You Can’t Afford To Be Careless With Money

23:02$160 ,000.

23:03Dave Ramsey:Do you hate the van? No, we love the van. You should not sell the van. Keep the van. Not because of your reasoning, but just the van is not out of line in your situation. It just represents a quick fix. But not because it's a quick fix. I wouldn't tell you. I think your reasoning is sound, but I think you ought to just keep this van just because it's a good van and you can pay it off pretty quick. Here's what's going to happen. If you sell the van, what are you going to be doing? Saving up money buying another van? Right. Exactly. And you make$160 ,000, and you'll be able to do that pretty quick.

23:41Dave Ramsey:And so you're selling the van. Why, so I can buy another one in a year or in eight months or something? No, that's a bad use of all your brain calories. No, I would just buckle down and pay it off. And you will get the benefit of the thing you brought up while you're doing that. Yep, yep. What do you all do for a living? What's the$160 ,000 coming from? It's a great income. Thank you. you'll be shocked by this. My husband is a social worker and I'm an artist. Okay. All right. Yeah. And so here's what's back to your original point then that is super valid. Neither one of you are, by your careers anyway, are process people.

24:30Okay.

24:31Dave Ramsey:You deal with a lot of subjective things, not objective things. and in order to win at money you have to develop some processes that you stick to and that was in a sense what you said at the opening of the call you said the exact same thing with a lot of wisdom yep okay and so um the uh i'll give you an example we live in nashville and so a lot of the country music people are my friends and uh there's two types of country music people the ones that are pure artists and then there are those that are artists and actually have some business acumen. The pure artists are the ones usually get taken to the cleaners by some crooked manager, and the ones that have a little bit of business acumen become household names for decades.

25:18Oh, thank you. I guess artist turned business owner is my career.

25:24Dave Ramsey:Oh, okay. Oh, you're running a business? Yes. Yeah, you'll get a kick out of this maybe. We sell custom paint by number kits of people's pets. So customers send us a photo. Oh, I thought you were standing in front of an easel. Paint by numbers is a process. This is awesome. Okay. You're making my point for me. I bet George Camel has 50 of your products for his little precious dogs. That's awesome. Good for you. Okay. Now I get it. Have you all ever done a thing longer than your marriage? have y 'all ever stuck to a workout program a nutrition program a anything like that longer than your marriage uh for me being an artist slash business owner but that's basically it okay so that's a good point y 'all i want y 'all to practice this like you're um like like it's a new muscle okay because you're gonna find your marriage is gonna get better on the back end of y 'all grinding this thing out together yeah we're not talking seven years like most like or multiple years like most people who call y 'all are talking like a few months y 'all make a ton of money y 'all can pay this off yeah so i want y 'all to practice building this muscle so i i completely made the wrong assumption about you obviously you are a systems and a process person and so um the very nature paint by number oh my gosh but i mean but also like i i had that's gonna but that's gonna lend itself to the wisdom of her question the way she posed her question and so yes go keep the van and you guys let that be the first part of your muscle of you working together, working money as a system, as a process, let's build that muscle like John's saying.

27:01Dave Ramsey:That's the answer. Yeah, it's a good exercise. Very cool. Good. I love it, Maddie. I love it a lot. Self-aware people. It's one of my favorites. Very well done. Nicole is in Ohio. Hi, Nicole. How are you? Hello. I'm good. Thank you. How are you? Better than I deserve. How can I help? well i'm calling because um my husband and i got married a year and a half ago um it's both of our second marriage so i was married um for 20 plus years i'm sharing finances with my former spouse and he was single for 15 years or a divorce for 15 years when we met and so this month is our first month having our budget meeting and we make, I wouldn't say significantly different amounts, but enough for it to be a difference.

27:57And so I just wanted to find out if I could get some suggestions on how to go about approaching it so that we can start saving for our dreams and goals and things like that.

28:08Dave Ramsey:Good for you. Good for you. Well, the fact that you've been through one that failed and he's been single a long time with no boss in his life except the guy in his mirror makes it harder for the two of you to just go we're both going to throw in and go right um if you were 22 and you didn't have any of these scars or any of these ruts where you were stuck in singleness for 15 years or anything like that you would just jump in and go whoo let's go but you guys this is gonna be hard for y 'all teaching an old dog new tricks is tough right yes yes but But it's going to be worth it. It's going to be worth it.

28:44Dave Ramsey:Jesus said your treasure is where your heart is. When you agree on your spending, you're agreeing on what you value, what you prioritize. You're agreeing on your fears. You're agreeing on your dreams. It's not the money that matters. It's that we're agreeing on where the money is going, and that means we're agreeing on what's important. Okay. And that's a big thing, and that's going to be – there's going to be some polishing going on. There's going to be a couple of these rocks are a little rough, and they're not going to be smooth stones easy. You're going to have to hold your breath a couple times, girl.

29:17Okay, okay. Yeah, because he is the type where he wants to be, you know, he's a manly man, if that makes sense. And so I don't want to be, I don't know if we should do, like, percentages or.

29:31Dave Ramsey:No, no, no, no. You need to do dollars. Manly men work with their wives all the time. And manly men put their childish egos aside for building something that's greater than themselves, which is one plus one equals one when you get married. Yes, yes. And you have to have the courage when you're putting your money in the same checking account to say the words, this makes me very scared. Yeah, the last bozo messed me up, and you're not that bozo, but I still have that scar. And a manly man wants his partner to feel safe. okay okay got it but there might what you're saying is there might be a hunting rifle in the budget somewhere

30:17Dave Ramsey:that's okay that can be there and there could be a nice pair of shoes in there for you too i don't care i just want you to be in agreement on it and not come in and go look what i did honey no no no we're going to be in agreement we're going to decide in ahead of time what we're going to do we're going to lock together because as john said one plus one equals one actually it equals probably about five because you get the power of synergy the marriage advantage all the data calls it

31:15Dave Ramsey:If you've listened to me for more than five minutes, you know that being normal with your money is not a good thing because normal is broke. And I want you to be weird. That's why I love what we're doing with Fairwinds Credit Union. Our friends at Fairwinds just launched a brand new Ramsey debit card, and it says, debt is normal, be weird, right on the front. I love that because every time you swipe it, you're choosing to live differently with no credit card payments and no debt. You see, Fairwinds has been helping people like you ditch debt faster and bill wealth for years. They're not trying to shove credit cards or auto loans in your face like the big banks do.

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32:41Dave Ramsey:The Ramsey Show Question of the Day is brought to you by Y-Refi. Defaulted private student loans can drag on for years, but Y-Refi helps borrowers explore custom refinancing with a low fixed rate and a payment you can actually manage. Go to YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not available in all states. Today's question comes from Molly in Minnesota. Molly writes, my partner and I bought a house together, but I'm the one who made the down payment. I can already tell you we got a problem he shares the monthly payment expense but hasn't said anything about paying me back for half the money I put down okay should I ask him to take out a HELOC just Molly no y 'all break up just break up and sell the house and move on should I ask him to take out a HELOC and pay it off to pay me back for his half half of the down payment you know what's interesting is this is the actual first time I've seen the proper use of the word partner.

33:45Dave Ramsey:Oh, like my business partner. Yeah, and he owes me money. Oh, by the way, I sleep with him. On the building I bought. Yeah, yeah, yeah. No, Molly, y 'all have got, number one, don't take off a HELOC. You're like you're trying to punish him. Don't do that. Because y 'all bought a house together, and so you telling him to take out a HELOC that he has to pay back actually puts your house at risk. Don't do that. That's silly. The bigger issue here is y 'all have some major fractures in your relationship, and y 'all need to address those on the front end. You should have addressed them before you entered into a legal binding contract called the purchase of a house together, but y 'all are already here.

34:26Yeah, y 'all got big issues. I don't even know where to start with this, Dave, other than just to say, don't do that.

34:31Dave Ramsey:Can I pull the pin and throw the grenade? Yeah. Okay, good. Here we go.

34:39Dave Ramsey:You have two choices to fix this, Molly. Get married by Saturday and stop this shacking up crap because you're doing things backwards or sell the house. Those are the only two ways you will survive this. Both ways you have a potential to survive it. but you're not going to survive it the way you are. It's not going to work because you entered into a business arrangement with a person you're sleeping with with absolutely no written partnership documents, and this is going to go sideways, and you have no out when it goes sideways. He could just leave, and you never see him again, and you can't even find him to get the house sold because you can't get him to sign the deed.

35:34He could be in a car wreck.

35:37Dave Ramsey:That happened to one caller. And she called me up and said, yeah, now I own the house with his mom. Because, by the way, he doesn't have a will either because you people aren't real good about doing paperwork on stuff, I can tell. And so he didn't have a will. So guess who his heir is? It's not his girlfriend that he sleeps with, I can tell you that. That'd be his mom and dad. That'd be who gets this stuff if there's no will. The blood heirs. And so now you are partners in a house with the mother of a guy who didn't repay his portion of the down payment. Oh, this is not going to go well, Molly.

36:13Dave Ramsey:People never. Let me help you with this. The word was never. I didn't have a caveat. There was no except. There's a complete never. Capital N-E-V-E-R. Buy a house with someone you're not married to under any circumstances. Period.

36:35Dave Ramsey:Everything that can go wrong in this life will go wrong at some time or another. And you are stuck in a house with that guy. You find out he's doing cocaine. You find out he's got a secretary that he's more in love with than you. You find out and you're just stuck, stuck, stuck, stuck, stuck with no legal or business recourse to get your little butt out of this mess. And you're just beginning to discover how uncomfortable that is when this one little tiny thing about the down payment didn't come up. Like you guys shouldn't have talked about that on the front end. I think they did. And he's just not, quote unquote, paying her back.

37:13Dave Ramsey:Oh, but what happens when he doesn't do what he says he's going to do? then he then he needs to go take out a heloc yeah and yeah off and put it and put his lien on my house no it's just dumber than crud yeah so i'm deadly serious there's only two ways to fix this i i'm gonna i'm gonna caveat i don't think they should get married i think there's too many issues here i know but i'm just saying to protect her okay i see what you're saying you know but now because so so at least when there's a divorce right she has a there's a there's a legal mechanism for getting rid of this stupid house. But right now, there's no legal mechanism for getting rid of this stupid house except getting rid of this stupid house.

37:53Dave Ramsey:And here's another prediction. She ain't going to do any of it. So we're just telling you all these stories so that the rest of y 'all don't do what Molly did. That's the only reason we brought it up because Molly ain't going to do anything except what Molly wants, I can tell. Can I ask you this? This is just fun. I wonder if in the state of Minnesota, I wonder if he would have like eviction rights. Like if she went and dumped him today and said, get out of this house. Who gets the house? Who gets the house? Who gets the French Bulldog? Who gets to stay? And then I got to give you 30 days eviction and then you got to get 30 days and it's going to go to court.

38:27I got squatters right. Like this could get really messy really quick. Like, you know.

38:32Dave Ramsey:Like spray can lines down the middle of the hallway. This is my half. This is your half. My dishes. That's my half of the sink. No water on my side of the sink. That's your Tabasco. Yeah. Oh my God. Yeah, this is so bad, y 'all. This is people acting like they're married when they're not married, and the whole system in the United States is not set up for you. Sorry, darling. The English law is what we're modeled after, and it doesn't set up, with the exception of Louisiana, which is French law, and it's not set up for it either. So just to help y 'all, the way this stuff is laid out, you're screwed in these messes.

39:08My gosh.

39:08Dave Ramsey:All right. Carmen's in Colorado. Hi, Carmen. What's up? Hi, how are you guys? Better than we deserve. How can we help? Thanks for answering my call. I'm calling in today because my husband and I need your help on what to do to get out of debt and start saving for a house. My husband is 22 years old. I'm 24, and we have a one-year-old son. My husband is in his second year of electrician apprenticing through a union, and I just went back to work in July as a dental assistant. So my husband gets paid weekly. His gross pay before taxes on a check is about$900, but after taxes is like$696. And then so for the whole month, it's about$2 ,784.

39:54I get paid biweekly. My pay for the month is about$1 ,500 to$1 ,800 a month. My husband pays all the bills, which altogether our bills are about$2 ,753. um so with his check as you can tell we're left with maybe a few dollars after his check after the bills but including inside the bills we have tithing which is 240 so every week we put in 60 dollars from his check to tithe um i pay my car payment and then the groceries and gas that adds

40:30Dave Ramsey:How much do you owe on your car, hon? So here's the stupid thing that we just did. I had a 2021 Jeep Compass. It was about$22 ,000 that I owed on it. And the car was getting too small. We couldn't fit the baby's car seat in there. How much do you owe on your car, honey? $44 ,000 now. You have to sell your car. That car is going to bankrupt you. That car is in the land of crazy. If you look up crazy in the dictionary, you're going to see a picture of this car. Yeah, okay. That's what me and my husband have been talking about, too, about selling his truck on top of my car. You need to get a$4 ,000 car that you pay cash for.

41:15Okay. So that's one thing, too. We only have$1 ,000 in our emergency fund.

41:21Dave Ramsey:Good. That's a good start. And you know your numbers, so even though he's been paying the bills, it sounds like you all are working on this together. That's really good news. You're doing a good job with that. Yeah, but the car is like wee over in crazy land. Are you going to sell it or not? Yeah. Well, you said to sell it. I know. I said to sell it. I asked if you were going to do it. Yes. Okay, good. This weekend. Yes. This weekend. Put a sale sign on it. Let's go. Okay. The car owns y 'all. You don't own it. Yes. And then that's going to free up so much. And then you guys keep doing your every dollar budget.

41:59Dave Ramsey:We're going to give you a free year for every dollar, and it's going to give you a step-by-step thing of exactly what to do after you get out from under this car payment and how you can walk your way into some savings, out of debt, and start talking about building the life. Because right now, y 'all don't make much money, but you're just getting started, and you'll get there, and he'll be making more money as he gets out of the apprenticeship. Right now, he's starving to death, though. Y 'all will get there, but this car is way off the chain.

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43:33Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studios. Dr. John Deloney, Ph.D. in Counseling, Ramsey Personality, number one best-selling author, is my co-host. I'm Dave Ramsey. Brittany is in Indiana. Hi, Brittany. How are you? Hi. Great. Thanks for taking my call. Sure. How can we help? I am calling. We paid off our house in 2023. Awesome. And we, yeah, we have no debt. We are following your baby steps and your advice as much as we can. The reason I'm calling is we don't feel the sense of freedom, I guess, that we kind of expected or wanted because we're currently saving for a big home renovation.

44:14Our house was built in the 70s and has a lot of the original exterior components, and a lot of them are in need of being replaced. They're quickly going from a cosmetic need to those windows need replaced. type thing. And we're still trying to balance the enjoying freedom with our house paid off with staying intense so that we can get that reno done and then really feel free. And I guess we were just, I was just looking for some words of wisdom or perspective on how to stay patient while you're saving for a big project like that.

44:51Dave Ramsey:Well, it is devastating that no matter what stage of money you get at, you find out it's finite. Right. It's just a pain in the butt. It doesn't matter what you're driving that there's always another one to drive. It doesn't matter where you live, there's always another one to live. And you never really arrive at that. Contentment is kind of a bully in the schoolyard. It says, step across this line and I'll punch you. You step across the line, it backs up and draws another line. It's a moving target, this contentment thing. and um and that that's you know i've run into it too i completely relate to the feeling that you have um it's like you you kind of thought when you got here it was going to be easy or you you wouldn't have to worry about it anymore you could just do whatever you want right yeah and it's not you you intellectually didn't think it was going to be unlimited but emotionally you felt like you were going to feel like you were unlimited like i'm a millionaire I don't have to budget anymore.

45:50What was that? It's like, I'm a millionaire. I shouldn't have to budget anymore, right? Well, we do still budget. I mean, and I knew that we would. No, I know you do. I'm just talking about the feeling of it.

46:00Dave Ramsey:The feeling, the emotion. It's annoying. Yeah. Yeah. It is annoying. And it's also, it's hard because we thought, well, we would be able to use more of our so-called extra money for things like bigger, nicer vacations with the kids and things like that. but I feel like... Well, you could if you move. Yeah. I want to call out what Dave just said. Here's my promise to you. The day these renovations are over, if you and your husband don't get together ASAP and change how you experience the world, you're going to find yourself in yet another self-created prison. Because y 'all haven't made the switch to, we are choosing to live in an old house, which means we are choosing to update this stuff.

46:45Some stuff has to be done, Some stuff doesn't, but we're going to. These are all choices. You're not owned by it.

46:52Dave Ramsey:Yeah, there's two ways to fix an old house, fix it or move. Right. If we were to move, I have considered that thought. Maybe we would be better off moving, but there's repairs that would have to be made regardless. So we're kind of— Yeah, but the point is this. I don't want to say traffic. The point is you're choosing. You're choosing it. You're free. You're choosing. You're doing what you want next. Thank God you don't have this window project and a house payment. Yeah. You know? And two car payments and student loans. Yeah. You'd be what's known as up a creek, right? No paddle. Yeah, all that, right?

47:29Dave Ramsey:It's the whole thing. I mean, so you really are, you know, you kind of got to look back in the rear of your mirror and go, thank God. You know, I had a heat and air system go out on one of our properties the other day, and it was like$10 ,000 or something we had to spend. And I went, thank God that's an inconvenience. Yeah, it's annoying. It's annoying versus a freaking catastrophe. Yeah. You know, which is what it used to be. Everything was a catastrophe. When you're broke, your life looks like a country song, you know? Keep the dog out of the street, it'll get hit. I mean, come on. Everything that'll go on can go wrong.

47:57Dave Ramsey:And so, yeah, the difference is something's annoying and has a, I kind of feel cheated versus a dadgum drama. It's an emergency. It's that old C.S. Lewis quote that hell is locked on the inside. Like y 'all have created yet another prison and then yet another prison. And yet it's going to be a pattern until y 'all decide to exhale and say, we are free. We're choosing to live in this house. We're choosing to go through these renovations. And this is going to be a pain in the butt. And we've done it before. We can do it again. And you laugh and you kind of get that snarl and then you go get it versus this is happening to us.

48:32We are stuck here. It's a victim mindset. It's a scarcity mindset versus a, no, we can do whatever we want. and we're making this choice right here. This is a totally different reframe.

48:43Dave Ramsey:I think you're in control. You're making a choice. You chose to do the windows and delay the travel. And that's not a bad choice. No, it's a great choice. It's an annoying choice. It's a great choice. It's probably the right choice, even if you turn around and sell the house. Like you said, we've got to fix it up to sell it, even if we're going to do that. That's okay, dude. That's all a good choice. The great news is you have choices. Yeah, that's it. For two reasons. You've got choices. Two reasons. One is you put yourself in this position, and two is God chose for you to be born in America, where you still have choices as opposed to someone just dictating to you what you're going to do.

49:14Dave Ramsey:So, yeah, that's the cool thing. And I got to tell you all, one of the things that I distinctly remember, it's a dumb metaphor, but it actually happened because I'm the spender, okay, and Sharon's the natural saver, I'm the natural spender. And so I'm reading these scriptures and it says, Godliness with contentment is great gain. And so I go down the rabbit hole, start studying contentment because I'm like, where do you find this? I want to buy a box of it. You know, I need some of this because I've been go get it, go get it, go get it. Acquisition, acquisition, acquisition, my whole young life in particular in my 20s.

49:52Dave Ramsey:Right. So it's Jaguars and Rolexes. And I'm going to I'm going to acquire. I'm going to I'll be happy when I'll be happy when I'll be happy when I'll be happy when. And, you know, the bully in the schoolyard backs up, draws, draws a new line, says, come on. and you come on he's a do it again do it you never really get to hit him in the nose he never did and so i but after we went broke i went to costco where you can buy 25 pounds of peanut butter and you can buy 73 of anything you need one of and they check your little receipt when you're going out because it's federal law you have to spend 200 in there if you don't spend it They make you go back and finish, right?

50:33And so that's why they check the receipt.

50:37Dave Ramsey:And I distinctly remember, I can take you to the Costco. I had a spiritual experience. I walked out of Costco buying nothing. It was like a breakthrough. I think there's a statue of you in a Costco somewhere. I think there's a breakthrough. You know, it was like, oh, you know, I was like, I don't have to have any of this today. And it was like something snapped. It was real. Yeah. It was real. And godliness with contentment is a great gain. And I became convinced that contentment might be the most powerful financial principle. If you don't have contentment, you get into debt. If you do have contentment, you can save.

51:17Dave Ramsey:If you don't have contentment, you're always at odds with your spouse about money. If you do have contentment, the two of you are just trying to figure out how much you can give away. It's a breakthrough. It's a financial breakthrough. That's true for you. None of the other financial principles we teach. It's true freedom, yeah. It's very powerful. It's a great call. I appreciate you calling so much. I completely relate to you, Brittany. I understand your feeling. It's a very human feeling. It's a journey you're on, and you'll get there.

52:16Dave, 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.

52:24Dave Ramsey: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. Yeah, it's important to understand the difference between them. Life insurance steps in when you die.

53:00Disability 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.

53:09Dave Ramsey: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. And 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.

53:43Dave Ramsey:Go to Zander.com or call 800-356-4282. Protect yourself, protect your income, protect your family.

54:11Dave Ramsey:So many years ago, we came up with this great idea. There were these new things on your phones called an app, an application. So we decided that Ramsey should have an app that would do your budget. And we worked and we worked and we worked and we worked on it. and we developed really over the last decade or so the world's best budgeting app without a doubt. It's called EveryDollar because EveryDollar has an assignment by you. You assign every one of your dollars a place to go, give it a name. Well, what has ended up happening then is that over the last three or four years, we've invested a bazillion dollars in programming and in brilliant digital minds inside this building that do things I can't even spell.

54:55Dave Ramsey:and have managed to integrate into it the whole Ramsey plan, the Ramsey way. So like you guys call in and ask us detailed, nuanced questions about what you do at this baby step or what do I do there, what do I do there? And we've actually got almost all of that now answered inside of EveryDollar. So the all-new EveryDollar, we just relaunched it the other day, and it's a complete game changer. You can watch the premiere on our YouTube channel and see how it works in action. What happens is when you go in, if you've been there before, do it again. If you've never been, go now and get into the EveryDollar app because what happens in just the first 15 minutes or so, you're going to find thousands of dollars of margin.

55:44Dave Ramsey:And then we're going to start showing you how to apply it using the Baby Steps framework and the Ramsey way, so to speak. And the Ramsey way basically is we're going to take you from debt into wealth and generosity. Change your whole family tree. We want you to get there. And so imagine how much you could find to put towards your money goals. The all new every dollar. It's here. Check it out. Jake is with us in Cleveland, Ohio. Hi, Jake. How are you? Good, guys. How are you doing? Better than I deserve. How can I help? So me and my wife were 24. um fresh out of college a few years ago uh so we decided to build a home our forever home um and the cost kind of got out of control our parents stepped in my parents stepped in me and my wife been blessed to have our parents by our side um they actually followed your financial piece back in 2000 there's a different story behind that but they're very uh they've accumulated some wealth over the years um they've handed us over a lump sum of money um to help us build this house.

56:47And whatever is left over, we will pay back in a mortgage payment to them. Me and my wife make about$130 ,000 a year before taxes with a commission bonus for myself at the end of the year. So my question is, and we do have a good amount of savings from the past years of working, about$120 ,000 in savings.

57:08Dave Ramsey:I'm sorry, if you have$120 ,000 in savings, Why the flip did your parents have to give you money? They have been working so hard their whole life to set their kids up, and so they want to help every single one of their kids out. I'm one of three brothers. Yeah, but you may sound like you got in trouble and they bailed you out. Oh, no. No, no, sir. No, no, no. So what happened with the house? You bought too much house? What's the deal with the house? Yeah, so we're building. Oh, you're still building? Yeah, we're still building. We're in the foundation phase right now. Oh, you just started building.

57:41Yes. So the deal was with them was we can collaborate with them. They can help out. I mean, we have a really good relationship with our parents. I work for them, actually. And they wanted this what they wanted to do for us. And so we kindly accepted it. And any cost after their initial lump sum that they handed over, we would pay back to them in a mortgage. And so I guess my question is, is me and my wife are still young. We're 24. We're not thinking of my kids right now. Do we give up a lot of that savings that we have straight back to them at the beginning? Or do we have some of that, keep most of it and travel and have fun in our early 20s?

58:20Dave Ramsey:So do I borrow money from my parents when I'm newly married to travel? That's in essence where this lands. when i say it that way does it sound as crazy to you as it does to me yeah a little bit okay yeah no you you you like did grown-up stuff and went and bought a house at 24 years old pay for your stinking house and then start talking about traveling do you have a good relationship with your parents very good the surest way laws and the surest way to blow it up is to have money in between you. Okay. And I know that's a weird, hard thing to say at 24, especially when you got two people who are like, no, it's no big deal.

59:01It's no big deal. Just take it from two older guys, clear the money between your relationship so that it can stay as

59:07Dave Ramsey:good as it is right now. I think I heard a two stage deal here. Like they gave you a gift of a certain amount and that even wasn't enough. And so then they loaned you more. Is that right? Yes. They loaned us the full amount of whatever it costs for the house we're paying for it in cash. to build. So they're not taking loan out from any, they've been completely debt-free since 2008. I know, but you now owe them a mortgage payment. Okay. So that part where they went through Financial Peace University, they flunked the class because we tell you not to do that ever. Don't ever loan your children money.

59:42Dave Ramsey:Oh my God. Because it puts a wedge between the relationship. Yeah. The borrower is slave to the lender. Now you have to eat dinner. Hey, eat Thanksgiving dinner with your master. Yeah. Okay. That's going to be painful for your wife. Not going to bother you much because it's your parents, but it's going to be painful for your wife. Understood. So how much money do you owe your parents that you have to pay the mortgage on? Probably going to be around$200 ,000 to$250 ,000. Okay. And how much of a gift did they give you? about 50 % of the total cost to build so about 200 to 250 ,000 so you're 24 years old you make 130 and you got a 450 ,000 house yes yeah dang gina okay it's a lot of house dude it's a lot of house all right um well for sure the answer to your question is no you don't need to go on vacation Yes, you need to take the$130 ,000, but I'm even going to go a step further.

1:00:44Dave Ramsey:I'm going to put the$130 ,000 with your mom and dad to limit the size of the mortgage, and then I'm going to go get a commercial mortgage, not from your parents. Okay. Because I don't want this mortgage. I don't want you paying payments to your parents for any amount of money, for any amount of interest. I don't think you're going to do that because I think you guys have worked out this detailed thing in all of your heads that this all works out to the point that you're ready to go to Europe instead of pay back. Here's what I would say. I can see myself working really hard so that I can bulldoze a path for my son and his new wife.

1:01:23I get that. But if my son was to hand me a check for$130 ,000 and say, Dad, I've got this money saved up. This is the part of the mortgage. And then I want you to see here. I'm giving you the rest of it. I took out a commercial loan because I want to just stay your son. I don't want to stay one of your, like, I don't, I don't want you to be my banker. I would be so proud. And in a way you're kind of not showing him up, but you're kind of saying, I'm taking this by, I'm taking the reins here. It would show a level of wisdom and maturity. I'm trying to give him as much grace as I can, dad, because the arrangement he's put you in is madness.

1:01:58It just ends in somebody wanting you to do something for Christmas and your wife doesn't want to and it's like well after all we've it just it's just a recipe for disaster but man if you went and did what dave just said go get a commercial loan for the rest of it and by the way that's a tiny mortgage it's a hundred hundred and twenty thousand dollar mortgage a tiny tiny tiny mortgage just go do that man you'll have that paid off in no time with as much money as y 'all make if you don't go on trips yeah if you don't go to europe and by the way you're i don't know dave trips are more fun when i when i'm older now i don't know why they just are well they're more

1:02:32Dave Ramsey:fun because they don't follow you home. But in essence, that's what this ends up being. I don't have to have Sunday lunch in my bank account. We're going to increase the amount we borrow from mom and dad by the amount that we spend on the trips. Yeah. And so it's like borrowing on the trip, borrowing from mom and dad to go on a trip. And obviously that would be ludicrous. So moms and dads, those of you that graduated from Financial Peace University with a better grade than that mom and dad got, which was an F, here's the rule, okay? If you want to give your children some money and they pay cash for a house and part of the bargain is they never borrow money again because you want your family tree to be completely changed, great.

1:03:15Dave Ramsey:Never make your child, your grown child, your slave. You change your relationship with your daughter-in-law, your son-in-law. You change the relationship in how you interact with each other. it's just you're adding layers to it that you were unintended but they're very real and no one is the exception even a nice master is a master

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1:05:33Dave Ramsey:Tim is in Ohio. Hey, Tim, what's up? It's Ken, K-E-N. Oh, sorry. Hey, Kelly, it's Ken. That's okay. K-E-N. Okay. I was just reading my screen. Pardon me. How can I help? That's no problem. Yes, Dave. So a year and a half ago, I got into your program and stuff. And let me thank you from the bottom of my heart, because that completely changed everything for me. and with I'm married now and my wife is 62 I am 55 and I work for the state and I have opers and we have to we don't have a choice we have to put in 10 percent of our gross income into that and then the state also matches that 10 percent and adds four percent my wife's 401k They do not have any company match.

1:06:31Her late husband only would allow her 5 % to 6 % and not aggressive at all. So there's not much in there, but we currently have$27 ,500 in debt. There's$44 ,000 in that account, and then we have our house. And crunching the numbers and looking at things, If we take the$27 ,500 out of there and just wipe out that debt, that allows us to pay the house off in under five years and 18 months more of investing at$3 ,000 a month. Does that make sense to you?

1:07:16Dave Ramsey:She's 62, 62? How old is she? She's 62. So, yes, we understand we'll be on the hook for taxes, but we are about$1 ,100 away from it. It's going to take the whole$44 ,000 to clear$27 ,000. Okay. So, or close. I mean, give or take$1 ,000 or two, but it's not. I mean, you're going to pay taxes on$44 ,000. It's going to be at least$10 ,000, right?

1:07:49Dave Ramsey:Hello? We would be in the 12 % tax bracket. Why? Y 'all don't work? Yes, we work. How are you in a 12 % tax bracket? Because of filing jointly, and you take the first 10 % off of that, and then the rest of it goes into the 12 % then. What's your household income? About$75 ,000 a year. Okay. I don't think you're doing that right, but I'm not a tax pro, and I can't do it off the top of my head. Anyway, you're going to have taxes. It's going to eat up a lot of the$40 ,000, and so you're basically going to cash out her retirement at 62 years old, pay the taxes, no penalties, and pay off her debt. Yes, I would do that, but make sure you set this money aside for tax.

1:08:42Dave Ramsey:Okay. And have somebody else calculate it other than you and me because neither one of us are very good at it, I don't think. Yeah, I don't think you're calculating that right. But anyway, yeah, but I think either way, you're going to use up most of it either way. Tell me the math behind that, Dave. Like somebody 62 is going to go ahead and pull it. Well, I mean, if you've got retirement, and he's got a bunch, and they're going to, you know, we don't tell people to cash out their retirement and pay before they're retired. But at 62, you're retirement age. And so you can pull it without any penalties.

1:09:13Dave Ramsey:And I don't want to pay that 10 % penalty, but you're going to pay your taxes on it. But, you know, like if we have somebody call in, they owe$300 ,000 on their house and they've got$900 ,000 in their 401k, I'll pay off the house out of that. If they're 62 or older. Yeah. Yeah. Because I have no penalty on it. I'll pay off their house. That's what you saved it up for. And in this case, it's just a blended family, a second marriage thing. And it's just a weird little account. Yeah. It's not a big account. But it doesn't really change them. The principle is, yes, if you have enough in retirement and you can clear all your debts and pay your taxes that you create by doing that, I would do that.

1:09:48Dave Ramsey:As long as you've got some left over. And, of course, they've got all of his. And they're both continuing to work and are going to put$3 ,000 a month back into the program. So that's where we're going. Yeah, that's no different than, yeah, very, very good. Christine's in Virginia. Hi, Christine. How are you? Hey, I'm doing well, Dave. Thank you so much for taking my call. Sure. How can we help? I recently discovered you about a month ago, and I'm hooked now on your little cult, which I'm happy to be. Yes, we're going to send you some Kool-Aid here in the mail. Awesome. My question is, my husband and I are in about$87 ,000 of debt.

1:10:30I'm 60. He's 62. I want to start your program desperately. We both do. But my concern is that of that debt,$68 ,000 is in a debt settlement program. Doesn't mean you can't pay it off. Really? Yeah. Well, aren't I obligated to them for the 55 months I signed up for?

1:10:57Dave Ramsey:Nope. You've already paid them. They got all their money up front. The first handful of payments you paid them paid them. None of your payments, the first handful, went to the debt. It went to them. And then what they've done is destroyed your credit and have put you in default on everything and then set up payment plans with everybody. But I would do it as a lump sum. I'd probably do it as a lump sum. How much of the 87 is in that? 68. Oh, yeah, you said that. Okay, all right. And what's your household income? we make about a hundred thousand together okay well you may find that it's easier to just lump summit and call them up and go okay help me settle lump sums on this rather than payments ask the ask the debt settlement company to do that how many different deaths are in the 68 uh let's see i was just looking at it my problem with them is that they're not doing very well No way.

1:12:01You're kidding. I'm sure. I was hooked. I was hooked, line and sinker, I will not lie. It's been since January. How many deaths? And they've only settled two accounts.

1:12:14Dave Ramsey:Okay. Probably 10. Okay. And they've settled two of them. Okay. What I would do is call them up and say, hey, I'm going to start advancing some cash towards this and you're going to get more aggressive because you're going to feel my foot on your butt. I don't have any extra cash to send them, though. No, you do if you're going to get out of debt. You make$100 ,000. Something's going to change. You're going to get on beans and rice, rice and beans. We're not going out to eat. We're not going to see the inside of a restaurant unless we're working there. We're not going on vacation. We're not spending any money on anything because we're 60 years old and deeply in debt.

1:12:51Dave Ramsey:We've got to get this crap cleaned up. No Christmas presents. Yeah. We're sending cards this year instead of presents for everybody. Yeah. Everybody, here we go. The worm has turned. Times have changed. It's about to change, baby. I mean, you've got to get after it because you don't want to be 70 and be looking at half his debt still laying there because you've been toying around with it. But go ahead and clear the other portion first, and then when you get to the debt settlement 68, then start being on the phone with them going, okay, I need to settle one more of these. Let's get some aggression going here.

1:13:26Dave Ramsey:and it doesn't take five years, then you can work through it in whatever period of time you work through 87 making 100, which hopefully would be working extra selling stuff could be as early as two years, probably a little more than two years to get through that. But you're going to have to be living on nothing, nothing, nothing, nothing, honey. Blankets, blankets, sweaters in the house, all of it. That whole thing, turn the thermostat. I mean, it's a mind shift, man. You've got to have to go. And here's the thing. You don't have a lot of time to do this. It's not like you've got 40 years to figure this out.

1:14:04Dave Ramsey:You've got 40 months to figure this out. So you need to get with it. And you can do it. You can absolutely do it. But the debt settlement companies, boys and girls, the way they work is they collect payments from you for five years. The first set of payments they collect from you, they put 100 % of it in their pocket while letting all of your credit cards and other stuff go into default. Then they go to the creditors and say, oh, these are in default. What will you take as settlement? And so even if you weren't in default, they put you there. That's their process. That's how they do it. And that's why we tell you not to do that stuff.

1:14:42Dave Ramsey:If a washed-up actor between a Snuggie ad and a gold ad on cable TV is pitching you something financial, stay away from it.

1:15:34Dave Ramsey:Well, it happens occasionally. We've got one of our friends stopped in here. the one and only Tim Tebow. Welcome, my friend. Thank you, guys. So good to see y 'all. Thanks for having me. Good to see you again. So we were just talking Papa stuff before you, as you walked in. Got a new baby? We do. Almost three months old. It's crazy. Now I feel like I'm actually getting old. A little gray in the beard there. You got to be careful. It is a little gray in the beard. My wife calls it salt and pepper, though. Yeah, that's good. But it has just been such a crazy blessing. And a lot of people ask, like, you know, being a dad, is it a different kind of love than you knew?

1:16:13And I thought a lot about it. And I don't know because the moment Demi said she was pregnant, I think I already felt it. But I'll tell you what hits you is the responsibility. Like when we get home, I was like, oh, we got to change this cabinet. We got to change this countertop. She could get injured on. She could do this. You're like, you're trying to think 10 steps ahead and five years ahead. And that level of responsibility is surreal. I always tell somebody it's like somebody just adds two more plates on the squat rack, and it just sits under you, and you're like, oh, this guy's heavy, right?

1:16:45It is.

1:16:46Dave Ramsey:So the Tim Tebow is a two-time national champion, Heisman Trophy winner, first-round NFL draft pick, speaker, college football analyst, five-time New York Times bestselling author. I think he's been on here four of those times, if I remember. So I'll take credit for a little of that. He's the founder and the leader of the Tim Tebow Foundation. He and I have done some wonderful ministry work together in and around the sex trafficking world, preventing that, obviously. Yeah, anti. Anti. Big distinction. Yeah, I mean, we both share a love of several people that are in that space, and your team is in that space big time.

1:17:25Dave Ramsey:And so we've had a lot of different things we've done together. New book out. Look again. Recognize your worth. Renew your hope. Run with confidence. Now, I do know you well enough to know the truth is, is that you don't just sit down and randomly go, oh, time to do a book. That something had to be burning and churning inside of you that you couldn't not say. And so where's that come from on this one? It was really inspired several years ago, and I felt like I put it off longer than I was called to. and it was really first inspired at a Night to Shine. It's our worldwide celebration for individuals with special needs and we were at one of the Night to Shines in Arizona and it was during COVID.

1:18:12And so they're driving through the drive-thru and on the red carpet and we're celebrating all of these cars that are coming through and a lot of them are Corvettes. And so all the kings and queens are in the back and cheering for everyone as this massive crowd is cheering for everybody. And there's a young girl in a red Corvette as it drives around. And she is just beaming the joy in her life and in her heart and just oozing out of her so contagious. And as the Corvette pulls by and I see the back of it, and I didn't even know our teams and partnerships with the churches were even making these bumper stickers, but I saw the bumper sticker.

1:18:51And on the back, it said royalty on board. And I just thought, man. Yeah. Yeah, yeah, yeah. That's somebody's daughter, right? It is. It's royalty on board. And so it really led us down this track of really studying what does it mean to be made in the image of God? And so we talked to so many incredible scholars over the last few years and diving in. A lot of people talk about the image of God is rational, relational, functional, right? How we're rational beings, so logic and thought and all this that God's given us are relational, meant for relationship with each other and for God are functional to rule and reign.

1:19:27And I think all of those are part of it, but I think it's a step further and a step that's even more important. And that's when you really look at the image of blank that was used over history, especially in the ancient Near East. It was always a term used for kings or for monarchs. So a Syrian king was made in the image of Bela, or an Egyptian king made in the image of Ra, gods that they believed in. And so when they would have heard that in the ancient Near East that we were made in God's image, what it would have come across to them is that it's a royal worth statement. And we have forgotten that in our society, that when we're made in the image of God, it's not just what we do, but it's who we are.

1:20:05It's the worth statement that God has given us. It's a royal worth statement that He loved us so much, He would create us in His image. And we have just forgotten that. And if you look at what's happening in our societies and around the world, if you look at the boys and girls that are being exploited or trafficked or the loneliness or the suicides or all of this, it's a royal worth statement. We've forgotten the worth of humanity. We've forgotten the value of every single life. And I really, my heart and prayer for this book is that part of it would be one of the most encouraging things that someone would ever read.

1:20:41But the second part will also be one of the most challenging things that hopefully, prayerfully, someone will ever read. Yeah, so as you're talking, I'm thinking, A, the importance of hearing this, but that also means I've got a responsibility to every single person in my neighborhood. Everyone you ever meet is made in God's image. And the encouraging part is we share so much biblical truth that should be encouraging to people. Man, I'm made in God's image. It's a value statement for me. It's a love for me. But it also is why we argued and challenged and thought over and over about the title. Why it's so important to look again is to look again at who God made me to be.

1:21:21But then it also applies to every single person that I see ever of all time. Check that bumper sticker. Your friends and your enemies. Every one of them. Royalty on board. It's royalty on board. Man. That's a profound call for this moment. Yeah. I think that you just couldn't have written it or thought it for what's taking place in our society, for the divisiveness, for the demeaning and the diminishing of people that we disagree with, for the lack of value because of an argument or because of disagreement or because of a political stance or because of a background. And we diminish people. and instead of having a disagreement but still valuing people, you can do both.

1:22:11And as a society, we have to do a better job of valuing who God made us to be, but then also valuing everybody else.

1:22:19Dave Ramsey:Look again. You'll see the bumper sticker if you look again. Recognize your worth. Renew your hope. Run with confidence. This is a brand new New York Times bestseller. I'll go ahead and predict that from our friend Tim Tebow. So, man. Dude, I'm convicted sitting here, man. The thing that keeps running through my head is I remember even teaching teens years ago, you're a king's kid. Yeah. You're a king's kid. You're a king's kid. I remember a pastor teaching us one time. He said, you know, in the Old Testament, in Genesis, it says, God created the heavens and earth and the stars also. That's the mention of the stars.

1:22:59Dave Ramsey:And then he spends 35 chapters on Joseph. You know, I mean, it's like, what's more valuable to God? That individual. It's not even close. It's not even the individual and the stars also. That's right. It's almost an afterthought. That's right. There's only one thing that Jesus as the son of God came to die for, people. And yet we put in place of people or above people our cars or our watches or our praise or promotion or recognition or all of these things. And when you do that, what you are doing, what's implied is how diminished people are, right? That they come after all of those things. And this is a challenge that you are more important than all of those things, but so is every person you see.

1:23:41And especially when you see people that are suffering. And today there are so many people that are suffering. And how could we know the worth that God has put on humanity and not do something, especially when we know they're suffering? So bring it down for the person who's the truck driver or the single mom who's balancing two kids and listening to the Ramsey show trying to figure out how to pay her debts off. What is a thing they can do in their community? Well, it's like we can start foundations and big stuff. But what's something that a person who is just grinding it out right now in their neighborhood?

1:24:14Don't look past. Don't look away. Refuse to look away. refuse to look away um on that person that you're when you're pushing your kids in their stroller and you want to ignore them say hi value them yeah value people if you're the truck driver and how what's taking place well how many kids are being exploited on that right be aware of it talk to your teams talk to your supervisors understand the problems that are taking place and act upon them and people say well what can i do in the macro sometimes it's hard to step into some of these fights because they're big, they're very hard, they're very difficult, daunting and overwhelming.

1:24:50But all of us see people almost on a daily basis, value them, love them, show them the worth. Because how do we know their worth? Well, it starts in Genesis that they're made in God's image, but then is brought full circle when Jesus came and died on the cross for them. And how do we know the value and worth of somebody? By what someone is willing to pay for them. And Jesus Christ, who has infinite value and worth, was willing to give his life in exchange for you and me and every person we ever see. That's how we should see them. And right now we see them through the faulty lenses.

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1:26:02Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Dr. John Deloney, Ramsey personality, PhD in counseling, is my co-host today. Open phones at 888-825-5225. Kim is in South Dakota. Hi, Kim. How are you? I'm great. How are you? Better than I deserve. What's up? Okay. So we lived debt-free, had purchased two used cars. We followed your program since we had our daughter 20-something years ago. And he lived that way. But ran into a little snaggle when we were part of a natural disaster. and we had purchased homeowner's insurance with State Farm. It had a really high deductible because our opinion was we had enough money saved that if something happened, we would pay for it ourselves and not pay a huge premium.

1:26:54So that's how we lived our lives. We don't have to go on vacations. We have one child who was in college, and we were paying for that with cash. She's pre-med, so she has to go to school for that. And so that's kind of how we lived our lives until the storm came. But the storm made our house unlivable, and so we had to go into a hotel for two and a half years. And the insurance company did not pay us like they said they would, and so we ran up thousands and thousands of credit card dollars in debt to pay for food, housing, all of that stuff. And unfortunately, we tried to resolve this with them and couldn't.

1:27:31So we have an attorney who's filing suit against them to try to get our money back. But in the meantime, we're trying to dog paddle our way out of this. And at the same exact time, our child had to have open heart surgery. We had to take her to California, to Stanford. And we spend a lot of time, which I have no control over, these bills at the Mayo Clinic in Rochester. So I never know how to budget because I've got hotel bills unexpected when they say you have to come to Mayo and you have to pay for those things. You have to pay for food when you're Mayo, gas. And so it's very difficult to budget.

1:28:02So I just wanted to know if there's something I'm missing, because sometimes you're too close to it to see it. What's the best way to manage this? Because I don't feel like I have control like we used to have, and I just wanted some ideas.

1:28:17Dave Ramsey:Okay.

1:28:22Dave Ramsey:So for 20 years you were completely debt-free, and you didn't have any money? Well, we did have money, but we used a lot of that to do repair it front. We became the Bank of State Farm. Yeah, I know, but how much money did you have? We had a, I'm going to say, saved up and not used for college cash on him because we just bought this house, probably about$100 ,000 that we had saved up. Why did it take two and a half years, and why were you not buying your own food while working? Well, we couldn't. In the hotel, you can buy food, but you can't cook if there's no... Well, I mean, if it's going to take two and a half years, why don't you go rent something?

1:29:08We tried. There wasn't anything available that met the physical needs that we had. We had moved our neighbor into our home who was 90 years old, actually 95, for end-of-life care, and we couldn't have stairs, and there were just requirements that we had that they could not meet. So we ended up in a hotel, and you had to pay for laundry. you had to pay for meals every time to day.

1:29:32Dave Ramsey:I mean, State Farm screwed you, but so did those decisions. Yeah. I mean, you quadrupled or 5X'd your cost, and it doesn't take two and a half years to rebuild a house. Oh, it's not even done now. I mean, why? I built an entire house in 11 months. Why can you not build a house? I've got family members that just lost their house in Texas and last night was their first night back. But it's been, what, four months, five months? Yeah, two and a half years. Tell me about that. It seems like they could have knocked the whole house down. One, it was a natural disaster, so there were lots of building projects going on.

1:30:15So there weren't a lot of contractors available. It was also during the time where you had high gas prices and stuff, and contractors didn't want to come out to look at the house if it wasn't something that they wanted to do because there was so much work. There was a lot of contributing factors. Also, the fact that State Farm was not approving things, you kept having to wait. They would make us do another estimate and another estimate and another estimate.

1:30:39Dave Ramsey:But you stayed in the ditch rather than making a decision to do something completely different for two and a half years. So that's what puts you here. My goodness. And now the health, your daughter that's studying to be a doctor, has had open-heart surgery? Correct. So she's not studying to be a doctor right now. She's recovering, right? No, the school's letting her stay in school, and she's trying to do stuff, you know, online and submit things sometimes late. Did she have health insurance? She has our health insurance, my husband's health insurance. And does it not cover the surgeries and the other stuff?

1:31:20It covers surgeries, but it doesn't cover any of the other things associated with it. like hotel bills and gas and food when we go to Mayo or when we had to go to Stanford. We went to Stanford for seven months.

1:31:33Dave Ramsey:Yeah. So what is your household income? $188 ,000. And you can't buy a hotel bill and go to Stanford if you make$188 ,000? Well, again, I mean, we did and, you know, put things on credit cards. Why? You make$188 ,000. Because we had a mortgage payment, and we had college tuition, and we had other things that we were paying. I mean, it wasn't – and we were paying for the house while we were in the hotel. I mean, there was a lot of government. I could sit here and go over a single bill, and you'd go, oh, that makes sense. But we're not extravagant. I mean, we're not – give you an idea like we've canceled our trash service and gather up our own trash and take the dump ourselves.

1:32:17Yeah, but hold on. We didn't run sprinklers. But we're saving money. Yeah, we're not trying to pick those apart. I think if I back all the way out of this thing, I think the part for every emotional health challenge, there is this distance from this scary, terrifying line called reality. And if you on my show, I say this probably three times an episode, which is the life you had is over and you got a new one now. and what most people try to do is keep parts or the whole of their old life going while navigating this new reality and so for instance you were in a position when you were debt-free and had a hundred grand in the in the bank and y 'all made two hundred thousand dollars a year to fully fund your kids college that's a dream you'll have it's a priority for you if you can't afford it though you can't afford it and that's a hard conversation with your kid that that's what i'm that's what i'm talking about.

1:33:14Dave Ramsey:Yeah. And you know, the third month, not the third year, right. I sue State Farm and I move out of a hotel the third month. And if I have to pay for nursing home for the 92 year old neighbor as to just to make me feel good about that, I will, or maybe not, or go to my church and say, maybe I can't do this. I thought I could help this guy. I can't help this guy anymore. I'm not in a position because only the strong can help the weak. And right now our knees are broken and we can't do anything. And so, no, we can't pay for med school. And no, I'm not living in a hotel. And no, I'm not putting out requirements for a 92-year-old neighbor that caused me to go completely broke and lose everything I owned because I stayed in a hotel two and a half years longer than I should have.

1:33:57Dave Ramsey:So I think you got to start putting some limitations on some of these things that you keep declaring as absolutes in this conversation. The absolute is we got to have a place to live and we got to keep our daughters like healthy and outside of that i think everything's got to be back on the table 188 000 will do those things yeah without credit card debt and without parsing it out and parsing it out and parsing it out you know so and you know just if it's any consolation to you at all state farm has a horrible reputation on claims you're not the only one so sue their butt but i'm not going to wait around on them to fix my life either.

1:34:52Dave Ramsey:How many times do you end up with too much month at the end of the money? Even if you can cover the bills, there's nothing left over. You work your butt off and you still feel broke. That's normal for most people. But you do not have to live that way. You can completely transform your money and your life with EveryDollar. Our world-class budgeting app is better than ever. Now, EveryDollar coaches you to find extra margin every month so you can make real progress and change your family tree. The average person finds$3 ,015 in just the first 15 minutes. That's extra money you could use to beat debt, to build wealth, to finally breathe again.

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1:36:07Dave Ramsey:John, I came away from that last call feeling like I was too tough on her because she's been through a lot. Bless her heart. And but there's some kind of a thing that I guess you can guide us through from a counseling perspective. I could do it almost from a business acumen perspective. But when tragedy occurs, not if, in your life, it's going to have financial implications. Correct. how do you because i meet people and and she had done some of this i mean bless her heart she's been through hell it's awful okay um and so i i should have been probably more sympathetic but there's something that happens and i and i did it i think i think i did it during bankruptcy um it like it gives us permission uh to be illogical in setting boundaries for ourselves you know it's like okay this has happened and so now all the rules don't count does that mean you know what i'm saying totally it's like a human nature thing i i can think of times i've done it too not so it's not just poor kim with the hell they've been through no i've done it yeah But there's also – how can we coach folks that are listening to say, okay, well, what should you do when tragedy occurs?

1:37:42Dave Ramsey:Somehow you've got to put – you've got to truncate the – you've got to cut off the damage, not expand the damage. Yeah. The only path – and I've wrestled with this for a couple of decades, sitting with somebody whose life was going one way. And it was often started with my college students. Like they would be having a plan to go do a thing and then mom would get cancer and they want to continue their degree in, you know, molecular biology, but also, and it's, it always came back to, hey, everything in your life is different now. And we have to start here. And, but I don't want to, you're right.

1:38:21It's not fair. You're right. This shouldn't happen. You're right. And yet here we are. So the old phrase is you have a new normal. You have a new normal. And so the only thing I've seen people do to be successful in my own life and folks I've sat with is this word that we have an allergy to in our society, which is grief. You have to spend some time just mourning this thing is over now. And now I have to move forward. I wanted to pay for my kids' college, but now my husband had a stroke and we've got to pay hospital bills. And I got to sit down with my sophomore in college and say, this blows up your whole life and I'm so sorry, but here's reality.

1:38:58and instead of wanted to take care of my 92 year old neighbor i wanted to what a noble amazing thing and suddenly i don't have any money i wanted i kept thinking house i don't have a house right i kept thinking that in in two more months they're going to get this thing rolling again and then two more months after four months three months six months i have to say there's nobody coming and we are racking up bill after bill at this hotel we sure is credit state farming have to do something different. Yeah. Right. And I was telling you off air, I had a family member that lost their house in the Texas floods.

1:39:28They lived in a hunting trailer for months because that's all they had. Not because they're noble or tough or anything. It's, it's all we had. Or the alternative is, I'm going to, I have to put myself in jeopardy in my older age and run up a whole bunch of debts. I'm never gonna be able to pay off. And it's that the folks that I see are able to experience tragedy, which we all will. And we talk about resilience, we talk about growing from, or there's a big word, post-traumatic growth, right? Those that I see make that move are the ones who can sit in that exhale grief and say, everything's different now.

1:40:06What's my next right move? And if you can do that, there's, it's a, it's an amazing trajectory. If you don't, you drag that past and it's this weird, I have permission to just go buy that meal. I have permission just to stay in this place for two and a half years i have permission to keep doing the awesome work i was doing with my elderly neighbor um even though reality says you can't afford it it's not going to

1:40:30Dave Ramsey:happen yeah and we're using her as an example of course i'm picking on her it's all of us no i wouldn't wish what she's experienced on on eating yeah i i do want to go back and you know lighten that up a little bit but um it's the lesson because one of the reasons you should listen to the show is the lessons right right not just the entertainment value of of people's stuff but But you ought to say, okay, what's a lesson I can take away so I don't end up there? Well, the lesson is you limit the financial impact of the tragedy by restarting your life with a new definition quickly. As quickly as you can get there.

1:41:06Yeah. And sometimes you don't feel your way into that. You start acting your way into that. The feelings will come later, up and down like a roller coaster. But I'm going to make the next right move, which is.

1:41:16Dave Ramsey:Okay, I'll give you an example. Here's one I do all the time. Okay. have for 30 years. We're getting a divorce and the lady calls and says, I make 30 ,000. He makes a hundred thousand. And I want to keep the house for the kids. I don't want to disrupt their life. I don't want to disrupt the kid's life. A thousand times out of a thousand. I say, honey, you got to sell the house because the life you used to have is no more. You no longer have $130 ,000 income. You have a$30 ,000 income and you can't afford this house. The kids are already disrupted. It's called divorce. And so they're restarting.

1:41:53Dave Ramsey:The best thing you can do for them is to restart them on solid ground, not a sinking ship. And you trying to keep this house as a sinking ship. So restart, reset your vision of your life. And that's a little miniature one off version of what we're talking about. We talked to folks all the time who I was making$120 ,000. My company did layoffs, and now I'm in month nine with no income. And they'll spin up a lot of activity. I've got on LinkedIn and sent out 10 ,000 resumes via email. No one's getting back to me. So I think, yeah. But it's going back to that reality. Exactly. So when you are restarting, one of the things you have to do is take inventory of what is still there.

1:42:36Dave Ramsey:What is still here? The income. This is the income that I do have. and this is i have you know it's almost like count your blessings yeah okay here's what i do have to work with as opposed to what i used to have to work with and i i what i do have is a situation in texas where uh everybody got wiped out at once in that area so finding a contractor is dadgum near impossible that's right and so i don't have a uh an overabundance of contractors to work with right okay i don't have that and so what do i have i got a hunting trailer i got an old hunting trailer with an air conditioner i plug it in and we're going to make a go of it and until we can get the contractors to show up because everybody else is in line and um uh i i can tell you this there are the city of new orleans was virtually destroyed a couple of decades ago by a hurricane called Katrina.

1:43:32Dave Ramsey:And there are Cajun restaurants all over the United States today from people who left New Orleans because they had to start over. Yeah. And they couldn't start over there. I was in Houston. So many people came and said, new restaurant, man. We got to start here because my home doesn't exist anymore. My life as I knew it before, I have to restart. And in some cases, it's pull up stakes and go to a whole other area. That's right. Is that fun? No. Do you lose your family heritage? Yes. Is it? Do you weep? Yes. And this thing, reality, just keeps chugging along. Math doesn't change. And it's hard, but it's true.

1:44:08Dave Ramsey:And so if you're in the middle of a storm, like poor Kim has gone through multiple storms at once. Yeah. And she had like the perfect storm. It's awful. The only thing we can tell you is take stock of what you do have, not what you used to have, and reset a new vision that fits within those numbers. and the other stuff is you have to sadly say no to that's right i can't live in this area anymore you can't go to the school anymore i can't take care of this person anymore i can't do this again and you have to you're gonna have a whole lot of cants and that's what i mean by truncating you're gonna have to stop doing some things that you used to were able to do in order to create a new life with the new limitations and in the new situation that is healthy and that doesn't follow your own Because if you don't, you end up with two decades to clean up the mess.

1:44:54Dave Ramsey:The tragedy goes on indefinitely. Until you stop. Until you stop. Yeah. Trying to recreate the old life. Yeah. And this happens if there's an affair. It's not fair, by the way. It's not. It's not fair. Yeah. And this happens if you have an affair in your marriage. This happens if you lose a job. It happens to all of us multiple times throughout our lives. the quicker you can exhale sometimes getting out a pen and a piece of paper what is true mathematically what's true what do i have what am i grateful for i got i got a trailer in the back i'm gonna have to move in there and then that's the ash with which you plant the tree and man new trees can grow but you gotta plant them in soil of reality

1:45:49Dave Ramsey:Many of you listen to The Ramsey Show because you're sick and tired of getting nowhere with your money. You work too hard to live paycheck to paycheck with no money in the bank. But here's the deal. Just listening to the show won't change that. If you want different results, you have to do something different. We've helped millions of people save money, ditch debt, and build wealth. And you can too. But you've got to have a game plan, and that begins with our Get Started Assessment. Go to RamseySolutions.com slash start now, take the free quiz, and get your free step-by-step action plan. If you've had it with money stress and are ready to take control of your money for good, go to RamseySolutions.com slash start now.

1:46:39Dave Ramsey:In the lobby of Ramsey Solutions on the Debt Free Stage, Ryan and Amber are with us. Hey guys, how are you? Doing great. Welcome, welcome. Where do you all live? Spring Grove, Minnesota. Southeast Minnesota. Cool. Welcome to Tennessee. Thank you. Good to have you. And all the way here to do a debt-free scream. How much have you paid off? $180 ,000. Very cool. Over 32 months. 32 months. And your range of income during that two and a half years? Started at$140 and got up to$180. Cool. What do y 'all do for a living? I'm a construction superintendent for a general contractor. And I do ultrasounds.

1:47:14Dave Ramsey:Oh, very cool. Good for y 'all. Very good. So what kind of debt was the$180? It was our house. Oh, look at it, weird people. Young weird people. Paid off a house early. I love it. Yep. So what's this house worth? uh we're selling right now and be right around 300 good for you guys way to go and how much you guys got in your nest eggs already your 401ks and stuff just a little to over 200 right now all right so you're about a halfway to a millionaire already and you're what 30 how old are you 28 and 27 there it is not even 30 i don't know if y 'all didn't get the memo you're not allowed to do that you're not you're not able to do that anymore yeah it's different to be weird but well congratulations how long y 'all been married four years okay and two and a half of that you've been tearing into this mortgage yeah yep so tell us the story how'd you get tied into ramsey uh my first employer had uh smart dollars so got uh got tied into that and then followed the baby steps from there um so we originally bought the house and uh we were working on like side projects in the house as a little fixer-upper working on our side projects and then the spring came around like a year and a half into buying the house Amber wanted to do some siding exterior updates and I was like so we had some money set aside for that and I was like ah let's just pause on that let's pay the house off so actually it was uh what was it for the months that we paid it off it was 13 months we paid off 132 ,000 so we just paused all our projects and then put 132 away in 13 months whoa that last year was really intense yeah very yeah okay we want to i want to get to these projects so we're knocking this puppy out yeah yeah wow wow very cool yeah i wasn't on board at first entirely um i really want to do that siding but there's a point where it was projects that we needed to have done and projects that we didn't need to have done and when we sat down and ryan's like this is how much we're spending on interest it's like oh my gosh it's just insane eye-opening over the life of the loan how much you would pay you all don't realize it yet because you've been married four years but most couples get to the oh i didn't know we could get through this after a major crisis and y 'all decided early on let's tackle a big monumental thing that nobody else is doing together y 'all don't know this yet but y 'all have proven to yourselves there's not a thing that the two of us can't lock arms and and tackle together over the course of your entire marriage together it's so i'm gonna smile all day because this is awesome this is fantastic man yeah there's so many good things that have happened to you what you've become while you're doing this so proud of you have y 'all got the siding done since y 'all paid it off no that's the next spring thing first i upgraded my car i was driving an 08 impala it had what 210 000 miles on it that thing was so loud it was very embarrassing but you learn not to care what people think.

1:50:15Dave Ramsey:I love it. So yeah, you needed a car. Yeah. I'm glad you did that. So first goal was that then we'll do the siding next spring we got. And so we just start laying out now that we don't have payment in the world. We start laying out goals and knocking down goals, right? Travel, car, siding, whatever it is, right? Amber, let me ask you this. Okay. I've had projects that start burning a hole. Every time I pull in the driveway, that's all I see. I don't see the house i don't see my awesome wife kids i just see that but when you grind out another goal i stop seeing it all the time right does that make sense has it become less a burr in your soul yeah it's like it's worth it it's like the house is paid for now and i can wait a year on sighting it's okay yeah yeah very good way to go you guys all right what do you tell people that are 25 years old they want to pay off their house it can't be done america is dead the capitalism is killing everyone it's a systemic problem we're all stuck oh wait a minute hold my beer ryan and ember just paid off their house at 28 years old what do you tell them the key to getting out of debt is i would say by far the biggest key is to uh just forget what other people think about you it's your own money you're working hard for it uh do live your own life live your own goals i think we were listening to the podcast a couple weeks back and jade said it best she said And the biggest superpower you can have with money is not caring what other people think.

1:51:39Dave Ramsey:And that's so true. So you did have some other people that had some thoughts, huh? Oh, yeah. Yeah. You definitely get weird looks. That's for sure. Yeah, because people know that y 'all aren't starving, right? They know y 'all are doing well. And then they can hear your car coming nine miles away. And they're like, hey, you know you can get a new car. And it's hard. I mean, the temptation is definitely hard. But, I mean, at the end of the day, it's worth it. Because when you're making that kind of money, you can literally on the way home pull into a dealership and go home with a new car that day.

1:52:08Right. With just a signature, right? And to just go home and grind it out. It's so cool, man. Who taught you both? Because this is a – and again, I'm kind of hijacking this call, this conversation. Who taught y 'all to sit down together and to say, I want this? And the other person say, well, I want this. and we're going to talk about this not as enemies but as, okay, we both want different things, but we're going to come to some sort of solution. That had to have been modeled somewhere for you or y 'all just are, y 'all even weirder than paid off house people. Where'd y 'all get that from? Did your parents model that for you?

1:52:47My parents definitely did for me, yeah. Yeah, I'd say our parents were big models in that. And somebody once told me, it's not you and him, it's not you versus him in a problem. It's you and him versus the problem.

1:53:00Dave Ramsey:ta-da ta-da yeah there it is right i know but people told me a lot of stuff when i was 24 i didn't listen to them man that's so amazing that's good that's very good well done you guys all right so the secret is not caring what other people think that absolutely and then that frees you up to just do what you think and decide who gets a vote and if it's not one of us nobody else gets a vote so who was cheering you on lots of friends co-workers parents of course um our big thing is probably just how competitive we are though because we dave not to like make you as an insult but we would call each other davish if one of us started slacking oh yeah you're an ish like a dr zeus character you're an ish don't be an ish it's just a wish yeah i like it that's good y 'all are the only ones in america that uses that that's mean Dave is an insult.

1:53:55Dave Ramsey:So that's good. I like it. I like it. I'll take it. My name gets used a lot of other ways. I was going to say, y 'all aren't the only ones that use Dave as an insult. So that's at least a positive methodology. I'll go with that. Good job. You guys. Very, very, very good job. So, um, when your mom and dad actually realized you're actually doing this, what did their face look? I mean, like mom, we just wrote the last check. We're done. So my dad, I would meet him every week for lunch, and I'd always tell him where we're at, and he'd be like, oh, I'm so proud of you. That was huge just to have that reinforcement all the time.

1:54:30But my parents actually paid their house off in four years, so I was kind of like, we got to beat that four-year life. Oh!

1:54:38Dave Ramsey:You are competitive. Dad. Nah, nah, nah, nah, nah. Yeah, I like that. Very good. Gosh, can I just say this to all the dads out there? how proud is he of that you want to have an amazing daughter that grows up into an amazing woman have lunch with her every week and never let her leave the table without you looking her in the eyes and saying I'm proud of you that's huge that's a super power your dad gave you everything and you gotta man you're gonna have to get pants to go all the way to the floor now because you got yourself a rock star you're married to it's amazing it's amazing All right, you guys.

1:55:19Dave Ramsey:I'm proud of y 'all. We're proud of you, too, just like your dad is. Way to go. Ryan and Amber from Minnesota,$180 ,000 paid off in 32 months. House and everything. They're not even 30, and they're already halfway to being Baby Steps Millionaires. They'll be there in about 20 minutes at this rate, making$140 ,000 up to$180 ,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah!

1:55:52Dave Ramsey:Yeah, baby! That's how it's done.

1:56:32We'll see you next time. Thank you.

1:57:03Dave Ramsey:Well, no, by now the Fed has dropped rates, and mortgage rates have followed slightly. They dropped them slightly, and mortgage rates have followed a little bit. 5.71 right now for a 15-year fixed. If you're financially ready, now is a great time to buy or sell. Buying or selling an affordable home you love is possible when you work with a Ramsey trusted real estate agent. These pros are hand-picked to guide you through the market and keep your financial goals top of mind. Find a trusted local pro for free at RamseySolutions.com slash agents or click the link in the show notes. Lane's in Ohio.

1:57:38Dave Ramsey:Hi, Lane. How are you? Good. How are you? Better than I deserve. What's up? So me and my fiancé, we're 21 and 22, so both live with our parents. We're looking to move out probably in May when she graduates college. and we don't really know if we should buy a car for her first or wait until we buy a house, but I don't know if we buy a car or if we have 20 % down for a house. You can wait on the house. You need to get a car first. It's okay to rent an apartment for a year and you've got to save up some money. And if you use part of the money you've saved to buy her a car for cash, then you need to replenish that for your down payment fund to be full again.

1:58:23Dave Ramsey:And if that takes a year and you rent a little apartment for a year, that is not going to set you back in your life. You're going to be fine. Okay. Should we put 20 % down on our house or should we just do an FHA one? Well, FHA has MIP, which is much like PMI. PMI is private mortgage insurance. Mortgage insurance premium is what MIP stands for. And FHA is a much more expensive loan in all the fees and the interest rates than a conventional loan. So if you have the ability to put together 20 % on your first home, you're better off to do a conventional loan than an FHA loan. But you don't have to worry about that right now for about almost two years from right now.

1:59:12Dave Ramsey:Because she's graduating in May. You're getting married then, sounds like. And then we're going to get her a car. And then we're going to rent for a year. and that puts you almost two years from now. Yeah. The thing you need right now is one of the fruits of the spirit, a healthy dose of patience, man. You want to give her the world, you want to give her everything, and I love that, but slow down. Yeah. It's going to be good, man. Back it off. Slow your roll. Nikki's in California. Hey, Nikki, how are you? Hi, John. Hi, Dave. Thanks for taking my call. Sure. What's up? I'm calling because my husband and I are in a little over$300 ,000 worth of debt.

1:59:53About 120 of it is IRS debt, and my fault. But I know you say, you know, do whatever you need to do to break away from the IRS. They sent notices for liens and levies and all that. So we set up a payment plan, but I am wondering how desperate we need to get in this situation.

2:00:23Dave Ramsey:Very. What's your household income? We make about$350 ,000. Okay. Why, pray tell, do you owe the IRS$120 ,000 then? well okay so i was previously divorced um and at that time i'm a nurse now i'm making money now but at that time i was not i had three kids i literally just put my head down and worked and worked and worked just to keep the loop over our head i did not file taxes probably for about four years um okay and now you've gone back you've gotten remarried and now you've gone and filed Yes, I went and filed and then our income together is just way too much. So obviously we owed that first year.

2:01:09So yeah.

2:01:10Dave Ramsey:Okay. And what's the rest of the$300 ,000 in debt? So we've got about 100 in student loans and the rest of it is credit cards and personal loans. Okay. All right. And so you've got$80 ,000 in credit card debt? Yep, about that. How long have y 'all been married? We just got married in 23, June of 23. Okay. And who brought the credit card debt? Well, so, I mean, we both had some. I had gone to... Has it continued to grow after you got married? No, we've been paying it down since. So we've gotten rid of several. All right, so here's where we are today. Today you make$350 ,000. You got$300 ,000 in debt.

2:02:06Dave Ramsey:What part of California do you live in? The Bay Area, the most expensive part. Yes, absolutely you do. Okay. All right, and how much is your house payment? $5 ,000. And what's your house worth? About$780 ,000. We just bought it in 23, so we bought it for$750 ,000. Well, it's probably worth more than$780, then. If you bought it in$23 ,000. Well, that's what Zillow said. Well, Zillow said. Okay. Yeah. Okay, so let's go with$900. And what do you owe on the house?

2:02:47About$620, maybe.

2:02:49Dave Ramsey:Okay. All right, so you guys are living right on the edge on everything. Everything's got a payment on it. Everything's locked down. We make$350 ,000, and we feel broke. Pretty much. Yeah. Okay. And it's not a super expensive house for San Francisco. I mean, that's a cheap house, really, right? Yeah. Yeah. What do you do for a living? You're a nurse. What's he do? He's a manager. A manager. Okay. Yeah. All right. Well, what I'm going to do is buckle down and live on nothing. Pretend like I am broke, because you are, and I'm going to cut up all the credit cards. We're not going to use them anymore.

2:03:35Dave Ramsey:We're going to do a written budget every month, you and your husband. You don't make$350 ,000. You make$50 ,000, and you need to pay off$300 ,000 worth of debt. Or you make$100 ,000, and you're going to pay off$250 ,000 worth of debt and be debt-free in about two years, starting with the blessed IRS, and then work your way through a debt snowball on the other stuff after you get rid of the IRS. But you guys need to go pay them like your hair is on fire and get them out of your life because the penalties and the interest that they're charging you are the worst on the planet, and they have almost unlimited power to come and mess with your life.

2:04:15Dave Ramsey:Even when you're on a payment plan, they might make a clerical error and put a lien on your house. even though you're on a payment plan. They can if they want to. And so what I want you to do is get them out of your life like your life depended on it. So I think what's happened is you guys are living a Bay lifestyle, and you're eating up your$300 ,000, and you're not making much progress on this debt. And I want you to live a lifestyle as if you lived somewhere else and didn't have a life because you don't. You're broke. act like it and attack this debt with a vengeance. Yeah, and I hear in your story, Nikki, and even in your voice, that fear of that single mom who has just put her head down and tried to keep a roof over the head of her babies during a really chaotic time.

2:05:05It would be easy to say you shouldn't have spent all that, yada, yada. I just want to say I'm proud of you for getting through that four years. And it's easy to think I got my degree. I'm a nurse. I married a guy who makes a good income together. We have a good income and to take your foot off the gas. And I want you to let that woman who's been grinding it out finally be free. And that means you got two years of hitting the gas. And I'm telling you on the other side of this with nothing but a house payment, making$350 ,000, you are going to finally feel that peace you've been craving for so many years, but there's no other way than through this thing.

2:05:43So just get through it as fast as you possibly can. No restaurants, no fancy cars, and everyone's going to be like, I thought you were. Yep. As for me and my house, we will not be owned by anybody. And the one way, I'll say it again, there's only one way through it, only one way, and that's through it. Just get through it as fast as you possibly can.

2:06:03Dave Ramsey:I put this hour 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.