When You Feel Overwhelmed, Control the Controllables

13:12Dave Ramsey:I have no credit cards, um, no other debt besides those three items.

13:17Rachel Cruze:My current plan is to pay off the home equity line first, just because that's where most of my money has been going, being more interest. The second attack was the car payment, and the last was the mortgage. And the current plan I have set up, everything should be paid off. By the time I'm, I think it's 37, I'm currently 28 years old. and going back to the income, say the$80 ,000 of current income, of guaranteed income, I also bring home another$20 ,000 or so in bonuses.

13:53Dave Ramsey:Okay, so you're making$100 ,000 and you've got$25 ,000 in debt plus your mortgage. Yes.

14:00Rachel Cruze:Yeah, well, I would flip the HELOC mark in the car. I'd pay the car off first. And if I were you, I mean, I would be aggressive. I would do this. I would look at the consumer debt first and not the mortgage. So I would separate it out. I would look at that$9 ,000 and see how fast we can get that car paid off. And the HELOC would be next. And then from there, there's probably some other financial goals you may want to hit before even getting to that mortgage. But that's what I would do. And I think you could do that. I think you'll do it faster than nine years, personally, Mark. I think I think you'll be able to attack this stuff quick.

14:39Rachel Cruze:But especially the car, I would go ahead and get that out. Because how much is your payment per month on the car?

14:44Dave Ramsey:The car payment is$460,$465 a month. See, what you should, at a minimum, you ought to be done in a year. That's$2 ,000 a month, not counting the house. Correct. $2 ,000 a month you're done. And so that tells us with$460 plus$2 ,000 a month on the car, that's$2 ,500 on$9 ,000. and that tells us in three months and some change, the car's gone. And then we knock the other out in the next nine months. And so when you do it that quickly, Mark, the interest rate on either one of these things doesn't matter because you're not going to have it very long. Yes, sir. So we always tell you to pay what Rachel's doing the smallest off first.

15:26Dave Ramsey:If you're 100 % debt-free other than your house in one year, you've not done anything dumb either way. But I think you'll have better results, and we've proven it by paying off the smallest first. And we teach a thing called the baby steps. And in baby step two, you pay off your debts, smallest to largest, paying minimum payments on everything but the little one and attack the little one with a vengeance and then move on up. And then, yeah, I think your house will be paid off that quick because you've got a very modest mortgage, been very wise in that regard, and you make really good money. So congratulations.

16:01Dave Ramsey:Hey, I'm going to send you a copy of the book, The Total Money Makeover. It gives you all the details on the baby steps, exactly why, when, and how to work them. And, dude, work them in exactly that order. It's proven to build millionaires. It absolutely works. Melissa's in North Carolina. Hi, Melissa. How are you?

16:20Rachel Cruze:Hey, I'm all right. How about you?

16:22Dave Ramsey:Better than I deserve. How can I help?

16:25Rachel Cruze:I guess my main question is, can you ever graduate from baby step number four? and to go into that, my spouse is military. And so we have never bought a house because we didn't want to trap ourselves into having a mortgage and also a rent or a second mortgage. So we were mainly just really aggressive with retirement. And then also we had a child about two years ago and we were aggressive with a 529 plan. So we feel pretty good about where that's at. And so when my spouse retires next year, should we really scale down on the retirement savings? So right now we've got about$225K in all the different retirement accounts, mainly TSP.

17:16Rachel Cruze:Way to go, Melissa. Way to go. It feels pretty good, doesn't it? Started early. And tell your husband thanks for his service.

17:25Dave Ramsey:So I would just use a different phrasing than graduate. So you may have heard us talk about when you finish baby step three, you've got three to six months of expenses saved and you are out of debt except your home. If you don't have a home, that's the point that people will start saving for a down payment on a home. Typically, you're not in that situation. And we call that baby step three B. And when they're doing the save for the down payment thing in 3B, some people put money into their baby step four and some don't. OK, while they're saving for a down payment. And so what's happened is, is you didn't buy a house as a strategic move yet.

18:05Dave Ramsey:And that was a wise move. I agree with your strategy. Now, when he gets out of the military, you are going to buy a house. And so really what that's going to do is it's going to put you back to baby step 3B. and you might temporarily put retirement and kids college on hold but not because you graduated but because you're you're kind of going shifting a different you're stopping to get your down payment did you say he's retiring melissa next year yes so he'll have a pension so that's another

18:34Rachel Cruze:reason why when i do the calculations often the numbers of the way 225 will you know increase you know, in theory, over the next 30 years, because we're 36. So, yeah, so that's why I wondered.

18:49Dave Ramsey:No, you never stop saving permanently. Okay. So, no, I disagree with, we got a good military pension and 225 is enough. No, I would always be doing three things with money once I'm out of debt. I would always be having fun with it, investing it, and being generous you never graduate from those three things okay got it so your savings scale back

19:16Rachel Cruze:we can scale back the 15 or stop it or stop it while you save a down payment yep okay and if you and hey you're two years out you could stop it now oh okay and save you know save like crazy right now for a down payment has he got his new career picked out uh not yet um he also has you no education benefits. I know, but he needs to get it picked out.

19:41Dave Ramsey:Two years is going to be here in about 20 seconds.

19:44Rachel Cruze:Oh, absolutely. But career-wise, yes, he wants to work with computers and, like, network security. Oh, that's great. That's great.

19:54Dave Ramsey:Yeah, phenomenal. Okay, yeah, so move on from the military.

19:57Rachel Cruze:And that's an exciting step. When you do retire from that, you guys get to be settled in at a city. You get to buy a home. You get to plant roots. I mean, yeah, it's a fun next season for you guys, the next chapter.

20:07Dave Ramsey:And you've earned it, serving your country for 20 years. Thank you.

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22:13Dave Ramsey:Mary is with us in Virginia. Hi, Mary. How are you?

22:16Rachel Cruze:I'm good. How are you?

22:18Dave Ramsey:Better than I deserve. How can we help?

22:20Rachel Cruze:Thanks for taking my call. So if I'm calling, trying to get your advice on what we should do, my husband and I, with a large sum of money that we're going to be getting over the next five years or so. Send it to Dave's Bahama Fund.

22:39Dave Ramsey:Dave's Virgin Island Fund. So what's a large sum? How much?

22:44Rachel Cruze:We should be getting after taxes about half a million.

22:47Dave Ramsey:You're selling a business?

22:49Rachel Cruze:Correct. Way to go! That's awesome! Thank you.

22:53Dave Ramsey:How fun! How long have you run the business?

22:55Rachel Cruze:Yeah, we're excited. Well, so actually it's a family business that I just have share in. and we've decided to move on as a family. Wow. So that's my share. How many generations? Three.

23:08Dave Ramsey:And what kind of business? Just curious.

23:12Rachel Cruze:It's a hospitality. It's actually like a restaurant and a gift shop, but it's still going to be with my family. It's just being sold is kind of complicated.

23:19Dave Ramsey:One family member is buying out the rest? Pretty much, more or less. Okay. Wow. Well, that's cool. I'm sorry. I love family business stories, and I study it, and I coach a lot of family businesses. our team does through Entree Leadership, so I was just curious about the details. Well, wonderful. Half a million bucks, and you want to know what to do with it.

23:37Rachel Cruze:Right. We have a little bit of a not-so-straightforward future. The next five years, my husband is actually leaving the military, and he's going back to school. He wants to be a doctor. He's wanted that for a long time. I'm a physical therapist, and I'm working part-time and also taking care of our kids. So we're just trying to figure out the wisest way to spend this money without as much financial security.

24:00Dave Ramsey:He wants to be an MD. For the next five years.

24:02Rachel Cruze:Correct.

24:03Dave Ramsey:And how much is the military going to pay for that? How much of that are they going to pay?

24:06Rachel Cruze:The military is free. We will pay nothing.

24:09Dave Ramsey:All the way through med school?

24:11Rachel Cruze:All the way through. Wow. That's amazing.

24:13Dave Ramsey:Well, thank you for your service. That's awesome. Okay, so you don't need that, but you may need money to eat with while he's not working and going through that.

24:23Rachel Cruze:Right. And we have, so our monthly expenses are about$6 ,000. And based on his different payouts from the military, we have about$4 ,000 coming in every month, whether I work or not. So we have about$2 ,000 deficit a month.

24:38Dave Ramsey:And then on top of that, we have$125 ,000 in cash, like high-yield savings, and then$180 ,000 in liquid investments, like the stock market, and then$350 ,000 in retirement. Do you have any debt?

24:50Rachel Cruze:Good job. No debt, no.

24:52Dave Ramsey:Even on the house?

24:54Rachel Cruze:no we do oh sorry we do owe about 230 on our mortgage okay it's worth about 450 we may or may not be moving depending on he's actually applying to med schools now so we're not sure exactly where we'll be we're hoping to stay in the area okay do you want to continue working mary part-time is that something that you enjoy or would you step back from that even you know i do enjoy it and i want to keep my skills up um i'm a physical therapist by trade And so I don't know that I want to be responsible for the whole load of, you know, I want to have a backstop should I not want to work or would we like to have more kids and things like that.

25:33Rachel Cruze:Sure, absolutely.

25:34Dave Ramsey:Okay, so you have a mortgage balance of what again?

25:38Rachel Cruze:230. 230.

25:40Dave Ramsey:Okay, and you have 300 in liquid and in high yield, and you're getting another 500, so you've got 800 to work with, right? Right. Okay.

25:49Rachel Cruze:Yeah, well, it's just the only thing is with the payouts, it depends on how they decide to pay them out. It's going to be over the next five years. We just don't know if it's going to be one large lump sum up front or slow leaks over, you know, five years. So it could be$100 each year or something. Correct. Gotcha.

26:03Dave Ramsey:Okay. It's going to be more than$2 ,000 a month, though.

26:07Rachel Cruze:Right, for sure.

26:08Dave Ramsey:All right. So, well, as soon as you know if you're staying in the area, if you are, pay off the house that day, whether you've got this money or not because you've got enough money in the bank now to do that and you should have already done that yeah and we thought about it we just with our future is so uncertain well as soon as you as soon as you know as soon as you know when he's going to med school then you know if you're going to stay in that house right that's going to be in what the next year right right okay then pay off the house if you're staying okay okay now now your expenses just went down.

26:40Dave Ramsey:Hello. Right. Yeah. Yeah. Okay. And then we're going to take the rest of it from the sale of the restaurant and the portion that we also didn't use because you have 300, you only need 230 to pay off the house. And by the time you get to it, you probably only need 210 to pay off the house. So we're going to put the rest of it with get with a smart investor pro someone that's the we endorse. We don't do investments. But if I were in your shoes, I would put this in good growth stock mutual funds. I would look for some low turnover funds, which that means they don't sell the stocks inside them very often.

27:13Dave Ramsey:They're fairly conservative funds. They're not very exciting, but you also don't have a lot of taxes on them. And, you know, if they earned 10 % and you had$600 ,000 to work with, that'd be$60 ,000 a year, that'd be$5 ,000 a month. You're not going to have all of that initially, but eventually that's where you'll get to.

27:34Rachel Cruze:And so you would recommend the stock market even if we're not – like if we do need to take some of that out.

27:38Dave Ramsey:Why would you need to take some of it out?

27:41Rachel Cruze:Well, just for monthly expenses if I'm not working. No, no, no, no, no, no, no, no, no, no, no.

27:46Dave Ramsey:We just covered monthly expenses. I want you to begin taking out the income off of it. If you invest$600 and it makes$60 a year, they'll send you a check for$5 ,000 a month out of that.

27:59Rachel Cruze:Right. Now I understand. Thank you.

28:01Dave Ramsey:Okay. And we're not going to touch it. But we're going to leave the goose that's laying the golden eggs alone.

28:09Rachel Cruze:Yeah, the initial investment.

28:10Dave Ramsey:That's the portion that goes in there. And so, yeah, the day you know where if you're going to stay in town or not, you pay off the house. If you move, buy a house of equal dollar amount as you have now or less and do the same plan. Okay. Don't use moving as an excuse to move up in house while he's in med school. Yeah, no. You can move again after he gets out of med school. Right. And you might very well move again after he gets out of med school anyway.

28:42Rachel Cruze:And more depending upon his income versus this.

28:44Dave Ramsey:Yeah, well, based on his income, but you also might move cities after you leave med school.

28:48Rachel Cruze:Oh, yeah.

28:48Dave Ramsey:You might get a great offer with a great hospital in a city you'd rather live in than where the med school is.

28:52Rachel Cruze:How long will that take, Mary? Do you know the program that he wants to do and everything? Is it five, six years? It really depends. No, so med school is like the next five more years, essentially. And then he's got three years at least after that of residency. So the pay there is less than six figures typically. Yeah. But again, you guys have done enough for us to live on with the other incomes that we have. You've done such a wonderful job.

29:17Dave Ramsey:If you use this nest egg you called about, plus your normal operating procedure, which you guys are very careful and you're very good planners, you've done an excellent job. If you do all of that, this is very, very doable with no debt at all. and living completely debt-free the entire time, and your wealth will continue to grow, and then when he comes out of residency, it's going to go zoom-zoom.

29:41Rachel Cruze:Okay. And Dave, you just said a Mazda zoom-zoom. I know you're a car guy. If I do need a new car with a growing family, would you support using some of this money to buy? Yeah, we just want to be real careful,

29:54Dave Ramsey:because if we take the leg off the goose, and then we take another leg off the goose, pretty soon your goose is cooked. life yeah so don't be messing don't be messing with that principle okay but yes bad thing but

30:07Rachel Cruze:get a car yeah get a update yeah i mean you're making listen you told me you need two thousand dollars a month we just gave you five thousand dollars a month so save up and buy a car i mean

30:16Dave Ramsey:you got plenty of money coming in off of this but no i would not support using the goose leave the

30:21Rachel Cruze:principle alone you wouldn't use any of the half a million dollars to get a car you don't need to

30:26Dave Ramsey:You got the money. Crap. Right now they got the money. Yeah, that's true. If they have 300K in the bank in these two accounts and they pay off 230, they got 90. What kind of cars does this woman need? Yes. Okay.

30:37Rachel Cruze:Maybe a$90 Suburban. We don't know.

30:39Dave Ramsey:Well, maybe not. Maybe not. Your husband's in med school. Maybe not. Maybe we're driving a cheaper Suburban. I know. An older one.

30:47Rachel Cruze:Or a minivan.

30:48Dave Ramsey:There we go. Yeah. Yeah. Yeah. That's important. It's great. But yeah. Yeah. I don't be.

30:53Rachel Cruze:No, I hear you. It's good.

30:56Dave Ramsey:develop a game plan and then work the system and then don't get all antsy and jump the system. That's the whole issue here. You guys have been doing a really good job of that. I'll say it again. I don't think you're going to mess this up. But I know I've got about 35 other million people listening who might mess it up. So we just kind of want to make sure that while we're talking to Mary,

31:19Rachel Cruze:we know there's people eavesdropping.

31:20Dave Ramsey:There we go.

31:27Thank you.

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33:05Rachel Cruze:Equal housing lender.

33:23Dave Ramsey:If you're tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free every dollar trainings, new trainings every week this month. And they're all hosted by one of the Ramsey personalities, either Rachel or Jade or George. We're going to show you how to stick to a budget, find thousands of dollars of margin using every dollar. Since I started doing this with a yellow pad, long before there was a sophisticated piece of software to show you exactly an app, to show you exactly how to work our system, including the budget, just doing a budget, I've always heard people when I sit down with them doing coaching one-on-one, they would say, Dave, I feel like I just got a raise.

34:04Dave Ramsey:When you make your money behave and be efficient, you always have that feeling. So you're going to find thousands of dollars over the margin when George or Rachel or Jade walk you through this. And you can ask questions during the live Q &A, and you're going to learn how to get out of debt. Why? So you can become wealthy, because your most powerful wealth-building tool is your income. Sign up for free at RamseySolutions.com slash webinar. Jim is in Texas. Hey, Jim, how are you? Good. Thank you for taking my call. Sure. What's up?

34:31Rachel Cruze:I need some advice on how I can break it to my wife that we are broke and that we are$500 ,000 in debt.

34:43Dave Ramsey:Well, why does she not know this?

34:46Rachel Cruze:I take care of all of our finances.

34:50Dave Ramsey:She has a credit card that she swipes and doesn't have to worry about anything. Yes, she should.

34:56Rachel Cruze:It's just something that I've taken advantage of and gotten us even deeper with not including her in this spending ordeal.

35:07Dave Ramsey:How long have y 'all been married? We've been together since we were 16. I'm 26 and she is 25. You got married when you were 16? 10 years. No, we've been dating since 16 and we got married in 2022. She'd been married three years. Yes. You ran up a half a million dollars in debt in three years? Yes. What the crap did you buy? Well, I went from an income of$25 ,000 in 2022 to an income of$150 ,000 in 2023. And then year to date for 25, I'm at$195 ,000 just myself. Yeah, that doesn't explain how you went a half a million dollars in debt. Your income went up.

35:53Rachel Cruze:Is it your house too, Jim? Does that include your house?

35:56Dave Ramsey:It does. How much do you owe on your home? $330 ,000. Okay, she knows that. Yes. Okay, and what is the other$170 ,000 in debt? We have two vehicle loans, and the majority of the other debt is credit cards. Okay, so the two vehicle loans amount to what? My vehicle is$50 ,000, and hers is$35 ,000. Okay, and she's aware of those. She is. Okay. Which those are just reoccurring payments. I know, I know. But she's not like she, the way you describe this, you're like there's a half million dollars in debt my wife doesn't know about. Yes, she does.

36:37Rachel Cruze:It's about$80 ,000 of credit card debt that she may not understand is floating out there.

36:41Dave Ramsey:But she's been running her credit card around like she's in Congress, so she probably has a clue about that, too.

36:47Rachel Cruze:She may not think it's$80 ,000. She may think$15 ,000 to$20 ,000.

36:50Dave Ramsey:Okay, so you guys are, you said 26 years old? yes okay so let's re let's reframe this a little bit then okay uh what you're really asking is how do i get my wife to get on a plan because our current plan sucks correct okay not how do i tell her about a half million dollars in debt she doesn't know because that's not true she does know about it yeah all right so what i would do is say this say hon i gave this a shot i'm a new husband I didn't know what I was doing, but I am getting very afraid with our current trajectory that even though we make a lot of money, that we're going to be broke. And we are really broke right now making$190 ,000 a year.

37:34Dave Ramsey:We have car payments. We have house payments. We have credit cards that are out of control. And you and I are going to have to work together to get on a different system than the one we've been using. because the one we've been using, which is me just letting you do anything you want to do and me not telling anybody anything, those are two really bad ideas, and we're going to stop doing that.

37:54Rachel Cruze:Yeah, I'm waving the white flag, and I'm not doing this anymore. I can't, and I'm sorry I haven't told you about the credit card. Like, this is everything.

38:02Dave Ramsey:I don't think you were deceiving someone. I think you're concerned that you've never told her no, and now you get the opportunity for her to be an adult and tell herself no. Correct, yes.

38:14Rachel Cruze:How do you think that's going to go?

38:18Dave Ramsey:She's easy going. I think it'll go okay. It's just handing the ball over to someone else. No, we're not handing the ball over to somebody else. The two of you are going to sit down together like two grownups instead of daddy and daughter. Okay. You're like a daddy spoiling his only daughter. Instead, you're going to say, honey, we're going to sit down like two adults now, And here's how much money is coming in. And here's what we owe on the house. And here's what we have to pay on these stupid cars. And we make$190 ,000 a year and we're broke because we're out of control. We don't have a system.

38:56Dave Ramsey:And we buy everything in sight. So we together need to figure out how we, as two grownups, are going to exist on freaking $200 ,000 a year at 26 years old. Wah! Well, that's just my income.

39:10Rachel Cruze:What does she make? That's not including hers. What does she make?

39:12Dave Ramsey:$55 ,000 a year. Well, then let's try it again. $245 ,000 a year. We make a quarter of a million dollars a year, and we are broke. So because our system sucks so bad. So what would you recommend when we start on xing out some of this debt? I recommend that the two of you sit down and have a come-to-Jesus meeting tonight and say, here's what our total income is per month. Here's what we have to spend on the house. Here's what we have to spend on these cars. we have this much in credit card debt and we have to buy some food and lights let's figure this out and all of a sudden you guys are going to go holy crap we're out of control both of you are going to have that moment you've already had the moment you're just trying to figure out how to navigate the fact that you're not doing it by yourself anymore dude that was a bad idea to start with and we're stopping that right now because we get two benefits one is you get another brain involved to help you uh the other thing the benefits you get is you don't have to carry all the stress by yourself yeah oh and the other benefit is she suddenly is as a grown-up is going to buy into a future plan a plan that takes us to a solid future versus i just do whatever i want to do

40:19Rachel Cruze:yeah and the good thing is jim you guys are going to see as you start mapping this out it's going to be yeah it's going to be fast i mean like after taxes okay after taxes and you guys say you lived on 90 000 you know that frees up it's like oh my gosh i mean you get free in a year Yeah,$110 ,000 to put towards this debt. You could be complete.

40:38Dave Ramsey:I also haven't filed for 2024. What?

40:41Rachel Cruze:What'd you say?

40:42Dave Ramsey:Okay, put that on the list. I also haven't filed my taxes for 2024. Okay, well, what do you owe there?

40:47Rachel Cruze:What will the tax bill be? I just spoke with a tax lady today. I paid$25 ,000 in 2023. So I'm reckoning.

40:58Dave Ramsey:You've not set any money aside for your taxes? Are you$10.99 or something? I am$10.99. Okay, and you've not done any quarterly estimates? I have not. Your tax lady sucks. How in the world are you making that kind of money and not doing quarterly estimates? What? She did, and I moved on to another tax lady. Oh, she wanted to do quarterly estimates? No, she didn't give me any advice, know where to go. Just kind of send me what your income is, and I'll tell you what you owe. Okay, yeah, go to RamseySolutions.com and you can find one of the endorsed local providers for taxes. The Ramsey trusted people to help.

41:36Dave Ramsey:You need to be doing quarterly estimates. But now you've got another$25 ,000 or$40 ,000 or whatever it is. It's on this list of things you've got to address. But, dude, you've got to start at the top.

41:44Rachel Cruze:And that still leads you seven. Yeah, yeah. You guys can start knocking this out, Jim. So what I would do is sit down tonight. You guys need to list out all of your debt. I would include the IRS bill in that, and that will be first. Then list out every credit card and what you guys owe on it. Cut them up. both car loans cut them up be done with it and you start working your way the smallest debt first well the irs is going to be paid so get that but this is not you telling your wife what to do no this is you saying honey join me in being a grown-up and living on less than we make and that you're not going to do this by yourself anymore jim and tell her that that every month we're going to sit down and relook at this plan i need some help i need to do this together yeah

42:26Dave Ramsey:Yeah. This is our future together, and we don't have one right now because the way we've been doing this is straight up stupid. And it's got to stop. And that's okay. Just wave the white flag like Rachel said. And you guys are young. I surrender. You've got plenty of time. If you change this, yes. Oh, my gosh. You make a lot of money.

42:42Rachel Cruze:You guys could be multimillionaires if you start this. Yes.

42:46Dave Ramsey:If you get in control of this and just, you know, quit kicking the can down the road.

43:10Hey, you guys.

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44:45Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Rachel Cruz, Ramsey personality, number one best-selling author, and my daughter is my co-host today. Open phones at 888-825-5225. Cheryl is with us in Atlanta. Hey, Cheryl, how are you?

45:05Rachel Cruze:I'm doing okay.

45:06Dave Ramsey:Good. How can I help?

45:09Rachel Cruze:Okay. I have cleaning service in Atlanta. I make about$13 ,000 a month. I started the Dave Ramsey plan and paid off over half my debt in the past six months. However, the first two years when I started my business, I thought I had won the lottery with all the extra money. And then I got in some bad behaviors with spending. So I incurred about like$45 ,000 in debt. But I'm down to$20 ,000. I've been crushing it this year. I got the every dollar and I've been budgeting. We don't eat out. We eat cheap. um i've cut spending um way to go yeah thanks um but so i have not been saving for my taxes so this year instead of writing off so many expenses i want to claim more because i would like a house one day uh but i have not saved up for maybe 16 000 in taxes so how can i save this up and still pay my operating costs as well as my own bills i want to catch this before april

46:13Dave Ramsey:Good. You're getting ahead of it a little bit. Okay, so your taxes for last year are paid, but not for 24.

46:21Rachel Cruze:Yeah, I've been writing off. I wrote the income was like 156, and the tax person got it down to like maybe on paper 14 ,000. So I tried to get a loan for a house, and they said no. Wait a minute, honey.

46:33Dave Ramsey:Stop, stop, stop. You are under the illusion that there are mysterious ghost columns that are not actual expenses that can be written off. those don't exist if you only made 14 000 for tax purposes that means you only made 14 000 yeah like writing off like no honey that means you won't make a freaking profit your business is barely open okay those are actual expenses that you write off there's no other thing except depreciation schedules and you don't have any of those in a business your size so you're really not making any money you've gotten confused okay let's stop a second let's just have a basic business primer here for a second all right business works like this gross revenues are the total intake that you bring in from the customer your total revenue correct that is apparently about 13 000 a month does that sound right yes okay then you have the business expenses that it takes to actually operate the business in order to make the 13 ,000 come in the door.

47:39Dave Ramsey:Those expenses are called expenses. They're subtracted from the 13 ,000. What is left is called profit. That is taxable. Yeah. Period. Okay.

47:55Rachel Cruze:Yes, sir. I was just going off of like the last year. This year I've been doing my own P &Ls and I'm much more, I was having other people do it because. So wait a minute, if you're doing your own P &Ls, you shouldn't be

48:09Dave Ramsey:getting a different answer. Yeah, right. P &L is a P &L.

48:14Rachel Cruze:Yeah, this year has been more, I started painting as well as cleaning, so the price point has gone up.

48:20Dave Ramsey:Okay, so you've had more revenue come in. Yeah.

48:23Rachel Cruze:Okay.

48:24Dave Ramsey:All right. And even a few more expenses, but the net is more profit maybe. Okay. So that's lesson number one. Now, when you have a separate checking account for your business, the only money that goes into that checking account is money you earn from your services, the revenue from the business. The only thing you write out of that account is expenses to run the business. Nothing else. You don't buy groceries out of that account. You don't go out to eat out of that account. You don't go buy a car out of that account because you can't write that crap off. That's bull. Okay? You only put actual business expenses, rent, payroll, if you're paying somebody else.

49:08Rachel Cruze:Cleaning supplies. Cleaning supplies.

49:10Dave Ramsey:Apparently you're in the cleaning business. Paint, if you're buying paint. Whatever those actual expenses are, then what's left income minus expenses that is the p &l it's also happens to be your checkbook register and what's left in there is called cash basis accounting and that is your actual profit when you take some of that profit home out of that account you should set aside a fourth of it for taxes every single time you pull money out of the business you should set aside a fourth of it over into a separate savings account for taxes because you're supposed to pay quarterly estimates on your profits.

49:44Dave Ramsey:And if you do not, they hit you with a large butt penalty. But you're getting hammered right now the way you're doing this. That's why I'm so leaning on you, okay? Because you're getting killed by this tiny lack of sophistication. Okay? So you've got to separate the business and then business expenses and business income. What's left is profit. When I bring profit home, that is what will help me buy a house and you can't make that number up in order to buy better quit more quickly buy a house because there's no made up expenses that you're not taking you have to take all your expenses there's no reason to pay a bunch of taxes and not claim your proper expenses to to hide from the government that you're not profitable so you pay more taxes so you get a mortgage you can't

50:35Rachel Cruze:afford yeah i don't yeah i've seen i've seen so many behaviors i've been on it this past six months I realize that that's what's going to be happening. And so I guess I'm sorry, I don't want to be mean or anything, but you ain't on it.

50:50Dave Ramsey:OK, what you've described to me is chaotic. You might have been paying some on your taxes, but you're what what I what I just described to you is the way to do that.

51:00Rachel Cruze:Is that how you do it, Cheryl, the way he just talked about it, though? Do you have everything separated out? Yes, I do now. I wasn't before. Yeah, I wasn't. But you are now. And just kind of. Yes, I am now. So how much are you taking out of your business account? How much are you paying yourself per month?

51:16Dave Ramsey:Profit.

51:18Rachel Cruze:It's around$4 ,000 or$5 ,000 after all the cost of labor and everything. That's great.

51:23Dave Ramsey:That's what you qualify for a house with. Yes. There's no way to hide and pretend like you make more money than you actually make.

51:32Rachel Cruze:Yeah, yeah.

51:33Dave Ramsey:Not responsibly, okay? And make sure you're paying your quarter lease. Now, we've got$4 ,000 a month. That's$48 ,000 a year. and we need$16 ,000 by April 15th. Yeah. $48 ,000 a year. We only got a half a year left. So that's$24 ,000, and you need$16 ,000. Have you got any other income your family eats on?

51:55Rachel Cruze:No. No, I am sole provider. It's me and my family. Well, there's a whole other story about my living situation. But I mean, you're the only, this income is all you have to eat on. Yes, sir.

52:07Dave Ramsey:Okay. Because you're not going to make but$24 ,000 if you stay at$4 ,000 a month between now and April 15th, right?

52:14Rachel Cruze:That's why we're painting. How much are you making per month on that? I have them together right now. But the price point for a space that I would get cleaned like one to one. Do I need to start a separate painting business?

52:29Dave Ramsey:No. It can all go in there as long as all the expenses for it come out of there. And so you're right. Right. The answer to the equation is you need to make more money between now and April or you're not going to have$16 ,000 and eat.

52:42Rachel Cruze:Yeah.

52:42Dave Ramsey:With the numbers you're giving.

52:43Rachel Cruze:Is it like when they gave you that bill, do you have to pay it like right then or? Yeah. No, honey, you were already supposed to have paid it.

52:50Dave Ramsey:You're already late. No, she's talking about. No, the$16 ,000. It's a quarterly estimate that she hadn't paid. She should have been paying$4 ,000 a quarter.

53:00Rachel Cruze:I don't think she was doing quarterly estimates. I think she was doing.

53:02Dave Ramsey:She has to. No, I know she has to. But she's not. I know. So she's already late. The quarterly estimates aren't paid. It's unpaid quarterly estimates. So you're already late. So you're already going to get penalized. So I'd start doing my, get with your CPA and start doing quarterly estimates now. That's a good start. Well, that's just for 25. Jeez. You got 24 still.

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54:33Dave Ramsey:guys if you're enjoying the show and you think it's helpful we would appreciate it if you'd help us out click the subscribe button or the follow button the share button share the show or cut out the link and send it to somebody we're listening on talk radio tell people the station you're listening to help us in other words spread the word oh and those five-star reviews they move the needle on the algorithm too. What happens is these different platforms that broadcast the show, whether it's podcast or YouTube or whatever it is, wherever you're finding video or audio, Spotify, everything out there, Apple, anything, they all use an algorithm that if there's activity around the show, they push the show forward and present it to other people.

55:10Dave Ramsey:And so it helps us a ton if you guys actually do that activity thing. So help us. We appreciate that very, very much. We know a bunch of you are because there's bazillions and millions and millions of new ones every month. Thank you. Thank you. Thank you. Dalton is with us in South Carolina. Hi, Dalton. How are you?

55:28Rachel Cruze:I'm doing good, Dave. How about yourself?

55:30Dave Ramsey:Better than I deserve. How can we help?

55:32Rachel Cruze:Okay. So my question is, I'm wondering if I'm crazy for thinking about doing a career change right after completing Baby Step 2. Okay. So a little bit of background. I'm 25 years old, and I work at my local Ford dealership here in my town. And I'm at the highest possible salary that this company will allow me to get. and I don't know whether it's the job or the place, but I am very irritated with this company.

56:14Dave Ramsey:Well, it's the place. You just said it.

56:17Rachel Cruze:Right. But my question is, I just finished paying off my last$4 ,700 from the debt that I owe.

56:25Dave Ramsey:Baby Step 2 doesn't have anything to do with it. What do you make? I make$87 ,000 a year before taxes. How old are you? I'm 25. What do you do? Sell cars? No, I'm a service technician. Oh, okay. All right. Well, I mean, have you investigated working for someone else? Will they pay more?

56:47Rachel Cruze:I have. I've gone to a couple of other places. But the issue with that is all of the other dealerships are 45 minutes plus from my house.

56:57Dave Ramsey:Do you own your house?

57:00Rachel Cruze:Well, the only piece, that's the only amount of debt that I have is my mortgage. Oh, so you own the house. Okay, you have a mortgage.

57:06Dave Ramsey:Are you married? I am not. Okay. And so what would you make at the other place that you investigated?

57:15Rachel Cruze:It depends on which dealership I go to. I've gotten the same amount or$2 ,000 or$3 ,000 more over where I'm at now.

57:22Dave Ramsey:Per month or year? Year. Okay. Okay. How bad do you want to be away from these people? Sell your house and move.

57:33Rachel Cruze:I guess I let myself get too comfortable.

57:38Dave Ramsey:I said, how bad do you want to be away from these people? I just asked you. Do you want to be bad enough away from them to drive 45 minutes or sell your house and move closer to the 45-minute change and make a tiny bit more money? Do the same thing you already love doing, but for people that you like.

57:55Rachel Cruze:And is that the career change you're talking about, Dalton, is moving companies, or are you wanting to switch careers completely? I'm wanting to switch careers completely. What do you want to do? What do you want to do? I'm looking to go from automotive to aviation. Mechanic. Yes. Okay. Or a pilot, depending on which ways I'm leaning more. I'm leaning more towards technicians. Okay. So what do you have to have? is anything required of you to change? Is there schooling? Is there classes? What do you have to do? I would have to go back to school to get an airframe and power plant certification. Okay.

58:34Rachel Cruze:So how much does that cost? When I looked at the tuition, I would have to move up to Greenville to do it. So that was going to be, I think, between$20 ,000 and$25 ,000. And I had the

58:47Dave Ramsey:ability to cash flow it. Okay. And what does an aircraft mechanic make?

58:54Rachel Cruze:Down here in Columbia, the low end is about... Are you going to move back after you get it? It depends on where I can get a job at. Down here in Columbia, it's right around 65 to right where I'm at now to about 90. But if I go to, say, Charlotte or go to Atlanta, it can get up into 150, 160 range. Great. So it's all depending on where I can go.

59:14Dave Ramsey:Okay. No, no, no. Where you choose to go. Are we right? Where I choose to go. Yeah. Okay. No, I would not go spend$25 ,000 in two years of my life to make$25 ,000 a year less. That's dumber than a rock. Of course you wouldn't do that. Okay. Come on, man. I mean, that doesn't make sense. But would I go spend that and go move into a different career and change cities and make$150 ,000, make$50 ,000,$60 ,000 more than I have now, and sky's the limit and you learn a whole new craft and now you're certified in two different types of service, which is not only vehicles and cars, but it's also aircraft, absolutely I'd go do that.

59:54Dave Ramsey:And that's what my plan is. Yeah, life is a grand adventure. Put your house on the market, move to Greenville. Let's go, man. Get your certification and move your butt to Charlotte or Atlanta or whatever it is you need to do and go make some bucks. But no, I'm not going to retreat. and that's why I say it's not a baby step two thing. In baby step anything, if you can go make more money tomorrow and you want to do it, go do it. Go do it, yeah. You don't have to wait to go make more money. But usually when somebody asks those questions, it's because they want to make less money. And no, I'm not going to endorse that.

1:00:29Dave Ramsey:Not because I'm all about money, but because you can usually make more money doing something you're good at and you love than you can doing something you hate with people that are toxic. so generally speaking and it's this idea that i in order to be happy i have to make less money that's the pass backwards no in order to be happy i need to make more money hello that's just crazy y 'all so um it's like i need to work for a non-profit because it's holy no it's not it's not any more holy than a prophet that's that's just silliness a prophet a for-profit

1:00:59Rachel Cruze:oh i thought you meant like a biblical prophet i don't know whichever prophet but any kind of

1:01:04Dave Ramsey:profit some kind of profit god help me with profit but yeah all right there we go that's what i'm doing dalton yeah i would go live your dream but dude make your dream a dream not a nightmare lay it out where it's you know up and to the right sense yes up and to the right baby up and to the right go be somebody do it man i like it and uh the cool thing is you got this house you can sell probably get some money out of that and that's what's going to help him and you're only 24 so

1:01:29Rachel Cruze:i'm like you go do this for a few years maybe when you're 30 we just met someone that's going to be a pilot she's gonna she wants to fly for delta we just met her in the lobby yep young girl you know and you get to maybe make a decision of 10 years to go do that right so just keep on dreaming but yes don't be uh don't make the math go backwards to pay money to make the math go

1:01:46Dave Ramsey:backwards yeah i think i might feel really good about a pilot flying the plane that knew how to

1:01:50Rachel Cruze:work on it no now that gives me a lot of peace it does actually i mean it's like yeah something

1:01:56Dave Ramsey:If something happens, you can run out there on the wing and fix it, right?

1:01:58Rachel Cruze:No, I'm kidding. That would be ideal. Don't know if that's reality, but it's good, Dalton. It's good.

1:02:07Dave Ramsey:Oh, well. Darren's with us. Hi, Darren in Madison, Wisconsin. How are you?

1:02:11Rachel Cruze:Good. How are you?

1:02:12Dave Ramsey:Better than I deserve. How can we help?

1:02:15Rachel Cruze:So me and my husband are in baby step two. So far, we have paid off about$215 ,000. Yay! Good job. Yeah, in the last 22 months.

1:02:27Dave Ramsey:Way to go.

1:02:28Rachel Cruze:Yeah, and we are going to be able to pay off the remaining of my husband's student loans by the end of this year, which is about$92 ,000 left.

1:02:40Dave Ramsey:Amazing.

1:02:41Rachel Cruze:And me and my husband sat down and we're like, okay, what's next? and we currently own a home, but we're not living in it because my husband's company has moved us to a new location and they pay for all of our housing expenses. So we have a lot of extra money to throw around and we're like...

1:03:03Dave Ramsey:By new location, do you mean different city?

1:03:06Rachel Cruze:Different states about every six months. Okay.

1:03:10Dave Ramsey:And you kept one of the homes back in the other place and by default have become a landlord, not by strategy.

1:03:16Rachel Cruze:Yeah.

1:03:17Dave Ramsey:Yeah, I'd sell that.

1:03:20Rachel Cruze:Okay. Okay.

1:03:23Dave Ramsey:Long distance landlording is not really a good plan. I mean, if you're sitting in Madison, Wisconsin, and said, where's this house located?

1:03:30Rachel Cruze:Just over the border in the Twin Cities, so it's not a long drive, and we have family there.

1:03:35Dave Ramsey:Yeah. But, I mean, if you were sitting here in Madison, Wisconsin, with a situation you've got and said, we're going to buy a rental house, you probably wouldn't have bought it over there. Okay. You got it by default. That's what I mean. You backed into this instead of walked into it. And so it generally ends up being a bad decision. So I'm generally going to sell it. I own a bunch of rental property. I love rental property. I don't have any long distance rental property. That's how people change Harley oil in your living room.

1:04:15Thank you.

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1:05:49Dave Ramsey:Don't just set goals in 2026. Learn how to actually reach them. Our unbelievably popular 2026 Ramsey Gold Planner is here. Yeah, you're ready for 2026. It's packed with monthly content from Rachel and Jade and Deloney to help you start your month on track and keep up with your money, your faith, your relationships, follow through on your goals. This thing is massive. We let the creatives loose and told them to have fun, and boy, did they. It is beautiful. We sell out every year. Don't wait. They're$49.97, but when you see it, you'll understand why. It's the most expensive thing we make, just about.

1:06:27Dave Ramsey:I mean, it's crazy in terms of our cost on it. It's fabulous. So if you're watching on YouTube or podcasts, you can click the link in the description, and you can go to RamseySolutions.com slash store and get your Ramsey Gold Planner for 2026 before they're gone. I know it's hard to believe, isn't it? Trey is in Florida. Hi, Trey. How are you? I'm great. How are you doing? Better than I deserve. What's up? Not too much.

1:06:53Rachel Cruze:Hey, so I got a question for you. I probably back in, let's say, January, I bought a motorcycle for$15 ,000. and in May I got in a motorcycle wreck and broke my wrist and ankle and I recovered and doing well.

1:07:11Dave Ramsey:Good, I'm glad. How far have you been through that?

1:07:14Rachel Cruze:No, no problem. I mean, it's what you get into when you hop on a bike, I guess.

1:07:19Dave Ramsey:Yeah.

1:07:20Rachel Cruze:But I'm kind of now realizing it wasn't a very smart decision and I'm kind of in the hole with it. So originally it was$15 ,754 and I've made six payments. or possibly more, but I'm right at$15 ,000 payoff. The bike's worth about$11 ,000. They tear up the bike? So the bike, all that happened was the quick shifter and the body panels needed to be replaced. All that has been done, and it's back to normal. So the bike's in excellent condition.

1:07:49Dave Ramsey:Now it's back to excellent condition, and it's lost a third of its value in six months. Correct. So I'm trying to figure out what the best route is. What kind of crap is this? What kind of bike is this? It's a CrossRocket. It says the ZX6R 2023. That's horrible. Correct. Man, are you sure that's what... Who said that's what the bike's worth? Just like when you get it from a dealer,

1:08:18Rachel Cruze:that's about the price average of what you look online and find that. From a dealership, though, if you did an individual sale, you could probably get$2 ,000 more for it. because dealerships are going to buy it at cost, so it could go up a little bit.

1:08:35Dave Ramsey:Okay, so you're$2 ,000 to$4 ,000 in the hole, depending on how we calculate this, right? Correct. Who do you owe the money to?

1:08:44Rachel Cruze:It's going to be Roadrunner Financial, so a loan company.

1:08:49Dave Ramsey:The motorcycle finance company where you bought it? Correct. Yeah, okay. And how old are you? 23. I assume you have no money. No, I mean, I do have an emergency fund. How much? $4 ,000. Oh, sell the bike. Correct. What's the question? I guess I'm just like, is it okay to just drain the entire savings inside of the day? Yes. Okay. Yes. You want to know what's draining your savings? That stupid bike. Interesting. Sitting in the garage going down in value like a rocket. Absolutely. No pun intended. Absolutely. I agree. Yeah. I mean, the sooner we cut bait, the sooner this fish is gone, man.

1:09:38Rachel Cruze:10-4.

1:09:39Dave Ramsey:Yeah, right. A check be done. I mean, like by Friday, man, you have a new goal. And then go replenish your savings because you don't have a stupid motorcycle payment and a stupid motorcycle going down in value like a rocket. Right? I guess that'll be the plan. Yeah, I mean, you got two things, two reasons motivating you to drain your savings because you put your savings right back because this thing's doing more damage to you than being down to broke and then you know be work be planning on working like all the ot and all the side hustles and everything else you can next three weeks put your money back really super fast which will keep you from having another mistake which is having some kind of an event with no money it's going to be another 4 000 yeah so so um be done

1:10:25and then trey what i would do is this um one of the things when something costs me money

1:10:30Dave Ramsey:and i've done a lot of stupid things a lot of dumber things than this okay this is not super dumb it's just dumb but i mean i've done super dumb so anytime i do that and i have to learn a painful lesson so you got like three painful lessons here at once um i want to i want to write them down, I don't know what they are so I don't have to do them again. If I do something dumb again, it needs to be something, a new dumb thing that I've never done before. I don't want to do the same dumb things over. So I try to figure out from an autopsy standpoint what happened here, okay? And I'll walk you through it.

1:11:03Dave Ramsey:Here's the way I would do this if I were in your shoes. I would say, okay, mistake number one, I was impulsive and bought this thing while I had motorcycle fever. I should have calmed down, taken a cold shower, and waited overnight or waited two weeks and not bought this bike at all. And if I was thinking with more wisdom and less passion and less immaturity, I wouldn't have bought the bike. And that's what I would say to myself if I looked up, because I've done that very similar thing. I bought a truck one time. It was a similar situation. I just drove up on the lot. I liked the truck, and I just bought it.

1:11:47Dave Ramsey:And about three months later, I hated that stupid truck, and I lost like two grand on it. I mean, it's just the same thing, right? But it's impulsive as hell. It's just ridiculous. All right, so then the second thing is I need to understand that things that have motors and wheels go down in value, and I can't finance them because they go down in value, and you get stuck in them. okay um and uh it was a third one but i don't remember what it is now what in the world well anyway just figure out what your lessons are from this so you don't do them again the biggest thing you did was you were just impulsive and you you didn't give any more thought to this than buying a bag of fritos i mean you just said yeah hot cheetos let's get something right i mean you just this thing's a crotch rocket here we go boom this is cool i'm gonna be a cool guy if i had this cool bike and i bought a cool bike well he did get in a wreck and got hurt and then you laid it down Let's be laid it down.

1:12:45Rachel Cruze:Let's find some safer hobbies. I don't know. I'm not a fan.

1:12:49Dave Ramsey:That was a mother. A motorcycle. That was Rachel Mother. Find a safer hobby. Every nurse will tell you, stay away from them. Yeah.

1:12:57Rachel Cruze:That's the motherly comment for you, Trey.

1:12:59Dave Ramsey:Yeah, for sure. For sure. But anyway, figure out what in the world is going on. And I think it's always good for us to look back and go, okay, if I'm writing a check for stupid tax, because I'm paying some tax for being stupid, what do I do so I never have to write that check again and you can you can really go back and go man i learned a valuable lesson when i was 23 years old and you could be telling your 23 year old this i'm assuming it was

1:13:23Rachel Cruze:brand new i mean i don't know how much they cost that's it for the fact that it went down that's

1:13:27Dave Ramsey:the third that's the third thing don't buy brand new you bought a bike without realizing that it was a absolutely crummy bike in terms of how fast it's going to go down in value i mean ridiculous I mean, there's a lot of horrible car deals you can do. But when you lose 30 % of the value of something in six months, that's in the sucks column, like the super sucks column. I mean, it's over there, right? This is nutto. And so you go, okay, you look that kind of thing up before you buy it. And you go, okay, I think that might change my mind.

1:14:05Rachel Cruze:Buy a six-month-old bike for$11 ,000 and let someone else take the 30%.

1:14:10Dave Ramsey:Or a one-year-old bike at this rate for$5 ,000. That's right. Oh, my gosh.

1:14:13Rachel Cruze:Let someone else take the hit.

1:14:15Dave Ramsey:Yeah, and pay cash for it. And then if you lay it down and you're upside down, at least it's in the garage and, you know, you can deal with it, right? It's a different situation. So all of those things are there. But, hey, in other words, learn your lesson. That's not picking on you, Trey. I'm just kind of setting up that decision-making framework and that wisdom-building thing because the old saying is, The reporter went up to the old guy on the porch who was known for being wise, and he was in his 90s. And he said, Uncle Zed, how did you become so wise? He said, I got experience. He said, where'd you get experience from not being wise?

1:14:47Dave Ramsey:And that's what I always want to learn every time. So that by the time I get older, I do fewer and fewer and fewer dumb things. And so it accelerates my wealth building. There you go.

1:15:06Thank you.

1:15:43Dave Ramsey:Mia is in Georgia. Hi, Mia. How are you?

1:15:47Rachel Cruze:Hey, Dave. I'm good. How are you?

1:15:49Dave Ramsey:Better than I deserve. How can we help?

1:15:52Rachel Cruze:Yeah, so my husband and I have been married for 13 years, and I got a hold of your book, Total Money Makeover, and the part about having a joint account. We have never had a joint account since we've been married. And I finally was able to sit down with my husband and, you know, tell him the reason for it. Because even at that time, our marriage was getting pretty difficult, pretty challenging. And we just weren't in unity, you know, with our finances. But when I sat down with him, he said, that's fine. We can have a joint account, but we should still keep our separate accounts. he's afraid that if we put it all into one account something, you know, like fraudulent or scammer could happen Bullcrap Absolute bullcrap

1:16:44Dave Ramsey:That's ridiculous He doesn't really believe that

1:16:48Rachel Cruze:I hope not, but I know it's a trust issue Yeah, that's what it is Yeah, and I know I haven't been always responsible with my money but I don't think I've done anything that's like completely irresponsible that's gotten both of us in trouble. But, you know, for me, I told him, I was like, it would give us at least a vision, you know, for what we want to do, set some goals, perhaps. And you could see, I could see the total picture. I honestly didn't even know where money was going because we never, I could never see it. You know, it was never in one place. So I don't know how I could convince him that we need to do this, to be in unity, to, you know.

1:17:30Dave Ramsey:I think you're very articulate, and you're voicing this fabulously, personally.

1:17:35Rachel Cruze:Mia, what would be the concerns he has about you? You said, I haven't been perfect at it, but nothing like crazy. But what would be the things that he may not trust you with? Is it that you spend more than him, that you're more of a free spirit? Like, what are the things that he would feel like maybe you're not as, quote unquote, responsible as he is? I'm not saying that's true, but I am wondering what he would say. Well, I mean, these were his words. He said to me, I don't want to intermingle my money with you because of my spending. And mostly my spending comes from, like, eating out. You know, I tend to do that more than he does.

1:18:14Rachel Cruze:He cooks at home, you know. But I don't go on shopping sprees. I don't, you know, I might spend a little bit more on groceries or something like that. Let's stop a second then.

1:18:22Dave Ramsey:Then there's an easy fix for that, okay? So the way that we teach, and you can tell him this, that solves that is we together put together a budget every month where every one of the dollars that are coming into this house from both of us have a name and are allocated to something going back out. that would include Mia going out to eat and that would include our hitting our goals and that would include achieving some things that we want to do together it would include some of the things he is now doing with money that he frankly probably doesn't want to report to you on and he needs to that's he's not bringing that up but that's there he's doing a few little things here or there while he's shaming you that that he doesn't want everybody to know about nothing nothing illegal eagle and nothing crazy, but just little stuff, okay?

1:19:13Dave Ramsey:Like he's spending more at the Coke machine than he wants to tell everybody he does, as an example, or something like that. I don't know. He's buying some little thing, a little part for his gun or something. I don't know, whatever it is, right? But aside from that, now every dollar has a name, and we have full transparency, full disclosure. Oh, and honey, nothing's going to happen with any of this money that you didn't pre-approve. And by the way, nothing's going to happen with any of this money that I didn't pre-approve because it's all going to be written down and then we're going to do what was written down.

1:19:45Dave Ramsey:And so unless you approve me being irresponsible with money, there won't be any irresponsibility with money. Right? You see how that works mechanically? Yes. The second thing then is to pan back and say, why does this matter ultimately? Okay. Because when we surveyed, the actual data tells us that when we surveyed 10 ,167 millionaires and did detailed research on them, we found that 89 % of them, that's nine out of 10, all of them just about, said that one of the reasons they were able to become millionaires is because of working together very detailed together with a cooperative spouse. When we survey the general public, we find that less than 40 % of them work together and they have no money.

1:20:43Dave Ramsey:So the data says that it's a wealth building tool and you increase your probability of wealth building substantially, like over double chance.

1:20:53Rachel Cruze:That's like one of the pros of getting married in a dual income household is you guys have more in the pot to say we have more money to do things with like invest and give and spend and all of it and mia the other thing is um that we find and and i'm sure it said in the book total money makeover but even for you guys like you said at one point like our marriage wasn't in a great spot you know this at this activity if you will exercise yes exercise is is something that's very unifying because it's very vulnerable. And I will give it to him that for 13 years of doing something and changing it, it may not just be a one time to talk.

1:21:32Rachel Cruze:And then he's like, absolutely. Right. Like this may kind of be an ongoing discussion for a bit. Um, and there is a level of, of deep vulnerability and trust there, right? You're kind of like exposing this part of yourself that you know, that you have it. And that's how a lot of married couples live. It's Like they have this autonomy of themselves, you know, it's separate, but yet we have chosen to be married, which means we have chosen to do life with someone. And I want to do life with you and in a deeper way, because our money exposes our values and it exposes what we are scared about. It exposes, you know, triggers that happen with something.

1:22:06Rachel Cruze:And then you get to have a conversation with your spouse about that so that you actually get to talk and get to know them. There's a deep unraveling that happens, and money is a filter at which that occurs. And so for you guys to be in the same lane and to work together, not only financially do you guys get ahead, but also relationally. And I would say that to him too, Mia, and say I just long.

1:22:29Dave Ramsey:It'll help you heal the marriage.

1:22:31Rachel Cruze:Yeah, I long to do this marriage in a deeper, more beautiful, unified way. And this is a symbol of that, right? Because you're taking the thing that you want to hold the tightest, and you're opening your hand to your spouse and saying, okay, we're going to do this together. And I don't know. And there will also be conflict, you know, I mean, there's still things that come up and that's fine, but it actually gives you the opportunity to solve it. Our friend Les Parrott always says that conflict is the road to intimacy. And so there is something about understanding that, that, that grows a marriage too.

1:23:01Rachel Cruze:So I would, if that's your desire, I would communicate that part of your heart as well.

1:23:06Dave Ramsey:Yeah, absolutely. And I'll go along with you, Rachel. We've had almost 10 million families now go through Financial Peace University since I started doing it 30 years ago. And the number of times is amazing to me that people come up to me over the years and said, hey, your financial class saved our marriage. I mean, it's, and then I actually, when I started hearing that enough, I was kind of confused because I'm like, you went the wrong class of sex classes down the hall. I mean, what's that? I mean, that's just weird. And they're like, no, no, really, you forced us to work to talk about life because we had to, to do the stupid budget you were making us do.

1:23:45Dave Ramsey:And, and when we talked about life, it did more good than the marriage counselor we were going to, because it forced us to align our dreams and our values. It forced us to have conflict. It forced us to do those things and work through those things just to get to this goal of being debt free. And in the process, lots of little wrinkles were ironed out of our marriage or we were on the rocks and about to walk off and this saved us. And it wasn't that I saved them. I didn't. No, it really wasn't even that the budget saved them. It was the fact that they sat down together and for the first time aligned their futures.

1:24:22Rachel Cruze:Yes.

1:24:23Dave Ramsey:And paid and what price we're going to pay to get to that future.

1:24:25Rachel Cruze:Yeah, that's right. Yeah, it's interesting. It is the most hate. One of the subjects that we get the most hate on is this, or at least I do. You do. I get hate on a lot of things. Well, yeah, yeah. But it is something that is so, it is fascinating because, and people will message me or comment about this. Like, well, we just kept fighting, so we just decided to do separate accounts, and now we just don't fight anymore. And I'm like, those are the, that's the exact fight in marriage you need to be having.

1:24:51Dave Ramsey:Well, I mean, yeah. And so when you sweep everything under the rug. Let's bury all of that because that has a high rate of resurrection. Yes. Yeah, we're going to call that zombie feelings when they come back up. Yeah, I mean, my gosh. They will come.

1:25:02Rachel Cruze:They will come. Yeah, it's just going to blow up someday.

1:25:04Dave Ramsey:Sweeping things into the rock. You're not going to know what happened. It's like a geyser. I know.

1:25:08Rachel Cruze:Push through the heart.

1:25:10Dave Ramsey:That's a complete emotional moron. We're just going to ignore this and pretend like it's not there and like it's never going to come back. You've got to be kidding me. That's a lot of people.

1:25:40Dave Ramsey:Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about,

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1:25:55Dave Ramsey:for help to get prepared to buy or sell your home with confidence.

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1:26:26Dave Ramsey:Welcome back to the Ramsey Show. In the Fairwinds Credit Union studio, Rachel Cruz, Ramsey personality, number one best-selling author, and my daughter is my co-host today. Donovan is in San Jose, California. Hey, Donovan, what's up?

1:26:41Rachel Cruze:Hey, guys. Thank you so much for taking my call. Sure.

1:26:44Dave Ramsey:How can we help?

1:26:46Rachel Cruze:So my wife and I currently invest about 43 % of our income, and she wants to take a trip to Europe next year. So I was wondering if that is something that we should look at doing, reducing our investment rate in order to take that trip. Okay.

1:27:03Dave Ramsey:Are you guys out of debt?

1:27:05Rachel Cruze:We are out of debt. We are debt-free.

1:27:08Dave Ramsey:Good. And what's your household income, sir?

1:27:11Rachel Cruze:So this year we should net about$175 ,000.

1:27:14Dave Ramsey:And what's your net worth?

1:27:18Rachel Cruze:It's around$89 ,000.

1:27:22Dave Ramsey:$89 ,000?

1:27:24Rachel Cruze:Yes.

1:27:27Dave Ramsey:With$175 ,000 income and a 40 % investment rate?

1:27:32Rachel Cruze:Yes. So my wife and I, we basically finished our education as of last year, and we paid our way all through school. Oh, okay. Yeah, so this is like our first year of actually making a real income.

1:27:46Dave Ramsey:So you're both now making good money for the first time ever, and you get to live your dream of investing, and she gets to live her dream of traveling. And that's in conflict. Now it makes sense. Yes, sir. Okay. And what do you guys do for a living?

1:28:03Rachel Cruze:So I identify as a janitor, and my wife is an ABA therapist.

1:28:11Dave Ramsey:Okay. You just finished your education. And I'm sorry, did I misunderstand you? I identify as a janitor? Is that what you said?

1:28:20Rachel Cruze:um so basically i have profit sharing with a company directly under the owners so my official title would be coo but honestly i i have to do a lot of different things

1:28:34Dave Ramsey:well welcome to being the coo but i mean what do you make what do you make of your mr janitor

1:28:41Rachel Cruze:um so i make about 80 000 a year okay all right that's funny

1:28:47Dave Ramsey:okay i identify oh my lord all right that's cute uh all right uh what's the trip to europe cost

1:28:58Rachel Cruze:uh so we actually went to europe uh for our honeymoon which was generously uh gifted to us by the business owners um but uh when they paid for it it was around 25 000 and uh how much we budget towards this trip would probably look around 18 to 20 from what I've been looking at.

1:29:20Dave Ramsey:Yeah. All right. Okay.

1:29:23Rachel Cruze:Do you guys have any money saved?

1:29:25Dave Ramsey:Yeah, you've got$89 ,000 net worth and you just saved it.

1:29:27Rachel Cruze:Well, net worth, but I don't even know what that means. Is that in retirement? Like, is that cash? What is that? Yeah. So about 16 ,000 is in a Roth IRA. About 6 ,000 is in my wife's 401k. I have$35 ,000 in a cash brokerage account, and then we have about$25 ,000 in a high-yield savings account.

1:29:50Dave Ramsey:Okay. And how old are you guys?

1:29:53Rachel Cruze:So I'm 31, and my wife is 28.

1:29:55Dave Ramsey:Okay, cool. Well, Donovan, I love this. This is a great approach to the question. Thank you, and it just took us a minute to find out where you guys really are, because there's so many assumptions I could make when I see on my screen my wife wants to go to Europe, and I want to save 40%. I was getting ready to call you Scrooge McDuck or something. But I don't think you are. I think you're just getting started and you're a serious guy who wants to hit some numbers and your wife is serious about enjoying some of this hard work. And so those are fair. Both of them are fair things to do with money.

1:30:25Dave Ramsey:Both arguments are. And so I don't think I would slap my fist on the table and declare either one of these answers to be stupid. Okay. The thing that throws it off a little is it's 40 % of your income is going into retirement. So we do tell people systematically throughout the scope of your life, whether this year or next year, I would go to Europe. Because systematically throughout the scope of your life, you need to constantly with a rhythm, be enjoying your money, investing your money and being generous with your money. If you consistently with a rhythm do all three of those things, all the data that we have and all the experience we have of decades of doing this tells us that you're going to not only become wealthy, but also be very relationally healthy and have a high likelihood of physical health, too, by the way, weirdly enough.

1:31:19Dave Ramsey:And so all of those things go together when you're doing all three of those things. So to say, no, always save money and live in a cave, collect Lent, and only come out on Triple Coupon Thursday. No, we don't believe that. We think you live like no one else so that later you can live and give like no one else. It feels like to me you guys have paid a price of sacrifice to get the education under your belt and to get to this point to get started. Your reward on the price is saving and investing because that gives you a high. Her reward is the travel and the fun. And both are legitimate.

1:31:59Rachel Cruze:And you can do both, Donovan. That's the great thing because of your income, because where you guys are. Yeah, you guys would be able to save cash flow a trip to Europe and be saving altogether.

1:32:14Dave Ramsey:But, you know, I'm probably going to negotiate, you know, as we're discussing this, some trade-offs here. Okay. If we do Europe this year, we really, to be responsible, only need to spend X. If we were to wait 18 months, we could spend Y.

1:32:30Rachel Cruze:Yes. and I have just a slight, you know, not painting a broad stroke with this, but the fact that you guys just went to Europe.

1:32:38Dave Ramsey:Anyway.

1:32:39Rachel Cruze:Anyway, and she wants to go back. Like I bet she does. I bet it's wonderful. That's great. But also we can't be in a habit or a pattern of doing this all the time.

1:32:50Dave Ramsey:We do Europe every two years.

1:32:51Rachel Cruze:Because it's just going to continue to, you know, and if you have the money for it, you can, but I just want to make sure the pattern is set and the contentment And all of that is being talked about, too, that it's not just this assumption that this is what we're going to do all the time.

1:33:06Dave Ramsey:The sad thing is we're not giving you a really good answer because both answers are okay. But probably some hybrid of the two, a little rhythm, a little on and a little off is a better thing. And say, okay, if we do this, then we're not going to do another big trip for three years. and we're going to pile up and get this net worth going and get some results so that we can do trips forever because i mean if you keep doing the net worth thing the trips are infinite later yeah but but if you don't if you don't if you constantly are eating up the money constantly so again it needs to not be a pattern like rachel says and there needs to be a trade-off and go okay we spend x now or y 18 months from now but in either case we're probably not going to do you know once every five years until we hit a million dollar net worth we're probably not gonna do a bunch of big huge trips that's a big trip that's that's inexpensive and i'll say there's

1:34:00Rachel Cruze:a group of girls that went um to europe that we work with and they were just got back and they did not they spent half of that and they were able to do a great fun trip you know what i mean so there's different degrees at which you can do a trip too so yeah throwing that out there too

1:34:13Dave Ramsey:I wouldn't argue that. Wouldn't argue that. Yeah. Yeah. So yes and yes. Yeah. Sorry. I wish I could be more precise. Usually I'm devilishly precise. But on this one, I'm going to be philosophical a little bit and let you kind of learn the rhythm idea between these three things of generosity and fun and investing. Generosity and fun and investing. and then ratios of those things that allow them all to occur reasonably.

1:35:15Rachel Cruze:Hey, what's up? Dr. John Deloney here. The new dates have dropped for the Money and Marriage Getaway over Valentine's Day weekend in 2026. This is your chance to hit pause on everything in your life and reconnect with your spouse over a long weekend in Nashville, Tennessee. Me and my friend Rachel Cruz will be digging into topics like sex, money, communication, and more. This weekend is happening on February 12th through the 14th, and early bird prices start at$749 per couple, but the prices will be going up soon. Get your tickets today at RamseySolutions.com slash events.

1:36:06Dave Ramsey:Ramsey Show question of the day is brought to you by Why Refi? You may think no one can help with your defaulted private student loans, but Why Refi is different. They work with borrowers that are in tough spots without judgment. Check them out. Yrefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not in all states.

1:36:30Rachel Cruze:Today's question comes from Kathy in Arizona. I've been a health care worker for many years and became close to a patient while she was in the hospital. That was 23 years ago and we've stayed friends since. She's now 92 years old and a widow. She has a son and a daughter who don't live by currently or don't live nearby. She has been estranged from her daughter, estranged from her daughter for almost 15 years. Her son calls periodically to check in on her. She recently revised her will to remove her daughter and put me second in line if something were to happen to her son first. Should I be worried that her daughter could come after me legally?

1:37:09Rachel Cruze:She has not told either of her children about the will details. I want to help her, but I feel like I'm getting in the middle of family drama. What are your thoughts?

1:37:19Dave Ramsey:You feel like you're getting in the middle of family drama because you are in the middle of family drama. That's why it feels that way. Yes.

1:37:28Rachel Cruze:Wow. So, no, legally, no, she can't come after you. If there's a will in place.

1:37:33Dave Ramsey:You haven't done anything wrong.

1:37:34Rachel Cruze:Yeah, she can't.

1:37:36Dave Ramsey:You haven't done anything wrong.

1:37:36Rachel Cruze:But I would encourage her to talk to her kids about this. Yeah, I would go further than that.

1:37:43Dave Ramsey:Would you say no to it?

1:37:45Rachel Cruze:I would say I don't want this unless you have told both of your children, which would involve her talking to her daughter that she hadn't talked to in 15 years, so she's not going to do it.

1:37:57Dave Ramsey:But just because, let me just tell you, I would tell you there's a 100 % chance that you're going to be involved in drama. Did you do anything legally or ethically or morally wrong? No, none of those things. But that doesn't mean you're not going to end up defending yourself. Or the daughter is going to come in and file suit and say, you know, mom wasn't competent and this nurse took advantage of her and try to call you out on medical ethics or something like that. And none of that is true based on what you've told us, Kathy. And it doesn't. I mean, it's also it's been 23 years. So, you know, but, you know, this is it's a it's a sweet gesture by a lady who doesn't do conflict.

1:38:41Dave Ramsey:this lady's a sweet lady she doesn't want to deal with her daughter but she doesn't want to leave her daughter anything so she wants to take one last poke at her from the grave you know and it's just like nah i really don't want to be in that i'm sorry um if you you know 100 chance there's going to be drama the only question is how much

1:39:01Rachel Cruze:yeah i mean just okay here's a really shallow question does it matter the amount to you? Is there an amount that's worth the drama?

1:39:11Dave Ramsey:I guess that's an individual choice.

1:39:13Rachel Cruze:Yeah.

1:39:13Dave Ramsey:Yeah. I mean, if there's$20 million, you know, let me tell you, I would tell you this. Here's an interesting answer to that. I'm just making this up because it's a fun question. I appreciate it. The more money there is, the more drama there's going to be.

1:39:29Rachel Cruze:That's probably true. Sure.

1:39:31Dave Ramsey:Yeah. If she's leaving her$62 in her snow globes, you know, the daughter's going to go, good luck with that, mom. You know, crispy, extra crispy where you're going, mom.

1:39:42Rachel Cruze:But if it's$20 million, she's going to be coming.

1:39:44Dave Ramsey:If it's$20 million, the daughter's going to be going medical ethics and dreaming up anything else she can dream up. And this nurse has hypnotized her 23 years ago and stolen my mother away. And, you know, I mean, you're going to hear all that. Yeah, it's fair. But the more money, the more drama. Yeah, for sure. I think that's true. Drama's already here. Drama has announced itself. It's got an engraved invitation to the party. The only question is how much it's going to show out. And I would say in ratio to the amount of money. So I think that's right. But now how much do I want to get involved?

1:40:18Dave Ramsey:How shallow am I in that regard? That's a good question, because, I mean, you know, honestly, I don't want a lot of drama in ratio to the money. so um and and so if it's 67 and four snow globes i don't want to be involved at all yeah for sure no and so it's not worth it at all and but you know if the only time you you would think about it as if there was more money right i don't guess that's shallow i guess it's practical well i just i'm gonna have to put up with some crap is it worth it right right that's the question

1:40:49Rachel Cruze:and again we don't know it all but i mean i the story you know there could be a story that that But she's, I mean, who knows? Some multimillionaire, sweet, kind woman. And this nurse has befriended her, been kind to her, has kids of her own. And that's how this 92-year-old wants to leave her legacy.

1:41:08Dave Ramsey:I don't think it's a problem. I don't think you've done anything morally or ethically or legally wrong. But that doesn't mean you won't have to defend it.

1:41:14Rachel Cruze:Yeah, you're going to be in some drama if you take it. You won't have to defend it. Yeah, but I would encourage her to talk to the family about it.

1:41:21Dave Ramsey:In America, you can sue anyone for anything. You can just make it up. Yep. If it's not true, you can just say a bunch of stuff and put it in the pleading and file a lawsuit. Happens all the time, boys and girls.

1:41:35Rachel Cruze:Good luck, Kathy. Let us know.

1:41:37Dave Ramsey:Wow. What a mess. Emma's in Washington. Hi, Emma. What's up?

1:41:43Rachel Cruze:Hi there. We just found out that I'm pregnant about a week ago with our fourth child. Yay! Congratulations. We currently have a 2003 Honda Odyssey, and my husband has a commuter car. So the Odyssey will obviously fit us, but it's pretty old. And it started to have some transmission issues a few months ago. And we are looking at buying a house. We don't own a house yet. We're really saving hard so we can buy a house. My question is, should we try to replace the minivan with a more reliable minivan, a newer one? or just go hard at saving for a house and kind of deal with minivan breaking after the fact i mean it's what a 22 year old van i would probably replace the van if i'm if i'm you if i have i mean i have three kids and if i was expecting another one there's a level of stability if you can cash flow it um and i mean i wouldn't go get a brand new one but you could go find you know 2015 for you know$14 ,000 or something um I would probably do that especially if you guys have ongoing issues I just wouldn't want car maintenance issues all the time with four little kids yeah if you have the ability to do it though um my because my husband he's a private school teacher um he makes about$63 ,000 a year um so 14k for a car is way out well haven't y 'all been saving for a house yes so how much do you have in that account we have eleven thousand dollars right now okay okay so we're still about 18 months out before we can really even look for a house yes and that's if you don't take any of this cash to replace the van if you got if you got it fixed how how much longer do you think it could hold hold on to i know just 23 years old Yeah, I'm 28, so it's almost as old as me.

1:43:46Rachel Cruze:Yeah, I don't know. I think we probably have a year and a half, two years left. We don't go on super long drives or anything like that. And I homeschool. We stay home most of the time. But it's just iffy. Mm-hmm.

1:44:03Dave Ramsey:If you bought the house and kept the van, you have to keep a fully funded emergency fund for when the van breaks.

1:44:11Rachel Cruze:Is that three months or six months?

1:44:13Dave Ramsey:I'm probably going with six. Okay. Because you're going to have to, you said the transmission's slipping, and that's going to be an expensive repair at some point. It's probably cheaper than buying another van, but it's still going to be an expensive repair. So you cannot get down to the nub and use up all your cash to buy the house and have no money, and then the van breaks three weeks later. That's for sure. We're not doing that. Yeah.

1:44:39Rachel Cruze:Emma, is the$11 ,000 the only money y 'all have saved, or do you have a separate account for an emergency? No, that's our emergency fund. Oh, it is.

1:44:48Dave Ramsey:Oh, so you don't have any down payment fund.

1:44:50Rachel Cruze:Not yet. No. That's the struggle. Oh, there's no struggle.

1:44:56Dave Ramsey:There's no struggle. We're having a hypothetical. It's not going to occur. You're not buying either one. Okay. You don't clean out your emergency fund and upgrade the car, and you don't clean out your emergency fund and buy a house. Okay. You don't have$11 ,000. That changes the story. Yeah. Sorry. No. I mean, I want the family protected by the emergency fund first. Then we talk about moving up in car and cash. Yeah. Or we talk about down payments on houses.

1:45:25Rachel Cruze:And on a$63 ,000 income, you know, it will be a few years for you guys to purchase that. And that's okay. I wouldn't rush it.

1:45:32Dave Ramsey:To do either one. Yeah. Yeah.

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1:47:30Dave Ramsey:Jimmy is with us. Jimmy is in Arizona. Hi, Jimmy. How are you? I'm good. I would ask how you're doing, but I assume it's better than you deserve. Some things are natural. What's up, man? So my question is that my girlfriend and I are doing married people stuff, but we aren't

1:47:46Rachel Cruze:married, and we do want to get married, committed to each other, but we are on baby step two. Now, my question is, how do I afford things like a ring or a wedding and things like that if all my money is supposed to be going towards my debt?

1:48:03Dave Ramsey:Well, how much debt have you got?

1:48:06Rachel Cruze:Well, we've got$87 ,000 currently.

1:48:09Dave Ramsey:I'm sorry. Let's stop the we thing a minute. How much debt do you have? Personally, I am in$61 ,000 of debt. Okay. And so she has about$20 ,000-something? Yeah. Okay. $26 ,000. And your 61 is what?

1:48:26Rachel Cruze:Is personal loan.

1:48:28Dave Ramsey:To who? A bank?

1:48:30Rachel Cruze:My parents.

1:48:30Dave Ramsey:Your parents?

1:48:31Rachel Cruze:Yeah. Okay. They're fairly affluent, so they offer to help me out, and I'm paying them back with some interest.

1:48:40Dave Ramsey:Okay. Help you out with what? What were you doing?

1:48:44Rachel Cruze:With, like, paying off my debt and moving on to the next stage of my life and trying to get out of all this. So they paid your debt, and now you owe them? Yeah.

1:48:53Dave Ramsey:Yeah, so you didn't really pay off your debt. You just moved it to your parents. Okay. Yeah, yeah, yeah, exactly. Okay. All right. And so what was your debt on? It was originally just a bunch of crap, like things that I didn't need,

1:49:07Rachel Cruze:tents around my house, which maybe I needed, but other things. Okay.

1:49:11Dave Ramsey:Do you own a home? Yes, I do. Okay. Is your girlfriend's name on the deed? No, not yet. What is your home worth?

1:49:21Rachel Cruze:About$400 ,000.

1:49:22Dave Ramsey:Very cool. How old are you?

1:49:24Rachel Cruze:I am 30.

1:49:26Dave Ramsey:Oh, okay. All right. And what do you owe on your home?

1:49:30Rachel Cruze:I owe$230 ,000.

1:49:33Dave Ramsey:Okay. Well, that's nice. Okay. And what do you make, sir?

1:49:37Rachel Cruze:I make$130 ,000 a year.

1:49:39Dave Ramsey:Okay. And so she makes what?

1:49:46Rachel Cruze:She makes$70 ,000 a year.

1:49:48Dave Ramsey:Okay. Cool. All right. And she's around the same age? Yeah, she's 28. So when you're married, you have a$200 ,000 household income, a$400 ,000 house, and$87 ,000 worth of debt. If you got married tomorrow, that would be the together picture. Yes, sir. Okay. All right. And you're living together is what you indicated, right? Mm-hmm. Okay. How long? It's been almost a year now. Okay. All right. What is the dream for the wedding?

1:50:23Rachel Cruze:Well, she's okay with going to the courthouse tonight. And I've got like over 20 aunts and uncles and like over 30 cousins. And I would like as many of them as I can afford to be there. But I'm not sure how to afford that.

1:50:40Dave Ramsey:Okay. And what is your personal take-home pay a month?

1:50:44Rachel Cruze:My personal take-home pay after taxes is$8 ,300.

1:50:49Dave Ramsey:Okay, good, good. You're doing really well, sir. Thank you.

1:50:52Rachel Cruze:Thank you.

1:50:53Dave Ramsey:All right. Do you have any cash or any money that's not in retirement?

1:51:01Rachel Cruze:No, just my emergency fund.

1:51:03Dave Ramsey:How much is in your emergency fund?

1:51:05Rachel Cruze:Oh, sorry.

1:51:06Dave Ramsey:Well, it's$1 ,000 that you suggested. Okay, all right. It was the starter emergency fund. Okay. Yes. So you have$1 ,000, and that's your entire money you have available? Yes, sir. Okay. All right. I'm asking a lot of questions because once I get the whole picture, I can say clearly what I would do, knowing what I know now, if I woke up in your shoes. Okay? Right. For sure, I'm going to call the preacher and go get married at the courthouse or in his office tomorrow. For sure, or in a month, okay? Okay. Somewhere in the next month. And then have a big party later. Okay. After we clean up some of this debt.

1:51:48Dave Ramsey:Because you've got a great income to clean up some of the debt. And you can have a big reception, you know, even if it's 12 months from now. Okay. Easily. And have the uncles and aunts and that kind of stuff. Because, you know, that's, yeah, that's what I would do for sure. then the only question I've got is how much to spend on a ring and do I stop everything for a paycheck or two and get a three or four thousand dollar ring and I probably would and I would do that this month and I'd get married you know the end of the month or the end of next month or whatever something like that and because then that allows you to combine all of your efforts safely and correctly and you'll be able to clear the debt faster And as you said, you're already playing house.

1:52:34Rachel Cruze:And you love her. You're going to get married to her, right?

1:52:37Dave Ramsey:Absolutely. Yeah, so just go do it. There was nothing in any of your sentence structure that was any hesitancy in. That's what I was going on.

1:52:43Rachel Cruze:Yeah.

1:52:43Dave Ramsey:No, sir.

1:52:44Rachel Cruze:Yeah, we're not doing this so that we can combine money. We're doing it because you love each other. You know you're going to get married. So go ahead and do it.

1:52:51Dave Ramsey:Yeah, just got some stuff out of order. And so let's get back on.

1:52:54Rachel Cruze:Also, like you said, you know, in a different call a while ago, but I saw, you know, there's more buy-in when we are married, too, right? Is that she doesn't got to worry about anything going anywhere. I don't got to worry about her going anywhere, and I want her to have that stability, you know, as soon as I possibly can. So I'm with you guys on that one.

1:53:17Dave Ramsey:How's her relationship with your affluent mom and dad? It's great.

1:53:22Rachel Cruze:They love her.

1:53:29Rachel Cruze:okay are mom and daddy to be pissed that you guys go to the courthouse and not have a big wedding well i did float the idea to my mom and she was a little like oh why would you do that yeah

1:53:40Dave Ramsey:but i'm not i'm not too concerned because your mom wants to have the party too but mom we are

1:53:43Rachel Cruze:going to have the party we're just going to have a fluent mom pay for the party i was just that's

1:53:48Dave Ramsey:where i was going why don't they pay for the wedding they're all yeah the wedding reception and do it, you know, even if you did it at Christmas and it was a few months after the actual quote-unquote marriage. But, I mean, we know several young couples that are like in their 19, 20-year-old types, okay, that go literally to the courthouse, go sit with a preacher and get married, and then they walk down the aisle with the white dress and the whole thing four months later. I've seen that happen a bunch of times because that's how the schedule worked out for the stupid venue. but they are legally morally married and all that a long time before we all went to the wedding, you know.

1:54:32Dave Ramsey:And a couple of us that are close enough friends actually knew that. But my concern with that is that, you know, I've asked my parents for so much help and they've helped me out so much. I'm not asking them to help you. I'm saying, hey, if y 'all want to throw a party, we'll do it now. If you want me to throw the party, we're going to do it in a year.

1:54:50Rachel Cruze:But they didn't really help you, Jimmy. I mean, in a sense, you're paying interest to your parents. So it's not like they went and paid your debt off. If they did that, I would be like, yeah, that's really generous. They just became your bank. They're not helping you. You're paying them interest. They're making money off you. Yeah.

1:55:09Dave Ramsey:Yeah.

1:55:10Rachel Cruze:It's kind of weird. I do know people that their parents have paid off their debt so that they don't have to pay interest. And it's a better deal for the kid. But, yeah, I don't know.

1:55:19Dave Ramsey:Yeah. Yeah. So I, I, I, I, I, you know, your parents better than me, but I'm kind of thinking when you make this announcement that we're going to get married and we're going to have the party over here, if you all want to have the party earlier and you want to finance it, we'll do it earlier for the uncles and aunts. And we'll do that big party in December because we're getting married in a month and I'm going to go, dad, I'm going to go get a ring. Mom, take her over there. Y 'all announce it to them. Tell them what your plans are and then watch and see if, how generous they become towards the 61 ,000 and towards the party.

1:55:50Rachel Cruze:Yeah.

1:55:50Dave Ramsey:I'm not begging for that. I'm just laying it out. And I'm not even going to ask.

1:55:54Rachel Cruze:Yeah, not even expecting.

1:55:55Dave Ramsey:That's why I ask what they thought of her, because that's going to affect their participation, their voluntary transportation, without you even asking. Yeah, totally fair. Your mama might reach across the table and tap her on the hand and go, honey, we got this. You never know. You never know. And I hope that for you, sure.

1:56:14Rachel Cruze:Yeah, that'd be great. Go have a great party.

1:56:16Dave Ramsey:That'd be great. Have it. It's a cool question, Jimmy. Thanks for... It's obvious you've been listening to us the way you've used some of the words back at us, so thank you for that.

1:57:10Dave Ramsey:This podcast is brought to you by the Lord of the Rings. in the house. Oh, guys, come on. They give me a Charlie Kirk quote. Oh, man. If you believe in something, you need to have the courage to fight for those ideas, not run away from them, or try and silence them. Wow. Oh, makes me cry. All right. Heather's in Illinois. Hey, Heather, what's up?

1:57:39Rachel Cruze:Yes, Dave. I need to know your thoughts on a couple things. I'm an 82-year-old widow, and I have approximately, well, first of all, I do own my own home and my car. I have about$236 ,000. It earns about 4.4%. I also have about$10 ,000 in an emergency fund. but I have no debts except$16 ,000 on some windows that I bought. And my payment is not due for 16 months and there's no interest on them. And I need to know, shall I just wait until the time is up and pay that amount or should I start paying on it now? Because my other concern is if I should have to go into a nursing home. And I don't know what your thoughts are on that as far as how much money I need to have set aside.

1:58:49Okay.

1:58:49Dave Ramsey:What are you living on per month?

1:58:53Rachel Cruze:About$3 ,500.

1:58:55Dave Ramsey:So pretty much your Social Security is covering you?

1:58:59Rachel Cruze:Social Security and pension, yes.

1:59:02Dave Ramsey:Okay. What is your pension total? What's the total of those two things? Is that$3 ,500?

1:59:06Rachel Cruze:Well, the total of both of them together is$3 ,526 a month.

1:59:12Dave Ramsey:Okay. And so you're able to live on that without touching the$232? Yes, I am. Or even the interest on the$232?

1:59:20Rachel Cruze:Yes.

1:59:21Dave Ramsey:You're letting it grow?

1:59:23Rachel Cruze:Yes.

1:59:24Dave Ramsey:Okay. All right. um the the deal with the um interest-free windows is if you do not get it paid off exactly on time they're going to back charge you through the entire contract a huge interest rate and so as a matter of safety because those things are a bear trap those those systems that they and they put those together with the intent that you don't pay it on time they're a bear trap and so i want you to i want you to go ahead and clear it for no other reason except that i don't want the bear trap to get you okay and um that way it doesn't it doesn't give you you know there's no dispute because it's so far away and you get very clear complete documentation from them that says paid in full nothing else due so they don't come back later and say you still owed ten dollars so we're going to charge your interest on the whole thing all the way back through because that's the kind of thing these shysters do okay so i want to make sure that doesn't happen and let's get very clear documentation paid in full and go ahead and pay it you don't have to do it where is sometime in the next month or two okay yeah where is the 232

2:00:40Rachel Cruze:sitting heather is it just in a high yield high yield savings um well i've got uh about 206 000 in money market and$30 ,000 in large-cap stocks.

2:00:53Dave Ramsey:Yeah. So you can just write a check out of that money market and pay the bill. So call them or have them send you an email or something that gives you an exact payoff by an exact date. Send that in and then helm them until they give you some kind of documentation states paid in full because I don't want the bear trap anywhere near you. Okay. So that's a minor thing. That's done. Now we've got$216 ,000 because we just spent$16 ,000. All right. And now what do we do with nursing home? So what is your home worth? Oh, about$160 ,000 probably. Okay. All right. And so there's two options, really, that you could go with.

2:01:41Dave Ramsey:And I'm going to recommend you go ahead and spend some of your time getting prepared. for one or both of them. All right? Option number one is your best option that I like in terms of quality is I'm going to start investigating full-time care in your home. Okay. It's a better quality of life for you. You get to stay in the house, and you got one-on-one care. It's almost like you're – it's hard for someone like you, but it's almost emotionally because you're basically hiring a butler with a nursing degree. Sure. Okay. And I want them to just move in there and take care of Heather. And if you have to have two of them and do two shifts because things get bad because you need someone night and day, that's still going to be cheaper than a nursing home.

2:02:37Dave Ramsey:Okay. And it's going to be nicer for you than a nursing home. now if you need more care you need to have investigated some of the nursing homes in the area get in the car and go look at them shop let's go shopping because on average what would have them price it out in your area there's probably three or four within a 20 or 25 mile radius of you there and let's go that one's the this this one's the expensive one but look at what the stuff they've got this is the medium and this is the other medium and this is the one i don't want to go to and you're going to find all three there um and the expensive the medium and the one you don't want to go to and you know go ahead and get that figured out and then that'll tell you what you've got because your 200 000 is making you only about eight thousand dollars a year and so if you're going to start if you start burning through that money we've got to figure out how long it's going to last.

2:03:35Yes. And so the nursing home is going to be, okay, let's just make up numbers.

2:03:41Dave Ramsey:If you did the in-house care and it was$10 ,000 a month for people working in your home and that took over everything, well, I mean, we know what that is. It's 20 months. Sure. Sure. Okay. I will tell you the interesting stat. It's a little bit depressing because of the way we're talking about it, But the average nursing home stay is only 2.3 years. Okay. And I guess that's because by the time you get there, you don't live long. Not because they kill people, but you know what I'm saying. So, I mean, we're just at the end times, right? Because I'm looking at that stuff, too. I'm 65, and so my wife and I are talking about this stuff, too.

2:04:22Dave Ramsey:What are we going to do in this case or that case if something happens to one of us? Is the other one going to just take care of them in the home? Yeah, that's what we're going to do. We're just going to hire help in the home instead of going to a nursing home.

2:04:35Rachel Cruze:Your children will help, too.

2:04:36Dave Ramsey:Well, I know. But you're not moving in. No. You have a life and stuff. No. But I'll just hire Sharon a butler. I mean, I'll do it. I mean, I'm happy to do that. And so all that. So anyway, you just kind of got to – you develop a plan, and you look at what it costs, and then you see what your burn rate on the money is, And then that tells you that you got$200 ,000 plus the value of this house to get through that. And if you outlive all of that in a nursing home, you're going to end up in a Medicaid nursing home, which is a welfare nursing home. And it's a different level than the other stuff we're talking about.

2:05:16Dave Ramsey:So, you know, that's going to be your last resort, not your first choice. and so um but i'm a i'm an advocate for building out a system if it's possible for medically possible and financially possible to uh stay in the home uh if you can write the checks to cause that to happen if you can do it yep yeah and and some of you that have built large net worths that are listening that's your best shot really it's your best option um but especially

2:05:46Rachel Cruze:if the home's paid for everything like there's not all those expenses but for people like

2:05:50Dave Ramsey:Sharon and me or Heather or people that worked our whole lives the idea of having uh you know Downton Abbey in the house you know that have the help in the house so to speak is weird for us we don't think we're not butler type people so we've kind of got to get our emotions around that if

2:06:06Rachel Cruze:we're going to do it um but I mean they aren't medically trained professionals but I'm just

2:06:10Dave Ramsey:saying you know we're gonna ring a little bell here I mean it's just a little strange for people like me. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In 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.