You Can't Stumble Your Way Into Financial Freedom

30:47But if you're out there and you're 18 or 19 or 21 and you want to learn sales as a skill, I'm going to encourage you to do that before you do a whole lot of other things. like studying and getting a degree in left-handed puppetry. You know, let's learn something that's actually usable in the marketplace.

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32:21And every time you reach into your wallet, your card is a daily reminder that you follow a different path. Listen, if you're living like no one else, your bank should back you up. Check out the Fairwinds Smart Bundle, including the all-new Live Like No One Else debit card at fairwinds.org. That's fairwinds.org. Insured by the NCUA.

33:03Today's question of the day is brought to you by Why Refi. If you've fallen behind on your private student loans, you don't need more shame. You need a plan. Why Refi helps borrowers explore refinancing options with low fixed rate payments based on what you can afford. Go to whyrefi.com slash Ramsey might not be in all states. Today's question comes from Hope in North Dakota. My husband wants to retire next year and we're trying to get out of debt. So we don't have any financial worries in the future. We are less than$50 ,000 away from paying off our mortgage. Plus we have two car loans and three credit cards.

33:38The house and the cars don't trouble me too much. But the cards have a 25 % interest rate. So we're not making much headway on getting them paid down. even with extra payments. Should we take out a home equity loan and pay off the cards, then throw everything at the loan and pay it off as quickly as possible? We have no intention in keeping any credit cards going forward and have agreed to just pay cash from here on out. No hope I would not do that because the problem is you're just moving your debt from other debts. And so there's no real progress happening. Yeah, you can play the interest rate game.

34:17But the truth is, if you focused all of your energy, didn't pay more on the house, didn't pay extra on the cars, you throw everything at that smallest credit card and you work your way down. Honestly, by the end of it, you didn't say how much specific credit card debt you guys are in. But ideally, it'll be less than a year when all that's paid off. So the interest isn't really what matters at that point. It really is the focus intensity that's going to get you guys far and then possibly selling these cars and setting yourself up because um yeah going into retirement with two car loans three credit cards not too much in the mortgage you got 50 000 so i mean you guys are getting close on that but you're not ready for retirement it's not a it's not a retirement year next year for your husband hope you guys need to get your husband's not gonna get to retire next year you're not ready you're broke you have two stinking car payments and credit cards coming out your ears that you can't figure out a way to pay off you don't get to retire while you're doing that and make less money you need to make more money so he needs to double triple his hours and you guys need to quit spending like you're in congress this is out of control so the deal is this you you presented two things in the email that are juxtaposed with each other we're trying to get out of debt so we won't have financial worries in the future but the cars and the credit cards don't worry me so much well they ought to worry you that'll worry you so much the soul you sell them because keeping your husband from retiring so the problem is you're not worried that's what that's why you shouldn't do this you need to get worried you need to get fired up and wired up you need to get pissed off that you're this old and still in debt well why because you keep buying cars on payments that's why sell them get you a couple hoopties and let your husband retire oh now i got personal see but yeah when you need to get worried that's the problem with this email you're not bothered no what bothers her is the 25 interest rate not the fact of debt but she acts like that's the reason she's in debt no she's in debt because they keep spending yep and keep buying crap they can't afford with money they don't have that's called debt that's where that comes from and so when you got you got to get upset about this stuff and go Citibank has been screwing me Ford Motor Company has been screwing me.

36:29I'm tired of getting screwed. I'm going to do something about this. I'm going to take control of my life away from these stupid bankers. And until you get that kind of thing going, you're not going to get out of that because you're not going to cut deep enough, sell enough, work enough to clean up the mess because it's all okay. It doesn't bother me that much. Well, of course it doesn't bother you. You're going to stay right there then. It doesn't bother me much, well, then you're going to keep it. That's the thing. Until it bothers you, you're not going to fix it. John's in Macon. Hey, John, how are you?

37:02I'm good, Mr. Dave. How about yourself? Better than I deserve. What's up? I had a question for you. So I just completed a college internship. I'm 21 years old, and they have offered me a full-time role in sales and ag sales. But the caveat is I have to move off for a year before I can come back home to kind of get me out of my comfort zone. And I understand that, but my question is, should I rent while I'm gone or should I buy a large-sized camper and that way I'm putting money into something my own besides renting? You should rent. You should rent, okay. Yeah. Listen, if you're going to go out and make sales calls and you slept in a bed in an apartment, you're going to look different than if you slept in a camper.

37:47That's right. And see, it's not— I was going with it's going to go down in value. you it's you're not going to have the money to pay you know to buy it outright rent so you don't have to you know well yeah dave's is your your your sleep score john that's no that's what dave no it's your rumpled clothing yeah yeah no ironing board fits in a camper okay so the you would look fine john i i would think you would look john uh why did you take this job what does it pay intern with them i know but why i mean you took an intern but but they're running you out of town and putting you in an uncomfortable bad position are they paying you to make up for all this how much are you going to be making i'm making 70 granny okay and your degree is in what you got a degree in agriculture yes sir and you're going to come back there and sell for them after a year in your hometown yes sir that's right okay this may be a naive question is that a normal process?

38:46I never heard of it, but it's a company process. They were very upfront with me about this. I mean, I accepted this role, and it's designed to get me out of my comfort zone because I have a lot of connections back home, and I guess this is not just me. This is everybody. They want to see what I can do. Where you don't know anybody. That's right. They want you to get your knuckles raw from knocking doors. I'm up for that. I like that. But yeah, just rent an apartment, John. don't go get a camper because you're going to get a loan on it you're going to pay an interest it's going to go down value it's yeah it won't bad idea this is this is you don't need a used camper when you come home that's not that's not a plan no um it's a i appreciate your thinking about it and looking at other options but just get you an inexpensive apartment and work all the time and and you know uh live like you're still in college stay away from happy hour and work all the time and get you a couple of roommates and keep your expenses down and go make, make your 70 grand.

39:47And this is bootcamp. I got this, my one year trial by fire. And then I get to come home and have a great life and make good money with the commissions. I make off my connections and my family, uh, you know, the P the people I've grown up with and all that. So, uh, and you're going to get the advantage of a family network and a, uh, so forth in a small town, which is wonderful good for you sounds interesting okay but yeah no camper yes apartment one year no big deal good sleep score john yeah good job good sleep score what we're worried about the sleep score you're talking about him no i'm actually i'm just yeah in a sense yeah that's that good i guess i hear i know you're talking about appearance all right scott's in uh minneapolis hey scott how are you good how are you doing dave and nachel better than we deserve how can we help well first off i just want to thank you you guys have been a real inspiration of my family um we've learned a lot and i think because of listening to your guys's uh steps and ways of doing things um so long story short we have a daughter that's in high school she's in her senior year she got accepted to a private school um out of minneapolis we um both contribute a full uh 20 percent into our 401ks with each of my wife's work and my own.

41:10We also contribute the max to our Roth IRAs. Cool. For I run out of time on this hour, what can I help you with? So what we're looking to do is, we did the math on this and it looks like she's going to have about$17 ,000 left after a four-year degree, which is something we can wash out. We've got about $60 ,000 in our emergency fund right now. We own our vehicles. What's your question? The question is, should we have her go to this school with that balance? Or I know you guys have always talked about possibly not having a balance when you're done with school, but that would be something we could probably help her with.

41:53$17 ,000 in the hole with tuition is what you're saying? Yes, that would be the leftover that we've done the math on. Okay. And you can't cover that? yes we can oh we don't want her to know that okay if you want to pay for college and that's a college everyone's in agreement with and you want to pay for it go wherever you want to go yeah but if you feel like it's a stupid idea because it's too expensive for what you're getting and you want to just say this is a stupid idea it's too expensive for what you're getting it's not going to do with seventeen thousand dollars y 'all have done well enough seventeen thousand in your problem.

42:28But we need to actually speak into, is this a good education decision? Sounds like you don't think it is. It sounds like between the lines.

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44:06Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Rachel Cruz is my co-host today. Sherry is in Los Angeles. Hi, Sherry. How are you? I'm good. Thank you for taking my call. Sure. What's up? Well, my husband and I are getting closer to retirement age, and we have$735 ,000 in combined IRA and 401K accounts. Way to go. Yeah, that is positive for sure. We do have$150 ,000 in cash that's in the bank. That's obviously a waste. And I just started to panic thinking, oh, my gosh, we've got to get things rolling here and invest that excess cash. And I'm just not sure where to do that.

44:52We're not contributing to our IRA and one other 401K that were separated from service from that employer, but we've never rolled that over to IRA. So we do have – It sounds like you've kind of got some cleanup to do. Yes. Like pull all these things together and point them towards a single strategy. Exactly. Yeah. I would just jump on RamseySolutions.com and hit the SmartVestor pros in your area. The brokers, the financial advisors that we endorse all have to have the heart of a teacher or we don't put our name beside them. In other words, they're going to sit down and not tell you what to do. They're going to teach you what they would do in your situation and explain to you why.

45:36and then you will decide if you want to do that or not. That's the proper way to go at this. So it sounds like some of those things just all need to be rolled into good growth stock type mutual funds. In general, I spread my portfolio and Rachel and Winston have spread theirs across four types of mutual funds, growth, growth and income, aggressive growth, and international. We put about a fourth in each. We want to move as much toward Roth as we can move because it's growing tax-free and we don't have mandatory withdrawals at 73 called RMDs, required minimum distributions, okay? So that's a couple of things you may want to kind of target, but they'll teach you all of that when you sit down with them because they're going to give you advice that's consistent with what you'd hear on the air also, or we wouldn't put our name beside them.

46:25Are those other accounts, Sherry, that you mentioned with old employers, was that included in the 735 number that you gave us, or is that more? That's included. Okay. So that's just total. Yeah. And how old did you say you were again? How old? 50? I'm 53 and my husband's 57. Oh, you guys are going to have so much money. Oh, gosh. I hope so. Oh, no, you will. So let me kind of give you a rule of thumb just to prove it to you. It's very interesting. If you take a number and divide it into 72, it tells you how long it takes a lump sum to double. So if you made 10%, it takes 7.2 years for it to double.

47:01So if you're in a decent growth stock mutual fund portfolio, your 735 is 1.5 and you're 60. It's 3 when you're 67, and it's 6 when you're 74. Oh. If you do nothing else. So I'm not kidding when I say you're going to have a lot of money. You're doing really well. But you need to get all of this stuff. You can't be sitting in cash. They'll be using some of that in retirement. Maybe, maybe, depending on what's going on. What else is it going to? Well, you may be drawing down on some of it at some point. I don't know. But that's also you probably will be adding to it between now and retirement, too.

47:37So those numbers aren't going to be that far off for that reason. So anyway, let's get the cash working. Let's make sure that those old junkie leftovers from the other jobs are all pointed in good mutual funds. Everything's dialed in on Roth as much as it can be within reason. And, you know, we've got a good portfolio of long track record, high producing mutual funds that you feel really, really good about. And then you can really just, you know, watch this thing cruise and you're going to do great. Okay. Well, with that being said, I've been our goal is to have our house paid off when we do retire.

48:15Good. And I've been bringing extra towards that every month. Good. But saying that we're going to be OK financially, should I be putting this extra money into the house or should I be using that to invest? No, you need to get the house paid off because there's two things that causes people to get their first one to five million dollars of net worth. One is a juicy retirement program, which you have, and two is a paid off house. We find the average millionaire that we find that becomes a millionaire. So they got a one point seven million dollar net worth. We find$800 ,000 on the house, and they got another$600 ,000 or$800 ,000 in their 401k.

48:49And that's the typical first$2 million that somebody builds. Yes, but you are investing 15 % of your income until then. Yes. In retirement, yes. But no more. Okay. Everything else goes on the house, and we're going to get this all working. What's your household income? We make$242 ,000 combined. Yeah, so you got another 30%. How much is left on the house? two i mean 330 and i've been paying a thousand extra a month but according to the mortgage calculator if that's accurate if i paid 2400 extra a month which would be an extra 1400 which i could do we'd have it paid off in seven years i would do that and so that's not too aggressive no no there's no such thing as too aggressive get it paid off unless unless you're not having fun in life because you're aggressive but i still want you to go on a cruise i mean you're making a quarter million dollars a year.

49:40So enjoy your life. But put 15 % of your income away and throw as much at the house as you can, get the house paid off as soon as possible. And then with the house paid off and you've got by then several million dollars saved, invested, you know, you're in a really, really good spot at like 60 years old here. Okay. Well, that is a relief. I was starting to panic. No, there's no reason to panic. But I do believe in tuning up things, You know, this is a good piano. Let's get it tuned up so it plays a good song. Okay. You're doing a good job. Let's just do a little bit better. Excellent job. So, and, and that'll also give you the comfort, the emotional piece, because you got your hands around the neck of this thing, making it behave right now.

50:28It feels like it's a little bit drifting and that's bothering you as much as the actual numbers. Yeah. So when you're on top of it and you're telling your money what to do, there's a sense of power. When things are drifting away, there's a sense of powerlessness. That's right. And anxiety that goes with that. Because, yeah, by 60, I mean, a paid off house. And then if they're investing 15 % over the next seven-ish years. And that would have$2 million. Yeah, it'd be close to$2 million. Plus the house. That'd be worth probably$3 million. I don't know what the house is worth, but guessing a million.

51:00So, yeah, she's in great shape. You've done a wonderful job, by the way. just this is this is what you aim at i took a call earlier in the week from a 64 year old that had forty thousand dollars he didn't know what he was going to do just security guard he's worried about eating so that that's the other side i mean so you know uh you that's a cautionary tale for the rest of us to get ready you know get ready it's coming christmas is in december retirement's in your 60s 70s whatever I mean it's coming the other option is death so you probably ought to plan you know I mean this is this is what you need to do so uh this is the thing and it the it's amazing how fast it comes at you all of this so um yeah you feel like you have forever when you're in your 30s and yeah I was just a daddy yesterday and now I'm a grandpa who knew you know it's just like Just like that.

51:59And now I'm a grandpa of a 13-year-old. How does that happen? I have teenagers. Now I'm thinking about being a great grandpa. You know, oh my gosh. Stay alive, Dave. Stay strong. I'm working on it. I'm working on it.

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54:16Andrea is in Raleigh, North Carolina. Hi, Andrea. How are you? I'm K-Quala Dave, how are you? Better than I deserve, what's up? Yeah, so I want some advice on if I should buy a car if I'm already in debt. I am about$69 ,644 in student debt. I just finished my master's degree. I drive a 1994 F-150 and drive about 30 minutes to work, so I'm thinking I need a new car. I just started a new job and I make$65 ,000 a year. Cool. What's your master's in? Landscape architecture. Good for you. Okay. Thank you. How long have you been driving the F-150? For about two years. Drive it for two more. Okay. You're broke.

55:07Do you have any money saved, Andrea? I do, yes. I have about$19 ,600 and some change saved up. And nothing's wrong with the truck. It's just old. It's just old. I have had some issues with it. And, you know, that uncertainty of driving 30 minutes every day and not being sure if something's going to happen to the truck. It's just. But nothing. I mean, it's not like there's one specific thing that you're like, it's about to go down. It's just the idea that something might. Right. Right. Exactly. Yeah, I'd keep driving. Things have happened, but I, you know, just keep repairing it. And throw$18 ,000 at this debt, too.

55:50Yeah. We teach you to pay everything down to$1 ,000, don't borrow anymore, live on beans and rice, and attack your debt and clear your debt. You believed in investing in this master's degree, and so far you've gotten a$65 ,000 job as a result of it. Hopefully that's going on up from there to make your theory of investing in this education correct. So I want to see you making$100 because of this master's, and I want to get some master's paid off as soon as possible. This is not a pet. It's a student loan. Kill it. Right, exactly. And that's how I feel. The cars that I'm looking at are all within the$37 ,000 range.

56:29$37 ,000? You have$19 ,000. You're going to go in debt while you're trying to get out of debt? And so that's why I was like, I don't think that this is the right position for me to make right now. No, it's not. $3 ,700 isn't the right decision. $37 ,000 is 10x a bad decision. No, no, no. Right. No. Yeah, well, that was my question. You know, I feel like I knew the answer to it. Yeah. Here's the thing. If you will get in the business, if you'll set your head to say, my number one wealth-building tool is my income, and as long as I'm giving that away in car payments and student loans, I'm going to be what's known as a middle-class broke person.

57:12but you can make$65 ,000,$75 ,000,$85 ,000,$95 ,000 as your career expands here and become a millionaire if you'll get out of debt and stay out of debt because you're not giving all your money away to other people every month. Right, and with my$19 ,000, you guys are saying, you know, pay everything but$1 ,000. Yes. I do have my company that matches$5 ,000 in 401K. No. So I'm not worried about that. You do not need to be putting money into a retirement plan. You're broken in debt. Okay, gotcha. Get the debt cleared up as fast as you can. Yeah, Andrea, when you walk the steps, we call them the baby steps.

57:51So it is that$1 ,000 emergency fund. Baby step two is paying off all of your consumer debt. So that'll be your next goal. And hopefully you can do that in two years. And then you want to save up a three to six month emergency fund. And by that point, you're probably going to be simultaneously saving up. For a car. For a car. That you pay cash for. Yes, and that emergency fund. And then after that's done and that emergency fund is in place. And if you're single and you have a great job, you could do a three-month emergency fund. It doesn't have to be six months. And then from there, you start investing.

58:20So yeah, you will not be investing probably for the next three, three and a half years. But that's okay because when you start investing, we tell you to put 15 % of your income into retirement. So that is that 5 % match and also a Roth IRA. So you will have plenty to catch up on. So just because you're not getting that 5 % match in the next three years, you're going to more than be okay because you're going to be funding 15 % of your income into retirement because you have that margin. So those are the baby steps, really, we walk people through. Hey, Andrea, if I give you a book that shows you how to do all this, will you promise to read it?

58:54Yes. All right. I'm going to give you the total money makeover. It shows you how to do all those baby steps. And let's give her every dollar for a year. And we'll set you up on our budgeting app Rachel's talking about. And it helps you walk the baby steps, too, on that. Yeah, it's going to guide you through the baby steps as well and reinforce this idea that with no payments, you have money to invest. With no payments, you have money to invest. See, what we've done is we all make – most Americans make pretty good money. They just give it all to a bank. They give it all to Ford Motor Company,$37 ,000 car.

59:26They give it all to Sally Mae,$69 ,000 in student loan debt. and we give all our money away and then we wonder why they have tall buildings and we're broke and they have Samuel L. Jackson saying what's in your wallet well apparently my money is in your wallet that's what apparently we can go with there if you're using that stupid Citibank card right so um that and whoever it is what's the other guy Bradley Cooper is that the one that lives in the lobby or something I don't know I saw that one the other day the the Citibank guy that lives in the City Bank Man lives in the lobby? I don't know. I think it's Bradley Cooper, maybe.

1:00:02Oh, no. They didn't get Bradley. I don't know. It's some actor. Anyway. Oh, man. These actors are now all bankers. Jennifer Gardner, I know. Yeah, Jennifer for sure, which is real disappointing because I was a fan. Oh, stop. You still like Jennifer Gardner. I know, but I can't stand the, you know, anyway. These companies are screwing you guys is what it amounts to. Yes. And they're paying a pretty person to tell you to do it. Mm-hmm. And regardless of who it is. And so I don't know if Samuel is pretty, but. Oh, it was no, it was Dan Levy is what I'm saying. City Bank commercial where he's in the lobby of the hotel.

1:00:39Is this what you're talking about? No. Different. Different one, I think. No, this guy lives in the lobby of the bank. Capital One. Oh, wrong one. Not City Bank. Capital One. Okay, thank you. We'll figure it out in a minute. All right. Will is in Atlanta. Hey, Will. Who is it we're mad at? What's up? Hey there, Dave. How are you doing? better than I deserve. How can I help? Hey, well, thank you. First off, thank you for taking my call. Even when I was a kid, my dad was watching your Fox business show, you know, back in 2009 when all that was going on. And I took a financial literacy course that they had set out for you in high school.

1:01:16So I've always really respected your work and everything. So that's why, yeah, no fun. That's why I wanted to talk to you today. I'm 25 years old and I've been married for two and a half years and we're doing okay financially. But there's two things I wanted to really get your advice on. And that's, we have a$17 ,000 car loan left from a car we purchased two years ago. And on the flip side, we want to know how we can maximize our cash and income we already have in the bank and that we do make. How much do you have in the bank now? Uh, currently, but for between me and my wife's savings, we have almost, uh, 13 ,000 in our joint.

1:02:08I have 85 ,000 in a money market. Pay off your car today.

1:02:17Pay off your car today. Will, do you remember the class you took? I mean, I will say I wasn't that smart in high school. No, no. You can say it was boring and you ignored it. It's fine. I didn't really like you, Dave, but I thought I would start out being nice on the call. Anyway, now pay off your car right now. You have$85 ,000 and$17 ,000 car loan. Pay off your car today. You understand? Okay. Instantly. Instantly. And never borrow money on a car again. No, and we had a, she had an old car at the time. and it did have a few problems here and there. I don't really want to hear your excuses. Just pay off your stinking car, man.

1:03:02Pay off your car and never borrow money on a car again. Ever. Ever. If you want to be rich. If you want to be poor, keep a car payment. Poor people drive big old cars with big old payments on them and walk around with stress. They don't have financial peace. Two words that don't go together, like airline service. so I mean you got to think different man break the cycle break the cycle break the cycle no car payments I don't care what's going on don't get a car payment I'll ride a bicycle before I'll get a car payment

1:03:520

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1:05:32Well, we wish we could get to every call and every question here, but we can't. Over 100, 150 ,000 of you are asking Ask Ramsey every month. It's full of Ramsey answers from three or four years on this show. We dumped it into the AI, into the data set. We dumped all the books we wrote into the data set. We dumped all the articles, several thousand of them that are on our website, into the data set. So when you ask Ramsey, you're getting a Ramsey answer. There's no Reddit trash stirred in. There's no sewage from TikTok stirred in. It's just Ramsey, straight up. If you don't want a Ramsey answer, you shouldn't ask Ramsey.

1:06:11If you do, you should ask Ramsey. It's completely free. You can do it at RamseySolutions.com or click the link in the description of your own podcast or YouTube. Ask Ramsey. Jocelyn is in San Diego. Hey, Jocelyn, how are you? Hey, I'm doing well. How are you guys? Thanks for having me on. Sure. How can we help? well i am just trying to figure out how to get my husband on board with one pain off our debt and just really like getting that gazelle intensity i don't think we've really had that um it just doesn't feel like yeah he he's really there and he's the the money maker right now and i'm doing the best i can but i kind of want to control things you know human nature so what what What's the pace look like?

1:07:02What are you wanting to do? What is he pushing back against? I think he says he's on board, but our biggest expense is eating out. I mean, it's a lot. And so it's like I'm like, could we not eat out? You know, yeah, yeah, I'm down to bring it down. But like it's not really happening. I just did our first budget last month, so we did have expenses. We didn't really exactly hit everything. but he's not unwilling. I just feel like he doesn't participate that much. Okay, you've made a mistake that is unusual for ladies to make. Usually the man makes the mistake you're making because you're hard driving, and I love you.

1:07:47I think you're awesome. But what you did is you started talking about what we're going to do and what we're going to do this, we're going to do that, what we're going to do instead of why. Yeah. And so I want to sit down tonight and turn off the television, put the kids to bed, and let's have a dream date. I have a dream. Why? Because the debt scares me to death. The idea of having no retirement scares me to death. The idea of having a car payment the rest of my life scares me to death. and I want us to dream about what it would feel like to have no payments and have a big old stack of money to be able to travel and to be able to do the things that you want to do, honey.

1:08:35What would you do if we had a big stack of money and him dream with you? And then we've got a why, a reason to not go out to eat. That's true. And it changes the motivation. What would it be for you, Jocelyn? What's the reason you want to get out of debt? I mean, we don't have much, honestly, like on the scale of things, but I want to be able to save up for a house. And right now I honestly don't know, even if I go back to work, like I'm a nurse, but right now I'm at home with our one and a half year old son. Um, like I can make a decent amount, but from what I'm understanding with numbers, I'm like, we don't have a down payment.

1:09:12Um, and homes here, you could get a tent for probably more than we could afford, you know? Right, right. How much debt do you guys have? Honestly, um, we've got, oh my gosh, I just spaced. We've got just a personal loan with my parents because they bought my, our truck off of us. We were in over our heads with it. Like we owed more on it than it was worth. Um, so we've only got 8 ,700. Okay. And that's it. That's your only debt? Yeah. Well, I just got him to pay off the credit card. I was like, please let's pay off the credit card. Okay. So that's paid off. How much How much does you guys make a year?

1:09:44How much does he make? Right now he's bringing home$7 ,500 a month. Good. Oh, great. It's not bad at all. Okay, so I think you just sit down and you say, okay, let's talk about what it feels like in the future to have a stack of money and own our own home. And not owe my parents. And not owe my parents any money. When we don't owe your parent, don't owe anyone anything, and we're stacking money for a down payment on a home, we're building a life for this one-and-a-half-year-old that's going to change his whole life. And I want us to have a home. I want us to be able to do this or that. I mean, would you join me in this dream and then let us sacrifice to hit the dream?

1:10:30Yes. It sounds nice. Yeah, I want to dream in high definition. Let's start talking about, I remember we were in a rental house and Rachel was eight. And no, yeah, Rachel was eight. Rachel was seven or eight years old. And we were in a rental house because we sold our house to get the rest of our debt after the bankruptcy cleaned up. And my wife hated that rental house. and she said, we have to get a house. Life is too short. And I'm going to pray for a white kitchen and a three-car garage for our two cars and our boat. And I'm going to pray that we can do that in the school system over here where the kids are going to school already.

1:11:21And I'm going to pray for that. And, you know, we were on this little weekend trip and I got an email from a real estate friend of mine. And it was in the early days that they actually started putting pictures on the internet of a house. That's how long ago it was. And the dadgum thing had a three-car garage and a white kitchen. That's crazy. Because we had dreamed in high definition with great detail and we were both agreed that's what we were pointing at. You had a goal. And we had pulled the money together to do that. And when we came home from that little weekend trip, we didn't even go home.

1:11:55we drove straight to that house to view it with a real estate agent. And then we went home. And we bought that house, by the way. It's the house that Rachel grew up in. And so that's the kind of stuff, but you're together joining. Well, it makes it feel real. To a detailed thing. It's not this vague thing of, I just want to have a pile of money. Right. No, no, no. That's not good enough. It's not good enough. It's a life. What's the life that you want? What is the money by you? Yes, the money is the tool to create the life that you want. What is that? What does that look like for you? Is it the white kitchen?

1:12:27Is it the, you know, the certain school district, whatever it is. But I think, and John Zaloni talks about this too. Do you really do as detailed as you can create that? It just makes it tangible that it's not vague and it's not out of reach, but it's like, no, no, no, this is the type of house that realistically, because you guys were being real, you weren't like, we need a$4 million house. We had the money for. Yes, that's right. So it's like it's a realistic in there, but to pinpoint it and to have those details. And I would say, too, Jocelyn, I always love a timeline. Like, map it out. And you guys be like, hey, let's have a goal to be out of debt in three months.

1:13:07What do we got to do to make that happen? Okay, from there, building up that emergency. What must be true. Yes. And you actually start painting it and looking ahead and be like, oh, my gosh, in five years, he's going to be starting kindergarten. We may have another baby. What does life look like in five years? How much money do we think realistically we'd have saved up? What type of house can we buy? And I'm going to go to nursing then to hit that next goal. Yeah, totally. Go back to work for a little bit. Or I'm going to take ER weekends now to hit the goal of buying a house. Yes, or there was a mom in the lobby earlier, and she was saying for 22 years she stayed home, and that was their number one goal.

1:13:42And because they did the baby step, that was her goal, to stay home. She was able to. They did it. That was the dream. That was the high-definition dream. That's a good dream. so exactly yeah whatever it looks like but and to jocelyn you know if you're super broke i remember a dream we had we were super super broke and we've been so scared for so long sharon's dream at one point was i want to have enough money to go to the grocery store and fill up the buggy and just the buggy and not southern southern southern fill up the shopping cart shopping carts the shopping cart the buggy the buggy yeah and not have to look at prices i want to fill the I broke the family.

1:14:20Yep. That doesn't sound like a big goal, but that's a lot of money. You could mortgage a house for that today. Well, today, yeah, yeah, yeah. Oh, my gosh. It's more that feeling of freedom. I want to get to this place. I can see it. Yes. It's very clear. It's not a dollar amount. It's what the dollars do.

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1:16:39Holly is in Austin, Texas. Hey, Holly, how are you? I'm pretty good. How are you? Better than I deserve. What's up? I'm just wondering how you would approach, how can I better encourage my fiance to try to continue to better our income without him feeling like I'm telling him he's not making enough money? Where's this feeling coming from, Holly? Do you feel like he's not making enough money? Oh, he's making plenty of money. So about a year ago, we started getting really serious about paying off our debt, following the baby steps, trying to get set up to where we can start saving to build a house.

1:17:24Right now we're living on his— You're not married. No, we get married. Our marriage date is exactly a year from now. Well, you don't buy a house or pay off each other's debt until you're married. Our debt's combined right now. That's dumb. It's been combined for about a year and a half. That's really dumb. It paid off about$60 ,000. You're going to have a nightmare on your hands. That's really, no, no, no, no, no. Please do not do that with somebody you're not married to. Yeah. If you want to get married this weekend, you can start acting like you're married, but you're not married. This is a disaster.

1:18:01What's the combined debt, Holly? Cars? um yes so it was two vehicles and then um a credit card and then a car hauling trailer okay and are these both in both of your names yes please have a celebration one year from now and get married this weekend you are so vulnerable that your goose is cooked if something happens here. This is so scary. You have no idea the mess you have potentially made. This is really, really dangerous for you. How much do you make, Holly? I make about$40 ,000 a year,$45 ,000. And then he makes about, this is all take-home. And then he makes about$75 ,000 a year take-home.

1:18:52And what is it you want him to do better about when he makes twice what you make? He's not necessarily doing better. He was told about, I would say, four to six months ago that he is making the best he can make at his shop right now. And, you know, he goes in on the weekends. He works late during the week. And I've kind of tried to encourage him to, you know, possibly seek a different shop or a higher position at his job currently. And he feels like I'm not being appreciative. and I was just wondering how you would go about encouraging, kind of like when is the end of the road of trying to increase your income?

1:19:39Yeah. I'm trying to figure out, is he enjoying his job? He does. He's a body shop technician. He does enjoy his job. He's had a couple of problems just with, like, coworkers and stuff, but nothing. How old are you guys? He is 25 and I am 22.

1:20:04Yeah, I probably honestly, Holly, I would I would focus in more on not only figuring out what to do with your 40 ,000 and start paying off some of these debts and start working your journey separate than him because you guys are not married. and it's one thing to tell him that you see potential in him and what he's doing but he may be very content with where he is right now and he's not making a bad living No, not at all Yeah, so I'm just curious how those conversations go because he's not feeling appreciated apparently Yeah, it's kind of back and forth Sometimes he has a lot of feelings towards him wanting to better himself, wanting to become, you know, a shop manager potentially or starting his own business as far as that goes.

1:21:01And then other times he's kind of down in the dumps about it. I do think that when they told him he was making the most he can in his shop, he was not very happy about it. And he really wanted to move and then he kind of changed his mind. Yeah. Well, I don't think there's much that you're going to be able to do. I think the only thing you can do as a fiancé, no, as a fiancé, you can't do anything. As a wife, the only thing you could do would be to, you don't have the leverage from the fiancé position to lift or to do anything because you're still in the negotiation phase, believe it or not. so um you're you're barking up the wrong tree but once you're a wife then the thing you could do is just be say honey i think what i see in you i see that you could run your own business and you'd have to learn some skills that you don't know yet about running a business because being a body shop tech is different than running a body shop different set of skills you have to learn the business parts of it the marketing and the sometimes being 25 doing what he's doing and really getting good at it.

1:22:13It's not a bad thing. It's not bad. But if we started planning and said, okay, five years from today, we have a goal of you opening something. Let's start saving towards that. And you start reading books about business and learning about business. I think you could be, I think you can make three times what you're making and own your own shop and have guys like you working for you. And I think we can get there. And I think you can get there. And as your wife, I would love to help you do that. I honestly think you're doing it from the wrong position and you're not listening to me. So that's okay.

1:22:44You do go do what you want to do. But I'm telling you from having sat in this seat for almost 40 years that you guys are playing with fire. And if you don't get burned in this, I'll be shocked. And so please do not buy a house for someone you're not married to. You are doing what we call in legal terms a general partnership. and if he dies and there is no will, you will own a house with his mother. This is the kind of crap you're playing with that you don't even know about. And you think I'm just being mean and telling you to get married, but you are really walking across the lake of fire and asking to fall in it and get your butt burned.

1:23:28You are playing with about four different things there that are going to take off your head if you guys aren't lucky. You might luck your way through this, but you might not, too. And so please, if you're going to own cars together and buy houses together, get married first and do your celebration a year from now. But you're not listening. So you're not going to do it. No, I can tell. Really, I've been doing this a while. You never know. You never know, Holly. So I think you can encourage him from that position to go do something with his life. um but you know yeah i don't know something something wrong in the air something wrong no they're just 22 and 25 no there's something wrong in the air no i i think they're young and sorry not that sounds demeaning holly but you're young and what you which she doesn't see either is that you know engagement there's there's zero legal protection for either of you and he he or you in four months could be like, I think I'm done, you know, and you walk out and that's it.

1:24:35And then for the rest, for the next three years, as you're trying to get out of debt and date and all of this, you got the X and I mean, it's just, it, it is not worth it. It's not worth the risk. Keep your money separate. And that's for other people listening, right? I mean, they're in it, but like when you are dating, keep it separate. Do not combine finances. And then once you are even when engagement, but once you are married, yes, combined. It is so funny to me on the show. I don't know why it is like this. There's so many couples like that, that are dating, engaged, and everything's combined.

1:25:09And then we talked to married couples and they refuse to combine. I'm always like, how is this? How is this happening? How is this happening? It's so bass backwards. I know. But yeah, there's just, it's the, it's the protection side. There's just not there's not any and oh and the worst is the co-signing and then we get the call and they're like i co-signed with my ex-girlfriend and she's not paying anymore you know what i mean and then i can't find her or the car yeah and i mean it's just like they're just there's so much life that can happen and when you're not legally married you get to just walk out you get to just leave at least with a divorce you're having to go through a court system and you know the judge The judge will make you pay it then.

1:25:50Yeah, but there's a lot up in the air, Holly. So I'd lock it down if I were you and get married. This weekend.

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1:27:38Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Rachel Cruz, Ramsey personality. My daughter is my co-host today. Erin is in Charlotte, North Carolina. Hi, Erin. How are you? Hey, guys. How are you? Better than we deserve. what's up uh first of all i just want to tell you you've changed our lives like we're in baby step two and i mean you guys our marriage everything is just on such a trajectory that i never could have thought that a few years ago we'd be there so thank you thank you to you guys thank you well done i'm gonna cry no um so okay so currently we're in baby step two um we have paid about 76 ,000 down in the last two years or so.

1:28:22Thank you. We have about 33 ,000 to go. Now, our question is, we have a mortgage on the house now. Our plan is, once we get everything paid, our emergency fund, we want to take a couple of years. Our plan is to buy a house, a new house in a different location. We kind of want to move out in the country a little bit. And our plan is to say we want to say take about two or three years, save hopefully up to about 150, 200 ,000, you know, depending on, you know, life and situations. But so to use on a down payment on the house and plus the equity in our house now. Yeah. How much equity do you think you'll get out of that house at the time you move?

1:29:06You know, unfortunately, I made a lot of stupid tax decisions, as you would say. We refinanced the house way too many times. and the last time right before we started the baby steps. So, unfortunately, the mortgage we have now, it's only a few years old. Oh, it'll be two or three years from now, you said, right? Yeah, yeah, true. So it's going up in value in Charlotte, North Carolina, isn't it? You know what? I don't know. I guess we could see what it's going to be like then. But right now we owe$243 on the house. And the last time we had it appraised about three years ago, it was at about$310.

1:29:41It's probably worth$400 a day anyway. Yeah, well, hopefully. Fingers crossed. At least by then. It's going up like 2%. Okay. Well, that's good. So my question is, the money that we're saving in the next few years, should that go into a high-yield savings account, or should we be putting that money on the principal of our mortgage since we're going to sell anyway and use that on the down payment of the house? I put it on the principle of your mortgage. All of it? Yep. Really? Okay. Above your emergency fund, yes. You wouldn't save any cash? Not for the move, no. Not for the move? Okay. Okay. Yeah, that's kind of what I was thinking.

1:30:25And I know sometimes they say you should have a certain amount of cash. Well, for closing costs. I mean, you may want to have a little bit for the actual mover and some closing costs or something like that. But you're going to get all the money out of this house when you sell it. It's not like you're giving the money away or spending it. It's going to be there. It's just stored where you can't get to it. And what's your mortgage interest rate? It's 4.99. Okay, which is more than your high-yield savings is paying. True. It's almost like a forced savings account, Aaron. Yeah. As you're putting it in, you're like, we'll get it out.

1:31:02Yes, in equity. But it's not sitting there for a beach vacation to grab. You know what I mean? It forces you into that goal. And if your plans turn left and you end up staying there and paying off the house, then you didn't lose any ground. True. Yes, that's a good point, too. I don't know that that's going to happen. I think you probably will live your dream because you've been executing on the other part of it beautifully. So I think you're probably going to play through. So I think two years from now, three years from now, you sell this house. It's going to be$450 ,000,$500 ,000, somewhere in there.

1:31:35And probably, based on the numbers you're giving me anyway. and you will have reduced the principal dramatically during that time. So you're going to walk out with this big fat check to buy this house in the country with. That's going to be beautiful. And you will have been making 4.99 on your money. Not bad, really, for that situation. And you won't accidentally go buy a bass boat with it. Not that you would, because I don't think you would. But he might. I don't know. You wouldn't. I can tell. Race is in New York City. Hi, Race. How are you? Living the dream. How are you doing? Better than I deserve.

1:32:06What's up? So I just graduated from law school this past May and took the bar, and I have some law debt or student loan debt that I need to pay off, and I'm planning on paying it off as fast as possible. Good. And I was wondering, would it be worth it to refinance the loans I have to get a better interest rate, or does that even matter since I'm just planning on paying it off as soon as I can? What's the balance? um 104 when do you think you'll pay it off how fast um we've got it calculated out to i think two and a half to three years okay and what's your current interest rate so it's separated in between six loans the highest rate is just a little over nine percent at 9.2 percent, I believe.

1:33:00And when I did something through SoFi today, it said they could give me a rate of just under six percent, if I remember correctly. But I'm not sure your aggregate is not six percent already. Do you not have loans that are below six? No, none. OK, no, none of my loans are below below. It's just seven. I don't trust SoFi any further than I can throw their stadium. so I want you to get some other people to look at it. All right? Okay. And so they didn't pay for that stadium by giving you the best deal. So their stadium sponsorship. But student loans at Rice are the one area that we would consider refinancing.

1:33:45You get one shot. These are federally insured, right? Yeah. Yeah, you get one shot. So shop around and check on it and try to find a company. What's the company we used to endorse? It's gone. They were a good little company. I can't think of their name off the top of my head, but we had one on here for a while that was doing that, and they were dependable. But here's the thing. Let's pretend that you can go from six to nine on the entire - You're not thinking of Y-Refi. On your - Y-Refi. No, yeah. No, Y-Refi doesn't do it. That's private student loans only. Yeah, it's private. Yeah, yeah, yeah, yeah.

1:34:16It's private only. The - Question of the day. Yeah. Thanks. For your private student loans, though, if they're in default, check out Y-Refi. But, Rayce, that's not your problem. So if you can move the entire portfolio is not at nine, what do you think the aggregate of the portfolio is, the average through the whole thing? Eight? Probably eight or a little under eight. Okay. Let's call it eight, and let's say you could refinance it to six. That saves you two on$100 ,000 paid off over two years means at the end of the first year you would have paid off$50 ,000 of it. And so your average balance that you're saving 2 % on is$50 ,000.

1:35:01And so that is$1 ,000 you're going to save through this whole exercise. Okay. And you don't have a$1 ,000. If you want to do it, it's okay, but you don't have a$1 ,000 problem. you have a$104 ,000 problem. Correct. Meaning that if you're paying this off in two years, to your point earlier, the way you asked the question was correct, Race, was does it really even matter because I'm paying it off so fast? And the answer is it matters about$1 ,000. Okay. Assuming you can't beat SoFi's number, and you might not be able to. But if you want to do it, it's okay. You get one shot at it. But the important thing is to find the other$103 ,000 during the two years by living on nothing, not going out to eat, and starting your law career on beans and rice, rice and beans, and get this mess cleaned up.

1:35:49That's the important part. That's 98 % of the equation.

1:36:20Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:37:16Kat is in Des Moines, Iowa. Hi, Kat. How are you? Hi, I'm doing well. How are you guys? Better than I deserve. What's up? My husband and I are wondering if we should move forward on an opportunity for financial freedom. Yes.

1:37:37Of course you should. What kind of a question is that? Tell me about it. What's the opportunity? So my mother-in-law would like to sell us her home and about 10 acres of land for what she has left on her mortgage. She wants to help us. She knows we've been through a lot in the last few years, and she is ready to move on from that property. She's tired of maintaining it when she doesn't even live there. How does taking on a mortgage equal financial freedom?

1:38:13Well, we would be selling our home in a different area of the state. And if we sold it even for what we paid for it four years ago, which it sounds like we would get more for it after talking to a realtor, we would be able to buy the land and property outright. Okay, so you currently have a home that you owe how much on? We owe$177 ,700. And it's worth what? Well, when we bought it... I mean, the realtor told you the other day, you think you can sell it for what? He said that what we bought it for would be easy, but he's anticipating we'd get a little bit more. He didn't give me an exact number.

1:39:03So what do you think the number is going to be in real life when you put it on the market? What's it going to sound like? Probably around$230 ,000. It wouldn't be much more because we did pay$230 ,000. And so that's only$50 ,000, okay, minus some expenses. So probably going to walk away with$40 ,000. And her mortgage on this land is only$40 ,000? She said$30 ,000, yeah. Okay. And what's the land and house worth? truth? Probably more than what our house is. It looked like from what she's going to give you a $200 ,000 gift. Yes. Yes. We, yeah, it would be a huge gift for us. Nice gift. And what does your husband do for a living?

1:39:47He is a machinist. And he will be moving, being a machinist there? Yes. So there are opportunities there, but it is a lower income area, which is kind of where we're This is just a tax - The whole area is lower income? I'm sorry, what was your question? The whole area that you'd be moving to is lower income? Lower income than where we're at, yeah. It's not, there are opportunities, but they're harder to come by. Do you like the house, Cat? Would you guys have moved there if the opportunity, if this whole deal wasn't happening, would you guys willingly want to move there just for your own family?

1:40:34Yeah, I would say so. My husband has been on third shift for a while. And I don't know. It's just been really hard for our family. We've been through a lot in the last year. What have you been through? He had emergency surgery in December of last year. Um, I, we had another baby, which is wonderful and amazing. Um, but I broke my ankle. So he's had to take, uh, less pay because his, his, uh, job doesn't pay FMLA. So he's had to take some unpaid time off because I was recovering from a broken ankle while heavily pregnant. Um, And on top of that with him being on third shift, it's been really hard on our family.

1:41:30We have five kids, and I homeschool. And I've just watched my husband change. It feels like he's barely surviving. So moving to this land, you go with you. Right. You've still got five kids, and you still have a husband that's a machinist. right but you're thinking you won't have to work third shift is that kind of the straw that yes that's the hope and he has to work third shift in order for you guys to live where you are today he has not been able to get a job with similar pay that is not third shift so even what does he make uh he brings home 1200 a week when he's not working overtime and he usually works overtime So usually it's about$1 ,600 a week.

1:42:22He's making about$60 ,000 a year. Yeah. Yeah. And the place that you're moving. Okay. So here's the problem. I'm a little bit afraid that you think you're going to run away from all of these problems when most of them are moving with you.

1:42:44You've still got a broken ankle or had one. He's still going to be a machinist. He's still going to be a machinist. And now you're going to be in an area that's not as economically viable. And it might even be harder for him to make this kind of money. So I love the beautiful generosity of your mother-in-law, and that's all wonderful.

1:43:11So, I mean, there's other options, okay? Option one, stay where you are. Option two is take the deal. And the only way you would take the deal is if he first has a job. you cannot move over there if he didn't have a job first. Right. Okay. So he's got to go find a job and then we can say yes to mother-in-law. That's option two. Option three is she sells the property and gives you the money. And you pay off your house and your husband finds a better job in the area where you are. Okay. It's the same thing. Yeah. I don't think she wants to do that. I think there's still. It's the same thing. She still gave up the money.

1:43:48Why does she care where the money goes? Is it the property sentimental to her? Yeah. So what happens when you want to sell it? You're stuck. I don't know. Yeah, I don't do that. If you have to buy a property, if you have to take on a property that you can never sell or never do anything with, no thank you, I'll pass. Okay. if she but so only i mean i would i think it might be better for your husband to get a better job that's not you know in the area where you currently are and everything's already set up and just pay off your house with the proceeds of the sale of the farm um but it sounds like there's all kinds of emotional complications there that are going to be emotionally complicated so you're jumping from one fire into a frying pan because now you got mother-in-law breathing down your neck about everything you did with the house she gave you because it comes with strings attached yeah ropes attached hangman's noose attached gosh don't say that no i mean really it's bad you cannot get rid of it you're stuck in it and well i gave you that house and and now you're stuck in the country and your husband can't find a job he loses that job what he finds yeah you got five kids you think you got problems now it might not that might be a trap you need to be careful on the front end it sounds great but if they're I mean and honestly Kat I would I would assume you guys are going to be leaving friends and you know possibly a community of people of where you guys are and it's it's just a lot to think through um where the the knee jerk is oh wow we basically get a we get a house like that's paid off but then when you start untangling it you've written this narrative in your mind that it changes your life and it really doesn't it might change it negatively and that somehow that this, you know, no mortgage is going to make everything okay and make all the things that are causing you to cry go away and all the things that are causing you to cry are going with you.

1:45:43Five kids and a husband that's a machinist. I mean, that... And he's probably exhausted. I mean, I can hear you. He's probably just tired. Very, very. You're probably just tired. All of it. So I'm just wondering, is there a career difference, you know, a different decision in that? and that clears all this versus a house and a house that you cannot sell that you can't sell yeah yeah yeah so i'm gonna approach her and say i think we would love to have the proceeds from it how about that mom and that's not for you to do that's for her son to do by the way and known as your husband you do not make that phone call Thank you.

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1:47:44Well, one of our favorite things to do is have a debt-free scream on the debt-free stage here in the lobby of Ramsey Solutions. We do this show, if you didn't know, on the glass in our lobby from 1 to 4 every Monday through Friday. And so folks stop in and have a free homemade chocolate chip cookie and some free coffee and hang out and watch the show happen. And occasionally there's a debt-free scream happening as well. The only thing that we like more than that is when it's one of our own Ramsey team members doing a debt-free scream. Yeah. And in this case, one of the most popular guys in the building.

1:48:23Yeah, look up. Look who's here, Rachel. I know. Risley. Risley, one of my faves. Risley. Thank you. Thank you. Oh, my gosh. Actually, Matt Risley, but we call him Risley. And Madeline. I don't think we've officially met. And Madeline, right? Yes. Hi. Welcome, Madeline. I know. Congrats. Good to have you. And we've got like 100 of your team members out here not working and watching you do your debt-free scream. Sorry about that. Celebration. Productivity in the building has gone down, caused by you. Congratulations, you guys. Well done. Well done. Hey, congratulations, you two. We're very proud of you.

1:48:54Well done. So how much debt have you two paid off? It was$188 ,000. Oh, my gosh. How long did this take? Five and a half years. Wow. And we don't ask incomes because all your friends and coworkers are standing around. That would be a little strange and weird. Yeah. So, and awkward. So what kind of debt was the$188 ,000? Well, you're looking at weird people. It was our house. Yeah. And what's your house worth? It's about$400 ,000. Boom! Look at Risley. Way to go, guys. Oh, my gosh, you guys. Look at you, man. Well done. So proud of you. How's it feel to have a paid-for house? Amazing. True freedom.

1:49:36Now, he's the senior director, folks, of media distribution in the Ramsey Network. And so a lot of you that see things happen with a show somewhere on the Internet, it's all his fault. And so he works really, really hard going through every single episode and making sure it's distributed with all nerd probabilities and analytics and everything out there and does a great job. And so a lot of you have found this show because of the work of this man. And so we really do appreciate him. So house and everything. You've been here, what, seven years? Yep, a little over seven years. Working here. And how long have you been on this journey?

1:50:14Yeah, this journey started about 15 years ago. To condense that 15-year story into something really quick, I was a baby Christian. I was really skeptical of the whole Christianity thing, and I decided, hey, I've got something important in my life. Let's see if this prayer thing works. So I remember praying at the time, hey, do I go, Lord, to an in-state school and accrue no debt, or do I go out of state with some friends and accrue debt? and the next day I went to a men's event and Dave, you were on the screen at Willow Creek basically yelling at me to not go into debt. I can't imagine me doing that.

1:50:55And so it was a double whammy. You know, I realized prayer works and also I became a rabid fan from that day forward and every week I'm listening to the show. And then you come to work here. Yeah, it was a dream come true. Totally get dunked in it. Well, and then you've got to watch the show every day. You're totally done. I have to analyze how this segment does. That's right. That's right. You're going to be looking at yourself. How long have you guys been married? Eight years. Eight years. Okay. So you've been working, Madeline, all this time with this guy who went Ramsey crazy. Oh, yes. To the point he comes to work here.

1:51:33Yes. And has he been hard to live with during this time? No, not at all. Not really? My dad raised me with the money mindset. So you guys were on the page. Did you guys have consumer debt before this or was the whole thing was just the house? Yeah, that's just the house. Okay, so you moved here, took the job, and then later bought a house and then took five and a half years to knock it out. Yeah. Okay, way to go, dude. Yeah. Way to go, man. Okay, so we talk about when you're paying off the house, we always say that's kind of like the intentional step, right? That you want to enjoy life and all of it, but the extra goes on the house.

1:52:07And some people go crazier and they just stay intense. where were you guys on that on that scale would you say we were on the intense side we were we weren't gazelle intense we went out to eat once a month um but uh once a month you splurge you um but there was a piece that left us because this is the only debt that we've ever had um and so we were very intentional together uh we would talk about money every week almost every day hey what's our goal what are we going towards and we really wanted to pay off this house so that we could live and give like no one else. So you're saying when you bought the house, took on the mortgage, the piece left and you wanted it back.

1:52:45That's right. Okay, I'm making sure I understood that. So good. Very cool. So what were things that you guys, you mentioned the out to eat thing, but what did you say no to? Honestly, a lot of trips and vacations. Both of our parents are in New Jersey, so we didn't go home often. Was it worth it? I'd say so for sure. Yeah. Now that you're free, how does it feel? Yeah, it feels amazing. We honestly can drop of a hat, go take a trip, and that feels freeing. Yeah, you can do anything you want to do. You can do any payments. I mean, you can do anything you want to do. It's pretty incredible. So, man, talk to the person out there who's thinking about this, and they're going, I don't know if it's worth it or not.

1:53:29Is it worth it? It's so worth it. And there's nothing flashy about our story. There was no big paycheck or payoff. I didn't inherit anything. And so it was a daily choice to do something hard. And if you're seeing this or listening to this right now, you have a choice before you to do something hard and take that next incremental step because it gets easier over time. And so when we had a tough decision, it was relatively easy because we were just on the same page about everything. And so I just encourage you guys to take the next right step when it comes to your money journey. And that snowballs into the rest of your life.

1:54:09Yeah. Have you run out the numbers of if you just invested the mortgage payment and where it takes you? How many millions that's going to be? Oh, yeah. Yeah. I'm old school. I have a time value of money calculator. Oh, I like it. Yeah. An HP-12C or something. Yeah. Yeah. Okay, good. I like it. Very cool. Yeah, so you can run that out. You don't even need the Ramsey calculator on the website. And you can figure out that this is millions and millions and millions of dollars. Because how old are you guys? Well, we're 33. Oh, I'm 33. 32? Okay. So early 30s, paid off house. Yeah, and we have a$400 ,000 house.

1:54:47Unbelievable. Unbelievable. And we're kind of, I'm a loser. I had a goal of paying it off at 30 but I missed that goal but I don't know I had a paid for house at 33 I think you're going to be okay the extra restaurants were worth it enjoy your life that one restaurant a month that's what did it you guys are impressive I'm so proud of y 'all very very well done and we certainly love the work that you've been doing here and the team loves working with you is obvious with them all standing out here to cheer you on today. That's very cool. So pretty, pretty stinking cool. What was the driver? What was the motivation under this for you two?

1:55:33Yeah, we have a very clear goal of where we want to be long term. Early on, it's really fun. I'm seeing the guy next to me. We wanted to support missionaries long term. And I'm looking at the guy who was in China doing missions work. And he came here to work here. I brought him. But when he came over, I said, man, it would be great if we can house missionaries when they're in between things or they're getting ready to go out to missions or they're coming back. And so someday we'd love to own a big plot of land, put some houses on it so that we can serve the kingdom that way. Well, you're going to be able to.

1:56:14That's a no-brainer with the math the way it is in your situation. just a matter of when. That's all. It's not going to be next week, but you'll be there. You're going to be there before you know it. Well, congratulations, you two. That's awesome. Thank you. Well done. Very, very well done. Incredible. Okay, now you've got no payments in the world. What's the first thing you're going to do for you two to celebrate? Big, something big. We're going to give Madeline a newer car. Yes. Newer car. Good. Good. Madeline needs a better car. I don't even know what you got, but you need a better car. Yeah.

1:56:45Great. Good job. All right, Risley and Madeline. No, it's actually Matt Risley and his wife, Madeline. Let's make sure we get that right. $188 ,000 paid off house and everything at 33 years old. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yay!

1:57:11Woo-hoo-hoo-hoo! Amazing. And little Liliana in there. My gosh, precious. Beautiful. Precious.

1:57:35Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke. Not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our EveryDollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change.

1:58:11It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the App Store or Google Play.

1:58:42Our scripture of the day is Luke 637. Do not judge and you will not be judged. Do not condemn and you will not be condemned. Forgive and you will be forgiven. Robert Louis Stevenson said, Don't judge each day by the harvest you reap, but by the seeds you plant. If you're buying and you're selling a home, it's super expensive. and you want to make sure you do it right. And if you make a mistake, it's always with too many zeros. So you need to get a pro in your corner that does a lot of real estate transactions that knows what they're doing. Ramsey Trusted connects you with vetted real estate agents who have high performance and the experience to guide you step-by-step to make the right Ramsey-type smart decision.

1:59:25No expensive mistakes. Connecting is easy. Compare the agent profiles. Interview your top choices. Pick the right one for you. Find a local Ramsey-trusted agent who has your best interest at heart for free at RamseySolutions.com slash agent, or click the link in the description, the show notes for YouTube and podcast. Marshall's in Baltimore. Hey, Marshall, how are you? Doing well, Dave. How about yourself? Better than I deserve. What's up? So I've got a quick question. I've got to give you a little bit of background. I'm 29. I'm married. I'm living in an apartment. My wife is out of a job right now.

2:00:02And basically to my question, should I liquidate my brokerage account to pay off my truck? What do you make? I make$71 ,000 a year. What did your wife make when she was working? She was at$75 ,000 a year. Are you able to live on yours? We're doing all right. Will she get a job? Will she go back to work, do you think, soon? We've been looking. There's a potential opportunity, but we haven't heard too much more about it. Okay. How much do you owe on the truck? I owe just about$26 ,000. How much is in the brokerage? $28 ,000. Okay. If you guys are not in the middle of an emergency, and it sounds like it's kind of medium, I would write a check today and pay off the truck.

2:00:54There's no reason I'd have borrow on my truck to have a brokerage account, And that's basically what you've done. The downward income. You may want to wait two weeks and get her a job, and that would make it much more comfortable to do that. But it sounds like you guys are going to make it okay until she gets a job, so it's not like you're going to need this money, right? Right. How much is her car worth? Oh, it's a 2009 Nissan, so maybe$500 if we're lucky. Okay. Okay. I was just saying. How long have you been married? It'll be a year in October. You should give her your car, Marshall. Marshall, I have to give you the unfair information that it's federal law.

2:01:41Wife gets the good car. Okay. But, yeah, we're going to have to move her up in car quickly as soon as you guys. That's your only debt, right? That is the only debt. I want to move her up in car with cash after she lands a new job. You've got to save up some money, and let's get the emergency fund of three to six months expensive. Do you have other savings? I have a Roth IRA and the 401k and then a little bit of cash in my savings account. How much cash in your savings account? Four grand. Okay. Okay, well, that's a good little buffer, too. So you'll have six grand that you could get to if you needed it after you pay off this truck.

2:02:22Yeah, pay off the truck, though, too, into the savings. We're building an emergency fund of three to six months of expenses. As soon as she lands a job, let's save quickly and move her up in car. So that way you get to keep your truck and don't have to give it to her.

2:02:39But I want her to land a position pretty quick to bounce back emotionally from the job loss because she's got this huge potential. I mean, your household income doubles when she lands that back. So I don't want to jump into something bad, and I don't want to take something for less. So let's continue to work the network and find that next position as soon as possible. But as soon as you're comfortable with it, I would pay that off. And if you're comfortable today living on your income, then I'd pay it off today for sure. Stephen is in St. Louis. Hi, Stephen. How are you? Doing better than I deserve.

2:03:17I appreciate it. How are you? Better than I deserve. What's up? So I've been listening to you guys for a few months now, and I really appreciate all the really practical, emotional, and moral clarity that you have with all of your decision-making processes. So I was curious about a car, as a lot of people on here are curious about. My wife and I kind of live in two very unique financial realities. I am a trust fund kid, but I have not used it really apart from education. So a little bit about my wife and I's combined income is probably about$75 ,000 a year. And we just had a new little kid. He is doing great now, but at about two weeks of life, he had to have a pretty major heart surgery.

2:04:19and something and yeah no i appreciate that luckily insurance is covering the vast majority of it but i went a little bit more into dad mode and wanted to get more protective about things particularly about just wanting to make sure that we have the best safest car for him um so currently my wife primarily drives uh 2015 ford lex it's been pretty through the ringer in its own career it has about 120 000 miles on it um i would personally be very pro into upgrading her into a newer car um something that is either pre-owned just certainly newer certainly has like the newest safety specs all of that sort of good stuff um just to make sure that her and the the kids are best taken care of.

2:05:12Okay. What does you make? So I make$72 ,000 a year. You said that was the household income. Yeah. Yeah. So my, my wife used to work. Um, we moved to Missouri a couple of years ago. Um, and when we moved, she left her finance job where she was making probably close to a quarter of a million dollars. Oh, wow. Yeah. Yeah. So we were doing well. We saved up a lot of money then. A lot of it is still primarily in like retirement funds. So we've definitely funded the Roth IRA and the 401ks. But you have no cash just on the side? No, no. So we have some cash also. Bought a new house when we moved to Missouri.

2:05:59Luckily, Luckily, we are debt-free from all that when my grandpa, who was... So how much is in the trust? So in my trust, it's about$2.8 million. And what is your draw on that? I don't touch it. I've never touched it. But you have access to it. If I were to ask my parents, they would give me access to it. So your parents are the trustee, and it's at their discretion. Yeah, correct. And you're how old? Young 30s. And you're thinking about buying a car that's how much?

2:06:39Probably no. If we were to get a new car, probably no more than like$50 ,000 or$60 ,000. Okay. We tell folks not to buy a car that is more, and to have vehicles that total add up to more than half their annual income. So no, I would not do that. Okay. But you do have, I'm sorry, wait a minute, wait a minute. We tell people not to buy new cars unless they have a net worth of over a million dollars. And I guess you do, because I guess your net worth is$2.8 million. Okay. And so pay cash for it.

2:07:18Is your fear like lifestyle creep that you're going to start tapping into this and spend it, Dave? Yeah. Okay, that's your hesitation, Stephen, too? Are you scared to touch it? Are you just like, oh my gosh, this is so... She's driving a$3 ,000 car. Why don't we go halfway and buy a$30 ,000 used car? No, so that's one of the other options and considerations. Yeah, I think that's what I would do. And I would do that more as an exercise in restraint than I would as an actual mathematical guideline. Because you've been really restrained about dipping into the... I mean, you're showing good discipline in that.

2:07:55I mean, you're not a trust fund kid in the sense of like a stereotype. I don't think you're going to destroy anything if you bought the 60, but I just like the restraint of, I'm going to buy you as half my annual income. And I'm going to stay with that. And it's still enough to take care of this. I'm not being emotional about the kid. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. bod��� teşekkür ederimhalizm selam selam