You Can Still Take Charge Of Your Financial Future

28:10Okay. Well, 100 % of what we're talking about is not taxable, but only the gain on it is taxable. And the money market's probably got very little gain. And if it does have gain, it's taxable, not at capital gains, but at ordinary income. So it's only the brokerage account itself. What did it start out at? What's your basis in that account? From what I've been able to calculate, it would tax about 81 ,000 of it. Okay, so 15 % of$81 ,000. Yep. Wow, so it's been sitting there a while. Yeah. Okay.

28:44So$12 ,000, right? Give or take, yes, sir. And so, wait a minute, you said we got$280 ,000 to work with. No, no,$80 ,000 and$2 ,000 what? The mortgage is$273 ,000 and roughly$285 ,000 to pay it off with. Because you got$202 ,000 in the brokerage. Okay, so you have$15 ,000 in your emergency fund, and you need to save$12 ,000 before tax time. Yes. I think you can do that making$100 ,000 with no house payment. Yeah, the mortgage is$1870 right now. If you just took your house payment and put it up, you'd have enough for your capital gains tax when it comes due by April 15th of 2026. Would you consider waiting until January to wait for the 2027 tax season?

29:33yeah okay i might i might just to help your cash flow yeah because this is a little tight i'm i'm i would if you had zero money left and you had to pay off your house you had no emergency fund left i would not tell you to pay it off okay and i would tell you to wait till january and we're kind of on the bubble on that i mean you got a little bit here um but uh yeah yeah because that kicks it out it kicks it out almost uh 14 15 months then yeah by doing that yeah that's that's a good okay i do man but gosh i mean be ready like i'm talking like you pop a champagne cork at new year's and write a check right for sure i mean don't don't hesitate here don't don't don't rethink this and over analyze it and all that kind of stuff uh but that's a that's a that's a valid question sitting here um in late october we're only talking about 60 days i mean think But Christmas is only 10 weeks away.

30:27So that's not a... If we were earlier in the year, I probably wouldn't. But since we're right here on the threshold anyway, yeah, that's a good... That's very non-wussified, Brooks. I'm proud of you. I like. That's how we started every call. Wuss or no wuss? To wuss or not to wuss. Yeah, there you go. Brooks, you're fun, man. Shakespeare would have loved that.

31:13This show is sponsored by BetterHelp. All right, here's the truth. I have great friends, a strong faith, an amazing wife and family, and I've even got two PhDs worth of information about how to be well. and yet the times that I've spent with a great therapist across my life have made all the difference for me. The right therapist can change everything and this month my friends at BetterHelp are shining the spotlight on therapists. These are people who truly make the world a better place. With over 30 ,000 therapists, BetterHelp is the largest online therapy provider in the world and BetterHelp works.

31:49Their average rating of 4.9 out of 5 proves it. Plus, BetterHelp is totally online so it's easy to fit into your schedule. To get started, you just answer a few simple questions and they'll connect you with a licensed therapist that helps fit your needs. And if it's not the right fit, you can switch at any time for no extra cost. This month, we celebrate the therapists who've helped millions of people take the next right step forward. If you're ready to find the therapist that's right for you, BetterHelp can help you start that journey. Visit betterhelp.com slash Ramsey to get 10 % off your first month.

32:25That's betterhelp, H-E-L-P.com slash Ramsey.

32:37Today's question of the day is brought to you by Why Refi? If your private student loans are in default. You need a lender who sees you and meets you where you are. Y-Refi offers low fixed rate plans based on your real ability to pay. Learn more at YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey. Not in all states. Today's question comes from Jessica in Illinois. Before getting serious about following the baby steps, I co-signed a car loan for my 22-year-old daughter. I have two credit card balances to tackle besides her car, and I will be debt-free. She owes$12 ,000 on the car, and I have$20 ,000 in credit card debt.

33:15Do I finish paying my personal debt and move on to Baby Step 3, or do I include her car note in my debt snowball? She has not missed a payment and has not asked for help paying, but I just really want to be done with it so it's not hanging over both of our heads. That being said, I'm also nervous about only having my starter emergency fund in savings and want to move on to Baby Step 3 as soon as possible. Tell her, Dave. um well we're going to pay off the car after you pay off your credit cards because the car is under control right now it's not in panic so we'll put it at the back of the debt snowball and clear your credit cards and then clear the car and then work something out with your daughter so that she repays you since you're paying off her car early okay because there's several problems um with this that lay in the future.

34:06If she gets laid off, gets in a car wreck, has a medical event, anything like that, this is going to come back on you. It's what we call a contingent liability, which means it's a liability and meaning they're going to come after you. And by the way, they're going to come after you really fast and they're going to skip over her because they never thought she was going to pay it in the first place. That's why they wanted to co-sign her. And so they're going to come straight at you. if something goes wrong. And I mean, I'm not predicting horrible things happening to your daughter, but you know, life just says things happen.

34:41And that's why we never co-signed. So I have co-signed and I ended up paying it. And when I went bankrupt in my twenties, a friend of mine had co-signed for some stuff and he ended up paying it. I went back and paid him back, even though the bankruptcy said I didn't have to, but I wasn't going to burn my buddy just because he was dumb enough to co-sign and I was dumb enough to let him. But let me just tell you, the most aggressively marketed product in the United States today is debt. Debt is sold as a product more aggressively, more sophistication, more money, more bandwidth is spent selling you folks debt because it's so profitable than any other product.

35:28I mean, you think you've seen a Chevy Silverado run through a mud puddle on every football program for the last 20 years, and you think Chevy spends money on that? It's nothing compared to what Visa, MasterCard, American Express, and your local bank spends to get you to co-sign a car for your kid. okay they spend money convincing you and they've convinced an entire culture generationally that the only way to prosper the only way to get what i need is to go to the bank the only way my daughter gets a car they've convinced you and brainwashed you of that so that you co-sign because she couldn't get the car on her own now if debt is so profitable that they will literally fire a teller if they don't get enough home equity loan applications in while you're making deposits.

36:23Victoria's Secret literally does not sell small underwear. It really sells credit cards. So much so that if you ask the ladies that work there, if they don't sell a certain number of credit cards per shift, they get fired. They make more money on credit than they do small underwear. Same at the car lot, same everywhere else. Okay? And so if this is the most aggressively marketed product, and if they want to sell debt more than they want to live and eat and breathe, and they won't loan your daughter money, something's really wrong. Because they really want to loan her money. And if those people, the sharks, will not loan her money, your sweet little daughter, your sweet little grandson who wants his pickup, your daughter who just went through a nasty divorce, if they won't loan her money, it's because she's not going to pay it back.

37:26So don't act like that you're doing somebody a favor by helping them buy something they can't afford. That's what you do when you cosign. It's stupid. As a matter of fact, it says it in the Bible. Proverbs 17, 18 says, one lacking in sense cosigns for another. And if you look up 17, 18 in the CEV, the Contemporary English Version, this is not a joke. This is a fact. Look it up. it says if you co-sign for someone else you're stupid that's what it says because of what i just described and so poor jessica i'm not calling you stupid but i'm calling you what you did stupid stupid you were trying to help you're sweet you're trying to help your daughter all that but yeah so what do we do with stupid we get out of it as fast as we can because it's going to tackle you by the ankles later if you're coming up from behind look out look over your shoulder so and folks the next time you get ready to co-sign for someone just remember it's stupid i mean straight up biblically stupid don't do it if the most aggressively marketed product in the nation will not loan your friend your daughter your son your grandson whatever it is whoever it is you're trying to quote help by getting them a car payment god help you if they won't loan them money it's because they can't pay it and they're not even looking to them they're looking to you and that's what this is for so please and i've done it i'm not saying it i've been decades ago but i still remember how stupid i felt when i wrote those checks like i knew this i knew this guy was a debbie i knew he i knew the bank was right the bank wouldn't loan him money, but I'm so smart.

39:10I'm going to help him. And then I get to pay the bill. And you know what I wrote on the four column on the check? Stupid tax. That's good. I paid some stupid tax. Tax on your life when you're stupid. And I paid plenty of stupid tax in my life. And some of y 'all have to try not to do it, though. I'm trying to help you with this. So the moral of the story is don't do debt and don't buy small underwear. Is that right? Ken, you're very precise on your listening. I am locked in. I'm locked in, folks. I want to make sure you're catching the lesson. I did not. That's not what he said. I did not say small underwear was off the menu.

39:46He did not. I just said financing it was. That's all I said. Some guy in the audience got very excited out there. He elbowed his wife. Kayla's in Kansas City. Hey, Kayla, what's up? Hi, how are you? Better than I deserve. How can I help? um i have a question on i have around three thousand dollars in credit card debt i owe around twelve thousand dollars on my car um that i bought during covid i got right before covid so i have two percent interest rate and it's worth 22 to 25 000 right now um so i have equity in my vehicle but then i have 16 almost 17 000 in student loans My student loans are all federal financial aid, and through that, it's broken down into three loans.

40:35Into how many? I'm new to your program. Stop, stop, stop, stop. How many loans in the$17 ,000 is student loans? How many different loans? Two. I'm sorry, three. Three. Okay. I got you. All right, go ahead. So working the baby steps, I'm going to, one, start with a credit card. Two, what I didn't know is if I should start with my car or if I should split the financial aid actual loans up. They're not financial aid. They're federal student loans that are failing, and we just need to get rid of them. And you have three of them. What are the amounts on those exactly? The first one is$3 ,553. Second one is$6 ,490.

41:23Mm-hmm. And the third one is$6 ,645. Yeah. So credit cards to student loans to car, smallest to largest. Gotcha. After broken down. I don't know if you keep those higher or break them down. Yeah. It doesn't matter mathematically much because you're going to do it at about the same time frame. What's your household income? $150 ,000. Oh, good. Okay. So you're going to be done real fast. Right? Mm-hmm. Good. So I just didn't know if I... Yeah, just pay off the smallest first. Because when you pay off the smallest, and by the way, cut those credit cards up tonight. Time for a plastic surgery. A plasticomy.

42:04Chop, chop, chop, chop. Get you a debit card. They don't accidentally run up debt. For airline miles. They've never made anyone rich.

42:33Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance.

43:13Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Xander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the money's still showing up.

43:44And that's why Xander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling. I've trusted Jeff Zander and Zander Insurance for over 25 years, and so has my family. So don't wait. It's fast, it's easy, and it could make all the difference. Go to Zander.com or call 800-356-4282. Protect yourself, protect your income, protect your family.

44:26Welcome back to the Ramsey Show in the Fairwinds Credit Union Studios. I'm Dave Ramsey. Ken Coleman, Ramsey personality, number one best-selling author and host of Front Row Seat on the Ramsey Network is my co-host. Vanessa is in Corpus Christi, Texas. Hi, Vanessa. How are you? Hi, I'm good. Thank you. Thank you for taking my call. Sure. How can we help? I, my parents and myself and my children consolidated households a few years back. And my mom made the down payment on the house. And I've been making the payments, the utilities, everything else. So I've been maintaining the household. I'm getting ready to sell the house.

45:07And we're going to go to separate residences. My question is, should I give her what I get back out of the house? to basically pay her back for the down payment. I think I should. My brothers think I shouldn't. Okay. So is your dad still alive? My dad has just moved into a nursing home. Okay. So where's your mom going?

45:38I'm assuming an apartment or something. Yeah, I'll get her a little apartment. I have told her I'll pay$1 ,000 a month towards whatever rent or whatever she needs, and then she'll need to live on her Social Security from there. Okay. So is this a relational breakup? Is that why you're selling the house? It will be better for a relationship to sell the house, yes, a relational breakup. Also, my youngest child is about to go to college, and with my dad moving into a nursing home, we do not need a house as large as we have. Okay. How long have you been in the house? three years. Okay. So there's not any written agreement?

46:18No, sir. Okay. Well, was it a gift or was it a, I'm going to contribute to this collective living arrangement?

46:32I, I think it was more like we're out of money. I'm going to give you what I have left and buy a house and you're going to take care of me for the rest of my days. Yeah, that's what it sounds like. Okay. So how much did she give you at the time for the down payment on this house? It was$84 ,000. And how much equity will you get out of the house when you sell it? I think I'll get between$60 ,000 and$70 ,000-ish. So you've lost money on the house? I think so, yes, sir. How? How? It's just the market we bought at the very height when it was... The market in Corpus Christi, Texas has not crashed. Okay.

47:17Where are you getting your numbers? From my realtor. The one that sold you the house? No, sir. So she says you, or he says you overpaid dramatically for it at the time? Because I don't think house, I mean, what did you pay for the house total? total? 415. Okay. So you're saying this house has lost 10 % of its value in three years rather than going up in value? I don't think so. Yeah. Okay. I'll buy that. I might be able to get a little more out of it. The neighborhood we're in, there's still new builds being built. So why do your brothers think that your mom should not at least get her money back out of it?

47:58But there's some logic here I'm missing. Yes, sir. They think, one, that she won't be responsible with it, and two, that she owes me basically rent for paying for everything for the last three years. Wow. Nobody in this family is happy with mom. Okay. Not at the moment. We love mom, but we're not happy with mom. I got that. I got it. She's difficult. And I'll make sure she's taken care of. I didn't hear that. I'm not hearing you be a jerk. You're not being a jerk. It's just interesting. Matter of fact, you're being so subtle, I'm having trouble coming to conclusions. I'm sorry. I'll be more direct.

48:40I'm not anti the brother's point of view right out of the gate. I'm not saying I'm supportive, but I'm also like you've been paying for everything since she's been in there. Well, the problem is that you didn't have a clear deal. That's correct. It was fuzzy. There's not a clear deal. I mean, the clear deal was you stay there until she dies. And then it's your money. Well, the clear deal, yeah. When they passed away, I would get basically the house. Yeah, which was the down payment money. I mean, that's all it's worth. Okay. Right. And now my dad is Alzheimer's incapacitated, can't make any decisions on the house.

49:14My mom has left. I don't think she's far behind him going in the nursing home. But we need to split residences. Okay. And your mom thinks that she should get the money or does she say it? My mom has not said a word. Okay. Interesting. Okay. I don't think, I don't have a clear ethical or moral guide on this. Okay. So the fact that your mom wouldn't take care of the money does not make it not hers. Agreed. Yeah. Stupid's not illegal. And so it doesn't mean you get your money taken from you just because you are incompetent. That's not how it works. so it's not private not how profit private property laws work but i'm also not sure it's her money anymore so i don't know what to do um what would i do if i were in your shoes because i don't hear you bringing harm to her or revenge or vengeance i don't hear any of that in your language or your voice i just hear separation has to occur and i love her and she needs to be over and um so the other thing is if you put this money in her name and she goes straight into a nursing home um that's what it's going to get used for right if you keep it in your name and she goes straight into a nursing home you can work with the nursing home and negotiate with them and use the money to care for her as if it was for her as if it was her money but you kept control of it.

50:53Is there a way I could put it in something that would take care of her until then? Yeah, you can put it in a mutual fund, and you could give her some monthly income out of the mutual fund. In other words, you're not personally taking use of the money, but you're keeping it in your name for her good. That's the same as giving it back to her, but maybe better given the situation. I think that's a great idea. Yeah, and I'm listening to this, and I'm just going to say that you've already committed, you've told Dave and I that you're going to give her$1 ,000 a month to go towards her living expenses.

51:26She has to foot the bill from Social Security. So I think in some ways this is a bit of semantics because you're already committing to give her$12 ,000 a year. Yeah, but you wouldn't have to do that if you use this$80 ,000 or$60 ,000 or whatever to create an income. It's all the same thing. I don't know that I would give her the money. No, I'm not giving it to her. I'm holding it for her good. Yeah, if I'm managing her money, then I wouldn't give her$1 ,000 out of my income. Exactly. Of course. Exactly. But I'm saying it's a pot of money, and I just don't think the lump sum given to her to control is what I'm saying.

52:00I just wouldn't do it. Yeah. I think that's a great solution. Because there's not a moral imperative to do that because there's no deal. Yeah. You're not breaking a deal. No. I'm not, but I want her taken care of. Well, you're doing that. Exactly. And you're going to do it. Exactly. I think it's a great idea. So the best way to do that is to keep the money earmarked for her. In other words, you're not going to take this money and use it for your next down payment. It's going to be sitting over here with an investment advisor, earmarked in an account named Mom, even though it's in, but the legal owner of the account is Melody.

52:32And that, yeah, that makes sense. Or Vanessa, I'm sorry. That makes more sense.

52:39It's good if you treat other people like you don't be treated. That's always a good rule. I think Jesus said that.

53:10Let's face it, health insurance today is more complicated than ever. However, the system isn't built to help the average person understand, and it leaves too many families unprotected. That's why you need my friends at Health Trust Financial. They aren't just brokers. They're trusted health insurance advisors who have been helping families like yours for over 20 years. You don't have to navigate it alone. The experts at Health Trust Financial listen to your needs, work to understand your family situation and budget, then help you choose the health insurance plan that's right for you. That's why they're Ramsey Trusted and why we've worked with them for two decades.

53:55Look, medical debt is the number one cause of bankruptcy in America today. One hospital visit can wipe out your savings and undo all your hard work. So health insurance isn't optional. It's part of your financial defense plan. Health Trust Financial knows their stuff, and they're the only health insurance provider I recommend. So get clear about health insurance plans and get the coverage that's right for you at HealthTrustFinancial.com.

54:42Susan is with us in Memphis. Hi, Susan. How are you? Hi. How are you? Better than I deserve. What's up? I have a question. I am 72 years young and on baby step two. And I've jumped all in with both feet. I've got the book, the Total Money Makeover book, the workbook, the Every Dollar App, the financial coach. And I'm just wondering, am I too late to be doing all of this? No. No, okay. It's harder to make the exact same progress. I mean, the power of compound interest, if you were 22, would work to your favor to build a million dollars a lot better. But what you're looking for at any age is first getting to sustainability and then moving into wealth building.

55:34and the fastest road to sustainability is to get rid of the consumer debt, get those payments out of your life, and build an emergency fund. Exactly. And then, of course, start building the nest egg. And so you still working? No, I'm retired. Okay. So what's your income? What are you living on? $67 ,000 a year. $67 ,000 a year. Okay. And how much debt do you have not counting your home? Oh, I'm embarrassed. My home is paid for. $41 ,000. $41 ,000. Good. On what? I'm sorry? On what? Credit cards. Ridiculous credit cards. Okay. That's okay. So have you analyzed for self-awareness yet where that debt came from?

56:23How did you get$41 ,000 in credit card debt? What were you spending it on? Well, my problem was I had two sons that both died within six months of each other. Oh, my. Yeah. And I just went to retail therapy. I thought that would make me feel better and cure the grief and all that. It's an understandable thing, and it's a clear analysis. Mm-hmm. So the point is it's not going to reoccur. No. Right. And so that's the point of the self-awareness, right, Ken? Yeah. See, when you're clear on the source of it, we go, all right, how do I guard against that? And you walk through something that is unimaginable for a parent.

57:04So you do have the knowledge now of this deep pain caused me to do this. So you can get out of it. Here's my question. Can you, through the skill and experience you have up to this point in your life, can you pick up some work that would be just focused on knocking this$42 ,000 out as quick as possible? What did you do? Okay. I was administrative assistant for churches perfect that's easy I gotta tell you tool that up real fast yeah I would be and I know this isn't fun so I know this is a bitter pill but if you went to work for a year and it all be over that'd be cool that's right hmm okay that gives you something to think about then this is think about this is we're only working for the sole purpose of knocking out this pain and this is going to be extra special for you not just to remove the burden of the debt, but what that debt is actually tied to, which is a lot of pain.

58:03Okay. Okay. That makes sense. And I think you need a goal like that at 72 is my point. If you can visualize that to see why I'm doing this, there's really a twofold victory. I think it's huge. Do you have the$67 ,000, that's a retirement income, a pension? It is. My husband's in the service, and he died from Agent Orange. So we get or I get a compensation from that. Plus, there's Army benefits. So there's no nest egg? No. Okay. All right. Cool. All right. How much is your house worth? About$350. Okay. Good. Yeah. I think you're fine. We get you out of debt. You're going to be fine. And, you know, it'd be neat if you started building up some kind of investments, but we don't have to panic about that part of it.

58:54Okay. But I do need you to have an emergency fund of$15 ,000 and be debt-free. So you're$60 ,000 from your goal. So one year of work might be really cool. Okay. All right. I'm sorry. Go ahead. No, you're fine. Go ahead. I was just going to ask along a different note, should I close my local bank accounts and go with Fairwinds? I've read a bunch about it. Well, we're big fans of Fairwinds. We've all got Fairwinds accounts, but we've not closed our other accounts. Oh, really? Okay. We've got both. Okay. Yeah. And so, like, Rachel opened up hers because she wanted that cool debit card. She was, like, the first one.

59:33She went running to do it. So, but, no, you know, for starters, you might end up with them 100%, but I would start with a 50-50. Oh, okay. All right. And make the transition gradually at this stage because you've got enough other things that you're burning calories on. I mean, you know, that you're burning brain calories on. So, yeah, you're doing good. Susan, I got to tell you, just the talking to you, the clarity in the language you're using and the way you're describing all of this, there's a lot of wisdom and a lot of self-awareness. So I predict that you're going to do very, very, very well.

1:00:12And I'm sorry you went through these tragedies and that it left you with this credit card stain as a part of that story. I'm with Ken on that. So, yeah, the sooner you get rid of that, the better and the more stable you get. And, yes, the baby steps do apply regardless of age, regardless of income. But we're apt to adjust the income around here. We're not above saying get a job. We do that sometimes, like almost every day. And Melody's in Denver. Hey, Melody, what's up? Hey, I'm so excited to talk to you guys. Thanks for taking the call. Sure. How can we help? um so i have about four thousand dollars in my card debt that i would really love to just knock out and get out of my life um i have five thousand dollars in savings but the problem that i keep running into and has me feeling stuck is um my husband and i were both self-employed and um Um, both of our jobs are very seasonal.

1:01:14And so winter is when we go into slow season. Um, and that always puts us kind of in like. You're doing what again with your job? It's seasonal. So what do you do? Yeah. Um, I'm a photo editor for like wedding photographers. And then my husband does shed hauling. Okay. Okay. So we're about to go into slow season, and usually we have to be, you know, very, very, very frugal. And like last year, we had to dip into our savings. Well, that's because you're not working. Why don't you work? That's something that's not off on the season. I mean, if you're a photographer, get Santa Claus lined up. I'm not kidding.

1:02:02I'm not a photographer. I'm a photo editor. Yeah, but do something else then. And just because you're a photo editor full-time doesn't mean you can't go be, you know. How about being a photo editor for something other than weddings? Like Santa Claus pictures. I'm serious. Or something that's, I mean, offset your seasonal instead of saying I have to sit on my butt. Right. No, I've taken as many clients as I can possibly get. Only in the seasonal area. I'm also a stay-at-home mom. No, it's for worldwide. I can take clients all over the world. Yeah, but even if it's you, you said stay-at-home mom, so you're making excuses here.

1:02:38I get it, but your husband can at least be working. He can be stocking shelves. He can be driving trucks. He can be doing all kinds of things that you don't even have to touch the savings. Right, yeah. I mean, that would be the logical option for him to do. No, no, no, no, no. It's not that would be. No, no, no. Not would be. Must be. Is. Must. I must work in our seasonal downtime. Yeah, no, I agree. 100%. The issue for him is that he has a bad record. So he did some stupid stuff when he was a teenager. And because of that... Darling, stupid stuff didn't keep him from building sheds. Yeah. And I would tell you, they're building homes.

1:03:21They're building... There's all kinds of crap you can do in spite of having stupid stuff on your record. Sitting on your butt is only one of them. That whole industry, by the way, is full of people who have people on their record. I worked in construction as a college kid, and I was the only one with a driver's license. I had to run to 7-Eleven, Dave. If you spent as much time getting jobs as you do making excuses, you'd have no money problems.

1:04:01Thank you.

1:04:58What does the future hold for business? uses NetSuite, and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. With one unified business management suite, there's one source of truth for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, You spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at NetSuite.com slash Ramsey.

1:05:42It's free at NetSuite.com slash Ramsey.

1:06:02In the lobby of Ramsey Solutions on the debt-free stage, Mitchell and Sarah are with us. Hey, guys. How are you? Hello. Hi. Welcome, welcome. Where do y 'all live? Anchorage, Alaska. Fun. Welcome to Tennessee. It's beautiful here. Oh, we're glad to have you. And how much debt have you two paid off? $217 ,000. Awesomeness. How long did that take? Three years. Three years. Good for you. And your range of income during that time? Started around$100 ,000, ended at$172 ,000. Wow, nice jump in three years. What do you guys do for a living? I'm an occupational therapist. And I work for Costco. Very cool.

1:06:41Have you met George? George would love to meet you. So what was responsible for that$72 ,000 jump? A couple things. When we first started, he was on Workman's Comp. And we were currently living in Idaho. And then we moved to Alaska, which also led to an increase in income and get him back to work. Yeah. Okay. Very cool. So what made you go on the Alaska adventure? I'm curious. Well, we just really felt God kind of opening that door. And you didn't notice the cold air when he opened the door. We welcomed it when it came through the door. Arctic blast. Yeah. Wow. Yeah, we were in a dark year. The year prior, my dad had passed away.

1:07:29He had gone to workman's comp. We had made some dumb money decisions, and we needed to make some change. We had a lot of things happen all at once. And a change in scenery is not a bad idea. Yeah. All kidding aside. Yeah. The pay in Alaska is excellent. It is. And how long do you have to be there before you get to participate in the gas stuff and all that? It has to be one full calendar year starting in January. So if you moved in after January, you have to wait until the following January to start all over. Just start all over. Okay. So you've not been there long enough yet. We just got it. Oh, no, you're three years.

1:08:01Yeah, you just got this. Okay, cool. So how much is that a year? It changes year to year depending. About 10 or 12 grand usually. Oh, no. No. It's like$1 ,000. Oh, I thought it was serious. Yeah, I think this year it was$1 ,000. On behalf of everybody, what are we talking about? A PFD. It's from the oil fields that they have in contract with the Alaska government. If you're an Alaska resident. I didn't know this. You get to participate in the profits of the pipeline. Oh, okay. That's nice to know. Okay. Sorry, I'm just now caught up. I thought it was substantial. I didn't realize it was only$1 ,000.

1:08:32Okay. All that discussion for not much. All right. Anyway, so is this the house? Did you pay off that? No, no, no. No, student loans, car, credit cards, medical and tax. Cool. And how old are y 'all? I'm 34. And 35. How long have you been married? Five years. Okay. So two years there. tragedy strikes new scenery moved to the so how where in this process you get tied into ramsey stuff i started um after i graduated from ot school um in winter of 2019 and we were dating at the time and i was telling mitch about it and he was not on board he thought i was at mlm scheme and i wish i would have made more money and then when we got married went a little more davish and didn't take things quite as seriously and then when we had that hard hard year it's like we really need to get brought everything into focus yeah yeah and come together so mitch when everything when the when the hard times hit what made you say okay we're gonna do the ramsey stuff now um i think for me it was just seeing something's got to change something just had to change and and seeing how scared sarah was and how hard she was working she took on three jobs and with work comp they don't you know really make the ends meet and so it was just kind of all of that and it it took a while for god to work on my heart for that yeah fair enough fair enough that's that's it's not that unusual but i always love hearing the story yeah it's not just because other people are probably in exactly the same spot that are watching or listening to this so yeah yeah very cool good for you guys so what do you tell people the key to getting out of 200 000 worth of debt in three years that's impressive we didn't eat nothing but rice and beans Mexican food yeah um being willing to sacrifice um especially for the short term with the end goal in mind yeah yeah um especially because like um we had a slight pregnancy scare and in the middle of all that and we realized i we couldn't afford to even have daycare we couldn't afford to have one of us step down so if we wanted to have a family we need to make some sacrifices something had to change yeah yeah keep doing the same thing over and over don't expect a different result right so you got to change something yep yep to change the recipe if you want a different cake yeah good good for y 'all proud of you this is herculean effort when you look at those numbers 217 you have been bench pressing like 400 pounds that's pretty incredible so here's what i want the audience to hear how quickly in your journey did you begin to see momentum because you you bought in and you went hard at this thing how quickly before you went oh we're making headwind and we're we can actually do this it was i don't know as soon as we got to alaska kind of we got there and and i got back into full-time work.

1:11:33I got a raise. Sarah got her big raise and it was just, it was, it was really quick. At that point, you guys had already been all in going hard. What's the first debt that got paid off? The car. Yeah, the car. Okay. And what's the one that you paid off that went, I hate you. I'm so glad you're gone. All of it. Yeah, all of it. There wasn't none of it that was good. A lot of hate yeah that's good yeah that's a motivator that's okay good way to go you guys all right and so what do you tell people the key to getting out of debt is man for me it was getting on the same page and uh getting on that budget and just being real with one another communicating and that's that's a huge thing i would say know your why know what your goal is why what was yours A life of peace.

1:12:26A life of being able to do things that we want to do without having to have that fear of I should be doing something else with my money. Whether that is taking education for my career or going on vacation or even just buying. Or not having pregnancy and scare in the same sentence. Exactly. Having that peace. Yeah. Peace. It's not a scare anymore. No. No. Good. Very cool, you guys. Very cool. Yeah. Who was cheering you on? My family, for sure. My mom taught FPU when I was in grad school. Oh, wow. All my siblings did FPU and all of their families. Yeah, all of my family, siblings, parents. We have a lot of friends in Alaska and Idaho that...

1:13:09We were very open and honest with them about what we were doing. They all cheer us on. Well, that's good. So, nobody dragging you down? No. No. Nobody saying you're crazy? No. Oh, there were some people that said we were crazy. Okay, good. That was just for moving to Alaska. Those people motivate, too. I'm just saying, if that guy thinks I'm crazy, I'm right on track. You need that guy, the anti-mentor. Yeah, I like it. Very cool. I remember working years ago on a campaign in Alaska. I was probably 21, and I never forget this. We were out campaigning, knocking on doors, old school style, Dave, and it's probably 7 o 'clock at night, summertime, gorgeous.

1:13:43And I come off of somebody's front porch, and I look to turn to the next house, and I see a gigantic, I mean full-blown adult moose. chewing on flowers in a suburban neighborhood. And that blew my mind. They're everywhere. We have them in our yard. Not a deer, a giant moose like it's a pet. And that's scary stuff. It's pretty scary. Freaks me out. It is. Nasty. You're brave people in more ways than you. I love it. Well, congratulations, you guys. Thank you. Once again, the whole Ramsey crew is proud of you. Thanks for making the trip down here to celebrate and to encourage others on the YouTube and the podcast.

1:14:20and everybody let people know this can be done. Mitchell and Sarah, Anchorage, Alaska,$217 ,000 paid off in three years, making$100 ,000 to$172 ,000. And you know how they did it? They decided to. They got on the same page, decided to work together and know their why. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah. Yeah.

1:14:51Wow. You know, it's amazing the number of times we talk to someone that a change of scenery is not an option for them, and sometimes it's the most healthy possible thing. Yeah, that's absolutely right.

1:15:23Thank you.

1:16:02Lauren is with us in Toronto, Ontario. Hi, Lauren. How are you? Hi, how are you doing? Better than I deserve. What's up? So I'm trying to decide whether to buy or lease a car. My husband leases his car. I currently own mine. and so I'm used to not having monthly car payments. My husband thinks I should lease because we can write it off through our business. I would prefer to buy but of course it would take out of our savings that we have. So yeah, I'm just trying to decide which route to go. Okay. Well, it's quite often that I get to tell the wife that she is right and her husband is wrong because that happens a lot and this is one of those wonderful cases so but let me give you the actual backup your husband's so wrong it's unbelievable how wrong he is he's not just a little bit wrong he's like really wrong okay uh including when he did it so let's walk through how our write-off works what is your tax rate in Canada I know you guys get taxed a lot more than we do and we get killed yeah in the 40s 40 percent so you pay 40 percent I thought it was 65 Yeah, it's closer to where, yeah, it's about$45.

1:17:25Okay, all right. So if you spend in your business a deductible expense,$10 ,000 as an expense, and it goes on your P &L as an expense, it reduces your income by$10 ,000. Right. And so that is the tax write-off that people talk about. All right. Okay. And so what that saves you, let's say you didn't do that. And instead, you had that$10 ,000 worth of income. The taxes on that$10 ,000 would be$4 ,500 on a 45 % bracket, right? Yeah. Okay. And so when you spend$10 ,000 that you don't need to spend in order to be to call it sophisticated and do a write off, you've traded a dollar for 45 cents okay bad trade yeah got it okay yeah it's kind of like i gave an extra ten thousand dollars to the church and i saved the right i can write that off as a charitable deduction i assume in canada correct okay if i give ten thousand dollars extra to the church and i save the tax i get to give the gift which is good and i save four thousand five hundred dollars on taxes but it costs me six thousand five hundred net yeah in order to give that gift so i would never look at someone and go oh i give to charity because i get the tax write-off because that would be a stupid statement yeah because you're trading ten thousand for forty five hundred that's not sophisticated in any math.

1:19:14And that's what your husband is saying when he says, oh, no, we should lease the cars and piss the money away so that we can take the ride off and act like we're sophisticated. No, you're trading a dollar for 45 cents. Right. Yeah. And one of his arguments is that, well, you can lease a new car, so it's always within warranty, and then you don't have to worry about maintenance. Yeah. And then the other argument would be new cars lose 60 % to 70 % of their value in the first four years. So that's stupid. Yeah. Man, this guy, he's just losing all the way around. You're just killing him here. It's awful.

1:19:54Okay. So, no. Wise people do not spend money on their business and trade a dollar for 45 cents and call it sophisticated. Okay. The only time you would do that is when you're actually getting a return on the investment, not buying a depreciating asset or a super-duper depreciating asset called a new car. So, no, this is just dumb, dumb, dumb. And it's rationalization because he likes the car. That's right. He just wanted to buy the car, and he tried to figure out some way to posture and act like it's smart. And by the time you get through doing the math, you look not only not smart, you look just plain dumb.

1:20:32So, no, don't do it. Don't do it. Don't do it. So moral of the story, Lauren, is listen to Lauren. She's smart. And you didn't even know the math. You just had a bad feeling about it. I don't want to be in debt. I don't want to be in debt just to call it a write-off. And don't go in debt just to call it a write-off because it's dumb. The math doesn't work. They never give you 100 cents on your dollar ever in a tax write-off. There's no such thing. So, no, we just don't do those deals, not ever. Marissa's in Houston. Hey, Marissa, what's up? Hi, Dave. Hi, Ken. Hey. My question for y 'all today is my husband and I are paying off our debts.

1:21:13We have about$85 ,000 in debt, not including our mortgage. As we take the baby steps on, we're slowly paying off a Peloton as well as a mattress. They're both 0 % interest. Wow. And then after that, we have my husband. You guys just buy everything, don't you? You financed your mattress and the thing you hang your clothes on, the Peloton. Oh, my gosh. Hey, we use it. But anyway, the truck is a 2021 F-150, and we owe$26 ,000 on it. That is at a 2.99 interest rate. But actually, I know we can pay those off slowly and snowball the payments. But my next question is, we actually have a HELOC worth about$47 ,000.

1:22:03What's your household income? We make, let's see, $15 ,000 a month. Okay. Marissa, please don't justify staying in debt by having low interest rates. Yes, sir. And you've been giving me your interest rates as you went along like there were some kind of bragging rights on a Peloton. Okay. Okay, so no, let's just say this consumer debt, including the truck and the HELOC, is stupid, and we need to clear it all up. Because the faster we clean all that up, the faster we're going to be in a position to really build serious wealth. Well, and the main question we have is the house we're in now we've lived in since 2017.

1:22:45It's a great house, but we have three boys, and we are quickly outgrowing it. So we know that we're not going to be in this home for the long term and plan on moving actually in the next two to three years. You need to get out of debt for you, though. That's correct, of course. Okay. But where we're stuck is we're trying to figure out if once we pay off the truck and pay off the other two consumer debts, then are we going to then pay towards the HELOC and get that completely paid off? Yes. Or should we start saving money to have a larger down payment on our next home? When you sell your home with a HELOC not on it, they're going to give you a check that's$40 ,000 larger because it doesn't have a HELOC on it.

1:23:28Right. So you are saving the money. It's just buried in your equity. Right. Well, we just knew since we're going to be moving in the next two to three years. You're not hearing me. You're going to get the money. Yes, I understand. Okay. So don't kick the can down the road and act like everything's... No, just get rid of the stinking debt. and then when you sell the house they're going to write you a check and you got the same down payment you would have had as if you didn't pay off the heloc and had the money in savings okay exact same down payment okay because it's the exact same forty thousand dollars it still works that way both ways so but you do whatever you want but that's what we would tell you to do obviously so can our rule of thumb on uh second mortgages is if they're less than half your annual income and at fifteen thousand a month this is definitely less than half their annual income and$40 ,000 being the amount, then we put that in baby step two.

1:24:18If it's a huge HELOC or whatever second mortgage we want to call it, then we put it over there in baby step six and pay it off with the mortgages, in which case we would have done what she said to do, which is wait until the house sells or refinance or whatever you're going to do and get rid of it. By the way, these rates are coming down. We're sitting at five and a half right now, a 15-year fix. And so if you're sitting on a 6 % first mortgage and you've got a big second mortgage, it'd probably be a good time to refi and roll them together and get you a 5.5 % on the whole puppy. Now, if you're sitting on a 2 % first mortgage, you're probably not going to want to roll that in and do a refi.

1:24:56But if you're sitting on a 2 % mortgage that's$20 ,000 and you have a$200 ,000 second mortgage at 10%, great time to refi and get rid of that. So start running your numbers at this 5.5 % number on your first and second. and does it make net-net sense to get a new first mortgage at a lower interest rate, cumulative interest rate, right, a weighted average interest rate over the thing? And it may for some of you that are sitting on that. So be watching, be awake, be aware.

1:25:54What's up, guys? George Camel here. What if I told you that you had thousands of extra dollars hiding in your budget right now? Listen, I know how crazy that sounds. You're thinking, dude, I'm broke. My money's tighter than the middle seat on a spirit flight. But believe it or not, you've got more margin than you think. And our EveryDollar budgeting app helps you find it. In fact, the average person finds$3 ,015 on average in just the first 15 minutes. That's like giving yourself a huge raise without an awkward conversation with your boss. Now look, this isn't magic. You're not hitting the lottery.

1:26:24This is just your money that we're helping you reclaim and reorganize. And EveryDollar shows you how to make the most of it so you can make faster progress on your goals. So don't miss out on thousands of dollars of margin. Go start every dollar for free by downloading the app in the App Store or Google Play right now.

1:26:59Welcome back to The Ramsey Show in the Fairwinds Credit Union Studios. I'm Dave Ramsey, your host, Ken Coleman, Ramsey Personality. Number one best-selling author is my co-host today. Steve is in Columbus, Ohio. Hi, Steve. How are you? Real good, thank you. Good. How can we help, sir? Okay. My wife and I are on Baby Step 7, and we have three children. Our 16-year-old is very eager to work, make money, but he looks at more of buying things online and then reselling as his job and we keep pushing for him to get a job how else do we go about this to help him see the importance of actually going to a job or are we looking at it wrong has he has he been able to actually do this with his own money buy something and then flip it?

1:27:54So he, yes. Over the years, he's mowed. We pay well at home. So, I mean, he's stocked up a lot of money, but now he sees it as an online avenue is better for him to make money with his time. Is he actually proving out his theory? Does he make money with his time? Unfortunately, I don't feel he does. And I might be just too overcasting on it, my wife and I, but we just don't see as, no. Okay, we talked to a 19-year-old the other day that had a million dollars. No, we're talking maybe$10 he might make off of a pair of shoes if he buys and resells them. Maybe. But does he do that 15 times a month or one time a year?

1:28:39It's like he goes in spurts. Okay, so here's, I would meet both of you in this and say, All right. Number one, my job as your dad is to make sure that you have extreme work ethic because people that do not work do not succeed. Correct. That's my job as your dad. And I'm going to do my job even if it causes you great discomfort. Yes. This is the kind of discussion I've had with mine when they were that age. okay and then so the bad news is that the good news is i'm going to help you so now if your job is being an entrepreneur and you're using your online skills that are native to you as a 16 year old that the old man doesn't understand that's fine but you are running a business and now let's talk about i'm going to coach you in how to run a business so a business has a profit and loss statement and if you're running a business and you make a dollar an hour your business is failing yeah because you could have been working at job for somebody else and making twenty dollars an hour yes yeah so but if your business is making a hundred dollars an hour and you're working 40 hours i'm gonna be get excited about your entrepreneurial spirit and your business acumen that we're building because we're going to run a p &l and we're going to see do you actually make a profit on this crap or do you have an online hobby and you're substituting that for work.

1:30:01Yes, I think it's where we're going. Yeah. Well, I don't care. In other words, I'm going to prove to him that this is not his job. Okay. By the fact that he's not making any freaking money when I make him do a proper profit and loss statement on this and start tracking his sales. Okay. Okay. So how many items did you sell this month and what did you pay for those items and what did the collective group sell for? And the difference is called your profit. Yeah. You've cost of goods sold in a business, my son. That's how entrepreneurism works. Is it correct to tell him when you do profit, put the profits off to the, or put your actual money that you spent, keep that, because you've got to pay yourself back, and then keep his profits separate?

1:30:44Yeah, you have to at least take your cost of goods sold and put it back in. Otherwise, you run out of inventory money. Yes. And so, let's say he sells$4 ,000 worth of items, and his cost in those items, was$1 ,000, so he made$3 ,000 this month. I would call that very successful for a teenager. That is, yes. Okay? If he did that, we would take the$1 ,000 that he paid for those items out of the$4 ,000 and put it into next month's inventory. Yes. Or a little more,$1 ,500, because maybe we can grow this thing. Yeah. But we're not going to just take the$4 ,000 and bank it or blow it and then have no inventory for next month.

1:31:24What I'm saying is If part of me teaching you work ethic Is to also teach you some business principles And encourage your entrepreneurial spirit I'm willing to do that I am not willing And you are not As a person that lives under my roof Going to kid yourself And burn a bunch of activity Make no money and call that a job Yeah That's an illusion And I meet adults that have not learned that But you've got the opportunity to have this young man under your wing and teach him some entrepreneurial skills. Yeah, Steve, I want to make sure. Dave just gave you great advice. I want to give you some tactical things to do here.

1:32:01You've got to lean in with your kid, and you've got to push him to do what he's doing now better and see if he can make it bigger before you poo-poo this. And I'm not getting on you, but your posture as you started the call, and by the way, I've been there, so I'm not getting on you, but make sure you hear what Dave said. But before you push him to something else, push him to do this really well, which means you got to know the numbers better. And you barely know because I think the whole concept of you is probably a bit foreign and you're a little irritated by it. And I think you're going to get him – you're going to have more effect doing what Dave told you to do if you lean in first.

1:32:40If I can teach my kids to be entrepreneurs successfully, they're going to do better than if I teach them to get a job. And I was just going to suggest something as you push him. Why don't you invest a little bit? Go, hey, and I'm making this up. Do your homework. Get in it with the kid. Do some of your own homework on kids that are doing this well. But let's use the shoe example. And I'm not telling you to do this. This is an example. I might go, hey, I'm going to give you X amount of dollars, and I'm going to invest in you. Because I want to see if you're serious about this. So I'm your investor.

1:33:13I'm going to buy five pairs of shoes for you. and you're going to sell those. And based on what I've learned, what you're telling me, you should make this on the shoes. And walking through that, like Dave was telling you, because now you're teaching him about investors. You're teaching him about a lot of things. And let's put some positive pressure on this instead of negative. That's the only thing I wanted to share. Because I think you end up... That's amazing how you shared that. I like that. Well, Dave's advice is genius, but I'm trying to give you something tactical where your kid goes, oh, dad's not being dad and just, you know.

1:33:43So, like, he'll learn by you being so positive that we actually reveal if he is just scamming you and he's just trying to come up with an excuse not to go pick up a shovel. And under all of this is he's feeling your strength to force him into character-based decisions because that's how he becomes a man. Thank you. I appreciate that. Yeah, he's not. And so what you don't want to do is say, oh, all things that are online and entrepreneurial are bad. Because it always makes me laugh. I remember my grandmother. My grandpa worked for Alco Aluminum for 38 years. He had a job because he went broke in the Great Depression and never wanted to be unstable again.

1:34:25And my grandmother tied into that same emotion. So getting a job was a big deal for them. They were get-a-job people. And so I'm self-employed. And the day I got the call from the publisher that I had sold my one millionth book, the first book, Financial Peace, my grandmother called me and she said, you know, I was praying for you this morning. I'm worried about you. I really think you need to think about getting a job, you know, and you don't want to be that. You know, that's a cute story, but you don't even want to be that. You just so I want to encourage this entrepreneurism, but only if it's not an illusion.

1:34:59I don't want to encourage delusional thought. So let's turn this into money, baby. And you prove yourself. You prove your idea. And if not, you'd be working at Chick-fil-A saying it's my pleasure.

1:35:41Hey guys, I'm so excited to tell you that our new 2026 Ramsey Goal Planner is available right now. This isn't just your average planner. It's your personal guide to setting clear goals and building habits that stick. So get ready for all new monthly content from your favorite Ramsey personalities, tactical goal-setting trackers, and upgrades that make this our most durable planner yet. Last year, we sold out, so don't miss out. Order your 2026 Ramsey Goal Planner for$49.97 today at ramseysolutions.com slash store.

1:36:24well don't just set goals for 2026 learn how to reach them the 2026 ramsey gold planner is here it's packed with monthly content from jade rachel and deloney to help you stay on track with your money and faith and relationships and follow through on your goals we sell these out every year, so seriously don't wait. This thing is a master class in creative design. Our creatives just went bananas. It's awesome. They're$49.97. There's just a few of them left for$26, so go to ramsysolutions.com slash store or click the link in the show notes. Jess is in Rochester. Hi, Jess, how are you? Hi, I'm good.

1:37:04How are you? Better than I deserve. What's up? So my husband and I are in baby step two and we are struggling with managing the cash flow of our budget. Maybe it's because a portion of his pay is irregular, but usually at some point in the beginning of the month, we have to pull from our baby step one to cover the bills so that they're not late. And then the next paycheck, we can replenish our savings. But I was just wondering how we fix this so that we don't need to dig into our baby step one savings every month. probably a shortage of income what is he making um well i guess gross our w-2 for the month income is 7800 and then gross fifth income for him that irregular income is about 2200 but it varies we don't really know and so you can't make it on ten thousand dollars a month well so our minimum to run the household is 8 000 why pray tell um so our mortgage is 2400 and i guess the next biggest thing would be our son's school is 1700 and then just utilities food transportation all that adds up to 8 000 No, it doesn't, unless you have a$1 ,200 car payment.

1:38:33Our car payments, I have credit card debt, car payments, and... How much credit card debt do you have? $8 ,000. And how much do you owe on these cars? 15 ,000 on the RAV4, 20 ,000 on a GMC terrain, and then 73 ,000 on student loans.

1:39:00Okay. All right. How many children do you have? One. Are you working outside the home? Yes. I'm an accountant. Okay. So your total household income is$10 ,000 a month? yes but you can't make it on$10 ,000 a month even with what you've described to me well we can I guess it's the timing of the bills that are a struggle so I keep digging into the savings and then I'm punishing it I don't think you're doing a monthly budget are you I have my Excel spreadsheet yeah that's what I thought you need to get on the every dollar app and lay out a proper budget where every dollar has an assignment before the month begins and you pre-plan the cash flow so that it doesn't get backwards on you.

1:39:54And you say, okay, what's going to wait on his bonus check at the end of the month? And then, of course, ultimately you build margin into this and you flip it to where his bonus for this month is covering stuff for next month instead of last month. but that's going to be done by getting margin and under control. I also have, I mean, y 'all have done some ridiculous purchases. I can tell that. You spend a lot. So are you guys staying out of restaurants? No, you're not. Okay. All right. I didn't think so. We're trying to. Yeah, you're not, though. You're not. What are the combined car payments? It's$15 ,000.

1:40:36Yeah, but I'm just looking. What's the monthly bills right there on the two car payments every month? $1 ,000. That's insanity. Yeah, but, I mean, I think you could get them all paid off, but you're going to have to get the other side of this and create some margin, and you don't have margin in this budget. And it's kind of ridiculous that you don't on$120 ,000. So that's where you've got to get to. So you've got to increase your income and decrease your outgo, and the spread is how you clean up the debt mess instead of spending every stinking dime you make every stinking month and spinning your wheels because you start to lose hope because you feel like a rat in a wheel.

1:41:17Yes, 100%. Yeah, that's the problem. It's scary, I understand.

1:41:24So, you know...

1:41:29Yeah, I feel like I'm just always behind. I'm just... No, let me change the word. It's not I, it's we. The two of you sit down tonight and lay out on every dollar budget for the upcoming month. The two of you sit down tonight and say, okay, why can't we live on$10 ,000 and look at it together? And start asking yourself the question, why has to be cut? Number one, you need to not go on vacation. Number two, you need to stay out of restaurants. Unless you're working there as your extra job to get your income up. Okay, that's it. and then we burn our lifestyle to the ground, if that doesn't work, we start selling cars.

1:42:08Okay. And get rid of these debts. Because I've got to create$1 ,000 to$2 ,000 worth of margin in this to start reducing these debts rather than just spinning our wheels. And you're not going to do that, A, without a plan, and B, without cutting spending, and probably, C, increasing your income somewhere. You probably could pick up some side gigs on accounting that you could do, quote, spare time, unquote, uh evenings after the baby's asleep whatever uh it's tax time here right now you got a bunch of filings and stuff going on right this second uh probably too late on that one actually but um you know whatever you can do around christmas whatever he can do to pick up and just you know if you picked up a couple grand a month and use that let's get rid of the credit card debt and then let's get rid of the car debt and now we start to have some margin and then we can knock off that student loan debt and work that debt snowball smallest to largest in that order and But you can't even talk about doing that right now because you're just borrowing from Peter to pay Paul each month.

1:43:02I understand. But I think the first thing is you're going to cut your lifestyle and get on a detailed plan. Both of those things will make you feel like you've got a raise. And that's going to flip this over. So you're about 10 % to 15 % of intensity that you have to turn up. This is not an intellectual exercise. This is an emotional exercise. I'm so pissed off. I'm sick and tired of being sick and tired. And that's what gets you out. That's what gets you out. Orlando is in El Paso. Hi, Orlando. How are you? Hey, Dave. I'm doing good. I'm breathing. My family's breathing. I'm blessed. That's a good thing.

1:43:43It's a good start. How can we help? Well, I've got a pretty good question. We just recently paid off my house. Good. property um yes sir and um i'm thinking of um doing a equity loan or a heloc on the property to build a um to build another house and sell it for profit and um it's like i don't know i mean it's kind of scary yeah it should be wondering if that's a good idea or not no it's not a good idea it should scare you to the point you don't do it You just worked to get your house paid off. Now you're going to roll the dice on your personal home and hope you hit red? Hope you hit craps? No, I'm not doing that.

1:44:35Not a chance. I love the idea of flipping houses with cash, but not cash from your home. No, no, no. Please, please, please. I mean, you felt a different kind of peace the day you paid it off. and now you're wanting to step back into the land of anxiety and right back into the bear trap. And you said, I'm kind of scared. That's what I'm telling you. You recognize your body physically feels different when you pay off your house and now you're going to want to put that tension back between your shoulder blades. No. Please don't do that. Please, please, please get off that Tic Tac site. That Get Rich Quick Real Estate, whatever you're reading, get away from that.

1:45:19it's going to cause you pain my man and we love you we don't want that to happen to you i'd love for you to do some house flips in the future with the money that you pile up since you don't have a house payment anymore and do it with cash but not with borrowed money on your personal residence once you finally get it paid off that makes my that makes my hurt my head hurt oh my gosh

1:45:53Thank you.

1:46:19purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com slash insurance.

1:47:00In the lobby of Ramsey Solutions on the debt-free stage, Brent and Polly are with us. Hey, guys, how are you? Hi, Dave. Hi, Ken. Hey, Ken. Hi. Welcome. Where do you guys live? I've been to Oregon. Fun. Well, welcome to Nashville. Thank you. A little bit of a haul to get over here and do your debt-free scream. We're glad you're here. Just a little bit. It's beautiful. Thank you. We're honored to have you. How much debt did you guys pay off? $286 ,452, Dave. Way to go, guys. Excellent. How long did this take? Six years, six months. Good for you. Love it. And your range of income during that six years and six months?

1:47:35$108 ,000 up to$170 ,000. $170 ,000? $170 ,000. Oh, wow. Good. And what do you all do for a living? I am a NDT radiographer, Dave. And I work in accounts receivable for a digital marketing tech company. Very cool. Good for you guys. Well done. And the kind of debt, the 286, what kind of debt was it? 56 ,452 was two cars, a boat, and our two phones. Oh, wow. And then 230 ,000 was our house. Oh, boy. Looking at weird people. I love it. Congratulations. It's finally done. Well done. How old are you two? I'm 41. Wow. And I'm going to be 40 in May. And you have a paid-for house. We do. Yes. Wow. That's so cool.

1:48:22What's the house worth? Zillow tells us$550 ,000, but I know what we could get it for if we put it on the market. So probably right around$6 ,000. That sounds right. Yeah. Sounds about right. We know Zillow's not active. Yeah, right. Exactly. All right. And, man, that's so cool. How much in your retirement nest eggs? We're roughly probably right around$860 ,000. Wow, so you're 40-year-old Baby Steps Millionaires with a paid-for house. Oh, excuse me, excuse me. That's with the house. With, yes, included. We're close. Oh, so you're heading to Baby Steps Millionaires. Yes, heading. Almost, but not quite.

1:48:57By next year, Dave. Got it. Okay, yeah. Well, I mean, the stock market shoots up. There will be. Okay. Just like that. There you go. There you go. Way to go, guys. How does it feel to be almost millionaires and 40 years old with a paid-for house? Wild. It's surreal, Dave. Like, it's so hard to explain. Like you always looked at it and I was so like, I could think how I wanted it to feel. And like, now that we're here, it's like John Deloney always says, it's like you have bricks in your backpack and you take them all out. It's finally, we've set all those bricks out of our backpack and down. It's just, we're free.

1:49:28Huge sigh. I love that. All right. So what was the catalytic moment or was it a series of things that makes you guys go, hey, we're doing this and not only are we getting rid of the debt, we're going all the way and paying the house off. Right, exactly. So for us, it was, we kind of thought about the answer to that question because we listen every day. And there was no aha moment, tragic life event. Nothing like that happened. It was actually kind of more of a conversation that we just randomly had. I work from home, so I'm listening to the podcast all day, which is great. But kind of, you know, he comes home one day and we start chatting about it.

1:50:04And we both kind of, we're very competitive people. You should see us play Monopoly. and we looked at each other and we're like do how quick do you think we could actually do this or is it even a thing do you think we could actually do and i am the nerd of the family and so i immediately got into my spreadsheets and started you know color coding putting our pay dates putting how much you know margin we have and it was off to the races truly at that point and we were like let's see if we can do this so no big argument really no we don't argue it was just kind of She's always right, Dave. Only at Monopoly.

1:50:39We don't argue. She's always right. No, he was ready. Like, we were ready to roll. How long had you been married at that point? Right at six and a half years. Yeah. Yeah. So now you're 13 years. 13 years next month. Okay. Wow. Okay. Very cool. Good for you all. Wow. That's cool. That's very exciting. That's a good way to get at it, though. So it was more kind of a, begins almost with an intellectual curiosity spurred by the podcast. Yeah. Yes. And you said, I wonder if that works for us. 100%. Well, and Dave, and also, like, I look at, like, we made a fairly decent income starting off. And I looked at our paycheck every two weeks.

1:51:15And at the end of the month, it's like, man, we're making this much money. And we were felice people. We enjoyed the new vehicles. We totally were. And it's like, I mean, why are we doing what we're doing? We had, like I said, a great income. And it's like, it's just getting taken away. And taken away to nothing. To what? Just so you can show people you have a nice car. We got caught up in that how much is the payment game that so many people, including people that we know very closely, it's, oh, well, what's the payment? You can afford it. What's the payment? And we got caught up in that. And it was something that we were like, why?

1:51:49Why are we doing this? Like, you know, just for a piece of metal that's sitting in the driveway. We called it our yard, aren't we? Yeah. Yeah. Expensive ones. Yeah. I love it. That's fun. Well, that is cool that really what happened is what you value changed to a longer-term vision that was less than the shallowness of just having a nice car. Yep. Very much so. We wanted to wake up and just breathe and not work. At one point, I had the other couple that was up here. I had three jobs. He was working nonstop over time. We were just like, why? Why are we doing this with our precious little life we have?

1:52:31Yeah. Exactly. It goes fast and end up working your whole life for somebody else if you're not careful. It felt like we were working our whole life for the last six years. Yeah, we did. I owe, I owe, so off to work I go. Yeah. Good for you guys. Who was cheering you on? Definitely our parents. We have amazing sets of parents. His parents have a paid off home and have been a huge, huge inspiration for us. My parents have cheered us on. Amazing, amazing friends. Friends, yep. How did you find the podcast originally? Boredom. to be honest um if you type in boredom no that's what everybody wants to hear i was bored and i'm like i honestly just truly was looking for something to listen to that was inspiring and came across it and binged it for like i said i got sent home to work from home during corona years and just started binging it and it was to this day it's the first thing i listen to till the show's over.

1:53:28Wow. Yeah. God bless you for putting up with us. I know. Dave, it's one thing. The rest of us, I don't know how you do it. It's hard sometimes. Hey, not surprised. That's why I apologized. What's the key? What would you tell people the key to this whole thing is? Get your butt to work. Oh, I like that. My alarm would go off at 1 a.m. every morning, and I'd start work anywhere between 1.45, 2, and then I didn't get off till 3.30, 4 o 'clock. And I would do that four days a week. And then on Fridays, I'd go in and work six hours. And then we had our side hustle that we would get furniture. And we would turn around and paint furniture and sell them.

1:54:12Anything on the side of the road was mine. If you look at some of our photos that we have, that's our garage. Oh, wow. At one time, we had 42 dressers in our garage. Furniture store, in the kitchen, took it over, no room for anything. And that's kind of like our end result. So this is going to inspire some people real fast. Give us one example of how much you paid for a piece of furniture and how much you flipped it for. So she got one off the side of the road actually for free. Right. And we put it on a trailer, took it home, and I think she ended up selling it for$750. Come on. It's a beautiful Drexel, vintage.

1:54:43I mean, you know. Wow. Yeah. Just cruising around the rich end of town, see who puts something on the curb. I see it. I'm like, babe, get in the car. Let's go. It was 6.30 in the morning one morning. And she jumps out off the couch with coffee. And she's like, we got to go. We got to go. There's a dresser on the street. And we went and grabbed it. Somewhere in Ben, they're going, oh, I put that out there for the furniture. Got to come by, pick it up, repair it. You stole it. I'm kidding. I'm kidding. No, no. Only legal for you. I know. Good job. Thanks. Excellent work, you guys. Excellent work.

1:55:12Thank you, Dave. I'm proud of you guys. Thank you. Thank you. Very cool. Good for you. Work, work, work, work, work, work. And get on that every dollar budget. And here we go. Yes. Yep. All right. It's Brent and Polly Bend, Oregon. $286 ,000 paid off in six and a half years, making 108 to 170. Their secret was coming together, being unified, work, work, work, work, work, live on less than we make, and steal dressers from people's front yards. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah!

1:55:51Wow!

1:55:55You know, Ken, I knew we'd had a lot of listenership growth, but I had no idea that it was because when you type in boredom, we come up. Well, we'll take them, however we can get them.

1:56:30I'm out.

1:57:03Our scripture of the day, James 1.12. Blessed is the one who perseveres under trial, because having stood the test, that person will receive the crown of life that the Lord has promised to those who love him. Joss Billings said, be like a postage stamp, stick to one thing until you get there. That's pretty good. Half our audience has no idea what a postage stamp is. That's true. Top questions people have about online wills. How do I know if I need a trust or a will? Well, if you've got a large estate, something north of a million dollars, you may need an actual attorney to do the will for you, and you might need a trust at that point.

1:57:40But it's certainly got to be north of a million, probably north of five million before you even worry about that kind of thing. When do I need to start my online will, or what do I need? You need to know, like you do for any will, who do you want to get your stuff, who do you want to take care of your children that are minors, and who do you want to make decisions for if your health goes and you're incapacitated. The health care power of attorney. Is an online will legally valid? Of course. But you need to know that all wills are state law, not federal law. So when you leave one state and go to another to live, your old will is invalid.

1:58:18You need a will done according to your state's laws and their proper signatures or notaries or whatever's needed. And the components of the will itself are different from state to state. And so it's very important to get one that's state-specific. So go to RamseySolutions.com slash willsquiz to find out if an online will is right for you. It's a free willsquiz, and we'll start to learn about this stuff and get that taken care of. It's what grown-ups do. Matthew's in Salt Lake City, Utah. Hi, Matthew. How are you? Hi there, Dave. Hey, Ken. How are you today, gentlemen? Better than we deserve. How can we help?

1:58:53Awesome. Just have a quick question for you. I'm quite entrepreneurial in spirit. And one year ago, I unfortunately had to close a business and was advised to declare Chapter 7 personally just to protect myself from some of the dotted lines I had my name on. Did you? I did, yeah, in early December of 2024. Wow, that's hard. Yeah, it was definitely a fantastic learning experience for me. I have since pivoted and been saving as much money as I can and paying down some of the accounts that were associated with that business closer just out of a moral. And I am due a bonus quite soon at my current position, and I already have about$12 ,000 in savings.

1:59:45And I just kind of wanted to see if you recommend debt snowballing, you know, some of the past new stuff associated with the business, or how do you associate, you know, non-personal debt, but if you're paying stuff off where there's a variance of different things? Well, it was personal debt when it was in the business because they didn't loan your business money. You had personal signatures on all of it. That's why you filed Chapter 7. That's fair. That is correct. And so now you don't have any debt, legally speaking. Correct, yes. Okay. And you're saying that you want to go back and pay back the bankrupted debt.

2:00:26Yeah, as much as I possibly can, just as a small business operator. I know I owed some small businesses, you know, AP accounts and stuff like that. So I've never taken money from anyone. So, you know. How much is involved if we total all those accounts? About 187. Okay. Is all of it associated with the business. Okay. And you're making what kind of money now? 130. Okay. Good for you. All right. Are you married? No, sir. Okay. All right. Well, here's the thing. You do not legally owe the money. and I would only tell you to go and pay it back if you feel like God's telling you to do that. In other words, this is a moral, spiritual tug on your heart.

2:01:20I do not think that is required to be ethical. Okay. I did do what you're doing on my bankruptcy 10 years later. Okay. But it was not because I felt like I morally owed the money, And it was not because I felt like I ethically owed the money because I'm pretty sure I didn't. I was the laws of the United States allowed me to file bankruptcy on the debts. I had repaid already 90 percent of it before we went bankrupt anyway. And I was forced out by craziness on the other side of the discussion.

2:02:02but I did wake up very very clearly knowing one of the one of the few times in my life I'm 100 % sure God told me to do something and in my case and it might be because I'm on the microphone doing this but in my case God told me to go back and pay everybody not just the small ones but everybody and so and that was a trip I gotta tell you it took about six months to convince people to take money that they had not thought about in a decade, you know, particularly bankers because it wasn't their money. And it created like work for them to put this on the books, and they didn't want to do it with their job and stuff.

2:02:38So it was weird. But I did do it, and I don't talk about it much. I don't brag about it because it's not relevant because I'm not going to impugn that on everyone else. I felt like that was a directive to Dave Ramsey. I'm not sure if that's a directive to Matthew, but I would tell you if you felt that strongly, you know, from a spiritual perspective, you should go do it. And I also would tell you there's no hurry. Okay. You don't have any money. You make$130 ,000. You don't have any money. You make$130 ,000. You're talking about$187 ,000. It's going to take a while. Right. By the time I got there, I had the money in one account to write a check and do it.

2:03:19It also took close to a decade to talk my wife into it, but she wasn't going to ever pay them back because she knew what they did to us. She knew how they treated us. And she's still mad 35 years later. But don't make a hillbilly woman mad. I'm just saying that's the moral of the story. But anyway, yeah, but that's, you know, again, I hesitate to tell that because I don't always want, I don't want other people to impugn it as my actions are a principle of ethics or a principle spiritually. So if he decides, he was asking, does he do the debt snowball? No, I would just take, I would do it one debt at a time in full.

2:03:55Yeah. Because the debt snowball is you pay minimum payments on everything, but the little one, you're not paying any payments on these. And so I just list them smallest to largest. When I had enough to knock out the little one, I'd call them up and go, hey, feel like God told me to pay you. And I'm going to run the check over for that$13 ,400 that I owe you. And here, I'm going to drop it by. And I did do some of that. And the reactions were very interesting. I can imagine. They were very weird in some cases. Some people are like, no, don't worry about it. I'm like, yeah, well, too late. I'm already worried about it.

2:04:24And then others are like, oh, it's$13 ,422.13. Are you going to include the interest? You know, it's like people have all kinds of different reactions. Instead of like, I can't believe you're doing this 10 years later. But, yeah, anyway, so list them smallest to largest and knock out one at a time incomplete. complete. And in other cases, if someone was doing this and they had a bunch of debt that they were behind on, we'd be settling these one at a time. But these are settled, so we don't need to go ask for a discount on these. If you feel like you're supposed to pay it, I'd just go pay it and just do them one at a time.

2:04:59It's going to take you a little while, though. You know, I loved about what he said is, you know, a lot of them were small businesses, and I love the sentiment there. And I think God will honor that. I do think that. He doesn't have to, and I agree, but I think that spirit is really, really good. Well, it's a, yeah, it's, in things like that, it's hard to know exactly how to feel, but you can never go wrong leaning towards integrity. Right. Or extreme integrity or weird fanatical integrity. You know, no one's ever mad when you do that. Right. Well, most, I don't know one, but very few are. Very few are.

2:05:40So, yeah, it's a process. So, yeah, very interesting. Very interesting. And, Matthew, you're a good man to at least be thinking about that. I would tell you, make sure you're taking care of your own household first. Make sure you've got your emergency fund in place. You're avoiding personal new debt of any kind. And then as you have excess money, apply it to this program, not scrimping and saving. It's not debt snowball like Gazelle Intensity. It's just as I've got some excess money, maybe I've even got some investing going on. and I'm going to put 50 % towards investing and 50 % towards this program of my excess money.

2:06:15Also love that he went back to work for somebody else, swallowed his pride. He's being productive. He's not licking his wounds and trying another entrepreneurial venture. I love that. Great character. That puts us our 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.

2:06:42Thank you.