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 amazing relationships. I'm George Campbell, joined by Dr. John Deloney, bestselling author of Building a Non Anxious Life. I guess I'm an aspiring best selling author. John, I just prelaunched a book, and I hope that it's successful as yours. It's called breaking free from broke. It's on presale right now@ramsaysolutions.com. Store.

Work hard, George. Aspiring may you accomplish all of your.

Dreams, but we're both YouTubers, so we succeeded in that regard.

You're crushing me on YouTube.

That's success. Well, let's take some calls. The number is triple 8825-5225. We'll help you take the right next step with your money, your mental health, your relationships, whatever it is. We will give you our advice. That is a guarantee. All right, let's start with Jessica in Boston. What's going on, Jessica?

Hi. So I am wondering how my husband and I, we're a family of five. We have three kids, five and under. We both work. We make a very good living north of Year, which almost 50 of it is tax free because my husband receives VA disability pay monthly. But we've had several crises, I guess, come up the past two years, and we were debt free. But now, due to the unexpected occurrences, we're now living beyond our means. Paycheck to paycheck, have no savings. And our emotional, our physical health is taking a toll. Our marriage is taking a toll, and we want to stop living paycheck to paycheck. How do we get out of this, and how can we repair the relationship along the way?

I'm sorry to hear what you're going through. Yeah.

What happened?

What were the crises?

Yeah. So the height of the real estate market, right. We sold our first house. This is our opportunity to get debt free. We were probably, I want to say, between 50 to 65,000 in debt at the height of the market in 2021. We sold our first home, walked away spot free, paid off the entirety of our debt. And then I got pregnant with our third child. I was only six months postpartum, and I was actually struggling with postpartum depression. In the interim, we had major complications. I was in preterm labor for almost three months, and I am the breadwinner between me and him. Very high pressured software sales, technology sales, I should say job, which forced me to need to take a medical leave of absence due to my postpartum getting so bad. It was literally for the safety of myself and my family that I had to take a medical leave. And the day I returned to work, I was laid off in turn. We literally two weeks. Yeah, it was bad. I want to say a month prior to me going back to work, we had just closed on a new home, our forever home, and the bills piled up quick.

So how much debt are you in now?

It's probably, I want to say between 22,000 total and what kind of debt? Yeah. So it's unsecured loan debt, credit card debt. Should I include the car or no?

Yes.

That's debt, isn't it?

Okay. Then it goes up from there. So I would tack on a total, an additional 60.

So you're probably $85,000 in consumer debt.

Are you back to working now?

I am. I found a new job fairly soon, within a month, and I am working.

Are you still making 300,000?

Take some time to build the pipeline again.

Okay. What's your husband do?

Yeah, he works for the government and he was a Marine, and now he works for the government as a safety inspector for OSHA.

So I'm going to let George talk you through this debt situation, but I want to say a couple of things. Okay?

Okay.

The first thing is I'm really glad you're still here.

Thank you.

Making that call when you're holding a baby is one of the scariest calls you can make, right? It is, yeah, because there's that demon telling you that they're going to take your baby away. People are going to say you're crazy and they're going to lock you up. And I'm so proud of you for doing that. That's hard. And we're good now, right?

For the most of the time. Well, I still have moments.

Yes.

There you go. Let me ask you this way. You're always going to be around here, right?

Yes, for sure.

Good. The second thing is, if you haven't already, there's going to come a moment when y'all are going to have to and the quicker you get here, the quicker you can begin to do the walk the path that Jordan's going to lay out for you. You're going to have to make peace with grieve the crap out of, but make peace with, here's the life we had and now here's the one we're in right now.

Okay.

The more you try to, quote, unquote, get back to what we had, the more you're going to make yourself nuts because you're just going to run in a circle. You're going to be dragging what used to be investment. Right. So we used to have $60,000 cars. We don't anymore. We're a Camry family now. We used to have a Humongous house and we had our forever house. It's not our forever house anymore. You and me are forever husband, but the house isn't. And that's okay.

Okay.

And we used to make 300 grand. Now we don't. And maybe one day we will again, but that's not the world we're in right now. And so when you make peace existentially with those moments, then remember we had Alexis. Yeah, but now we got a Corolla, and it gets us where we need to go. And you got a bunch of dope marine tattoos, but you're going to look awesome smoking hot getting out of a Camry. That's just the world we have now, right? And it's not less than, it's just different. It's different. And it'll be back. It'll be back. You're a hustler, your husband's a brilliant guy. I mean, you'll be back, but let's make peace with that new world, right? Right. And that new world is awesome, by the way. It's top 1% of planet Earth. It's a great world. Just we got to let go of what used to be used to be awesome, and then we got laid off and it sucks. And here we are now. Now it's awesome again. Just a different kind of awesome.

Okay, so, Jessica, this is going to start with some simple math, but it's going to end with some sacrifice and behavior change. You ready for it?

Absolutely.

Is your husband on board, too? This is an important factor.

He is.

He knows how you feel about all this. Okay, we're going to get you to solid ground and I'll give you some options. It'll be a choose your own adventure. My guess is your take home pay is somewhere around 15 grand a month.

Yes.

Okay.

Correct.

So let's look at what our expenses are. What do we need to keep the household running? And you're going to do that with a budget. I'm going to gift it to you. It's called every dollar. I'm going to give you the premium version. It's going to have paycheck planning, connect to your bank account, all the good stuff. Your homework is to list out every single expense you have as a family and ruthlessly cut out the stuff that doesn't matter, that you don't need right now. You got that? Okay, give me a rough estimate of what that would add up to.

Five grand for cutting out or the.

Total expenses that would keep the house running. Food, shelter, utilities, transportation, all that. Probably twelve grand.

Yeah. With our nanny included. Childcare included. Okay.

Remember those sacrifices I mentioned, Jessica? This is where we might have to figure out how to get that twelve grand down to five. So we have 10,000 to throw at the debt and we can be done in eight months. That might mean selling the cars if you can't make those, that might mean.

Letting the nanny go for a season.

This is not going to be fun, but your life on the other side is going to be way better for it. So hang on the line. We'll gift you every dollar. We are wishing you the best.

Yo, yo, Dr. John Deloney here. Hey, it's pumpkin spice, late season. Just joking. Those are gross. But it is fall. It's a little cooler. The sun's going down earlier, and God help us, daylight savings time is ending or starting or whatever. The time is changing again and it can be exhausting to adjust. So make sure you're moving your body every day. Make sure you get some sunlight in the morning and hopefully in the evening. And make sure you get seven to 9 hours of sleep every night. And I can't stress enough how important this is. Sleep is the cornerstone to your physical and mental health. And for me, amazing sleep starts with an extraordinary mattress. And that's why I love DreamCloud. Right now, DreamCloud is running an incredible offer 40% off all mattresses, plus an additional $50 in savings exclusively for our listeners. Go to Dreamcloudsleep.com and enter promo code John Deloney. That's Dreamcloudsleep.com with code John Deloney for 40% off all mattresses, plus an extra $50 in savings.

Welcome back to the Ramsay show. I'm George Camel, joined by Dr. John Deloney. We're taking your questions at AA 825-5225. You jump in, we'll talk about your relationships, your mental wellness, your financial wellness, all of it right here on The Ramsay Show. Our Question of the Day is brought to you by Neighborly, your hub for home services. With 19 home service providers nationwide, the network of local service pros on Neighborly.com can help with just about anything you need done in and around your home. Visit Neighborly.com slash Ramsey to find out more.

All right, today's question comes from Leanne in Virginia. Leanne writes, I've been hearing that the US dollar may be obsolete. And so called experts advising to do something with money sitting in various large banks like Wells Fargo, bank of America, et cetera. Since the market has been all over the place and the CD rates have been up, we stockpiled a couple hundred thousand dollars in Wells Fargo. But now, after seeing these alerts, we are a bit concerned. What are your thoughts on the US. Dollar becoming devalued or obsolete?

Wow. A lot going on here, John.

A lot going on here. All right, I'm going to let you talk about the investing strategy, George, but here's my two cent, and you can do with it what you will. The US. Dollar is how the world does business, right? And I had one friend of mine, she was a legal scholar who said, the world spends. Planet Earth spends on one sentence. The United States will pay its bill, end us. Dollars. Right? Pay its bills. That's why things like government shutdowns and the debt ceiling not dealing with this long term issue will be an explosion of catastrophic events if we don't get this debt under control nationally and we don't continue to figure out ways to pay our bills. And if you owe 30 something trillion dollars, it makes the whole world nervous. And if you just print and invent money, it makes the whole world nervous. And other people can't divorce themselves from you. Other countries can't. If they have to pay their bills and your money. Right. They can't devalue your currency because then they're devaluing the amount of money they owe you or you owe them if there's debt. Right? So there's been the conversation with Brazil and Russia and China, like brick, is the big new thing.

BRICS I think it is. Which is we're going to create an alternative world currency that's not the US.

Dollar, not tied to us.

And then everyone goes, It's all coming down. So here's what I can tell you. I can tell you that if the US dollar does not continue to be the world currency, and Wells Fargo, bank of America and fill in the blank, all fail. Any amount of things that you think you have done to prep for that moment, you have not done, it will be a drastically different planet.

Okay?

The world will be different at that moment. So I have like this, like every other it's all going to move all your money to gold. Start buying coffee and burying bullets and silver coins in the ground and buy a bunch of Beanie Babies and whatever the thing of the day is, I always like to look on the other side of it and ask myself, will the world be the same? Like this world I'm preparing for? Will it be the same on the other side of this? The answer would be no. It'd be a radically different world that we're all going to have to adjust to when we get there. So what does that mean? That means I'm going to go throughout my regular day, not trying to time the meteorite that's going to hit us one day. I'm going to do the next right thing. And the next right thing is, given the information I have in front of me, the world currency is the US dollar. And forget the world currency. My country that I live in uses the US dollar. That's what I'm going to put in the bank, and I'm going to invest it for long term, and I'm going to pay off my debts, and I'm going to next right thing.

Next right thing. Next right thing. I'm just not going to get on YouTube and listen to the just absolute drivel that is coming out of some of the news stations out there who have no vested interest in information quality information. Truth. They have vested interest. They're publicly traded companies. They have a vested interest in one thing, clicks your attention so they can sell ads. They're not incentivized to give you correct information, and so they're incentivized to get your attention. How do I get your attention? It's all coming down, right?

That's one way, right?

And then you go, what's coming down the dollar.

Well, John, if you upload a video and it's like, guys, the dollar is fine. Everyone just go to work and love your families. It's going to get zero views. Nobody wants to watch that. It's not exciting, right?

And is there some challenges? Are you freaking kidding me? We owe $37 trillion. We have people in Washington just throwing crayons at each other in a sandbox like, you're dumb. No, you're dumb. And then it's madness. So if I am a trading partner with the US. Would I be concerned about the absolute insanity I see everywhere. Yep, I would. No question about it. Should the average citizen who has a mortgage and a car payment and some credit card debt be trying to think through a strategy for what happens when the dollar goes away? No, I would not spend my time doing that. I think there's a ton of hurdles between the US dollar going away and brick or whatever, these things kicking. There's a lot of strategies, I mean, a lot of hurdles in between now and then. The biggest thing we can all do is take care of our homes, take care of our personal finances and vote people who will do what's right. And that's what we can do.

That's the game. That was a good intellectual take, John. Mine was not that smart.

What do we do?

I just underlined things that I thought were funny in this question. Like, the so called experts are advising me to do something. So, no, I'm not going to trust the so called experts out there who are using fear to get your clicks. And I also wouldn't stockpile hundreds of thousands of dollars in a bank account, because your biggest problem there is not devaluation, it's inflation eating away at your.

Money, which is very real.

That part is real. And so I would be investing that money. Anything beyond your emergency fund and your current savings goals, invest it in the long term. I still believe in the US economy and some amazing companies that are innovating, that will know the economy to rise and the GDP to grow. So I have faith in that. And it's all at the end of the day, I can't control any of it, John, so I'm just going to the best thing you can do is be debt free and have pile of money in the bank and be investing the future. That's it. Otherwise, I'm not worried about the dollar becoming obsolete anytime soon, because I got to pay bills, John, with dollars.

I do think what you said earlier is something I wish everyone would double down and triple down and quadruple down on, which is a great inflation. Hedge don't owe anybody any money. A great guy just got laid off. Hedge don't owe anybody any money. A great anxiety mental health challenge. Don't owe anybody any money. And if more people would default to as for me and my house, I'm going to take care of that and I'm going to work seven jobs, I'm going to work 15 jobs, I'm going to get rid of the nanny like the last call. I'm going to get rid of the cars we're going to drive, corollas we're going to make this thing work. Because so many of the things on what can I control and not control? Can any of us individually control whether the US dollar becomes obsolete? No, absolutely not. There's nothing we can do. Can I control that? I don't owe anybody money and if one day a foreign currency calls and says, I call your note and I'm like, I don't owe you anything, they'll be like, okay, I'll go to your neighbor, dang it.

Right.

Exactly. So I think the most important thing almost every one of us can do right now is not owe anybody any money and work like bloody hell to get there.

Yeah, that's an interesting take. If you're truly worried about what could happen with the economy, then why are you owing Ford Motor Company a giant check every month for that car you must drive?

Why do you make a payment to Visa?

It just doesn't care about the and it sounds like this question. They have a bunch of money that probably aren't carrying debt, but it's one of the best things you can do to sleep better at night. Because when it all comes down, the lenders are still going to want their payment and they will do whatever it takes to get it. They will take you to court in the midst of a pandemic. They'll do whatever it takes. And so the best thing you can do is just live a debt free life and turn off the headlines if you're starting to spin out of control. And, John, I know there's a lot of people out there who genuinely want to they want to stay in touch with what's going on in the world. But what is the balance there between going, all right, all the headlines are telling me it's all coming down. My real life says I love my family and I like my job and I'm just going to go to work and go home.

It's just become like an old trope, right? Which I control what I can control. And so when I hear something going on like this, what can I do about it? What can I literally do about this? I know I'm going to lose money due to inflation if I put the money under my bed. I know that real estate usually has a good return over time, but I'm not going to borrow money to do it, so I'm going to put it in a high yield savings account. I'm going to invest my money and on the long term strategy and that's how we're gonna roll. And number one, I'm not gonna owe anybody any money. And we'll deal with this as this rolls out.

It's that simple. And, John, you lay out six daily choices we can make in your new book, Building A Non Anxious Life, which I highly recommend for Leanne in Virginia, it actually may help more than anything.

And George can turn anything into a sales pitch. That was impressive.

That's what I do. America. This is the Ramsay show.

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Would you consider yourself quick and nimble?

I am, actually. It's the one thing I am good at as a small person.

I disagree.

I appreciate that. I'll outrun you any day, John.

You're a small person, but you're not quick or nimble.

On that note, Chris in Albany is waiting with bated breath for our answer to this question. What's going on, Chris?

Hey, George. Dr. Don, thank you so much for having me on the show.

Sure.

What can we help?

So I guess one of the things I noticed when trying to get on a budget and one of the things that's kind of like, hampering things, I should say, is the constant bombardment I'm getting of emails, marketing emails. Seems like every time I check my email, like 99 out of 100 of them or something, trying to get me to spend money. So I was just wondering if you guys had any tip strategies or anything to kind of combat this and to stay on track with the budget.

What does that have to do with your budget?

Well, just making sure that we don't spend extra money. That temptation to spend money from the constant emails and trying to have you to spend.

So if I gave you a really sophisticated answer, which was just, don't, what's your pushback to then? I don't have much pushback other than.

Just I didn't know if it was something that your audience or anybody might have had, anybody has issues with. Maybe just trying to combat that.

There's a simple and effective way to do this. And I talk about this in Financial Peace University. John and I tag team a lesson on why spending. And I talk about this tiny thing at the bottom of that email. There's this tiny link. It's an invisible font about size 0.4, and if you click it, it'll say, sorry to see you go, and you say, okay, bye, subscribe.

That's it.

There's an unsubscribe link. And it gives me no greater joy than to hit that link on every single marketing spam email, unless it's a Ramsey email, and then I accept it with great joy. But for real, that's all it takes. What kind of marketing emails are you getting and did you sign up for them? Are these stores that you love?

Well, it's mostly just like because I've really tried to get on track with my spending and getting on a budget, and I be honest, I really haven't been that great. So products I've bought in the past, whether you've signed up for a rewards program or something in the past, and then you're just consistently getting those emails and it feels like it's nonstop. And also I'm not sure, has my email also been sold to other companies as well? And I get the unsubscribe thing, and I've done that. It feels like there's so much, it's just very overwhelming.

Don't even open them, though.

Yeah. What's underneath this? There's something underneath. Well, I think it's also just like.

In the email, just like, oh, there may be important emails that I'm not neglecting because sometimes I'll just won't even look at them, but then I may have missed an email as a result.

Give me an example, what's a store that you might be tempted to spend at?

I don't know, maybe it could have been anything from I'll throw one out there, maybe it's Amazon, maybe it's another company where I bought clothing, things like that.

All right, so if you were struggling with alcohol, one of the things I would tell you, if you and I were sitting down and you had wept and I'd heard your story, I would tell you, you have to agree today you're not going back into a bar, period. And then you would probably say, well, that's where my friends are. That's right on the way home from work. That's my routine. It's where my community, it's where my laughs are, it's where I get connection. And I would say, and it's killing you, you cannot go back into a bar and you'd have to figure out another way home. You have to figure out other people, but you'd have to figure out another way to deal with that thing inside of you that you are trying to wallpaper over with purchases and purchases and FOMO. And what if this is an important email? What if it's not? And so here's my challenge to you. Delete your email account just delete it. There's 700 services, email services. There's Google, and is Yahoo still a thing? I'm sure Hotmail still exists.

Does it people have it? I don't know why?

I have an Hotmail address, actually.

Proton Mail. There's stuff all over the place. Delete your email account. Just delete it. And if there's three or four people that you want to have your thing, just send them a note that say, hey, this is my new email address. Just clean slate it. And that would tell me that you are serious about dealing with this part of your life that is out of control. Because, dude, I get emails from some of the coolest companies and I go through their stuff and I am like, I want this. I would love to get this. It'd be so rad. I have that, and then I just don't. Or I wait 60 days, and then I do. Or I ask my wife, and she's like, really? Okay. And then I just don't because she's right.

And Chris, you mentioned the budget at the top of this, and the budget is going to dictate your spending, and so you're the boss of the budget, but when the budget is done, it's the boss of you. So if you have a $200 shopping line item, then you have permission to spend $200 on shopping. And it may be stuff that just Chris wants. If he's out of debt and he's in a good spot, it's okay to buy stuff. It's when we do it with the wrong motive, when it's not in the budget, when it's not the right time, when we haven't really done the research. It was just impulsive or emotional. That's when it gets out of hand and it feels like that's what you're getting at. You're self aware enough to know you have the tendency to go there.

Yep.

Just hear me and George say, I don't fully get the link between your budget and these emails.

I think it's before I had a lack of a budget, Dr. John, and I think now that I'm trying to get on a budget, get everything set, I'm still seeing those emails. Just to avoid that temptation, don't go off the budget. I guess that's kind of what I'm.

Trying to delete your email account, dude.

And whenever you sign up for stuff, here's what I do. I have, like, a spam marketing account.

I do too, and that's what I.

Give to all these companies, and then I never open that inbox because I know what's coming.

Yes.

So that may be another way to go about this. If you can't delete your email account, if it's connected to 14 million things.

Okay, I appreciate it. That becomes your junk email account and you send it over.

But I usually go through a tirade where I just keep unsubscribing from every single thing for a week straight, and then I tend to stop getting those emails. It's really nice.

It's a.

Nice feeling.

Hold on. This is important. Any behavior that you think I can't stop, like I can't control a do what he did and reach out and talk to somebody, whether it's alcohol, whether it's spending, whether it's whatever it is, the second thing is look at the environment that's allowing this thing to happen and begin to make environmental changes. And I'm not going to go in that bar anymore. I'm not going to go back in that house where this person is abusive anymore. That is really tough. If you don't have any money and you're scared and you're all alone in a new city, I get that. Or it might be I'm deleting my email account. I'm just going to get that serious about it because this isn't a spending issue. This is something beneath that. He created a budget and realized he went with him, right? He created a budget and he realized I've been running from a long time from something inside of me and I don't want to deal with it and I don't want to deal with it and I don't want to deal with it. And that budget forces you to look in the mirror and say, no.

What do you actually value, dude? Like, who are you going to be? And that's tough.

That's a scary moment when you look at your bank statement for the last month or two and you go, this represents who I am as a person, what I value, my identity, who I'm becoming, who I've been. Man, that'll set you straight. You're like, that was a lot of Taco Bell in a month. Who am I becoming?

Mine is mostly thorn supplements, but I get what you're saying.

That's who John is.

That's right.

A man who values his health. That's a good reminder. And John, you walk through three really important questions in that why spender lesson of Financial Peace University that our brains are asking on ancient technology. Do I belong? Am I safe? And does this feel good? And marketing is trying to get at all of those. It's trying to tap into the fears and going, it's going to feel so good if you just take this supplement, John, you're going to sleep so much better.

Or the dollars going away. Like the earlier question, right? Like, are you safe? Right. Do you belong? Hey, look at all the guys like us. We're all using this thing and wearing this thing and I want to be like those guys because that's the tribe I want to identify with. So, yeah, always step back and ask yourself, is this something I need or is this something I'm trying to use as duct tape over a person I don't like?

Usually the latter, but hey, if you want to check out that lesson, it's lesson five of Financial Peace University. John and I tag team it. I cover all the ways companies go after your money and what you can do to regain control of it, you can go check it out. ramseysolutions.com slash FPU.

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Welcome back to the Ramsay show. I'm George Camel, joined by Dr. John Deloney. Hey, if you're a new listener to the show and you want a deeper dive on the Ramsey baby steps, you can go to ramsesolutions.com and click on the Get Started button and we will help you figure out the next best step for your financial journey. That's ramsaysolutions.com and click on Get started. Heather joins us up next in Baltimore. Heather, what's going on?

Hi, I'm calling to figure out next best steps. My husband and I, we've been married about 20 years. About, I would say ten years ago, we did the Financial Peace University. We were in a ton of debt and we did that for a while, and then we got distracted and stopped working on it. But happily now, even though we didn't pay attention for a while, we are out of debt. Other than our house, I have a six month emergency fund and everything, and recently I got an inheritance from the passing of my father for some extra cash. So where we're at now, we bought our house 15 years ago. It's 170 ish years old.

Whoa.

And my biggest argument is, stop watching HGTV before you buy a house because it was the stupidest thing we've ever done.

So you thought we're going to turn this into some Victorian dream?

Maybe not that, but we just thought we could do a lot more than we have in 15 years.

Okay.

I'm very aware. I even take all the blame because this is 100% on me. That's health. Well, he signed on. So where we're at now, my husband has always wanted to build a sizable workshop. He has hobbies that are big, heavy machinery, and he's slightly hoarderish.

That's a good combo. Really expensive machinery. Plus hoarding not as expensive, they're just big.

So right now we have about $120,000 or so from the inheritance, and he clearly wants to go forward on the building, the workshop, because the plan always was build the workshop, then we would have the space to solve other house problems. I have been here long enough to know that my house needs too much. Like our foundation, massive issues. Everything is old. Everything is basically going to need replaced at some point. In fact, it's needed replaced.

So just sell your house. Sell your house.

That's what I am thinking we should do. Like, it would be smarter to sell our house and find another house. The area we live in, Maryland, is an incredibly high cost of living area.

Just sell your house. Just sell your house.

What could it sell for? As is, without you putting all this work into it, I might be able.

To get $20,000 out of what over what we owe.

What do you owe?

190.

And you've lived there 15 years?

We bought it at 2007, right when the market crashed. So it took a long time just to get back to what we owed.

Just sell your house. And we didn't put the sell your house.

I'm there the other concern I have is that I really like our mortgage where it's at now.

Hey, Heather, sell your house. Sell your house.

I'm on that. So I want to do that. But to buy another house, I'm looking at, like, 400,450 other houses that I could convince my husband to move into.

Okay, here's another idea. I just thought of it. Don't sell your house.

Okay.

How does that hit you?

Well, that's the other one I'm at, but then I have to spend all the money either I still can't I.

Got a new idea. I got a new idea.

Just fix the house.

I have a new idea. Sell your house and we're back. Here's the deal. There's not a right or wrong here. You have just twisted yourself up like a pretzel.

Oh, I have?

Yes.

That was tricky. John, do what you talked about the anxiety thing.

My $1,500 a month mortgage doesn't give me anxiety anymore. A new house, another $1,000 a month mortgage on top of that does.

But you're forgetting that 1500 is not 1500. It's going to be 150,000 because of what you're going to have to do to this place over the next decade.

But if you just got $100,000 inheritance and you put $100,000 into that house, it will appreciate for what in a high cost of living area, would it double? Would it be worth $350 to $400,000?

No, because the money that would put into it is like the invisible stuff that still just gets it back from not falling down anymore.

Okay, here's an idea.

If I have $1,000 into it, I'm probably getting close to 300 to 350.

Maybe, which almost doubles it.

We'll put 200 now, but yeah.

What would it cost to rent somewhere? Let's say you sold it. You have 140. You keep saving on top of that. What if for one year, you rented while saving? Would your husband go for that or does it crush his dreams?

Not for 5 seconds.

Why?

He has stuff problems.

Okay, well, let's deal with the stuff problems. Putting ourselves in a terrible financial position.

Here's what I think. Can I just say what I think? You tell me if I'm wrong. Say you're an idiot and you're wrong. I think your marriage is not as good as you're letting on. And I also think, and maybe your marriage isn't bad. You and your husband are two very different pages. You all are great co managers of your house, your roommates, and you have some other stuff going on. And this is a big merry go round that you can get on and go around and around and contemplate all the reasons you should stay and all the reasons you should go. And what it allows you to do is avoid dealing with the scary, scary truth sitting inside your house, probably sitting on your couch right next to you.

There could be relevance there.

There could be relevance there.

That was awesome.

This isn't going anywhere.

Right?

So if I were to take on.

Additional mortgage no, we're not doing that. Okay, listen to me.

Back to that.

What about this? What about taking your husband out for dinner and saying, honey, I plan us a date, and sat down and said, I'm scared to death about the trajectory of our marriage. I want to get you a barn. But how you spend money and your addiction to stuff scares me. And the fact that I'm running really low, some might call it depression, and I'm anxious a lot scares me. I'm scared our house is going to fall down. I'm scared we can't afford to move. I can't breathe in this house. What if you did that? I just felt my shoulders drop. Just saying that for you, this wouldn't.

Be a new conversation.

Okay, then you have to deal with that reality. And selling your house or not selling your house is not you and your husband are going to go with you to your new house.

Yes.

You and your husband are going to go with you when you build a shop that you can't afford.

Well, that's not happening because I won't say yes to that.

Yeah. Him having this dream workshop solves zero problems.

Yes.

So we need to deal with a root problem, which number one is we are way far away on our values when it comes to our dreams and vision financially. So we need to align on that first before we make any decision. And if we can't find alignment on that, it's worth reaching out to a third party. Our friends at BetterHelp. We need to get to the root of this, because if he still has his addiction to stuff, we're going to be broke three years from now regardless of what we do.

You sound really close to resentment.

It's not resentment.

What is it?

This has been here for a long this is our reality.

You've resigned.

I can't change another person. I can choose to make decisions going forward based on the reality that exists, or I obviously could leave, but that's not an option. But the only thing that stops me really from trying to buy a different house is that then brings on it just makes money tighter and we were a single income family for a long time. For the last few years we've not been and it's amazing to not feel stressed about money anymore. I like that.

So sometimes when I've had a house that I just want to get out of really bad, yeah, I sometimes over inflate just how the house is falling down. It's going to fall down. No, I'm just saying what I did, not what you do. I would go through that list of questions like the things that you think have to be done, the things that you had planned to do because of HGTV back in the day and then the Chip and Joanna things that would just make it amazing. Like make a list of those things and put real, not imaginary, put real dollar amounts to them and just see what you're talking about because right now you have no data. You have a storm that just is on repeat in your mind and your body's wearing out because of it. Sit down with real numbers and real stuff and then see what this looks like. I don't know another option for you because you said you've had the hard conversation with your husband and he'd rather have as big toys then have a wife that feels loved and safe. And so, as George said, you're going to have to deal with a marriage counselor at some point.

But I would love for you to sit down and say, okay, let's get serious about answering the questions about this house that's going to allow us to get serious about what we do next. But I'm telling you right now, these imaginary conversations you're having over and over and over in the loop and the what if, but then what if and then the what if you're driving yourself into an early grave. You're worth more than that.

That puts this hour of The Ramsey show in the books. 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 amazing relationships. I'm George Camel, joined by the Dr. John Deloney. And we are here for you, America. The number to call is triple 8825-5225. Emily is going to kick us off in Reno. Emily, welcome to the Ramsay show.

Hi.

Thank you.

What's going on?

So I've been listening to you guys for a couple of months now and I've eventually talked to my husband about it. He was a little bit reluctant at first, but now he's on board. We don't have any credit card debt, which is great, but we do have two truck loans and our house. And what we're thinking about doing and he's on board with, but we're not sure if it's the right move is to take what we have in our largest retirement account and pay off the truck loans, which are kind of large. And then that would free up, of course, a lot of our income to either put toward the house or to rebuild the retirement account, which we feel like we could do fairly quickly. So I just wanted to get your guys'opinion and take on that.

Well, first of all, I love that you guys are aligned on wanting to get out of debt. The goal is great. The method is terrible of robbing our retirement accounts to achieve this. So let's talk about what's left on these loans.

The larger one is around 37,000, and then the smaller one is a little over 20.

Okay. And what's your household income?

Together, we make about 150 a year.

Good. Okay. Awesome income. So let's look at it this way. If retirement accounts were not an option to rob, which, by the way, if you take a withdrawal against that you sound young. I'm guessing you're not 60.

No, but we're not super young. He's 43 and I'm 41.

You're really young.

According to the government, you are not old enough to be retired. You're not a retired person.

We're young, but yeah, that's why we're nervous about that's why I called is because it sounds like a good idea, but I'm a little nervous about do.

You know what it's going to do to you guys not only with taxes and penalties, but also robbing from your potential future growth on that money against a depreciating asset?

And then we've thought about because the company we're with allows you to basically take a loan against yourself.

No.

Which we don't want to do. Which we didn't want to do. Yeah, we didn't want to do.

Okay, how about this? If you're that desperate to get out of debt, why not sell the trucks?

Well, we need them.

Hold on. You need a $40,000 truck for what?

You guys are ruplex.

Hold on. I live out in the country. I live on some acreage. I do need a truck. I'm an avid hunter and I have stuff all over my property. I'm not any better.

We are avid outdoors people. We have a camper that's bought and paid for no payments, so we need the truck to pull it. And then the other one is just the smaller truck my husband uses drives it all the time. I guess we're not desperate to pay it off. I mean, we do okay.

You're desperate enough to rob your retirement at 30% with interest in penalties, not.

To mention lost future earnings for a car that will go down in value every year.

Okay, well, I guess the reason that got me thinking about that is because I listen to you guys all the time and I hear Dave always talking about go scorched, like, put everything into getting debt free.

Yeah.

But he also says never rob your retirement account to pay off debt or.

Yeah, you don't go scorched earth.

And like, scorched earth means we're going to sacrifice and use our future income and sell everything we can in order to get out of debt. It can also mean we're going to sell the trucks to get out of debt. But if that's not an option, I pinned you into that corner to say, well, the other option is let's use this amazing $150,000 income to pay off $57,000 in debt. Yeah, but guess what? That's going to take a different kind of sacrifice. That means we're not eating out. That means we're going to pause all investing as we attack this debt, which.

That was my next question, because just in the last year, we've really ramped up our thinking for the future. So we've always put into our 401 KS and retirements. But just this last year, we upped our percentage to 8% for both of us, plus our employer matching. And then we opened an IRA that we put a couple of hundred a month in.

And what is your Apr on your trucks? What's your interest rate on your truck?

Well, we got them in the last couple of years when interest rates have been high with inflation. So I think they're around, like, 13.

Nothing says I'm thinking about our future like taking out a $37,000 loan at 13% interest.

It's trying to earn it in a volatile 10% market. You see what I'm saying?

Yeah.

So your math doesn't even work.

Emily, we're having fun with you. We're not trying to just rag on you. I'm trying to get you to the point where you're willing to go. You're right. Our plan is not working. Trying to invest while taking on debt, while having the camper debt free, but then we need a $40,000 loan to run the camper. We didn't think this through. And so the great news is this is a very solvable problem, so easy to solve.

Okay.

But there's only two solutions. You either sell the trucks or you pay them off very quickly with future income by selling stuff, getting on a budget, cutting expenses, increasing income. That's it. No life hacks, no retirement robbing.

That's it.

What do you think about? Because I know well, I think I know in the baby steps that I've read that you don't invest, I would pause every dollar, retirement and everything add.

Up what it would be to pause all retirement. My guess is it's going to be close to $1,000 a month, if not more.

Well, and here's why that's important in your situation.

Yeah.

You having a paid for camper and a $40,000 loan against the truck that makes the camper usable. And you choosing to pause your investing while you're, quote, unquote, getting serious about your future. You will see how insane what you're doing is because you're going to say, there's no way I want to pause investing. We have a match in everything. And then the next logical question will be, what if we sold this camper and paid this truck off? What if we sold this camper and this truck and everything in our life changes literally in a weekend, all of it. And then we can breathe, and then we can say, what if? How often do we have actually used this camper? What if we used a tent? What if we went to Koas? What if we built this thing back up because you said at the beginning of the call we feel confident. We could just refill our emergency. I mean, our retirement really quick. Cool. Just use that same energy and buy yourself another camper down the road. In a few years, if we enter into a recession, there's going to be a lot of campers on the market.

You could sell yours right now while.

The going's good, and you're also going to double your investing. If you follow our plan, you're going to go from 8% to 15% of household income. You're going to build extreme wealth by doing that. And when you spend cash on that next camper and that next truck, you're going to spend it differently because it's your own money. And you might be buying a $20,000 truck because it hurts too much to let go of $40,000 in cash. That could be working for you instead of against you. So that was a fun time, beating up on Emily. But it's because we love Emily. We want her to win with money. And sometimes that means tough love and getting rid of crap and sacrificing.

Hi, everybody.

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Welcome back to the Ramsay show. I'm George Camel, joined by Dr. John Deloney. Well, big news if you missed it. We prelaunched my new book, Breaking Free from Broke. It's my first book ever. I'm real proud of it. And you can preorder today for only $20 and get $100 in free bonus items, including instant access to my newest talk from our Smart conference event called Show Me the Money. Exclusive access to an online private event and Q A the audiobook, which will be enhanced and very exciting, the ebook. And on top of all of that, you're going to get three months to every dollar premium to try that out, to live out the principles in this book. This is everything you never learned about money, but wish you did. This is how the debt industry, how companies come after your money, how to break free from broke, and how to live out this Ramsey plan that freed me to go from broke to millionaire many moons ago. And so I'm going to expose all the myths and lies that we believe from credit cards, student loans, credit scores, auto loans, mortgage traps, investing traps, you name it, and I'll show you the way out.

I'm going to show you how to ditch debt and build wealth and buck this toxic system. And you can get it today@ramsesolutions.com slash store. And we'll send it to you in January when the book is out. Mike joins us in Washington, DC. Up next. Mike, welcome to the show.

Hey, guys. Thanks. Hope you're doing well today.

Absolutely. What's going on with you?

I have an 88 year old mother who's getting ready to run out of money, like really run out of money. But let me give you a background here. My dad passed away 15 years ago, and he left her the 15 acre property that they were living in, and she stayed there. The house is now, say, neglected, certainly dated, needs some work. It's about 45 minutes away from me and where my brother lived. But in 2020, she had a little issue. She's been having some medical issues. She nearly burned the house down, had some issues like that. So my brother and his wife convinced her to live in a nearby retirement home. And I wasn't included in that process. She didn't want to move, but she agreed. And she's been there since August of 2021 and been paying the mortgage on the house, and she'd been paying for the retirement home. And that's a burn rate of about 10,000 a month. I don't know all of her finances. I ask her questions and she gets irritated. My brother's kind of handling that, but without a power of attorney or anything, I basically have to steal some of her mail and look at it, figure it out.

And what I got down to is that in her family trust, all the money my dad left and her parents left her and everything, there's about $3,000 in cash left in that and about maybe 30,000 in stocks, and I think about 15 in a checking account. That's it.

Have you not called your brother and just said, what in the world do you do? How does that conversation go?

It usually goes with, I'm working on it. He wants to make sure the house is perfect before it sells, which it will never happen. That's one thing I've asked. What's going on with the finances? I'll get back to you. Oh, there's a plan, I'll tell you, but I've never been told.

I'm being honest. I've got a brother. He's a person of such impeccable character. This would never apply, but I would be really close if I were you to in fact, not really close. I would probably draft a letter from an attorney because A, something sounds fishy here. B, I don't care what plan your brother has. Your mother's about to lose everything.

Yeah.

Everything. It's time to stop waiting for a plan.

One of the problems here, and I'm sure it's something you've probably heard of, she's come out and said in the past she likes him better as a person and everything else that aside, every time I ask about something, oh, I trust him. I used to take her to the doctor and I'd take her shopping. I don't even get that anymore. So I am so far out of the loop on this because I think ultimately I'm the realist, and I'm the one who tells her what she needs, and he's the one who does what she wants. And that's part of the problem, why this house is sitting on the market for it's not even on the market for two years. It hasn't even been on the market yet in two years. But yeah.

Do you think he has some kind of vested interest where he's driving this wedge between you guys on purpose and he stands to gain something?

No, I think he's pretty much kind of like just a dumb dumb, and he has always had issues, OCD type issues, but also just can't make a decision, those sorts of things. He's the older brother, I'm the younger brother.

Yeah, but nobody's that dumb. To where there's $240,000 in an account and two years later, at a burn rate of ten grand a month, there's three. Everybody knows this train stops next month.

Yeah. And actually when it stops, it's going to park itself in his house.

Yeah.

There's nowhere else for it. Now she says she's going to get a camper and take her cat.

Of course she says that that's not happening.

Of course.

So here's the deal. It sounds like there's two things. One is there's the money aspect of it, but I'm more interested in you are watching your mom, a woman you love and who loved you, slowly peel away and head in a direction that you don't believe is healthy. And I think what you've just played out for us, it's not healthy and you're heartbroken.

Yeah. One of the reasons I called was kind of a precautionary tale for others who you think you have a plan. Her plan was to die. I know that's a fact. She planned to die at that house and all this would be taken care of. And I think she's still counting on that now, like, oh, it's not going to be a problem because I'll be dead, and it's going to go away.

What if she lives. Another decade?

Well, yeah, she says she's going to live to be 100, and then on.

The other hand, well, do some quick math with her and show her that she's out of money in a year.

I'm more worried that there's way more money in this trust than your brother's done something nefarious with it. He's either so listen to the options here. He is so incredibly incompetent that his incompetence is so bad his mother's going to end up homeless, or he's had some financial incentive to keep you out of the books.

Well, she refinanced this house ten years ago. Now, she's been in it for 30, so she would have paid it off. My dad had sold our old house when they moved out to this other place. So there's $300,000 that was put into it into a $500,000 house. It would have been paid off. Somebody somewhere about ten years ago got her to refinance. And about ten years ago, my brother was $20,000 in debt and then suddenly bought a house. Sure, I'm kind of thinking that's where that money went, but nobody wants to tell me. And that's why she gets irritated and he won't answer the questions. And I think they refinanced. She took the pulled out the equity, paid for it.

Here's the deal, man. You can wipe your hands of this and grieve like bloody hell, your mom and your relationship, and it shouldn't be this way. And you wish you were still one of her boys, and she has chosen the other one. She's told you I choose him over you. I cannot wrap my head around how devastating that would be if my mom did that.

You know what? It's actually more than devastating. It's actually a relief, because now I know why things are happening the way they are.

Okay, it might be a relief in the short term, but you're going to have to grieve that. Or the second thing is you get an attorney and demand financial accounting. Quite honestly, you're going to have to sue your brother, probably. And if she made him the heir of this stuff, your suit probably won't even matter.

Yeah, he's the executor, but not the power of attorney.

Who's the power of attorney?

Nobody. She still retains everything.

Okay, well, this is bordering on elder financial abuse, and so that makes me think we need to get some third parties involved to look into this before we continue. Destroy her life.

Yeah, those are the words I was.

Looking for, because that's what I was thinking. But you've kind of I mean, I'm.

No lawyer, but I would contact one immediately and just explain the situation.

And here's what's hard. She might talk to an attorney and say, I have directed my oldest son to do every single thing I want, and when I run out of money, I'm going to move in with him or I'll move back into my magic home.

Both of those are options on the table for her.

She said the bottom line is an 88 year old woman should not have $10,000 in expenses every single month.

No, especially with a burn rate with a finish line coming up.

Tells me her expenses aren't ten. That money is going somewhere, and it sounds like it's going partially to your brother. So I'm sorry you're dealing with this, Mike. This is a tangled web of just broken relationships and financial abuse, and I hope you find some resolution, even if it's not the one you're looking for. This is the Ramsey show.

This episode is sponsored by BetterHelp. Hey, folks, it's Dr. John Deloney. This time of year can be hard, and seasonal affective disorder is real. When I moved to Nashville, the time change caught me off guard. It got dark at like 430, and I was ready for bed by 06:45. P.m.. Things weren't as fun. Even the food lost its flavor. Now I know how to prepare my body. When things get dark, I go outside to enjoy nature, I stick to an exercise routine, and I intentionally connect with people. Another thing I did is therapy. Therapy can be a bright spot even when the sun goes down too soon. Something positive and interactive to make us feel grounded and give us the tools to manage the way seasonal change can affect our bodies. So if you're thinking of starting therapy, give BetterHelp a try. BetterHelp is flexible because it's totally online, so it can fit into any schedule. Just fill out a short questionnaire to get matched with a licensed therapist. You can switch therapists at any time for no charge. Find your bright spot this season with BetterHelp. Visit BetterHelp.com Deloney today to get 10% off your first month.

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This is the Ramsay show. I'm George Camel, joined by Dr. John Deloney. The number to call is triple 825-5225. Chris joins us in Seattle, Washington. Chris. Welcome to the Ramsay show.

Hey, thanks for taking my call. I had a question. I found Dave Layton life, so I'm just now getting started with his baby steps, and I'm on baby step number two. I got about 8000 in credit card and about 57 in personal loans. I have a 401K loan aside those two, and I'm trying everything in misa to go against what Dave says on the 401K loan because it's the interest I would receive back and it falls in between some of these loans in the monetary value. So I'm curious if that should be paid off in that order, which is what I'm thinking against, which I'm guessing you guys will probably say to do because of the interest. I'm just curious on your guys'i don't.

Know at what point did you think this is about the interest? Because it seems like there was a series of decisions made that has left you in a place where you're feeling stressed out and anxious, overwhelmed by a pile of debt. So I'm far less concerned about the interest and more concerned about how do we get Chris back to some financial foundation where he doesn't owe anyone anything.

Right.

So what's the balance of the 401K loan?

It started at six, it's about 5000 now.

Okay, and what other debt do you have? You have the credit card, personal loans, 401K loan.

And I have a deficiency balance from a vehicle. So I'll give a guess a backstory. I found Dave a few months ago and I got on this thing. I stopped all 401K investment, which was really hard for me because of the match.

But you took a loan against your 401K.

Right.

So we can't get too excited about the free money when we just robbed ourselves of it.

Right. And so I got rid of a vehicle that was very expensive.

You already did the voluntary repo. It's done.

Okay.

What's the deficiency balance on that?

33 and some change.

Good God, man. Was it an airplane car? What was it?

It was a brand new diesel truck.

Okay, what are you driving now?

It's a little Azuzu car beater, paid for. Worth about 1500.

Yeah, good.

Hey, hold on, hold on. How old are you Chris? Real quick, George, don't get back. How old are you Chris?

I'm 37.

All right. I keep hearing some shame in your voice, brother. Let it ride. I'm freaking proud of you.

Well, I'm shamed or I'm embarrassed because of the amount of money I do make.

Hold on, dude, we all learn. We all learn. And George and I talk to six figure broke people all the time and we talk to millionaire teachers all the time, so dude, you are not dumb, you're not an idiot. You're clearly good at what you do professionally. You probably just did what everyone in your life told you to do, what the next right smart move was. So stop with the shame, man. I'm proud of you. Listen, you've lived for this many years thinking this was the path and you now have a new path. Cool. I'm going to hold my head up high. I'm going to take this new path. I'm not going to spend my time on this new path just beating myself up for being on the old path. We're on the new one now, man. We don't hit each other on this path. We just solve problems. Okay, that's number one. Number two, it here's the key that I want you to digest before you go any further on this plan because it's going to hold you up. If you don't, the way you've done it for 37 years hasn't worked. Will you try something new?

Right? Yes. And that was sort of my thinking when I quit the 401 investing. It was really hard for me because I'm like that money. All I could see was that money.

But it hasn't worked. When you approach George with interest rate and it that model hasn't worked. Not just for you, for most of America, doesn't work. Doesn't work. And George has the keys to your freedom right here. But I want you to change your psychology. You've done right. You're on a new path. Sweet. We're so glad that you're in this cult with us. And the way you did it in the old way didn't work. Let's say we're going to do a new one all in. Is that all right? All right.

What's your total monthly payments on all of this debt?

It's about 2000.

Okay, now what's your income?

It'll be 150 this year, but it's going to drop to 135 next year because they want us to have a more work life balance, so they're cutting some overtime.

Okay, well, you can go pick up a side hustle and keep it at 150 or even higher. Right. Sounds like you just freed up some time to work.

That is, with my side hustle, my day salary is 127, and then I about 10,000 on the side hustle.

Great.

And I take a day for myself. So I'm working about two days. I work Monday through Thursday in my engineering gig, and then Saturday I take for myself, and then Sunday, Friday and Saturday I work, and then I take Sunday for myself.

What's your take home pay every month without investing? What's your take home pay going to be?

On average it's going to be probably about seven.

Okay, so your goal is to figure out how much gap in margin we can create between your expenses, which is going to be food, utility, shelter, transportation, and those debt payments. Everything else we're going scorched earth for a while because making 150. How quickly can you pay off this $103,000 in debt if you get really intense about it? How many years is it going to take?

I estimated two and a half years.

I'm saying two or less if you're following our plan.

18 months max.

Okay, so now think about this.

I guess, but I just haven't been able to see the numbers.

That's what I want you to see is the numbers. See what your life looks like two years from now when you freed up $2,000 worth of payments and you have a fully funded emergency fund. You never have to turn to a lender again. You never have to feel the shame of one of these money mistakes again. You just get to walk in freedom making 150 grand with no payments. Nobody's going to tell you what to do. Nobody's going to demand payment from you at the end of the month. Are you a homeowner?

I am.

What's left on the mortgage?

330.

And you're living alone?

Yes.

Okay. I want you to start dreaming about what does Chris look like ten years from now when he's got a paid for house making 150, probably more, ten years from now with no payments in the world, including no mortgage. Think about that. And then let's reverse engineer it to where we make decisions today that get us there. And one of those decisions is pausing investing. Another one of those decisions is screw the interest rate. I'm going to go smallest to largest because I make $150,000, so who freaking cares? These loans are going to get knocked out so quickly and then you're going to be facing down the barrel. That car loan, the deficiency balance, and then we're onto the personal loan of 57,024 months from now you're going to call us back and do your debt free scream. That's it, that's your one goal. But we can't sit here and look at the interest rates and math anymore. We've got to focus on behavior change.

Right?

We can argue about math once you're debt free. That'll be a more fun time for us at least when we get to celebrate with you too.

So if you make it 150.

Your.

Gross is about twelve, five. Where's the other $5,500 a month going that you only bring home seven.

So my mortgage is right at 3000 with all the expenses and then fuel.

You have 7000 left after you pay all your bills and everything?

No, I take 7000 home. So anywhere from three to 3200 is monthly expenses for the house. And then I have my phone bill.

But John's saying, hey, you're grossing twelve, you're taking home seven. 5000 can't be going to taxes every month.

Well, a lot of it was going into 401.

You freed up that money now that you pause. So you might be taking home about eight or nine grand.

Yeah, be about eight and a half or nine.

Right. And so next year it's going to drop to my base salary, drop down to 127 and then I'll have about 10,000 take home or not take home, but in other side. Hustles.

Okay, cool. We're still working with nine and you have 2000 off the top that you have to pay. So now you're down to seven and then you got $3,000.

Actually I take that back. I pay 3000 amongst all those loans and stuff. Okay, 3000 what I paid.

Sweet. We're going to start knocking them out. Smallest, largest.

I'm going to help you out with that. Chris, hang on the line. We're going to send you every dollar premium. You're going to make a list. Income minus expenses need to equal zero. You give every dollar a job, create as much margin as you can to throw at that smallest debt and you're going to feel the momentum in no time. Man thanks for the call. All. This is the Ramsey show.

If you pay taxes to the IRS every quarter or run a small business and you're not using a CPA, what are you doing? The more complicated your tax situation gets, the more you need expert help. With a Ramsey Trusted tax pro, you can get top notch service year round for payroll, bookkeeping, quarterly tax payments, and of course, tax filing. Let an expert take the stress off your shoulders. Go to Ramsaysolutions.com tax to find a Ramsay trusted tax pro.

Today.

That's Ramsaysolutions.com tax.

This is the Ramsay show. I'm George Campbell, joined by Dr. John Deloney. You can call us at triple 825-5225. John is with us in Boston, Massachusetts. John, welcome to the show.

Hi, guys. How are you doing today?

Doing good. What's up?

So basically, I'm 37, married, I got three kids. One of our two reliable vehicles has started acting up, so I started looking at replacing it.

Does that make it the unreliable one?

I mean, that's hard to say. It's only a five year old vehicle. Right. It should not be in this situation. But it is a truck, and my transmission is essentially blown, so I can limp around town in it. But we're talking, like, a $7,000 repair right now. I owe $11,000 on the truck. It's worth about 30, so the numbers make sense to repair it. But it's also a five year old truck with 100,000 miles on it. With this being a fairly significant repair, I started looking at buying, like, a new car. Right. And that's, like, what should I spend financially? That's how I got to your site and started consuming this content. But now I'm like, this doesn't seem like borrowing 50 grand makes sense right now.

You thought the solution was, let me borrow more money to get out of this pickle.

Yeah.

Okay. We've all been there.

The good thing is, at least the truck is not upside down. Right. That is equity in it.

Now you're saying it's worth 30K if you fix the transmission.

So, I mean, I've kind of, like, been slippering around to different dealerships, and I feel like I can get away with trading.

Don't be that guy. Don't be that guy. Because a single mom's going to end up in that car. Don't do that. Be a person of integrity, dude. Not for a depreciating asset.

Fair enough.

It just sucks.

How much money do you have?

Like what do you mean? In my bank account?

Yeah.

260K in my savings account.

What?

You're my hero, dude.

What are you doing? Mismanaging finances, for sure. No doubt about that.

What other debt do you have?

How much debt do you have?

Yeah, so my wife has a minivan. We owe about 15K on that. 15? We have a mortgage. We have 15.

Okay.

So total car is beyond that. We have nothing. We have a mortgage that we pay. We have $304,000.

No credit cards, no student loans or anything?

No. We do use our credit card for all of our expenses, but we haven't paid interest ever.

What do you do for a living?

Like a people manager at a pharmaceutical company. Cool.

What's the household income?

Like, 265 in that range.

Okay.

Base.

Well, the solution here is simple. If you want to keep the truck, let's just fix the transmission and drive it. But we're also paying off these car loans today.

Okay? I mean, that's sort of what I had heard. From now I'm taking in the content is like, pay these off. The only thing I was wondering is, since there's such a low percentage rate.

I was waiting for that. I was like, I bet this guy's got a low interest rate, and he's making 5% of his savings account. And he's like, bro, I'm making the spread. Right?

Yeah, that's the science, right? That's the math in it.

I learned it in a hobbit bar.

You know what else math tells us to do? Stay out of debt. Because when we have payments going out, it lowers our money that we get to keep, and it also causes us to buy things that we otherwise wouldn't have purchased. We would have spent less money if we had used our own money. You know what I mean?

Oh, I'm feeling that right now, especially when I'm looking at interest rates and talking about taking this cash out of my savings. Yeah, it's just not worth the BMW to a beater.

You're too smart, you're too successful, and you have too much money to be playing the spread game.

And one thing you've never experienced, and it's a cool you can do an experiment on either side of the equation here, okay? I want you to pay both these cars off today, and I want you to drive around and tell somebody, I'll give you $5,500 in cash at a reputable place and see if they'll fix your transmission right, because you've got cash. And then I want you to sleep for a week. And then if your stress doesn't relieve a little bit, if you're not a little bit more fun to be around or you have a little bit more joy in your home, then you can go back out and take a loan out on these cars and tell them.

John Deloney said you could.

Yes. Now, does taking a loan make sense?

No. It would be the stupidest thing in the world.

It was rhetorical.

Most people undervalue the cost of what I would call a soul tax, because there's a part of your brain that always scanning the environment 24 7365 trying to make sure we're safe. And if you owe somebody else money, it knows one little glip in the matrix. One report from one of your employees that you did x, Y, or z, and it's just easier to let you go. And it knows we lose the cars, and we probably lose the house. And that little part of your brain never shuts off, and it would be failing if it let you sleep all night because you're not secure. And so most people are like, dude, I'm making 6% in a high yield savings account. My interest rate is 4%, so I'm actually keeping the 2%. I'll pay that 2% for my sleep tax any day of the freaking week, you throw a mortgage on top of that and they can't take your home away. Now it's game on. See what I'm saying?

Okay, so if we ignore the truck problem, right, and we just fix it and move on with our life, what should I be doing differently? Because we maxed our 401K out for the year.

Awesome.

Can't contribute anymore, dude.

That's 265. Is everything to your name?

No, there's more money.

You have an emergency fund?

We both have, yes.

Okay, so anything beyond your emergency fund, I'm throwing at the house. Let's pay these car loans off. I know it sounds crazy because let me guess, you got a low interest rate on that mortgage.

Yeah, for sure. And I made this money in real estate and so that's why I enjoy having the cash. Like if something comes out, I can jump on it.

I would pay off your primary home and then start dealing with investment property with cash. I tell you that. John would do the same. I would do the same. Dave Ramsey has done the same and he's amassed quite the real estate portfolio in.

You'Re paying off your first loan first and then going exactly for cash real estate.

So you're not over leveraged with so much risk. You got a mortgage hanging over your head with your family and then you're also hoping to make the spread on this investment property. It's simply too much risk. And you're going to get there no time making 265 without a mortgage payment.

Simple.

You're going to be buying real estate like no one's business in a few years. But right now we can clean up this mess real quick, man.

Tell your I think the unfortunate thing is we have not been budgeting. Like we just kind of started and realized we were blowing like 20 grand a month.

There you go.

That's the power of a budget, dude.

You're going to get such a raise when you start doing a budget.

Yeah, I mean, we've already seen the change in one month. Really? We like shaved.

All right, here's the deal. We're going to hook you up. We're going to hook you up. We're going to give you every dollar, the best app on the planet for budgeting, for planning, for paying off debt you and your wife can dream together. Here's how quick it's going to take us to buy another rental property to buy this duplex we want to buy. We can begin to put all these stuff in there and we're going to give it to you. It links up to your bank. So you and your wife talk about what we're buying, our budget that we create together, you both entered in there together and it attaches to your bank. So you know in real time what we're buying. So we're going to hook you up, stay on the line here and we'll get you taken care of with every dollar, the greatest budgeting app on planet.

I like John. I like him a lot, and I like guys from Boston because that's where I love John.

It's the second call we've had this hour where somebody's like what I'm doing not working, and I make too much money to be this broke, or I make too much money. I have too much money in the bank account, and I don't have this one thing. I got $200,000 in the bank, and I can't pull the trigger on a $7,000 car repair. And that tells me the person has money. The person's got intelligence.

These are smart people.

They don't have peace. Yeah, right.

That's worth something. That means it may be worth paying off the lower interest rate first, even though it doesn't make mathematical sense, because it means I'll actually get out of debt this time.

And the question I think we always have to ask ourselves is, why do we earn money? What do we amass after we pay for our basics? What does it give us? Does it give us opportunity? Maybe. Does it give us this false sense of security? Maybe. Does it give us opportunity to go on vacations? Yeah. But if it's not giving you, then you're doing it wrong. You're doing it wrong because if you solve for peace, then nobody cares what you drive, and nobody cares what you're wearing.

And the spread on the interest doesn't matter as much anymore, right?

It's just about solving for peace.

Beautiful reminder. Well, hey, you guys can go check out every dollar as well. This is the way to actually pay attention to where your money's going to stop overspending to save more. And we've got a lot of new features in there that are great. So go check it out. You can download it. It's a free app for iOS and Android. Go to everydollar.com and get started today. That puts this hour of The Ramsey Show in the books. My thanks to my co host, Dr. John Deloney, all the guys in the booth keeping their show afloat, and you, America, will be back before you know it.

From the headquarters of Ramsey Solutions. It's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality George Campbell, joined by my esteemed colleague Dr. John Deloney. That's with two PhDs, in case you're wondering how to spell that. And we are here to help you take the right next step with your relationships, with your money, with your mental health, all of it right here on The Ramsay Show, and it's totally free. AA. 825-5225. Abe joins us first in New York City. Abe, welcome to the show.

Hey, guys, thanks so much for taking my call.

Sure. How can we help?

So I started a new job last month, and I went out and got myself a brand new oof.

I'm assuming not with cash. Not with cash, but I could oh, all right.

The plot thickens.

Well, George has one and I want one, so why don't you just go pay it off? All three of us will high five.

Yeah, definitely. Well, so my company is giving me, on top of my salary and everything else, $1,000 flat each month for car expenses. So I was paying my commute is around an hour and a half each way, and I was driving my 2004 Honda Accord completely paid off, but I was consuming about $600 in gas each month. And so I figured payments on a new Tesla for 680 versus gas for 600.

Pay it off. Just pay it off, dude.

All right. I'm trying to save the money that I have for a down payment on a house. And between me and my wife, we're going to come away with around $290,000 next year.

Where is that?

From my job, I make about 200 plus 20% bonus at the end of the year, plus the 12,000 for a car, and my wife's a teacher, making in about 27,000.

Okay, so what's your total household income going to be, you think? Close to 300, 290. Okay. Yeah, that's your total household income. What are you taking home from that?

10,000 on my part, two and a half on her part.

Wow. Is that all in taxes? Where's all that money going?

Yeah, taxes. Right now I don't have my four. I'm too new for a 401K here and pretty much all taxes.

Goodness gracious. I mean, you're talking just 50% gone.

Yeah.

You should move to Tennessee.

No state income tax. Okay, let's talk about this Tesla. So how much money do you have in the bank?

In my checking savings of stuff that's liquid I could get to any minute. I have about six. I've got ten in a 401K. I've got 25 in some investment accounts my grandfather manages that I'm not touching until he dies. And I have about 180 in index funds that I manage.

Wow, okay, so you love investing. That's good.

Yeah.

And how old are you?

I'm 27.

Wow. And what other debt do you have?

Nothing.

Just this one. Tesla.

Yes.

How much?

I put nothing down, so financed about 40, and it's going to come out to, like, $8,000 in interest and fees by the end of the loan in six years. But if I put the full thousand down, which I plan to do each month, I'll have it paid off in just under four years.

What if you just paid it off tomorrow?

TADA.

Yeah, I could do that. And then the 1000 just goes right back into the account. At this point, the investments have about leveled out to where I was about a year ago. So it's no loss either way.

Yeah, I would cash out on 40K worth of index funds and be done with it. And you said there's pretty much no gains there.

Right.

And by the way, I would also take the rest of that. Out and I would create an emergency fund. You make too much money to be this broke.

Right. So in essence, I have it there as an emergency fund. If I need it, I'll pull it out.

But it goes down because you know.

What happens, Abe, because you're smart enough to know this. When the market's down, it's going to hurt to pull money out. When oh, crap. The HVAC hit as soon as the market took a downturn. And now I can't sell because I'm at a loss and you're going to have too much emotional pain to get rid of it versus it being liquid in a savings account making 4% interest. You'll be okay.

All right.

So John's right, I'd probably cash out 80 of that 180 and use 40 on the car and put 40 in an emergency fund and a high yield savings account and just be done with it all.

And here's what you're solving for that you've probably never solved for before. You do a lot of calculations in your head and you run a lot of numbers. And I don't say this pejoratively dude, I say this like out of high respect for you. Also, you're 27 and you've never been smashed in the mouth economically. I have. And that day will come again. It's a cycle. It runs, it will come again. And you make too much money to only have $6,000 liquid to your name that you can get your hands on at a moment's notice.

Right? It's only because I'm between jobs this past month has been restocking on the money that I was missing between jobs. That's the only reason it's so low. But my wife and I, we do a zero dollar budget and we have about $3,000 this month that we have no idea what to do with.

Cool. Put it in an emergency fund.

Well, you'll restock all the money you were investing and whatever your down payment goal, you're going to free that up with freeing up this car payment number one and having money in the bank already. Then all the rest of the money can go towards investing, saving the down payment. And you can choose your own adventure with how aggressive you want to get with the down payment versus investing.

We're going to pay a tiny percentage in sole tax, which is I get to sleep knowing I have cash that I can get to and get out of here if I need to or I can fix something if I need to. I got a car that's 1000%, mine nobody owes, because here's the deal. You're working in this 20% bonus. I've got some friends who work on a they get paid at the bottom deal and it has been very lucrative and they've gone through a couple of years where it has been a nightmare.

True.

Just because the business decides to invest instead of doing X or they're moving this around or we're going to recoup this over here, it just gets messy. And so I would love you to have a pile of cash that you can sleep on and a car that's yours, and then you buy a house with cash. You'll just make too much money. It's going to be dope, dude. You're going to be set yourself up, but you're going to be doing this in a healthy way, not a what about this? What about this? Move this over here. Oh, gosh, this is down, and so on and so forth. We both love Teslas, so good for you.

Yeah.

Out of curiosity, Abe, which one did you get? Was a model three long range?

No, I got the base model three. I was not spending any more money on any of the non necessary stuff. I just needed a car that could drive me to and from work and that's it. Wow.

That cost 40 grand?

Yeah.

New York, dude.

That's the New York tax, I guess. Wow. Well, enjoy it, man. You make enough money.

Federal tax credit.

So that's tax credits john Every wealthy people I've interviewed, they all went, man, it's the tax.

I got rich on tax credits and airplane miles. Push this over to the edge. That's how I got rich. Hey, here's the deal. When the time comes and it sounds like it's sitting there, very quickly, go to Ramsaysolutions.com and look up real estate agents, okay? And when you move to Tennessee or Texas or wherever you're going to move to that doesn't have a state income tax, you're going to have that madness. You get to keep 80 or 90% of your check instead of 50. Then you'll get to change your fortune forever. Reach out.

But, Abe, I'm proud of you, man. You're crushing it at 27.

Great job.

And we want you to be unbelievably wealthy and have no traps and distractions along the way. And that means no car loans, no credit cards, no student loans, no personal loans, and you're going to be a homeowner soon. And you're going to pay off a mortgage real quick if you just stay focused on one thing at a time and don't let lifestyle creep into your life where you have $150,000 in expenses every year because you can live on less than you make, man. That is the key to building wealth. This is the Ramsay show.

Here at Ramsay Solutions, we're on a mission to bring hope to the hopeless. We've helped millions find peace in their money and their life, and we need people like you to help us. We have open roles in our sales, marketing, and technology teams. We offer financial, developmental, and health benefits to help you live a balanced life while doing life changing work. You want to join the crusade? See our Openrolls@ramsesolutions.com slash careers and apply today. That's ramsaysolutions.com slash careers.

Welcome back to the Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Let's get to the phone. Zach joins us. Up next in Tallahassee zach, what's going on?

Hey, how are you guys doing?

Well, how are you?

I'm doing good. I have hopefully, not a stupid question.

No stupid questions, only stupid answers. And they come from John.

Yes, sir. I'm 26, and I currently work as a music teacher a teacher band in elementary music. My fiancee is a general manager at a restaurant. I'm looking at the Florida retirement system, and I'm grateful for the perk, but when I'm looking at it long term, it's just peanuts. And financially, right now, I feel stuck and a bit clueless, and maybe it's from my own age and inexperience. I really don't know what to do because I'm looking at my bank account, and after watching the Dave Ramsey show and hearing what all the people are making at my age and what I'm doing right now, I love what I'm doing. I feel stuck.

How old are you?

I'm worried that I'm 26.

All right. I have an experience. So I was 21, and it was my first high school teaching job at a giant public school, and I was a coach, and I loved every second of that job, every second of it. I liked my colleagues. I like my fellow coaches. I like the athletes. I love my students. I loved all of it. And I'll never forget, after my first year of teaching, going into my second, they handed me a spreadsheet or, like, a piece of paper, but it was basically a spreadsheet. They'd print it out like a table, and I could just find out what age and how much money I'd be making. And I remember thinking, yeah, and that's.

The salary schedule, and I am aware of that.

No, but I remember looking at that and thinking, oh, I'm out.

Yeah.

I remember thinking, I want there to be some variability. I want the opportunity to go earn. I want to be able to win, and not just on a sporting field, but I want to be able to go do good in the world and help people solve problems and also make a good income. I can provide for my family. So I've been exactly where you are. I'm looking around all this where's all this economic security, right. And you're doing a really hard.

I just I'm very passionate about teaching bands. The one thing that I know and.

Love yeah, you're a real life school of rock. Right. I'm just I'm jealous a little bit.

George is still stuck in the ta t ta. So he'll get there. He'll get there.

Well, from two musicians, we're thankful for teachers like you who are out there inspiring the next generation.

Lord knows I'm trying my best, and I love it, but, man, I'm grateful for it, but it's peanuts.

Well, let's talk about what this future could look like. So what's your current salary?

I make 42 and a half a year.

Okay. And you're not married. You have a fiance. Any plans to get married or is.

It still we're getting married in June.

Exciting. Okay. Do you know what your household income would be by then?

Combined income. We're roughly looking at between the both of us, we're roughly looking at 90.

Awesome. Okay. So that's the near future. A dual income makes a huge difference as far as building wealth.

Yeah.

And what are your retirement options right now? What's it look like? Is it mandatory?

I'm at the FRS. It's something I can't withdraw without penalty until I'm 65. Right now, they take about $127 out of my paycheck a month, and this is my third year of teaching, and I'm currently standing at roughly $9,000, but I can't touch it until I retire at 65.

But when you're 65 and they'll probably move it to 70 by the time you get there. But are they going to average your top three years? And that's going to pay you a percentage of that?

It's just going to keep growing, and then whatever it's at, I just withdraw.

From what I understand, is it essentially like a like a pension? I think that's what John's getting at.

Oh, I'm sorry. Again, I'm inexperienced and I'm sorry.

My teacher retirement when I was in the state, and I've been at the state as a university professor and as a public school teacher, it was they take your three highest years or five highest years, average that together, and then I get a percentage of that, like 70% of that number pension. Okay. All right, so it's very similar to that.

Yeah.

So you do have other options. One of those options is a Roth IRA, and I would encourage you to start that today. Yeah, write that down. And we've got tons of resources on our site, and there's a program called SmartVestor, and you can connect with investment pros all over the country through our website@ramseysolutions.com that can help with this to walk you through it. But this is essentially a retirement plan that's not connected to your employer, and you have full control on what to invest in there. And I've got a whole YouTube video on investing for Beginners that I encourage you to go watch on my YouTube channel. And the simple strategy I lay out is match beats Roth beats traditional. So if you have a match through your employer, let's start there. Then we're going to move to all the Roth options for you that may just be the Roth IRA for now, and you can max that out and then you can move to the traditional side.

And then how do you feel about a 403 B?

Yeah, those are great. I mean, that's essentially like the 401K for you. And I like that because you have more control versus this pension. And so are you a debt free right now?

Something you would run? I'm sorry?

Are you debt free?

I have 9000 in student loans, and that's it.

Okay, well, I would be tackling the debt aggressively so that we can get back to investing because right now there's a certain process that I want you to follow. It's called the Ramsay baby steps, where you attack all the consumer debt first, meaning we're going to use our savings. Do you have any money in the bank to throw with this student loan debt?

So I have about 1200 in my bank account after paying bills. And then the only other thing that I own that's of value is I have an instrument worth about 8000 and my car is paid off with no debt and that's worth about 30.

Wow. I'm curious about this instrument, what is it?

It's a tuba.

Is it a sentimental tuba?

Half of me wants to say yes.

Okay, I'm just wondering. That looks a whole lot like debt freedom, getting rid of that tuba. That's probably collecting dust because I'm guessing if it's $8,000, you don't want to use it much.

No, I use it it's for my side hustles. So because to supplement my income, I don't take days off. I haven't had a day off in a long time. I work at a butcher shop and then I use that instrument to teach lessons, which pays me $40 an hour. And at the butcher shop I take home, it's under the table, probably around $100 every time I show up.

What's a used tuba cost these days?

So they come in beginner models, professional and intermediate. What's good enough models range? Typically you'll see professional grade tubas that range from five grand all the way up to 30.

But what about used? Could you go used?

Yeah, I mean, my tuba is used and it's worth right now at around 8000.

I'm just wondering, can we offload the tuba, get out of debt and then cash flow the next one to keep the side hustle going? It's just an option. It's just one option to get you out of debt faster so that you can get to investing, which is something that you want to do. But when you think about this, you can go crunch the numbers on our investment calculator@ramsaysolutions.com from 26 to 66, you have 40 years to invest. And so that gives me a lot of hope and confidence that you're going to retire a millionaire. And that's notwithstanding your fiance's income as you guys get married and combined finances, and you guys will both be making a great income over the years, knocking it up to six figures, and you're going to increase investing at that point, as well as your income goes up, that 15% gets bigger and bigger.

And also, call me silly, would it be worth considering? Because I've actually had more thoughts on selling off the car than I have my own instrument. That sounds stupid.

No, I mean, $30,000 is a lot of money based on what you probably bring home in salary. So I wouldn't have any problem if you sold a $30,000 car and bought a $15,000 car and took that 15 grand and paid off your debt. That's a great move, I think.

Very wise.

Okay, here's the other thing.

Any advice on selling custom vehicles?

Custom? How custom are we talking?

Yeah.

Did you build this thing in the garage?

Dodge Challenger. And I've modified it to all hell.

You didn't get it lowered too fast, too Furious, Tokyo Drift, did you?

Custom rims, custom speakers, custom engine parts, all the works and everything. But I had no payments on it. I bought the thing in full. It was from the whole GameStop. Escapade and on an impulse that I regret, when I made a lot of money off of Games, I spent it all in that stupid car. And I love the thing.

But does it go like this?

It has a pretty good impression.

Dave Ramsey would call that dave Would Call that your stupid tax. That's what you get.

Yeah, only when you wind it up, it makes that sound.

Oh, boy. I know.

It starts.

You have to pull a rope to start it. Good job, dude.

You know what? Just like NFTs and Crypto, there's always another sucker that might buy it. So I'd go ahead and post it and hope for the best, my friend. But I have faith. You'll be out of debt soon. You'll retire a baby steps millionaire. You just got to follow The Proven plan, my friend. Thanks for the call. This is the Ramsey show.

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey. Trusted agents aren't just experts who guide you through buying or selling. They're someone you can trust to have your back. From the first call to closing day. Find a Ramsey Trusted agent near you@ramseysolutions.com. Slash Agent. ramseysolutions.com slash agent.

Welcome back to the Ramsey Show. I'm George Camel, joined by Dr. John Deloney. Let me tell you right now, if you like this show, please help us out. Consider subscribing. Leaving a review, sharing it with a friend. All of that matters. We don't have a big giant marketing budget. We're not sponsoring stadiums. We're just out here doing our best to help people. And you guys are the marketing. You just telling people how this show has impacted you, how it's changed your life, the entertainment value you get from it. When John is on, all of that matters. So continue to do that. It would mean the world to us. Brittany joins us up next in sacramento. Brittany. Welcome to the Ramsey show.

Hi, Guys. Thanks so much for taking my call. I met you both at the Smart conference in April, and it was amazing.

Awesome.

So calling about. I got into a very small accident in September. It's just like front bumper damage and I hurt my left arm, but it's not a huge deal. The insurance agent just called me on Saturday and started offering here's some money that we're going to give you first, pain and suffering, but also we're going to give you money for medical. When she found out that my two children were in the car with me, she started saying, oh, well, were they injured? And I said, no, they were on the opposite side of the vehicle, they're okay. And she said, well, we want to give them something too. So she said, normally they start out at like $500 per kid, but because we've waited eight weeks to even hear from this insurance company, she's like, I'm going to give you the max, which is 2500 per child. And they're 14 and eleven, my son and my daughter, and we have five kids and we're on baby step two. So when the lady was like, you can use this money for them or you can use this money for you guys, it's really up to your discretion.

And I thought, oh, well, I don't know what we should do. So I thought about calling you guys because follow you. We do every dollar. We've done FPU, and we're working hard on baby step two, but we have kind of a long way to go another couple of years. So we just weren't sure. Should I be putting the $2,500 per kid into an account for them when they're older or if because they don't care honestly about the accident. They were like they looked up from their phone and they're like, what just happened? Oh, nothing. And they weren't affected, so to speak. I mean, I'm just trying to find out what's ethically right and what I should do to really just I think.

You should call that agent back and ask for a million dollars.

Yeah, that would be nice.

That's the strangest insurance call. I mean, I've had people with like, cancer, broken legs, and their insurance is like, no. And they're trying to find ways to.

Give you money previous. Yeah, and this one is the first nicest insurance agent I've ever worked with in my life. I'm not kidding. And she's very helpful. And she was just like, I'm so, so sorry. And I can't believe how this has affected you and your family and all this stuff. And I was like, wow, this is the nicest insurance agent I've ever talked to.

Wow.

Did you have to sign something that says no matter what, you'll never come back and ask for anything more as long as you live?

No. They sent me emails for both children saying if they have any growing pains or insurance problems later that they can come back until they're 20 years old and sue them for any money they'd want.

Oh my goodness, dude, you just gave me hope. I was just telling George during the break, like, I think we're all doomed. And you just turned it around with one call.

I know, it's absolutely crazy, but wow.

It was, like I said, one of.

The unicorn insurance taken. Okay, your question really is about morally, what do I do with this money? Technically, it was for the kids, but we have debt to pay off.

Yeah. So $2,500, that's $5,000. That's a huge amount. And we've been working really hard. I'm a nurse. I work night shift, which my husband hates, but we're like, until we get out of babysitter, too, I'm going to work really hard. I'm going to stay on night for the next two, three years. And it's an extra $30,000 a year to stay on night shift. And the the kids we working hard, but we saved up cash in August, and I worked four extra shifts so I could bring home $2,500 to pay for our daughter's braces outright so we wouldn't get another payment. So we're trying really hard to make sure we don't go into any more debt, but we're taking care of things for the kids and stuff like that. So I'm not saying we should use the money at all. I'm just saying I don't know what the right thing is, because with compound interest, what is 2500 for Jackson when he's 18 versus is 14 or for when he's 25? I don't know. Like I said, we have five kids. We have two about to go to college right now.

So we're like, I think the greatest gift you can give your kids and George, tell me if I'm wrong. I think the greatest gift you can give your kids is a mom and dad that can breathe and a mom and dad that have peace so they can deal with the regular crap that's the rest of our life. And a mom that finally gets to stop working the night shift because she's just worked her butt off trying to get this stuff taken care of. And so I'd throw that money on your debt and just use it as money from above and just stop somebody in a conversation in the future if they ever badmouth an insurance agent and say, no, I met a good one once. She's amazing.

She was good.

And in addition to the money for the kids, she's also saying that they're double checking if they can make it more, but they're trying to offer me, like, 7000 just for the fact that I missed the night of work. And I'm like, doing doctor.

Yeah.

So that's an addition to the medical cost, I think.

John, spot on here. Brittany, so what's your total debt load? What's left?

289,000, not including our house.

Whoa.

Is that a student loan?

That is everything except cars. We have no car payments. We paid off our cars during COVID and we've been working. We have two timeshares that I'm in the process of getting out of. We have student loans, we have credit cards, we have a personal loan, and we have a solar loan on our house.

Oh, boy.

This is something my husband and I have talked about many times, but our house is worth 1.5 million. We're in California, and we could sell and pay off everything, but I kept telling him that's an easy fix. I don't want to not feel this. I want to make sure that we're doing hard work following all the steps and try to make sure we're doing the best we can.

What's your household income?

This is $260,000.

Oh, wonderful.

What does he do for a living?

He installs water heaters.

What do you do?

I'm a night shift nurse. I work in the ICU and the emergency department.

So did you go get your doctorate or something?

I have a Master's, but I paid my Master's in cash, actually. So the student loan that's left, I think it's about 80,000 in student loans. That's all from my bachelor's degree because I went through a really bad divorce in 2014. And so we're a blended family now. And like I said, we have a really good income, but our solar loan is 60,000. So a lot of that is student loan solar, and then the rest is all jumbled of credit cards and personal.

Loans and all that.

Okay. So the good news is you have a great income. I'm going to go through the baby steps one by one, smallest to largest. Start knocking these out. I'm making 260. If you keep this up, how quickly do you guys plan on paying off this 289 in debt?

We calculated probably about 24 months. And the only reason I say yeah, I think 24 months because of costs that have been incurred. I swear, every month something happens. Right now. We've had car repairs. We've had my brother ended up going into the hospital, and I had to help him there's just, like, all these little things that have happened where we just $1,000 here and $1,000 here, which we bought cash flow now, but we started the plan again since I've been with you guys in April at the Smart Conference. So starting in July, we just have tackled, and I've made I think we've paid off already. Let's see. Debt payoff. We've already paid off $24,000.

Awesome.

Will you make me a promise?

Yes.

That you will not borrow money for your kids to go to college when they leave next year?

Oh, absolutely not. We have debt free have they have scholarships? We already have six colleges that have accepted my daughter with scholarship offers. We are not doing any.

Awesome. Awesome.

We are on board with that.

Mom of the year right there. Thank you so much for the call. Brittany wow, that's a lot of debt. John with a great income, but even in California, that income can disappear very quickly.

So we say, don't do this a lot, George. But part of me thinks if you're sitting on $1.5 million and you got the message and you've learned it. I get the I want to feel it. And we need to do this behavior.

That you get a Brittany who's like, no, I want to change my behavior. I don't want this shortcut to get out of debt.

But almost it feels like I want to be flogged for this. As we go instead of no. We got two kids leaving for school. We're going to downsize a little bit. We're going to go from a 1.5 to a $1 million house. We're to going pay everything off.

It's pretty wild. I might consider 1.5 to 1.2 clears the debt completely tomorrow, wipes it out. So that is something I would consider, especially as the kids head off to college. I like that game plan.

And when somebody tells me, hey, I went through a traumatic divorce, I had undergrad stuff, I've got this and we've just done dumb after dumb and never again. I don't know. Part of me says, man, if you all can come together and sell that house, that'd be cool.

Well, what's amazing is when you think about the fact that people, as they enter their adult life, start accumulating debt, this might be the first time in her life they become debt free with no payments in the world in their adult life.

No question.

And I think people, they don't really take time to grapple with what that would feel like mentally, emotionally, physically on their bodies, to owe no one anything for the first time in their adult life because they're so used to it.

Right.

Or they take out a $60,000 solar loan, which I'm a huge fan of. I'm going to get solar in my place so they don't have to pay a $300 a month bill, right?

Oh, yeah. We can justify it all day long with math.

Right.

And that's when the train goes off the tracks at justification station. Every time.

John, did you just rhyme?

Call it rhyme.

That was painful.

I'm no eminem, but I get the job done.

No, you are not. You're a skittle.

This is the Ramsay show. Welcome back to the Ramsay show. Our scripture of the day comes from Matthew 620 and 21. Store up for yourselves treasures in heaven where moths and vermin do not destroy and where thieves do not break in and steal. For where your treasure is, there your heart will be. Also. Paul Stanley from one of John's favorite bands, kiss there. It is said, this charity is not an option, it is an obligation. That was not on my bingo card.

And I quote, I want to rock and roll all night and party every day.

We should have chosen that quote. I think it's just as powerful disagree. Okay, fair enough. Well, let's get to the phones. Joanne awaits in Jacksonville. Joanne, what's going on with you?

Hi, John and George. I just want to thank you guys for taking my. Call today.

Sure. How can we help?

Yeah. So essentially we're wanting your thoughts on whether or not we should sell our property. Our situation is my husband is active duty military. He's been military for 22 years, and pretty much 22 years ago, his parents helped him to buy a home, a piece of property, and we've since paid it off, so we own it free and clear. We're also completely out of debt. We have been for, gosh, probably almost ten years now.

Wow.

But we're wondering if we should sell it to buy another home or if we should just buy another home where we are. We think we'll be here in this location for another five or six years. And we do have $100,000 saved up as a down payment, and we've paused retirement to stack up more cash for all the fees and things. We do rent our property. It's in Washington State. We rent it, and we get about after paying the property manager, we get about 1300 a month from that. And I reached out to our property manager and asked her what it would be worth if we were to sell it. My husband initially bought it for, I think, $64,000, and she said it's worth over $500,000 now.

Wow. That's amazing. Okay, so let's say you sell it and you get 500,000 plus your 100,000. You want to pay cash for a spot in Jacksonville for 600,000.

Well, see, that's the problem. We've never lived there, so we'd have to pay capital gain plus all the other I think it would increase our tax bracket by having all that earned income. We'd lose 20% out the gate right. With capital gains. And then how much more would we have to pay in taxes?

I don't know, but George, you're the smart one here, but I thought if you roll it immediately into another property.

You don't pay capital with a 1031 exchange.

Right.

Well, that would be investment property. But you're wanting a primary home.

Right, but it has never been our primary home. So from what I understand, the law is you have to have lived in it for the last two years, and they do bend the rules a little for the military yeah.

To avoid up to $500,000 of gain.

Yeah.

So you would have to pay the capital gains on that.

Yeah. I don't think we could get out of that.

And it would be that 20% tax rate, according to my estimations.

Yeah.

But let's also say this. So the house is appreciated a significant amount. So if they had called and the manager had told you, hey, it's worth 400,000 or 425,000, would you guys still have jumped up and down and celebrated?

I think so. I mean, gosh, it's depreciated so much. I just wonder, do we want to lose that much in taxes when there is a chance right. When he retires, we could go live there for a couple of years and then not have to pay that when we sell it. But there's no guarantee that we'll go live there either.

That's exactly right. And so there's this weird phenomenon, and I slip my mind right now. It's late in the afternoon. It's a psychological way our minds work. Right? And it's a psychological mind way our minds work. That was a terrible sentence.

Brilliant. This is why they pay this guy the big buck.

If somebody says, hey, you got $5 coming to you. And then later that afternoon, someone goes, dude, I was way off. You're getting $150. And then when you get the check, you open it, it has $100 in it, and you say, I thought I was getting $150. They're like, yeah, dude, the calculations were all over the place today. But, dude, you get $100, that's 95 more dollars than you thought you were going to get. Yet your body goes, dude, I lost $50. Right. You gained 95 more than you were expecting, yet it feels like a loss because that other number was out there. And so part of me says, do what's best for your like, part of selling and transacting real estate, unless somebody knows something different than I do, george is paying taxes on what you buy and what you sell. That's part of life. What's best for your family right now might not be to have a would you buy a $500,000 property in washington to make $1,300 on it every month living in jacksonville? No.

Right. Normally, no.

Right.

And so part of me says, man.

Take your 375 that you would get plus your 100, and get yourself a spot in jacksonville, and you'll be okay. Missing out on the 15 grand a year in rental income, that just feels.

Like such a win to me, a win to the piece of your household.

And even if you take on a small mortgage, you're not violating any of the principles. Get a 15 year fix where the payment is no more than a quarter of your take home pay. And that's how you know you're not biting off more than you can chew, and you'll still be able to pay that off really quickly. Because I want you guys debt free again real soon. So if you can't pay cash for a place at lease, roll all of that into it so you have all of that equity with a real small mortgage, which is also going to lower your monthly payment, which also allows you to pay it off real fast.

Right.

That's what john and I would do if we were in your shoes.

All right. Thank you guys so much.

Absolutely. And thank your husband for his service. Active duty, 22 years. That's absolutely awesome. Impressive. And a lot of sacrifice goes into that with all the moves every few years, and we appreciate that does not go unnoticed. Dylan joins us in columbia, missouri. Dylan, welcome to the ramsey show.

How you doing?

Good.

How are you?

Not too bad. How are you guys? Good.

We're hanging in. You're the last question of the day, so you better bring a hot one for us.

What's up? I've been trying to get through for a while. With my work schedule, I haven't been able to get through. But with my work schedule changing, I've been able to get through, so I'm blessed to be able to do that. So we started working on the Ramsay program about eight months ago. We're on baby step number two. We have knocked down our debt pretty significantly. We started about 46,000 with some two vehicles and then some personal debt that we had. We're down to just the vehicles and then a couple about 3000 left on medical and other little individual things with the baby steps or with the Snowball pick. In the next month, we'll have that 3000 or so paid off, and that will leave our two vehicles. We owe roughly about 13,000 to 15,000 each. On those, we have attempted to try and sell one of them, which is a 2016 Ford Explorer. I have a 2017 Ford F 150, and we've attempted to try and sell the Explorer. I haven't had any luck. We've posted it. We've had a couple of people interest.

What's your household income?

So, single income. My wife stays at home with the kids, so our household income is roughly about 3000 a month.

One of these cars has to go. That's a lot of car for making 36 grand a year.

Yeah, $3,000 a paycheck. Sorry, not a month. $3,000 paycheck.

That gives me a lot more peace. I was like, man, okay, what's the Explorer worth?

You think so it's roughly when we Kelly Blue book it right around 16 to 18.

Okay. And then what would you do without that car?

That's the other thing that we will have to get. So I drive about an hour to an hour back for work every day. I work in Jefferson City, so we would have to get just a car to drive back and forth, which that's what we'd like to use the difference and what we owe.

Well, you needed maybe a little bit more than that, because I don't want you in car repairs because you got a hoopdy and said, George made me do it. So save up a little bit of money. Get something reliable, maybe five or six grand, and then you can sell it. Get that other car with cash. That's the movement. You'll get there either way. It might take some side hustles and sacrifice, but hope you get that car sold soon. That puts this hour of The Ramsey Show in the books. Until next time, spend wisely, save intentionally, and give generously.

If you're a leader, your personal growth matters for your organization, because whatever you lead can only grow as much as you do. Know from experience, I've been CEO of Ramsay Solutions for over 30 years. And now I'm sharing that leadership and business coaching experience with you on the Entree Leadership Podcast. I'm taking your calls and helping you figure out how to overcome challenges within your organization. One episode could change your business. Check it out on Apple, Spotify, YouTube or on the Ramsay Network app.