Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, number one best selling author, co host of the smart Money Happy Hour podcast, along with a YouTube show, along with Mister George Camel. Also my daughter, she's my co host. Today open phones at 888-25-5225 Nathan starts this hour in Anchorage, Alaska. Hi, Nathan. How are you doing?

Well, Dave, how are you?

Better than I deserve. What's up?

Hey. Calling in. Built a duplex with some family members last year. I got out everything I put into it, but I supposed to get a paycheck at the end of the summer, and it never came. And the relationship with the family members hasn't been great after that. Kind of curious what your thoughts on what I should do.

What did you learn from this process?

I don't want to do any deals with family anymore.

Disagree. I disagree. I think you should have learned you don't want to do deals that aren't clearly defined and written down with anyone ever, because you guys did this out of your ear and your rear and don't even know what the other one agreed to.

We had it written down.

Oh, you do. Look, you have a contract with your family member that they're violating.

Yes.

Why are they choosing not to pay you? Why are they defaulting on the contract?

They're wanting to just extend the term. They're not wanting to pay out right now. And that's my parents.

Okay. Why.

You can't pay right now.

They don't have the money.

They don't have money.

Okay. So how much do they owe you?

About 110.

Okay. And they're supposed to write you a check for $110,000 at the completion of the construction?

Correct.

And where did you think they were going to get this money when you signed the deal?

Out of the loan that we signed on it. The mortgage.

Both of you signed a mortgage?

Yeah, the properties in the LLC, of which I own 50%, and the parents on 50%.

Okay. And the loan was taken out. Where did the proceeds of the loan go if they didn't go to you like they were supposed to?

They went to my parents.

What did they do with it? Since they don't currently have any money.

They pay off some of their line of credit that they use to finance the project.

Mm hmm. We knew they were going to do that at the beginning, didn't we?

Correct. And they pocketed the rest.

How much was the loan for?

Total loans for about 385.

Okay. If they pocketed the rest. They have the money to pay you?

Yeah, we spent about 360 on the project. We're supposed to get a check for about 63,000 at the end, and then they're wanting to buy me out now, if that's what they tell me. And the whole check would be about 110 of my equity portion past the loan amount.

Okay, that's a different story than. You're talking about that. What? You didn't talk about that 110 was a buyout. You said they owed you 110 at the end of the project. That's not true.

They owed me, like, 60.

Okay.

I think it was about 60 grand, and then the.

Okay, but the price. You said the thing cost 360, and you borrowed 385 or the flip. You think they're going to get 60? That's a $20,000 spread. I think a $70,000 spread.

Correct.

How many properties have you built? You. Were you the builder?

I was the builder on it.

Okay. Have you ever built anything before?

I've built. I help people build stuff. This is my first honor builder project. I'm a general contractor up here.

Yeah. Okay. Okay. What are you, 25?

I'm 22.

Okay. All right.

Are they saying they will pay you back, Nathan? Like, I just wonder if they even acknowledge, like, yeah, we still. We owe you about 30 grand, and we want to buy you out, but we just don't have the money for the 63 grand right now. Like, do they acknowledge it when you talk about it?

Yeah, they acknowledge it, but I haven't seen anything from it. I'm also not. My mom manages the finances on the rent. Like, the rents are good, and the tenants are aaa. One's a nurse that makes a bunch of money at the hospital, and the other ones, actually missionaries for a church, and the church is never going to default on that.

Okay.

Attendance are great, and it covers the mortgage and all the expenses that. I haven't seen any.

Let me backtrack to the beginning of the deal. Okay. You signed up to build the property, and the builder's fee that you were to be owed when the property was completed was how much?

Right, about 60 grand.

Okay. That's $60,000. And you signed up to build a property. And when you signed up, what was the budget for the property? What were you supposed to spend to build it?

The budget was, uh, right about 410.

Okay. And who put in the all this other money? Because you only borrowed 385 at the end of the story, I think I heard.

Oh, yeah. So the budget was 410. So I. I had a build budget of 410.

And you built it for 360?

For 360.

So you came in $50,000 under budget?

Correct.

And the beginning. At the beginning of the story, you were supposed to get $60,000. The budget was 410. So you all originally planned to borrow 470?

We originally planned to borrow because the property appraises for 550 last year. And right now it's about 600 this year.

What did you originally plan to borrow when you were promised 60 and they had a 410 budget?

Borrow about 420 on it.

That's not enough to pay both of those things, honey. 420 -410 is not 60. I think we found the problem. You've entered into a deal that you have no idea how it was structured because you can't even recant numbers back to me, that makes sense on some basic addition and subtraction. The only way this deal would have worked at 410 is if you and you get sixties. If they had planned to borrow 470, you follow me?

Okay.

Is that right?

The 60 was coming out of the build budget.

Oh, so 410 included the bud, the 60.

Yeah. So my builders fee, like my total bill.

Okay, so you were supposed to build it then for 350, and instead you built it for 360.

Yeah.

So you went ten over budget.

But then that means they're still 50 grand.

But they didn't borrow 385. I mean, they didn't borrow 410. They borrowed 385. Yeah. I think you guys put the house on the market and sell it immediately. And both of you get out of it what you can get out of it. And. And I think you have got to learn a lot more about business before you do another one of these transactions, because you're having trouble even laying this out logically for us. And I think that's the nature of the problem here.

Yeah. And this isn't to point blame, but it does. I'm like, it kind of sucks. He's a 22 year old kid, goes in with his parents. There's a trusting process there. And that's hard to learn.

That's hard to learn, except that he's blaming them for ripping him off, and I don't think that's what happened. This is the Ramsey show.

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Thanks for joining us, America. We're so glad you are here. The book, the total money Makeover, is now 20 years old. It's old, but you know what the interesting thing is? The law of gravity worked 20 years ago, and the law of gravity works today. Common sense is still common sense and it is still marketable. But we went through, updated all the statistics and tuned up the stories and got some things in there for you. Plus, we put in a little code in there so you can get a every dollar premium for free for three months. So go pick up the brand new version of the total money makeover. I think this is the first or the fourth time we've done a makeover on the total money makeover. So it's apropos, right? So you go check it out@ramsaysolutions.com. store or anywhere great books are sold. The total money makeover 20th year anniversary edition. Rebecca's in Toronto, Ontario. Hi, Rebecca. Welcome to the Ramsey show.

Hi. Thank you for taking the call.

Sure. How can I help?

Okay. It's a bit of a complicated situation. I'll try to simplify, but I'm calling on behalf of my parents. Basically, we want to know if it's wise or even ethical to sell their matrimonial home. Basically, my father, he was extremely verbally and emotionally abusive growing up towards my mom. And then later for me and my brother, and it got so bad that I had to leave home and did. My mom joined me. That was five years ago. And he made it clear that we weren't welcome back. But prior to me leaving my brother, he was away at university, and then he went back to with my dad, but he left home because he couldn't take it anymore. And now he's doing death, but we're struggling. Cost of living in Toronto is extremely high. So all our friends and family are telling us it's not fair that this is our situation, and my dad gets to live in the home. But at the same time, why is.

It not fair that your dad gets to live in the home? Because he was a jerk. That you give up your rights to homeownership because you're a jerk.

I'm sorry. He, like. Because he was abusive and he's not letting us back in the home.

But it's not your house.

Yeah, I mean, it's not my house, but my mom, it's under her name too.

Mm hmm. But she's. She's a grown up, and that's her decision, right?

Yeah. I mean, she wants to sell, but.

That'S her problem with him. Right? What's it got to do with you?

Yeah, I just wanted to get advice to help them, to guide them, because my dad, he also had a stroke a few years ago, so he's not able to work, but he's independent. So that's kind of why we didn't push to sell the house as well, just so that.

I'm sorry.

Are they gonna.

Who's we?

Who's we that's pushing the mom and the brother, the family. The family that left the abusive dad that is now living together.

I'm sorry. Your mom lives with you?

Yes, my mom and I miss that. My mom, brother and I.

Okay. But they've never gotten a divorce.

Yeah, I was gonna ask, is there gonna be a divorce?

They're legally separated, but right now.

So when the divorce happens, then that's where things can really start moving with the home, with.

Okay.

With the equity that's there, with what's owed to her. I mean, all of that. Then he may be in a position where he would have to sell it in order to get proceeds for them to have. I mean, I don't know the divorce law in Canada, but that's where you can actually make legal action, Rebecca. But just. You can't.

Rebecca, here's what I don't want you to do, okay? And I kind of think. I think I heard this, but I might be wrong. You tell me if I missed it, okay. I'm willing to be wrong on this. I kind of think you still want to be able to. You still want to be able to have a reasonable, logical conversation with your unreasonable, toxic father.

Right? Yeah.

Yeah. And I want to help you. That that's not ever going to happen. He's an unreasonable, toxic human being. That's why all three of you have separated yourselves from him. Now, to expect him to suddenly be reasonable and non toxic regarding a real estate transaction is not going to happen. Is that okay to understand?

Yes. Yeah, I agree.

So the only thing this guy's going to do is when someone makes him do it. Agreed.

Right.

You're not going to persuade this guy to do anything.

Right.

Okay, so Rachel's right. When the divorce court drops the gavel and the judge says, sir, your house is going to be sold now, voluntarily or at auction as an order of the court, then he will sell the house. But until then, he will not.

Right. Yeah. My mom, she wanted to get lawyers involved and. Yeah, we just don't have the money for that right now, so.

Well, what is the house worth right now?

Probably close to 900,000.

No, I think your mom's got the money. Then again, I'm like, Rachel, I don't know canadian law, but I suspect your mother has rights to half of that 900,000, does she not?

She would, yes.

Okay. Why don't you all talk to an attorney, then? Talk to the attorney about getting paid when the house sells.

Okay? Yes.

And the attorney gets paid out of the house proceeds, and he goes and files the divorce and gets the house sold under divorce court. Because I don't expect your unreasonable, toxic father to suddenly become reasonable.

Right? Yeah. And we just wanted to know if it was ethical because of his stoke, too.

Like, oh, it's very ethical. Yeah, it's ethical. He'll have $450,000. With a stroke, he can take care of himself.

Okay.

Yeah, you guys, you guys, you're. Then the story you have told me is so sad that the three of you are still worried about this guy's happiness. Okay, that's. You know, a therapist would call that codependence. I'm not worried about his happiness. I don't like him and I ain't even met him, and I've only known about him for three minutes. You know, I hope he turns out. I hope it's okay. But, I mean, his own daughter is telling me this horrible story on him, and his wife has indicated that it's true by leaving him, and his son has indicated that it's true by leaving him. And so your story is corroborated, right?

Yes.

Yeah. I'm sorry, honey. I'm sorry. Y'all have gone through this broken, twisted mess. And I'm sorry. It's. The scars are going to take a while for all of you to heal from, but your need to support him or make him happy needs to stop today. You all need to take care of that, right?

From you guys.

Yeah, he lost that. He lost that and Rebecca.

And that's a, you know, and you kind of flew over. But seriously, like, those types of environments, it's extremely damaging on many levels. And so for you guys, your mom, to seek help and to have somebody, a professional talk to you, Rebecca, I'm like, being. Being a child of that is just. It's. I mean, it's horrible. So, I mean, making sure that you put yourself in a healthy spot as well, especially on the emotional side. Not just, you know, this, but even feeling like you have to take care of your mom, too in this. I understand you guys are banding together, which makes complete sense. But making sure that you're, you know, navigating this, well, to bring in a professional, too, for you guys, start aiming.

At what happiness ten years from today looks like, and what are the steps to get there and making him happy is not one of the steps. I'll go ahead and tell you. Jesse is in San Antonio, Texas. Hi, Jesse. How are you?

Hey, Dave. How's everybody doing today?

Better than we deserve, sir. What's up in your world?

All right, well, I'm trying to, I guess, prioritize saving and investing. I am probably in between baby steps three and four right now. I've got about 10% of my income invested in retirement. I'm working on trying to get a down payment for a house, and I'm trying to figure out how much I should prioritize the saving for the house versus putting money in investments, whether it's retirement or otherwise. I wanted to see what your advice was on that.

Do you know how long it'll take you to save up for a down payment, the kind of home you guys are looking at in your budget?

A year, maybe two.

Okay. I honestly would probably. Because it's that short, I would probably pause investing, even the 10% and save up that down payment real fast. Five or 20%. And then once you guys have that saved and you're in the housing process of buying the home, then I would press play and invest 15% of your income into that.

Yeah, we call that baby step three b around here.

I wasn't sure whether that meant hitting the pause button.

It doesn't. It doesn't always. Sometimes people. Sometimes people keep doing the 10%. Yeah, but Rachel's saying in this current housing environment, it's a cool thing to go ahead and get into the house because they're continuing to go up in value, continuing to go up in cost. They're not going down. And so short circuiting some of that by piling up the down payment as fast as possible is not an unwise suggestion. It's a good suggestion. This is the Ramsey show, so here's a quick math. There are only 24 hours in a day, so your business needs to streamline tasks that are time suckers and focus on activities that make money. So to reduce headaches as they scale, smart businesses use Netsuite by Oracle, the number one cloud financial system. Netsuite helps you improve efficiency by bringing all your major business processes into one platform. Join the more than 37,000 smart businesses like Ramsey solutions that have done the math and graduated to Netsuite. And right now you can download Netsuite's KPI checklist absolutely free@netsuite.com. ramsey. That's netsuite.com ramsey. Rachel Cruz, Ramsey personality, is my co host today. It is a free call anywhere in North America.

Thank you. Thank you for joining us. Today's question comes from Jenny in Illinois.

Jenny says, I'm a single woman and I rent an apartment in a great city. I'm very happy here as it is close to my work, my church and most of my social activities. I have no desire to own my own home because I'm afraid I have to have maintenance and lawn care people on speed dial. And to buy something even remotely affordable, I would have to move way outside of town. Is it okay to rent forever? I hear you talk about a paid off home being a large piece of people's net worth. But is it still possible to build wealth if you don't own a home? So, yeah, I mean, I think the biggest piece in this, Jenny, is looking far in the future. And I always look to, when it comes to retirement time, the singular expense that continues to go up that you will not have control over is your house, is your housing. So rent will continue to rise. And if you own your home and you pay it off, then that's an expense that you don't have and it's continuing to work for you, building equity. So it is a part of your financial, you know, picture that we, I would want you to have a part of it.

It doesn't have to be today, it doesn't have to be in the next five years, but eventually I would have homeownership in your financial picture for many reasons. But I think mostly when you look towards times like retirement, you won't have to have that expense that continues to rise and you actually have an asset for you.

I can completely endorse that where you are today in your life, Jenny, that this particular situation makes sense. It sounds like you got it made right now. There's nothing wrong with that at all. It just doesn't scale long term. So here's the problem. You know, she's. She doesn't say how old she is. Let's just say she's 30. Okay. Every single year from 30 to 70, your rent's gonna go up, or your landlord's asleep at the wheel. They will die, and the next person will jack it through the roof to make up the difference. But the value of the rent goes up every single year from age 30 to age 70. Your most expensive line item in your budget is housing. So the most expensive line item in your budget is out of your control, variable and increasing. That is not scalable. That's not sustainable long term. Again, what Rachel said, if you want to do it for four or five years, I think you got a good gig. Go ahead and do it for four or five years. But that. Let's not translate that to, is it okay to rent forever? It's okay, but it's gonna kill you, because what you're paying in rent now is nothing compared to what it'll be 40 years from now.

I think we can all agree with that. And so when you buy. If you buy on a fixed rate, 15 year, you now have a fixed payment for a property. It doesn't have to have a lawn. It can have a. Be a condo. You have a fixed rate. And then when you get paid off, you have a fixed rate, which is zero, other than your taxes and your property insurance. Right. Those are two things that will go up as well. But they don't. They're a small, much smaller percentage, and they don't land. They don't end up being the largest thing in your budget anymore, usually. So.

And I will say this, too, Jenny. You know that it doesn't have to be a, you know, a single family home. If you're. If you are single, you don't need a lot of room. It could be a condo. Right. But owning property that you eventually own full out is. Is what the key is. That's the goal.

I don't want you to confuse the fact that you've got a really good situation right now, and I endorse you staying there with a forever plan. It's not a good forever plan. It's a really good short term plan, though. I would sit there, and I wouldn't let your friends shame you into buying something. And that's what's happening. And people are going, you got to buy a house. You got to buy a house. You don't have to buy a house right now. You got not got a bad deal. But you do need to stabilize the most expensive line item in your budget before it gets out of control and starts messing up your life. I mean, can you imagine being 70 years old and broke, and your rent goes up every month, every year? He. That'd be no fun. San Francisco's calling. And that's Valerie. Hi, Valerie. How are you?

Hi. Hi, hi, hi.

Hi.

I am so.

Thank you.

Things are good and sound friend, huh?

Oh, my gosh. Oh, my gosh.

What is up with Valerie?

Well, excited as I am to talk to you, you know, I got some troubles, of course. So I filed for bankruptcy, and I believe it was. Everything was discharged either May or June. I can't remember the date of this year because it was a little problem, and they were missing a paperwork, and so they. Whatever we got that cleared up. So I believe the discharge was probably may. I mean, June instead of May. But I realized that. How do I build my credit up without getting a credit card? How do I build my credit back up? I know that it was a mistake.

Now, Valerie, you went deeply in debt and got bankrupt. Why you want to go back in debt?

I don't want to go back in debt.

What is credit for? Well, yes, I bet if you don't have a credit score is used only for one thing going in, right? You build it only by going to the debt. And you just got discharged from debt. Why are you so itching to get back in?

Well, I'm.

Honestly. Honestly. Honestly. I'm gonna call you Uncle Dave. Uncle Dave. Honestly, I'm not trying to get back in debt. I just. I own a house with my four other siblings, and me and my sister live in the house, and we're paying for the house, and they're paying the insurance and the tax, and we all pay the insurance and the taxes on the house. Well, I want to be able to come out of this house, because this house is what. What got me into debt trying to fix stuff. And then we had a guy that we knew. He was a contractor. He is a licensed contractor, but he screwed me and my sister over, and I ended up going into debt trying to not have holes in my house not have water flowing from the kitchen.

And so it was construction. That. It was construction, Valerie, that got you to the point of bankruptcy. It wasn't, you know, credit card debt or car loans or everything else?

No. Well, you would. You would tell me that my car loans are, you know, ridiculous. You. My car loan is ridiculous.

Construction.

But it was really the issue of. We had water damage, and when he. When he went in to fix all of that and redo the kitchen, they gave us the money to redo the kitchen. He.

Stop. Stop. You had a crisis, you had a mess, and you use debt to fix it. And then you called me after filing bankruptcy and said, how can I go back into debt?

No building credit, okay?

There's only one way to build credit, only one reason to build credit, and that's to go back into debt.

So you're telling me, don't worry if.

You'Re not gonna borrow money, if you're not gonna borrow money, you don't need credit.

And, you know, there will be things, Valerie, that they may pull your credit. Right. If you apply for a job, sometimes they will pull your credit report. If you're for cell phone company, sometimes we'll pull your credit report. Renting an apartment, you know, there's different times in life. Yes, they will pull your credit report.

But you can do life without.

Yeah, but you. But a credit score, you can live without. You can do all of those things without a credit score there. It may be harder right there. There's gonna be some workarounds, but it is possible. The real, only real reason that you need it is if you're gonna go take out a loan, right, for a car or something else. And if you want a home later, you can do what's called manual underwriting. And there's a process there. But for you, Valerie, I want you. You have a lot of. A lot of things going on, and I like your energy, and I want to channel that energy to changing completely the way you've been doing money. And even, like, the mindset of even credit. Like, there is a totally different system out there that does give you control. It gives you peace. It gives you a plan. It gives you guidance, and it's. And it's going to be a. It's going to be a change, a mental change. But if you're ready for that, I mean, I'm gonna have christian pick up, and I would love to give you financial peace. University, our seven. Our nine lesson course on money.

Everydollar premium, our budgeting app, the total money makeover, 20 year anniversary edition.

Love financial fees.

Yes.

You go through that? Answer your question. What? We're bank. But when I went through bankruptcy, honey, it wasn't any fun. And I decided what caused it. It was borrowing money that caused it. I had a lot of reasons for borrowing money. But then the day very few people filed bankruptcy that are debt free. This is the Ramsey show. Hey, listen up. Everyone is at risk of identity theft. I don't care if you're a hermit living off the grid, listening to the show on a battery powered radio. All of your data collected by every company you've ever done business with lives online. Your bank, your doctor's office, retailers, the apps on your phone, the gas station where you have loyalty rewards. They all store your info online, making them ripe for a cyber attack or data breach. That's why I've been telling people for almost 25 years they need an id theft protection plan. And the only one I've ever recommended is from Zander Insurance. They monitor your personal and financial info, even your home title, and take over the work if you become a victim. The most thorough and affordable plan out there. I even have it for my family and our entire team.

Visit zander.com or call 803 564282. Rachel Cruz, Ramsey personality is my co host. I'm Dave Ramsey. This is the Ramsey show. Open phones at triple 8825-5225 James is in Fort Lauderdale. Hi, James. How are you?

Hey, guys. Thanks a lot for taking my call today.

Sure.

So, my question is, I'm a w two employee. I've been pretty bothered by the amount of income tax I pay. I've been investing into a Roth 401K. Because of your teaching. My company does match 3% of the six of six up to 6%.

Good.

But I feel it makes sense to do a traditional 401k for the tax savings and invest the difference of the savings into a backdoor Roth IrA. But I wanted to see what your thoughts are on that.

Well, the math doesn't hold up. Okay. Let's just take a simple example. Okay. I'll just make up. Not you. But let's just use an example. Okay? If you save $100 a month from age 25 to age 65 in a decent series of growth stock mutual funds, you'll have somewhere around a million dollars. Okay. If you do that in a Roth, a hundred percent of it is tax free. If you do that in a traditional, you're going to pay taxes on 100% of a million dollars, which will be somewhere around $350,000. So instead of having a million. You'll have 650 after the government, however. Let's add that up. Okay. Twelve times 100 is 1200. Right. Okay, follow me. Okay. Times ten years would be 10,800. Right. Times 40 years, which is what we're. The period of time we're talking about, would be right around $50,000. So you saved taxes on $50,000. Meanwhile, you got to pay taxes on $1 million. That's your traditional numbers.

Let's see. So I'd be saving now, just not later.

Yeah, but see, when you get to the million dollars, what my point is, is 95% of what's in there is growth, not what you put in. And you're only saving taxes now on what you put in. Now, if you want to get real nerdy about it, you could run a present value calculation on that $50,000.

But it still doesn't.

Still doesn't make the point.

But if you invested that 50,000 in a backdoor Roth somehow, like, is that. That what does.

That still doesn't. Still doesn't offset the fact that you've got $350,000 in taxes.

Okay. Well, wouldn't it. Don't I pay taxes on the withdraws on the back end, like, when I.

Am not on a Roth? No, Roth is 100% tax free.

No, on a traditional tradition, as you.

Pull the million dollars out, you're gonna pay taxes on a million dollars, which is $350,000. If you did it in one year or ten years, you're gonna pay out $350,000.

I see. But what if I'm living off less than I'm making right now, but later.

And you're in your. In a lower tax bracket, correct.

Well, if you can help me find a place in the United. In the history of the United States of America, when taxes go down permanently, I'll go with you on that. But taxes don't go down. They go up, because Washington hasn't ever increasing appetite for my money.

So, James, I think the argument is, by the time you retire, you're still going to. Even if you're in a lower tax bracket, that lower tax bracket is probably going to be the same.

Here's the other problem.

Lower than it is today for you.

Yeah. Here's the other problem. Okay. Let's pretend you didn't just do $100. Let's pretend you did $1,000. Well, now we're dealing with $10 million. Your mandatory withdrawals are going to keep you in the highest tax bracket. And by the way, on the Roth, you don't have mandatory withdrawals. I don't know where you have a required minimum distributions at 72 and a half on traditionals, you have zero requirements on Roth. So I'm sitting here with a several hundred million dollar net worth and ten and hundred million probably, I don't know. Not quite in Roth, but guess who. Guess when I will take that money out for that roth. I'm 63. You know when I'm gonna pull the money out of that Roth? Never. Because it can go to my next generation tax free. I'm gonna let the sucker sit there and grow. I'm 63. Let's say I live to 93. That's another 30 years. All that money is going to grow tax free, and then it's going to be handed to the next generation tax free. Not true with traditional. An inherited IRA is taxable, so it screws up your estate plan. And if you do really good and you save a whole bunch, you're going to be in a high tax bracket.

Doesn't seem to matter which way you vote, both of them screw it up.

Okay?

So I'm just telling you, man, anything you can do to keep the government from controlling the money, the distribution of the money or taxing the money, you're always going to come out ahead because you're so young and smart. The beautiful thing about what you're asking is you're actually thinking about it. Way to go. And you're actually running numbers and asking very intelligent questions. You came to the wrong conclusion, but you're asking great questions and you're paying attention. So I can tell you this from having done this for 35 years, you are going to be wealthy. Because even if you miss, even if you did this wrong, you're going to end up with a lot of money.

I have a question for the average listener out there that's not going to build a massive company and not going to have your income. They're more just like, yeah, and I am going to use the money, but I'm actually gonna retire. And that's my retirement plan, is to use that money. Okay, not saying this me to your money, I'm saying the average person out there, so talk that.

Okay, let's say you got $5 million. So you got a $5 million net worth.

Yeah.

Or a $2 million net worth. But here's the thing. If you started his age, it's gonna be difficult for him to not end up with $5 million cuz he's paying attention. Yeah, okay.

Yeah, totally.

But anyway, the power of compound interest is, I mean, it's me. So anyway, but your point is, let's say, let's say we talk about our typical millionaire and they've got a million five net worth between four hundred one k and six hundred thousand dollars house, and they got $800,000, $900,000 or whatever in their Roth IRa and they're going to start drawing it out. Now, what's your question about that?

Yeah, so when you were saying yes, you're still going to be paying taxes on, I mean, the argument still stands when you just went, no, you're not.

Going to pay taxes on it.

If you did a traditional, if you.

Got a traditional grand.

Exactly. Yeah, yeah, yeah. It would still be the traditional route.

Yeah.

But the lower tax bracket. High tax bracket still. The argument stands that it'll probably still be the same.

Well, you gotta look, it's hard to compare a lower tax bracket with zero. Roth is zero. That's the lowest possible tax bracket.

Right.

Okay. So I mean, I don't care how low the tax bracket is because the 50,000 created the 900,000 in our 950,000. In our scenario, it was the seed that grew $950,000 worth of corn. And so what's it you end up with because of compound interest when you start in your thirties or twenties is particularly, is 95% growth in your nest egg when you get there?

Yes.

So how that growth is taxed really matters. And here's the other thing. It's probably even then, not going to draw it all down. So let's say you got $900,000 and you live off of 10% of it and it's growing at 12%. Okay, so 10%, $90,000 a year, you're gonna live on $9,000 a year and never touch the nest egg. So that 900 is likely passed.

Yeah.

As in it from an estate planning perspective?

Totally, yeah.

A hundred percent tax free versus if you, that 900 was traditional and you lived off of $90,000 a year and you paid taxes on the $90,000 a year because it's taxable but at a lower tax bracket, but not zero. And if you did that, then you still are going to leave $900,000 if you never touch the principal and just lived off the interest it created the growth it created, you're still going to leave $900,000 all taxable to your kids because an inherited IRA is taxable. And the new rules require that you pay all the taxes out within ten years on it under the Secure act. Thank you, Joe Biden and so there you go. I mean, that's new rules that just, you cannot drag your inherited IRA out. You've got to cash it out because those people want your money, and they're not going to let you keep your money if you structure it. In a way.

What's in there? What's the death tax?

The death tax is an estate tax.

Okay.

Means I've already paid. I've already paid income tax on all this.

And is that, on top of that, you have to have a minimum of that, right?

Yeah. 20 million.

Okay.

Yeah. And then, but, but if you, if you get $40 million or you get $120 million, you get taxed on 100 million at death.

There's a lot of taxes that you.

Have already paid taxes on. That's why they call it the death tax, because you're taxing people who've already paid taxes, but they're too dead to do anything about it. This is the Ramsey show, live from the headquarters of Ramsey Solutions. It's the Ramsey show, where we help people build wealth, do work that they love, and create actual amazing relationships. The phone number here is 888-25-5225 Rachel Cruze, Ramsey personality, is my co host today as we answer your questions about your life and your money. Aaron is with us in Salt Lake City. Hi, Aaron. How are you?

I'm wonderful. How are you?

Better than I deserve. What's up?

I am 58 years old. My father is 83, and we farm together. He still come to the farm five days a week. Three years ago, I lost a leg. We have about $150,000 in cattle, and the cattle prices are high. I would like to sell the cows. They're just too much work, and they don't normally generate a lot of income. Not the income for the work that they take.

If you're going to sell beef, this would be the time to do it. Agree?

Well, that's what we're talking about. And he has been against selling the herd off. And I'm. I'm done.

How long have the herd farm?

Oh, 20 years.

Yeah. He don't want to sell the family. Their family.

Yeah. You know, they are. And I enjoy them, but not that much. But three years ago, and I'm just. I'm on crutches. I've been eleven weeks on crutches, and I've had it. I, trying to farm 600 acres of ground with is ridiculous. It's crazy.

How'd you lose your leg?

I was in a car accident and got diabetes from a car accident 21 years ago.

I'm sorry.

I hit a motorhome head on.

Ooh.

I'm here because. I'm here because the seatbelts. A lady hit us and then pushed us into a motorhome 29ft later. It's been an experience. It's been a roller coaster.

Do you have family? Are you married?

I'm divorced. Eleven years ago, I basically lost all my wealth that accumulated in a divorce. My wife had a traumatic brain injury in the accident. And after 25 years of marriage, I just can't handle the stress, man. And I'm an entrepreneur. I've always been self employed.

Okay, so if you sell off the cattle, they'll bring how much?

About 150,000.

You said that.

And they're paid for?

Yeah. And your dad, he didn't want to do that. Because of what?

Just because he knows it's probably the last time he'll own the herd of cows?

Yeah.

But he's to the point now that he realizes that this is a good. If we're going to sell, this is a good time.

It is definitely that. It's the timing issue, for sure. You don't want to wait. You don't want to wait till next spring and then go, dad blame. We missed that.

That's right. They're worth double what they were two years ago.

I know.

Yeah, yeah, yeah.

Okay, let's try this. Let's try this out. Okay.

Okay.

Sometimes when we're making decisions like this, we feel like that they're more permanent than they have to be. Let's pretend. Let's pretend we sold the cattle for $150,000 and you and I are both of the opinion that cattle prices are probably not going to continue to go up. They generally, like all agricultural prices, go up and down and they are at an unusual high. So it's fairly easy for a non economist like you and I to predict that probably next spring there'll be less. Agreed?

Agreed.

Okay. Let's pretend that you could buy that same herd next spring for 100. If you. If you sell off the cows. If you sell off the cows, you still got the land next spring.

That's right.

You're miserable. Your dad's miserable. He's 84 and he's miserable because he doesn't have any cows. Well, take some of the 150 and buy the cows at half price that you sold and bomb back.

Makes sense. But here's my question and then this is, we have commercial real estate on the interstate I 15.

Is that got anything to do with the cattle?

It does. Because what I want to do is if I take the cash, I'm going to get taxed pretty heavy because I've carried over losses in the past. Last year the price was high enough when I sold the cattle, I erased all my losses. So I'm not carrying any losses from the past.

Yeah.

So everything I sell is going to get taxed pretty heavy and you can't do anything about. Well, can I buy, can I build a commercial building on the property I already own on the interstate?

Nope.

And take this 150,000 and convert it into a real. Into a building?

Nope. You can, but you're still gonna pay the taxes. It doesn't have the taxes at all. The commercial building is depreciable on a depreciating straight line asset at, you know, at 27 years. So you, you know, if you spend a million dollars, you can write off 120 7th of that. Not going to help you.

That was my question. Can I hide?

There's no tax shelter. There's no tax shelter for this because you've already blown you through your losses, which were, which were legitimate losses. I mean, you really lost. It wasn't like a tax shelter. It was lost money for livestock.

What is the, what is.

We live porn dia rich.

Yeah, yeah.

I mean, I live on a south is what my budget is.

What's your, what's your. What's your farm worth?

$13 million. Dave, I have lived on a strict budget for a thousand.

Are you the. Are you the sole heir?

No. Well, no, not on the main farm. I have on an LLC. I have 107 acres of commercial real estate. That's in an LLC.

That's.

Your dad or I are equal partners.

Okay.

And the first guy that dies, the remaining guy gets.

Okay.

And I think my dad might outlive me.

Sounds like there's a chance he's pretty healthy if I'm in your shoes. I asked myself, if I had $150,000 cash in the middle of the table, would I go buy cattle right now at an all time high? Answer is no.

Sure.

What that means. I'm going to sell them. And even if you don't sell them all. Even if you don't sell them all, I would sell 80% of them.

Agreed.

And get it down to where the daily Chore is more manageable because we've got a guy with an amputation and a guy that's 83 trying to handle 150 head of cattle. It sounds like.

Sounds like an impossible over $10 million of.

Yeah.

Okay.

Just to hear moving.

Enjoy. Enjoy your. Enjoy yourself.

Yeah, you guys. You guys really ought to put this in a position where you can enjoy something here, you've earned the right. Rachel's right. Both of you take a trip.

Three vacations in 30 years.

Yeah. What's the 100 and 5150 head worth? $150,000 is what they're worth. That's what you said. Okay. It's not 100.

Well, we only got 100 head, and they work about 1500 a head.

Yeah. Okay, so it's 150 grand. Yeah, that's what I would do. Yep. And it's not because I hate cattle farming or anything like that. Dude, we have an 83 year old and an amputee. You told me what's going on. I mean, this sounds like a. It's. There's the fun. Left the building on managing this cattle. Yeah. Elvis left the building, man. So, yeah, I'm. And if you hate it, you can buy them back next year at pennies on the dollar, probably. That's my. And that's worth exactly what you paid for it. This is the Ramsey show. Rachel Cruz, Ramsey personality, is my co host today. Selling a house the Ramsey way makes homeownership a blessing instead of a curse. Buying a house the Ramsey Way makes homeownership a blessing rather than a curse. It is tough out there right now in the real estate market. It is tough to buy. It's an interesting time. Prices continue to go up, and there is a shortage of houses, there's an inventory shortage. And so that's why prices continue to go up. And, and yet it's, there's people buying. In other words, it's happening more people buying than selling.

So if you're a seller in a weird market like this, you need someone representing you that's going to help you maximize the asset and not think crazy about what you're going to pull off here. If you're a buyer in this market, you need someone to talk sanity into you if you get in one of these bidding wars. And that's a, that's a high end, high octane, high producing real estate agent that knows their stuff. And that's the only ones that are Ramsey trusted. I got my real estate license in 1978, and so I know what a real estate agent looks like. That is a high profile, high performing professional. And I know one. One looks like what I call a donut eater. They sit around, eat doughnuts and talk about real estate, but there's a difference. So who's going to sell your, who's going to sell your most expensive asset? Your, your aunt, who just got her license three weeks ago and she's sweet. Or somebody that sold 150 houses last year. Nick, say on the aunt. Say. I'm just saying. Okay. No way. Don't do this. All right. Go to ramsaysolutions.com agent and get a Ramsey trusted real estate agent to help you with this.

You'll be glad you did. Alan's with us in Phoenix, Arizona. Hi, alan. Welcome to the Ramsey show.

Hey, how are you, man? Thank you so much for taking, taking my call.

Sure. What's up?

I'm so got an upside down loan in a car that kind of ran into my car loan now. And sitting down trying to look at everything that we pan here in Arizona. Of course everything is going up. That's like one of our biggest bills that we got. The car note is like 695. We're like 6.9 inches rate on it. We just trying to figure. I don't want to do a repo. I just need to try to get that payment down somehow, some way.

What do you own?

32,000.

Okay. Have you looked up what it's worth on private sale on Kelley Blue book?

Yeah. We even took it to, like, Carvana.

Carvana is going to pay you wholesale. They're going to pay you wholesale?

Yes. Yeah. Carmax. I mean, they told her that it was worth 22.

Okay. It's. That means it's worth 27.

Okay.

Not because Carmax is trying to rip you off. Carmax is in the business of buying cars at wholesale. Selling them at retail. That's how they make a living. And so they'd never. Why would they pay someone retail for a car? They sell cars for retail. And so if they're willing to buy it from you for 22, you can rest assured it's worth 27, which leaves you 5000 in the hole. How stinky is your credit?

That's. It's bad. It's like 515. And that's. That's why I can't refinance.

Who's the. Who's the car loan with?

It's with Toyota finance. It's a 22 Toyota Camry.

Hmm. Okay.

So somebody told me about subleasing it.

To know somebody's a fool. No.

Okay.

Okay.

And why?

Well, because if they don't pay it, you still owe it and they won't pay it. Yeah.

You're taking the risk on somebody else.

Who buys a car on sublease. Somebody can't buy a car any other way because they're too screwed up and screwed up. People that are so screwed up, they can't buy a car any other way. Ain't gonna pay your sublease and then you're gonna get screwed again. You've been screwed enough on this car. We need to stop it. Okay, so, wow, what do you make? What's your household income?

So I make 50 myself. My wife, she's a hairdresser, but she recently just got a job at a call center. She makes 18 an hour.

Okay, so how much other debt have you guys got?

So when I looked at everything with my kidney transplant and all that type of stuff, my credit alone, I owe like 17,000 right now.

Your kidney transplant?

Like medical bills?

Medical bills, yes.

You had. You had a kidney transplant?

Yes, sir. Kidney and pancreatitis transplant. Three years ago. Four years ago.

Wow. How you doing?

I'm doing good. God is good. They called me a miracle because they say a lot of people don't get called for.

Yeah. I'm thinking after you've been through that, a car payment ain't no step, right?

Yeah.

Wow.

Yeah, man.

That's something else, Alan. Okay, so here's the answer to your question. Here's what I'm fishing after. All right?

Answer.

Your question is we need to sell the car. In order to sell the car for 27,000, we need $5,000 to put with it it. To be able to pay the car off. Right?

Oh, okay.

And that gets rid of the whole stinking problem. And then we go save up and get a $1000 hooptie until we can get some money saved and move up out of the land of Hooptie. But right now, you cuz dad gum man, with what you're paying a month, you could save some serious money towards a car. Ten months of your car payment. About a $7,000 car, man. She's right.

Yes, sir.

Wow. So that's the world you're living in. So we've got to get rid of the. This camera.

Do you have any money saved, Alan? Anything?

So that was another question of mine. But they only said I had to ask one. That's. That's a very concerned mark. Because I got children, I get depressed about it. I'm 42 years and me and my wife, we have no savings. We live in Arizona in a two bedroom condo and it's 1800 a month. And we just. We don't know what to do. It's just like we don't know how to go about it, if that makes sense.

Yeah, it does. I've been right where you are, man. It's not fun. I haven't been with the. Can I have the pancreas? Kidney thing, but, oh, my gosh, I've been the rest of it. I've been where you are. I know what it feels like to be scared.

I was still working full time doing it, too, so it was. It was. It was such a journey. And so, you know, by time my bills are paid and everything like that, it's kind of holly enough to save anything.

So. Okay, so here's the deal. Let's just. Let's just close our eyes for a second. All right? If. If you had $25,000, your whole life would be different. You'd be a hundred percent debt free and out of this car. You'd have paid off all the medical bills and be out of this car, be selling it if you had $25,000, right?

I would. Yep.

Right. Okay. So a month is $25,000 in two years.

Okay?

A month, extra jobs. Fifteen hundred dollars a month extra jobs gets you out in 18 months.

Okay?

I want. I need you to save up $5,000 and sell the stupid Camry as soon as possible, and then just continue cracking that whip on that 17,000 from then on, and let's be done with this thing and get you a cheapo, cheapo car. I don't want you to drive a cheapo car the rest of your life. I want you to get rid of this thing that's killing you, okay? And it's not with the Carmax or carvana. It's selling it to an individual for 27, not for 22, but you got to have the money to cover the difference because you can't get the title to give to the buyer if you don't pay off the bank. Toyota's got your title.

So the moral of the story, Alan, I think, you know, the conclusion is what's going to help get you guys out the fastest is. Is raising your income. And if you can do something evenings and map it out, too, because this can feel always really overwhelming. But just to say, okay, on average, if I work an extra 3 hours a night for five nights a week, you know, what is that going to equal in money? If that's driving Uber, if that's instacart, whatever it is, you know, find some side hustle stuff and kind of map it out and just say, okay, how much do I have to work for us to get to a goal of a then and then timeline that out just like what Dave did earlier, and then say, what if I did 1500 a month, right? Like, start running those numbers and actually write them down. You and your wife sit down and that and your 50,000 doesn't even count hers salary. So maybe there's a challenge for you guys, lifestyle wise, to take her income. Yeah. And throw it. Yep, all of that.

So everything at this. Throw everything at.

We're cheering for you, Alan.

Yeah. So you hang on. We're gonna put you through financial peace University, and then I want you to call us back. As you're walking through this, if you've got other questions, you get some money piled up. You don't know exactly what to do. Holler. We'll help you, man. We've been scared, too. We know what it's like. This is the Ramsey Show. Rachel Cruz, Ramsey personality, is my co host today. Open phones at triple 8825-5225 we're talking about you, your life and your money. And we talk about you right in front of you. It's a free call at triple 882-5522 guys, we could use your help, and a bunch of you have been helping us, and we want to say thank you to those of you that have helped and thank you in advance to those of you that are going to. How can you help us? You can click subscribe on the platform, follow on the platform that you're consuming this show. Share the show. Send a link to someone or tell them where you're listening and tell them they got to go check out the show. Thank you for sharing it. When you hear, when you read a good book or you see a good movie, you tell your friends.

When you see one that stinks, you tell your friends. Don't bother. Right. So tell your friends. Either one's fine with us. We hope. We hope. We hope we're a good book. But, and apparently, based on the numbers that are coming in on YouTube and on Spotify and on Apple podcasts, our ratings across the board are way up. Thank you guys for spreading the word because you're basically our marketing plan. We really don't have one. You're it. We either help you and you tell people or we suck and we go out of business. So one of those two things is going to happen. Right? So thanks for hanging out with us. We appreciate you very, very much. Open phones at triple 8825-5225 Missy's in Fort Wayne, Indiana. Hi, Missy. How are you?

Hi, Dave. This is Missy.

Yeah.

So I was calling because I'm not sure if we should put our assets in a trust or just will. We have rental properties, and we just want to make sure that everything that we have we get to pass on to the kids, and it doesn't get used up like in a nursing home or something like that, if we were to end up there.

Okay, well, to start with, let's just back up before we got to nursing homes. And let's just say everyone needs a will.

Okay.

If you're 18 years old, you need a will. A will directs things. Sometimes it directs an existing trust. Sometimes it creates a trust upon your death. I have a bunch of llcs for my rental properties and other things that I own. I use it for risk management more than estate planning, but I don't because I don't want any single entity to have too big a target on its butt for lawsuits purposes. Okay.

Okay.

So we spread our wealth around into different llcs, and we also have trusts. Most of our trusts that we have are for estate planning purposes, but they're pretty complicated trusts because our estate is over 20 million. Is your estate over 20 million?

No. I estimate our rental properties in total are about 900,000. Our home is about 140,000. And then in investments and stuff, we have about 300,000 in, like, liquid cash.

Excellent. Excellent. Way to go. You're millionaires. How old are you?

I'll be 50 this year.

How much of this did y'all inherit?

We really didn't inherit hardly anything. My parents are both gone.

You did it the old fashioned way. You earned it.

Yes, yes. We have a small construction. Construction business.

Good for you. Okay, so number one thing. Number one thing you want to protect your estate from with a will, is just outside influences, like the government telling you what to do with your money. Instead, your. Your will. You know, it is my will that this piece of property go to my child. That's why. That's where the name will comes from. It is expressing what your will is. What your desire is. You follow me?

Yes.

And so you turn it into a written document, what your desire is. And that's called a will. A last will. The last thing I wished for, my last will, the thing I willed, was that you kiddos get this property, okay? So that's the first thing. The second thing your wills and trusts are used for is to avoid estate tax. Federal estate tax. Federal estate tax does not kick in until $20 million. So you don't have a federal estate tax problem. Okay.

Yeah.

The third thing you're wanting it to do is to avoid nursing home. And I'm going to talk you out of that.

Okay.

Because there's two types of nursing homes. There's nursing home that the government provides to people that are poor. It's called welfare.

Okay.

You don't want to live in subsidized housing, I assume.

No.

And you don't want to go to that nursing home, either.

I do not.

Okay, so what you need is you need some money to pay for the nice restaurant instead of the junkie restaurant.

Yes.

Okay. So that. That's, you know, you need long term care plan. And you can buy, at 60 years old, you can buy long term care insurance that'll cover about three years worth of a nursing home stay. And by the way, the average nursing home stay in America is right at two years, because usually once you get there, you don't last long.

That's true.

Okay. Statistically. Sorry, guys, but that's how it is. If you're heading over there today. Sorry to hear you be this word, but. Yeah, but that's. That's the thing. So, you know, the second thing you can do, of course, is just to have some money to take care of you. A nursing home will cost somewhere today between 75 and 100,000, $110,000 a year, depending on what you want to what. How nice a home you want. Okay? Now, if you've got $2 million and it's creating $150,000 a year of income without touching the $2 million, and you will have that before you get there, then the income off of your assets will provide you a very nice nursing home.

Okay?

Nursing homes don't come and take your assets. The only time that happens is if you got $200,000 to your name and papa goes into the nursing home and burns through the nest egg while ma. And then dies, and then mama's sitting at home with no money. Yeah, but the nursing home didn't take your money. You gave it to them to provide care.

Okay?

And so it's just like, you know, the restaurant doesn't take your money. You gave it to them to get food.

Yeah.

You're purchasing another way. You're thinking of that, missy.

Well, you're trying to hide the assets to where she gets free nursing home from the government. Right?

Well, I'm. I'm fine with paying for what I want. I just don't want to just leave nothing to my kids.

Yeah, well, if. If all that your stuff does is take care of you and your kids get nothing but a good example, that's okay. But it's better if you can set yourself up to do that. Now, in my case, I'm 63. I don't have long term care insurance because I won't be going to a nursing home. Why? Because I have enough money to hire somebody to live in my house and take care of me.

God bless that person.

I'm thinking, Rachel's not signing up for this because my daughter won't be coming to care for me. So I will have to hire someone because my daughter will be the character I will.

That poor nurse. Grumpy old Dave.

Come on. Great political discussions.

Grumpy or the older he gets, too. If you just go back a few years, talk about a trust that. Because the will can inform the trust. You said that earlier.

An example would be. A simple one would be if you have a special needs child and you're gonna leave money into a trust to take care of the special needs child. That's a special needs trust that would only be formed upon your death.

Okay.

You wouldn't need to form that ahead of time as an example. Okay. Or if you wanted to leave money and try to control when your kids got some of the money, you could leave it into a family trust and say, okay, junior. Until junior grows up and goes to college and gets all b's or whatever, he doesn't get any money or whatever. Whatever you want to, whatever verification you want to put.

But in the will she can have for the rental properties in an LLC, and upon her death, her husband's death, the kids, the LLC can be passed to the children.

Absolutely.

So that. That helps with the rental side.

Yeah, you just. You just leave those assets to the person that you want. The people that you want them to go to. Our rental properties when Sharon and I are both gone, will be going to the kids.

Yeah.

Rachel's husband.

But you don't need a full. You don't need a formal trust to do that in her case, just through a standard will.

Yeah, a will will take care of that. So you need to go see an attorney and have a will drawn, and you need to do it within the next 30 days. Don't put this off, people. Put this off, and it's not good. I'm afraid I might die. You're gonna die. You need a will. Everybody needs a will. We did research. Nobody gets out alive. You need a will. This is the Ramsey show. Are you planning to sail with us on the live like no one else cruise? Then you better book your cabin before they're sold out. If you're on baby step four and above, come aboard March 22 through the 29th of 2025 as we set sail for Turks and caicos, St. Thomas, San Juan, and the Bahamas. Join me, the Ramsey personalities, and a ton of special guests for the ultimate debt free celebration. Book your cabin because they are going fast. Head to ramsaysolutions.com cruise today. Rachel Cruz Ramsey, personality nursing home care student. She's my co host. Today open phones at triple 8825-5225 has officially declared me to be a grouchy, old, crotchety, horrible patient. I might be the nicest old man on the planet.

There are nice old men.

Dave's going to be in this studio. Just get off my lawn at night. At 92, I'll be down the show. We've joked about this, that he's going to, you know, it's going to start to get like, oh, I don't know if Dave could go live on the air. I don't know. It's going to get that time and he's not going to give up if, you know, Dave. Never give in. Never give in. So we're going to have to. We're going to have to.

We have to. Well, my answers will just get shorter and shorter.

I'll just say our joke has been, we're going to be like, Dave, you're on the air from noon to one. Come to and we all like, we have fake callers. And then we're like, good show.

Good show. The show never airs.

Good show, Dave.

Way to go, Dave.

And he walks on out of the building and goes home. That's our plan, America. That's our plan.

See, the problem was, now you've announced the plan and now I'm on to you. See, I wouldn't have called.

You'll forget about it. Don't worry. Oh, man. No, it is a weird thing when.

You say my answers are going to get shorter and shorter. I'm eventually just going to say, stop it. It. Next call, the old Bob Newhart routine. Remember that? Just stop it. That'll be $5. Stop it. Why'd you do that? That's dumb. Stop it. That'll be my answer to everything.

You're wrong.

So funny. So funny.

Noon to one. The show, by the way, for those of you don't know, begins at one every day and runs to four central times. So their little fake show that they're setting up to take care of the old man later is never going to be on the air. I'm just that y'all may not have realized the time we air this thing. Amber's in Dallas, Texas. Hi, Amber. How are you?

Hi.

I'm doing okay. How are you?

Better than I deserve. What's up?

Good. Yes. So I was calling because I've been having a struggle trying to make a decision on my car. And I got a lot of moving parts, but my car is 17 years old, and it just started overheating again for the third time two days ago. So I really can't drive in more than about five minutes. I did take it into the shop, and they are estimating it will be about $1,800 to repair it. They say that it needs a radiator.

And my guess is the car is not worth 1800. Right.

I think if the car didn't have a problem, it might be worth 3000. So I'm, like, conflicted because of my situation, you know, financially and personally. Like, if I should repair it, go ahead and repair it and try to find a new vehicle soon, or if I should just go ahead and try to get a different vehicle.

Do you have any money saved?

So I have. I think I have about $35,000 saved. I don't work right now, though. I called before. It's kind of crazy this is happening to me, but I'm not unable to work right now. I have a baby, and I'm trying to get back to Work, and I also have a disability. So all I have is $35,000 left in my savings. I do have some stocks that I'm also wondering if I should be considering doing something with.

How much were they worth?

They're worth about 25,000.

Okay. I would go buy a $4,000 car, and I would sell this car.

Okay.

Okay. Are you in a good church?

I'm trying to do that now. Yes.

Okay. Are you. You're not married, I take it?

No.

Okay. All right. Do you have family in the area?

No.

I need you to find. And the reason I was asking about church was not to be. Not to rub your nose in something. But I'm trying to connect you to community somewhere because I need you to find an old, ugly uncle that will stand in with you and help you on this car search. Okay. Not because you're not capable, because I think you are capable, but because sometimes when people are selling cars, they will treat a sweet young lady differently than they will your old, ugly uncle. They'll be more intimidated by him and tell the truth and not try to sell you something that's a pile of crap. Okay. So I need somebody to kind of go with you, go shopping. The second thing the old, ugly uncle might be able to provide, and this is a stand in uncle. It's not going to be your real uncle in this case. Right. But is they may be able to provide some automotive expertise that you don't have. So, for instance, I mean, I'm old and ugly, and if I went and bought a whole bunch of cars in my life, if I went with Rachel to go buy a car, I can probably tell her some things about a car and she's perfectly capable buying a car.

Well, and I would say this too, also, Amber is fine if you can ask around from, like, a great mechanic, like somebody that owns a shop and knows this, who can, like, just again. And maybe, maybe the inspection of the car, if you go on your own and find the car, right. That you take it to a reputable mechanic that you trust and that's known.

Right.

Like, I totally hear what you're saying, Dave, but also, like, yeah, but about.

The price and the type of car, is it going to be sustainable? Because I don't want you to necessarily buy something that's a cool car for $4,000. I want you to find something that's reliable because you've had it with unreliable. Right.

Which is 17 year old car, though.

A nice, you know, a nice Honda Accord that's old, a Camry that's old, or two cars, for instance, that would stand up and those cars will run 300,000 miles. If they're taken care of, they may run more. And. And so if you buy one that's in the four or $5000 range and you pay cash for it, that's going to be an okay move here. That is not really your issue, though. Your real issue is you have to find a way to start creating some income because you don't have a sustainable situation. You're going to run out of money.

Right.

How much, how much of this savings, Amber, are you using monthly? Like, how much are you dipping into this?

Yeah, monthly it's about $2,000 a month.

Yeah. So you got 17 months and you're baked. Yeah, that ain't cool. We need a plan, girl.

What were you doing before you had the baby?

Before I had baby, I was doing Doordash, and I had a, like a very small studio that was only like $850 a month. I was very lucky. But as you've been talking about, they went up kind of really high on the rent. It was like, like, you know, they were like, oh, we've been charging you too little. So they increased it.

Your only income was Doordash?

My only income at that time was Doordash because I was going through, like, a disability, multiple disability cases like Social Security and long term disability. So that's where the 30, it was 80,000 but now it's down to 35,000. That's where that came from.

So you're watching it doing Delaware. We have to have an income.

Right.

You have to solve your career problem. What's the nature of your disability?

So I have multiple sclerosis. So I'm trying to work with the vocational rehabilitation, I guess, specialist to try to figure out something that I can do.

Yeah.

You know, that's a good.

That's a very wise move.

Yeah. So that's what I'm doing now. It just takes so long to get through all of this stuff.

Well, MS has fatigue that goes with it.

Yeah, absolutely. Yeah, absolutely.

Yeah.

Well, I think that's what I want you to do. Let's get somebody, you know, get some community around you to walk with you. And that includes that vocational rehab specialist, and it also includes anybody that can encourage you on the income side of the equation, because I don't want you to not deal with this and look up and have zero.

Yeah, but sell your car as is.

Sell your car as is and take $5,000 car and get something reliable. Reliable, reliable. I don't care if it's ugly. All I care about is it's reliable, reliable, reliable. This is the Ramsey show live from the headquarters of Ramsey Solutions. It's the Ramsey show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality, is my co host today. Open phones at triple 882-5522 you jump in. We'll talk about your life and your money. Jill is in Las Vegas. Hi, Jill. How are you?

Hi. I'm good, thank you.

Good. How can we help?

I'm calling because I'm just kind of like. My mind isn't, like, in chaos right now. I on the verge of wanting to divorce my husband, basically to try to keep it short. And for the whole last year and this year, he has been kept me in the dark in our finances. Like I wasn't allowed to be, to have access to his account or any of the accounts. And he would kind of occasionally give me money weekly. But anyways, I was like, hey, it's time to get a new house because we have a three year old that needs his own bedroom. So we pulled out money from the HELOC, and he was, you know, very up to pulling that money out.

Why would you pull money out of a HELOC to get a new house. Why don't you sell your house?

Well, we were going to keep this house to rent it out and charge double because the rental market in my area is about 2300, and our mortgage is only 1000.

Well, that's before you took out a HELOC and before you had expenses, but let's go ahead. Okay.

Yeah. And so we were going to take the heel off, put money down on another home, and live there, but between December to May, I didn't know that he had actually gambled all of the hemlock. And I found out, too, that we have, like, $20,000 worth of credit cards that were all cash advances.

So now he obviously has a gambling problem.

Yes.

What kind of gambling is he doing?

He does slot machines.

Mm hmm. Okay. And when you all talk about this, what does he say?

He doesn't. He. Well, when I found out, I was like, where did our heloc go? I was like, well, first I found out about the $20,000 loan from, like, seven different credit cards, and I was like, okay, you know what? Like, take our heloc, pay it off with that, because the HelOc is only 9%, and all the credit cards are, like, 23 or 29%. And he's like, well, the heloc is gone. And then I was like, wait, okay, start over. What happened to our heloc? You mean gone? Like completely gone? And he's like, yeah, there's only, like, $1,000 in there. And so he told me where it went, and I was kind of in shock, and he just. And then I said, okay, you need to go to gamblers Anonymous. But he refuses, and he says, I have no problem. I can do it. I'll just give you all the money. I'll transfer it from my account to your account, and you handle all the bills. But a big part of me just feels like he calmed me into getting this so that he could have access to cash, and he burned through it really quickly.

So now we have this house that was only $1,000 mortgage. Now it's $3,200 mortgage. And now we have no money to go get a new house or even pay for repairs for this house. And all the whole time I've been living, like, what does he mean by 90,000 a year?

What do you make?

I don't make anything. I stay at home. I did sell a couple of real estate. I mean, a couple homes last year by 18,000 last year. But since he didn't give me any money, I kind of burned through that and paid off things and, you know.

How do you think we can help you best today?

I guess just that was since that's not his only addiction. In 2018, he had to go to rehab and finally, you know, stop drinking. But I feel like just with so many addictions that I've had to tolerate, like, is that grounds for a divorce and selling the house, and then we could be free and clear of debt?

Yes, it is grounds for that. But the. The thing is this, until he puts addiction of all kinds in the rearview mirror, and unless he puts addiction of all kinds in the rearview mirror, you're going to have hell on earth.

Yeah, it has been.

Yeah. And it's not going to get any better. It's getting worse every day. And so I'm going to work on it myself as the famous lie of every addict. Okay? No one destroys their whole financial situation when they have a three year old at home. That is logical. That's not logical. It's financial suicide. Only an addict commits financial suicide. It. And 100% of addicts eventually are broke, and most of them die from something associated with the addiction. And we've worked with addicts for 30 years. We are not addiction specialists. But I'm afraid I've watched them a long, long time. 100% of them are liars, 100% of them are manipulators, and a hundred percent of them are eventually broke and stay broke. So the only answer, the only solution to that is to not be an addict anymore. And that means get help and put the addiction in the rearview mirror. Gamblers Anonymous counseling, strong support systems, social systems around you, changing the picture, changing the look, changing everything. And the cocaine, the heroin, the alcohol, the gambling, the pornography is in the rearview mirror. It's the only chance that the family has and that the addict has.

And this is not something you fix on your own, bubba. That ain't how this works. It's got control of you. It owns you. And you have to have some help to get these. This demon off your back. You can't do it by yourself. And it's just, obviously, if you coulda, you woulda, because you wouldn't have screwed your whole family over. No one does that on purpose. It's an out of control person that does that. So, Jill, your position, if you were my daughter or my little sister, I put my arm around you and say, he's already got two strikes if he doesn't get in counseling and doesn't start taking some hard strides towards putting this in the rearview mirror. And that includes he doesn't touch money ever again for the next four years. You touch all the money, you handle every bit of it. He doesn't see any of it. You explain it to him. You show him where it went. You can be transparent with it, where it happens, but he hands his paycheck over to you. He has no hidden accounts, no lies, no side credit cards, no side girlfriends, no bull crap.

And keep yourself protected, too, Jill.

Yeah, and if he won't. If he won't turn it over to you and go get in counseling, you're gonna have nothing but hell on earth, because he's just lying. Again, sorry, but that's just the hardcore. There is no middle ground with folk in these situations. Man or woman. Doesn't matter.

And so in that case, you're brave, protecting yourself, Jill, and your child.

Yeah, because. And you gotta start talking about what kind of career you're gonna have to sustain your life as a single mom, because 100% of addicts are eventually broke. 100%. That's a horrible stat. Listen up. Trying to reach your money goals without a rock solid budget is like trying to climb Mount Everest in ice skates. It isn't going to work. That's why we built the every dollar app, to help you win with money. It's the simplest, most straightforward way to track your spending and give every dollar a job. That way, you can stop letting your money push you around and start reaching those money goals. Download every dollar for free on the app store or Google Play. Rachel Cruze Ramsey personality is my co host, openphones at triple H 825-5225 Peter is in Toronto, Ontario. Hi, Peter, how are you?

Hi. Good, thank you.

Good. How can I help?

So, my question is, I recently inherited some money from my father, who passed away, and it's enough money to pay off the mortgage on the house. And my question is whether I should do that or invest the money in investments like in Canada. It's not an IRa, it's an RRSP and things like that. And we do have. I have two children. I'm married, I'm 60. My wife is 55. We have eleven year old twins. And so we do have a college account for them, an investment fund for them as well. But. So there's only enough money to either pay off the mortgage or not. The wrinkle in the question is, to be blunt, my wife is a compulsive shopper. So we've been married 16 years, and we've gone to counseling on this issue a number of times. And she promises to change and to stop. It doesn't change. My wife's parents are not wealthy, but they were comfortably middle class. They were very wise with their money. So when we got married. They actually bought the house as a gift for us that we live in. It's in my wife's name alone. I didn't realize how much credit card debt she had racked up.

And it was in the hundreds of thousands. So we ended up having to get a mortgage on the house to pay off the credit card debt. And that mortgage is in both of our names. The we're paying right now. It's an adjustable rate mortgage. We're at 8.34%. The bank is saying that they're going to raise the rate soon. You know, like money wise, it is kind of paycheck to paycheck. So paying off the debt on the mortgage.

So let me get this straight. If you take your inheritance from your father and pay off the mortgage from your wife's compulsive spending in a house that's in her name.

Yes. But the mortgage is in both of our names.

I know, but now the house is free and clear and it's not in your name?

Yes.

That doesn't end. That doesn't end.

Well, I'm not worried about that.

Why?

Well, a few reasons. One, our marriage is strong.

When. When was your marriage strong? Your wife is a compulsive shopper, runs up a hundred thousand dollars. How do you call that a strong marriage?

Yeah. Yeah. Okay. Yeah.

So, no, I'm not paying off someone else's house who has an addiction.

Yeah.

How easy is it to get your name on the deed? I'm just curious. That doesn't fix her issues. But I'm just from an asset perspective.

Well, she could, you know, with her permission, add my name to the deed. I. I am not. I'm not the kind of person who fights over money.

And I. I wasn't asking you to fight over money. I was asking you to be wise.

Yeah, I hear what you're saying. I. Her parent. I love her parents very, very much. And by the way, her parents are actually.

That has nothing to do with it.

Yeah, well, I would feel, you know, they.

You guys are married. You guys are married. Okay. So if you're going to share in assets and share paying off her debts, you have just of a right to have your name on the assets of your marriage. You're not being greedy in that sense.

Unloving act towards her. By the way, we're paying off her debt. Wasn't your debt. She ran it up.

Yeah.

Okay.

I mean, her argument would be that it was for necessities, for the house. The thing is, she overbuys. So, you know, like children's clothing. Our kids had a hundred thousand dollars. Yeah. Dozens and dozens of shirts and pants and, you know, stuff like that.

Right. If we're talking ten grand, we can probably nitpick if it was right or wrong. But a hundred grand, I mean, that's. That's an obvious crazy number. I mean, that's. That's wild. Yeah, that's.

Oh, and by the way, under the cloak of darkness, you didn't know it happened.

Yeah, it was hidden. So, Peter, I want to go back to the realize.

Yeah, I didn't realize. I saw stuff coming in, but I like prior marriage.

Okay.

Besides that, that card specifically or that whole $100,000 in general, do you guys talk about money, or do you all have a budget together? Like, do you know what's going on? Or does she just handle the money? How does it work in your marriage?

So she has always handled the money. And before our marriage, I never had credit card debt. You know, like, once in my life, when I was very young, in my twenties, I paid.

Do you have access, Peter, to your accounts? Like, do you check in on the. On the accounts and kind of have a pulse of what's going on at all?

You know, I do. I'm going to. Now that our kids are a bit. When the kids were young, like, we were barely getting any sleep. And, you know, with both of us working full time, we were exhausted. But now that the kids are more self sufficient, I feel like I have the time now that I can spend with.

Okay, that's my encouragement to you. Because we find this so often that one spouse in the marriage takes the weight of the money, that they're the ones that pay everything, know everything, do everything. And to a degree, that spouse has so much pressure and responsibility. It's very isolating. And that's been your wife. Now, I'm not justifying at all her stuff of 100 grand of going into credit card debt and you not knowing all of it, but also, you didn't know because you don't know what's going on. So, Peter, I.

You're no help.

You need to. You need to step up in this and sit down and be a team together. And you're a very kind person. But when you said, I'm not the kind of person that fights with money, these are the fights you need to have, because your marriage needs a level of unity and a level of agreement that is so. That is so deep that you guys are on such a level of vulnerability and honesty that it may come up. There may be some fights. And that's okay. Conflict is okay. And this is an area of your marriage. You need to be fighting about, Peter. And not being irrational and angry and hurtful, but, man, you need to step into this, Peter. You really. I mean, she may feel very alone in it and she acts out for whatever reason in this way, but just. I'm just saying you need to step in. And I would say that to any caller when it comes to marriage, you guys need to be more of a team. And that's gonna be a. That's the. That's the exact reason you wanna push into this. Cause it's going to create a better marriage.

It really will. It's gonna not be fun at first. Cause you're gonna be. You guys are gonna be maybe, you know, back and forth with stuff, but that's what creates a level of intimacy because you're doing it together.

So enablers, people who psychologists or therapists label as an enabler, as I've worked with them over the years, they're the nicest, sweetest people. They don't want to cause a ripple. They don't want conflict. They want everybody to be happy. And the. The irony is, is that it's the most hurtful thing that you can do to not cause the conflict. Because the conflict is where healing comes from. And again, not a raging, angry conflict, but a conflict based on strength and wisdom. And so what you're thinking about doing is just trying to hide this lump under the rug again by paying off the mortgage, leaving it in her name, which is absolutely ridiculous. Dude, that's just nuts, okay. With what you've described here, and you think then it's all going to be okay? If you just keep being nice, it's all going to be okay. If I keep being nice, it's going to be okay. I love her, mom and dad. They're sweet people. I wouldn't want to hurt them. If I keep being nice, it's all going to be okay. And, dude, that's a classic. It's a classic case study. And so you've confused nice by being so nice, you've actually caused harm and you didn't mean to.

You would never cause harm intentionally. But I want you to be the surgeon that cuts so that there's healing a little hurt, so that there's healing a little conflict so that there's healing. You don't pull the splinter out, it's gonna fester.

Hey, guys, it's Rachel Cruz. When it comes to teaching kids about money, moms tell me all the time. Just how overwhelming it can feel to get started. That's why I'm so excited to tell you about financial peace, kids. This toolkit was designed to make learning to save, earn, spend, and give money fun for both you and your kids. The best part, it only takes ten minutes a day. Yep, just ten minutes. You've got this pick up financial piece, kids@ramsaysolutions.com. store. That's ramsaysolutions.com store.

Rachel Cruz Ramsey, personality number one best selling author. And my daughter is my co host. Today, open phones at triple 8825-5225 in the lobby of Ramsey solutions debt free stage. Luke and Arizona are with us. Hey, guys. How are you?

We're doing good.

Welcome. Where do you guys live?

Just north of Bowling Green, Kentucky. Little town called Owensboro.

Know exactly where it is. Welcome to Nashville. So you're about an hour and some change out?

Yes, sir.

All right, cool. How much debt have you guys paid off?

We paid off $25,500.

Very good. And how long did that take?

About one year.

Good for you. And your range of income during that time?

We started at about 105,000 and went up to about 115,000 during that period.

Very cool. What do y'all do for a living?

I'm a teacher. I teach 8th grade social studies, and I coach football and wrestling as well.

And then I work for a university called South University. I'm an admissions representative online, remotely for them.

Oh, very cool. Good for you guys.

So great.

How long you two been married? One year on Monday. Oh, happy anniversary.

Thank you.

Well, well.

You got $25,000 worth of debt. What was the debt?

Student loans. Small things.

Yeah, mostly student loans.

Mostly student loans. Okay. And you get ready to get married, and you go, okay, we got student loans. Tell me the story. What happened here? What made you decide? First thing, first order of business when we get home from the honeymoon is this debt's going away.

Well, I guess we were kind of looking at things and talking about, like, what life would look like whenever we were married and finances came up. And, you know, I've always known about the Dave Ramsey show, and I've listened to it with my dad since, you know, I was probably five years old, and we were kind of talking about it, and I said, well, here's. Here's a plan, you know, and if we. Whatever plan we decide to do, we need to stick with. And I convinced her to tried the Ramsay way, and then we, you know, got to it and paid it off.

Yeah, just like that. Just like that.

Just did it yeah. What did you think, Arizona? Were you like, okay, I can. I can do this.

Strange man getting ready to marry the.

The student loan. Was it more? Whose was it?

That was me.

Okay, so it was mostly yours. Okay, so. So you were like, we got. We're gonna pay this off. And so what did you think about it all?

I was terrified, I would say more than anything. Like, he came into the conversation so excited. He's like, we're gonna listen to this podcast. And it was funny because on the way to get engaged, he played the podcast for half of the 14 hours drive for, like, the book, total money makeover. So I was. I was like, please, can we listen to some music?

He was like, please, can you turn this guy off?

We're gonna listen to this. And so it became kind of, you know, common practice and common conversation in our household. Like, we would go to do something or get a trip or something like that. We'd be like, Dave wouldn't like that.

So great. Okay, so what did you guys do? You're a newlywed couple. What were, like, the things that really helped you knock out this 25,000?

I think, for me, the big thing was he is very passionate about, like, our future, not only for ourselves, but for our kids. So it was a big deal for me because, number one, we both want to create a life for our family, to be able to give them something to look forward to or give them something financially. But during the process, we were very fortunate to, you know, we both have great jobs. But on top of that, we sold a vehicle and purchased another one with cash and used the proceeds of the first vehicle that we sold to pay a huge chunk of that off. And then the rest of it we paid with savings that we had basically gained by living off one income during this period of time.

Oh, that's smart. Okay. Yeah. You were able to look at that and just live off one. That's great.

Well done. Yeah. What do you tell people the secret to getting out of debt is?

Be intentional. Yeah. Communicate.

Yeah.

Even when it's hard, because I like to take cruises and, like, cruises. I'm a big carnival cruise fan, and so anytime that there's a deal email that comes through, I'm like, look, Luke, this would be awesome. He's like, no, not right now.

Until we get this cleaned.

Yeah, exactly. Exactly.

Very cool. Good for you guys. I'm proud of you. Who was cheering you on as you went through this?

Honestly, with my parents, we kind of talked about that we were doing the Dave Ramsey plan, but we really kept it to ourselves with clean, our friend groups, our friend circles, if someone asked us, then we would tell them that we were following Dave Ramsey. But then, other than that, we didn't share with a whole lot of people. We just kind of kept it to ourselves and make sure that we communicated together.

That's so great. Well, what advice would you give a newlywed couple who's starting this journey? What would you say to them?

I would probably say unsubscribe from the cruise line? Yes.

Don't get on carnival cruises email list. It's not good for your wallet. No. I would say above all, like, it's more about the connection that we've grown together in the last year. You know, we actually just purchased a new home and paid off our previous home with. That's like, we sold enough to pay that 20% down on our next home.

Yeah.

And we close, hopefully next week. So this last year has been so full of ups and downs for us, especially in our first year of marriage. So just being intentional with each other and having those hard conversations. But above all, when people say, oh, that Dave Ramsey thing, or, oh, you can afford it, it's not a big deal. Just reminding ourselves, especially me, I'm probably the one that has to be put on track a little bit more, but just reminding ourselves and everyone else that, like, it's worth it in the end. And this feeling is unmatched.

Yes. Yes. So good. So great. Oh, well, congratulations.

Thank you.

So. But are you gonna go on a carnival cruise to celebrate one year now that you're debt free?

Probably not.

Okay.

He says no.

Gotta save up some money. I'm not sure carnival is getting a good ad version here. Oh, my God.

That's awesome.

Way to go, y'all. Thank you. So proud of you. So proud of you. I know your family's proud of you. And you've set yourself up to have a very, very bright future. You're obviously on Track. You got a game plan. You're laying it out. Whether it's ours or anybody else's. You're on track. You're doing it together. That's what it is. That what you said? For sure, Luke. Intentionality. That is the whole thing. That's how it's dialed in. Well, congratulations. We got a couple of years for you two one year subscriptions to everydollar premium. Keep that old budget going, and. Or you can give away one of them to somebody else and get them started as you're talking about it. And our way of saying thanks to coming for coming down from Owensboro. Owensboro is a great town.

Thank you.

It's a great town. And congratulations, you guys. We're very, very proud of you. All right. It's Luke and Arizona celebrating a one year anniversary on their marriage by doing their debt free scream. 25,000. Don't you wish you'd done this in the first year of marriage? $25,500 paid off in one year, making 105 to 115. Count it down. Let's hear a debt free scream.

Three, two, one.

We're debt free. Yeah. This is how it's done, boys and girls. I love it. I love it. I love it. Well done.

So great. So, so great.

So I wonder how many people have been trapped in their car on the way to getting engaged, forced to listen to one of our books. Mine or yours or somebody else's?

Oh, man.

Yours would be more pleasant.

So funny. Oh, my gosh.

So great.

So romantic. Luke. Such a romantic guy. Such a romantic guy.

Luke's a regular romeo.

Oh, my gosh.

Hey.

After 14 hours of listening to Dave in the car. Want to get married?

And I love. Almost like, their attitude around it was like, well, we have it. We're gonna knock it out. We're gonna say no to stuff, and we're just gonna do it.

It was just matter of fact, there's.

Just this level doing it. Just do it. Just do it. And now, I mean, with great income, no payments, it's amazing. It's an amazing thing.

I mean, you're making a hundred thousand dollars a year. You don't have a payment in the world.

That's great.

And you buy your next house. I mean, my gosh, you got a payment on the house, but that's it. God, Lee. And that's the first year of marriage. Not bad. Ding, ding, ding, ding. Ring the bell. That was very well done. Very well played. And the interesting thing is, if we take, you know, what they were paying payments on that 25, if you just put that in the bank from their age now, put that in a mutual fund from their age now till 65, that's millions of dollars that that debt would have cost them. That it's not going to cost them now, and it's not going to make them, because your most powerful wealth building tool is your income, and you get it back when you don't have to give it to everybody else. The borrower is slave to the lender. The Bible's not kidding.

Yeah. And again, it's that, that urgency of getting out as quickly as possible. Mathematically, it's on your side.

It increases the probability of success.

Yep. Absolutely. Well done, Luke in Arizona.

Yes. Well played. This is the Ramsey show, our scripture of the day, ephesians 312. In him and through faith in him, we may approach God with freedom and confidence. Abraham Lincoln said, those who deny freedom to others deserve it not for themselves, and under a just God cannot long retain it. That was stated in the middle of the slavery movement. Wow. Middle of civil war. Wow.

Juneteenth.

There it is.

That's real.

Holly is with us, and I never read that quote. Holly in Albany, New York. How are you, Holly? Good.

How are you?

Better than I deserve. What's up?

So, I've gotten myself into a big hole. I apologize. Right now my account's negative $600. I have no money. In the past 60 days, I've paid over $1,300 in overdraft fees. I'm going to call my bank to cancel that overdraft, because I realize that's ridiculous, and I just don't know where to start. I'm behind on my mortgage, and I just don't know what to do.

You by yourself?

I have a husband, and we have two kids.

Okay. Are you handling all the money by yourself, or is he just watching this happen or what?

So we're trying to talk more about it. Originally, it was. He was just giving me money to pay the bills, but he had his car broke. He had to get a new car, and so he's not. He has not been giving me money with his paycheck here and there. He will. Or buy the groceries, but it's pretty much been all on me.

Holly, are you working?

Yes.

So you guys have separate accounts?

Yes.

And he kind of earns money, does whatever he wants, comes. And you pay all the bills?

Yes.

Does that not feel weird to you? It feels weird to me.

It feels very weird.

Yeah. Like, wrong.

Yeah.

Okay.

And have you guys talked about that? What does he say?

Well, he just says that he doesn't make as much, and he's trying to pay. He pays. So he pays for his car, his insurance, and then our kids do go to a private catholic school, and I know I could just cut that out, and I wouldn't have that monthly payment, but it is something that's really important to us. So he has that payment for his daughter, and because her mother refuses to pay for school, so we've taken that on.

So he has a child from a previous marriage, and then is the other child both of yours, or was it one?

The other child is just mine.

Okay. From a previous marriage. Okay.

How long have you all been married?

Since November.

Okay. All right. Okay. You have several. The overdrafts are not the problem. They're the symptom. And so what we're hearing is there are several problems that when you solve those problems, the overdraft will go away. Okay. Does that make sense?

Yes.

Problem number one is just disorganization because no one intentionally runs their checking account into the red. You might have if you were, like, buying groceries or something like that because you didn't have the money to eat otherwise. But most people, it's just disorganization. If you laid out a game plan, your game plan would not be, I'm going to intentionally create $1,300 in overdraft fees. That would not be your game plan. I don't think you did that. You're too intelligent to do that on purpose. Does that make sense?

Yes.

That's kind of what happened as a part of the chaos and the disorganization. And coming up short, because your portion of the responsibility here is larger than your income. You're coming up short.

Yeah.

Yeah. Okay. Problem number two is you all are running your relationship and your household horribly. And that would be that the two of you need to sit down together. You probably need some good marriage counseling, because you need to sit down together and say, all right, we just got married. And the preacher said, and now you are one. And you're not acting like it. You're acting like two. You're acting like roommates that both have a kid, and it's killing you. It's causing you to be afraid. It's breaking your heart. You feel disrespected. Am I. Am I saying things that are untrue?

No, you're spot on.

Okay. All right. And he's probably wounded and hurt from his last relationship and is still carrying some of that and then projecting that onto the new relationship. I'm guessing that be kind of normal to do that, by the way. It wouldn't mean he's a bad guy. It just means it's like, well, last time I got burned when she was acting like this. I'm not doing that again. Right. I'll just keep everything over here and I'll take my part. You take your part. We'll see how it works out. That that's generally. That that's the voice of hurt. That's the voice of a wound. Okay. So I'm not saying he's a bad guy, but he is really mistreating his current wife. So if I were your your older brother, I would tell you to put your. To sit down tonight and turn off the tv and put the kids to bed and say, hey, dude, this is not working. Turn the lights. As John Deloney says, turn the lights on in the room, because we're all kind of walking around in a fog, acting like this might work out. It ain't gonna work out. Turn the lights on and go, this is not working.

We either made a huge mistake, or we got some work to do to get on the same page, because I'm not going to live where you treat me like your servant. Does that sound right?

Yeah.

Okay.

Holly, from just a tactical sense, I'm curious. If you combined both of your incomes and you guys really worked out of one account, you paid household bills together out of that account, would you be behind on the mortgage right now?

I don't think so. Yeah, I don't either, because I feel like I would have a better handle on what each of us are, kind of.

Yeah. I want both of you to have a full handle on it.

Yep. And so much, Holly, of money and the way we use money, the way we view money, the way our dreams are around money and our fears, all of that is so wrapped up into who we are. And when you keep that part of you from your spouse, which is what he's doing, there is such a lack of transparency that's going on. And, you know, on a really extreme, terrible side, you know, we see people with addiction, that they hide stuff from their spouse. Another light. I mean, like, stuff just happens when money is hidden in the dark on an extreme side. And on the other side, I pray that it is. What kind of Dave said earlier, he's just like, I just don't want to get burned, and I've been through a divorce, so this and this, you know.

Well, if you've been married eight years, I might be suspecting him of a lot more. You've been married eight months?

Yeah. Yeah.

So I'm trying to get. Trying to give him the benefit of.

Yeah, that's fair. That's fair. But the lack of transparency, too, is one of the reasons we talk about the level of unity.

Horrible.

Because it's just everything is. Everything's there, and you're working together, and you're. You're a team, and you're not being held like this. I mean, Holly, when you said, I'm behind, you're not. You guys, we are behind.

We are about to lose our house because you are standing over there in the dark handing out money. Like, I'm your child giving me an allowance. That ends tonight, bubba. Okay? That's how the conversation goes in Tennessee, you know, so you can. In Albany, New York, you might be nicer than that, but we get, we get all. We get all hillbilly about it around here. I'm just saying.

Oh, Holly, we're cheering for you, girl.

Yeah, go get. Go gets. Go get some marital help.

It's worth pushing into this.

Yeah, you can. You can win this battle. It's. I've seen people overcome it a many a time. But he needs to. He does not understand how much harm he's doing to a you and to the marriage. He's getting ready to lose his house because he's being stupid. Y'all gotta get on the same page here. Go get some help, kiddo. That puts 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. Hey, folks, Dave Ramsey here. You know, budgeting doesn't have to be boring. You just need a budgeting app that's made with you in mind. And that's everydollar. The everydollar app has helped millions of people work the baby steps and take the stress out of planning and managing their money. Start budgeting with everydollar for free. Right now. Just go to ramsaysolutions.com everydollar and download the app today. That's ramsaysolutions.com everydollar.