There Is Hope When Debt and Life Feel Overwhelming

29:48So today, this is going to really help you get it out of your brain. put them all the debts on paper and put the balances and list them in order from the smallest balance to the largest balance. So your next goal after getting$1 ,000 is throw as much as you can on that smallest debt. Okay. That might be the dental debt. I don't know. And maybe I'm guessing your credit is shot at this point. No one's going to go give you a personal loan, correct? Yeah, no. I know my score is like 625, but I don't think anybody's going to give me a loan or anything. Yeah. I was trying to get you out of this payday loan cycle.

30:22Cause if this is going to be another year before you can attack this payday loan, the balance is going to be 10 grand. Yeah. And so we have to stop the bleeding. And if that means the, the dream of the HR job is on pause, I'm okay with that. Cause I don't want you to look up and now it feels hopeless because this loan just keeps doubling and doubling because it's three or 400 % APR. I'm so sorry you're going through this Alicia. Hang on the line. We're going to hook you up with our budgeting app, EveryDollar, to help you make a plan for every one of those dollars coming in, and hopefully you'll see some light at the end of this tunnel soon.

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32:04Your money doesn't control you. So this year, stick to your plan, don't chase gimmicks or points, and partner with a credit union that helps you make progress in the baby steps. Visit fairwinds.org slash Ramsey to take control of your money and stay weird. Fairwinds is federally insured by the NCUA.

32:53We'll be right back. interview them and choose the right one to work with. And you can do that at RamseySolutions.com slash agent or click the link in the description if you're listening on YouTube or podcast. Karen is in Denver up next. Karen, welcome to the show. Thank you. How can John and I help? So this year, my husband and I would like to start saving for retirement. but in our budget we only have about$500 a month to put towards that. So my question is, is it better for us to open one Roth IRA and put the full$500 in each month or for each of us to get one and split it in half or if that makes a difference at all?

33:43Well, as far as growth goes, it'll be the exact same. Okay. Now, are you guys in a financial place to invest? Do you have any debt right now outside of a mortgage? No, we don't have debt. We have an emergency fund. And the reason our budget is lower for retirement is we're trying to save for a house this year. So we're pretty much putting everything we can towards saving for down payment and closing costs and all that. Got it. So you're in what we would call Baby Step 3B, where you can sort of split the difference here. You can choose your own adventure and invest anywhere from 0 % to 15 % while saving up for that down payment.

34:25So how long is the down payment going to take? We're hoping we can do it in the next 12 months. Awesome. And so after that 12 months is over, you guys get into a home, would you then ramp that up to 15 % of your household income? And could you? um we live in a pretty expensive place um so i don't know if we could do the full 15 but i think we would like to increase it over time as we can okay how expensive are we talking because when you say we're going to save up a down payment we're going to buy a home how much is this mortgage going to be in comparison to your take-home pay um so for the area we live in pretty much the The cheapest houses we can get is between$400 and$450.

35:15So that's our goal. Okay. And my husband, a lot of his work is commissioned, but the goal would be to make about$150 this year before taxes. Okay. Are you working outside the home as well? I'm just bringing in between like$500 and$1 ,500 a month. Okay. So let's add another 10 or 12 to that. 150? Okay. So here's, the good news is you guys have a great income and I hope you're able to get that house within 12 months. My fear is that if you, if it's too tight to invest 15%, it's always going to feel too tight. And that's going to leave you guys with, you know, probably needing to work later in life in order to catch up on retirement.

36:08So that's something I would consider. You can plug some numbers into an investment calculator to get a better picture of what that's going to look like. But you guys are young, you got time, just make it a goal to get to that 15 % mark. And that might mean we need to cut other expenses. That might mean we can't afford to live in the area we wanted to. It might mean you need to be working part-time or full-time in order to make the numbers work. And so whatever you guys do, make peace with that decision. And hopefully you'll get to that babysit four mark in no time. Silas is in Des Moines up next.

36:40What's going on, Silas? Hey, I appreciate you guys taking my call. It was actually your book, George, that got me to take financial situations a lot more seriously, so I appreciate that. Awesome. Love to hear it, man. So what's serious now? What'd you get serious about? uh well we've been trying to me and my wife have been trying to be better about budgeting i haven't had the best time with that but recently we found out that um we have some settling going on underneath our house and our foundation is dropping a little bit and we've only got a couple quotes on it so far the first one was 12 000 second one was like 24 $4 ,000.

37:27And we don't have that kind of money. And so just not sure what the best way is to handle this, knowing that it could get worse, but not knowing how fast it could get worse. Yeah. How much money do you have saved? $1 ,000. Okay. And you still have some debt to pay off? Yeah, we've got just a little over$9 ,000 of debt. Okay. And what's your household income? $60 ,000, give or take. Is that both of you working? No, just me. Just you. Okay. Is she home with the kids? Yeah, she's home with our son. Okay. So I imagine money's already tight as it stands, let alone thinking about, you know. Yeah, that's pretty tight.

38:11Because if you need to solve this problem within six months, let's say, well, you need to save$2 ,000 for six months straight to get$12 ,000 to make the repair. You tracking with me? Yeah. So, yeah. And that feels like it's going to be a lot from your take-home pay. So this might be a season where we say, hey, we're going to pause the baby steps if this is a really urgent matter. And within six months, we need to scrape together$12 ,000. Okay. Yeah, we've been spending today, the first day we've been trying to find extra work. I'm trying to find extra work. She applied that at place, and so we're trying to find that.

38:49I just don't know. So would, I don't, because the other issue I have is I don't, I'm not certain if we can afford the house even without the issues. Oh, wow. Like a mortgage itself? Yeah. Yeah. Cause our mortgage payment with escrow is like 1400 and I bring home about three grand a month. You bring home three grand a month. I'm already concerned about, yeah, I'm already concerned about that, but I don't know if she's as concerned about that. How do you make$60 ,000 but you take home$36 ,000? $60 ,000 is something with bonuses. I get a couple bonuses a year. And then in the past, I've had a lot more overtime work, not as much this last year.

39:33I think we're going to need some in the present and the future until we get to a better spot financially. And so I would have her working if she's able to. I think you're going to need to ratchet up the overtime and maybe a part-time job on top of that. because right now I don't think the mortgage is the big problem here. I think long-term you get your income a little higher, we can make this work. If you're making$5 ,000 or$6 ,000 a month, now these numbers aren't that scary. It's not like you have a$4 ,000 mortgage payment. That's a reasonable – you're going to pay$1 ,400 in rent somewhere. And so this is – do you have a professional that's looked at it who said, hey, you need to deal with this within this time frame?

40:13That's what we're working on. Mostly the two companies we've had come out, they kind of are just like, you know, they don't know how fast it's necessarily progressing or how bad it actually is. So we thought about, we've been thinking about trying to find maybe just a local inspector or something like that that can come and maybe try to do that. A hundred percent do that. Because a foundation repair company has a job, and that is to, they put all those little sensors out and they say, it's not perfectly level and we can fix it for this much money. but get an inspector out it's worth the four or five hundred bucks you're going to pay to bring him out and say is this the thing i have to do right now or is this the thing i need to do in five years and let him tell you that would be money well spent just for your peace of mind and then maybe you track it and go hey here's how it's progressing based on what he said and if it gets to this point we got we got to make this happen but i would act like you need to make this happen next month in the fire that's under you guys to get to work and get this money saved.

41:19Okay. And so if that means pausing the baby steps right now, because you're in store mode, because it is an emergency, great. Maybe the inspector says, hey, I wouldn't worry about this right now. I'd check back in a year. Well, that gives you some breathing room to go, okay, we can knock out our debt and get this foundation repair money saved up. So we need a few more facts here to give us some peace about the next steps, but I think you're well on your way. The income is really the glaring issue here. And the good news is that's fully in your control. It's not going to be fun, but for six months or a year, you can do just about anything and suffer through it and live to tell the tale.

41:54So I wish you guys the best on the journey to debt freedom and a smooth, stable foundation, literally and figuratively.

42:27I 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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43:55Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel, joined by Dr. John Deloney, and we're taking your calls at 888-825-5225. You call us up, we'll help you take the right next step for your money, your relationships, and your life. Ryan is in Flint, Michigan, up next. Ryan, what's your question today? How you doing, gentlemen? God bless. I have a few questions, but the main one I'm trying to get through is that we've been listening to Dave Ramsey's Total Money Makeover. I listened to one of his seminars about baby steps, and we're trying to dial in a few things.

44:37Now, I don't know if you want me to go into how much we make and how much debt or not to help with these questions. Well, you tell me the question, and then we'll dig in with some follow-ups. All right. Thank you, sir. First one is that I know you guys said something about a savings should be around$1 ,000. We have about$9 ,000 in our savings, and we have a car. The one car that we have, it's debt that we want to pay off, and that's roughly around$10 ,000 to$11 ,000. And we're just kind of not used to not having some kind of, I guess, oh, crap money to fall back into. Is that your only debt? No, we have the car.

45:14And as I've been listening to the books and what you guys say, I've been lied to. So you must excuse me about this, but we have the car, we have two lease trucks. Our biggest is our house, our mortgage. And then from what I understand, we have two loans that we took out on our 401, our Roth. We pay ourselves back on those ones. Well, yeah, but you unplugged all the growth and paying interest. So yes, sir. Okay. I'm less concerned about your Oh Crap emergency fund and more of your Oh Crap debt that you guys have racked up. How much do you guys make? uh between me and my wife total probably around 200 wow that's a great income yeah we're just not great so i mean we ran into some issues we moved in and we outlived let's just say we outlived what we had and when we had coming in until we got to the point where we were just about underwater uh the wife had 34 000 i think on her cards i took the loan out of my 401 to pay her card off She took another loan out to pay the credit card off.

46:15So once the credit card was paid off, I thought, well, man, we should be getting an extra$1 ,000 to$1 ,500 a month. And it just didn't start equating to that. It just disappeared into more spending lifestyle. You got it 100%. That's the American dream right there. You summed it up. Okay, so you've been robbing Peter to pay Paul, playing whack-a-mole, taking out one debt to pay off the other debt. What is your question today specifically that we can help with? Okay, so once we pay off the car with the savings that we have now, do we just keep$1 ,000 in there? Or because of our expenses, say our mortgage and whatnot, should we keep a little bit more money than$1 ,000 in there?

46:51The$1 ,000 does not change based on expenses or income. It's a flat$1 ,000, and it's not meant to cover everything. And so if something did occur where you needed more than$1 ,000 to cover an emergency, you would simply pause the baby steps. And that next check that comes in, you would use toward the emergency. You'd sell stuff. You'd work extra. You'd cut your lifestyle down to nothing until you got through the emergency. Now we're back to the baby step two, paying off our consumer debts. Excellent. And now the next one would be, obviously, from what you said, we should not be borrowing from R-401 because of the interest we'd be missing out on, the accumulated interest.

47:31Yeah. There's like 14 reasons why it's a bad idea, but we won't get into that today. Just are you committing live in front of America that you are done borrowing money? That's the big question I have for you. No more leases, no more 0 % cards, no more borrowing from retirement. Are you guys done with debt? Yeah, we're done. And that's kind of where 100%. I'm more committed than I would say my wife's committed to. And I'm very committed on it because I'm tired of living the paycheck to paycheck life. That's just for what we make and what we do, we should be able to be fine and live way better. You know, at least have more money in the savings.

48:05So I'm 100 % committed. It's just these few of these questions that I'm having. I'm trying to rationalize in my head to get my head around, wrap around how you guys want us to do this. Have you guys ever created a budget together where you actually sat down and said, all right, here's the paychecks coming in. Here's all of our expenses for the month. We're going to track our transactions. Sir, we just had, we've been married. We've been together almost 20 years and about maybe two, two and a half years ago, we just put our accounts together. Wow. Congrats. Welcome to the big leagues. Yeah, I know.

48:35Right. And that's when we paid off the debt and that's when we started, you know, okay, we need to accumulate. So primarily what we do right now is most of our stuff comes out of our savings account slash checking account. and then we like for groceries and other things that we have to buy for the most part goes to the credit card and then we just pay the credit card off every oh we've been there's a new character has entered the scene here the credit cards tell me about those yes sir how many do you have and is there a balance it's just one and there's usually there's only the balance for the week prior which is gas if we get groceries and that's pretty much about it so we put gas groceries there may be a few other bills i'm had to look to see that goes on but we pay it off pretty much every week with every check.

49:16We don't occur a balance and let the balance hold on because we just paid off$34 ,000. So we're not trying to get a balance on it. So we pretty much pay it off every week regardless. Wow. So we're just, you told me you're not going to borrow money, but you're okay temporarily borrowing someone else's money with the promise of paying it back within the week. It's like, hey, bro, bro, I got you. I got you at the end of the week. Essentially, right? And so here's my challenge to you. And I put this in my book, Breaking Free from broke. It's a 30-day no credit card challenge where you put the thing in a block of ice, you put it in a drawer you don't have access to, and just for 30 days, only use a debit card or even cash envelopes.

49:52And the goal is, let's see, if you didn't have more peace in your life, if you didn't create more margin to throw at the debt, if you didn't miss the credit card rewards you thought you were getting. And what I found is most people go, oh my gosh, instead of the 2 % cash back, I I spent 10 % less than I was spending. Yeah, that sounds about right. And we only did this because of my financial, my 401k guy said to do this. And the main question was - What is a 401k guy? You have a financial advisor told you to open the credit card? That's exactly what he said. He said we should have everything going on to the credit card that we pay and then just pay that off.

50:29Is that the same dude that gave you the 401k loan? uh no that was from i did that from fidelity for my work because i get work and matching and i'm able to just go in there myself and take out but that was he told me that's what i should do in order to pay the credit card off i say this with all due respect you got to fire that guy before the day's over and get a new guy i've been feeling like that i just told my wife today the other day i told her something's just not right with what what this guy is doing and i'm just not feeling right about it. You've been following his advice for years and you're broker than ever.

51:02Yeah, yeah. I can't deny it. Are you guys still investing as well? My guess is you're still putting some money into retirement. I am at 8%. I think I get a 3.5 % to 4 % match from work and my wife is roughly around the same. I rolled over a previous 401 into this Roth with this guy. Correct me if I'm wrong, but I didn't know you could contribute to your retirement once you take a loan against it until it's paid back. I can contribute. Yeah, the contribute. No, mine is it takes a certain portion out on top of my percentage that I'm putting in for the match. Well, here's another thing I would encourage you to do is to stop all investing until this mess is cleaned up.

51:44Because right now you're doing 17 things at once and you're not seeing progress on any of it. I gotcha. With the debit cards, you're saying just go to debit card and just don't even worry about credit cards then. Exactly. I've been living that life for like 13 years. I'm going to send you a copy of Breaking Free from Broke. I cover the whole debit card, credit card thing in the credit card chapter. So read that and I'm going to hook you up with EveryDollar. This is going to be like John and I in your pocket, coaching you 24-7 with new recommendations based on where you're at financially and educating you along the way.

52:15So hang on the line. We'll get you the book and EveryDollar. I'm rooting for you, Ryan. This is a solvable problem. You make$200 ,000. There's no reason to be this broke.

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54:11Jamie is in Chicago up next. Jamie, welcome to the show. Hey, George. Hi, John. How are you? We're doing great. How can we help today? So I've been following the plan for quite a while. I got rid of my car. I paid down all my debt. The only two things I have left are my student loan debt and my mortgage. Awesome. My mortgage I owe$98 ,000 on, and unfortunately on my student loans, I owe today$142 ,000. Last Wednesday, I learned that my position at my job is going to be eliminated, and I will be without a job on February 1st or on 2nd. And I am kind of freaked out. Yeah. I feel like— You have a right to be.

54:59I only have about$25 ,000 in 401K, and obviously I'd want to get that student loan debt out of the way. But with my separation, I'll get a seventh package, but it's only going to be about$16 ,000, and that's before taxes. So I am not sure. So that floats you three months? What do you think? Yes. Yes, three months. Okay. What do you do? I am a facility planner. For a guy who's not very smart. Basically, I manage for a large healthcare company. I manage the plans, the floor plans, and where people sit, and departmental allocations, things like that. What is your chance of getting a new job quickly?

55:50I hope, well, good, but it took me a couple of years to get that job. Okay. So, John, I'm glad you're on this call. You'll understand this. I was on disability for some years and was able to get back into the job market. And this was the position I landed, and it's been a really good position for me. I work from home. Yeah. So I'm kind of nervous about, you know, kind of the things that go around with social anxiety and those kinds of things. So I'm going to give you a word. I don't see a problem. I'm going to give you a word. It will be, but I'm going to give you a word that it might cause some people listening to inhale sharply, okay?

56:35Okay. But I'm telling you this word because I believe in you and I trust in you, okay? You have an absolute emergency on your hand. Yes. Agreed. And you have proven to yourself, you have documented evidence over the last few years that you are not who you once were. Exactly. And these kind of big events, a job loss, somebody passing away who we care about, our body wants to drag us right back into this is how we always handle things. Right. Right. And what you have a bona fide emergency and you've got a tiny little runway to land the plane. Right. Right. And so what we're not going to do is turtle up.

57:28We're not we're going to grieve the heck out of this thing. But I'm going to say this. It's going to sound crazy. We're going to grieve it later. what we're going to do is start applying for jobs like mad and we're not looking for careers we're not looking for exact replicas we're not looking for perfect work from home situations we're looking for two jobs that we're going to go to in the morning and in the evening and we're going to feel the social anxiousness we're going to feel it and then we're going to go through it because we have an emergency on our hands and on the other side of this you're going to be so freaking strong that the landscape of jobs available to you will double or triple in scope.

58:08You get what I'm saying? Yes, I do. It's going to be hard. It's going to be scary. And your body's going to want to go back to what it has done in the past, which is turtle up and just wave the white flag. And we're not doing that this time. You've come too far. Exactly. And that's exactly why I'm calling, because I felt like my instinct was to go back to that old thinking. It's like, no, I've come so far. Why would I do that? We're going to apply for coffee shop jobs. We're going to apply for maintenance jobs. We're going to apply for waitress jobs. Everything. Everything. Okay. Everything. Because what you need right now is, A, a reason to get up in the morning, and, B, you need money.

58:49Think about this. If you could work so hard that you didn't need to touch the$16 ,000, And you can throw that whole thing at the debt once you get some stability. That's the goal. You're going to be on cloud nine. Yeah, exactly. That's what I was thinking. Make that the goal. I just want to make sure that I'm doing the right thing. Now, you're not a bad person if you touch the$16 ,000. I'm not mad if you use the severance, but how cool would it be if you didn't? And it really propelled your baby steps. Instead of waiting three months, the money runs out, and you go, well, I guess I need to find a job now.

59:18That's not going to help anything. I'm not going to do that. We're going to apply for fancy jobs. And you know the difference, what I'm saying. I'm not trying to be a jerk, but we're going to go get waitress jobs, Home Depot jobs, whatever. And we're going to apply for the facility management jobs. These bigger picture things are going to take longer. They have longer processes. We're going to apply for those in the evenings and at night. Okay. Sounds good. We're going to send you Ken Coleman's Find the Work You're Wired to Do. It has the Get Clear Career Assessment in there. And what it's really going to help you do is figure out, hey, what are the skills behind the work I've been doing that I really love and enjoy and I'm good at?

59:51and what other roles can I apply that to? Because right now you're thinking, I'm going to type in these keywords. And I think there's so many underlying skills. You can take a logistical nightmare and clean it up and organize it. Sure. That's an amazing skill to have that you can apply into anything. Project management. That would be a great field for you. What is your degree in? I have a degree in interior design and a degree in psychology. I love it. Have you pursued interior design at all? as a career? I did. And that's kind of why it took me so long to find this job because I felt like I wanted a very specific commercial job and it just wasn't happening.

1:00:32So then I found this job, a recruiter each other. Well, on top of your job shopping, I'd contact 10 interior design companies in your area and say, hey, I have a degree in interior design. I'm ready to start tomorrow. Okay. I will do that. I mean, you got the degree in it. You spent a pretty penny to get it. Might as well give it your best shot. This might be the on-ramp you needed to go. I needed to get laid off in order to go pursue the thing that I really wanted to do. But here's your key word. Okay. We're going to go. Go. We're going to act. There will be no hours left unspent twiddling our thumbs.

1:01:08Yeah, you're going to close your computer screen and go for a quick walk around your neighborhood and you're going to put your head on your pillow exhausted. because you've been working so hard. The energy has to go somewhere, right? It can paralyze you, or you can do it to solve this present emergency.

1:01:26Exciting? She's paralyzed in excitement right now. That's so great, Jamie. Thank you for the call. John, let's talk about this because a lot of people, we talked about this on the show, that it's like losing a loved one, like the grief of losing a job. Yes. And the shame, the guilt, the fear. It's like all the emotions. And in her situation, having a diagnosed anxiety condition, the thing about anxiety that's the worst is the only way through it is through it. And so you're going to have all of this, these feelings, you're going to have all these emotions. She has an emergency. and millions of Americans have an emergency.

1:02:01And what many people do when there's an emergency is either they run around bananas or it's creating more mess or they just take their foot off the gas, put the car in park and exhale. And she doesn't have that luxury. She owes a couple hundred thousand dollars in various things, right? So we're going to have some direction. We're going to go get a job, get some money, get some connections. We're going to apply for some jobs. We're going to read a book. We're going to have coffee with somebody who's in a job adjacent. We're going to go do a bunch of stuff. and the weight of this dude i got fired they took my job away that took my livelihood be there but we're gonna we don't have the luxury of just stopping for a season we gotta go get a job and we're gonna go go go go i love that an object at rest stays at rest once you stop it is so hard to get moving again yes you get comfy you get your favorite blankie you're watching your favorite netflix show and you go well that's a problem for tomorrow me yeah it's hard george if i'm if it's like nine o 'clock i go to bed early because i'm a nerd and i sit on the couch and just i'm gonna watch one show it is so hard to get up from the couch and just go to my room to bed yeah right i should have just stayed up and gone to bed and got the extra 30 minutes or 45 minutes of sleep similar here man if you exhale and be like well i've got this 16 grand that 16 grand will be gone before you can sneeze and now you're gonna be in a real mess so you got a job you're taking your job away in a month, tiny little severance, it's time to hit the gas and go.

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1:05:16living paycheck to paycheck to finding$3 ,500 of extra margin each month to put toward our debt. We each had four credit cards and have been able to pay them all off, never going back. We love to hear stories like that. And the truth is you can do this too. That's not just a Claire and Winston thing. That's an anyone thing. You can take control of your money. You can change your family tree and live like no one else. And it starts by downloading the Every Dollar Budgeting app for free in the App Store or Google Play. Go see how much extra margin you can find with a little bit of that coaching and encouragement.

1:05:49Lee is in San Antonio up next. What's going on, Lee? Hi. Hey, how can we help? Well, so my question, I'm a little unique. So I went through a divorce in 2024. And by the grace of God, as of the holiday season of this year, we are reconciling and God's restoring our marriage. Wow. Yeah, it's really beautiful. My question, however, has to do with, so when we were married before, I was not great in the financial department. My husband was with the same company for almost 20 years, hard worker, always provided. I kind of jumped from job to job, wasn't the best with the money, racked up a$10 ,000 credit card, all of that.

1:06:37So over the past year, while we were apart, I graduated from FPU and have followed Dave Ramsey. And I've, I'm working with a company right now to pay off my credit card. So I'm hopeful that within the next couple of months, that will be paid off. So I will myself be debt free. My question really is, I know that Dave is pretty vocal about his opinion that when a couple is married that there is no my money. It's our money. So understandably, given my past behavior, my husband is a little hesitant to go back to commingling our funds. So I'm just kind of looking for some guidance on how he and I can navigate that this time, just, you know, as we, that trust is built back up and maybe just some guidance on how to navigate this, this season.

1:07:28What other trust was broke in your previous time together? Well, there was no infidelity or anything like that. I honestly, my story is that I really just was in a really bad place. I believed a lot of lies about myself and my marriage, and the enemy convinced me that it was right to leave. And so I just did. I just picked up one day and I left. There was no seeking God in any of that. So really the trust that was broken was just me giving up on us. Okay. So I want you to hear his hesitancy as not about money. It's deeper than that.

1:08:14If it was a surprise to him, not that y 'all were in a tough season, not that you were struggling or anything like that, but if it shocked him when you walked in and said, I'm out, I want you to see that for what it was which is you pulled a pin on a grenade and rolled it into his life and exploded it now every couple co-creates their relationship that is what it is so I'm sure he would sit here and tell me he's not perfect I get all that but if you're going to truly say we're reconciling there is no reconciliation you can get remarried you can do whatever you want but there's not a true remarriage if both of you don't have your feet in the boat.

1:09:01And at the same time, he's still living, he still has fresh scars from when this person he's getting back into the boat with shot a hole in the middle of the boat and then swam to another shore. You get what I'm saying? Of course. And so here's the path back. The path back is, will you give me, being him to you, a very clear roadmap that I can follow to reestablish trust? Because trust will not be re-earned in huge, grandiose moments. It will be earned in a thousand tiny little ways over time. And the commitment here is we're going to do this every 30 days, every 60 days. And it's not you groveling.

1:09:45It's not like, how am I doing? an A on trust this month. It's not that. It is, I want to clear a path back. If we're going to really get remarried, we're going to go all in on this thing again. Both of us have to put our feet in the boat, and you'd be crazy to do that all the way. I get that. So I'm going to ride in your boat for a while. I'm going to ride shotgun with you. What does a path to reestablish trust look like? And he's going to lay that path out, and then you get to decide whether I'm going to follow that or not. Yeah. Right. And, and here's the other thing. If he says I'm in, he's got to be all in too, which means he has to risk that the person he's marrying does this to him again.

1:10:25That's the risk of any great marriage and any great relationship at all. Right. Is that you could get hurt.

1:10:34So he needs to give you a path. You need to ask him not, Hey, why aren't you sharing our money, you don't trust me, and not you hanging your head in shame saying, I'm not trustworthy. We're past that. We're going to start establishing this. What does a path look like for me to reestablish trust? And let's take infidelity. Sometimes people say, I want to see your phone every night. I want us to get new phone plans. I want us to change our numbers. I want you to cancel all your social media. And here's the thing. The person who got cheated on can lay out whatever path they want. And then the other person gets to decide whether I'm going to follow that path or not, whether I want to be a part of this relationship or not.

1:11:12And when you start walking that path, they can't weaponize the past because they have said, I'm in this too. Yeah. And reestablishing money, like sharing your money together is part of me and my wife share a single account. George and his wife do, Dave and Sharon. The people that I know that are successful and the data bears it out, couples who share finances do better because, not just because of the money, but that means they share a picture on what they value, where they want to go with their life, what their shared vision is, like all that stuff gets wrapped up in, we all know where the money is and all that.

1:11:48So it's just you humbly asking for a clear roadmap. And we're going to do one at 30 days, we're going to do one at 60 days, we're going to do one at 90 days, and we're going to continue to work down this path together until both of you feel safe enough in your guts that Both feet are in this boat and we are rowing the same direction. Can I give you some ideas, Lee, of some tactical things you could do? It might make him go, who are you? Number one, cut up all of your credit cards and close all the accounts. And then, here's the baller move, you freeze your credit. And you give him the passcode.

1:12:25So that you can't open any type of account. You can't take on any type of debt if your account is frozen, if your credit's frozen. And then on top of that, say, hey, you know what? We're going to have a joint account, but I don't want the debit card right now. And we're going to turn on transaction alerts so that anytime anything comes out of the account, we both get a text message of what happened. Or to celebrate your guys getting back together, we're going to give you a year of every dollar premium. It will alert each of you if somebody spends something with a debit card. Okay. Okay. But these are some things you can put on the table when he's like, what are you talking about, a roadmap to trust?

1:12:57I'm going to do this thing and this thing and this thing. I want to know a path so that we can reestablish trust in this marriage all in, both feet in the boat, both of us here's what I've already done, here's what I'm doing now here's what I plan on doing I'd like to check back in, and then maybe you guys agree on our timeline, hey, we're going to check back in and six months from now, if all is good, then we're going to open the floodgates and it's going to be, you know we're just going to fly and build wealth together and I think that will prove to you more than to him That's exactly right.

1:13:29That has changed. Because I don't know that you trust you right now, Lee. You probably have some shame and guilt and baggage. Yeah, for sure. And by the way, you have to have the courage to say, I don't want to re-engage in this marriage if only one of your feet is going to be in the boat. And so you get to say, one of my bedrocks, one of the things that's going to be important for us moving forward is that we get back to trusting each other enough to share money, to share whatever. But I also know that's a tough, scary thing right now, so I need a path. But you get to say this is a big deal to me, not just I'm going to put my head down and go along with whatever he says because I screwed up and I'm just a whipping post.

1:14:12It won't work that way. Right. You get what I'm saying? I'm proud of you. I do. Thank you. This is a big step, Lee, and I'm so just inspired by the reconciliation, and I hope that you guys are fully reconciled soon. Full unity, building wealth together like never before with an amazing marriage. So hang on the line. We're going to send you every dollar. That'll impress them. Go, hey, I'm working on my budget this month. You want to take a look? Like, who is this person? Or our budget? Now we're talking.

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1:16:17Today's question of the day is brought to you by Y-Refi. If defaulted private student loans have taken over your life, Y-Refi can help you breathe again with a low fixed rate plan that fits your budget. Visit Y-Refi.com slash Ramsey to learn more. That's the letter Y, R-E-F-Y dot com slash Ramsey. Not available in all states. Today's question comes from Wyatt in Montana. Dude, Wyatt sounds like he's from Montana. I love that name. We recently started the baby steps and me and my family are on step two. We've been snowballing pretty successfully. He sounds like a Wyatt. We've been snowballing pretty successfully by selling stuff and we're making good progress.

1:16:55Our question is that with all the stuff that's going on around the world, how is it rational to stick to this? my instinct is to use extra cash right now to cash flow stocking up on food ammo and water should we really stick to the baby steps or make sure our family is ready for any unexpected disaster wow this could have been a question from john deloney in nashville you wish you were wyatt montana i do i do okay so there's a part of this that i understand which is hey there's some crazy stuff going on. Should we just stockpile some cash in case? Because we got debt. If he's on baby step two, it means he has a thousand dollars to his name and savings.

1:17:35The rest is going towards consumer debt. So is this a storm mode where you go, we got to batten down the hatches and just save up money? I'm going to say no. Should you stick to the steps? Yes. Should you make sure your family's ready for unexpected disaster? That's the part we need a definition on. Right. Right. And so if your unexpected disaster is the air conditioner going out, the you losing your job, the stock market crashing, not owing anybody any money is a really great place to find yourself. Having no other payments other than we have to scratch and claw our way to pay our bills. There's a real disaster in front of you, which is the debt, the mess that you made.

1:18:16And so I'm not going to focus on what could be and is there going to be World War III and it's all going to come down. and therefore I'm going to hang on to my debts forever, that's a terrible way to live. Yeah, and the...

1:18:34I just, again, I quote my friend who told me this years ago, but I don't have a meteorite plan. I do. I have a lot of meat in the freezer. Hunting season just wrapped up here, so I do, right? Am I going to Deloney's house if something goes down? Absolutely. He would never make it. But do we have unrealistic stockpiles of water, etc.? No, because if the local municipal water gets cut off, we're going to have a whole different issue going on. And so I think people like to think our family's life is going to be like this, just minus these things. It will not be. It will be such utter wild apocalyptic chaos.

1:19:11So it is easy to get distracted when you get past the energy stage, George. like the it's it's like the january 15th at a gym like already starting to fall off because everyone got excited they started their first workouts even got sore the first couple ones they feel like they're doing something and then about january 15th you're like oh i just have to do this forever and it just goes wah wah and so it's real easy when you're in baby step two you're selling stuff you're feeling it paying debts off that you look up and you're like oh we have two more years of this four more years of this what about water and ammo right stay the path yeah stay on the path the other thing is dude you live in montana not gaza like let's not act like it's all coming down in montana like there's some there's some scary places there's some scary things happening montana's fine right now and so unless there's imminent danger in your area i would stick to the plan and if something really did happen sure you can pause the baby you step stack up cash.

1:20:12I don't think the apocalypse is on the list right now. And Montana's probably one of the places where you'd want to find yourself. If it all went down, I would love to be in Montana. Don't tell the zombies. They'll go there first. They'll never make it. Tim is in Los Angeles up next. What's going on, Tim? Hey, I was curious. Me and my wife are getting ready to pay off our$148 ,000 worth of debt. Yeah, I know, right? And I was trying to kind of see what's next because we do have like, you know, a three-month like, quote, emergency fund. But, you know, we're trying to wonder too, like with these Trump accounts, should we just install like, if they happen, great.

1:20:55But, you know, we're trying to figure out like, should we start investing like in a high-yield savings or something like that for our kid now who's doing April. So you're in baby step two, you've already done baby step three, and you want to skip to baby step five. Did I hear that? I suppose, yes. Okay. I would do them in order, which is take your emergency fund and let's focus on the emergency at hand, which is the debt. Could you clear your debts with the amount you have in savings? Yes. We could do it, honestly, within probably the next, like, 30 to 60 days, even without the emergency fund.

1:21:29And that's kind of, like, where I'm at. All right, bet. Then pay off your debt today and spend the next 30 days restocking the emergency fund. Okay. in vegas we call that i call

1:21:46so that's one one idea number two once you are through baby step three you're now a baby step four which is to put your own mask on and invest 15 in your own retirement uh the other problem is we don't actually own a house at this time especially here in california uh it's a little more difficult these days. And so that's kind of like the underlying question is like, do we just pay off the debt and then do that gazillion density towards a house or put our child's future ahead of our own? Well, I don't think any of those are the options. I think you should invest 15%. And if it's going to take you a long time to save the down payment, that's okay.

1:22:25If you're going to stay in California long term, it might take you eight years to save a down payment instead of two. Right. And so that's the math of it. But I would not put any money towards, and here's the thing with the Trump accounts, the government is, did you have a child in 2025 through 2028? Is that the plan? Yes. Okay. So I'm going to open one and here's why. I would love the free thousand dollars from the government. After all the money I've given them, it's time they give a little back. You don't have to put any money into it. And I personally wouldn't. I did a whole video on this.

1:23:01It's really not super impressive other than the free thousand bucks that will grow from age zero to, you know, 65 into a few hundred grand. That's awesome. Not mad about that. But I would invest for your kids in a 529 plan, which has tax advantages of tax-free growth. And if you want to invest outside of that, you could just open up a brokerage account in your name, and you can use that to save up for their wedding or a down payment on a house for them one day. Right. So I love the motive behind it all. And the 529 plan, how exactly would you go about that? That's the first time I've even heard of it.

1:23:38Yeah, well, there's a blog about it on our website. And so I'll make sure we get you that link and we'll put it in the show notes as well for anyone who's interested. But a 529 plan is just a plan to save for college where you use after tax money and that money then grows tax free for education purposes. You can withdraw it tax free to use for your kids college and they've even expanded it now. It could be for trade schools and training and supplies and all kinds of things. So it's a great way to save for college with compound growth and some tax advantages. So that's what I'm currently doing for both of my kids.

1:24:11I put money in there every single month. If they get birthday money from grandma, grandpa, it goes into the 529 account. But here's the bad news. If you don't invest for retirement, your kids are going to have to fund it. And so that's why we tell people to put their mask on first. There's 100 % chance you need to retire one day. 50-50 chance your kids even go to college and graduate. right so you're doing a lot of good things tim you've got a great heart and you're so close you're on the cusp of this amazing financial foundation uh but i would just do the plan in order it works man it works pay off the debt today and if that scares you that tells me that uh you probably should do it because you'll stack up that cash in no time if you put you know 20 grand towards the debt and now we need 20 grand in the emergency fund well now we're just paying ourselves instead of a lender.

1:25:02I would rather do that any day. It's hard, John. There's so much you could do. There's so many things that are good things. We want to pay off debt. We want to save. We want to save for the kids. We want to save for retirement. And that's why I love the baby steps. It just takes out all the ambiguity and gives you just a clear, nope, do that first. Nope, do that next. And that's what I do. It's what I've done for my family. It's what John does for his. It's just, I get it though. It feels so hard when the world's all screaming at you from every different angle. It's hard to just stay the course, just stay on the path.

1:25:38And now there's a new one, the Trump account. So now we're distracted. It's like squirrel. It's like, look over here. Look over here. It's like just, the folks that win unhook from the system completely and just follow a different path and we've laid it out for you.

1:26:14Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Camel here with Dr. John Deloney. open phones at 888-825-5225. Teresa is in Indianapolis up next. Teresa, what's going on? Hi, how are you? Doing great. How can John and I help? Well, so my mom's 82 years old, and she just got hearing aids for$2 ,000. And she is asking me and my sisters to help pay the money back that she charged her credit cards. And, you know, she lives on our Social Security. She never really saved for retirement. And I feel like even every time we go out, she expects us to pay for the dinners or lunches or whatever we do.

1:27:11And most of the time I do, but not all the time. and I've helped her before with her budget and I know she can save to pay for this purchase but how do I approach her about asking for money and the entitlement she obviously feels that we owe her? What would you do? I'm on baby step two right now and really don't have the money to give her. Well, I think you just answered your own question. I think the part that sounds like it's weighing you down is the stories you're telling yourself about her requests. and so if you've offered to pay for dinner a bunch of times i don't fault her for just assuming you're gonna always pay for it if you think that's a move on her part and she's done that before and she's always trying to like your whole childhood she was trying to get people to pay for food or whatever that's another story but if you're if you don't have the money you can just say hey mom i can't i'm i'm working on my own finances i can't kick in on this time that's it and you can't control what questions she asks you.

1:28:14You can't control her temper tantrums. You can't control the guilt you would feel because you want to be able to do it. You just can't right now. You can't control any of that stuff. What you can control is what you do, the next right move you make. Your feelings are going to happen regardless. What's the next right thing? The next right thing is I can't afford it. I can't help right now. Have you ever pushed back on her and just said, hey, mom, I love you. I want to be honest. I'm not able to give you money anymore. I got to focus on my own financial responsibilities? I have. I've said to her before, you know, she asked me, you know, why haven't we been doing some stuff as much as we used to?

1:28:48And I said, well, mom, I can't afford you. Like every time we go to lunch, you expect me to pay. And then even when I pay, you know, you don't say thank you. And, you know, I just, I don't have the funds. Like I have to, when I think of going out, you know, I have to watch my pennies because I'm trying to, you know, get out of debt. But can y 'all do other things? Can y 'all go for a walk? Can you take some dominoes over to her house and play? Does it have to be things that we spend money on? No, it doesn't. And I've tried to curve it that way as well, too. It's just sometimes it's just really hard because I know she's, you know, she's never really been ahead of the eight ball with money.

1:29:27And, you know, I just wish I was in a better financial position to help her with these things. But, you know, some of it, I feel like, you know, she set herself up for this too. Yeah. But you just nailed it. And that's what I didn't want to say it out loud, but you said it. So I want to pull that string a little bit. A lot of this sounds like she's making requests that you as her daughter wish you could just give her the world. And you can't. And so if you feel guilty, if you feel bummed out, if you feel sad about your own financial situation. man don't compound that frustration and pain and guilt and yada yada by blaming her it would be cool if we all had enough money to give our parents whatever we wanted but most of us don't and it just stinks and so we can either just cut off contact which a whole bunch of people do which i think is insane or we can say hey i'm gonna start coming over to your house on tuesdays i'm gonna make a coffee at the house and bring over a pitcher of coffee or mom you make the coffee I'm bringing the dominoes, we're going to play.

1:30:32And I can control that part. And it's not as cool as a hip diner in whatever town, but it'll still be valuable time with your mom that you'll be glad that you spent.

1:30:44What do your siblings feel about this? Are they also wanting to stop the sort of forced giving? Absolutely, yeah. And we're all in different positions, and we all don't have the money right now. Like I have one sister has kids in college. The other sister just lost a dog and had to pay for her heater in her house. And my other sister just had a surgery. And I had a surgery last year. Here's the better part. You don't have to have a reason. Yeah. You can just say, Mom, I can't help out right now. Thanks for thinking of me. And that's it. And then hang up the phone. And if she chooses not to pay the credit card bill because she won't or can't, then she deals with the consequences of that.

1:31:30It might go to collections. Someone might be harassing her on the phone, telling her she needs to pay or else. I don't know if you can repo hearing aids. I don't think you can, but maybe. I don't know. Yeah. But that's the hard part of setting the boundary is it makes you feel bad, but you need to just repeat the boundary and make it clear. Because otherwise, if she knows that boundary is flexible, she's going to get over it every time. Every time. So just hold the line, and about four times in, and she's going to go, oh, this is a dead end. I'll try another sibling. And if she chooses to opt out of the relationship because of that, the sad part is it was transactional for the, you know, who knows how long before that.

1:32:11Does she reach out without money being involved? Oh, yeah. Okay. Oh, yeah. So there's a relationship outside of this. There is. Okay, good. And maybe one day you guys are all in a better place, and you go, hey, we're going to take mom on this amazing trip. but it needs to be on your terms. And right now, all of it has been entitlement and guilt instead of, man, it would be really cool to just cover mom's hearing aids. That'd be a cool gift to her. But if you like her and want to spend time with her, go over to her house with some Domino's and some coffee and some homemade cookies or whatever, and when she asks the question that she's inevitably going to ask, which is, can I have some money?

1:32:50You say, no, I don't have it, mom, right now. All right, your turn. and maybe choose to deal with a couple of awkward questions or annoying questions or guilt-inducing questions for the greater sake of the relationship. But you and your siblings don't need a whole bunch of, well, I got college and I got a sick dog. You don't need all those excuses. You can just together or individually say, as for me and my house, right now we're not going to participate. But we love you. We're still going to hang out with you. And she's not going to be on the street. I mean, she's not in dire straits here, right?

1:33:27Does she have other financial problems that are pretty intense? Or is it just, hey, she owes a little bit on her credit card? No, she just constantly, like, something happens, she puts it on the credit card. She's just in a cycle. And I've tried, like, I've worked on her budget before when she let me. And, you know, I even bumped it up a little bit so that she didn't realize she was actually saving money. um and but now she won't let me it's been a couple years and she won't let me redo her budget so that i can help her she doesn't want you involved on that side yeah that's a sign if she doesn't want your help getting better with money she just wants the money then that's a sign that you need to stop and maybe one day she opens up again and says hey listen i'm struggling i got collections people calling me can you help me figure out a way out of this and you go yeah here's a way out and it's not going to be you giving her money it's you showing her how to get out of this once and for all and maybe that'll get her to stop using a credit card the hard part is the credit card companies are insane for giving an 82 year old a line of credit who's living on social security well they're not insane if their kids are going to pay it back you know i mean like it'll get paid out of her estate or collections or it'll be a tax write-off one day madness

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1:36:10John is in Fort Worth, Texas. John, welcome to The Ramsey Show. Hello, good afternoon. How are you doing? I'm doing pretty good. I got a good spot to be at, but I still have the question of what do I do? So I'm wondering where do I go from here, me and my wife, with our investments and in the future. We just completed, we're basically baby, or not, we are baby step seven now, just this month, paid off the house. That's amazing. Congrats. What's the house worth? About$300 ,000. Awesome. And what do you guys have in retirement? retirement uh right now uh because we did put uh basically just like 10 at the time we just stepped that up or she stepped hers up for a 401k we're sitting around 155 i think counting hers and mine together okay but where i currently work i only have a uh roth ira option they don't have 401k they don't have a retirement plan through your employer correct okay so we're doing that Like, we started that last month.

1:37:08I started funding mine for last year, and now this year I'm going to end up funding mine and one for her. That way it gets me to the 15 % or actually above it, just max it out. Yeah, what's your household income? What's the gross income you guys will bring in this year? 2026, it should be about 150. We were beyond that before because I used to get a lot of overtime, but I changed jobs this year. pay went up a little bit but no overtime okay cool so what's your question well where we go with the uh investments from here so after the ira after the 401k we're going to have the house payment plus we were putting up to 17 grand actually a little more than 17 grand a year uh extra on the house to get the house paid off in 10 years we actually beat 10 we're at nine years and a couple of months is what we ended up with awesome so we we're still able to live our lives off of that.

1:38:04So it's like, okay, do I just put the rest of it into a brokerage account for a S &P 500? You said your wife has a retirement plan through her employer? Yes. What is that? Hers is currently a traditional, and she said that they were changing that to a Roth. Okay. But right now we're trying to figure out where we have to do what percentage we have to do out of our pay, so that way we can max that out, which is, I believe,$18 ,000. Well, the 401k is closer to$23 ,000 or$23 ,500. So here's the good news. 15%, which you can invest more, of$150 ,000 is$22 ,500. So you still have the tax advantage options.

1:38:48If you both do a Roth IRA this year, I think they just upped it to$7 ,500 is the cap for each Roth IRA. So that puts you guys at$15 ,000 there, leaving$7 ,000 to invest. You can do$7 ,000 in her 401k. on the Roth 401k. Yeah. But then after that, like the way I look at it, doing the finances, we're going to, we're going to eclipse that. We're going to have more than that. And you'll have more. So you could fully, let's try to max out the 401k and max out two Roth IRAs. That would be my goal for 2026 if I'm in your shoes. All right. But then what do I do with the extra after that? So you're saying you're going to invest the 23 plus the 15 that puts you at 38 ,000 and you're still going to have more to invest.

1:39:32correct yeah we looked at the we looked at our budget and we were sitting around 47 that was like okay wow that's awesome yeah do you guys have a high deductible health care plan no unfortunately we don't okay unfortunately we don't i guess because if you have an hsa you can invest through that and it sort of becomes a loophole retirement account so if you don't have that so i'm kind of going through in my mind what are all of the tax-advantaged options, and that's going to be your 401k, your IRAs, your HSA. If you run out of those options, then you can be investing into a brokerage account in the market, which is not tax-advantaged.

1:40:12And that's where my question came in, because it's like, do we still follow the investment recommendation, growth, growth and income, or do we just do S &P 500? Yeah, you could do either. I mean, S &P 500 is simple and outside of retirement, that's a great option. That's what Dave would do. If Dave gets a big royalty check for total money makeover, he's just going to throw it into an index fund, into a brokerage account. Okay. So I would just go that route. And how old are you guys? I just turned 40 and choose 41. Oh, amazing. Think about that, dude. You're in baby step seven, no payments in the world, investing 40, 50 grand a year.

1:40:50Go pop that into an investment calculator. We're trying to figure out what to do next. That's what you do next, and you keep doing it year after year. And it's not exciting, and people are going to tell you, dude, you need to be more sophisticated, and you should put your money here, and crypto is going to take off, and you should buy real estate. Stick to the plan. Stick to what you know, what you understand, and you will be multi, multi-millionaires in retirement. Hey, that sounds good. Congratulations, man. Never go back into debt. Keep investing as much as you can. And also enjoy your life.

1:41:24You know, we always talk about, John, there's three things you can do with money. Give, save, spend. And it's easy to have too much muscle in one area. We're like, I'm so good at saving and investing. And you realize it's like hoarding. Yeah. And you're giving muscles atrophied and you're spending muscle. Your wife is like, dude, we haven't been on vacation in 12 years and we haven't paid for a house. That may have been my house. That's John. And also mine right now with a toddler and a newborn. I'm like, I'm not going anywhere. But that's a good reminder. and congratulations on Baby Step 7 with the paid-for house.

1:41:54Matthew is in Columbus up next. What's going on, Matthew? You with us? We were so close to a great call with Matthew. It was going to be gangbusters. All right, we'll try again. Oh, there he is. Hey, Matthew. Took him a second. Hi. How are you guys doing? Great. What's your question today? Yeah, because I'm trying to refinance the house that I got and got a lower rate, obviously. But now when I want to pay over my mortgage rate, I was sold maybe invest that money instead. Who told you that? A family member. But I was under the impression if I can pay off my mortgage faster, I can pay off my mortgage faster, and then that just opens up a lot more money in the future.

1:42:41Yeah, you're right. And that's what we teach in The Baby Steps, and it's what I've done in my personal life. Me too. And so you can trust the family member. You're still going to go to heaven. But the Ramsey plan says, hey, if you're in baby step six, which you are, put any extra money toward the mortgage while investing 15%. So are you investing 15 % of your household income right now? Yes, mandatory with my job. Cool. And then how much extra can you throw at the mortgage? How fast is this thing going to get paid off if you follow our plan? Well, it's going to hopefully refinance, and I'm hoping to get an extra two payments in a year.

1:43:21Okay. Have you done the mortgage payoff calculator on our website to see what that does? I have not. I only get to listen to the show for like 20 minutes on my commute home. Oh, thank you for hanging with us today. Tonight when you get home, I would just pop onto our mortgage payoff calculator, see what those extra payments would do, and then have a game plan and go, all right, six years, we're going to have this mortgage paid off. and the good news is the mortgage gets freed up and then you have the rest of your life to invest that payment. And nobody can come take your house away. Which for all the people who are like, this is what you need to do, this is what you need to do.

1:43:55I'm telling you, man, there's something about having a house that is yours that even if your local city jacks up your tax rate on it, it's super annoying, but you don't have a house payment. Nobody can take your house. There's something so profound about that safety insecurity for you and for your family. Yeah, it's more than math. And I've seen the argument, well, I have a 3 % rate. Why would I not invest or even put it in a high yield savings account? I get it. You could make the argument on paper, but those people, they're forgetting about the psychological component and you truly can't explain it to someone unless you do it and live it.

1:44:29That it just is a more peaceful life. I sleep better because I don't have a mortgage payment. And I never think about, man, what could I have made if I invested that money instead of putting it toward the mortgage. I never have thought that once. I just go, cool, I got a freed up mortgage payment. I'm on track to be a multimillionaire in retirement. Life is good. All right. Excellent. Yeah. Pay your house off. Thank you so very much. I appreciate it. Absolutely. Hey, what's your mortgage payment, by the way? I'm hoping to get it down to$1 ,250 a month. $1 ,250. Okay. That's fantastic. Is that principal interest, taxes, insurance, all of that?

1:45:06Is that just principal and interest? interest. It's all taxed. Everything is all wrapped into one. I would also do some fun math using our investment calculator and go, all right, six years from now, I'm 46. If I invest that thousand dollar principle and interest from 46 to 65, what does that turn into? That's some pretty cool math too, on top of not having a payment for the next several decades. Nobody's ever said the words pretty cool math, except for you, George. Thank you. I like pretty cool math.

1:45:55you spend hours researching before making a major purchase like a home or car but it's also a good idea to put in the work searching for the right insurance coverage to protect your biggest assets I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com slash insurance.

1:46:38Everyone needs insurance, but it can be hard trying to find pros who aren't just looking to make a buck and agents who actually know their stuff. Well, Ramsey Trusted Insurance Pros, they're vetted. They're coached to make sure they're market experts who have your best interests at heart, a.k.a. they're not going to sell you crappy products that we would never recommend. So if you want to learn more, go to RamseySolutions.com slash coverage to find the type of insurance you're looking for and connect with a Ramsey Trusted agent. agent. Silas is in Tampa up next. Silas, welcome to the show. Thank you for having me.

1:47:11Sure. How can we help? So I have a Chevy Colorado, and I owe$36 ,000 on it. And my wife's car, she has a Toyota CHR, excuse me, a Toyota CHR, and she just had a transmission. It didn't go out, but the dealership told her that it's bad, and they don't know how long it'll last. So it's about$13 ,000 to fix. And we're 22, both of us are, and we're just trying to get our finances in order. And I want to get rid of the truck or I want to do something with the truck. I'm just looking for advice what I can do with it. Okay. What's your household income? I make, we work at the same job. I make$1 ,650 every paycheck, which I get paid twice a month.

1:47:58and she makes around$1 ,100 or$1 ,200. I'd have to look at it exactly, but I think it's like$1 ,150. She makes about$1 ,150. I make about$1 ,650 every paycheck, and we get paid twice a month. Got it. So you're talking like$3 ,200 and$2 ,200. Let's call it$5 ,400,$5 ,500? Correct. Okay. So how much is her car worth? I just took it. I looked that up on Kelly Blue Book, and they said it's worth about$13 ,000 to$15 ,000. It's like they have that fair price, poor price. Is that the private party value or trade-in? That would be the private party value. Okay. And is that with the repair needed, or is that saying, hey, if we got the repair done, it's worth$13 ,000?

1:48:48Oh, no, that didn't include the repair. That's just it by itself. Like if it was right now, because it's a 2021. Dang. Well, hold on. Hey, before you do anything, go to a local mechanic that you trust that's not the dealer. I don't trust them. Okay. Yeah, they were kind of bullcrapping us. You go to a local mechanic. If it's a transmission on a Toyota and it's a 21, my guess is it's covered somewhere in the powertrain warranty. Right. So I'm not sure because her grandparents bought her the car. There was a whole situation with her mom. That doesn't matter. That doesn't matter. Okay. Like, go to a local mechanic and get the skinny on it, okay?

1:49:29And maybe a third mechanic to get another opinion. Because then they look at it and say, yeah, this happens all the time with this car, or, yeah, this is under warranty, or, dude, you don't have a problem at all. All these cars do this. Have you checked to see if they warranty the transmission because it's newer? They didn't say—they didn't—I asked them a ton of questions when I was there at the dealership. And they didn't give me like a straight up answer. I was just asking, I was like, is there a warranty on this? And they didn't. They were just like beating around the bush with me talking about how I need to get a new transmission.

1:50:01I would do your own homework on that and figure it out. Because here's the truth. If it's going to take$13 ,000 to repair and the car's only worth$13 ,000, I wouldn't do this. I would sell it for what it's worth, save up some money, and then get a different car. Now, what's your truck worth? My truck, I took it in yesterday while her car was getting worked on. and they said the appraisal value for selling it outright is$19 ,000, and to trade it in is$22 ,000 to$25 ,000. How is it possible the trade-in is higher than what it's worth? That's because they're giving you a cash number. Don't do this kind of business with dealerships.

1:50:38Don't ask the dealership what your car is worth. They'll lie through their teeth. Go private sale. Yeah, go to the Kelly Blue book, back to where you were. What is the private party value for that truck? Because that'll tell you the exact difference you're underwater. You owe$36. If the truck is worth, let's say,$25, well, now we know. We have a number. We're$11 ,000 underwater. That's the gap. Hold on. What did they tell you the trade-in was? They told me the trade-in was$22 ,000 to$25 ,000, and then selling it was$19 ,000. Okay. That means you can probably get$27 ,000 to$30 ,000 private value.

1:51:08So you might be$6 ,000 underwater. So how quickly could you guys save up the difference in order to sell it and have a little bit more to get you a different car? Right. Right. And could you share a car for a few months? Or go down to Fairwinds Credit Union, get a$10 ,000 loan, pay this thing the difference off, sell this thing private party, use a couple of grand to get yourself a car that's going to get you from A to B, and pay that loan off. And you've just taken a$36 ,000 problem down to$10 ,000. Right. Yeah. Do you guys have any other debts? I do. I have—it's a few small debts. It's from Synchrony Bank.

1:51:52It's like a$1 ,000 debt and a$2 ,000 debt. And then I have one of my credit cards got shut down, and it was really my work's fault. So I filed a complaint with Capital One, which is who I have the car loan and the credit card through. So what's your total debt balance between the two of you? She has zero debt. I have, I would say, probably close to$40 ,000, including the car and those few things with the synchrony bank and my credit card. Okay. So the good news is if we clear this truck, you guys can be debt-free within 30 to 60 days. Right. So that's the new goal. Now, the thing is we've got to save up the money to cover the difference, or like John said, go to your local credit union and get the difference in a loan so that we can reduce$36 ,000 down to$10 ,000.

1:52:42so that's the game so you have two pieces of homework we got to work on your wife's car figure out what it's really going to cost from a few mechanics and then we need to either save up for the repair cost if it's going to be worth it or we need to just sell it for what we can get for it and get a different car yes sir so you you got plenty of work to do man and it's very doable i feel very hopeful about your situation but it sucks and i'm glad you're learning this lesson at 22 instead of 42, that car loans, here's the best news. When you pay cash for a car, you can never be underwater. And so never go into car loan debt again.

1:53:18Never lease a car, never go to a dealership and let them convince you into a payment. You will go in there with a check. And John has done this. When he goes in, he's got a check for a certain amount. And he goes, this is how much I have. If you guys want to do business, I'm here. If not, I'll peace out. and I've had them say hey appreciate you we shake hands and I walk out and I had somebody take nine thousand dollars off of a car price because I had a check and I said hey this is what me and my wife agreed on before I left the house and I'm not going to call her and switch the deal up on me this is a big check I would like that car let me go talk to my manager come back let me go talk to my manager they play the games and they said just take this car and get out of here and i was like cool right right but it here's the deal i wasn't tied to the car it wasn't like this is my dream like it's just it's a car man it's awesome it's nice i love it but it's not my identity it's not my end-all be-all and if that one didn't work out i was gonna find another one that's cool yeah that's what i think my wife's situation her car is it's it's got 80 000 miles on it and toyota they can go for a pretty long time and but her grandparents bought it for us.

1:54:25So I guess she's a little emotionally tied to it. But she's also understanding that the more practical aspect is I'm willing to pay the price, you know, maybe sometime down the road, then, you know, if they wanted to help us on another car or whatever. But she's just, I guess, emotionally attached to it because I have no idea, to be honest with you. Well, it doesn't sound like it's smart to sell it until you know your situation. Right. And if you can fix it for three grand, great, let's fix it. right yeah because they told me like i looked it up and it said that there was a it could be a wheel bearing or it could be the transmission and then they go in there they give me the highest bid possible which i i kind of expected them to give me the most expensive well here's the thing dealerships make money two ways financing and the service they don't make money when you walk in with a check and buy a car right and so they have a vested interest in getting you to do all of their service.

1:55:20That's why you get a million emails every day. Like you didn't do this or you need to do this or come see us. It's time to come in. Time for your checkup. And so take it to a local mechanic. And by the way, when you go to the local mechanic, look him in the eye or her in the eye and say, I'm coming here because you're somebody has a reputation that is trustworthy. I got this information from a dealer and I want you to check their work because I trust you. And let that be their guide. Really quick question. What do you recommend? And how would I private sell? What's the best way to private sell?

1:55:52You list it on Facebook Marketplace. You pay a little bit, put it on AutoTrader, take really nice photos. I actually did a video on this on my YouTube channel. Just search how to sell car for top dollar camel. It'll pop right up. We'll also put it in the show notes. And remember, don't let cars be more than half your annual income. Total, all things with wheels and motors. You do that, you're going to build some serious wealth.

1:56:27When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan, and that begins with our Get Started assessment. Go to RamseySolutions.com slash start, answer some questions, and we'll show you what steps to take next. Don't stay stuck. Take control of your money starting today. Go with RamseySolutions.com slash start.

1:57:10Our scripture of the day, Hebrews 12, 14. Make every effort to live in peace with everyone and to be holy. Without holiness, no one will see the Lord. Jordan Peterson said, face the demands of life voluntarily. respond to a challenge instead of bracing for catastrophe oh that's good i think most of us are bracing for catastrophe these days we're just tightened up just waiting for life to happen to us instead of responding to the challenge and being a little more proactive that's good maria is in san jose what's going on maria uh hi there john and george it's a pleasure speaking with you today.

1:57:50You too. I have a question. Should I continue paying off my house with the same intensity if I want to retire in the next five to 10 years? If I was paying off the debt, I'm completely debt free aside from the house now. Cool. Are you single, married? I am married, but I am the sole breadwinner. Okay. So at the rate that you're currently paying down the mortgage, how quickly will it be paid off? Well, the way that I've calculated, it would be three and a half years. Wow. And this is like with serious intensity. Is this like overtime, no vacations, we're not living or what? No, I do take vacations maybe twice a year.

1:58:36Okay. And I worked a lot of work. Okay. Well, that just helps me because I go gazelle intensity is rice and beans. We're not eating out, no vacations. We say move from intensity to intentionality once you hit baby step six. So as long as you have a happy life, you're going on vacation, you're enjoying your money, you're giving money, you're investing 15%, it's up to you how fast you go. Now, John and I, we're crazy people. We're like you. We're like, let's get rid of this debt as fast as possible. Yeah. So I went pretty scorched earth and I'll tell you three and a half years is right at the outer limit for how long your body can take.

1:59:16What does your husband think? Well, currently he is not here with me. That's why I'm kind of wanting to get this done over with so I can retire and go out of state with him. Well, out of the country because he's not here. Oh, literally not here. You guys don't live near each other right now. Correct. My vacations are to go see him. Wow. Okay, so So let me throw a complete wrench in this deal. Why not sell your house and just move there to be with him? Because my whole family is here. Ah, okay. Fair. Fair. Wow. Okay. So how old are you now? I'm 45. And when do you want to retire? At the latest, I would say 55.

2:00:03And you're able to do that as far as actual nest egg, retirement accounts, all of that? um well currently i do have about 50k in my high yield savings 40k in my high yield savings i have total retirement accounts and brokerage like hsa and ross i have 256 i believe and i also have a pension plan with my current employer okay and you're saying between all of that and me investing for the next decade, I should be able to make this whole plan work. And not having a house payment. Yeah, and then you can invest a portion of whatever that house payment was. I mean, there's nothing wrong with that plan.

2:00:48The only encouragement I would give you is to retire to something instead of from something. Right now it feels like you're running. And it's a great goal because you want to be closer to your husband. But I wouldn't also work a job that I hate and toil over it for the next decade or whatever. do you enjoy what you do i do okay i just so that's another thing it's like when i retire i don't know if i'll be able to not do anything no don't do you're too valuable to the world we want we need you we need you out there what likely will happen you'll take them on the vacation and then be bored and be like i need to do something with some meaning and purpose i'm gonna go start an encore career or your own business or consult or something or go down to a half time with your current employer, retire and have them bring you on as a 1099.

2:01:33Like there's a million different things and who knows what the world will look like in five years or 10 years or whatever. But I personally, George, tell me if I'm wrong. I love Maria not having a house note in three years. I'm a big fan of that. I love it. We, we paid ours in like 26 months and now it was a very modest town home. We had a huge down payment. So it wasn't like, I mean, we, we went hard, but we were young, no kids. And we went, huh, what's stopping us? We were aligned on the goal, and I look back with no regrets. So I don't think you will either. We were just kind of gut-checking to make sure that you weren't going to burn out and fizzle out because your life was unsustainable.

2:02:12Okay. Do you think with my numbers and what I have so far in retirement that that would be sustainable for me to be able to do that? I wouldn't be able to tell you on a radio call. I would sit down with a SmartVestor Pro, and you can lay out all the numbers and what your current investment rate is, and they have the most high-tech software where they can plug it all in and show you exactly what will be true and what kind of life you can live and when. And so jump on RamseySolutions.com, click on SmartVestor Pro and lay it out with a pro. And you can use our investment calculator and ballpark some of this, but there's so many variables that you forget about, like healthcare.

2:02:49Well, that's going to cost a pretty penny when it's not through your employer, especially before you can access Medicare at 65. So that's a whole nother wrench in the plan. That's going to be$36 ,000 a year we got to cover for healthcare as one example. And then what kind of lifestyle do you want to have in retirement? Are you going to live real simple or do you want to go crazy? And they found what happens in retirement is it's kind of a smile shape. And so at first, your spending actually goes up. It's a little dimple there. And then what happens is over time, your spending actually goes down.

2:03:18As you kind of settle in, you travel less, less vacations, less excitement. And then as you near the end of your life, the expenses ramp back up as you enter healthcare, long-term care costs, and all of that. And so it's not a straight line where you go, well, can I live off$5 ,000 a year for the rest of my life? I wish it were that simple, but life is more complicated. And that's where a pro can really help you unpack all of those variables. Thank you so much for the call. It's exciting. To be debt-free in California before you're 50, that's a miracle. JR is in Atlanta. JR, how can we help you?

2:03:56that's a sad ending jr are you here yes i'm here there we go okay get right to your question we're up against the clock yeah so uh i'm 24 i'm going through college and i'm trying to earn a degree that'll make me the most amount of money in the quickest time frame i don't enjoy the field i'm currently in but my goal is to chase money and then figure out what i want to do after is this the right mentality Yikes No, it's backwards Okay, so... Now, here's the thing. We don't need to conflate the two. I think you can hustle and work really hard at something you love, and that is the recipe. Because you'll never get bored of that.

2:04:39So I would not do something I hate and get a degree just because I think it will pay well. You meet a lot of those people. They're not happy. Miserable billionaires. And they never go, well, at least now I can do whatever I want. I've never met someone who said that. Okay, so here's my counter to that, right? Like, so my counter to that is, is that, you know, let's say, let's have a passion in, you know, art creation. I like to paint or whatever, right? You know, you know, to be honest, you know, that's not starting the most, you know, paying field. So, so my mentality and honestly, my advice that I give most other people is that, you know, screw, you know, what you enjoy per se, if it's not making money and just, you know, go to school for something that's paying.

2:05:22Like, for example, I'm about to get my degree in December for software engineering. Right now, I'm a software engineer team lead. And, you know, I don't per se enjoy the job, but, you know, in terms of financial, like, I'm happy. So I'm going to use the money later on, you know, to then fund, you know, whatever I enjoy. My pushback would just be this, simply this. A, you're right. There's a reality. And I tell everybody in their 20s, just be quiet and grind it. Go grind it, right? But grind it towards the person you want to become. And so there is a big difference between I just want to be a painter and I don't make any money.

2:06:06And I'm a person who's creative. I help create beauty in the world. I help people create homes. I'm an architect. I don't love, like architect isn't my first love, but it allows me to be creative. And when I get home, I get my easel out and I paint. you know what I'm saying there's a big difference it like work really hard grinding it out of course that's part of it I'm glad you have that ethos but become the person you want to become because man I know a lot of miserable lonely wealthy people and I wouldn't trade places with them for anything I'd reverse it if I were you man 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

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