or three hours a week.

46:49Rachel Cruze:And then maybe you're like, you know what, I'm going to, I'm going to volunteer. I'm going to volunteer or I'm going to, I'm going to hike every day or work out or start going to therapy once a week. Like, right. Like using your time wisely, I think is important. Now you're not having to rush to go make a paycheck, which is a gift. But again, I think sitting idle completely and not doing anything long-term, I don't think is great. Now, if you want to take two or three weeks and just chill, that's fine. but I would have a goal at some point in the fall to say okay I'm going to get into something and again I don't feel like you have to rush into anything major and like what John's saying too like finding the next thing I wouldn't feel pressure to have to do that right now but I wouldn't just sit and do nothing.

47:30How old are you brother? I'm 48 and that's what I was thinking because like now I feel like my whole day is like I'm kind of idle I get up in the morning I get up at 6 o 'clock and I go on like a two and a half mile. I mean, like a two hour hike every morning. Yep. I go hike for two hours. I come back home. Then I try to find some honeybees or something. Like I told my wife, I said, I don't like being idle. I don't. Yeah. I mentioned just like, I feel like I'm not useful right now. Yeah. And, and, and there, a person needs a purpose. Right. And a person needs a purpose. They need somebody to go add value to their life.

48:10That's how we're wired. That's how we're built. And so it could be that you get up and go down to impact and volunteer there in Houston with the least of ease in our communities. And you spend eight hours a day doing that for a month, right? Just to clear your cobwebs, right? But yeah, having a thing to go to where you are actively helping somebody else's life better, get better. Man, that's who you are. That's who all of us, that's who we are. And that itchiness you're feeling is important. Can I give you two things I would love for you to do? You don't have to do them, but I'd love for you to.

48:42I would love for you, when you have some space in your mind and spirit, go for your two-and-a-half-hour walk, get a piece of paper and a pen or three or four sheets of paper and a pen, and I want you to write a letter that you will, God help you, never send. Write a letter to the leadership team. Put it to the name of the company. But I want you to write a letter that has three parts to it. One, here's how y 'all broke my heart. I gave 30 years of my life. I was never late. I was always on time. I was a good leader. I was a good manager. I took care of customers. I want you to be honest about your anger.

49:23I also want you to be honest about the good times. Thank you. Thank you for what happened. Thank you for giving me this opportunity. Thank you for paying me really well when I was struggling, when my first kid was born. Be honest about the good stuff too. The third thing is, I want you to write in that letter, here's who I'm going to go be now. Here's who I'm going to go serve. Here's the kind of, I'm going to, another company is going to get my services for another 25 years. And this is the kind of man I'm going to be when I walk in that door. And that, that sort of, it helps metabolize grief.

49:58If you want to be really, if you want to take it to another level, read that letter to a couple of friends, to a couple of your, of your buddies, read it to your wife, share that with somebody because as Kessler says, grief demands a witness. I'm going to read this letter, this heartbreak, this here's who I'm going to be now. And there's something very empowering about taking hold of that grief and acknowledging it and then being honest about what I'm going to do next. And here's the second thing. Please, please do something to help my Astros, man. William, what are we doing? Go Astros, man. I know, but they're not going very fast right now.

50:34volunteer work go pep them up yeah listen go be that guy that helps people like me find my seat yeah and then while you're there cheer cheer real loud yep and William think too you know you're 48

50:46Rachel Cruze:whatever that second half is for you the beautiful thing is that you've set your life up where you're not in an urgent rush to go find the next thing whatever you want yeah where you go make 60 grand to keep the lights on like you have the gift of having margin with the time and that's great But yeah, that second half, what do you want life to be? What is this next chapter going to look like? And so you and your wife sitting down and talking through ideas and dreaming, you know? Yeah, take her to Papacito's or take her to Christie's, that OG seafood restaurant out there off Westheimer. Take her out there and y 'all have a dreaming conversation.

51:21What do we want the back half of our life to feel like, to look like? And y 'all dream together and then go find a job that'll fit that. because Rachel said you have done such an amazing job, probably a pathological job over saving the last 20, 30 years. But you set yourself up for just this moment when you can do whatever y 'all want to do together.

51:41Rachel Cruze:Yeah, and there's something so empowering when you finally get to make the shots, right? Call the shots and say, okay, this is what I want. And so maybe it's starting something from the ground up. Maybe it's plugging into something else. I don't know what that looks like for you. But yeah, just kind of take some time and dream about that. but also don't stay idle, William. But I don't think you can. He doesn't sound like he can sit still. I love William.

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53:05Rachel Cruze:Their privacy team of experts removes your personal information from hundreds of data broker sites and they keep monitoring it throughout the year. So far, Delete Me has saved me about 90 hours. I would have spent myself removing my information. And honestly, it feels so good knowing that someone is in the background helping me and I don't even have to think about it. So this summer, give yourself a vacation with one less thing to manage. Get 20 % off annual plans at joindeliteme.com slash Ramsey. That's joindeliteme.com slash Ramsey.

54:03Rachel Cruze:Up next, we have Mary in San Francisco. Hi, Mary. Welcome to the show. Hi. Thank you for taking my call. Absolutely. How can we help? So I have a couple questions for you all. I am 38 years old. I am a single mom and I work in law enforcement. About seven months ago, I transferred to the Bay Area to give my son better opportunities and a better future compared to where I was stationed last. And in the process of doing that, I spent tens of thousands of dollars in attorney fees over several years to make this move happen. I do not receive child support. I kept my first house as a rental now because of the terms.

54:47It's a 2.99 % mortgage on a 15-year loan. And I think there's about 11 and a half years left. But between the legal fees, relocating and rebuilding my life, I've accumulated a large amount of credit card debt. And I have a second mortgage already. So my monthly take home is about$5 ,900 after everything. But my required debt payments alone are at least$6 ,900 a month. And so before I even buy groceries or gas. So that's why I keep ending up back on credit cards every single month. So my question to you is because I plan on keeping the 2.99 % first mortgage, but I need to at some point replace my current second mortgage with a larger home equity loan to pay off that mortgage and then all of my high interest credit card debt.

55:36And I'm in the process of that research right now. But my the second part to that question is because I'm trying to build, you know, a retirement plan for myself as well. I feel like I've been doing everything for everybody else, but not really focusing on me, my mental health, my long term plans and everything. So I don't want to spend the next 20 to 30 years just trying to survive. And I'm trying to build enough real estate income that I can retire early, possibly to enjoy my life. So hold on a minute. So after I restructure... Let me jump in here. Let me jump in here. How do I have your permission?

56:14I'm asking you this as an officer of the law. Do I have your permission to be super blunt with you? Is that cool? Yeah. Yeah, of course. Okay. Here's what you're describing to me and Rachel. you have a giant and when i say giant i mean a humongous hole in the middle of your front yard and your plan for getting rid of this hole in your front yard is going about 30 yards past that hole and digging another hole that's even deeper and using that dirt to fill in this hole and then on the side what you want to do is dig six or seven other little holes to fill up that one big hole. You see what I'm saying?

56:57Like you have to acknowledge the plan you have in front of you is wholly unsustainable. And the plan, and you've got to deal with the giant hole first with new dirt. You can't just dig another hole in your front yard and try to refill it. And the plan you have down the road is I want to have this income or whatever. That's all well and good, but you, like your life financially is on fire right in front of you. So let's deal with the fire first. You know what I'm saying? It has been for a long time.

57:27Rachel Cruze:A lot of sleepless nights. Yeah, it's caused a lot of stress. And you're trying to do 18 things at once as well. Pay off the debt, try to get the second mortgage paid off, then fund retirement. There's so many directions that you're looking, which is understandable because of the situation you're in. And so I I think one goal for you, Mary, and hopefully in this call, we can help direct that is to focus on one thing. And we call that focus intensity here at Ramsey. Like I'm going to be focused on one step at a time. And what that looks like is first getting$1 ,000. It's our baby steps. Do you have any cash available in savings?

58:09Rachel Cruze:I have my short-term rental savings at this point, and that's about it. How much is in there? It's about$12 ,000. Okay. Is that just retained earnings for fixing the air conditioner and ceiling fans and stuff? It is, yeah. So that's just basically the income I've made the last six months on the rental so far. And the rental is not near you, right? Because you moved. No, no, I moved. You need to sell that house, Mary. Yeah, sell the house. You need to sell the house. I know you got a good interest rate. It doesn't matter. It doesn't matter. You're drowning underwater and you're holding onto this thing called the interest rate.

58:46And you're like, look how good I'm doing, but you're underwater.

58:48Rachel Cruze:And the interest rate is still, you know, because you're holding onto that, it's keep, it's, you're losing sleep in all these other areas of your money. And so we never recommend being a landlord long distance. So whenever you move, you or anybody else that calls, we would always recommend selling your home when you move cities. So for the, for the sake of time, if you sold that home today, Mary, what kind of equities in that home? I have probably about$275 ,000 in equity. Okay. So if you sell that house, it completely clears you. Is there a second mortgage on that home or your primary home? There's a second mortgage on that home, yeah.

59:28On that home. So after all is cleared out,

59:31Rachel Cruze:everything, you would be left with$275 ,000 of equity? Around there, yeah. I mean, hopefully. How much credit card debt is there? About$40 ,000. $40 ,000. Okay. Is most of that attorney fees and then trying to keep your life afloat with bills? Yeah. Okay. About$30 ,000 was attorney fees the last few years. Perfect. And moving and relocation. Okay. Gorgeous. Gorgeous. I like this plan, Mary. We're making traction here. I don't know if you're going to follow it, but this is what I would do. What other debt do you have? Um, that's, that's just it. That's it. It's just the second, the first, and then the credit card debt.

1:00:13Okay. Okay, great. The problem is, is my, my mindset has always been trying to provide for my son and leaving something for him, which was the house. Yeah, I know. But here's the thing. What I want you to provide him right now is stability and a mom who feels safe in her own skin. And he does not have that.

1:00:35Rachel Cruze:You're spread so thin right now, Mary, and you have something right in front of you. That can solve all of this. That can solve it and move you forward. I mean, you could invest$100 ,000 of this as well. And leave him half a million dollars in cash down the road. Oh my gosh, easily. What you can do for this money working for you versus working for everyone else and getting a HELOC and then getting this and getting... I mean, you are working hard for everybody else and not you. And so really focusing in again and knowing that, yeah, this is a little bit of your get out of free jail card to start over, which is a beautiful thing.

1:01:11Rachel Cruze:Where are you guys living now? Are you renting or do you own a home now? We're renting, but it's through my job. So it's really low rent. Okay. I was going to say, you're an officer, which has somewhat of a capped salary, but you're in a really expensive place to live. Yeah, we are. Yeah, so part of that too, Mary, is you have to be thinking long-term that if you're not in that job long-term and you look up and you don't have any money to put down as a down payment on a home, eventually, like that's a goal. So that would be a goal for me is to clear out this debt, set aside six months of an emergency fund.

1:01:50Rachel Cruze:I would normally say three, probably in your situation, but I think all the stress you've been in, I think six gives you ultimate peace. Open up a high yield savings account with Fairwinds Credit Union and park some cash there, six months emergency fund. And then I would look ahead and say, okay, I need to put some of this in retirement. I'm going to put some of this away in maybe a separate savings, high yield savings account for possibly a down payment, maybe in the next 10 years. But I'm going to be thinking about my housing because eventually that the rubber is going to meet the road with that.

1:02:21Rachel Cruze:But there's all these, do you see what I'm saying? You take your money and you let it work for you and it's growing and you're making interest when you invest. Your money's making money for you, not for all these other people living in a cycle of debt. And so you really could go from sleepless nights, stressed, feeling like I can't even, I have to have credit cards to finish out the bills every single month to having no payments, having an emergency fund, having a plan for your house, for your retirement and your son's college. Like all of that can be completed. And a big jumpstart on that is selling this home.

1:02:57Yeah. The cost here for you is grieving the loss of this picture you had where I'm going to hand my son this old house. I'm going to be sad about that. I'm going to be heartbroken about it. And then I'm going to be about changing my life. Yes. And for you, like most of the calls on the show, man, it's a three, five year, seven year slog. For you, it's literally 30 days and everything can be different for you. Thank you.

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1:05:11Rachel Cruze:Up next, we have Anne in Grand Rapids. Hi, Anne. Welcome to the show. Hello. I'm a little nervous, so bear with me. Sorry. Oh, you're great. Don't you worry. Don't be nervous. So I have a question. So I have a verbal promise for a position. They are ready to hire me and they're just in waiting to place me in an office. I've been waiting a month and a half. Um, and I'm just curious, how long should I wait? I'm doing like side gigs. I'm exhausted. Have you, do you have a contact there? I do. I do. I have someone in my network. They actually, she had actually asked me over the past couple of years to try to recruit me and it just wasn't the right time.

1:05:59Um, no, but like, do you have somebody you've been like on that you're going to be onboarding with that you've been back and forth? When's the last time you talked to him? Yeah. um you texted last week Wednesday I emailed the recruiter and then I texted my contact so I haven't heard anything back yet um but they're like yes we're still interested we still want to have you so it's all verbal but I don't have anything in writing I'm like dude I'm gonna tell you I this is me Rachel could have a different thing I would I would keep pressing putting my feelers out for other other things for two reasons one okay um it's been my experience when somebody really wants you, you know it, they know it, everybody knows it.

1:06:40And the second thing is, is it's, it's kind of like after a first date and they're like, yeah, I'll call you tomorrow. And they call you nine days later, they're kind of giving you an insight into who they are. And even if it takes a long time to find an office, it's confusing. We have to get a budget line filled all that that's business. That happens. That's life. The fact that they're not calling you and letting you know and keeping you apprised of here's what's going on and here's this and here's the start date and we don't have an office for you so you're going to work from home until we get an office like the fact they're not communicating with you well that would be an insight for me as to how they might do business once you get to be working there yeah well i was born too they're like well you know the company moves slow they really really

1:07:23Rachel Cruze:move slow so you know hang on and i've i've looked you know on the internet or whatever is that it can take two to six months to be placed and to be into an office. I'm like, good night. That's so, so bizarre that they would interview, post a job, interview, and accept it. No, no. It's not? I mean, it's been six. The process is very, very long. It's been probably about six steps so far. Gotcha. So my interview process here was 18 months. It was long, long. but then when it came to Dave Ramsey said you have 48 hours to make a call and here's the date you know what I mean like so it took a long time and it should Dave's deciding whether to put my name on my face on the side of the building but once it was on I mean it was overwhelming it was super on right I don't know I would ask for something in writing that employment for your own sake starts by August 1 or August 15th.

1:08:29Rachel Cruze:Like there's something in writing saying, yes, I am going to be employed here. And if they can't give you that, it's almost like an employee agreement. Like, I mean, that stuff is pretty standard when you're hiring. That's job 101. And so if they can't even provide that, and I hate to say it, what a bummer, but yeah, I mean, and I might communicate that to them. It's like a dream job. Ugh. Yeah. Yeah, but it might be a dream job in a nightmare situation. Right job, wrong company, maybe. Yeah, maybe. Yes, that's a great point. That's a great way of looking at it. Oh, man. Yeah. I hate this for you.

1:09:04Rachel Cruze:I would say you don't have to fully close the door, but I would be looking at other places. And if you get another job, except someone hires you somewhere else. You withdraw from the process. You withdraw, yeah. Okay. That's kind of what I was leaning more towards. But I just thought I'd get you guys' insight on that. If I was in your exact shoes, I would leave that door wide open, but I would start the process of having conversations with other alternatives. I'm so sorry. I hate it for you. It's so frustrating. So frustrating. So frustrating. Crazy. Okay. Let's go to St. Louis, and we have Ethan on the line.

1:09:37Rachel Cruze:Hi, Ethan. Welcome to the show. Hi. Hello. I'm super excited to talk to you guys. Oh, well, thanks for calling in. How can we help? So my wife and I are both 24. We have a soon-to-be one-year-old girl, and we're working on baby step two, trying to pay off our remaining debt by July of 2027. Oh, good. And have our emergency fund done by September 2027. Nice. I'm a youth pastor, and my wife is self-employed, specifically a 1099 NEC. And since I'm an ordained pastor, I'm also treated as a self-employed individual for tax purposes. So my question is, for future, when we get into baby step four and start investing again, should we open a traditional IRA for tax benefits now or should we open a Roth IRA for the future tax benefit?

1:10:36it?

1:10:37Rachel Cruze:Almost always, like 99.9%. I always go for the Roth. There are small exceptions with high income earners and what they'll be earning in retirement that you can kind of finagle the math. But I do a Roth IRA. My husband does a Roth IRA. We do not have a traditional because from, especially at your age, Ethan, the amount of money that's going to be growth versus what you put in is going to be insane. Like it's mostly, it's going to be, I mean, I don't have my calculator in front of me. I'm going to say 80 % growth. By the time you're 59 and a half, what you and your wife have put in is going to be so small compared to the growth.

1:11:14Rachel Cruze:And I would much rather pay taxes now and have that growth be tax-free. So when I retire, there's no taxes on millions, possibly millions of dollars right there. So that's, yeah, for sure the Roth IRA is the way to go. Does your church offer any like 403Bs, anything, or you are? Yeah, yeah. So I have a 403B through the church as well. That's great. So tell me about this. You're ordained, but you're self-employed. I don't understand that. Are you 1099 or they have you on a W-2? No. So it's weird with being an ordained pastor. So like I get a W-2, but I have like a housing allowance that is federal income tax free.

1:12:00Sure. I'm taxed at a self-employment rate for the rest of my income. So I why that is, I mean, I don't know. But that is how my tax professional has explained it to me. Does that mean that is that is that I know about the housing allowance for clergy. I know about that. But is this because the church is not putting in their portion of your tax benefits, and so you're having to pay the full 32 % or 33 %? Yeah, so the church doesn't – yeah, they don't pay for the taxes, so it's the – I have to pay the self-employment tax. Why don't they pay the taxes for their employees? um it's a small town church so it's um i mean i don't know if it's really feasible for them to do so while also um you know being able to keep me full time um so it you know it would cost them extra to do that okay that's it i think yeah it's usually the role of the employer right unless you're a 1099 contract employee yeah but you've got a good tax professional so i'll let y 'all work that out it sounds like it yeah and i've never asked i've never asked the church i just kind of um you know when i got hired i just understood that that was that was what the deal was and you know just been okay with that how many people are on staff i'm just curious uh there's there are

1:13:30Rachel Cruze:three of us right now so it's it's a tiny church yeah probably not a lot of money i don't know yeah i don't know how they're setting up all of yeah i mean you've got a tax professional what it is yeah um but to answer your question originally ethan yes is i would do two roth iras and if they have the 403b and there's a good you know matching situation there there's probably zero match not even paying your taxes no that's probably true i mean they're not paying their portion of employment tax or fika tax or any of that stuff yeah yeah dang so uh roth ira ethan is what i would And also remember, too, in these situations with people in ministry, if you ever want to go into the private sector or public sector, I guess, you know, and you leave your housing, you have to think through, OK, if I'm 34 and I'm going to go and start my own business and do my own thing, you have to be thinking about the housing.

1:14:23Rachel Cruze:I've got a place to live. Yes. You want to put some money aside for possibly future Ethan and his family. If you guys ever choose to leave that specific church and the other one doesn't have housing allowance and all the things. So have that in the back of your mind, too, Ethan, maybe some extra savings there.

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1:16:15Rachel Cruze:One of our favorite things is when people share their stories about how they're winning. And we just got an awesome review from our EveryDollar budgeting app. Someone said, EveryDollar is excellent. It really helped me get my personal finances in order. Now that I'm married, my wife and I use it together out of our joint checking account, and it helps us maintain a common vision and a set of goals. So we love to see it, and EveryDollar really is an amazing budgeting app. Not only just that, but it's a plan for your money. And if you are married, you and your spouse getting together and working together, being on the same page to take control of your money is what we are all about.

1:16:52Rachel Cruze:So start EveryDollar for free in the App Store or Google Play. All right, let's go to Michael in Minneapolis. Hi, Michael. Welcome to the show. Hi, how are you? Hi, we're doing great. How can we help? Good. I am 28 years old. I recently just bought my first house, and it's overwhelmingly stressful for me. There's been some problems that popped up, and I just didn't expect to have this much stress, like to the point where I can't sleep, the point where I had to go get medication from the doctor. and I'm just really considering selling the house and going back to apartment living where I was stress-free and to not have this weight of a house, you know, on me right now.

1:17:35I just don't know what to do. You just walked through the first chapter of my anxiety book. I've been there, exact same spot. So help me, if you think about your fear and your anxiousness globally, Distill it down for me. Be very specific. Give me two or three or four things that are keeping you up at night. So when I first moved into the house, I noticed there was mold in the basement and other parts of the house. Did you have the house inspected? It was not inspected, no.

1:18:10Rachel Cruze:No. Oh, no. Oh, geez. Okay. Yeah. But there's some good news, actually. So I noticed mold in the basement. It was pretty bad in the basement, but I contacted the seller who agreed to pay for the remediation of the basement, actually. So the basement is now cleaned and remediated, and he paid for it fully. He didn't have to, but he did. So I was really lucky with that. Yeah, you don't hear that very often. That's pretty great. I just feel like there's still like – I just have this thing in the back of my head where I think there's mold everywhere, and it's behind the walls and I'm just not noticing it.

1:18:48And I feel like I have a scratchy throat all the time, but maybe it's just because I'm so paranoid and stressed. Where else besides your house, where else are you a generally anxious guy? What other things keep you up at night?

1:19:05In terms of the house? Nope. Take house off the table. Okay. I'm a very indecisive person. So I stress about a lot of like any major decision. I wait till the last minute to make it. And then I feel like I regret it. Okay. Give me another one.

1:19:27I'm not really stressed about my job at all, but so that's good. But what's the state of your relationships? I have good family and parents are alive, healthy. I just recently am in a relationship with someone that, you know, in the past month. So that's going well. So when you hear the story in your head that you make bad choices, that you're going to make a wrong choice, that you're going to screw this up again, whose voice is that? Because it didn't start in your head. Whose voice are you beginning to repeat in your own words?

1:20:07I don't, I guess I don't know. I don't, I don't know what your, what your question is actually. So when you're indecisive, right? Should I do this or should I buy this car, the red car or the green car? Well, if I buy the green car, it's going to have this many miles. And if it's got, if I buy this car, it's the wheels may fall off. And if I, and then you buy the red car and you're like, man, I should have bought the green car. Underneath that narrative is a story running through your veins that you don't make good choices or that there's always going to be another shoe that drops or you didn't plan right.

1:20:40Yeah. Whose voice is that? Yeah. Who told you that story? I don't know. I guess to me, it feels like it comes from me, myself, that I'm just not, you know, I don't make, even if I make a decision, I regret the decision and then I'm just super indecisive. But I've known that about myself for a while. Okay. That's where I want you to sit down with a licensed mental health professional and walk through it and not sit down and say, I am anxious and indecisive and I want to talk about it. I want you to sit down with a therapist and say, I've struggled with indecisiveness and with a meta narrative in my life that I'm probably going to screw up the next thing.

1:21:22And I want to be free from that on the other side of it. And any licensed professional should be able to walk you through that because there's some pretty simple action steps in a therapeutic setting to walk somebody through that. I've been there. I've been on the other side of it. Okay. And also when I found myself in your exact situation. We don't have mold as much in Texas. We had different stuff. Part of my panic that I had all the time, 24 seven was I had put my, my family in a really financially precarious situation. Cause we had six figures of student loans. We had two car payments, we had credit cards and we had this house on top of all of it.

1:21:58Rachel Cruze:Yeah. Michael, what's your financial situation? So currently I make, um, like 75 grand a year and an IT job. I actually just got, because I've been so stressed out the past month, so I actually just applied and I got a job making like$100 ,000. So I start that in like three weeks. So that kind of helps me a lot. Okay. What kind of debt do you have? It's about the financial situation. I don't have any credit card debt. Both my cars are paid off. I just have student loans about$35 ,000 maybe. Okay. Do you have cash in the bank saved? Yeah, about$8 ,000 in the bank. In the bank. Okay. And how much did this house cost?

1:22:39$270. Okay.

1:22:40Rachel Cruze:How much did you put down? I was a first-time home buyer, so I put down a minimum, which was like 2.5%, I think. Okay. I did get a grant for$15 ,000 that covered pretty much all the closing costs. Sure. So I think just a couple of learnings, Michael, going forward. that part of your stress is caused by you don't have a ton of cash in the bank that can help maybe mitigate if there was a massive mold problem right or whatever it looks like you have you still have student loan debt um you put down not a ton right we would say at least five percent if you're a first-time home buyer on our end so you did even less than that um they're like everything is a little bit out of order and then you didn't do an inspection which now you've learned your lesson on that.

1:23:34Rachel Cruze:Yeah. So there's just some, there's some lessons to be learned and it's been done and you're doing this a little out of order. So a couple of things to do just to create for today's sake, some piece is I would, I would, I would hire a company to come in, test areas of your house, just so you know, okay, is there mold everywhere? Is it just in my head, right? You can figure that out. And so go get some tests done, let them run the stuff in the events, like you can figure out kind of where is the state of my house. My fear is this right here. I'm overthinking. I think I have a scratchy throat. I'm paranoid.

1:24:10Rachel Cruze:Get it taken care of. Get the answer. And then from there, planning out, OK, if there is mold, I go down path A. If there's not, then there's plan B. But from a financial perspective, your number one goal is to get the student loan cleaned up. And I would do that within the next nine months, especially with your new job, living on nothing. If the house does need repairs and things like put it in order and cash flow all of them because you will be more stressed, Michael, if you go deeper in debt or you go get a second mortgage or you take out a HELOC, right, and you keep adding on to your debt to fix this house, that's going to cause more and more stress.

1:24:51Rachel Cruze:So I would get all the facts I could down on paper, prioritize them and just start knocking them out. And again, I probably would not jump the boat right now and sell the house. I probably wouldn't unless it's just absolutely fallen. I don't know. I don't know why you would, but I would stick in it a couple of years if you could. But now I think it's one of these things like that was stupid. That was so stupid that I did X, Y, and Z, right? And we call it stupid tax around here and say it out loud. and you learn from it. We've all done stupid stuff, made bad decisions, but I think clarifying those and seeing those is going to help you move forward.

1:25:29Rachel Cruze:And I think some of this fear too, I mean, I'm not a therapist, but is in your head and I think you can get some of those answers. You get some of those answers. Yeah, which is going to be helpful. If you're financially precarious, your body's right to sound all your alarms. So don't try to silence those alarms. Like Rachel said, information will be your friend at this stage. So go get those facts, go sit down with a counselor And yeah, if you can stick it out, stick it out, stick it out.

1:26:14Rachel Cruze:Welcome back to the Ramsey show in the Fairwinds Credit Union studio. I'm Rachel Cruz hosting this hour with Dr. John Deloney, and we are answering your questions at 888-825-5225. All right, let's go to Chris in Tampa, Florida. Hi, Chris. Welcome to the show. Hey, Rachel and John. I'm a longtime listener, first-time caller. And Dr. John, I'm an OG 17. Yeah, dude. Glad to have you over on this boat. Yes. Hey, my question today is about co-signing for student loans. So my father, he's elderly, and I've been helping him plan his estate and his will. And in the process, I found out he co-signed for a student loan for my nephew.

1:26:59And as far as I know, my nephew, I guess he deferred the payments, and then he's on an income repayment plan. And I believe the balance on his student loan is about$200 ,000. So my question is, yes. Yeah, he got a computer science degree and he's working at Best Buy. So not exactly the best investment of money. Oh, no. But my question is, when my father passes, will his estate be liable for the balance alone? In other words, will the student loan lender come to my father's estate and ask for the balance? How does that work? That's a great question. I don't know.

1:27:38Rachel Cruze:I want to say it's to the primary on the loan. It would be your nephew. It would probably depend on if it's a federal student loan or if it's a private student loan, too. If he got it through a bank or he got it through some off book, not off book, but some lender that's not a federal guarantee, it's not federally guaranteed, it may be different. That's a great question. I know if you pass away with your student loans, they're gone, right? But I don't know about a cosign. Was it a Parent Plus loan? I'm not sure. I just found this out when I was helping him go through all of his expenses and accounts and so forth.

1:28:21And I saw that he was getting emails about the payments. So I don't know all the details. I don't think it's a Parent Plus loan. If I had to guess, it's probably a private student loan. Yeah, it's been a minute since, I mean, it's been, what, six years now since I was sitting in the middle of all that at a university. But for somebody to get a bachelor's degree and they're going to hold$200 ,000 of debt, I don't, off the top of my head, I don't remember a federal program shelling out that much money that you'd have to go somewhere else to get the money. But I may be wrong on that.

1:28:57Rachel Cruze:If it's private, they're probably going to go after, they're going to get their money. They're going to get their money. Yeah, it's not going to be. because they're going to say we would never have given this kid that money if this guy hadn't backed it up with his wealth yeah okay yeah i better do some digging and find out exactly where who has this loan yeah i would see for sure if it's yes if it's government issued versus a private through a company then that's those are going to be two totally different things because even with a private student loan if you die that that loan still i want to say with a private company could still be put against your estate.

1:29:33Really?

1:29:34Rachel Cruze:It's only federal student loans that are not bankruptable. Private student loans, that whole world is a totally different machine. I mean, you're dealing with banks and lenders at that point. Chris, I'm surprised that there can be an income-based repayment plan with a cosigner, too. That surprises me. Yeah, I'm not sure. Like I said, I really don't know all the details, And I can only imagine with my nephew's situation, I can't imagine him making the full payments on that loan. So I'm assuming he's on an income-based repayment plan. Or he's just not paying anything. If your dad's starting to get emails as a co-signer, that means the loan's not being paid.

1:30:17That's true. I think an income-based repayment plan, if there's somebody else who can foot the bill, who's signed up to foot the bill, they're not going to give you an income. That would be my guess. I could be totally wrong here. Has your dad made any payments? As far as I know, no. What's the status of his estate? Meaning, can he absorb this$200 ,000? Yes, he can. And the reason we're thinking about this is because his will is pretty straightforward. I mean, he's just going to split the estate between my sister and I 50-50. So the question is, okay, well, when that time comes, are we just going to split that if they come and say they want the balance paid off?

1:30:58Or does it come out of your sister's half? Exactly.

1:31:01Rachel Cruze:Is it her son? Yes. Does she know about this outstanding balance? I'm sure she does, yeah. I wouldn't be so sure unless you've had a direct conversation with her. Yeah, we haven't had a direct conversation, but I'm planning to, you know, since I've found out this information. Yeah. We just need to know. So I just want to make sure when my father passes, there's no questions. There's no surprises. We all know what's happening. In fact, I'm probably going to have a conversation with my father and just ask him, what do you want? Do you want to pay off this loan out of your estate or how do you want to handle this?

1:31:38Yeah. Dude, sorry, this is such a mess. That's why we don't like co-signing, man, because it just complicates family relationships in such a powerful way.

1:31:47Rachel Cruze:Yeah, so it, yeah, I think that's for sure the right path to take of everyone being on the same page completely before he passes because you don't want this to rip apart your relationship with not only your nephew, but his mom, your sister, you know? Yeah, your sister. And all of that and what's fair, what's not fair. That would be so hard. why do I feel this like knee jerk that I'm like she should pay it on her side right I think so but if she didn't know about it and she's like oh my gosh my dad did oh man yeah I mean the yeah without talking to anybody else my thought is if Hank set up an arrangement with my parents and they co-signed for 200 grand and I'm getting half and my sister's getting half that should I mean it feels like it's my kid it should come out of my half right right yeah that's That's my impulse.

1:32:41Rachel Cruze:Oh, man. Yeah, you guys, this is the one-on-one on why not to co-sign. I mean, genuinely, you entangle yourself in a situation, and the reason that you need a co-signer is because the person that is lending you the money, lending them the money, doesn't trust that they can pay it back because of whether it's their debt levels, whether it's income to debt ratios, whatever it looks like, the bank is looking and being like, eh. And this could be a$30 ,000 car loan, right? I mean, this is that to a$200 ,000. A cosine makes a financial matter a relational matter every time. And it's just not worth my friendships.

1:33:19It's not worth my relationships with my parents or my kids.

1:33:22Rachel Cruze:Yeah, we were doing a podcast this morning, recording one, and the conversation got brought up about financial boundaries. Which financial boundaries do you wish you had set earlier? What financial boundaries do you have in the future? and it's sometimes, you know, it's, it's, I think a wise things. I mean, I, I've even was like, oh gosh, what, what would mine be to, to have a forward thought towards your future. And then even looking back and being like, Hey, that's where I messed up with money. I probably should have had a boundary there. Right. And you just have this awareness to go back through your money story and then planning for the future and thinking through relationships and money.

1:33:58Rachel Cruze:What was healthy? What's not healthy? What does this look like? When is a good time? When is not a good time, you know, to help family or friends or whatever it may be. But just being aware of that, you guys, because I think sometimes you get caught in the moment and you probably don't always make the right decision. Absolutely. Because it's so, like, emotional. Or it would be hard for a grandparent to talk to their nephew and say, I love you enough to not give you this loan. Yes. I cannot co-sign this. $200 ,000 and then working at Best Buy. Yeah. Man.

1:35:00Hey, George Camel here. so you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start-to-finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramsaysolutions.com slash real estate.

1:35:32That's ramsaysolutions.com slash real estate.

1:35:59Rachel Cruze:Our question of the day is brought to you by Why Refi. When past due private student loans keep pulling you backward, it's hard to focus on what's ahead. So Why Refi helps borrowers with low fixed rate financing options that fit your budget and can focus on the future again. That's whyrefi.com slash Ramsey may not be available in all states. All right. Today's question comes from Sydney in Texas. Sydney writes, my boyfriend and I have had an on and off relationship for five years. He's always been the one to initiate a breakup because he doesn't think we share the same mindset on finances.

1:36:38Sydney, that's not why he's breaking up with you. Neither of us have any debt, but I would like to go to graduate school, which would be a$10 ,000 loan. We don't live together. We each have our own place and we pay our own bills. He thinks I have financial spending issues because I ask him to pay for my nails, hair, clothes, etc. If we go on dates. That's not a financial issue. He thinks you're too much. My job only covers my bills and groceries with nothing left for fund spending. Am I wrong for wanting to go to graduate school to increase my income or is this a blow up waiting to happen?

1:37:08Rachel Cruze:It's not sounding great, Sydney. Not in the positive right direction. Yeah, if your boyfriend is funding your lifestyle and you can't sustain, you have too much lifestyle, Sydney. So he probably wants some level of self-control from you. Yeah, you're not disagreeing on finances. You're disagreeing on you don't live in reality. yeah I mean and then going into debt if that is a value system of his it's like no I don't want debt and you're gonna go take out ten thousand dollars in two loans yeah he probably is like well I don't know if we have a few I don't know if this is gonna work yeah where you don't have you don't live in financial reality for yourself so what's it gonna look like when y 'all combine a household and yep so um so for your for your sake Sydney regardless of boyfriend or not I think it would be good for you to go through a process of budgeting, a process of saying, hey, what are my values around money?

1:38:04Rachel Cruze:I can't spend more than I make. No one else is funding my life. What I make is what I live on. What debt do I have? What's my next goals? Maybe it is graduate school. So no, it's not wrong to want to go and advance your degree to get a better high paying job. If that's all connected, that's not a bad thing, but you just want to do it in a wise way, which you wrote into us. So it would be a debt-free path to go and do that. And so what does that look like? Does that look like saving up? Does that look like having maybe one year saved and then you're working and saving the rest for the next year?

1:38:39Rachel Cruze:You're cash flowing as you go. Is it working at a company that helps pay for the school? Like getting creative and actually putting some effort into it. It's good for you, Sydney, but also it's probably a very attractive quality to your boyfriend. Who's like, Holy crap, you spend a lot and you're dependent upon me. Well, and you say like, I don't have any financial problems, but my job only covers my bills and groceries. So I can't, I can't do anything with my hair, with my nails. I don't have any clothes. Like he's looking at you saying you, you don't live in the real world. Like if you want that to be your life, you want to get your hair done, you want to get your nails done.

1:39:14You want to have clothes to wear to work. All that stuff makes sense and it's great. But then maybe you need to make more money. And that just is about living in reality.

1:39:22Rachel Cruze:Yep. And it may not take a graduate degree to go get that depending on what field you're in. You could just apply for another job or go get a side hustle. Oh my gosh. Go get another job? I'm just imagining this poor guy just being like we don't agree on finances. Listen, Sydney's boyfriend, you need to be honest with her about why you keep breaking up with her. It's not because you don't agree on finances. is it's because she lives in an alt universe and you like to live in reality. So just be honest about that. Poor Sydney. We love you. Cheering for you. Hope you can do it though. Hope you can do it.

1:39:59Rachel Cruze:I love you. I want you all to be well and good. Yes. We'll see. This is not a, this is not a. Not looking good. Finance. Same mindset on finances. That's not really the root here. Oh man. All right. Let's go to Kayla in Atlanta, Georgia. Hi, Kayla. Welcome to the show. Hi, Rachel and John. Thanks for taking my call. Absolutely. How can we help? Hi, I am 33 and$58 ,000 in debt. I came to Christ about three years ago, and I've just been learning so much about stewardship and I want to do better in honoring the Lord with how I manage my finances. So I'm calling to get a specific strategy on how to tackle my debt and be done with this for good.

1:40:42Rachel Cruze:I'm over it. I want to build a future college fund for my daughter, who's currently five, save for a home, and continue to contribute to my retirement. I also just want to prepare myself to be a future spouse and not have any debt. Good for you, Kayla. So impressive. So many amazing goals that you have ahead, which I think are all great and all very doable. It's going to take some time, but knocking each one of them out kind of one at a time, I think, is the best way. And so starting with the debt, what kind of debt do you have? I have$36 ,000 in student loans and$17 ,000 in consumer debt across four credit cards.

1:41:23Rachel Cruze:Okay, so four credit cards, that equals$17 ,000. Okay, and how much money do you make? I make just a little over$125 ,000 a year. Dang, Gina, you're doing great. Great. What kind of work do you do? I'm in commercial real estate. Yeah. Property marketing for commercial real estate. Good for you. That's great. Well, what we teach when you pay off debt is the debt snowball. Okay. So this is where you're going to list all of your debts, smallest to largest. So even those four credit cards, break those out. And one may be$4 ,000, one may be$6 ,000,$3 ,000,$4 ,000. I don't know what they all are balance-wise.

1:42:03Rachel Cruze:but you break out all four of those and then your student loan is it one large loan at 36 ,000 or they're multiple i think it's broken in two okay 20 ,000 and 10 something perfect so put that in there as well right so all the credit cards and student loans you're gonna take all of that again write them out smallest to largest regardless of the interest rate pay minimum payments on everything and pay off the smallest debt first okay and what's wild about that is you could probably pay one credit card off in a month. Like I bet if you had a$3 ,000 credit card, I think with your income and you do nothing, you cut back on out to eat, you cut back on everything and any margin that you have, you throw it at this debt.

1:42:46Rachel Cruze:And what's beautiful is once that$3 ,000 credit card is paid off, there's no payment on that. So you take that payment, throw it at the second smallest debt with all that margin you have from your budget. And so you just keep that moving. And again, looking at the numbers, I'm like, there's a really good chance, Kayla, in the next, I mean, 14 months, you could have all of this cleared. If you really, really buckled down and looked at it. Yes. And it may mean, I mean, I don't know with your situation is with child care and all that, you know, you pick up a second job, even a few nights a week, you know, you do, you just throw as much income at this day and you get it knocked out as quickly as possible.

1:43:24How old's your daughter? she'll be five in november perfect you know what's going to be super fun for y 'all to cook meals together in the evening as part of a mother-daughter activity and it's going to be the it's gonna be the biggest pain in the butt of all time because it's going to take eight times longer than if you just did it yourself but it will be a cool experience y 'all have it will save a ton of money on just eating out and y 'all get to spend some really like like connecting bonding time together. Um, and that'll be, that'll be, that'll be great stuff.

1:43:58Rachel Cruze:So may I ask a question because I think for me, again, the mental and spiritual click really locked in for me, but I recognize my own triggers, right? Like overspending, um, maybe instant gratification. And for me, I'm not like, you know, spending my bills on a Louis Vuitton purse or anything like that. But I've definitely, if I want to travel, I'm usually not, I think that's kind of where my, I use my credit card. And so I'm trying to just like go cash for everything. Be done. Be done. Yeah. If you have it in your wallet, you're going to use it. So get rid of it. Yeah. So there's definitely a moral conviction that you're going to have, spiritual conviction of I'm not using debt anymore.

1:44:40Rachel Cruze:Because when you want to talk about scripture, Kayla, every time debt is mentioned in scripture, it is in a negative fashion. You're a slave to the lender. It's a burden on your family. It's not good for you. I mean, we don't go as far as say it's a sin that you like can't get to if you have student loans, but it's not good. It's not good for you. And we see that from us, from a psychological perspective. We see that from a financial perspective, like it all lines up. It's not wise when you don't have autonomy over your money, you know, and the stress is there. And so for you getting out of debt is going to be your biggest step and then building that emergency fund.

1:45:13Rachel Cruze:And then you get to hit retirement, uh kids college you know the house everything so if you hold on the line christian's going to pick up and we're going to send you total money makeover the book to walk you through the baby steps

1:45:39dave ramsey here for more than 30 years i've been talking to folks on the air and i can tell you that most people are broke, not because they don't make enough money, but because they don't have a plan.

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1:46:44Rachel Cruze:One of the most fun events that we do here at Ramsey Solutions. My favorite. Happens to involve me and John. These two. It's the best. It's the best. It is. So we have our Money and Marriage Weekend Getaway. It's coming up October 22nd through the 24th. Tickets start at$749 a couple. And you guys, this is one of the most incredible multi-day events that we have. And not only is it what I think, great content, good Q &As. We really get in there and do it. It's the best marriage retreat you could ever go to. It's so good. But also we hear from couples that it's just nice to get away, like not have kids and logistics and all the things.

1:47:22Rachel Cruze:And you just come and you're stretched, you know, in the sense that we will challenge and talk about hard things. We're going to laugh a lot. It's fun. Like it's all together an incredible weekend. So make sure to get your tickets at Ramsey solutions.com slash events. Come hang out with me and John. It's the best. And I don't want to throw shade. I don't want those shade at the other events. I'll just say, I don't want those shade, but we don't pull any punches at this, at this retreat. The most common thing we get back besides it was amazing. It was awesome. All the accolades is we didn't expect y 'all to go there.

1:47:58Rachel Cruze:Yes. We didn't realize you were going to talk about that. Right. And so we cover everything at this retreat, money, sex, intimacy, friendship, and we give you a roadmap, like a step-by-step plan for when you get home, how to implement this stuff. And so I'm proud of it. I love that our names are on it because it's good. And we've done multiple of these and we always, we're still, we're in content meetings, you know, as we speak, literally, yes, of creating new content. So even if you've been at past ones, you know, every time you come, we refresh it and yeah, it's, it's so fun. So we want to hang out with you guys.

1:48:32Rachel Cruze:All right, let's go to Idaho Falls and Michael is on the line. Hi, Michael. Welcome to the show. Hey, guys. How are you? Hi, we're doing great. How can we help? Good question for you. I've been a Dave Ramsey guy since I can remember. I remember sitting in the car seat in the truck in my grandpa's truck and he listened to you guys on it's awesome. But it's only been the past year that I've taken your guys's advice really seriously. I'm debt free. I'm currently on baby step number five. I'm investing close to around 26 to 27 % of my income right now. But I also just got married. I got married one month ago.

1:49:10Oh, congratulations. Thank you so much. I also married her student loans. Yes, you did. Her student loans are around$10 ,000 right now.

1:49:21Rachel Cruze:Okay. My emergency fund, I'm a pretty frugal guy, is$10 ,000. I have$11 ,000 because I have another short emergency fund, that$1 ,000. So my question is whether I should pay off all of her student loans right now and reset it? Or since I'm in a sales position, I'm fully commissioned, should I start paying just little by little? Y 'all are now in baby step two. Mm-hmm. So what does that mean? It means I'm back to getting that debt free, so probably just getting to that debt, right? Right, to check today and be done with it. Is she working? We weren't living together before we got married, so she has to move towns now, So she's getting a new job now.

1:50:05Okay, great. So, yeah. So hopefully if she's not a 100 % commission employee, then there'll be some stability there, right? Yeah, what will she be making? There'll be a floor there. Yeah, she'll be a waitress. So it'll still be kind of fluctuating. What's her degree in? She's a cosmetologist. She's also working as a cosmetologist. She just got the job like a day ago.

1:50:25Rachel Cruze:Oh, perfect. Okay, great. How much will she be making doing that? It's a commission. Oh, it is. Okay. Okay, so we'll throw out, does she know how many people she wants to see a week? What would be around? I don't even know. Yeah, that's kind of the tricky part about the situation is she's not quite sure either. This is her first job after cosmetology school, so. Okay. So she's going to have to just slowly build up her clientele? Correct. Okay. All right. So is she renting a chair just at a place? Correct, yeah. For that first little training, it's a commission, and then she's going to be, yeah, renting a chair.

1:50:58Okay.

1:50:58Rachel Cruze:Is it hair? What specifically is she going to be doing? Yeah, it's hair extensions, that sort of thing. Okay, cool. You know what I would do if I were her? I would talk to a couple of people because that stuff is expensive. I mean, you pay good money to get done what she's offering. So I would find people that she wouldn't compete with directly in your city. But if she can somehow get connected to someone that's like killing it and they live three hours away or something, like you're not going to be direct competition with them. and just ask some like questions of, hey, okay, how did you start?

1:51:32Rachel Cruze:What did you have? Was the salon better to work here? Was it better to go on your own? Like what helped them? Social media presence? Like, I don't know what it is, but if she can find some of those people and she gets a rotation with women that want that done every six to eight weeks, I think she could kill it. I mean, honestly, and I know it's her first job and it's probably a little intimidating and she'll need some hours under her belt to do it all. But I'm just saying, I think you guys have like a, an exciting kind of runway for something that she possibly is going to love and hopefully we'll do really well at.

1:52:04Rachel Cruze:So, so yeah, uh, Michael, you guys are in baby step two, like John said, y 'all are. So, uh, I'd pay it off and then you guys rebuild that emergency fund. And then whether, whether you, you need to take your retirement down to 15 % though, Michael, cause you're, you're investing too much. We don't say that often on the show, but you're above that 15%. So some of that margin could go towards paying, saving up for a down payment on your first home. Or rebuilding your emergency fund. Yes, that's probably, yes, that first, first and foremost. And let some, like, the moment you hit send on that 10 grand, there's going to be a, like, let's be honest, there's going to be some frustration, some annoyance.

1:52:43And there's going to be some nervousness because now you've got a thousand bucks and that's it. Let that energy not go towards your wife. Let that energy go towards, I'm going to make an extra sale this month. Yeah. I'm going to lean in that much harder. I'm going to use that angst and I'm going to go that much more into a job that's essentially limitless, right? You're full commission. So you can kind of go get it. But another thing I would tell you is I've had several buddies who got jobs at like chain barbershops. And they did that for two or three years. And then they branched out and started their own.

1:53:19And it wasn't a matter of like stealing clients or anything, but they developed some relationships over time. And enough relationship development over time, then they were able to have a base of clients when they went and opened their own shop. And so maybe she just gets a job, not at a fancy salon, but just cutting hair. and is able to stay in the industry, learn more about it. You hear conversations about product and discounts and suppliers and all that. And so she's in the industry, but also building her own practice there on the side. Okay. Yeah. I love that. Hopefully next step we can save for that marriage retreat you guys were just talking about.

1:53:55That'd be awesome, man. We'd love to have you.

1:53:58Rachel Cruze:I know. It was so fun. Well, congratulations, Michael. And, yeah, I think that's part of the combining finances that, like what you said, there's probably going to be some emotion around it. Because he was like, I'm a frugal guy. I saved 10 grand. You know, now it's gone in a blink of an eye. But I do think that those are the building blocks. Those are the small, I say small decisions, but decisions that you make early on in marriage that set you up so well. Like you're like going all in. Like all the chips are in the center. There's something powerful about keeping your promises to yourself. We're doing it.

1:54:30This is who I am. This is who I am when things are good. And this is who I am when things are tough. This is who I am. And I keep my promises to myself. I'm a guy that follows these baby steps. I'm a guy who isn't going to owe anybody any money ever, especially when it's tight. This is who I'm going to be. And there's something really rooting about I can trust myself.

1:54:49Rachel Cruze:Knowing who you are. Yes. And this is the plan that I follow. And this is what I do. And by the way, based on what my wife spends, what I know Rachel spends, your wife's going to be rich. rich homie like dude listen dude you get in some of these niches in life and i'm telling you i'm like man people can do real well for themselves i'm telling you with they if they know what they're doing and i'm sure michael's wife does me and winston have never had a conversation about it but a couple of times we've what's better than a conversation is we've just stared off into space and just just two guys standing next to each other just looking at the horizon like hey does your uh does your wife get her hair done at such and such yeah that's all we gotta say that's all you gotta say and we just stare off at the horizon you know it's like i'm with you brother i know i'm with you listen but i'm sure i'm sure my wife could stand next to you and be like so is your husband buying more hunting outfits yeah what are the bows like what are all the yeah the wood that you're replanking a room you know that could be in wince and y 'all could Thank you.

1:56:31I'm not against vacations.

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1:57:13Rachel Cruze:Our scripture of the day comes from Psalm 127.1. Unless the Lord builds a house, the work of the builders is wasted. Unless the Lord protects the city, guarding it with centuries will do no good. Tom Sowell. How would you say that name? I'm just going to let you do it. Okay. People with their time on their hands will inevitably waste the time of people who have work to do. Thomas Sowell. Sowell. Sowell. I see well. Sowell. Sowell. Sowell. Thomas. It's actually Thomas. It's Thomas. so well so okay people i'm gonna read it again rachel has a new um reading curriculum coming out in the fall too i can i can't pronounce people's names very well i'm just saying it out loud it's fine people with time on their hands will inevitably waste the time of people who have work to do oh it's kind of sad yeah that's true i don't know

1:58:20Rachel Cruze:All right. We're going to head to the phones now and in Santa Barbara. I think we are the king and queen of compelling radio. I think we are too. All right. We're going to go to Shelly. For those of you all born in the 2000s, radios is when they used to take podcasts and just put them on the air. And that's all you had. The airwaves. Yeah, yeah. Yeah, radio waves. Then they captured them. All right, Shelly, we're here with you. How are you doing? Hi, good. How are you? We're doing good. How can we help today? So my husband, he graduated from college about a year ago, and we ended up moving back to our hometown because he got a really amazing job here.

1:59:04Rachel Cruze:And his job is very niche, so it's something that can't be done in most places, but it's also a very, very expensive area. And the job pays well, but also the area is so expensive. um and so when we moved we ended up we lived with my parents for a couple of months and then we were going to rent a place but rent was so expensive and we had money for a down payment so we ended up buying a home because the mortgage was going to be basically the same thing rent was um for like a tiny little condo versus buying like a house and we have kids and dogs and all things but we are spending over half of our income on our mortgage every month so i guess my question is like what are you supposed to do in a situation like that um how much is he making he brings home around 8 000 a month okay and how big of a house did you buy like uh cost wise it's it was 703 000 um and so after a down payment and everything um we're paying i mean with like after property taxes and insurance and all that it's like 4 300 a month does he see a raise anytime soon is is the trajectory of income already gotten one which actually he's gotten two so he's actually making a bit more than he was when he got hired they really like him there which is good and will that continue like does he see his income continuing to grow we're hoping so yeah it seems like he's actually he has a job interview today like for the same company for like in level up position.

2:00:38Rachel Cruze:Perfect. So I probably would have a lot of potential. Yeah. Yeah. So I, I would, because of that potential and it sounds like for real, there is a pattern of him moving up. Right. And so if you guys can get to a place, um, that you look up and it's, you know, 40, 40%, 38%, right. And you start ticking towards that what we would say is around that 25 % range, that's going to be ideal. The hard thing is it doesn't leave you much wiggle room financially to do other things. It's basically like your house is taken most of your income and you're feeling that. So if you guys can't get to him, I mean.

2:01:21Are you working?

2:01:24Rachel Cruze:I'm not anymore. I was doing hair while he was in school, so I was the one supporting our family at the time financially. but when we moved here we moved out of state and I don't have a clientele here and we have we have one and a half year old twins and a three year old boy so it's very hectic and I also started getting a lot of like allergic reactions to the chemicals and stuff it was a whole thing but as of now I'm staying home full-time okay yeah so I would say Shelly if you guys can't if he can't see himself bringing in, I'm going to say. 12, 13. Yeah, I was going to. Yeah. Something around there in the next probably two to three years.

2:02:06Rachel Cruze:Then you guys probably being recorded. All right. It's no longer being recorded. We're recording the call to show. We have it recorded. You can rewatch this too. No, you're fine. I didn't mean to know my cheek hit it. No, you're fine. You're fine. So, yeah, I would say if you don't see a path towards that in the next couple of years, you probably bought so much house. And I understand California real estate is so expensive and so is Southern Florida and so is Manhattan, all this, but math is math, right? So if you bring in$8 ,000, it doesn't matter where you live. If half of your income is going to your mortgage over a long period of time, it's not going to be great.

2:02:48Rachel Cruze:You're not going to have a ton of margin to invest in retirement and day for kids college and X, Y, and Z. Right. So, um, so what are you supposed to do? Well, I probably would have said I would hold off and I probably would rent and find something maybe in an area that's not super close to family. Cause that's a very expensive area, right? You would have to finagle the situation to make the math work. And that's the hard part of, I think all of this money stuff is that it doesn't really care about your feelings. You know, it's what it is. And so you're either going to choose to be stressed and strapped financially to have the house, or you're going to be maybe sad and disappointed about where you live, but it's less house and not as great of an area, right?

2:03:34Rachel Cruze:You have to kind of pick that side of it. Let's call this out. What is his annual salary? About a 125 probably? It's like 140-ish. Okay, but you live in a, if not the, one of the highest tax rate states too, right? Yeah. So a big chunk of it goes away and then Santa Barbara taxes are high. So all that to say is like$140 ,000 and a$700 ,000 house. Like it feels crazy to you that we make$140 ,000 and we can't buy a house in the town where our job is. yeah right so understand that frustration is real and because if you don't metabolize that frustration it bleeds onto all it makes everything feel emotional like just pull that aside and say the story we got growing up is if you make six figures you're a you're a bajillionaire you're good yeah and so the reality is in some towns 140 000 is like a million bucks if y 'all lived in the Midwest, y 'all be living, y 'all be living high, right?

2:04:46Yeah. And, but where, where you live now, it's just, it's just purely a math problem. Yeah. And I, I'm, I'm nervous for you, but that's just me.

2:04:57Rachel Cruze:Yeah. Do you feel stressed? Do you guys feel it month to month? Yeah. I mean, okay. It's hard. Cause before we were living in Texas and I was the one working, so I felt a lot more stressed because he was in school and we were trying to like stay out of debt and all the things. And so here I feel like we have more breathing room, weirdly, just because we still have like a little bit to spend at the end. Yeah. How much did you make in Texas? How much did you make? Not very much. Well, because he got laid off, so he went back to school basically with the GI Bill. But I was making like$40 ,000. And we had already bought a house there.

2:05:32But let's play this out. Let's play this out. If you were making$40 ,000 and he found a job making$100 ,000, you're right back in Texas. and except your housing costs are half yeah right and so sometimes it is having to sit down and say we had this dream of being around family we had this dream of you working in this really niche industry and it's only available in a few cities in america yeah we had that dream we had that dream of like living in one of most beautiful places on planet earth santa barbara which it is like we had all these dreams and we it's not going to come true and we're going to grieve that Yeah.

2:06:08Right. And that stinks, man. I hate that for anybody. One more thing with that, though, his job is really niche. Like, it's not – when we were in Texas, our plan was to stay in Texas because it made more sense. And he was applying to jobs there that made way less, and he wasn't getting anything. And then he got this job. Sure. And this job just doesn't really transfer. He works on Rockets, which is, like, so niche. Yeah. But, like, it just doesn't really, like, transfer to, like – Yeah, I get it. Like, he couldn't get this amount of money anywhere else. Sure. Does that make sense? Like, it doesn't –

2:06:36Rachel Cruze:That is true, but also the cost of living that you guys are living is also higher than anywhere else too. So you got to factor both sides of the equation in. But yeah, I think as he's getting promotions, he's doing great. And I think it'll start to even out for you guys. All right. Well, thanks to everyone in the booth. Thank you everyone for listening. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.