The Only Hack To Paying Off Debt Is Doing The Hard Work

28:38It's the emotional part of this. That's right. And that's what we're dealing with. The neural pathways, the behavior shifts, all of those things. And the feedback loops you put for yourself. Yes. One of the other things that goes with this, too. And, Jay, I know you talked about this in there as well. Indirectly. not exactly the way i'm going to say it in other words but uh one of the things i did jesse when i was at your thing is completely different from your question but it fits in the same bucket of stuff i don't do things mechanically tactically with how i pay things that aren't automatically always getting me the discount okay okay so before there was online bill pay because there was no online, okay, I prepaid my utility bills.

29:28To get the discount. To get the discounts. Prepaid to get the discounts. And I said it on an auto calendar, right? I have automatic draft to this day on my checking account. It goes straight into a mutual fund every single month. Automatically out of my checking account. So I don't accidentally forget it. That's right. I have automatic discipline all the way through there. There was a guy out a hundred years ago when one of my first bestsellers called Automatic Millionaire. His name is David Bach. It was a bestselling book. He said, just put everything on automatic so that you're automatically doing smart stuff.

30:02Automate smart. Yes. And you don't have to think about it. You don't have to be built in discipline with the systems. Not like I'm going to grip my teeth and do this every time. That's right. That's right. And that's the same kind of thing. We're resetting how we view this and what's the attitude, the altitude, and the angle of my heart on this stuff. Very good.

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32:27Chris is with us in Denver. Hey, Chris, how are you? I'm well. Thanks for taking my call, Dave. Sure, man. What's up? So I used to make good money as an engineer, and I was on baby step four before I knew what the baby steps were. Good. And then three years ago, I made what I realize now, two major mistakes in a row. I bought the biggest house I could buy with 3 % down and PMI, thinking that house hacking would be easy. I'm now doing Airbnb. And then a few months after that, I quit my job because I was miserable there, thinking I had enough savings. I can give you some financial details, but I'm wondering if you think I should sell my house.

33:14Tell us more. Yeah, tell us more. Yeah, so I quit my job, and then I realized that I would not be making my mortgage if I were to do house hacking. Uh-huh. So I pivoted and then started doing Airbnb. Okay. And where are you living? It took me forever to renovate. During this time, I was in the house, during renovations, I was living in the house. Uh-huh. Sorry. Yeah, I was living in the house. And then while I Airbnb my house, I was living with my friends that have a couple of kids, and I was helping them. Oh, gosh. Babysitting in exchange. So it was a very close friend. Chris, how old are you?

34:01I am 37. Okay. All right. I mean, sometimes if you wake up from a nightmare and you're standing knee-deep in the swamp, the best thing to do is to return to the last time there was solid ground and retrace your steps. And so that would, in this case, sound like get a job as an engineer and sell the house. Yeah. And then you would have your life back. Yeah. What prevents you from doing that? in your mind? Yeah, I was interviewing for some engineering jobs in 2025. It was difficult to come back after taking some years off, and I also know that I'm not suited for a 9-to-5 now, and I'm pursuing another career path.

34:46Why are you not suited for a 9-to-5? What's wrong with you?

34:52That's a great question. Are you trying to say that you're entrepreneurial? Yeah, I believe so. Yeah, you're suited for it. You don't want to do it. Okay. I don't blame you for that. I don't blame you for that. I'm entrepreneurial, too, and I wouldn't want to be trapped somewhere. I don't have an issue with that. So what we're saying is not suited for is not the right phrase. What we're saying is it's not preferable for you. But right now, you're not really in a phase where you can do exactly what you prefer. Exactly. Preference is no longer a point. You're neck deep in quicksand. so i'm wondering if if i do some numbers if you think i am in quicksand so in 2024 i broke even with my mortgage with airbnb and then in 2025 i was negative 10 or 15 000 with my airbnb is the airbnb the only money where does this sound like it's fun to you None of this sounds fun to me.

35:51If this was a business unit at Ramsey, we would close the thing and call it failed. Yeah. I'm wondering if an alternative is...

36:05Yeah, maybe... Why are you reluctant to sell the house? Yeah. You just don't want to get... You don't want to admit that this screwed up. Yeah, I think I might be falling into sunk cost policy. Okay. Yeah, definitely, 100%. Tell us about the property. Can you sell the house for as much as you owe on it?

36:26Yes, I believe so. I put about$100 ,000 into it, renovating it. Oh, you'd lose that. I mean, what would the house sell for? Yeah. So I'm looking at Zillow and Redfin right now. I bought it for$650 ,000. Zillow is saying$615 ,000. Redfin saying 580. Oh, so you're not going to get the money out of it. But you put$100 down or you put$100 in it after you bought it for$650? $100 into it after you bought it. So you have$750 ,000 invested in a house that's worth$600. $600 ,000. You know better than I do. Well, I mean, is that what you're telling me? I don't know if I got an appraisal if it would be worth more.

37:15I'm guessing it would be. Okay. But I mean, you're telling me you paid$650 ,000 for it, plus you put$100 ,000 into it, meaning you have$750 ,000 in this house, correct? Correct. And you don't think it's worth anywhere near that, is what you're telling me?

37:35I don't know. Get a real estate agent. Go on our site. You need to go to RamseySolutions.com and just in the box type in real estate agent. It'll take you where you need to go. and you need to have somebody come out there. I have done that. Okay, and what did they say? What would they list it for based on what they saw? Well, I started doing that step, and then I was like, I'm going to talk to Dave directly. Facts, and now I'm telling you, go do it, see it through, so you can see what the actual numbers are on this. You need to have numbers. Facts are your friends. You're in trauma, and you need to sell this thing if you can, and you need to retrace your steps and get back on solid ground, And then from there, think about how you can come up with some career choices after you're making a living again.

38:19How much money do you have in the bank in retirement or not retirement, non-retirement investments? Probably like about$10 ,000. $10 ,000. Yeah, you got to get a job, man. Well, since you find the work you're wired to do, because I think you don't know what you want to do. And I think you're just kind of coasting. And this idea that you might be an entrepreneur, I'm glad that that's so, but we need to get some beef around that and figure out what that's going to be. In the meantime, yeah, we'll send you the book, but you also just need to get a job. Yeah. So the first thing you're suited to do is buy food, lights, and water.

38:57The second thing you're suited well to do is pay your stinking bills. The third thing you're well-suited to do after you've done those two things is find something that is a style of work that you enjoy, meaning entrepreneurial and more freewheeling than in a nine-to-five. But you don't really have a lot of choices right now, man, because you've done screwed this up. Hello. Yeah. You've made a mess. And so you've got to get the shovel out. The barn is full of poop. Today is J-O-B. Yeah. There's some shoveling that needs to be done here. So you got a mess. Wow. So you do not get to, as an adult, boys and girls, ladies and gentlemen, do something that you saw on TikTok that feels fun or good or well-suited.

39:59whatever the phraseology we want to use is when the mathematics around it don't math 100 that that's called you know you can't that's not reality math does not form to your desires no math does not form to your uh suited the math forms to the math the math when sam and i were out of debt. We knew we wanted to start a business, but that takes time, right? You got to build it up. And so in the meantime, you have to work and you have to do the things that close the gap so that the math, maths, so you can continue to accomplish your goals financially while you accomplish your goals career-wise. You have to do it all at the same time.

40:49You can't just go, well, I want to be an actress or, well, I want to own a business and I'm not going to do anything until I have that success. That's not real. God designed me to be on the stage. Good. And in the meantime, that means you're also destined to wait tables. That's what that means. Every time. I mean, we're in Nashville. How do you get the next country music star's attention? Waiter. That's exactly how you get it, right? Yes. And so, I mean, you know, there's calluses that are involved in these things, okay? Yes. You know, God designed me. I'm suited for. I'm good. Me too. We all are wonderfully made.

41:26We have these, that's why we have finding the work you're wired to do that we're going to send to Chris. Okay? That's all great, but you don't get to use this specialness, that card, to try to violate mathematics. It just, it'll destroy your life. It's too harsh. It's mean out there, boys and girls. Mean out there.

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43:13Welcome back to the Ramsey Show. in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host, Jade Washaw, Ramsey personality, number one best-selling author and author of a brand-new book that lands in stores today, What No One Tells You About Your Money. She's my co-host today. Open phones at 888-825-5225. Luann is in Indianapolis. Hi, Luann. How are you? I am doing better than excellent, Mr. Dave. How are you? Just the same. What's up? Well, I got kind of an interesting one for you. My husband and I run a construction company together. He started the business in 2018 before we met, which was 2021, engaged in 2022, and married in 2023.

44:03I help him with some aspects of the business, but I'm not totally 100 % full-time with it just yet. I still have a full-time job on the side. or not on the side. It's the main job for me, unfortunately. But right now, my current access in our bank's finances for the business is as a signer because the bank, I guess, needs me to be listed as an owner with a state, which wasn't a problem until recently. My husband wears many hats and doesn't need to take care of the minutiae of running a business like fixing business associate debit cards for our team members. So I went into the bank to help an associate with their debit card fix their PIN, and I wasn't allowed to because I wasn't an owner.

44:51So I asked them what we needed to do. I needed to file through the state, all that fun stuff. We asked our CPA, got some advice on what to do, and he told us the things that we needed to do. One of those things was we needed to assign business ownership percentage. Here's where my question comes in. As a married couple, following the biblical principles, I said 50-50 because we are one flesh. We do this thing together, and that's just where my mind and my heart was at. My husband has his business, what I call business glasses and hearing aids in, so his mindset was thinking business, and he came back with 51-49.

45:35And that didn't sit right with me. We talked about it. Something came up, and we had to table it. And so my mind was kind of racing. I was emotional, and so I went to one of your podcasts. Let me ask you this. Yeah. Regardless of the percentage that's on the piece of paper, how will the two of you treat this business? We treat it as we both own it. You're going to treat it as 50-50 regardless of what's on the paper. I bet, aren't you? Yeah, I mean, it's kind of what we do now. I kind of think you do now. I kind of think that's the way you're both. You were in agreement until he went, well, that's a little weird.

46:18Okay, so I'll give you an example. We have several LLCs that I own 0%, and Sharon owns all of it. Oh. In case some idiot decides that Dave Ramsey's got a target on his butt, and he finds an idiot lawyer to help him. Makes sense. So, and you know how much I'm worried about that? About Sharon having 100 % of it? Not at all, because I told her if she leaves, I'm going with her. Yes. That's the thing where it is. You're stuck together, period. That's it. So, I mean, I think the spirit of your marriage is really what matters in this discussion is what I'm saying. Right. So I couldn't care less what's on the paper.

47:07I think your 50-50 is the spirit. And when he said 51-49, it violated your spirit. It's like, what? More than you were actually worried about him, quote, being in charge. Because we all know he's not in charge. He's not doing the details. You are. You already covered that. Yeah. And he knows that. Right? But it's as if he wanted to own, you know, have that one little trump card somewhere in case he thought he could flex at some point. Ha ha. That's funny. But, you know, I mean, this is kind of the way this went down. Am I missing something? No, it was more so like he's he's been married before.

47:50So he understands things happen. And so his mindset was sort of protective mode. Yeah, it won't matter if 41, 51, 49, if things go down, he's going to have to take care of you. anyway, and it's going to look suspiciously the same. And I had a feeling this was going to be the answer because I started thinking about it. It's splitting hairs because all I need to do is have some ownership to change debit cards. Yeah, you already had practical, spiritual ownership, and for that matter, legal, because he would have had to deal with the asset if he owed 100 % of it in the event of a divorce, it's got to be on the plate.

48:34It's up there to get cut in half, just like everything else is. Just like his 401k has got his name on it if he works in corporate America. But guess what? You're going to take a big bite out of it in the event of a divorce, the wife is. Hello? Right. Even though your name's not on it. So that's the same exact thing. So he's not, you don't get clear of the worst case scenario with this part of the discussion. You get clear of this part of the discussion with a prenup, if you want to go that way, or a post-nup in this case, which is really hairy. So, no, I think as long as the two of you are in spirit, we own everything together, we're doing life together, we're going forward together, I don't care what the paper says.

49:17Right. And, I mean, does it really matter what the paper says? And the other thought was, in case something happens to him, continuing to let the business run smoothly, as a 1 % owner, I could still do that. Yeah, but I'm 49%. Right now, on that LLC, I'm talking about if my wife passes away in a car wreck, I don't have any ownership in that. Now, I have a will, and she has a will and an estate plan. It's instantly mine, and I've got control over it, but I don't have the bank. I've got to take documentation to the bank to start cashing. I'm on the checking account, but, I mean, If I wanted to close that thing down, I've got to bring documentation and death certificates and stuff now because I'm not even on the ownership of it at all.

50:03Right. So I've still got all that crap to deal with. It's just your worst-case scenarios are always worst-case scenarios. So the big deal is, are we okay in our marriage relationship? And are we aligned on how we view marital assets that it's ours, as you said, and you clearly articulated that, Luann, and beautifully, by the way. Good job. So, I mean, do you have, Sam, and you have a business? We do. And there's things, especially now that I'm not part of it, that I'm not part of it. But I also know that if something happened to him, all of that, I would be able to have then have access to whatever it is and it would be willed to me.

50:43And I know, like he said, 50-50 in spirit. I think what really bothered you is what Dave said, that he said it in a technical way and it had you questioning if you guys view yourselves the same way. And I would just ask about that. At that point, it's really not about the business. It's really not about the money or anything like that. It's just, hey, when you said that, that just that hurt my feelings because I thought that we were 50-50. And it kind of made it feel like you were going for some power there. Ooh, good call. You know. Yeah, it was kind of a flex. Yeah, it was a little flex. I had this before I had you.

51:15Sometimes you just got to flick it. Woo. Flick it back down. Woo. Vicious.

51:45Thank you.

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54:03Becca is with us in Denver. Hi, Becca. How are you? Hi, I'm good. How are you guys? Better than we deserve. What's up? I had a strategy question, so I am in baby step number Q. I am 35, single, paying off a good amount of debt. And I had a question about my student loans. I'm about$46 ,500 in student loan debt, but they're technically in forbearance. And I guess my question is, I've seen some horror stories of people opening up their student loan accounts, and oh my gosh, they've doubled or whatever because of interest. But my question is, is it worth it to budget a specific amount to my student loans, even though I technically don't have a minimum on them right now, and use whatever that amount could be towards my credit card as my big focus right now.

55:02Okay.

55:06I get your concern, but you're not going to make any extra progress by doing that. You're going to slow down your progress is all. Yeah, yeah. The math is exactly the same. Actually, it's a little better if you pay it on the credit card because credit card is a higher interest rate. So if your interest, let's say you were going to give$100 to the student loan and the interest rate on it's 5%. And instead, you put the$100 on the credit card and the interest on that's 24%. Well, obviously, the$100, you know, you saved more interest by reducing the 24 % account. Agreed? Yeah. Okay. So it's mathematically incorrect to do what you're talking about.

55:49But I'm not as worried about that as I am that I just want you to pound that credit card with viciousness. Yeah. And then open up the smallest student loan and pound it with viciousness when you get to it and the debt snowball. Yeah. Yeah. Yeah. I'm about in total in debt. I'm about$92 ,400 in debt. I have about$3 ,000 in medical from an ER visit. My credit card is at like$16 ,500. My car is at$26 ,600. What do you make? I work in ministry. I make about$76 ,000 a year. You've got an awfully expensive car. Yeah. Yeah, my car payment is like$543 ,000. What's your car worth? um that's i'm not good with car stuff if i'm being honest with you uh it's a 2021 infinity qx50 that'd be my homework for you tonight is to go on kelly blue book and see what it's worth and if it's you know if you if you're not upside down or hardly upside down get a hoofty for a while and start pounding and not have a 500 car payment for a while i don't want you to drive junk the rest of your life but i'd love for you to drive junk so you can get rid of the rest of this junk.

57:07Because with that 543 back in your pocket, you'd be finished with that medical debt very quickly. And I have taken on, because I am serious about my credit card debt, I actually have two other, with my full-time job, I actually have two other part-time jobs now. Good. Wow. Like at the grocery store, just, you know, doing some shopping. And then I have friends who opened up a business, so I'm helping them on the weekend. Good. So every month, what are you bringing in? Do you know? Both part-time jobs. I actually just kind of started. I'm hoping between the both of them per month I can make like maybe like$500 at one per month and then$600 at the other because I'm just doing them on the weekend.

57:48Yeah, that's good. Okay. So you're not afraid of hard work and you're focusing on this. These are all really, really good signs that you're going to win. Okay. And so what I'm trying to do is how quick can I plow through? What mathematical shovel can I use to shovel$92 ,000? That's what I'm looking at. And so if I do$30 ,000 a year, it's three years. That's$2 ,500 a month. Okay. If I sold the car, it's two years. Right. And that's how my brain starts thinking because I want to be free. because if you didn't have a single payment in the world, including these student loans hanging over your head that you're not making payments on right now, but you're worried about building up, but if you didn't have any of this in your background, your freedom in the spirit to do ministry would be completely different.

58:42Would you agree with me on that? Yeah, yeah. Yeah. I actually like the thinking behind that, and I want to double-click on it. When you're looking at a high number of debt, like in your case, 92 ,000, some folks have 150 ,000, Sam and I had 460 ,000. What you have to do is focus on that monthly number because it's overwhelming to say, I have$92 ,000 of debt I need to pay off. But if you reverse engineer it and you've already done the math to say, if I pay$2 ,500 a month, I'm out in two years, then the only thing you need to focus on is$2 ,500 a month. I got to make$2 ,500 a month. You got$1 ,100 on the side job.

59:19Yeah, the extra is what I'm saying. I'm just going to say, and we got$1 ,100 on the side jobs. So that means we only need out of our budget, X, which means we might be able to do$3 ,500. Right, but that smaller number, that's a lot easier for your brain to break down and go after than$92 ,000. Do you see what I'm saying? Yeah, yeah, yeah, for sure. So it's a much, it's easier to digest for you, and then you can actually go for it. Then what we're going to do is we're going to get on a tight budget, increase income, which you've already done the increase income part. We're going to get on beans and rice, rice and beans.

59:50We're going to list these debts regardless of interest rates, smallest to largest, pay minimum payments, which is what generated your call on everything. Nothing on the student loans right now. And cut up the credit cards. And we're going to attack that smallest debt, which is probably one of those stupid little medical bills. We're going to pay off a whole bunch of those in month one. And then in month two, we're going to start hammering this credit card like it's evil. and you're going to start seeing Samuel L. Jackson on the TV and start yelling at him, start yelling at him, what's in your wallet?

1:00:20My wallet's got cash in it. Hello? With my medical bills, I'm actually, I'm not as worried with the medical bills because my employer actually, I have an HSA and they contribute to it very generously. So I kind of, not that I don't count it, of course I do, but I'm like, oh, that's another account. But when the money comes in, then I just spend from that. When does the money come in? I contribute to it monthly, and then they contribute a nice portion quarterly. Okay. All right. A little free money. We're still going to take that free money, but we're not going to wait on it five years. Okay? Right.

1:00:58So I still want you to clear those debts, smallest to largest. So really, you get to screw around with this HOA stuff, HSA stuff about three or four months, and after that, you need to just pay it off. Let's get it done. Get it done. I am worried about all this. I want it out of your life because I want you free, my friend. Yes. Okay. We're going to set you up with every dollar, which will help you, the budgeting app, and it also helps you walk through. It's not just budgeting anymore. It's got all the stuff in it now. And it's going to walk you through all the steps we're talking about. It's going to coach you along the way.

1:01:32It's very personalized now. The algorithm on it is incredible. We're going to give it to you, okay? so you hang on Becca and Christian will pick up and get you signed up for every dollar and it's going to walk you through this whole process so you're going to win because you're paying attention yes you're not afraid of hard work and you're learning new things you never learned before you've been victimized by these things and instead you're going to turn around put your thumb on the put your foot on the neck of it and say no more no more we're done and you know you got to stand on the neck of the snake and say well you're done You don't have a shot anymore, buddy.

1:02:05Absolutely. Absolutely. I like what you said about that. I keep thinking about that. When you're thinking about a grand total of debt, it helps so much to jump into every dollar and do the financial roadmap so you can see the snapshot. With what I'm earning now, how long will it take? And it might show you something like three or four years. And you get to say, that's too long. So I add the$1 ,100. I'm going to add more money to it. Or it's too long. I'm going to sell the car. Yes. Or it's too long. I'm gonna have a garage sale and reverse engineer it back and then you can focus on what are the three things I do to get that money I sell the car I do the garage sale instead of focusing on you know $200 ,000 and I'm stuck I'm stuck.

1:02:44Yeah, the way you eat an elephant is a bite at a time. That's exactly right

1:03:03Thank you.

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1:04:46ABC News.com reporting the stock market recorded stellar year-end returns for 2025 when the markets closed before New Year's. Performance marked three straight years of double-digit gains. The S &P finished up the year up 16%. Jade, we often talk about around here how the only thing you hear on the news about the markets is bad news. That's right. They never report good news. So let me give you the good news, okay? The stock market was up, the S &P, in 2023, 26%. The stock market was up in 2024, 25%. The stock market was up in 2025, 16%. That's a total of 67 % in three years. That means three years ago, if you had$100 ,000 in your 401k in a basic growth stock mutual fund, if you've added nothing to it, you now have almost doubled it at 170.

1:05:50That's right. That's not on the news. No. And that's a lot of money. That you missed. Because you were watching the news, worrying about government shutdowns and tariffs and artificial intelligence bubbles, whatever that is. and whatever else it is that you believe that you're going to watch bad news for every day. So meanwhile, I'm just the tortoise. I just keep investing every week, every day, every month. I just put a little more in, a little more in. And all these years, 65 years old, I've been doing that over and over and over, not worrying about what the news said. we've outlived the internet we've outlived sirius xm radio we've outlived bill donahue and sally jesse rafael that's a blast from the past wow i'm trying to think of weird stuff from the past yeah and here we are and you know you just keep investing and you just keep living and you keep and guys you're not going to hear this on the news okay the only thing you hear on the news is when the whole world's coming to an end, right?

1:07:07And what happened to the stock market when the president did so-and-so, or when he didn't do so-and-so, or when Iraq did so-and-so, or Iran did so-and-so, or name it, and it's in the news, and then, oh, the market, the market, the market, up 16 % last year, 16%. That means if it had done half, if you have a mutual fund that sucks so bad that your mutual fund did half as good as the stock market, you still did three times what your high yield savings would have done.

1:07:41It's a big deal. Just smoke on that for a second, okay? Hello? This is a big deal, y 'all. This is why you start investing, you keep investing, and you don't stop investing. And if you need to turn off the news, it's not a bad idea. And this is also why you get started on the things we teach, so you don't miss out on stuff like this because the time you get your butt out of debt so you get to take advantage of this the time is passing because i mean if you got a million dollars in there during this time it's looking nice that means you made seven hundred thousand dollars oh yeah in three years on your million sleeping if you got 10 million you just made seven million dollars on your 10 million in three years.

1:08:27Now, is that a guarantee? No. Is it going to happen in the next three years? No. But it explains why you're in such a good mood. That and coffee. Yes. I love it. Oh, that's fun. Tyler. Tyler's with us in Toledo. Hey, Tyler, what's up? Hey, thanks for taking my call. Sure. How can we help? so my fiance and i kind of have a interesting situation i guess we've been working a side hustle for uh about two years now um at a farm and she's been the manager and i kind of just i know i get to do the fun stuff sit on the tractor and drive around and pretend i can help him.

1:09:12So the previous owner passed away and now the son owns it and he's, you know, 18 hours away in Oklahoma. So he's trying to sell it to us. So it would be buying out the business and the house. And we've been looking at houses. I'm sorry, the business is what? A farm? It's a horse farm. So it'd be a boarding facility. Are you going to get the land? Yep, we'd get the land, we'd get the house. What is the land and the house worth? About three quarters of a million to$800 ,000. Okay. And what does this business profit? The profit right now is about$8 ,000 a month. Okay. All right.

1:10:02Okay, and what does he want to sell it for? um hasn't given us a hard number yet we're still in the financial stages the planning beginning stages of it right now but we're he's talking like 650 to 750 so he's going to sell you a 750 000 piece of real estate for 650 000 and give you a free business pretty much he just wants why that doesn't feel right why well he wants us to have it and wants us to run it and you know under his dad's legacy and all that good stuff and he's still got younger siblings in the area and okay um yes so let me let me poke let me poke a second and make sure because when i hear something's too good to be true you know what the saying is right if something sounds too good to be true it's because it's too good to be true yeah so yeah is this land and house really worth this or are you just wishing it was no that's i mean you know that's what zillow says and that's what the last estimate was um i think five years ago then then that means there's something on the business side that's well i'm not saying this but it feels like something on one of these sides isn't performing the way it seems.

1:11:20I mean, this guy really likes y 'all. He really likes you. Like$400 ,000 likes you.

1:11:30Is that what I'm saying? Okay. Yeah. No, I hear what you're saying. Okay. So I really want to dig into this if I'm you guys, because if these numbers are all accurate, this is a sweet, sweet freaking deal. Okay. Now, how does he want to be paid? That's what we're trying to figure out right now because we've been planning our lives. We're supposed to be getting married in September of this year. Good. And then we were planning on buying a house. Yeah, get married before you close this deal. If you're going to close this deal, get married before you close the deal. Now, the$8 ,000 a month profit, is that after you're paid and your wife is paid by the old man that died?

1:12:20That is after everybody's paid all that good stuff. And what do you get paid? Well, right now I'm currently working for free board for my horse. What were you getting paid when the old man was alive? About$12 an hour, just for barn work. Okay, so in a month you would make what? We'll call it$500 a month. Nothing. Okay. And what is your wife being paid? Your fiancé to be wife being paid? She's making about$3 ,000 a month over there. Okay. So let's pretend for a second. Jeez. that you gave almost all of the profits from the business after you all live on$40 ,000 a year, which is what you're making, and you live on the property, and you give the$100 ,000 a year, roughly, to the son.

1:13:24And we're going to give you almost like 95 % of the profit goes to you until we get to$650 ,000. Would he do that deal? I guess that would be something I'd have to bring up with him, but I would think so. That'd take you about six years to work it out. You'd be able to make$40 ,000 for six years, and then the whole thing would be free and clear. Yeah, and I wouldn't quit my full-time job either. Oh, you have a full-time job. He sure does. That's good. Oh, yeah, I'm a bricklayer. Oh, I missed that part of the conversation because you didn't bring it up. Okay. Even better. Yeah, I didn't bring that.

1:13:56This has been a side hustle for us. I got you. You're riding the tractor for the fiance is a side hustle. I got it. You know what? And I also think this deal, if he likes the sound of it, that's going to give you a good indicator if those profit numbers are right. But if he's like, I would never do that deal, then I definitely want to dig deeper. A percentage of profit after you make enough to live on. A healthy, like all the profit almost, until he gets his money and then he's done. And then if there's no profit, he don't get his money.

1:14:42I love entrepreneurs. Don't forget, guys, I started my company on a card table myself. So I know what it's like to have people counting on you, your team, your family, not to mention your customers. And when you're the one signing the paychecks, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, just fix it. And they did. We got NetSuite. That was years ago. And we've never looked back. See, NetSuite isn't just for tech giants. It's built for growing businesses like yours.

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1:16:10Today's question of the day is brought to you by Why Refi? When it feels like your private student loans have buried your future, Why Refi can dig you out. They can help you, that is, with low fixed rate refinancing and a clear path forward. Go to yrefi.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey. Not in all states. Okay. Today's question comes from Lucas in Arkansas. He says, how long is too long to save for a down payment on a house? We're expecting a baby soon and we'll go down to a one income once he arrives. To purchase a modest but well built home in our area, we would have to save over$120 ,000 as a down payment in order to qualify with one income.

1:16:55We're debt free, but it will take us years to get there. So there's a couple of things that I'm thinking about here. When we teach the baby steps, baby step 3B is when you're saving for a down payment. And then after that comes baby step four, where you're investing your 15%. And I think, Dave, what happens is people go, okay, I want to do 3B, but I don't want to sacrifice baby step four in the time in the market, like we talked about the last segment, how do I kind of juggle that together? Because the truth is, obviously, if you have focus and you take all the money, you're going to put more money towards the down payment.

1:17:30But with a long horizon like this, do you want to really go five, six years or whatever the timeframe is and not invest? So I would probably split the difference. Probably once I got past the two, I would say two to three years. Is that what you would say? Two to three years is when I'd say, okay, no more putting every dollar to the down payment. Now I'm going to split it and I'm going to try to do some towards retirement, not miss out there. And, and I know that that's a sacrifice. We, we rarely say to do multiple things at one time, but in this case, it's all good. Yeah. It's all good. I would do a hundred percent towards the down payment for two to three years.

1:18:04And then you have to adjust after that if you haven't gotten there. But the other thing, Lucas, is this, um, you know, your income during that time is probably going to go up. Um, your personal income, her income is going to disappear. Oh, wait a minute. Maybe we don't need to do that exactly that way if we want to buy a house. That's true. You can think through that. Maybe she needs to find some work at home type work, something that's flexible where she's home with the kid and does some work at home while a baby is sleeping and so forth. And so, yeah, we need an alternative where mom creates an income and that'll that'll change the picture too um and then of course also uh you know what you're saying is here's the thing you can't just yell at the sky and say my wife's going to stay at home and we're going to buy a house in our 20s in our 20s happen yes it doesn't you know shazam it doesn't work right and so uh you you are making a choice and it's a good choice if you ask me to say mom wants to be home with the baby that's a fine choice i would never shame you for that choice but it is a factor in an equation it's you just cut your freaking income in half that's right and so you are deciding not to be able to afford a house as quickly because you're sacrificing one for the other.

1:19:37Or you could say the opposite of that, like a lot of ladies that work here at Ramsey, full-time. I'm looking at several of them while I'm saying this, right? Jade, my daughter Rachel, and Kelly across the glass and so on. We have kids. We are raising a family, and we are professional ladies. And we work around that, and it's not only for money, but it's also what you've chosen to do with your life. OK, it's also for money. And so I've noticed that we pay y 'all. And so that kind of stuff. So it plays a big part. It's for money. Hello. So, you know, and so I think that's the thing. You can just decide that that's what you're going to do.

1:20:22But by deciding that, you're also deciding some other things. That's right. There's some unintended consequences or they should be actually intended consequences is my point. You say, by definition, I'm going to choose to live in that neighborhood because we have one income instead of this other neighborhood because we have one income or this other type of house or whatever, this nicer property, right? And by definition, we're going to have to buy something that's a little different to get our foot in the door to get started on this home ownership thing because we're choosing to do this on one income.

1:20:54And I don't think it's a bad thing, but you don't get to just say, I do whatever I want and yell at the sky. You can't yell at the sky. It doesn't work. You know, you still have to. There's mathematics involved in all this. And it's, you know, this idea that when money is one place, it by definition can't be another place. It's a fixed thing. It doesn't float around. It's not omnipotent. So, hey, guys, speaking of homes, buying or selling is a big deal. The market is picking up. I predict a robust spring. Right now we're sitting at about 5%, just a little bit over 5 % on a 15-year fixed rate. The median house prices have been holding pretty steady, right around that low$400 ,000 mark for quite a while now.

1:21:46And with these interest rates ticking down, we're about to see these markets take off. And so if you're thinking about buying a home, this is a really good time to start getting your act together. Get out of debt. Have your emergency fund in place. And if you want to learn more about the housing market trends and get some free tools to help you with your buy and sell, and you're doing all that with confidence, go to RamseySolutions.com slash market, and we'll get you going. Julia is in Albuquerque, New Mexico. Hi, Julia. How are you? Hi, doing good. How are you? Better than I deserve. What's up?

1:22:19All right. So my husband and I are starting Babyset 2 this month with$75 ,397 in debt. So when would it be most advantageous to refinance our balloon mortgage? Immediately. That's a panic. When is the balloon due? So the balloon is up in 2029. Jeez. So our current interest rate is 5.5%. Yeah. And if we refinance now, that'll give us about 6.6%. No, it won't. I just said just a moment ago, 15-year fixed right now is 5%. 5.5%. Really? Yeah. We've been watching. Wow. We've been watching because we just budgeted everything and we were Googling interest rates and it said 6.6%. Between, it's going to be between 5.5 and 5.08.

1:23:18Yeah, right now. It's hovering in the low fives for a 15-year fixed this week as you and I are talking. Now, I don't know when people are going to be listening to this particular version of the podcast. But, yeah, the moment you and I are talking, that's what we're looking at. So call Churchill Mortgage and talk to them about refinancing. If you roll 100 % of your refinance, have you got a lot of equity? Yeah, we have 100 to 120. Just roll your refinance costs in and nothing out of pocket. Okay. And get rid of this balloon because this thing's hovering over your head and you're just inviting, you're inviting an earthquake in your life.

1:23:56Okay. You know, you ever heard the saying, if anything can go wrong, it will, Murphy's Law? Yes. As you approach this balloon, if you leave the balloon in place, you increase the likelihood of job loss, medical problems, all these things that happen at exactly the wrong time. Screw up your income and keep you from being able to refinance and you lose the house.

1:24:21Okay. That's what I don't want. Okay. Right now, everything's sitting pretty and sassy. Let's not do a bunch of little half percent math and try to screw something up here. Let's get rid of this danger that you've signed up for in your life. This is nightmarishly suicidal. You've got to get this off your home before something happens and you're not able to. Right now, while you can, it's called get it while the getting's good. Right? Yes. Man, that stuff, balloons scare me to death. Can y 'all tell? Oh, yeah. I hear the fear in my voice. It turns into anger. Yeah. Oh, man, I can't stand it. Because these people get stuck.

1:24:57stuck and you know when we end up with them and financial counseling with one of our coaches is they're having to sit down because they are stuck and they lost a job or you know their sister got cancer or whatever and they've got all these income problems and credit problems and stuff's popped up or some kind of identity theft thing blew up their credit score and it's taking them six months to get it fixed and they can't get refinanced in the meantime all this other crap happens just exactly at the time you're doing that. It's just a disaster. Oh, yucko, yucko, yucko. Please act like your hair's on fire and get rid of that thing.

1:25:32Quick, quick, quick, quick, quick, quick, quick. You're scaring me.

1:26:14Welcome back to the Ramsey show in the fair winds credit union studio. Jade Washaw, Ramsey personality, number one best-selling author, and author of a brand new book that hits the streets today called What No One Tells You About Money, The Real Key to Getting Unstuck from Someone Who's Been There. You do need a copy of this book. It's available today anywhere great books are sold. John is in Los Angeles. Hey, John, how are you? I'm doing good. How are you today? Better than I deserve. What's up? So my situation, I'm trying to figure out the practicality of purchasing a home in or around the Los Angeles area.

1:26:55It's very, very expensive. You think? I think I do relatively well income-wise. What do you do? What do you make? So this year I made$200 ,000. That's pretty good. Right around there. Yeah. And, but even with, you know, that relatively high income, uh, it still feels a bit out of reach. Um, in 2024, I, I paid off all of mine and my wife's, uh, student loans were a hundred percent debt free. Um, but yeah, but, um, that, that down payment still seems like a little far fetched. And even if that is achieved the monthly mortgage payments, like honestly, I mean, not regardless of the interest rate, but it's going to be a lot.

1:27:38Yeah. Because, you know, the fixer-uppers out here run you about$850 or like$800 to$850. And that's no power. Yeah, exactly. It's definitely a fixer-upper. What do you do? I'm just trying to navigate. What do you do for a living? I am in sales for a large Fortune 10 company. Okay. Is it tied to Los Angeles? No, it's not. Okay. So why Los Angeles? That's, well, sorry, let me rephrase that. So my career is in Los Angeles. I am directly correlated with my territory out here. Oh, okay. Okay, that's what I was asking. So it is tied to Los Angeles. Yeah. Okay. Yes. Okay. Well, I don't think the numbers that you're giving are wrong.

1:28:31wrong. I think you've, you've realistically assessed this and it's kind of like, well, crap, I thought$200 ,000 a year was a lot of money. You know, it's like, golly, this doesn't, this is weird. And that's the way it feels. It feels that way to me every time I hear it. And it's still the reality of the math is what you're giving me. And I, I think you've, everything you said, I think was the truth. I don't think there was anything as exaggerated or fatalistic or anything there. So, um, you know, the, the, the thing is, uh, how old are you guys? I'm 24. Okay. All right. That's good news. Okay.

1:29:06And the$200 ,000 includes your wife's income? No, she stays at home with a child. Okay. All right. So it does include her income. Okay. Good. All right. So that's your household income. You're doing really well, man, for$200 ,000. You're killing it. Thanks. Yeah. So you got two or three options or ways of looking at this, and that is, one, you could say, okay, I'm in Los Angeles for a while. This is my adventure. Probably not going to spend my life here. And so if I rent for three or four years and see how the career thing goes, that's not the end of the world. And then you end up moving to a market that you can actually afford and hopefully you can make the same kind of money somewhere.

1:29:47Okay. That's, that's one thing that could happen. Okay. Another thing that could happen is you say, okay, I'm a scratching claw and I'm going to buy this little dinky house for 800 or$900 ,000. It's a fixer upper to at least get my foot in the door and then at least I own something right and at least then as as as prices go on up I get to ride the wave instead of being crushed by the wave right right so you you you you sacrifice uh home ownership being like a dream come true instead it's like barely getting in and even still you'll still have to embrace a bit of a timeline on this yeah and just knowing that going in so you can set realistic expectations on both sides, what you'll get for the money and how long it'll take you to get the money to get it.

1:30:36That's an okay strategy as well. It might be two or three years. That's not the end of the world. It's not the end of the world. Okay. Yeah. The other strategy, the other strategy is to start thinking about, okay, where do I want to live where I can buy a piece of real estate? Because I can't buy a piece of real estate in Los Angeles because you literally live in one of the easily top five most expensive cities in the world. Yeah. I mean, can you, just realistically speaking, as, I mean, you're making$200 ,000 between you and your wife. Can you guys live on half that? Can you live on$100 ,000?

1:31:09Yeah, so we can, but the$200 ,000 I do want to specify is before taxes. Yeah, sure. And we're talking, I'm talking round numbers with you. I mean, if you start chunking somewhere around$100 ,000 away, though, you'd have$300 ,000 away in three years. That's what she's saying. Yeah. Yeah. And I mean, we can we can live on half that. Because that's what you're looking at. I mean, I'm just and again, I'm round numbering this. I'm just plugging it in. So I'm looking at it with you. But if you commit to a three or four year journey on this and do what Dave said, I definitely think that's worth it. Because, again, you're getting your foot in the door and you're climbing you're climbing the ladder at that point, the real estate ladder.

1:31:46And I don't think the L.A. real estate is bad. I think it's excellent. It's just really expensive. It's just really expensive. I mean, it's that simple. For sure. And also, like, my career is here, and I could see, like, a lot of positive career growth, like, in this area. It's just kind of like that mental battle with, like, well, is it practical to stay? Yeah, but it's practical to stay for a while. It might not be your 10-year dream career, though. Yeah. You know, it might be. It's okay if it is, and if you've got a lot of growth. And, you know, that's the other thing. If your career continues to hockey stick, I mean, dadgum, dude, you're 24.

1:32:24You're killing it. It's 200 grand. That's amazing. You're stud. Okay. So, I mean, what if you went to 300 and then 400? Well, these numbers all start to change real fast. Very quickly. That's right. So I don't know what your comp schedule is or what this thing looks like on your career, but you're an impressive young dude. I know that. I got to believe he's making more in three to four years from now. I think he is. And I think also that you've done a very dispassionate, logical, there's no shaking your fist at the sky. You're just looking at it for what it is. I'm mad. This is not fair. There's none of that tone in what you're doing, which is the first clue that you're actually going to make it probably.

1:33:04Yeah, he was not very emotional. He wasn't emotional. No, he was just speaking. But there's no like, yeah, yeah, yeah, this isn't fair. It's like, you know, we get that a lot. Yeah. I understand it's not fair, but I can't, you know, your feelings don't care about your mouth doesn't care about your feelings. Thank you. That's the thing. So I think you're a sharp young dude. I think you're going to get there. And I would just sit right. I'd sit tight, start saving some money and just monitor your career and monitor the market and save like a crazy man and get your foot in the door. And what you said just then is so, so true because, yeah, he wasn't, he wasn't emotional.

1:33:41He wasn't whining. but a lot of people they do they look at the numbers and it feels overwhelming to them so they don't even start dave but if you just start putting aside or worse they ignore the math and go buy something that crushes them even worse crushes them even worse because it's just not fair so home ownership's not reachable with reasonable ramsey's not right not reasonable no crap it ain't getting to do with ramsey just start you know just start putting aside i've already got my house it's not getting to do with me it's got something to do with you so what are you gonna do are you gonna crush yourself because you had a little temper fit on the candy aisle and buy something you can't afford that that drives me nuts please don't do that he's the opposite end of the spectrum this young stud is he's got it going on now like this guy he's gonna win

1:34:48so

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1:35:51Mike's in San Diego. Hey, Mike, welcome to the Ramsey Show. Mike?

1:36:00I didn't push the button. Is that what you're saying? All right. I didn't push the button. Thank you. Goodness, you'd think I know how to do this by now after 40 years. Hey, Mike, how are you? Hey, I'm doing great. How are you? Well, I'm kind of challenged right now, but other than that, what's up? Well, I had a question kind of honestly, not kind of similar to the guy before, but I'm 25 years old. I live in San Diego, also work a job in software sales. And about 18 months ago, I started a side hustle that's kind of taken off a bit. And I'm really kind of looking, for some guidance, I guess, from an entrepreneurial perspective on when I should maybe consider doing that full-time versus trying to rack up as much income as I can.

1:36:48Good for you. So what's it doing? How much are you making on the side hustle? So I started it in summer 2024. Didn't really do much the first six months, maybe like$5 ,000 in profit. Last year, we did$68 ,000 in profit. And then this year, I think we'll do about$100 ,000 $5 ,000, maybe$120 ,000. What do you make at your day job? About$175 ,000. Way to go. Thank you. I'm in software sales, so some years it's$150 ,000, some years it's$200 ,000. Yeah. It can just vary. Yeah. And so you're$25 ,000, and between the two, you're making$300 ,000. You're killing it, man. Thank you. Okay. So how much time does the side hustle take?

1:37:32That's the thing. Like, it takes me probably, I want to say 20 to 30 hours a week. My average day kind of looks like working on the business maybe from about 5 to 8 p.m. I'm fortunate enough to where I work remotely to where I can just kind of log off and start working on that. That's awesome. Are you married? I'm engaged. Okay. All right. Wow. Yeah. It's kind of ideal right now. I mean, you're just stacking cash. Yeah, pretty much. I've been able to sock a good amount of money away. If you worked double the hours, would you make double the money? Is it that cut and dry? Not exactly. So the business is very online focused.

1:38:14It's very dependent on Facebook, actually. So essentially... What do you think the shelf life of the new business is? How long do you think it's going to last? Before some platform takes you out or a shift in technology or something? Yeah, that's a good question. Honestly, I'm pretty optimistic about Facebook and the way they're kind of investing. I would say that, I mean, conservatively 10 or 15 years, but, you know, who knows, right? I'm 100 % sure that Google and Facebook are going to do one thing, take care of Google and Facebook. Right. And they don't give a crap about you, I can promise you, okay?

1:38:56So you need to be defensive about your platform. usage and don't think that they're on your team. Okay. Because about the time you get something figured out, they turn it and screw you. I mean, we've been playing with these guys for 15 years since I started. I mean, I've been doing from the time back when SEO was a thing, you know, and not even exist anymore. So, um, you know, whatever, about the time you get it figured out, they figure out a way to monetize everything you've been doing and then they flip it on you. So I'm not cynical. I'm just telling you, you need to be realistic about your platform life.

1:39:30And it ain't 15 years. I'm not going to. There's no way. Not without you iterating substantially. Now, it doesn't mean you're going out of business, but you're not going to do it the way you're doing it. But probably 36 months and then they're going to change something. So, OK, cool. That's still awesome, man. Get off. Get off my entrepreneurial cynicism. But the. All right. Is there a reason to quit? no I just feel that if I had more time and energy to put into the business I could scale it non-linearly if that makes sense yeah it does and I believe you I think you're right we have a lot of systems in place that kind of run the business itself but it is it is a volume game yeah sure so I think with more time and attention I could get it to a point to where it's making more Then you'll hit the point of diminishing returns curve on their time as well.

1:40:29But I do think you could make what I think you could easily make. I don't even know what you're doing. OK, but it just sounds like the trend line on this. You could make what you're making now if you went full time, which I'm just curious on where your passion lies. Did you start the side hustle out of money or I just really like this field? I want to see if I can make do something in and possibly make some money. Which one are you more passionate about? It's just honestly like a passion thing. Like it's actually adjacent to my career. So I'm actually doing the things that a lot of my clients are doing in my career side.

1:41:01And honestly, I just kind of listen to them talk about what they were doing right and what they were doing wrong. And it kind of inspired me to do my own version of it. So if you jump to it, you'd be fulfilled. There's no ethical breach in that at all. No, no. It's completely independent from what they're doing. It's just a variation of it. I got you. Just best practices. Yeah. Okay. Pretty much. Yeah. So, I mean, it kind of sounds like to you, like, I mean, it would be my dream to really be able to do it full time. That's awesome. I definitely understand. When are you getting married? Next year, like maybe 13, 14 months.

1:41:36What's she make? She is actually, I talked her into helping me with the business about six months ago, which is why we saw such strong growth. And so is she doing that full time? Yes. Oh, interesting. Yeah, so she was working as like a web designer. And I told her she was doing it like contract freelance work, wasn't enjoying it too much. And I said, hey, I'm really time locked here with my job, but I really believe in this. And I think you have the skill set. What could you hire someone to do what you're thinking about doing? What would it cost you in addition to her? I'm not sure. I think that I've had experiences hiring people on Fiverr where they'll kind of take what you're doing and try to compete against you with it.

1:42:27I'm not sure we have the capital to go out and hire somebody like W-2. Yeah, you do. You got$100 ,000. Well, I was going to say, you paid yourself that. Did you pay her anything or that's part of the$100 ,000? Yeah, so right now we're basically splitting it. So she's getting$50 ,000 and then I pay myself$50 ,000 and kind of run the expenses out of that. All right. So I love where you are. I love what you're doing. I love that you're thinking about it logically. I think you guys are a power couple. So you're not there's not a screw up. There's no no no check the box in the stupid column here. None of that's going to happen.

1:43:03OK. It's only a question of what you want to do and what is best. All right. So one idea that popped into my head, if I were sitting exactly where you are and I'm very entrepreneurial and I'd rather work for myself than anybody because I'm too contrary to work for somebody. So one idea that popped in my head is let's just burn the midnight oil until we get married. I love that idea. And just crank this thing and see how high a stack of cash. Let's fill a bedroom full of cash over there. Okay. Just make some money. Okay. And during that time, you can start to see what some of the trend lines are in the platforms you're using.

1:43:42and if your prediction or my cynicism, which one is more accurate, and if you do that and you turn it on, you come back from the honeymoon and you just made$200 ,000 on this thing and you want to punt the day job and go on, then go on. And if the whole thing crashes in two or three years, you've got a bedroom full of money and you made some money and you could go do it again. Always go back and forth. You go do something else. The beautiful thing about this is you can land like a cat on carpet when you're done because you've got the skills. Yeah, honestly, I love that idea. I've really been going back and forth between like, I got a good job.

1:44:19I want to keep it. People tell me like it's a dream job, but also like I have to get it again. I mean, you know how to do that job. It'll be waiting there if you ever want to go back to it. And you're at a great time of life where you can do exactly what Dave said. You're not married yet. You guys are in that time of adventure where it's like, you want to go? I want to go. Let's go do it. Let's scramble. We'll eat peanut butter and jelly. Like you'll do whatever we need to do. Let's make hay while the sun shines, baby. You know, and, you know, after the marriage, quit. If you make a bunch of money, you know, I mean, you got to be making about what you're making or more.

1:44:54But if you are, then quit. The downside of both of you doing this is if it goes sideways, your whole freaking deal goes sideways. Your lack of diversification on your income base is a little scary, but it's okay. I think you've got the margin to handle all of it, and I think you're on top of it.

1:45:23So

1:45:37listen up guys, because I've got a big question for you. Where will you be with your money at the end of 2026? Will you be better off, worse, or exactly the same? Believe it or not, you get to choose. Look, I know there's a lot going on that can make you feel powerless over your money, but I want you to hear me. You're more in control than you think. You can turn your finances around. So let me help you out. Start your year off with me and Dave Ramsey at our free Every Dollar livestream event on January 8th. We're cutting through all the lies and all the chaos out there that's keeping you stuck.

1:46:12So you have the clarity you need to finally get ahead. And you could even win$2 ,000 just for signing up. Listen, another year is going to pass anyway. So decide that this is the year you're going to take back control of your life and your money. Go sign up for the free live stream at everydollar.com slash live stream.

1:46:41Logan is with us in Louisville. Hi, Logan. How are you? Hi, Dave. I'm great. How are you doing? Better than I deserve. What's up? So I am 26 years old, and I bought my first house last May, whenever I was 25 years old. And I'm kind of realizing that I probably made a very big mistake, because I bought it on a 30-year mortgage with 5 % down at 6.5 % interest. And I'm wondering what I should do. Okay. Is the home affordable? It is. It was$220 ,000, and the mortgage is$1623 a month. And what's your household income? Uh, so I make$65 ,000 a year, uh, last year. And, uh, I work at a major auto factory in Louisville.

1:47:35Sure. And, um, I will be eventually making a hundred thousand dollars a year in about a year and a half or two years or so, according to our union contract. Uh, and so I'm basically, are you married? No, sir. I do live with my girlfriend, however, because she had to drop out of college, and her parents aren't really supporting her financially. And she didn't really have another option other than she had to either move in with me or be homeless. So I went ahead and moved her in. And so she has about$10 ,000 in student loan debt, and then I additionally have about$12 ,000 on an auto loan. Okay. Well, there's no we.

1:48:17She has her life. You have your life. You're not married. And so you have$12 ,000 car payment and you have a house payment that is tight right now. Okay. So I don't think I would do anything. I think I would sit right there. What I would do is as your income goes up and you need to clear this car debt off, when those two things happen and these interest rates continue to go down, I would just refinance. And when you refinance, put it on a 15. Okay. But you're going to get down sub-fives probably this spring. Okay. So refinance to the 15. When you can afford it. I don't know when your income is going to go up.

1:48:57You can't afford it right now. Correct. Yeah. So when do you think you're going to be making the move from 60 towards 100? So we go up on a yearly basis. I'll be getting about a 10 % raise in May. Okay. It's probably going to be the following May before you start talking about refinancing. You're probably in coast mode. Okay. And then I actually have a lot in my retirement account, and then I've got some in an index fund that's not in a retirement account. Pay off your car today. What's in the index fund? Almost$14 ,000. Pay off your car today. Pay off the truck completely. Yes, today. Okay. Got it.

1:49:40I was thinking you were going to say that. Yeah, and then let's build our emergency fund. and as far as the house, we're going to sit with the 30 and we're going to sit with the six and a half until the rates drop and your income comes up and you can afford to refinance. And it's not going to kill you. We're talking about 18, 24 months here. And you'll be okay. Like you said, it isn't what I would have signed you up for, but you're there now and there's no panic in these numbers. There's nothing here that's just destroying you or something. It's just a good lesson learned for next time you want to make a large purchase to wait till you're in a better position.

1:50:14And don't be combining finances with girlfriends only with wives. Yes. Yes. I'm not even going to get into that. There were some things there. Yes. Some things there. Britton is in San Antonio. Hi, Britton. How are you? Howdy, sir. How are you doing? Better than I deserve. How can I help? so i um i'm in a little bit of like a family pickle i i have a brokerage account that was gifted to me for college graduation that has about 13 000 in it um but based off the previous gentleman you just told him to liquidate stuff and pay off the car today i have a seven thousand dollar car loan um for my wife's car i have a 25 000 car loan for my truck and i have about 40k and student loans putting us at about, what's that, 70, 75K cumulative debt.

1:51:08Yep. And my gross income is about 100K a year. My wife and I have been married four years. We've got a two-year-old, and we've got a baby in March. Y 'all are normal. And you figured out normal's not fun. No, I'm tired of thinking, oh, yeah, I make 100 grand a year, and where did it go? And I'm broke, yeah. Right, right. Yeah. So, yeah. So you got your first piece of advice, which is to liquidate that non-retirement savings that gets you the$13 ,000. So her car is paid off and you're able to put a little onto the truck. What does she drive? I'm just curious. She drives the 2019 Jetta. I don't know, probably got 70 ,000 miles on it.

1:51:55It's in really, really good shape. What about your truck? How good a shape is that in? It's in really good shape. It's a 24 Silverado. I bought with 2 ,500 miles on it with a little gift from her grandpa to really knock down my payment. Okay. So I only pay 500 bucks a month for it. Only 500 bucks? Yeah. That's a lot. Yeah. I thought it was great for basically a brand new truck, but I mean, hindsight's 20-20. But I drive a lot for work, so I depreciate it. I put on like 30 bucks a month. That means you're destroying the value of a brand new truck. You are. Listen, you're going to have to put the pedal to the metal on this debt.

1:52:34You have a great income, so that's good. But what's going to get you is these$40 ,000 of student loans. It's easy to let that sit around and collect dust. But this is the time, you know, to kick it up into high gear. I want you and your wife to get into every dollar. Have you jumped in there yet? I have not jumped into every dollar, but we used like rocket money, and we sat down and did our financial planning for the year. Well, there's a problem right there. I'm playing with you, but I'm going to give you a budgeting app that's actually going to help you and it's not going to sell you debt products along the way.

1:53:07So Christian will pick up and make sure that you get every dollar. And I mean it. I'm not just, you know, trying to be funny towards a competitor. I'm saying that if you go into every dollar, their goal is to get you out of debt. Yes, ma 'am. The other budget you're using, that's not their goal. Their goal is just to keep you around as a customer. Later, they can sell you debt. We want to get you out. And therefore, in the app, it's going to ask you things about your life. and you're going to be able to plug that in and then it's going to walk with you. You called into us to talk to us for a hot two or three minutes.

1:53:35It's going to give you the advice we would give you step by step along the way so that you stay focused and actually get this done. Very good. Bobby is in Pittsburgh. Hey, Bobby, what's up? Hey, how y 'all doing? Great, man. How can we help? I have a weird question I haven't heard before on your show. I have a minor son who received a$15 ,000 settlement. from an accident he was in. And I'm court-ordered to put it into a federally insured bank until he reaches majority, which is in 12 years. And I'm struggling to pick where to put it because returns are trash. Yep, which means the court is stupid, and the court generally is stupid.

1:54:21That's what happens when lawyers do financial planning, lawyers that become judges that are stupid. that I mentioned this is stupid, but you're still court-ordered. You're court-ordered. It's aggravating this crud. Yeah, you can't do what you should do with it, which is put it in a decent gross stock mutual fund. That's terrible. You can't do it. So you're going to be in a high-yield savings account at your local credit union or bank that's got federal insurance, and you're barely going to keep up with inflation. Exactly. I mean, everything I'm seeing is like less than 1%. Oh, no, no, no. You can get three right now.

1:54:55Yeah. You can get some high-yield savings up around$2.50 or$3.00. It's still a crime shame. It's still a crime. But the whole thing was this kid got hurt and somebody's trying to take care of him here, and then the judge is an idiot. Well, I mean, the good thing is we have some sizable money for him and our daughter currently, but it would be really nice to add this to it. Yeah, it would. I'm just asking, is there a way that you could get a lawyer in order to change that? Yeah, but I'm not sure. I mean, if you went from two to ten, or two to twelve, okay, you make ten percent, you make fifteen hundred bucks, I won't pay the lawyer.

1:55:36So it's not worth it. It's just the stupid law. I mean, it's not even the law. It's just the judge that doesn't know what the crap they're doing. They thought you were going to take it to Vegas and put it on red. Let it run. Yeah, run it, run it. That's what they thought. But, you know, nah, that's sad. Yeah. You're just going to have some money parked there, and the kid's going to have 15 grand. So it's not going to grow much.

1:56:30We'll be right back.

1:56:36Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about. And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start-to-finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to RamseySolutions.com slash real estate.

1:57:08That's RamseySolutions.com slash real estate.

1:57:34Proverbs 14, 15 says, The simple believe anything, but the prudent give thought to their steps. Albert Einstein said we cannot solve our problems with the same thinking we use to create them. There we go. Anthony is in Orlando. Hi, Anthony. How are you? Good. How are you? Better than I deserve. What's up? All right. So I came to ask you about a financial decision I'm going to make. So me and my fiance are having a baby together, and the baby comes here in two months. And she currently has a car payment that is$26 ,000. And it's roughly$800 or more a month. And we're deciding whether to try to refinance it.

1:58:35And I looked it up and everything and looked into it a little bit more. and it's that she says she owes around only$17 for the car, and then the rest is mainly like dealership fees and coverages and stuff. And I was wondering if it would be necessarily a good idea to refinance it and then just attack it and pay it off. What do you make, sir? I make roughly$30 ,000 a year. What does she make, sir? Um, I'd say maybe like 18, 20 a year. Okay. All right. Um, and you guys are 24? Uh, 23, yes, sir. 23. Close. Okay. Um, all right. Ken, I love you enough to tell you the whole thing. Will you allow me to do that?

1:59:36Yeah. Okay. If I were your age or you were my son, who's older than 23 now, and you were to ask me this question, here's what I would tell you to do, okay, in detail. And there's a lot of reasons for this, and I'll give you the reasons too, okay? But the first thing I would do is get married by Friday, okay? And because you don't need to be doing financial transactions and babies with people you're not married to, it does not lead to prosperity and does not lead to a wonderful life. The data on this, there's piles of research that show that this is a really, really good suggestion. Okay? So I'm meddling in your business.

2:00:29I want you to get things in the right order from this point forward so get married by Friday and then sell the car you can't afford the car you guys don't have any money you don't make much money and you have a brand new baby coming and you're so broke you can't see with an$800 payment it's killing you isn't it man you've got to sell this car So call or have her call and get the payoff number on the car, what it takes to pay it off today. And then find out what the Kelly Blue Book value of the car is. And I hope you can sell it for enough to get out of it. I hope she's not upside down in it. And for that matter, since you're her new husband by Friday, I hope you're not upside down in it.

2:01:21Because you're going to be joining this party. but you guys got this thing is a weight around your neck during what should be with a baby on the way in a new marriage the happiest time of your life this car is a nightmare and there's refinancing it doesn't get rid of it it's got to go away and then get you the cheapest something that you can drive that'll run and start your life off like broke people like i did and sharon did and jade did and sam did and most of the people listening did um that's where that song we ain't got money honey but we got love that's where that comes from okay and um you know and so you know you start with that and then you start working on your careers and both of you get your incomes up because both of your jobs sucks and let's get our incomes moving and then we start talking about buying a little better car a little better car but we're doing this as a couple with a new baby.

2:02:19That's a wonderful gift. And let's move forward. And those are the things that will cause you prosperity. There's a whole piece of literature out there, folks, a whole piece of research out there that's done multiple times in multiple different veins that talks about what's called the marriage advantage. And for instance, males live seven to nine years longer that are married than unmarried males. Just an advantage. Females live on average five years longer that are married. So that's the physical, one of the physical aspects of it. People survive cancer at a 20 % higher rate that are married.

2:03:08Isn't that weird? Okay. There's all kinds of data out there on this stuff. The net worth of someone in their mid thirties at 35 years old, and this is not me talking to you, Anthony, this is me talking to everybody out there. The net worth of someone in their mid thirties right now is 10 to 11 times higher for a married male than an unmarried male at 35 years old. That's at 35 years old. It's crazy. And it's got to do with a lot of different factors. But one of them is that we're joined and we're committed. And we're not got one foot in a boat, one foot on the dock. And it changes the dynamic of how you do your career, of how you do relationships, of how you do money.

2:03:56And it changes the whole thing. And so that makes sense. You're We're always going to get that at Ramsey, by the way. We're always going to be proponents. We're going to tell you every time, because we love you, to get married. Yeah, that makes sense. There's a lot of research out about the quality of your relationships and how they affect your longevity, how they affect your mental health. It only makes sense that it would affect your money in a similar way. Absolutely. It affects it dramatically. It affects your income. Yeah, absolutely. Oh, man. The amount of money that a lady makes more that is married in her 30s than an unmarried lady.

2:04:33Really wild. That's very interesting. And the interesting dynamic of that is that sometimes the unmarried lady is saying, I want to be independent. Isn't it? Yeah, sure. And yet ends up on average making considerably less on average. Interesting. I don't know exactly what that is. And the guys make more too, by the way. it's not it's not uh but it's just it's a dynamic in our culture and the way people's um neurosystems work and where our relationships work and then it plays out in the math that's what it comes down to so that would be my advice to you sir um if you since you allowed me to love you and be direct i'd be married by friday i'd get this car on the market and get it sold and both of you look for better jobs.

2:05:20And let's get you up there where you're making a little bit more than$40 ,000 or$50 ,000 a year between the two of you, below average household income, and a baby on the way. So let's get this thing moving, buddy. You can do this. You're not a dumb guy. You can do it. And you're not afraid of hard work either. So you can do this. And you called a show like this. So I know you can do it. I mean, they're just getting started. There's they got they can do it yeah absolutely they can do this and so there's great hope um and guess what if you've if you've done anything out there that you wish you hadn't done bought a house bought a car um you know whatever it is you wish you hadn't done you know a lot of it can be undone yeah or a lot of it can be survived just don't keep repeating it so i've about decided at my age since i'm old now that uh people say well you're wise and i'm saying yeah you know where wisdom comes from bad judgment.

2:06:12Yes. And doing stupid butt stuff. And the only thing I have done right is I seldom do the same stupid thing. I find new ones to do, but I seldom do the same stupid thing. And if you get a whole bunch of stupid things in your past that you never do again, then people start calling you wise. And so that's really what it comes down to. A whole bunch of things I avoid doing now that all of a sudden it makes you look like you're smart. It's a success thing. You're standing on a pile of failures. Exactly. It's exactly what it is. Good point. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it.

2:06:45In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:07:06Thank you.