The Best Return Isn’t Always Money

15:35Dr. John Delony:I would say by the end of the year. So that puts us at what, three? Good. Three months.

15:40George Kamel:So now we have some facts. We have three months to come up with 25 or 30 grand. And that can come from liquid savings. That can come from future income. That can come from selling things. So I would sit down. Do you do all the books in the business or does someone control the finances?

15:55Dr. John Delony:My son does. We're partners in the business, and he kind of handles that.

15:59George Kamel:So let's have a Come to Jesus creative meeting where we go, these are the options we have. We can liquidate things that are easily liquidated, like assets, vehicles, whatever it may be. We can use cash and savings. We can sell other things, or we can scratch up some new income. Based on all that, how do we do that within three months? That's the goal.

16:18Dr. John Delony:Have you all done that yet? No, sir. Okay. Okay. I think that conversation will be sobering on either end of the barbell. Either you guys will have a fire lit under your butt and you'll be like, oh, we see a pretty clear path. Or you're going to realize the business as y 'all dreamt it no longer exists. And y 'all need to make some other harder decisions. You get what I'm saying? Yes, sir. And going by this, my only other question I feel like I probably already know the answer to now. was I just, but I haven't wrote down, so I'm going to say it, is we are in a bad location, and would it be worth going into retirement to get a better location with a larger building to try to further build a business once this is handled?

17:04George Kamel:You're saying dip into retirement to move locations?

17:09Dr. John Delony:And to a larger one that would give us more, I guess, eye traffic. We have absolutely no traffic where we are now. We just do word of mouth, which actually was doing well, so they started taking too long. But anyway, it's a larger building and better location. Yes. Obviously, we would tell you the same answer is don't take a 35 % loan from yourself, minus future growth for a business. The bigger issue is your business as you describe it is failing. Y 'all make$1 ,800 a month in net profit.

17:39George Kamel:And the failure will just be worse in a newer, nicer location that has more expenses.

17:44Dr. John Delony:Yeah. It's not going to speed up your, like your return rate on your cars. It's not, I mean, like you haven't solved any of your business problems.

17:51George Kamel:Once you're thriving and you've got a handle on all this and you can cashflow the move, absolutely do it. But right now you're trying to solve one problem with a bad solution, which is if we move, everything will be fixed.

18:04Dr. John Delony:I don't think that's the case. And I'll tell you this, the mechanic that I trust and use on all my cars is in a way out of the way location. But that dude's reputation is so sterile, I could care less where he is, man. Exactly. It seems like that kind of work is like a 10-minute oil change. I can imagine you need to catch somebody's eye on a street corner.

18:27George Kamel:I mean, they're dropping the car once and picking it up once, right?

18:30Dr. John Delony:Yeah, the work you're doing is destination work.

18:32George Kamel:Yeah.

18:33Dr. John Delony:Okay.

18:33George Kamel:Is there anything you can back out of that would free up some of this money you're behind on?

18:38Dr. John Delony:That's what I was wondering. Can you go have a really— I would have to look at that. That's a very good question that I honestly don't have the answer to now, so I don't want to lie to you.

18:45George Kamel:Do they sign an agreement when they drop the car with you?

18:49Dr. John Delony:Most of the time, not. I'm in a small southern town, and most everything is done on— Just good old boy handshakes. It might be that you end up with some egg on your face, but you have to go talk to two or three gentlemen whose car's been sitting in your shop untouched for four or five months and say, I'm not going to get to it. I can't do it. I'm sorry. And they may get upset with you and whatever, but that's just you. That may solve all of this problem for you. But I think, I think you and your son need to have a bigger conversation about the systemic challenges in your business because it's, it, even if all cylinders are firing, you're making 12 grand and spending 10 and a half that's just not a sustainable business do you guys have any savings right now um well in the business or personal

19:35George Kamel:no sir um okay do you have one thing i will say uh yes sir sure do she work outside the home uh thank goodness she does yes sir okay well we might need to look at some other sources of income and maybe you even go out and do something you're really good at and make really good hourly money doing it in the meantime, even if it means letting go of some clients to try to climb out of this. We're hoping for the best for you, man.

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21:42George Kamel:Welcome back to The Ramsey Show. So, John, there was a, in the dark corner of the personal finance YouTube internet.

21:48Dr. John Delony:Where you live?

21:49George Kamel:There was a firestorm. And here's why. Graham Stephan. Who I love. Real estate investor, personal finance YouTuber. We've been friends for a while.

21:57Dr. John Delony:Yeah, he's great. I love him. We've collabed a lot.

21:59George Kamel:A lot of Graham fans out there. And some people found Ramsey through him and found Graham through us. And he recently posted this video. One day ago, million views. I paid off my 2.875 % mortgage, dot, dot, dot. Dave Ramsey was right. Graham! Which is a great title because famously, while Graham agrees with a lot of our teachings and he's one of the most frugal people I know, he makes me look like a real big spender.

22:26Dr. John Delony:I always dreamed of having a segment on my show called The Spend-Off between you versus Graham. It would have been awesome. There's still time.

22:32George Kamel:So Graham posted this video and it was 16 minutes of him basically saying what I have been telling him every time I've been hanging out with him, what Dave Ramsey told him, which is, yeah, but you kind of just pay it off because the peace of mind is worth it. It's a weight off your shoulders. Life isn't about arbitrage and the spread. You're not taking into account risk. And it was 16 minutes of just, it sounded like he had, we had infiltrated him. It was Inception.

22:58Dr. John Delony:All right, maybe.

23:00George Kamel:Well, you know, why don't we roll the, we'll roll a 60 second version, a little montage, if you will, so you can get a taste for what happened in this video. All right.

23:06Dr. John Delony:After years of telling people not to pay off low interest rate debt and arbitrage your money in the market to make more money instead, I'm starting to think that maybe I was wrong. I never thought I would say this, but for the first time ever, I kind of started to think that maybe Dave Ramsey has a point. Even though everything was on auto payment, I never accounted for the fact that every single mortgage became its own mini ecosystem of thinking. Honestly, I didn't even think this would be a thing until I started selling off my real estate. I'm talking the ones with 2.875 % mortgages fixed for 30 years.

23:44Dr. John Delony:And once those were sold, it just felt like an odd sigh of relief. It was as though something was taking up mental space in my head that I didn't even know existed until it was gone. That is why when it comes to the final piece of paying off your loan, it really just comes down to freedom.

24:03George Kamel:I'm just going to slow clap that one.

24:05Dr. John Delony:No, hold on. I have to say this. That's the first time I've seen this. And you're telling me about this. Like, I cannot, dude, I bet you didn't see this coming. I'm getting choked up. Here's why. I grandma somebody who I just love hanging out with but also I have high respect for but also grandma's a whole bunch like like people follow him because he's brilliant and he's smart and he's got very clear ideas on how and he lives what he preaches which is rare these days the world will shift and the world that my kids are inheriting that your kids are inheriting will change when people have the courage to say, I was doing this, I had a lived experience, magic words, I was wrong, and here's what I'm doing now.

24:52Dr. John Delony:And dude, just like, I applaud Graham for that level of character. That gives me a little sliver of hope in this world on fire we live in for the world my kids are growing up in. Like, bravo, brother. That's awesome.

25:06George Kamel:Well, I got a real treat for you, John, because we have Graham on the line right now on video. What's going on, Graham?

25:14Dr. John Delony:What's up, brother? Good. I wouldn't have said nice things if I knew you were on. I thought you knew I was on the entire time. You're like talking me up. I wasn't going to say nice things. Talking to my ear and I'm like, man. How are you, man? I'm doing good. Awesome, dude.

25:30George Kamel:I got to know, this was not an April Fool's prank. You actually paid off your primary mortgage?

25:36Dr. John Delony:So this started with some rental properties that I had, and I kept them for years because all of them were locked at like 2.8 % to 3.3%. And I kept them because I didn't want to give up that mortgage. Because to me, the mortgage was everything. And if inflation is 3 % to 5%, assuming they're not lying about those numbers, it could be way higher than that. It's free money. And I started selling off these properties. And oh my gosh, it never hit me until I looked at debt category, just go down. I was like, wait a second. This is just a weird weight off my chest. Even though they were all cash flowing, they all did fine.

26:19Dr. John Delony:It was just something for me that was just a bit of a sigh of relief that it just felt good to see that number go down. And then I asked on Twitter, and I sent you this link that I asked if anyone regretted paying off their mortgage early, even the people with low interest. And I want to say 98 % of people, not a single one was like, yeah, I have regrets. Everybody was like, yeah, I know I could have made more money in the markets. But just the feeling of having a paid off home, it just gave me a little more confidence, a little pep in the step.

26:54George Kamel:Maybe a couple inches taller. I love it. Man, that's huge. We've argued about this for years, I feel like. Anytime I've been on Ice Coffee Hour, you've been on our show, we usually get into a debate about arbitrage and spreads. And I'm always like, man, it's more than about a spreadsheet. It's about living your life and risk and peace. And you guys were such math logic people that I felt like I couldn't get through to you so what finally did it it wasn't me was it dave ramsey himself no it was really just paying

27:25Dr. John Delony:off the paying off those rental properties the feeling yeah it was the feeling of doing that and then realizing oh my gosh it's just like i've i've gone to this arbitrage my entire life to like not nickel and dime but like oh if i could make an extra dollar over here uh and i could do this and move this or like i would do it because i always just look at the numbers i'm like the numbers make sense. But when I started to get that peace of mind of just like, eh, maybe I'm not going to make as much money, but you know what? It's simpler. I don't have to think about it. It frees up some space for me to focus on something else.

28:00Dr. John Delony:I'm not so stressed out all the time. That's a feeling that I never really appreciated until I want to say this last year. And it all started oddly enough because I had this rental property where it made sense. It's so dumb. But I calculated that I could take a pledged asset line at like 4.something percent and build out this basically guest house. And I was able to make like a 15 % cash on cash return on none of my own money. And I thought, well, man, this makes sense. I should do this. And it was the worst nine months of my life dealing with construction in Los Angeles. And then I realized, what?

28:41Dr. John Delony:Oh, my God, for what? For what? I get to borrow this money over here and do this over here to make an extra. It was like 14 grand a year that I thought was, oh, that's going to be free. It was awful. The amount of stress and headache that went into, I lost so much more money than I ever would have gained in years, just from lost opportunity cost because my mind was not fully present. And that's when I realized, you know what, I've taken this too far. And I think there's a value to simplicity and peace of mind that I never calculated until that experience.

29:17George Kamel:Beautiful. So what would you tell someone, because we get these calls often on the show of, I'm confused, why should I pay this off when I can make more in the market? What would you tell those people out there who are hanging on to those low interest rate mortgages going, I could pay it off, I could pay extra, but I just feel like there's better opportunities?

29:35Dr. John Delony:The thing is, mathematically, I do think that there are better opportunities. I mean, again, when you look at the numbers, it doesn't make sense on a primary residence, low interest rate mortgage, if you're taking the deduction on top of that, like, my gosh, that mathematically pencils out. I would say, for me, there is a quality of life improvement, but that doesn't also mean that you can't, you should be building also up an emergency fund, You should be maxing out retirement accounts. You should be investing. I wouldn't take down the emergency fund and not invest for the sake of paying down a mortgage.

30:11Dr. John Delony:But I do think there's a value of peace of mind that comes with just having it paid off, as long as it's not done at the detriment to everything else. And when I cited these surveys, by the way, it said that one of the biggest quality of life improvements was also cash on hand. And so not having zero emergency fund, but you have a paid off house. It's having cash on the side led to more peace of mind than even having a paid off property. So I think there's something to be said about that. Yeah. Beautiful. Otherwise, I think, you know, peace of mind, you got to calculate that. Hey, bravo, brother.

30:46Dr. John Delony:Thanks for hanging out with us, Graham. Not because you follow the Ramsey plan, but bravo for choosing peace. That's awesome, man. And like respect, man. Big time respect.

30:55George Kamel:We'll see you, Graham. All right. I'm going to end with this comment I left on the video, John, which is my work on this earth is done. I've done it. I've evangelized the Ramsey plan successfully, even if it's subconsciously. I love that guy. And glad Graham's a friend. And way to go, being debt-free, man.

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32:54George Kamel:If you're working the baby steps, the best and fastest way to do it is by using EveryDollar. It is so much more than just our budgeting app. Now the plan is built right into it. You can track your progress, get personalized recommendations and coaching for your situation to help free up more money to work the plan even faster. You can start every dollar for free by downloading it in the App Store or Google Play. John is in D.C. up next. What's going on, John? Welcome to the show.

33:18Dr. John Delony:Hi, thank you guys very much. I appreciate you taking my call. I have a bit of a weird situation for you guys. So about this time last year, I was wrongfully terminated terminated from my union job. My union is fighting it on my behalf, but they've also advised to for me to take legal action. I do have concrete evidence that proves the termination was wrongful, but going into debt to retain a lawyer is something I'm very skeptical about considering I just got out of debt recently, and going back in it seems scary and daunting. Yeah, I've got some ideas. What happened? What happened in your job, man?

34:03Dr. John Delony:uh i was long story short uh i was off duty on my own on my day off on my personal time i went i went out to uh check out a museum that interested like a museum place outdoor museum that interests me and i was uh about a week later i get called into the boss's office find out i was accused of something that i didn't do and there was no proof of it and And yeah, that's the short of it. I don't know D.C.'s laws. Is it a right-to-work state? So I don't believe so. It's not a state, obviously, but a right-to-work territory? Right, right. But I'm also a union member, so it's a contractual violation as well.

34:52Dr. John Delony:I don't know enough about unions. Why isn't the union, I would think part of the dues you pay in is that they represent you in wrongful termination. They are to the extent that they can, but I work in a unique industry that has laws, different sets of laws governing how this kind of stuff is handled. So it makes it a little bit like the union is helping me fight it from their perspective, but from a legal perspective, that's not something that they can touch. I guess, call me ignorant. I don't understand what's the point of a union. I thought there was, for this exact moment, was collective bargaining in to help you fight the man.

35:40Dr. John Delony:And they're like, the man picks a fight with you and they're like, all right, man, good luck. Get an attorney. Like that is. Well, so I'm trying without trying to without getting into too much specifics. I work for the railroad and that's kind of governed under the Railway Labor Act, which kind of dictates that employment matters have to be dealt with through binding arbitration. But you can still, you know, sue in certain cases. OK. I have one of those cases to sue that I can sue. What's the ideal outcome? Is it a big check or reinstatement in your job? Reinstatement with back pay and a big check.

36:20Dr. John Delony:How many years are you in? Eight. Okay. You've already paid in a lot.

36:26George Kamel:Why do you need to pay a lawyer, a retainer? Why aren't you hiring a contingency lawyer? If this is a strong case, they'll take that and take part of the settlement.

36:35Dr. John Delony:I haven't found one that's willing to take it on a contingency basis yet. Hmm.

36:40George Kamel:Is that because they don't think you have a strong case or because you haven't found an attorney that works on contingency? Because like personal injury, it's usually contingency. So you're not going to pay the lawyer up front. If they think you have a case, they'll go, cool, we'll take 40 % of whatever the settlement is.

36:54Dr. John Delony:right and i i haven't found that in this situation yet i'm still looking but the one one one law office was like yeah we we think you know we were they were like yeah you were railroaded there's no doubt about it but we don't see a way forward for us to take this case right now without you know you paying a thirty thousand dollar retainer no we're not doing you know three three three hundred or something an hour.

37:20George Kamel:It's going to add insult to injury if you pay these lawyers and nothing comes of it. And it's been two years. Now you're 60 grand in the hole. So please do not go into debt for this. Do you have any savings right now?

37:31Dr. John Delony:Yes, I do. As a matter of fact, I have a rainy day fund of about$60 ,000 in my checking account. I do work part time, so I do have some money coming in. But with what I was quoted, what I was quoted by the firm that's not taking my case, It seems like that's my, because they said no one's going to take this on contingency. Well, of course they're going to tell you that because they want your retainer. Right. But listen, you got to understand like they're in business and if they're looking at what you laid out in front of them and they don't think they can make money off of it on the back end, they're going to demand it on the front end.

38:10Dr. John Delony:Right. It's kind of like what people call the show and they want, they have questions about like, hey, my bank won't loan me this money, so I'm going to go somewhere else. And it's like, hold on, the bank is in the business of loaning money. If they have said, I can't give you any more, that's like you need to look in the mirror because you've got some challenges there because that's their whole business, right? And so I'm wondering if the rage and the anger and the way you were treated, all that stuff is right and good, but that your case isn't as strong as you think it is. Or maybe it's not as strong as you want it to be.

38:41Dr. John Delony:And that very well could be. And maybe I've been asking the lawyers the wrong questions or explaining it the wrong way because I have other things on top of the wrongful termination. So maybe I was just explaining myself wrong. I would reach out to a couple of other ones.

38:56George Kamel:Here's the overall fear, John. I don't want this vengeance to cost you your peace and your emergency fund because you can go broke trying to prove you were wronged, and you will lose either way. And so I would much rather you let the union fight. You do what you can do to move on and go, that really was awful. and learn a lesson from it, whatever comes of that, and then move on and not let this live in your head rent free on top of draining your emergency fund. Because we got a lot of calls on the show, John, where people, they hire the lawyers and it's been years now and it was over, you know, divorce.

39:28George Kamel:And now they are 60 grand in over two years. And they're like, when do I throw in the towel? Right. And that becomes a hard sunk cost fallacy.

39:36Dr. John Delony:And if they want that kind of retainer, which is a significant retainer, plus an hourly rate, which is fair. They can do their business however they want to. You're going up against like a monster in a railroad company. They've got deep pockets. And so it's David versus Goliath here. And if you have, again, if you've got a law firm that sees a clear path towards, oh my gosh, we're going to get a big check at the back end of this, they'll line up for you. um i i i hate to say this because i like i i don't like injustice drives me bananas and i don't like disempowerment it makes me that's why i do this job and also i've learned the hard way through lots of scars lots of hurt relationships lots of sleepless nights that sometimes the bravest most powerful thing i can do is quietly walk away and so that's for whatever that's worth man um have your heart broken be upset with injustice learn any lesson you can take from this and go get a job where you can sleep on a regular schedule which you can't do or you can have holidays on a regular schedule which you can't do in your in your old job um and that that'd be my recommendation man um if someone won't take this on contingency and the union won't do their like won't fight for you on your behalf.

41:02Dr. John Delony:Man, it's hard to row a boat upstream if you're the only rower, right?

41:09George Kamel:And I just don't want this legal problem to also turn into a financial problem. And that's what often happens when we finance our way through it. And now you've got all this injustice plus the sunk cost fallacy. And now you're like, I got to see this through. And that can just burn you up. And so that's the scariest part, John. So I'm so sorry you're going through this. I know a lot of people are getting laid off right now. And there's a similar feeling of that level of, you know, betrayal of hurt of I jumped on a zoom call with 200 people and the CEO just said, yeah, you're all done today and jumps off the cowardice.

41:43Dr. John Delony:It's just like stone cowardice.

41:46George Kamel:So you have every right to be angry, to feel hurt, but don't let that cause you to make terrible financial decisions that you're going to have to clean up for years to come.

41:54Dr. John Delony:And don't let blind rage or this, this, this phrase that like, man, it's become part of our culture. You owe me. Um, they might, they might, they actually might, but don't let that carrot dangle out in front of you and keep you from reality, which is I got to go get two jobs today because I don't have an income anymore. I got to go throw boxes at this place and then go make coffee at night because I need a paycheck coming in. Um, and by the way, bravo to you for setting yourself up, paying all your debts off, having a killer emergency fund. And I hate to say it like this, for just this moment, when life happens to you.

42:28Dr. John Delony:For a time such as this. Man. While working part time. You're in the driver's seat. Yeah. Way to go, John.

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44:00George Kamel:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm George here with Dr. John Deloney taking your calls at 888-825-5225. George is in Kansas City up next. Love the name. What's going on, man?

44:14Dr. John Delony:hey uh good to talk to you guys uh i'm looking for some good counsel here uh my promise that i'm hoping i can get some guys to cancel but i started my job about a year ago and it's motivated me to pay off all my debt and now i'm in baby step three and this job that i'm at is very overtime dependent which means i've only been able to take four days off in the last year and every time I take time off, unless it coincides with the holiday, which I have to work holidays, then I can't really take time off. Otherwise, I'll take a big hit in my paycheck. Whoa, what are you doing? What's the job, brother?

44:53Dr. John Delony:I'm a trash truck driver. Okay.

44:56George Kamel:And it's 361 days a year?

44:59Dr. John Delony:I think you probably get Thanksgiving and Christmas off. That's about it. Like Labor Day, you had to work Labor Day. You know, New Year's Eve, got to work New Year's Eve, you know. Do you have to do this, or is this, like, do you have a regular schedule, and then you work overtime because you're trying to pay stuff off and get ahead financially? Overtime is kind of, like, mandatory. Like, it's an unspoken rule. Like, if you don't do it, you'll probably get canned, or they'll find a reason to can you.

45:23George Kamel:Okay. What do you make doing this? What's your normal pay, and then what's the overtime pay?

45:27Dr. John Delony:So my normal pay is$23 an hour, which comes out to, I don't know, like,$980. I can't remember exactly. but overtime is 35 53 and I work anywhere from anywhere from 10 to 15 hours of overtime which probably turns you to 30 over 30 hours overtime in a month okay so that's banking you an extra like a couple grand yeah I mean I'm making good money more money than I've made in a long time you know and I'm moving forward but I don't want to stop even if even if at the cost or me, you know. Well, what's the end game?

46:04George Kamel:Let's say you get through baby step three, you've got a fully funded emergency fund, and now you're just a guy working 361 days a year.

46:12Dr. John Delony:Okay. So this is all for the family. Like I want it. We've, we've been living in the same apartment for like the last 10, 11 years. And my wife has been dreaming of a house and I really want to be able to do that for her and for me and the family. So that's our goal is to be in a house and, you know, follow this up so we can be baby step billionaires, you know? how um yeah and dude we obviously we support you 100 and also um i don't want your kids at your early funeral reading off your your debt payoff spreadsheet i want them telling stories about funny silly things at times they had with their dad right yeah today is the first day i've taken off in like months and i only took this day off because it coincided with a holiday so that would hurt my pay less and we just got done fishing and we're about to eat some lunch so like this is so like how close are you to these goals how much debt do y 'all have all right so i have no debt and i have about four grand saved and i need about 17 grand to make this uh emergency six month emergency fund and i'm the only one working so i followed your uh your ai and it said i need it six months instead of three months and then i need to save the down payment which is going to try to be like within 25%, which is about, I forget what this is.

47:33I think it's like seven grand, maybe.

47:36Dr. John Delony:I can't remember. That can't be right. No, not seven grand. You mean like 70? No, probably not. Probably 70 grand. For a down payment? Yeah. What's the house going to cost? Oh, we're trying to stay within 25 % of my paycheck.

47:50George Kamel:Oh, okay. You're talking seven grand is your take-home pay?

47:55Dr. John Delony:As a down payment for that, as for the house.

47:58George Kamel:Okay. Because like if a house costs$200 ,000, 10 % down would be 20 grand.

48:04Dr. John Delony:Oh, yeah. We're not going anywhere to that. Okay.

48:07George Kamel:So what does a house cost you?

48:08Dr. John Delony:It's way cheaper. So for us, we were looking at a house a little bit and it was like 100 grand and it needed some work. And 25, it would come up to about$700 a month. Wow. Wow. We're really trying to stay even lower than that if we can and, you know, build it up over time versus get into this house and get real sticky financially. We'd rather put some work into it and make it worth something. Okay, but you can't put any work into it. Yeah, we don't want to be house poor either. I get that, but I want you to be honest with yourself. Are you going to do it on the four days off a year you get? Are you going to fix the roof and the air conditioner and the chimney?

48:49Dr. John Delony:I don't know because I'd like to think I'm like my parents. My parents were foreigners and they were go-getters, and I'd like to think some of that rubbed off on me. It clearly has, bro. You're working hard.

49:03George Kamel:You got the work ethic down. We just don't want you to sign up for something that you think is a blessing and it turns out to be a burden.

49:08Dr. John Delony:I'd rather you save up some money and buy a$150 ,000 house that doesn't need as much work on it and put a little bit more down, and that's more realistic. and then you and your wife be about asking what kind of job can I have where I can also be a husband and a father because the job you have doesn't allow for that and I think there's a season and it's pretty amazing what you're doing like I'm going to sacrifice these few years to give my family a different life that's noble brother it's just not it can't be indefinite

49:39George Kamel:so right now what you're telling me is you make about let's say 47 48k and then with overtime it's another 10 grand or so?

49:47Dr. John Delony:Man, I must have misled you guys badly. No, in my numbers, I make about 70 ,000 a year with overtime.

49:55George Kamel:Good. So 70 grand a year, and you want to be doing this in the long run?

49:59Dr. John Delony:I do not want to be doing this because I can't find a way to get out of overtime.

50:04George Kamel:So that's what I'm trying to get at is I want to build you a great life, not just get you out of baby step three. So that's what I would also be looking at is, yes, let's get to baby step three and maybe the down payment, but I don't see you doing this two years from now. So what baby steps allow you to do is have the freedom and margin to actually go pursue the thing you want to do and the brainpower and financial ability to do it. So I would start dreaming of what is that next career for you if it's not in waste management where you can still make 70, 80, 90 grand?

50:38Dr. John Delony:I feel so torn because, oh man, like literally, and I hate to do this, But me and the wife both felt led by the Lord to do this, and everything worked out. And I don't know if this is the time to move, if there's a time to move, or if I'm supposed to stay here too. Because I've been put here, and I've been using it as an opportunity to do the gospel, to give the word of God to people too. But it pays the bills, and I get to reach people too. We get to do that too in our jobs.

51:05George Kamel:So I don't want you to have the fallacy that this is it, and the Lord said I can never do anything else. I found that this is just me personally, that the Lord often works when I'm working, when I'm doing something active, when I'm searching for that thing versus just sitting around going, well, if something falls in my lap, maybe I'll pursue it. And so I don't want you to stop dreaming either because this is a grind. And like John said, I don't want you to have an early funeral. I don't think that's what the Lord intended.

51:28Dr. John Delony:It also is a pretty cool moment for your kids to see their dad hustle and grind to change their future. and it's pretty cool to see like your husband i mean your wife gets to see you say i'm going to put it all in the line for three years so that you can have we can have the life that you've been dreaming of that's that's awesome that's amazing and it might be that your dream job comes along and you're gonna take a pay cut for it for a season oh that sounds that sounds hard yeah but if you don't owe anybody any money and you have a fully funded emergency fund and you have a$700 a month house payment, you've set yourself up for exactly that moment.

52:05Dr. John Delony:You say, no, I'm good.

52:06George Kamel:I don't need the overtime. They go, well, you're fired. And you go, okay, have a good day guys. We'll miss you. Yeah. It's that simple. That's what we want you to get to, is to have that kind of freedom instead of being in this prison that we've created for you.

53:00George Kamel:We'll see you next time. for themselves. Worldwatch exists to be the antidote to the algorithms. Worldwatch is a video news service built specifically for preteens and teens. They're daily 10-minute videos that explain what's happening in the world through a factual Christian worldview. No outrage, no noise, just clear reporting you can watch together and that your kids can actually understand so they can come to the dinner table engaged and curious instead of worked up or zoned out. And I love that Worldwatch doesn't talk at kids. It gives families something to talk about. Because when my kids are older, I want them to be able to think for themselves and separate news from noise.

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54:06George Kamel:Roy is up next in Bend, Oregon. What's going on, Roy?

54:11Dr. John Delony:Hey, guys. How are you guys doing this afternoon?

54:13George Kamel:Doing well. How can we help?

54:16Dr. John Delony:Well, I'm about$320 ,000 in debt. I'm a small business owner, and I'm struggling to pay my estimated quarterly taxes, is and I'm still spending when I shouldn't be and just could use some advice and use some help.

54:30George Kamel:Man. Well, at least we're self-aware here. Is the$320 all business debt or is it other consumer debt?

54:37Dr. John Delony:Only about$37 ,000,$38 ,000 of that is on an equipment loan. The rest is actually all personal. I've used personal debt for the business since it's open, but the only thing actually in the business name is an equipment loan for about$37 ,000 and the rest is all personal. Okay, break down some of the other loans for me. So we have roughly about$4 ,000 buy now, pay later type of accounts. We have about$58 ,000 in vehicle loans, about$99 ,000 in tax debt, $24 ,000 in personal loans slash consumer loans,$52 ,000 in credit cards, about$5 ,000 in medical, and I owe my parents about$15 ,000 between the two of them.

55:22Dr. John Delony:Goodness gracious. It'd be a shorter list of who you don't know. And a$20 ,000 student loan on our name as well.

55:30George Kamel:Okay. Wow. So you're saying we. Who's the accomplice to these crimes?

55:35Dr. John Delony:Well, 95 % me, about 5 % my wife. She doesn't really contribute to the bet besides things from before we were married. There's a student loan she has in her name.

55:45George Kamel:Okay. On a scale of 1 to 11, how badly are you guys actually wanting to get out of debt? because that helps me navigate how to walk you through this.

55:55Dr. John Delony:So badly that yesterday I had an hour and a half consultation with a bankruptcy attorney, and all my stomach was not thinking this is not the way out. Like this is just a band-aid for this problem we're having.

56:07George Kamel:Well, I'm glad you called us because I'm going to steer you away from bankruptcy. I think you guys can get out of this, and it's not going to be fun, but it'll be more fun than dealing with bankruptcy for the next decade of your life. i agree i totally agree so tell me about these cars what are they actually worth

56:25Dr. John Delony:uh one car is uh it's we have a suburban it's a 2021 suburban it's worth about 45 46 we sold private party uh we owe about 55 on it you're 10 grand underwater is uh yeah we've been rolling negative equity over for a few years and we finally landed on that one and um and then we have an older Mazda that I got rid of a$37 ,000 auto loan earlier this year and got a way smaller loan, which I know I shouldn't have, but I got into like a$4 ,000 little Mazda pickup. So we owe about$3 ,000 left on that.

57:01George Kamel:Okay. So that one's pretty much a wash. Yep. So the Suburban is the one that's killing you right now. Because you said you had 58 in car debt. So you owe 55 plus a three. yes sir okay man well what's your income right now uh i do pretty well we i i net after my

57:21Dr. John Delony:business expenses and everything we net between 175 and 200 a year good and that's all through the business yeah all through the business it's all one one income okay so is the business thriving

57:32George Kamel:you just weren't paying taxes or is the business having its own struggles it's a trucking business

57:38Dr. John Delony:So I, you know, I'm, I'm coming up on three years in business and, uh, it was doing pretty well. I mean, I did pretty well in 24, had no tax bill, 25 running off 24. Didn't realize that I thought I'd be, you know, a few grand here or there, but I owed about 50 grand last year and that kind of hit my pocket. And I've already had, I read taxes from 23. I was paying on two. So that tax debt just almost doubled last year. And then, I mean, the business is doing well. I mean, I know fuel prices aren't the greatest right now and it's a little tougher out here, but you know, I'm still, we're still rolling.

58:07Dr. John Delony:We're still making money.

58:09George Kamel:Could you guys live without the Suburban right now and go down to one car, or are you going to need something else?

58:14Dr. John Delony:We're definitely going to need something else. We have three kids at home.

58:17George Kamel:Okay. Because I think getting rid of that car will give you some breathing room, because what's the payment on that thing? About$850. All right. So that frees up a nice chunk of the budget and brings you down to$265 in debt. Now, we're going to need the amount you're underwater on, plus enough to get you another car to get from A to B with the kids. Yes, sir. So that might be your A1 to clear one of the biggest debts, followed by the IRS debt. You want to get rid of that one ASAP. Have you talked to them? Are you on a payment plan with them?

58:44Dr. John Delony:Yeah, it's both the state I live in. It's both the state of Oregon and federal. And yeah, I'm on a payment plan with Oregon, and I'm trying to finalize things with the federal IRS to get on a payment plan. But since it's over that$50 ,000 threshold, it's a little bit more paperwork to do, it sounds like.

59:00George Kamel:Yeah. Well, is your wife on board fully that we're going to have a couple years of deep sacrifice and life is going to look different and we're going to say no to every single thing?

59:10Dr. John Delony:I think so. I'm still struggling with spending. We just came back from a vacation that we couldn't afford. How are you spending?

59:16George Kamel:Like on a credit card?

59:19Dr. John Delony:No, pretty much cash flow. I put about$1 ,000 on a firm account for our hotel and we cash flowed the rest of our – I just saved cash for our vacation.

59:30George Kamel:Well, here's one thing I want you to do. Cut all access to anything that could cause you to make a bad financial decision, which means I'm deleting my account with a firm. I'm cutting up my credit cards and closing the accounts. I'm going to change the login and give it to a trusted friend to Amazon Prime. Wherever you see yourself spending, you definitely don't need to be spending. It's gone. And even switch to cash envelopes for a while for your physical in-person shopping. Okay. If you're willing to do that, it tells me you're willing to get out of this debt and you'll actually do it. Because if you can make$175 ,000 and live off of$100 ,000 and throw$75 ,000 at the debt, we can be done with this thing in under four years.

1:00:09George Kamel:That's the napkin math. Now, can you scale this business at all? What does it look like to make$200 ,000,$250 ,000 in the line of work you're in?

1:00:18Dr. John Delony:Once I'm done with my – I think once I'm done with this equipment alone, I'll be able to be able to save a little bit more. I was paying a gentleman the first couple months of this year a really high dollar amount a month in payments. I finally refinanced the equipment into my name, and I started saving about$4 ,000 of it. Granted, that extra$4 ,000 a month I've been saving has been going right back into my maintenance on this vehicle. But right now, it's about$7 ,000 a month in debt payments is what we have on our name. Yes, sir. Well, here's my concern, brother. You've got a job that you're making good top line on.

1:00:54Dr. John Delony:But if you're bringing in 175, you're independent, right? Yes, sir. So take 35 % off the top. So if you bring in 175, you're only making 113. And then you put in fuel costs and you put in maintenance costs.

1:01:12George Kamel:And just minimum payments are 84 grand a year of your net income to service your debts.

1:01:17Dr. John Delony:like so you've got a business that you're running that makes a good big number at the top but it's not but you're living you're living above though that number but i want i just want it to be sobering because you could go make 65 000 at a at a hardware store as a manager yeah right and so once you do the true honest to goodness math on the on your business and what it costs to run this business. I don't think you're making near 175. I think it probably feels really, really good to tell people you're making 175, 200. I mean, that would light me up too, but man, that it's not what you're bringing home every month.

1:02:03Dr. John Delony:Well, I know in the last six months, we've grossed right about 196. We had about 111 in expenses and we've netted about 84 ,000 after all business expenses. Does that include your tax? Withdrawing 35 % for tax? That's not paying my estimated$4 ,000 a month in tax. Okay, then you have to start thinking about that differently because you have not made$84 ,000. Because the problem is you and your wife together, imagine we could go ahead and spend$100 ,000. Yeah. And you haven't made$84 ,000. You've made closer to$55 ,000. Yeah. Right? And you can't pay$7 ,000 in debt payments on$55 ,000 a year. No, not even close.

1:02:45Dr. John Delony:That's tough to raise three kids on$55 ,000 a year as a sole provider.

1:02:50George Kamel:Yes, sure it is. So why are you wanting to get out of debt now? What was the impetus for this?

1:02:56Dr. John Delony:I'm almost 32 years old. I started this debt journey right out of high school, pretty much 19 years old, buying my first pickup. And, I mean, this debt's been eating me alive for years. I've been a follower of this show for a few years. I've tried different budgets and different apps.

1:03:10George Kamel:How old are your kids?

1:03:11Dr. John Delony:I've read Facebooks. two, five, and ten. Wow.

1:03:16George Kamel:Man, if I were you, I would have a come-to-Jesus conversation with my wife tonight, and I would get really angry, because I don't think you're angry enough yet. I want you out of debt more than you do right now. I'm willing to go scorched earth and sell everything in sight. And so if you're willing to do that, you can climb out of this. Please do not pursue bankruptcy. We're going to hang on the line. We're going to give you our every dollar premium budgeting app. Tonight's the night. You lay it all on the table, and you and your wife, you're going to go, We're in this thing together. The next four years is going to be hell, but we're going to get through it.

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1:05:17George Kamel:If you haven't heard the news, Ramsey is taking over an entire cruise ship next year. So join us for the Live Like No One Else cruise happening March 14th through the 21st, 2027. We're going to spend seven nights in the Western Caribbean, Bahamas, Jamaica, Grand Cayman, Cozumel. Full Ramsey takeover of the ship, which means the nicest, most generous people you will ever meet. It's the entire cruise with Dave, all the Ramsey personalities, myself included, Dr. John Deloney. John, we had a great time doing a comedy night last year. I don't know if they're going to let us do it again. It kind of was off the rails.

1:05:49Dr. John Delony:It was awesome. It was a packed theater late at night. Right. It was a blast. Yeah. They'll let us run it back.

1:05:54George Kamel:You get all the fun Ramsey content, which we make sure to make it fun and nerdy because for some reason, people still want like deep dive investing content. Like, guys, you're multimillionaires. Relax. Have a good time. But they want it. We're going to do the world's largest debt free scream, new wealth building teachings from Dave. We're gonna have live tapings of your favorite Ramsey shows and so much more. So check it out. If you're baby step four and up, meaning you're debt free, you've got an emergency fund, you're budgeting and paying cash for this thing. We'd love for you to join us to celebrate the hard work you've done on this wealth building journey.

1:06:25George Kamel:Click the link in the show notes or go to RamseySolutions.com slash events to book your cabin. Already working on my base tan, John.

1:06:32Dr. John Delony:I'll get there. I don't know what that means.

1:06:33George Kamel:Mike is in Los Angeles up next. What's going on, Mike?

1:06:37Dr. John Delony:Hey, how's it going, guys? Great. So I have a question. I have about$170 ,000 in my 401k with my company. I'm planning to stop working, retire from that company in about nine years. And they just switched, or I should say they just began to offer a Roth portion of the plan. So basically, I can start contributing now moving forward to a Roth IRA. Yeah, a Roth IRA. Roth 401k? a roth 401k got it um and uh and so i'm wondering without killing myself tax wise because obviously this is a tax deferred what i've been doing um how much should i contribute to the roth portion how much do you make advice on that i make about uh say for just from that job about$60 ,000.

1:07:41George Kamel:Okay. I would just go all Roth. And you don't need to worry about the traditional money right now unless you have a paid for home and you're in Baby Step 7. Are you there? Yeah, no. Okay. No, not there. So once you hit Baby Step 7, you can start to do some conversions from the traditional side to the Roth side and pay taxes on that money so that it grows tax-free for the rest of your life. But we call that a Baby Step 7 item because the money you would spend on that taxes is far better off being used to fund college education savings and the home payoff extra on the mortgage. So what I would do is just start all the future contributions to the Roth side.

1:08:20George Kamel:So you're not going to get the tax deduction for it, but that money's going to grow tax free. And you'll basically just have two piles in nine years when you retire. And then you can decide how much to convert and when from the traditional side over to Roth.

1:08:33Dr. John Delony:Okay. So what does the converting mean?

1:08:36George Kamel:Converting just means to move the traditional, since you haven't paid taxes on it, the government says, Hey, if you want to move this to a tax-free version, you're going to have to pay the taxes on that amount of money. So it's basically going to add to your taxable income for that year. So let's say your effective tax rate is, I don't know, 15 % and you move over a hundred thousand from traditional to Roth, then that would be$15 ,000 added to your taxable income for that year.

1:09:01Dr. John Delony:Right. So it's really the same as if I'm, say I'm drawing on it, you know, in retirement, I'm going to pay taxes on it when I withdraw it. Exactly.

1:09:10George Kamel:So the big debate is, well, what's the tax rate going to be nine years from now or 20 years from now when you retire? And the truth is nobody knows. So I like to control the variables now instead of, you know, some people say, well, I'll do traditional now because what if tax rates go down, and it's actually a better bet for me, I think it's a lot of brain calories to burn. You're going to pay the tax man either way. And so the best time to pay it is when you have low income years, gap years, retirement years, or you're in baby step seven and you have that extra cash on the side to pay the taxes.

1:09:39George Kamel:The key is you don't want to pay the taxes from the account itself. You want to use money outside of the account to pay the taxes. You don't want to unplug all that growth.

1:09:49Dr. John Delony:Okay. So the strategy we have around here, Mike, to make it clear,

1:09:53George Kamel:this helped me focus in on the filter to use when investing any amount of money, match beats Roth beats traditional. So do you have a match through your employer?

1:10:04Dr. John Delony:They do match. It's not dollar for dollar. And there's profit sharing. So I'm not sure exactly how it works, but - Is it like 50 % up to a certain amount or one of those? I'm not really sure what it is. I just know it's not dollar for dollar, but they do match and they do profit sharing. But I'm contributing 12 % of my salary to my retirement.

1:10:27George Kamel:Okay. I would bump that up to 15 % if you're debt-free with an emergency fund. Okay. So that's going to be$9 ,000 a year split up across every one of your paychecks. So I would just dial that up to 15 % so that nine years from now, you have that extra 3 % going for you. from then to nine years from now, plus all the future growth. And we found 15 % is not a magic number per se, but it's enough to get you going to build a serious nest egg while having enough to live your life, save for vacations, upgrade the car, save for college for the kids, pay off the house early, all of that. So it's a good balance.

1:11:01George Kamel:Thanks for the question. I just had a question, George. I don't know if I'll have an answer.

1:11:05Dr. John Delony:What do you got? So let's say that gentleman, he's making 60 grand now. Let's say in nine years, he's making 250. and he's moved tax brackets, would he pay when he converts, would he pay all that conversion tax under his current tax rate? Or would he be able to go back and say, I was only making this much money, so I'd pay 15 % on this conversion. It's wherever you happen to be.

1:11:31George Kamel:It's the year you convert it, whatever your income is when you file your taxes. So if you're married filing jointly and the government says, hey, you made$200 ,000.

1:11:40Dr. John Delony:So you're in a, I don't know what the numbers are. It's adding to that number. Okay.

1:11:44George Kamel:And so, and now the good thing to note is your marginal tax rate is very different from your effective tax rate. Because people get spooked by this. They go, well, I don't want to make more money because it's going to bump me up in tax brackets. No, you pay this, you know, 12 % up to this amount. And then 15 % up to this amount.

1:11:59Dr. John Delony:What's the cutoff? I'm making it up, completely making it up. Because if it's$250 and suddenly you make$260 one year, all$260 is not taxed at that bracket. Just whatever's over the$10 ,000 would be taxed at that bracket. Exactly.

1:12:11George Kamel:So it's a graduated tax bracket. So I don't want people to get spooked by this. And generally, your effective tax rate is so much lower than the marginal. So if you're in the 37 % bracket, you get spooked by that. Your actual effective tax rate was probably more like 28 % to 30%. And so it's a good thing to note. Don't get too spooked by the taxes on this. But it is a baby step seven item in general to do any kind of conversions from traditional to Roth. But man, Roth is a game changer. because then you're going, the government never has to take taxes. You don't have the required minimum distributions because with traditional, the government says, hey, you haven't paid taxes yet.

1:12:45George Kamel:So when you turn 73, they start knocking on your door going, hey, bud, we're going to need some of that money. And so you have to start withdrawing so that they can get their taxes out. With Roth, you already paid them. So they got nothing on you. And that's a great feeling to go that$2 million in a Roth 401k is like net income. That's a game changer. So if you really want to beat inflation. And think about inheriting. Your kids get to inherit tax-free money instead of going, man, we love John, but he left us with a hefty tax bill with that inheritance. Thanks, Dad. Thanks, Dad. So it's a great sort of baby step seven goal to get as much in Roth as you can as you get older.

1:13:21George Kamel:But it's a good thing to work with a SmartVestor Pro on. If you want to connect with one at ramsysolutions.com, they can walk you through the timing of that, what the best strategy is, so that we can at least keep your tax bill as low as possible. I don't want to give,

1:13:33Dr. John Delony:you know caesar more than i need to yeah yeah yeah and make no mistake whether you're in baby step seven or not like writing that check for the conversion that'll hurt it'll sting you won't like it it won't feel good just prepare yourself for that it's not going to be like all right all my money's in roth you're going to be like you know the check i just wrote to convert oh well my wife

1:13:52George Kamel:did this because she worked at ramsay for nine years so when she left we rolled it over to roll over iras and a big chunk was in traditional because she had the employer match which was on the traditional side. And because there's something called the super nerdy called the pro rata rule, you can't do a backdoor Roth IRA if you have any money sitting in the traditional side. So we had to convert the whole thing all at once. And boy, oh boy, I got to pay Uncle Sam a nice chunk of change for the pleasure. But now it's yours. It's all sitting in a Roth IRA.

1:14:22Dr. John Delony:Yeah, it's all yours.

1:14:23George Kamel:You know, a couple hundred grand from her hard-earned money here at Ramsey. So way to go. And that employer match, I just looked at my account, John, 30 % of my entire balance was just the employer match. So you may think, well, that's only a couple of percentage points. That adds up as a compound. So thanks, Dave Ramsey. Appreciate you, HR. They don't get a shout out very often.

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1:16:20George Kamel:Ask Ramsey is our free AI tool that is built and trained on proven Ramsey principles. And today we're gonna break down one of the questions we got this week. Here it is. When you guys say eat rice and beans, do you literally mean to only eat that? No. It's a metaphor, guys. I was going to say yes. You can, and people do it. I love burritos. And I enjoy getting those posts. People send me, like, they've, like, dolled it up, and it actually looks amazing. Or to add some protein to it if you're John, because, you know, you don't get those muscles eating just rice. Yeah, but beans are a good source of protein.

1:16:53George Kamel:All right. All right, Doc. Thank you for that. Well, here's some ways you can do that. What we're talking about here is cutting your lifestyle down to the absolute bare minimum and being very frugal to create as much margin as possible, freeing up every possible dollar to throw at your debt snowball or build your emergency fund. So here's what rice and beans really looks like. This could mean canceling all of your subscriptions, which could free up 200 bucks a month for some of you. Eating at home instead of restaurants. That's the main thing it means, which is we're not going to go out to fancy restaurants.

1:17:22George Kamel:We're not going to be door dashing. we're going to be meal prepping rice and beans every day for lunch so that we can free up a couple hundred bucks a week just doing that alone. Driving an older paid off car. We're not going to upgrade. We're not going to have all these luxuries like vacations. We're skipping those. We're selling things we don't need. We're going to pick up extra work or side gigs. So the spirit is temporary, intense sacrifice, not permanent lifestyle cutting. We want you to live like no one else so later you can live like no one else. So get your questions answered. It's crushing it to the point where I'm nervous that we're out of a job, John, because it is giving people really good answers.

1:17:57George Kamel:It's conversational. It'll actually fire back questions at you to go deeper and get into your specific numbers. So check it out, ramsysolutions.com. It's called Ask Ramsey, or click the link in the description if you're on podcast or YouTube.

1:18:08Dr. John Delony:I want to point out one thing. We have a, like for the last few years, during the summer, we have college kids that will live with us at the house and who are working in town here in Nashville. the the young man that's lived with us this summer on sunday the first sunday he was there he's like hey can i take the kitchen over for a few hours in the afternoon we're like of course like that that dude put on headphones and got a old school cookbook and made this amazing meal and then had these glass pyrex things and made meals a whole and i was like what are you doing And he's like, meal prep, man.

1:18:49Dr. John Delony:And he said it as though, like, I'm washing my clothes. And every week. And then a few times in the summer, some of his buddies came over and they all just hung out and they were laughing and being goofy. But they're all meal prepping. And I thought, A, this kid's turned it into an art project and it's fun. And also, I can't imagine how healthy the food he was making. It was astonishing. But also.

1:19:11George Kamel:He knows what's going into it.

1:19:12Dr. John Delony:Yes. And how much money that kid saved. and it was, I was like, oh, that's how easy it is. It's literally that easy. It took a few hours on a Sunday afternoon, made it a fun thing with him and his friends and then they had healthy meals all week. And it was like, it was inspiring to me, the old man, like, oh, that's how simple meal prep actually is. Just to put on the calendar and just go do it. And I can make it as fun or as miserable as I wish. But man, so it's a thing, people are like, I can't do that. You can't, you absolutely can.

1:19:42George Kamel:And even if you don't like enjoy, like I'm not a cook, you know what's fun? Having money. not being broke forever wondering where it went and i check your bank statement i'm like a lot of door dash and chipotle on here what's going on man so it's a great thing to do it inspired me to eat at home more i just love that young people are getting back into meal prepping they're acting like it's some like little house on the prairie thing that's brand new that you can do and i'm

1:20:04Dr. John Delony:fine whatever trend you want to make it was all about it it was awesome fantastic all right shay is in chicago up next what's going on shay how can we help today hey my question was just uh Very simple and to the point. Should I be contributing more to my household or are we okay where we are? A little summary of it is I've been a stay-at-home mom for about 11 years. During a very small period of that, I did find a full-time job, but it required family to come and watch my children at like 5 a.m. to get them to school because I had to be there at 6. And that only lasted a couple years. The family ended up having some health issues.

1:20:43Dr. John Delony:And so I ended up quitting my job and going to subbing at a local school district. But my husband has held it down and he's never complained one way or another. He thinks it's awesome that I stay home and that I sub at the school. I'm involved in the school and our children's lives and just make it work. We make about$90 ,000 annually, like gross income. And we're on baby steps three. My only hesitation, honestly, and I guess what I want to know as far as, like, contributing more is we're making the steps work. It's just a slow process.

1:21:21George Kamel:So you want to get through baby step three faster? Is that the ultimate goal?

1:21:25Dr. John Delony:I'm just worried, like, are we behind in retirement or are we behind in baby step three? Should we be making it there quicker? Should we be concerned with him working and me not working? Like my kids are in school, but I don't have before school care or after school care.

1:21:42George Kamel:Got it. So how long is it taking you to get through baby step three?

1:21:47Dr. John Delony:We're right around the two month mark. And I want to say that we started this right around like March maybe.

1:21:55George Kamel:And you have two months of expenses saved?

1:21:58Dr. John Delony:Yes.

1:21:59George Kamel:Okay. And that's taken, I mean, we're already in September here as we record this. so it's taken you a good bit to get that two months. You're telling me to get to six months, we need two more chunks of this, which could be another year?

1:22:15Dr. John Delony:Well, now that we don't have the debt, and once we got done with Baby Step 2, we have put money into other things. We had some car expenses come up, so we just cash flowed that. Not all of our money was going towards savings.

1:22:29George Kamel:So there's been a couple of setbacks, but generally, here's the parameter. We generally see people do Baby Step 3 and get that fully funded emergency fund in about six to 12 months max. So if it's taking you longer than that, that's just, it's not a, you're behind, you're a terrible person. It's just, all right, if that's the average, how do we get closer to that number versus it taking 18 months after already getting out of debt to get the emergency fund? So the question then becomes, well, what can we do to get there? Making more might be part of the plan, but it might also be, can we cut 300 bucks of expenses?

1:23:00George Kamel:Cause we're, we're getting a little bit lazy now that we're out of debt. We got a little too comfortable. We got to keep our foot on the pedal. So I would be looking at the whole picture. And as part of that, hey, if we could get this done in three months or six months, what would that take? It would take$1 ,000 more per month. Who's willing to do what? How do we get there in the best way?

1:23:20Dr. John Delony:Can I challenge you on something, Che? Yeah. I don't want you – you can do what you want, right? I don't want you – it pains me to hear you say the words, ask the question, should I contribute more? Because I want – when you say it like that, when you ask it like that, you've put a dollar amount on the word contribute. You're contributing an extraordinary amount to your household. And I would even go farther to say you're probably the anchor point that allows your husband to rappel off the side and go earn the money that he earns. And so if you and him decide, hey, we want to expedite this, like George was saying, it's less about should I contribute more?

1:24:06Dr. John Delony:I want you to change the language to should I contribute or could I contribute differently for a finite period of time? Yeah, that's true. I definitely think George is correct in that way that we definitely took our foot off the gas pedal once baby step two was done. And I mean, some of it really was like we did have some things that came up that instead of like going back into debt, we just started cash flowing like from month to month. But I think we did kind of get lazy in that aspect. And it is hard, though. Like, I don't know. It's so hard. It's so hard. I contribute to the household because I don't have a problem doing inside work or outside work.

1:24:48Dr. John Delony:I don't have a problem scheduling the things or paying the things or doing any of it. It's just, I don't know, like sometimes you wish you could help more financially and you kind of overlook even the small things you do in the household. Totally, totally. And you're in what I call the American mom guilt factory. There's no way you can win, right? Like if you've got young kids, you should be staying at home more or you should be working more. And there's really no way to win. And so the path forward is almost always opt out of the what should I be doing? Like, what does this Instagram account say I should be doing?

1:25:25Dr. John Delony:What does this Instagram account say I should be doing? What does this mom of a friend's grandma's kid say I should be doing? And you and your husband say, what kind of life do we want to build together? And how quickly do we want to get these things done? And then y 'all get to decide which levers you pull moving forward.

1:25:43George Kamel:Sounds like you got some fun homework, Che. we're going to sit down tonight, look at the budget and go, okay, what are all the levers we can pull? And then what is my part of that? And you might find there is a part. You might be working a couple more hours a week, but don't do it out of guilt. Do it because we agreed this is the best path forward.

1:26:17George Kamel:Welcome back to the Ramsey Show and the Fairwinds Credit Union Studio. Sam is in Halifax, Canada. What's going on, Sam?

1:26:25Dr. John Delony:Hey, I'm 24 years old. I have$78 ,000 and change in debt. I've been budgeting since 2025, since I got my first job after graduation. But my Excel sheet tells me that I'm supposed to have money left over at the end of the month, but I'm just not finding anything, and I'm just in a lot of debt that's daunting on me.

1:26:44George Kamel:Yeah, what kind of debt is the 78?

1:26:48Dr. John Delony:$52 ,000 out of that even, I just checked today, are student loans, and the$19 ,400 is a car loan.

1:26:56George Kamel:All right, what do you do for work?

1:26:59Dr. John Delony:I'm a project manager for construction.

1:27:01George Kamel:Great, what do you make?

1:27:04Dr. John Delony:Take home$41 ,000 and change.

1:27:07George Kamel:Okay, so that's after taxes. So you're bringing home a little under$4 ,000 a month.

1:27:13Dr. John Delony:Exactly. $790 hit my account every week.

1:27:17George Kamel:What does the sort of career path look like in this world? Are you wanting to be in construction or are you just wanting to be in project management?

1:27:26Dr. John Delony:Project management has been my passion. Construction, I kind of just got into it with high school jobs and stuff like that. So that kind of merged together. This is my first job after her university, so I'm just starting off. I know the salary is quite low in my area from what anybody else makes, But everybody wants at least five to six years of experience before you can make it to that$90 ,000 or$110 ,000 range that everyone's posting about.

1:27:50George Kamel:Yeah, I'm glad you got your foot in the door, and I'm glad you're doing a budget. That's fantastic. But you're saying based on what should be on paper, it's not there, and that's largely due to some spending happening outside of what's on the paper. That's correct. So I would be looking at your bank statement as this source of truth to go, okay, where were the leaks this month? Was I, you know, eating out too much? Are some of my bills higher than I actually have budgeted for and need to adjust them because electricity is not$40 a month like I hoped it would be? That's where I would start to reconcile what you budgeted for and what the actual numbers are, and that will help you at least get some control over the controllables.

1:28:31Dr. John Delony:fee um so i did that exact thing for last month just before i got on the call here um my expected or projected leftover was supposed to be 543.89 last month and i actually ended up with 387 left over okay so i know i'm saving money i know i'm putting the actual versus projected versus actual in my sheet i've been doing that at a monthly basis because i just don't go in weekly than when I'm trying to put in like, you know, every time I travel for work, I get a little bit of a bonus for travel that goes directly into a car payment or the next oil change or whatever. I'm doing that periodically. I'm just like with these monthly payments here and the debt that I've got, it's just, I don't know.

1:29:15I'm not sure how to kind of put all the money together instead of wasting it somewhere else into where I should pay it.

1:29:22Dr. John Delony:I know I've tried the snowball calculator online, but I'm just not sure how to tackle that really.

1:29:27George Kamel:Well, what I don't want you to do is focus on the nickel because you stepped over the dollar. So let's focus on some big wins versus, hey, I'm focused on trying to dial in this$100 that I'm trying to figure out where it went. I would rather you be going, how do I create enough side hustle income that I'm bringing in an extra$1 ,000 a month? Or I'm getting a roommate to cut my rent and utilities in half, which is going to add an extra$500 towards my debt snowball. all those are the big moves i want you to make because even putting two three hundred dollars towards your debts every month it's going to take forever to pay this off yeah and you're i can tell you're a math guy you're real sharp so you know the math of if i can put a thousand a month towards this we might have some traction so that's the question mark is how do we bring in more for me 24 i was in your exact shoes i had 40 grand in debt instead of 78 but i was making what less than what you were making.

1:30:20George Kamel:And I just took on about five side hustles. And then whatever the one was most lucrative, I doubled down on that and tried to use my time more wisely.

1:30:28Dr. John Delony:You want me to tell you something wild, Sam? My wife and I, for maybe nine months, rented a room from a woman in our community. That helped us save rent. I was married, dude. We lived in a 900 square foot, like one bedroom. I mean, it was a tiniest little place. We sold our house and moved into a dorm one time. And this is before living expenses exploded like they have. And so at 24, the more sacrifice you're willing to take on now. I mean, that's kind of my next point. I did end up getting a roommate about two years ago, just before I got this job. Obviously, I came out of school pretty much broke with a huge debt.

1:31:14Dr. John Delony:I started off at 64, and in Canada, we get about six months of, I guess, grace. So just from October till September now, I've paid off$14 ,000 into that because I was making extra payments before all my other loans went up. Good for you, man.

1:31:31George Kamel:Good for you. What's your car worth?

1:31:34Dr. John Delony:If I were to sell it today, going to a dealership, I've been told$13 ,000 to$14 ,000.

1:31:41George Kamel:Well, the dealership's going to give you the lowest price known to man. If you sold this thing private party, took some good photos, what do you think you could get for it?

1:31:50Dr. John Delony:Looking online, probably$1 ,000,$2 ,000 more than that, just off of Facebook Marketplace I'm seeing.

1:31:56George Kamel:Okay, so you might be underwater by a couple of grand. I'm just wondering, this car, it's not quite half your income, which is kind of our parameter, no more than half your income tied up with things with wheels and motors. But man, in your entry-level stage of life, getting rid of a$20 ,000 car and freeing up that payment would give you some breathing room. What's the payment on that?

1:32:15Dr. John Delony:Yeah. A month, 551.

1:32:19George Kamel:Okay. So you told me that you have about, if you're lucky, 500 bucks to your name at the end of the month. Right. So we get rid of this car, we can double that margin instantly. But that means we got to save up the difference that we owe. Let's say, you know, you owe 19 and it's worth 16. You need to come up with three grand just to clear the title and sell it, plus enough to get you a used car. Something to get you from A to B?

1:32:45Dr. John Delony:Yeah, just to work, really, because, you know, project management, I don't have a company truck yet that's been in the talks, but that just keeps getting pushed back. That would change your life. I mean, that's honestly when I first, the reason I took this job was because it was keeping me in the same, I guess, little city that I went to school in. And it was my industry, and the truck was promised, but some reshuffling with the fleets happened, and my name wasn't actually in that draw. because I hadn't spent a whole year at this company yet. So now I got to wait for that next round where every other project manager gets a truck.

1:33:17Dr. John Delony:Yeah.

1:33:18George Kamel:Well, in the meantime, you might be driving the worst looking car in the entire parking lot at work. And I'm okay with that because in construction, who really cares? Nobody. The dude with the lifted truck is usually the most insecure. So you'll be just fine getting one with a little rust on it. I have a lifted truck, George. Exactly. I was trying to side-eye John secretly. He does have a big scary truck. But Sam, the key here is if you're willing to live like no one else right now, you will be living like no one else so much earlier than your peers. And I know it's your age. It's easy to compare.

1:33:47George Kamel:The guy in the next cube over is also 24, and he already has a house. And you're like, dude, I am so far behind. I want to live this lifestyle, but I also want to pay off the debt. So if you can just focus on one thing, which is your debt right now, and just do that debt snowball and create as much margin as possible and keep that up consistently, you're going to be in good shape. I would love to see you out of this entire debt in two years, which you know, that's 40 grand a year. That's as much as you're taking home in a year. So it sounds like you need a side hustle working an extra 20, 30 hours a week, making an extra 40 grand take home in order to knock this out.

1:34:25George Kamel:And if you get rid of that card, it'll help you tremendously. So those are some practical things. I'm going to send you a copy of my book, Breaking Free from Broca. It'll walk you through this whole thing. There's a whole chapter called Margin is Breathing Room that I want you to read specifically. So hang on the line. We will send it all the way over the border. I hope it gets to you. I don't know what the border's like these days.

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1:35:37George Kamel:Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at RamseySolutions.com slash SmartVestor.

1:36:00George Kamel:Everyone needs insurance, but it can be hard trying to find pros who aren't just looking to make a buck and agents who know their stuff. But I got you. Ramsey Trusted Insurance Pros are vetted and coached to make sure they're market experts who have your best interests at heart. So go to RamseySolutions.com slash coverage to find the type of insurance you're looking for and connect with a Ramsey Trusted agent. Marisol is in Sacramento up next. What's going on?

1:36:25Dr. John Delony:Hi, thank you so much for taking my call. I was calling in for some advice. I'm in a different stage of my life. I'm about to graduate dental hygiene school in about two months. And I'll have about$90 ,000 in student loans. But I'm also engaged. Me and my fiance want to plan our wedding and get a house. And so we've been saving, but we're trying to figure out what to prioritize. priority for me would be to get married before we move in together, but we don't know if we should rent until we pay off all our loans or buy a house. So just wanting some advice. You have 90 ,000 in dental hygienist school?

1:37:10Dr. John Delony:Yes. So I had to move to the town where I'm going to school. So I had to pull out extra loans for housing and bills and all of that, plus the school itself. Oh, wow. Ouchies. Okay. What are you going to be making? Yeah, what's a dental hygienist to make in Sacramento? So in my area, between$65 ,000 an hour to$80 ,000 an hour, just depending on being a first graduate. $80 an hour?

1:37:40George Kamel:You're talking a dental hygienist in Sacramento is making$165 ,000 a year?

1:37:46Dr. John Delony:Yes.

1:37:48George Kamel:That is insane. Dude, see if there's any openings where you work. Yeah, I mean, I'm going to take you at your word. You seem like a very honest person, but my mind is blown because what I know of dental hygienists is you probably make 50, 60 grand, maybe 70 over time.

1:38:04Dr. John Delony:Oh, yeah, no. So it's actually really in demand at the moment, and there's a lot to it too, to the career.

1:38:11George Kamel:Oh, no question. But it's a really good profession. Wow, okay. Okay, well, I hope you're making that much. What does your fiancé make?

1:38:19Dr. John Delony:so my fiance is um hr manager at a hospital he makes about 85 000 right now great well i love

1:38:27George Kamel:the idea of you guys getting married before you move in together i would not buy a house we've got a mess to clean up with the student loans and any other debts you guys have does

1:38:35Dr. John Delony:he have debts as well he does so he has about 9 000 left of the student loans um the interest rate for him isn't too bad. I'm more worried about the interest rate on my loan because it's about 16%.

1:38:51George Kamel:Ouch. Are these private student loans?

1:38:54Dr. John Delony:It is a private student loan.

1:38:57George Kamel:Man. Well, you might, I'm not sure that you're going to be able to refinance those into a cheaper interest, but the good news is with your incomes combined, once you're married, you're going to knock these debts out so fast the interest won't have time to even ding you yeah that was the plan to hopefully

1:39:16Dr. John Delony:refinance and pay it off aggressively um but the we also want to have um a nice wedding i've kind of come to terms with the fact that i don't think we're going to be able to have like a big traditional wedding it might have to be something small not if you're paying for it is family

1:39:33George Kamel:involved? Are they willing to chip in?

1:39:36Dr. John Delony:Not really. We don't really come from a lot of wealth, so it'd be mostly us.

1:39:42George Kamel:Okay. Because something you could do that we often encourage is you go down to the courthouse, you get married officially, you move in, you start your life together, combine your incomes, rent for a while, knock out all of your debts, you can do the debt snowball method together, which means it's going to get done a lot faster. And then later on down the road maybe a year or two from now we we budget for an awesome party that's one way to do it um

1:40:06Dr. John Delony:and marisol um i want you to check out our friends at y refi.com it's the letter y r e f y dot com and they specialize in walking through private student loan messes like you're in and looking at potential, like, can you refinance this mess? Can I say something to you that's going to sound harsh, but I'm on your team? Yes, please. Okay. Getting$90 ,000 in private student loans to fund apartments and a dental hygienist degree was a pretty, you dug yourself a pretty messy hole, okay? and what i don't want you to do is to say okay i don't want you to look at this projected amount of money that somebody told you you're going to make upon graduation start counting that as earned income already and then buy an apartment buy a house plan a wedding based on imaginary because the one real thing you have in your life is a 90 000 hole okay and so let's approach this completely the other way, which is there's a possibility that me and my new husband combined are going to make what?

1:41:25Dr. John Delony:Two and a quarter, almost a quarter million dollars. If we get a one bedroom apartment as cheap as possible and we put every bit of extra money we have, we can owe nobody any money by the end of the first year of being married. We can go scorched earth and never owe anybody anything ever again. And then we make a quarter million dollars together and we can do whatever we want whenever we want but that would take you saying i'm going i have this vision of this life i want to live and it sounds like i don't want to put words in your mouth but you're coming from a tough background and you want like you see this carrot at the end that says 150 160 thousand dollars a year it's going to be awesome like don't spend that until you have it in an account and make sure you clean up the past messes before you start creating new ones you get what i'm saying?

1:42:15Dr. John Delony:Like you have a chance to change your entire family tree if you'll buckle down for one year. Yeah. And I think that that was one of the biggest things I had to come to terms with is not following what everyone's doing, having these huge weddings, having so much debt, but just really attacking my loan. I do also want to ask, I have about$1 ,000 saved because we were planning for the wedding, should I put all that into my loan after I graduate?

1:42:47George Kamel:All but$1 ,000 could go towards those debts and free up a couple of payments. Because I'm guessing you have some smaller student loans in there, or is it all one giant big loan?

1:42:57Dr. John Delony:It's one giant big loan, but it gets split into two because it's per academic year.

1:43:03George Kamel:Got it. Okay, so you have like two$45 ,000 loans essentially.

1:43:08Dr. John Delony:Exactly, yeah. Yeah.

1:43:09George Kamel:I think if you do that, it'll put a stake in the ground saying, I'm serious about this. I think if you don't, you guys will be comfortable for a while. And you'll go, well, I'd rather, you know what? We probably need some emergency savings. We probably need to upgrade the car. There's always going to be something you'd rather spend that money on than paying off debt.

1:43:26Dr. John Delony:And Marisol, you both did not come from money. Is that right? Yeah, exactly. We did the first ones in the family that went to college, graduated, or getting like actual careers. So I want you to expect this, okay? People will come out of the woodwork asking you for things. People will expect you to go above and beyond because you're the one who made it. And I honor that. And I actually love being able to take care of people. But you have to, you've dug yourself a hole in the greatest way you can love everyone else who's going to reach out to you over the next 5, 10, 15, 25, 30 years is to make sure you and your husband are anchored into, like, you all have taken care of yourselves so that you can take care of other folks.

1:44:15Dr. John Delony:And that means you're going to have just several years of saying no a lot to yourself, to old friends, to cousins you haven't talked to in years, to his family. Like, you're all going to have that. Why are you driving that car? You told me you were making this much money. Yeah, I'm playing a different game. why are y 'all living in this tiny one bedroom apartment you told me you're making this one yep we are playing a totally different game like it's gonna have to be a like almost a it's a psychological and emotional shift but it's almost a spiritual shift y 'all gonna have to decide we are opting out of the game that everybody else is playing because we want to have this thing called freedom forever yeah yeah and i think i'm okay with not worrying about too much what other people think.

1:45:00Dr. John Delony:It's just, you know, when you've seen, you know, you see people get their careers, they buy their house right away, they get married. It's just a very different vision than I had originally envisioned.

1:45:10George Kamel:What you don't see is those people are broke. And they can't breathe at night. Or they had a ton of family help and you didn't know that. And so you got to run your own race because otherwise running someone else's race, the finish line will always move. So put the blinders on, get rid of this debt within a year, save up the emergency fund, and you will have so much more peace when you finally buy that house.

1:45:48Dr. John Delony:Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:46:39George Kamel:The Ramsey Show Question of the Day is sponsored by YRefi. If your private student loan payments are out of control, you may feel like you're out of options. YRefi was built for borrowers in difficult situations and helps explore refinancing options that fit real life budgets. Visit yrefi.com slash Ramsey. May not be available in all states.

1:46:57Dr. John Delony:Today's question comes from Carl in Missouri. Carl writes, I am retired with a yearly income of approximately$20 ,000 from social security. Is it okay that my emergency fund only has 500 bucks in it so I can pay off my debt quicker? I currently only have$2 ,000 left on my credit cards. Oh my gosh.

1:47:19George Kamel:I just, I'm so sad for Carl right now. Retired with a yearly income of 20 grand. So the average social security payment, John, is about$2 ,000 right now. So he's making below average and this is all of his income. Sounds like he has nothing in retirement, no savings. He's got an emergency fund of 500 bucks. He's saying, is this okay to not even bring it up to a thousand so I can get my debt paid off quicker? He's got two grand left. I don't know how he even has any margin to pay off that credit card debt based on the interest rate on those cards and how much he can throw at. I hope he can knock it out.

1:47:52George Kamel:You can keep it at 500. I would still bump it up to a thousand because what I don't want is for you to have a$700 car repair that now depletes your emergency fund and you go back into debt.

1:48:02Dr. John Delony:You can't, you can't hardly sneeze for$500 anymore.

1:48:05George Kamel:Exactly. So a thousand dollars is our bare minimum.

1:48:08Dr. John Delony:And this is a tough question because Carl, I don't know if you're 63 and you just retired or I don't know if you're 93. And so if you're 63, if you're 73, man, I would, I recommend you get a side hustle and see if you could go crank out that$2 ,000 over the next few months. And it might be delivering. That might be, I don't know what your, what your abilities are and your capabilities are at this point. But is there a way you could earn a little bit of extra money just – and all of it goes to paying off these credit cards? I'm just worried, Carl. I mean the$1 ,000 emergency fund is so thin as it is.

1:48:48I mean it's designed to like – to be scary.

1:48:52Dr. John Delony:To light a fire under you. Yeah. $500, man, is just – I mean you can't walk into a dentist for$500. You can't do anything for$500. And so that makes me nervous for you. I've got two parents who are recently retired. That would make me very nervous for them to only have$500 in cash if they needed something. That's just a recipe for having to go back in debt.

1:49:13George Kamel:Even if it takes you an extra month or two to pay off the credit cards, having that extra$500 in that emergency fund will give you a whole lot of peace along the way. Thanks for the question. Corey is in Tampa, Florida up next. Corey, welcome to The Ramsey Show.

1:49:28Dr. John Delony:Hey, guys. Thanks for having me.

1:49:33Dr. John Delony:around me and my wife trying to be part of the eating too much out problem. We want to open up a restaurant. That'll solve it. That'll definitely solve it. We've spent the last 20 months getting out of Baby Step 2, and we will be finished up with Baby Step 2 by the end of this month. Awesome. And looking to be finished with Baby Step 3 by December of this year. Okay. So we're really just trying to see what would be the best way to go about potentially opening up a restaurant following the baby steps with the reality being that the restaurant's going to cost a lot of money to open.

1:50:19George Kamel:Yeah, well, my gut says you don't have the money and probably won't have the money to cash flow this thing.

1:50:25Dr. John Delony:Not for a number of years without selling the house and using the equity from the house.

1:50:32George Kamel:Dear Lord, please don't do that. Can you promise me you're not going to do that?

1:50:38Dr. John Delony:More than likely will not do that.

1:50:40George Kamel:So when it comes to business, it goes beyond the baby steps. Obviously, we want you to be debt-free with an emergency fund and be investing for your future to build wealth for your family. When it comes to business, I'll send you Dave's book, How to Build a Business You Love. That's going to really walk you through the process. But the main tenant of Dave Ramsey and businesses is do it with cash. Move at the speed of cash, which is so hard for entrepreneurs because all they want to do is move forward, get it done, scale it. And often that means they're taking on a whole bunch of debt and risk to do it.

1:51:13George Kamel:And restaurants are one of the riskiest industries to start a business in. And you probably know that. The failure rate on these things is pretty high.

1:51:20Dr. John Delony:How old are you, Corey? I'm 33. 33. So, dude, you and I are both. We're six years removed. I mean, just six years ago, people were lawfully prohibited from entering into a restaurant. Right. And that, you know what I mean? And if you have the build-out debt payment plus the rental payment plus the staff, I mean, it's just you have a lived experience of this going sideways in a pretty big way. And that's different than the regular fail rate of just somebody opening up a restaurant. What kind of restaurant is this? We haven't nailed down the exact concept completely. This plan would not be taking life for another three to five years.

1:52:13Dr. John Delony:We don't want to do it haphazardly. We had a—

1:52:17George Kamel:Man, if I was on Shark Tank right now, I would send you out of the room. That was the worst pitch for a guy who was like, I have this big vision for a restaurant. What do you guys sell? Food mostly. Like, all right, great.

1:52:28Dr. John Delony:I do. I do have the concept. It's primarily going to be a local seafood and meat retail with a counter live fire. There we go. Dining experience.

1:52:41George Kamel:See, now I'm picturing this thing. I'm excited. Yeah. I want to go visit Tampa.

1:52:45Dr. John Delony:I love those kind of places, man. That sounds awesome.

1:52:46George Kamel:OK, so question number one. Are you in the hospitality field already?

1:52:50Dr. John Delony:Yes. Both me and my wife have managed restaurants for a decade plus each. Okay, so you know how this rolls. Okay.

1:52:57George Kamel:Because I'm wondering if you can work from the inside out versus starting one, can you work your way up to the point where they want to hand you the business because you're the best person to take it over or you buy them out?

1:53:09Dr. John Delony:Not with the concept that I have in mind. There's really not anything 100 % like it. I am kind of capped out on my growth currently. at my current position, as is my wife.

1:53:22George Kamel:What do you guys make?

1:53:24Dr. John Delony:I'm currently making$76.5 plus bonuses a year salary. My wife makes$69 plus bonuses as well. Awesome. We're averaging about$155 total pre-taxes. Fantastic. So my question for y 'all is, it's going to sound like a high school football coach, but it really comes down to how bad y 'all want this. what are y 'all willing to sacrifice for this dream three years from now five years from now is it one of y 'all stepping out of the the job you have to go make more money maybe doing something you don't love that might be adjacent um so that we can earn money faster is it like y 'all just have to ask you like do we work more hours you have to ask yourselves what how big of a dream how much do we want this dream how bad do we want it in three years five years ten years The problem that we have with that is we do have two small children, five and seven, and we have sacrificed very hard over the last 20 months to pay off the$110K in debt that we were at.

1:54:28Dr. John Delony:I don't want to put this burden on my children as well through their entire childhood. Got it. Got it. So you're going to have to pick your burden. Yeah. Do you want your kids growing up in a household that owns, that owes$700 ,000 in construction and remodeling debt on a restaurant with two parents that are chronically stressed for how thin those margins are? And there's one storm there in Tampa. There's one beef issue and the price is up. Like, like, do you want that, that burden or the burden of we worked really, we kept working more hours so that we could do this thing with as least risk as possible or the burden of mom and dad have this dream and it's going to, it's, it might not even happen until y 'all are out of the house.

1:55:18Dr. John Delony:It might be 20 years from now. Yeah, for sure. I mean, that's definitely something that we had considered and I apologize if I came off incorrectly. It was never my intention to take on 700. Oh, no, no, no. I'm just, bro, I'm making up numbers. I'm making up numbers. I'm being sensational for the radio. No, I understand. Yeah. But also, George and I talk to guys who do that all the time.

1:55:42George Kamel:If I'm in your shoes, my plan would be how do I get into local farmers markets? How do I then step it up into a food truck? Then that becomes so popular, so successful, people are clamoring for a brick and mortar location. That's the right way to do it. That's how you go slow. That's how you make it sustainable. So hang on the line. I'm going to gift you Dave's book, How to Build a Business You Love, so that you don't fall flat on your face. Because I love this idea, and I hope John and I can one day visit and get some free seafood on the house for our great advice.

1:56:30George Kamel:People ask me all the time, George, what's your number one money-saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the EveryDollar budgeting app a game changer. With EveryDollar, you'll get a clear picture of your spending, and from there, it's easy to see where you can get more intentional, cut back, and save more money. How much money are we talking? Well, the average every dollar budgeter frees up$395 in their very first budget.

1:57:02George Kamel:And if you ask me, I think you're way above average. So why are you still listening to me? Go download EveryDollar for free and start saving more money right now.

1:57:18George Kamel:Our scripture of the day, Philippians 4.12. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well-fed or hungry, whether living in plenty or in want. Bob Marley said money is numbers and numbers never end. If it takes money to be happy, your search for happiness will never end. Heather is in Portland, Oregon up next. What's going on, Heather?

1:57:46Dr. John Delony:Hi. Yeah, thanks for having me.

1:57:48George Kamel:Sure. What's your question today?

1:57:50Dr. John Delony:Yeah, my husband and I are considering me becoming a stay-at-home mom. However, I am the higher earner between the two of us. So that would be just quite the cash crunch for our family. So I just want to call and get your guys' perspective into the situation.

1:58:08George Kamel:What are the two numbers?

1:58:11Dr. John Delony:As far as our income, I make about$105 ,000 and he makes about$85 ,000.

1:58:17George Kamel:Okay. Okay. So is it, I mean, the higher earner thing, if you were making like 600 and he was making 60, I would be like, ooh, this is very lopsided. So the real question is, can you guys live on$85 ,000?

1:58:31Dr. John Delony:Yeah. Have you done the budget? Yes, we have. It would be tight.

1:58:37George Kamel:Have you pretended to do this in real life where you go, all right, my income, we're going to move it out of checking and we're just going to live off of his paychecks this month? That's a great way to test it out.

1:58:49Dr. John Delony:Yeah, we haven't done that just with kids. We're paying for child care right now, and that's a big portion of where my income goes. So that's something we should probably give a try. And maybe just pay your child care out of your check and keep that as simple as possible.

1:59:07George Kamel:And you can subtract it on paper knowing the child care expense won't be there. But all other things considered, did his, let's call it$5 ,000 take home a month, cover all the bills with enough margin to still breathe and eat and upgrade the cars and go on vacation?

1:59:23Dr. John Delony:And it's easy for me to make this a math problem. Like, it's just a math problem. But also, if you are like, have it deep in your spirit, I want to stay at home, then that's a different reorienting question for you and your husband. because it might mean like, hey, I want this to be a priority. This is a big deal to me. And he might say, okay, then I'm going to go get a new job where I can make more money. Right? But it's being honest about all the things going on in your heart.

1:59:50George Kamel:We need to move somewhere cheaper, which means it's not as nice. The schools aren't as great. Whatever it may be, there's going to be compromises here to make if you're saying, hey, it's going to be tight, but we can do it. So are you guys debt-free with an emergency fund? Yes. Awesome. Okay. So that's your homework. I would budget tonight based off of his income. You can take out the childcare and then try that out for a month. And if it feels good and you guys think you can do it, then go for it. And here's what I found. People who their value is I want to stay home no matter what, they figure it out.

2:00:21George Kamel:They make the sacrifices needed. But you can't have the cake and eat it too. That's where people mess up where they go, well, I want to stay home, but also I still want all of our lifestyle as well. That's where you go south. So if you guys are committed to remaining debt free, making any sacrifices needed, knowing me being at home is the priority, then everything else can fall by the wayside. You cover your four walls, you go on less vacations, you upgrade the cars less frequently, and you stop caring what people think.

2:00:49Dr. John Delony:Would you guys ever consider lowering retirement contributions while we're trying to work it out?

2:00:55George Kamel:You're saying go from 15 % down to 10%, for example? Sure. I wouldn't. If it requires that, that tells me that it's too tight right now and other levers need to move. But I would not sacrifice the retirement in baby step four in order to make this happen.

2:01:12Dr. John Delony:Okay.

2:01:13George Kamel:So as long as you can, the goal is if you can continue the baby steps with the income that you have, you can definitely stay home. You have the green light for me. And again, you can do what you want. You can stay home and not do any retirement and go into debt. But I want the best for you guys on your wealth building journey to have peace and a nice nest egg and to change your family.

2:01:34Dr. John Delony:Do you want to stay home, Heather? Or do you like your job? Well, yeah, I do want to stay home. Yeah, that's the rub here.

2:01:42George Kamel:I would do it. And this is something that my wife and I dealt with when she retired here from Ramsey after nine years. She was making great money at the top of her game, and it still was worth it to her. And not once did she say, man, it would have been nice to still have that income. And for some people, grieving all the work you put into that career and the money we're making, it's really hard to let that go. So I don't know.

2:02:01Dr. John Delony:Forget the money part. The identity. I'm an accomplished professional. The social life alone. Getting to shower. Yeah, exactly.

2:02:11George Kamel:Oh, man. Well, wishing you the best, Heather. It sounds like this is definitely possible. We just got to crunch some numbers and try it out. And I think you're going to find that it is well worth it. Alexis is in Los Angeles up next. What's going on, Alexis? hi how are you good how can we help today um my question is i was um i just got married

2:02:31Dr. John Delony:about two and a half years ago but the last year and a half it's been very very rocky um to the point now where um my husband has told he just put a deposit on a place to rent he told me he's going to file for a divorce but he said he will give us a chance um if i make him a primary beneficiary to my trust, to my retirement account, and put him on the house, which is in my name as my full and separate property. Just a quick backstory. We came into this marriage for a blended family, but we don't have children together. This is, you know, our, his second, my third marriage. And I came in with a lot of assets.

2:03:21Dr. John Delony:And now, you know, with everything going on, he's telling me he'll stay because it shows unity if I put him on everything and make him the primary beneficiary of all of my assets. Currently, everything is, you know, in a trust that my daughter would one day inherit. I have a 14-year-old daughter. I'm not working anymore. I left my job a couple of months ago with his agreement when we were doing okay. You know, we agreed to that. And now that he is filing for a divorce, he also said that once he moves out, which is in a few weeks, he's also not going to help me pay any of the bills at the house.

2:04:01Dr. John Delony:But I have to take care of all of it on my own and I can just pull money from my retirement. Okay, but this is a huge mess and we're not going to be able to solve all of it. Okay. But the way you painted the picture for me is I have all this stuff. I'm not putting his name on any of it. This is mine. This is mine before. This is mine now. And I'm moving the trust for your daughter to the side. That's a whole different issue. In my house, my life, we're getting married. We're going to have two separate lives here that you're not going to be a part of. He got that message. And then he's like, fine, I'm going to go live my life then.

2:04:41Dr. John Delony:And then you're like, well, you still have to, you said you were going to pay for stuff. So it sounds like he finally said, I get it. We're never going to come together and say, this is our home. This is our cars. This is our retirement. This is our future together. I'm going to always be living in your world. And so I'm going to go back to the way it was before and have my own world again, because that's basically how I live anyway. I see. You see what I'm saying? And so the trust is a whole other issue. If he's trying to hold you hostage for a trust for your daughter, that's a whole separate issue.

2:05:17Dr. John Delony:Well, that's the thing. We are already married. We got married already. I know y 'all are legally married. I'm saying y 'all have – you should have put him on your house when he moved in because it's y 'all's house now. Right, and that part, I actually told him I don't have an issue doing that. I can put him on the house. but when it came to like the retirement and the retirement is actually written out as I don't know how you put the terminology is but it is part of my trust which my daughter is set to inherit one day but I don't think he wants to be named the beneficiary and to be able to distribute how he he says that I need to be able to trust him to if anything were to happen to me to distribute everything amongst my daughter and his children, you know, the way that he finds fit.

2:06:11George Kamel:I think you've both weaponized money in this relationship. Yeah, I think money is the alarm system here.

2:06:17Dr. John Delony:It's not the true issue.

2:06:19George Kamel:It's all about trust and control underneath, and he doesn't feel like he's a part of this, and now he's using that against you in a hostage negotiation. And so all of it is toxic. If I was the referee, I'm going flags all around on both teams, 10-yard penalties. None of this is healthy, and I think this is going to require some deep marriage counseling if you both are actually wanting to solve it.

2:06:39Dr. John Delony:And yeah, figuring out a way that we are going to build our life together. And we do have to take precautions in blended families to make sure previous assets are for our kids. That's all that is right and good. But I promise this is playing out in 50 other areas of your marriage, not just in the money.

2:06:56George Kamel:Thanks for the call, Alexis. That puts this hour of The Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.