Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create actual amazing relationships. Number one best selling authority, Ramsey personality, co host of the smart money happy Hour, Rachel Cruz. My daughter is my co host. Today, open phones. The phone number is 888-25-5225 the call is free, and some say the advice is worth exactly what you pay for it. Phil is with us to start this hour in Fort Wayne, Indiana. I got a problem with my. Oh, no, my deal in here. Bring that. Just bring that. Bring it up. Bring up Phil for me.

Can you turn that off?

Hey, Phil, how are you?

I'm fantastic. How are you guys?

Can you hear me? Better than I deserve. What's up?

Well, Dave, my wife and I are having what we believe to be as a financial meltdown. We need some help. We need some advice. We're tired of owing people money. We want to get out of debt ASAP. And frankly, the arguments and the stress, making it hard to sleep at night. And we're on the verge of divorce due to this.

Wow. Okay. How much debt have you got?

I can go through it quickly. I've got 38k in a personal loan. That's rollover from credit card debt. 29 in the car loan. Of course, that's upside down. 28 student loan. Twelve in consumer debt. And eight in another car loan, the daughter's car loan. And then we got the house. You know, we owe 150 on the house. If we sold it today, it'd be worth 200. 5270, it would sell for.

Have you got a beeping in the background at your place? Or is that a technical thing on my end?

That's us. That's us, Dave.

Oh, it is? Okay.

Yep.

All right, thanks. My brain's about to be fried over this. Okay, sorry. So what's your household income?

Oh, no. Did we lose him now?

We lost him. Okay.

We're breaking down.

Yeah, it's all falling apart.

Okay. Hopefully we'll get him back up, because that was a lot, a lot of numbers. And we're finding continually it's a consistent issue of money becoming such a major part of people's marriage issues. I mean, this is a thing that has continued to be an issue. Can you concentrate?

No, I can't, but that's okay. You're right.

I think.

I think we're getting Phil back now.

We're getting it. We're getting it. Okay, Phil, we will have you on. I promise.

We're going to try to help you here, buddy. Okay. There are you back, Phil?

I'm here.

Sorry about that.

I'm sorry about that.

No, it's okay. We blew a fuse over here somewhere. But anyway, the. So you guys are. How long you been married?

18 years this year.

Yeah. And what did you say your household income is, sir?

Together we're gross in 174.

Okay, so why are you not able to pay these bills with 174? They look payable to me. That.

And when we actually sit down and look at it, I agree 100%.

But.

But frankly, we have never sat down and truly have done a budget.

Okay. And if we're fighting over money all the time, why would we not do that, then?

Just a communication issue, I think, when it boils down.

I mean, if you sat down with your wife tonight and said, honey, look, we have to map our way through this in a way that we can agree to so we don't kill each other and we make enough money to pay these bills. We just need to get aligned on how to do it. Would you sit down here and help me write this out and us be in agreement? And neither one of us raised our voice. Could you not do that?

We're getting there.

We've.

No, I mean, really. No, I'm talking about tonight. What? Why couldn't you do that tonight?

Does she know about all these numbers? Phil? Does she know the amount of. She does. Okay.

Absolutely.

So what's. What's the stick? What's the fly in the ointment? Uh, you're gonna have to tell me.

I think it's just a fear of buckling down and actually handling it, I think, on both of our parts.

Okay. And you said your daughter. Car. So you have a teenage daughter you don't want to tell no to.

Difficult to do. Yes.

Yeah.

The other part is she just got accepted to a local private college, both for academics and athletics. That's scaring me to death. Also because.

Are you supposed to pay for it after she got accepted?

That is a correct statement.

Yeah, well, I don't care. I can't afford it, honey, unless we figure this out. So one thing you figured out already, I figured out in 35 seconds talking to you is your teenage daughter has a vote in this and she shouldn't. It's not her money she's causing you. Not saying no to her, either one of you. This kid needs to hear no. It's part of what's causing your problem. Now, I'm not saying you're going to have to say she can't go that college or you have to sell her car. But you might have to say both. You make $174,000 a year. You make plenty of money to pay these bills.

100%. Yeah, we're not behind on anything by. By any means. I'm tired of making the minimum payments. I want to get these things paid off.

Yeah, absolutely. And you're out of control. Y'all just spend and spend and spend and spend with no plan and because nobody hears the word no in your place. And so the grownups in the place are going to have to circle the wagons, you and your wife, and say, all right, as grown ups, we're going to do what's best for this family in the long term, which means in the short term, we're going to say no to some things for ourselves and to all the non grownups in the family who don't get a vote.

Understand?

Is that old school dinosaur stuff or what?

I like it.

I mean, is it that that's really what you're going to have to do? It's, um. So one of the things I did, Sharon and I did, Sharon and I said this when we were fighting like crazy, we were going bankrupt, losing everything. Rachel was a brand new baby. And we said, all right, if we ran a business, and it was our job to handle money for that business, to be the CFO of that company, the chief financial officer of that company, we would get fired for incompetence. You would lose your job, Phil, if that was your job. Y'all suck at this.

Well, I agree.

And so we said that to ourselves, too, so I can say that to you. So, I mean, I'm not picking on you. I'm agreeing with you on this dance, but we kind of said we got to get above this and treat it like we want to keep our job, because God gave us the job of running this household, and we're. We're not doing it. We're incompetent. We're not doing a good job of that. And so we're now going to become professional money managers of this house, and we're going to tell our money what to do instead of wondering why we're sitting here stressed making 174 grandd. And if you and your wife can get into agreement on that type, then you can go anywhere you need to go from there. Does that make sense?

Yes, sir.

Yeah. Well, and I was going to say, too, Phil, that when you said earlier how we can't sit down and just have a conversation because we can't even, like, communicate about this because there is so much fear, there is so much heightened emotion. And I think what's going to start to come to the surface as you guys dig into these numbers is you're actually going to see a lot of, oh, my gosh, we've broken down in communication a lot of life, not probably just this situation. And what we do find, which I hope gives you hope, is that for so many people that walk a journey, that choose to really be intentional about a part of their life, and we're in the. We're in the world of money. So this is what we hear all the time, is we're going to. We're going to work on this money problem together. And then suddenly you start to realize, oh, my gosh, a lot of our marriage problems, it's not that they're being solved, but they're coming up to the surface. We're seeing them, and because we're able to communicate well and on the same plan, on one area of our marriage, like money, all these other areas seem to start to have a commonality, and that unity starts to be built.

So it's kind of the chicken or the egg of, like, marriage stuff and money. But this money stuff, if you guys can choose to get on the same page, it actually can be the thing to help improve your marriage. Cause you're gonna work as a team for maybe the first time in a long time.

Yeah. If you can get aligned on your spending, you've aligned yourself on your value system, your fears, your dreams all come into line. Budget can actually be used to heal a marriage. It actually is used all the time. Marriage counselors do it. So I got great hope for you guys. Hang on. We'll get you into FPU. There aren't many places you can save hundreds of dollars a month and still give you great service, especially with health insurance. That's why Health trust financial is the only health insurance company Ramsey recommends. Health Trust financial objectively compares the top health insurance providers to meet your needs and budget. And remember, the service is free and. And there's no commitment. Go to healthtrustfinancial.com dot. Healthtrustfinancial.com dot. Rachel Cruz Ramsey, personality, is my co host today. The Bible says, no discipline seems pleasant at the time, but it yields a harvest of righteousness. The way we say it around here is if you'll live like no one else later, you can live and give like no one else. Met a couple at the break. Rachel and I were out having pictures. So 14 years ago, we got out of debt, and I said, well, you have to be a baby steps millionaires.

And he goes, oh, yeah, definitely. So that's what happens. There's a live like no one else. So later you can live and give like no one else. If you are on baby step four and beyond, which means you are out of debt, have your emergency fund in place and you're now working on investing and paying off your house and your kids college and that kind of stuff. Now you're in the investing phase of your financial plan and our baby steps. Now you can go on vacation, but until then, you should not be on vacation. You should be going, getting out of debt and you should be in and you should be building your emergency fund. Baby steps one through three. But if you're four and beyond, we want to offer you the live like no one else cruise. Seven days in the Caribbean, Holland, America, and this is the nice cruise ship line, not the cheapo. This is the good one. This is a fairly new ship, almost brand new. And it's all the Ramsey personalities, plus a bunch of country music and christian music folk on there with us. We're going to be doing all kinds of special events.

No one will be on the ship except Ramsey people. All of them will be living like no one else. So if you want to celebrate your milestone of reaching that, Turks and Caicos, St. Thomas, Puerto Rico and the Bahamas might be a good place to do that March 22 through 29 of the year 2025. So about, about ten months for eleven months from now, we'll be going. There are just a few cabins left. You can still go, though. We want you to go. You can put down only a $600 deposit, secure your cabin before they are gone. We are selling out rather rapidly. And you can get a cabin, though. You need to get on the phone, you need to get on the website and start talking about it right now. This is the ultimate debt free celebration, includes Steven Curtis Chapman.

And it's going to be fun. We planned out the itinerary and saw, you know, the speakers for the night and sessions we're all going to do. It's going to be fun. It's going to be enjoyments, some learning, some celebrating, all that.

We will all be on there the entire seven days with you. So come out, hang out with us. It's going to be awesome. Ramsaysolutions.com cruise. You don't want to miss this. It's going to be going to be incredible. All right. I want to circle back to Phil's call and the concept for a second. Families making 174,000. They've got the money to pay their bills, but they're out of control. So we have seen for years, going through financial peace, university, learning to be on a budget together, you mentioned it to him, has healed many a marriage because it forces you to negotiate every part of your life, because money flows in and out of almost every part of your life. You know, are we going to give to church? Are we going to save for kids college? Are we going to have the kids in a private school? Are we going to. All these questions have money attached to them, and they all represent something you care about, your values. And when you can get aligned on your values, when you can agree on your spending, you're agreeing on your fears, your dreams, you're agreeing on your problems, you're even agreeing eventually on the order on which to attack the problems and decide if the kid goes to the private school the kid wants to, and the kid keeps the car that has an $8,000 loan on it or nothing.

Now, how do you get to Phil's place? It's where most people are. They're out of control and chaotic. And any system, including a family, and the operation of a family is a system, believe it or not, it is science more than it is art. Any system left to itself without an outside force holding it in place deteriorates and becomes chaotic. Families that don't plan to do things ever, eventually it catches up with them, the chaos takes over. And that could be in the money section. It could be on, you know, we're not planning for college. We're not planning for retirement. We're not planning to buy the next car. We're not planning anything. And it always surprises you then when Christmas is here in December. And so what this does is it forces a family to impose its will. It forces the husband and wife together to agree on and impose their will on the chaos and force it into order. That's what budgeting does. And it forces you to discuss the things where you are not aligned. And that's why I give great hope for Phil, because he was answering. He's over it. He's ready to fix this.

He's ready to say no to himself, to his wife, to his daughter.

Yep.

And impose our will on this broken mess. And so, folks, I want to tell you, I don't care how broke you are. I don't care. Out of control or stuck. You feel you can impose your will on the system using a budget, using. Just start writing it out. Sharon and I would just write out a list of debts that we had. We wrote out a list of goals that we have. And then we put those in order. Which thing would we do if we had some money? What would we do first? We dreamed again after we went broke and we had yellow pads full of dreams, yellow pads full of goals, yellow pads full of debts and problems, and yellow pads full of a budget. And those things, eventually, as we imposed our will on that system, eventually became our life. And it's what we've been teaching you guys now for 30 years.

That's how you run it. Yeah. And I wonder, too, the caution when it comes to even making that first step of imposing your will and just doing a budget, because I think it takes either a moment in time of a crisis, kind of where he was at, and we call it your high I've had it moment, I'm done. It's either that or it's just this big humility pill that you have to swallow to say, what I've done obviously isn't working. And I think that's hard for anyone to admit. Right? Like a part of your life that's falling apart, realizing that you've done that. There's a level of self acceptance there. Oh, yeah, that can be so hard.

Oh, it's very hard.

And I think those are the barriers. But when you push through those emotions and you actually sit down and do it, the change occurs. You start to actually start walking it out. But that even that first step for people emotionally, the weird thing is you.

Change when you have a crisis, but you can create the crisis.

Yeah.

In his case, the crisis is coming from the outside. It's a marriage problem, and everything's blowing up and there's tension in the home. But I've had two debt free screamers this week. Who? I asked them what their I've had it moment where you finally just go, that's it. I've had it. And in both of those two cases, they said, I was disgusted that we make this much and we're this broke. That's a created crisis. You're not about to be foreclosed on, but you look up and you go, we make too much money. We work too hard to have freaking nothing. I've had it. And you can just reach that down inside. And when you do that, that's when the switch flips. That's when you say, okay, I don't care what the teenager thinks. I don't care what your mother in law thinks. I don't care what the neighbor thinks. I don't care what anybody thinks. We're fixing this crap. And when you do that now you're imposing your will on the chaotic life, and you will bring order to it, and it's your only hope of not believing your whole life broke.

So good. It's so true. It is. And the other element of that that I think is difficult is that change. It is. It's embracing something new. And that's one thing. I just did a video on my show right before this show, and just talking about just the simplicity of the baby steps that you can list out seven. Right? There's seven. But the order of that brings order to people's lives, too. That's one reason I think that this plan, out of majority of financial people out there, is the most successful financially, because in order to have change, you need to have a plan that you have confidence in. And there's a level of submitting to that, that this works. So even if you're listening to this and you're new to it, just having confidence, and, okay, I'm going to have change and submit to a plan, create, order, everything that you're saying, but you're doing it to a system that works, and that's been proven, which is the confidence that we get to bring every day on the show, which is.

And that comes into almost anything. I mean, why would you push down on the accelerator if you didn't have confidence that the car was going to go forward? And if it doesn't go forward, then people just stomp on it. Because you're surprised that it doesn't go forward. Right. Why would you push down on the brake if you didn't think the car was going to stop? You have confidence in the system, and, you know, that's why a lot of people fail at something like a diet, because they try it for a little bit, and they don't get any result, and so they lose confidence, to your point in the system, and they bail, and so they stick with it, like, a whole 45 minutes or something. And, you know, I will freely admit that I have no confidence in kale for anything, but just I read a.

Thing that it's actually not that good for you.

I have a lot of confidence in donut avoidance. Donut avoidance has worked real well for me, although my life is lesser for it. This is the Ramsay show.

This show is sponsored by Better help. Hey, it's Deloney, and you gotta be kidding me. 2024 is flying by. So let me ask you, what's something you're proud of so far this year? And what's something you wish you could just stop and collaborate and listen and change direction on the it's important to take a moment to celebrate your wins, and it's also important to make adjustments and make changes when necessary. Therapy can help you take stock of your progress and set achievable goals for the next six months, nine months and beyond. Therapy is a safe, effective place to learn how to say hard things out loud and to make realistic plans for moving into an unknown future. Personally, I've been blessed to have a great therapist and you can be blessed with a great therapist, too. If youre thinking of starting therapy, give betterhelp a try. Its entirely online, its convenient, its flexible, and its suited to fit your schedule. You just fill out a brief questionnaire to get matched with a licensed therapist and you can switch therapists at any time for no extra money. Take a moment and be intentional for the rest of 2024 with Betterhelp, visit betterhelp.com deloney today to get 10% off your first month.

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If you want to help us out, we could use your help around here. It's a huge help. If you're listening on a podcast and you subscribe or follow, it changes all the numbers over at their platform and causes them to promote us. And it's a huge help. It really is. It changes the algorithm. Same thing's true over on YouTube. If you follow or subscribe, if you share the show, some of the platforms have a share button and you can just send a clip to or send a, you know, the link or you cut the link out and just copy paste and send it. That'll work, too. All kinds of ways to share it. If you're listening on talk radio, just tell people about us. We would appreciate it. We know you are because all of our numbers are up dramatically and the only marketing we're doing is you. So, yeah, we don't have $300 million to buy a stadium like Sofie. So we're just here to help you. And you're helping us by telling people about us. So thank you for that. We appreciate it. Open phones here at triple 8825-5225 Logan is in Chicago.

Hi, Logan, what's up?

Hi, Dave. Thank you for taking my call. I'm in a big pickle right now. I just lost my job and I have a lot of debt that I don't know how many, how, how am I going to pay that off?

So that's scary. Yes. How old are you?

I'm 19.

Whoa. You're on your own?

No, I still live with my parents. But I made some pretty terrible decisions in the last couple years, so.

Okay, what kind of debt have you got, sir?

I have a car loan, about 24 grand, and then I have about $5,500 worth of credit card debt that I still don't know how I'm going to pay this stuff off.

So what happened to lose your job? Tell me about it.

So I came into work, and then they told me that they didn't need me. They. And then he just basically just relieved me from my job. And then. That was on Tuesday.

So what were you. What were you doing?

I was a manager at a travel stop. I was in charge, like, supervising employees, doing paperwork, things like that.

So they do need the job done. They fired you? Why'd they fire you?

They told me it was because of performance and they found somebody better suited for the job. So.

Anything about that that you learn? What do you. What's your takeaway from that?

To be honest, I don't even know.

You felt like you were performing.

Yeah. And I just don't know what happened. It was just confusing to me.

Yeah. What were you making?

I was making around 40 grand a year.

How are your parents doing with you being there and job loss and everything? How's your relationship?

They're. They're good for the most part. It's just trying to find another job before I lose my car or anything like that, so.

So you owe 24 on the car. Have you looked up what it's worth?

Yeah, the car is worth 18 the last time I checked on Kelly Blue book.

And who do you owe the money to? Who's the 24 with?

It's, um, Kia finance company.

So it's a high interest rate?

Yeah.

What's your interest rate?

Actually, I want to say it's high. It's probably, like. I think it's 8% the last time I checked.

This is a local finance company.

I don't know.

They have a branch near you.

They do not.

Okay, so you just bought that. You bought this from a dealer, and they stuck you in this crummy loan? Yeah.

Yeah.

Okay. Because you're 19 year old, and they screwed you. Okay. And you bought a car you shouldn't have bought, and you know that, right?

Yeah.

Yeah. Okay. All right. Okay. So what. How's the job hunt going?

I'm really not getting anywhere that I would have hoped. I. It just isn't going anywhere for me. I just don't know what to do.

Mm hmm. Okay. All right. Does Uber have a 21 year limit?

Yeah, I know for sure Uber does.

Does door dash?

No.

Okay. I'll be dashing doors as soon as you get off the phone. Dude might as well run the wheels off his $24,000 car and go make you some money. I want you. I don't listen. And listen. Come Friday night and Saturday night, your butts working, you're not partying.

Okay?

Okay. Yeah. And period. You haven't got. You haven't any money to socialize, and you don't have any time to socialize. Cause you're broke and you're calling me afraid, so. You can't go hide that fear in a party. You got to go. You got to go get her done. You got to go leave the cave, kill something, and drag it home. You can do it. I know you can. And your performance this time is going to directly cause your income to go up. So I'm going to dash doors, and I'm going to talk to three pizza places before nightfall today. The three neighborhood pizza places, regardless if they're a chain, a known franchise, or a local, and ask them if you can deliver pizzas for them today. I want you standing in their lobby. I don't want you on the phone. I don't want you on their website. I certainly don't want you texting or some stupid butt email. I want you standing in the lobby with your beautiful smile and your hair combed, and you go get some jobs. Okay? You can do that, can't you?

I know I can do it.

Yeah. I mean, you got three or 4 hours before dinner time.

And, Logan, we just talked about this in the last segment about how there takes humility to step into something new. And I'll say this, Logan, I would think as a 19 year old guy, you went and got a salary job, 40 grand a year. You're kind of like, this is awesome. And then you're like, no. Door dashing. And pizza delivery was not what I'm supposed to do. My next step is supposed to be even better than where I was at. But I think during this time, you're back to, like, four or five side hustles put together throughout the week and working seven days a week until you.

Land the good job.

Until you land the good job.

So I'm not saying Sandra's. Good point.

Yeah. So just keep applying. But, Logan, this is gonna be. It's kind of a hit to the ego to be like, you know, I'm delivering pizzas. When I thought I was gonna be having, you know, some corporate job or whatever you were thinking, you're gonna be doing so again.

I want you doing anything that's honorable, to make money till you get a good job.

Yep.

Yeah. Yeah.

Here's what happens, okay? Let me. Let me tell you why I'm telling you to do this. Because when you're broke and scared and terrified, I can hear it in your voice, and so can everyone listening right now. And when you go into a job interview, you sound desperate, you walk desperate, you scream desperation, and they're not going to hire you. But if you've got cash stacked from Doordash and pizza, your car payment is there, and you got $2,000 in the bank until you get into the job. Now, you swagger into the interview, and your confidence is good, not cocky. But you're, you're, you're not. You're not screaming desperation and terror in the interview because an interviewer can smell this. You follow me?

Yeah.

And I'm trying to get that stink off of you so you can go win. And the way you do that, you get a little bit of margin between you and the wolf that's barking up your butt right now. You're getting your butt chewed off by that car payment, thinking. You're thinking, I'm going to get repoed trying to keep from losing the car. I heard you say it, and I don't blame you. I appreciate that fear. But let that fear be a motivator. Your first step is stack some cash to change the way you walk and talk in an interview. And then your next step, I'm going to send you Ken Coleman's book, Proximity Principle, and the get Clear. And the get clear assessment. Good, Rachel. And we'll do that in the. And I want you to take all of that stuff for your long term career goals. And I want you to read everything on kencoleman.com, on his website about how to get and land a job and go get that and solve this, and then learn from this process to never be in this situation again. Oh, and by the way, when we get to the other side of this, you need to have $6,000 so you can sell a stupid butt car and pay it off and get rid of it and get you a $5,000 car like a 19 year old should be driving that's broke or that anybody should be driving that's broke.

This is the Ramsey show. If recent times have shown us anything, it's that the least expected events can and will happen, and we have to deal with them. That's why everyone who has a family counting on them needs term life insurance for over 25 years. The only company I've recommended is Zander Insurance. Thats because Zander is a broker that works for you. They search all the top term life plans out there and find you the best rates and make the process of getting coverage quick and easy. You can apply online or over the phone in just minutes. And they offer plans with super competitive rates that dont require a medical exam, making it faster and simpler than ever to get the coverage you need. I trust Zander for all my insurance needs and you can trust them too. Dont put off getting term life insurance until it's too late. Go to zander.com or call 803 564282 for a fast and easy quote today. That's zander.com or call 803 564282. Rachel Cruz Ramsey personality is my co host. I have been in a position financially where I was terrified and I did not know what the next thing to do was.

And that's how we ended up doing this show to help people. We're in that situation whether they're 19 or whether they're 59. I will tell you the thing that I was telling that last caller, our 19 year old friend there, and that when you encounter fear, not if you encounter fear, but when you encounter fear on something, I guess there's several possible reactions. But two come to mind right now. One is you go into fight or flight, right? You either are going to attack and do something active or you're going to freeze like a deer in the headlights. And for those of you who have heard the saying deer in the headlights, we live in Tennessee. Literally, when a deer is caught in the headlights, they freeze and the stupid animal will stand there and destroy your car. So.

And their life.

And their life in the process. Yeah. And so, by the way, flight, fight, Bambi. Bambi will total a car. I'm just saying, because they freeze.

So those are three things. Fight, flight, and freeze.

Well, flight is freeze. I mean, it's the same category. I mean, it's, they run forward about.

Yes, yes.

So what I have discovered, though, especially on financial things, like losing your job as an example, or just waking up one day and going, oh, we're about to be repoed because we're so freaking out of control here, or we're about to lose our home, or we're going to retire and have to eat Alpo or whatever it is you discover that's on your doorstep that scares the p wadden out of you. So if you're in that situation, I have always found that the best reaction is not flight and not freeze. It is attack. And everyone wants to get all analytical while you're in the middle of this. And that's a form of freezing. And George Patton said it beautifully. He said, a good plan violently executed now is better than a perfect plan executed next week. So when you're in that situation, square your shoulders, lean into it, and get after it, even if what you're doing is not perfect, like you're doing things you don't want to do, in terms of, I don't want to be in a career where I'm door dashing for the, you know, when I'm 35 years old, starting at 19.

Right. You know, that's something you don't want to do. But I've done a whole lot of things in the name of activities, because activity solves these things more than the freeze does or the flight. You can't run away from it. It'll chase you down, and you can't freeze and stand on the road. You'll get run over. So you've got to go into attack mode, even if the plan is imperfect. And trust me, you're terrified your plan will be imperfect, but the other two are a death knell. You've got to get it. You got to lean into it and get it. And when you look back later, that sheer activity will change your neural pathways, it will change your attitude, it will change your spirit. I'm feeling blue and depressed. One answer for that. Not the answer. It's not a psychological. Doctor John Deloney might not agree, but one answer for that is activity. Exercise is always accompanied with solving depression.

Yeah, that's what I'm going to say. That's why they say, like, if there's, if there's major anxiety, go for a walk. Like, go outside, like, move your body. No, I think that that is sunshine. Yeah, I mean, there's sunshine and exercise.

Hello.

But from the financial aspect, that is just go get a job.

The version, do something. Do it, do something. Sitting and saying, oh, this is bad. I don't know what happened. You just. You're standing like the deer in the headlights then. And so, and it's not because someone has a lack of character, it's because we.

You're paralyzed.

Well, fear, like, fear. You're going to deal with the fear. You just got to decide on purpose how to deal with it, is what I'm suggesting, because it's going to come. You're going to be in those situations. Nick is with us in Knoxville. Hi, Nick. How are you? Hey, good.

How are you, Dave?

Better than I deserve. What's up?

I'm wondering if it was the right time to purchase a home. I am on baby steps four, currently debt free after being in almost $50,000 of debt. So on the right track there, but I'm not sure if it was the right decision to purchase a home right now.

Right time. In what regard? In the economy or in your life?

In my life.

And was it or is it. I mean, did you already purchase it?

I did purchase it.

Did. Okay.

Yep, you're in baby step four. So you're debt free, and you have your emergency fund in place. That is the time we would tell you to do it. In terms of, was it too much house, Nick?

Was it too much? Are you. Are you stressed about the payment? Is that what you're calling, or you're just curious?

I'm kind of wondering if it's the amount that I owe, and it freaked me out a little bit. I've never been in this much debt. The mortgage is 236,000. I make about 90 a year. I'm base salary and commission, so that's roughly what I'll make this year.

You're single?

And I sold. I sold some land worth about $120,000. So I could use that as a down payment.

So your mortgage is 230 or your purchase price was $230,000.

Mortgage is 230. I put down 60.

60. What'd you do with the rest of it?

I have it saved away right now. I'll have to pay taxes on some of it because it was inheritance.

And you have to have an emergency fund.

Correct.

Okay. That used up. That used up the other 60.

Correct.

Okay, I got you. How old are you?

And then 30 and 30. 24.

Okay. Wow. I don't hear a single thing in this. That sounds bad.

How much is your payment compared to your income?

My payment is going to be 1660. I'm just wondering. I took out a 30 year. I know you guys recommend a 15 year, but I was.

I would pay it off then. As soon as you can pay it off. I wouldn't refinance it just to do that. But you're just. You're 24. It's the first time you've done this to. The first time you do anything of scale or size, you feel the weight of it. That's normal. You should. That's what means you're wise. If you didn't feel a little bit of pinch when you do something the first time you pick up 300 pounds, you would feel it. Right. You picked up 230 pounds. You feel it? 231 pounds. Right. And you. You know, and so that. That just means you're wise. You're. You're, uh. But the numbers that you're giving us are all fine. And the order that you did everything are fine. We would have done a 15. You're right. But I would just challenge you to get to paying on it. Let's pay it off in seven or eight years. You can probably do that because you're that guy.

Yes, sir. I'm also wondering, I believe for a year, I'm going to have a friend rent off me who's looking for a spot. So I think that'll help out with the mortgage, but I wasn't sure if that'd be a good plan. Also, moving forward to help pay it off faster.

Yeah. I mean, if you're single, anything you could tolerate, you want to. Yeah. I mean, Nick, I think you want your. Your. I mean, you're okay, though.

What is it? I still not. If you called us and asked, should you do this, everything you said follows the guidelines, and we would have said, nick, by the house only. We would have put you on a 15. But other than that, everything else lines up. I don't hear anything here to be concerned about. Is there something I'm missing?

No, I'm just making sure that that follows.

Yeah. And Nick. And honestly, because we tell people if they're in a position, go ahead and get in. Because housing pricing, house prices continue to go up, we have no clue what's going to happen with interest rates and everything. But, like, it's to the point that if you have the money and you're able to buy, go ahead and get in now because it's going to be more expensive next year and the next year and the next year. And there's not a bubble, there's not a crash coming. I mean, none of that's happening. So if you have the ability to get in, go ahead, because it's terrible. I mean, like, just, we were looking at numbers last week and just, I mean, from, you know, salary, your generation.

Gen Z, this is the toughest time home buying has been in 50 or 60 years. I mean, it's tough right now. It's not going to be forever.

But right this second is tough. Prices and pulled it off. Salaries are not. Income is not kept up with it. So if you want to know more.

About this, folks, you can go to ramsaysolutions.com real estate. Or if you need to get a good agent in your corner, go to ramsaysolutions.com agent to help you buy. And they'll, if you, if they're Ramsey trusted, they'll make sure you're doing it the way we teach. They're not going to assist you in doing something stupid if they're, if they're Ramsey trusted agents. So go to ramsaysolutions.com agent. You did good, Nick. Live from the headquarters of Ramsey solutions, it's the Ramsey show where we helped people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality, multiple number one best selling author, co host of the smart money Happy Hour, and my daughter is my co host. Today open phones at 888-25-5225 Samantha in Vegas starts this hour off. Hey, Samantha. What's up?

Hi. How are you doing?

Better than I deserve. What's up in your world?

Well, I called in because I'm just tired of toiling in debt. I have been a single mother of six and my youngest is now 21.

You got them out. You did it, mom.

You did it.

Did they all survive?

Way to go into the next bedroom. No, they all do really well. Very well. However, except for the youngest one, he's still finding his way. But during the course of this, I find myself in close to $100,000 in debt. I am still paying my youngest car note. I'm paying one of my children's college debt deal. She graduated NYU, so I have a little bit of debt there. And I'm back in college. So I'm. I just don't even know where to start to attack these, these bills with me already. From paycheck to paycheck.

Why does a 21 year old need his mommy to pay his car payment?

Because it's in mommy's name and he's not working yet. Well, he was working, but they just laid him off. So I bought it for him as a graduation gift.

You bought him a car payment? Okay. How much do you owe on your car?

I owe now about 12,000.

What do you owe on his.

Oh, on my car owe. Nothing on his 12,000.

Oh, I see. Okay. So what's the other 88,000 in debt? NYU.

Yeah, it's NYU. And then, of course, credit cards.

How much is credit cards?

Oh, gosh. Credit cards is around three or 4000. The rest is NYU.

So you got $84,000 for one kid?

Yes.

Wow.

Yeah.

Was it a parent plus loan, Samantha, is it in your name or is it in her name?

It's an. It's a parent plus loan. And she does work for. I mean, she works. She's in a situation where her loans can be forgiven, you know, after so long, I'm not parent. Plus, you're on the hook for.

Nope. You got to pay it. Yeah. So what do you make?

Well, I make just under 100, but with bonuses, I make about 110, 115 a year.

What do you do?

I work in healthcare.

What are you studying?

I am studying to get a my bachelor's so I can move into a higher position in healthcare, into a director's role.

And what are you paying for that?

You know, the company does reimbursement, so. And I'm doing Sofia credit, so that's really. I'm not really paying for that.

Just taking up time. Okay.

Just opportunity.

Very wise. Good for you.

How long is the program, Samantha?

Oh, gosh. If I keep doing the Sofia credit, I'll be done by mid next year.

Okay, excellent.

Yeah, I'm trying to fast track that.

And then what? Yeah, what will you make if you're at about 110 with bonuses for the new position, what are you expecting?

Well, with this company, you know, it'll probably start around 120 without bonus. Probably 100 and 3140 with.

Okay, good.

Well, you're making progress. Good for you. How old are you? 55.

You're good. I'm 53. I'll be 54.

Well, I mean, you told me your story. Your story leads to that. Okay, good. Good. Okay, well, you're a warrior princess. I mean, you fought through raising six kids by yourself. You're amazing. You can fight through a lousy 100 grand in debt.

Yeah, you could do.

Okay.

Are you ready? Are you ready to get after it? Because, you know, you're used to fighting battles, and I'm getting ready to put you on the front line again. Draw your sword. You're ready to go?

I am so ready. I got my pen and pad and I am so 100% ready. I'm tired.

I mean, the first thing I would do, Samantha, is I'd cut up your credit cards today. I'd get rid of them. And I would force yourself to live on less than you make with the income you have. And that's going to include these debt payments staying current, but it's going to force probably a different lifestyle to a degree. I know you're not out there all bougie and glamorous and stuff, but I mean, it's going to be like, hey, I'm going to be eating in more. I'm going to be cutting out. I'm going to be cutting subscriptions, extras. It's going to be putting you on a tight budget, living below your means without credit cards because the credit cards have become the slippery slope for you. They're kind of your safety nets. And I want Samantha to be my safety net.

Yeah. No life.

And then I have. I mean. And then, honestly, Samantha, the car loan for the sun.

Mm hmm.

And that's gonna be a really hard conversation, but it's. But it is a. Hey, we're either transferring the loan in your name, son, or I don't even know if. I wouldn't even do that. I think I would just sell it. I mean, I would get to a point where you're like, no, no.

I say, listen, honey, you got. You got 90 days to get your butt in gear with this car and Uber eats and everything else, and pay it off, because otherwise I need to sell it because I'm getting out of debt.

Okay. That was my question.

I feel like give him a little time to pay. Come up with twelve grand, and if he'll work 24/7 for about till between now and Christmas, he can pay that car off and then keep it transferred.

The time. I mean, he'll have to pay it off, though. But if he gets behind on payments.

If he gets behind on payments, he's done. Done instantly. He's either paying the payments starting today, ready, set, go, or we're selling the car and he's going to pay it off and get it out of your name because we're getting you out of debt because this is. This is, at best, a contingent liability, meaning you have to pay it if he doesn't. At worst, it's just straight up you owe the money on the car. So Rachel's right about that. But what I want you to do is get on the every dollar app. We're going to put you into financial peace university. I know you're already in class, but I'm going to put you in another one and show you and teach you how to handle money properly. I'm going to pay for it because I think you're cool.

Oh, why, thank you.

I think a woman that can raise six kids as a single mom's a freaking hero. And so I want you to go win. It's time for you to go win for you. But that's no eating out, no vacations, no whining, no life. Until we get this stupid nyu thing off the books. We're not waiting around on her to work a stupid, horrible, backwoods job so she can maybe get forgiveness. That doesn't come through most of the time on the loan. I want you just pay it off fast. I want this loan, all these loans, gone in two years.

Oh, wow.

Okay.

Yeah.

Oh, that would be great.

Yeah. Well, I'm talking about $4,000 a month.

Go.

Yeah.

Okay.

Yeah. That gets you out of debt in two years, and that means you have no life. You're working all the time and you're, you know, you're eating tuna fish sandwiches at work. Hello, by the way, I hate tuna fish. I used to eat it when I was broke. And when I smell tuna fish, I smell broke. I can't stand it.

Samantha, is there a lot of opportunity to pick up overtime? A lot of healthcare in that industry, we find a lot of people are able to get some great overtime opportunities. Is there?

Well, I'm salaried and, you know, I'm a department health patient access care department.

So it is a little different. Okay.

Is there anything you can think of as a side hustle while you're going to school that is possible?

I have truly thought that up, and I really don't. The only thing I have is like, you know, breeds or something, and I can't really, you know, I can't do that.

You got to get through school. I want you to get through school. I think that's important because that's a better future play. But I don't know. I think you can do this. If a boy child takes care of his own car and. And you lean into this and you chop up the credit cards like Rachel said, and we get you on an every dollar budget, I think you can do this in about two years. I really do.

And then you're going to be up another 40 grand in salary that can be thrown to this next year when you get your new position, that's going to help.

That's going to help you do it even faster. Hang on. Christian's going to pick up and we'll get you signed up for financial peace University. We'll show you how to do this, kid. It's what we do. This is the Ramsey show, so here's a quick math refresher. There are only 24 hours in a day, so your business needs to streamline tasks that are time suckers and focus on activities that make money. So to reduce headaches as they scale, smart businesses use NetSuite by Oracle, the number one cloud financial system. Netsuite helps you improve efficiency by bringing all your major business processes into one platform. So join the more than 37,000 smart businesses like Ramsey solutions that have done the math and graduated to Netsuite. And right now you can download Netsuite's KPI checklist absolutely free@netsuite.com. ramsey. That's netsuite.com ramsey. Rachel Cruz, Ramsey personality, is my co host today. Thank you for joining us. Chris is in Bozeman, Montana. Hi, Chris. How are you?

Good, Dave. Thanks for taking my call.

Sure, man. What's up?

So I'm going through a job transition right now, and I'm hoping I'm not shooting myself in the foot. I work for a company down in California, and I live, obviously remote. I'm taking a slightly lower paying position to try and improve my quality of life.

You work remote?

Well, I work remote, and if I'm not remote, I'm traveling all around the country.

So where's your quality of life going? How often are you traveling?

It depends. It's kind of sporadic. I never know when I'm traveling. The most recent request, they called me at 10:30 p.m. on a Wednesday and wanted me to fly out the next morning. Wednesday night.

Is that normal?

No, that's not typical.

Okay, so that's an exception. What's the, what's the average month that's killing you look like?

Well, again, it's sporadic. I had six months in a row where I was gone week. Like every other week, I was gone for a week, so I was home for a week. Traveling for a week. Home for a week. Traveling for a week.

Okay.

And then now I've been sitting at home.

So what were you making?

Probably three, uh, 70 salary plus benefits.

And what are you making now?

I'll be making 30 an hour with the opportunity for overtime, but no benefits.

What's that translate to?

Six.

I'm sorry.

Base, I think it's 60. Base, 60.

So you're gonna take a $10,000 pay cut, but with ot possibility and loss of benefits. Yep. And you're at home and it's a 40 hours gig.

When I'm home, it's 40 hours and I'm traveling.

It's, oh, it's now travel the new ones got travel the new ones not.

Traveling local home every night with my.

That's what I said. Yeah. You're taking a ten pay, ten k pay cut. You're coming off the road.

Yeah, yeah. But my travel time, like, if I'm traveling, that's a 60 hours week sometimes, or typically was, you know. Yes, but I don't get paid for that overtime. So there's new time. If I have to work a 50.

55 I got, you'll get paid for it. I see. I switch.

Yeah. Does the new job include travel?

No.

No, it won't. I have to drive around my local town.

Trying to get a handle on it. All right. So I can. Okay. Anyway, so what your question is, did you goof up taking that? Yeah.

Am I making a bad financial decision? Because I do have.

Only if it doesn't take you where you want to be when you're ten years older. How old are you now?

33.

Okay. Is the 43 year old mad at the 33 year old you?

Not from what I can see.

Okay. All right, then you're fine. So I don't want you to take a permanent step back, but taking a step back to get your life under control so that you can step forward. In other words, does the new position have some upward mobility, some things you can do with it over the next decade? Does it take you where you want to go? But if you're taking a job, you're just going to be stuck in and you're spinning your wheels and you're going to make less and you're going to make less and you're going to make less and you're going to make less, then, yeah, I would have taken another job. I don't necessarily think you have to stay with that old job. It was a bad gig for you. But. But I, you know, I don't hear anything here that's devastatingly bad. If you took a pay cut in half, I would say you really screwed up.

But, you know, his point, too is the 70k included weeks of travel, and you don't get paid for those extra, you know? So, like, even if he picked up some OT's, if he worked the same.

Number of hours at the new gig, he'd make 70.

That's right. Or more. Yep, that's right.

If they'll give him the OT, but I don't know if they will or nothing.

And especially if you're in a position where you guys can live on that and you're not putting your family in a financial dire straight. Like, I just know for our season of life, like, yeah, if you have the ability to not be gone for a week, if you're married with kids, that's real nice. Real nice, you know? So that's fair for sure.

Absolutely. Now, in general, for folks out there, sometimes when people say work life balance, you mean all kinds of different things. All right. And sometimes people, I need to leave this job that's toxic, or I need to leave this job that is horrible. And I'm really not referring to Chris at all. I'm just referring to the subject then you know. And the only way I can do that is to make less. Well, I would challenge that. Okay. There's two times that people come to us in the last 30 years, and they come to us every week. Every week. With these two times. I want a better quality of life, and so I'm going to change jobs and make less. Number one, which he's not really making any less, probably, but the other time they come to us is I lost a job, and the new job I'm going to get that I don't even know what it is they assume is going to be less. Both of those are wrong answers. If you have answer a, a job that's miserable, answer b, a job that makes less. You have not enough answers yet. You need c, none of the above.

Remember, taking multiple choice c, none of the above. And none of the above means, I want a job that's not miserable or that is a new job because I lost my old job that pays more. And guess what? You won't find that if you don't believe it and aren't looking for it. People have a negative assumption immediately that in order to be happy, I have to make less. Well, let me help you. You're happier if you make more, and in order to get a new job, unless it's terrible. What? Hold on.

Unless the new job is terrible, you don't care if you make more.

And, you know, but this idea that the only way to be happy is equated with working for a nonprofit and I make less money than I've ever made in my life, that's just dumb.

But I do think there's an assumption that if you've been in a company and you continue to get raises within internally and then you step outside, that it could be harder to find the same equal opportunity.

Not if you. Not if you earned those raises because you're qualified to run that position that you're doing at that company.

Yes.

Well, and I would say if you're.

Overpaid because you got promoted beyond your competence, sure, then that would be true.

And I will say, out in the marketplace, to find a job that pays more is out there. Like, we see that a lot. You know, all the time you're getting paid 20 grand more. I mean, like, it's.

All the time.

It is wild. We see that even from internal, and.

We'Ve had people leave here because they get paid 30 grand more. I'll help you back. That's great, man. That's awesome. Happy for you.

So, yeah, there are there. So to your point though, you, you don't equate. Okay. I'm gonna have a better situation because of the toxic work environment I in or the schedule that I hate that I'm in. I can find a job that I love and enjoy and I can make the same or more and that I'm.

Passionate about and good at all of those things and make more.

Right.

So that this I. But, but the human nature is to assume the negative.

Yeah.

And I'm saying push back against that as an act of your will and assume the positive. Good stuff. All right. Renee is in st. Petersburg. Hi, renee. Welcome to the Ramsey show.

Hi, Dave.

Hi, rachel.

Thank you so much for taking a call.

Sure. What's up?

I just have a quick question. I was wondering, I'm on baby step two paying off my car and now.

The engine needs to be replaced and.

It'S an $11,000 repair. We have $1,000 in emergency fund. So I'm wondering what I should do. Like should I take out a personal loan?

No.

To get the car fixed.

That car's gone.

How much is it worth?

Well, with the engine needing to be replaced, it's worth $5,000 and I owe 20,000 on it.

If it had a new engine, it.

Would be worth 15,000.

Wow.

Oh. But if it was fixed, it'd be worth 15.

Okay. Are you single? No, I'm married. All right. The two of you need to sit down and understand that there's lots of places to buy car engines and the car dealer is the worst. 111 thousand dollars for an engine. The flip. Are you doing buying NASCAR? No, you're broke. You're going to a junkyard and get a used engine that has 20,000 miles on it and the car got totaled and you're going to have some guy under a tree put it in out back of his house. That's called a shade tree mechanic, by the way. And it's cheap and that's how you do it. No. And that's going to cost you three or four grand and you're going to save up money and do that real fast. You know, $11,000. No, I don't think that. They don't even call them junkyards anymore. They call them salvage yards.

So you call, you call a salvage yard and just say, I need an engine.

I'm start. And they've got, it's all computerized now. They'll shop all over the nation.

There you go.

They'll have you a nation. I'll have an engine for guy under. Well, that's what I was expecting. It's a shade tree mechanic. It's an old saying.

Y'all heard of it? Anyone out there?

Everybody.

Oh, my God.

Gosh.

Okay.

Thank you. Thank you. This is the Ramsey show. Rachel Cruze, Ramsey personality. My daughter is my co host today. Our question of the day comes from Brandon in Maryland.

He says, I've had several friends whose parents took out our parent plus loans and had them go sideways once they graduated. What's your stance on them? Obviously, they're a bad idea, but if they were taken out, whose responsibility should it be to pay them once they come due? Well, I mean, legally, it's the parents name on the bill. And so, I mean, I guess from, like, a legal perspective, it's the parents. I mean, what, what, what's frustrating about this whole thing, though, is that, and I've, we've heard this multiple times, is that, you know, the student agrees with the parent that they'll pay it, you know, but the parent takes out the parent plus loan, and the student fails.

To tell their new fiance they get.

Married or four years later doesn't get a job.

Mom and dad go, you remember that time you said you were gonna pay this loan? And they go, now? I didn't. Yeah, that's what happened.

They could be there, too.

We hear that all the time, don't we?

Well, that or the student pay, and the parents like, well, I guess I have to pay it. And then they're frustrated. I mean, like, it's just. It ends up being this, like, tangled mess relationally. But whose responsibility, once it comes due.

Whoever promised to pay it, morally, if the kid promised to pay it, then they should go back and pay it. They're not legally liable. So if you. If the kid. If you said mom and dad, if you take this loan out so I can go to the college of my dreams, then. And mom and dad are stupid enough to go do that. Then they sign the note, they're legally liable. But you made a promise to them to pay it. That's you keeping your word. You go pay it. Okay. Mom and dad took out the loan, and nobody ever said anything to nobody. And then mom and dad come back later and go, you need to pay for your college. No, I don't. I didn't tell you I'd pay it, and I'm not going to pay it. So there's no moral contract, and mom and dad are up a creek. Bottom line is you can avoid all this by staying away from the stupidity completely. No. Student loans of. Of any kind are good. In no freaking circumstances. Parent plus loans are stupid. That'll help you. Yeah.

There you go.

It's hilarious to me that when people are stupid about education, that's an oxymoron, isn't it? We've lost our stupid minds on the subject of education.

I will say. Do you feel like in the most in recent years, in the last two years or so since COVID I feel like people have woken up to this, though. I think that there. Yes, I think that there has been a backlash against just collegiate in general. Like, just every. I mean, I think people are.

Higher education has gotten a backlash in general.

Yeah. I just think that some of it.

Was they wanted to charge you the same amount while you were. While they wouldn't let you come to campus.

Yep.

And made you work, made you study remote, and they want to charge the same amount. And everybody went, well, listen, I was already getting ripped off, and this is really screwing me. I don't think so. So. But, I mean, yeah, I think it's waking up. And I hope that borrowed future, our documentary that was award winning and highly viewed, had something to do with it. If you haven't watched that, you can watch it on YouTube, free, and many other streaming services as well. But it'll blow your mind how crooked and backward this whole student loan thing is. And the politicians, you guys, you congresspeople. Somebody ought to just smack one of you. Y'all are just. It's unbelievable. Student loans are horrible. We need to forgive them while we continue to make them. That's so intellectually dishonest. If they suck and they hurt people, why don't you stop it? Hello. The poor little victims of the student loan is. And you keep making them, and you're the villain. Congress. It's your fault. If you just stop it, nobody would have student loans. That'd be an awesome thing.

And the universities would probably lower tuition because I promise you they would.

Because people couldn't afford to pay it. People would wake up and go, wait a minute. This is like real money in my hand that I earned. I'm going to make better value choices about what I study. I'm not going to study left handed puppetry and pay somebody $85,000 a semester for that and call it but an Ivy League education. And I'm furthering my thought patterns. Oh, bull crap. You're just shoveling money out. And by the way, it was my money because I'm the taxpayer and now you're not paying it because you got a degree that's worthless and you're a barista. And so that's what happens. It's just the whole stupid thing is a scam. And so higher education is to blame. The congress is to blame. Weak parents that won't tell their spoiled freaking children no are to blame everybody in this thing. And you used to say it a thousand years ago, before we had borrowed. Before we had borrowed, featuring all of it out. You said, we don't have a student loan problem. We have a parenting problem.

Because you talk to these college students, to your point, that graduated 21 years old with 120 grand in debt to not an Ivy League. I mean, they're charging insane money now, and they want to go and be a missionary or do something where they're not making a ton, but they got all of this debt. And I'm like, how did your parents direct you? Well, they didn't talk to me. And you're like, oh, my gosh. An 18 year old is sitting here making a decision that's going to affect them for the next decade of their life, and a parent didn't step in and at least have the conversation. Nothing is being said, or we get a call.

Like my daughter told me she's going to this school that we can't afford, so we're going to have to take out student loans. See, there's the problem because I love Rachel. But when Rachel was 18 and we were spending my money, she didn't tell me nothing. I told her some stuff, but she didn't tell me anything. That's not how this works. That's backwards.

So there wasn't much dialog.

No, there wasn't. It's like, you're going to go to this school and I'll pay for it. That's pretty much how it went. All three of them went to the same school. The dialog was, if you take all these classes, you graduate in four years. So take the freaking classes.

Yeah, that's fair. Cause. Yeah, and I did.

That was the dialog.

And to be transparent, you guys paid for our education, but we had to stay in state.

Yep.

We had to take in state tuition, and we had to graduate in four years. If you went four and a half, you had to.

And you had to freaking behave.

And if you did. Yeah. And if you went out of state.

You don't get to go off the reservation and get my money. That's not how it works. I'm not gonna support your freaking insanity that some communist professor told you to engage in. Not gonna do it.

You know, I went partying in my team. I went partying. In college, if you went off the reservation, that meant partying, not.

Well, I'm talking about losing your freaking mind. And, you know, you're. I'm gonna. You're confused what you're there for. You're there to take these classes, to get this degree. And if you take these classes and pass them, it's magical. You graduate in four years. And the. We go. We're sitting in the orientation at the University of Freakin Tennessee where the kids went. And I went and. And they said very proudly, we have a 57% graduation rate. Of the people that are sitting in this room, 57% are going to graduate. And I'm thinking to myself, I almost raised my hand and said, if they make a 57 in class, don't you give them an f? You wouldn't be bragging about that. That's called failure.

Oh.

And then they pipe up and say, and only 20% of the ones that do graduate will do it in four years. And I wrote across my. My oldest daughter's little orientation packet, so have a freaking plan in black magic marker while this idiot was on stage telling us this. I mean, how are you bragging about a 57% graduation rate? That's failure.

And this is another lesson that you take out loans and you may not even get the degree, and you're paying money back for a degree you never received either.

43% of the time.

Yeah.

Apparently you don't get the degree.

Oh, well, Brandon from Maryland, question of the day. Hope that segment, that was for.

Well, I mean, really, that.

Guys, I know, I know it's hard.

You can go and to college debt free. You choose a school that is reasonably priced. It's typically an estate school. Yeah, but $12,000 a year will put your little butt in a state school right now. 14. Yeah.

I mean. I mean, community college, it's getting worse and worse.

It's worse.

It is.

Okay, go. And you can go.

It's not gonna be fun.

I mean, for free, in most states, you can go to a community college.

Get your prereqs done. Yes. I mean, there's a plan to go about it, and you're not the most glamorous.

You're not studying anything that matters in the first two years anyway, usually.

Yep. Yep. So there. There is a. There is a plan. And it probably doesn't look like the shiny plan that you always.

Here's an idea. Get a degree. It'll help you get a job.

Whoa.

That was insightful. This is the Ramsey show.

Hey, guys. Are you ready for the secret to help you reach those money goals that you've been dreaming about? It's simple. You got to get on a budget. With our budgeting app, every dollar you'll get intentional with your money and build the habits that will make those dreams a reality.

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To that retirement home on the beach. Download everydollar for free on the app store or Google play. Remember today, download every dollar for free on the app Store or Google Play today.

Rachel Cruz Ramsey, personality, is my co host today. Thank you for joining us, America. The best way to make the most of your money is by telling it what to do, creating and sticking to a monthly plan known as a budget. The dreaded b word. Every dollar needs a name. Every dollar needs a mission. Every dollar needs an assignment. So we named the world's best budget app, every dollar. It's the every dollar budgeting app. Tens of millions of people have downloaded and are using the app. You can keep a pulse on your spending, make progress on your money goals, tell your money what to do instead of wondering where it went. Pretty amazing, guys. Download the Everydollar app for free in the app Store or Google Play or even@everydollar.com dot free. Jarrett is in Indianapolis. Hi, Jarrett. How are you?

I'm doing good. How about you, Dave?

Better than I deserve. What's up?

This one give a quick shout out to mister Haney. He put me on the Babe Ramsey show seven years ago in high school. So I just want to give a quick shot to him. He's been amazing, and he's the reason I know you, man. He's awesome.

Love a good high school teacher. Good stuff, man. How can we help today?

Yeah.

So my question kind of comes more long term than short term. So me and my wife were kind of thinking about buying the house, like, whenever we kind of get settled in with the economy and everything. And we're just trying to think about it long term because she wants to be a stay at home mom, which obviously, like, would take away her income. And we've talked about it. She would be open to doing a part time job, but probably not full time, you know, with the kids and everything. So we were just curious on, like, how do we save up for a down payment on a house whenever, like, that down payment, like, it would be saving with two incomes, and then we'd go down to one once we move in. So I'm just trying to avoid being house poor, honestly.

Yeah. I mean, I would just do the math that you're. I would do the math on one income versus two. You could save up the down payment pretty fast with two incomes. But once you guys move in and you want to go down to one, I would make sure the formula worked with that one income. Do you guys have kids now?

No. No. It's like very long term. We're just trying to plan ahead as much as we can so that when that moment comes, we're like, you know, we're ready for it.

Yeah. So Rachel's right. Run your house payment on the remaining income after she comes home being no more than a fourth of your take home pay on a 15 year fixed.

But I wouldn't do that now.

I mean, you guys today, but when you're doing the purchase.

But you don't have kids right now.

Yeah. And so, you know, and we don't know what you're going to be making.

Yeah, that's what I was going to say, too.

So it's not what you make now. So right now, your job is stack cash. Cause here's the other thing. The more down payment you put down, the bigger a house you can buy with that exact mortgage. Let's say that at a fourth of your take home pay, you can afford $250,000 on a 15 year at your then income, whatever you're making at that time. And she comes home with and stays home. Okay. Then, you know, obviously $250,000 is the loan amount. But if you had 100,000 saved, that means you're at 350. If you got 200,000 saved, you're at 450. And so the bigger the down payment.

The bigger the house or the bigger, you know, that you put down on the house. So the less the payment a month.

You take out less of a payment than the formula allows. But Rachel's right. You just need to be doing for today your job. Stack cash. Then just be cognizant when the purchase time comes to run the formula based on the remaining income. Because if you run the formula based on a fourth of your take home pay with her income and then she comes home, you are going to be house poor. That's going to strap you, and that's not going to work for you. Travis is in Buffalo. Hey, Travis, what's up?

How you doing?

Better than I deserve, sir. How can I help?

Well, I was calling basically because, you know, I've heard it said, you know, a lot of times, basically, in summation, that your number one wealth building tool is your income.

I say it all the time.

Right now for the person like myself, I'm on the lower end of the income ladder. I'm bringing about 40,000 a year or so. And I've been paying attention to what you've been saying and, excuse me, and I was thinking, like you talked about mutual funds and investing, and I have limited to no knowledge. So I was wondering how somebody, maybe in my position, could start to build towards retirement.

Okay, yeah.

Well, I can say this first and foremost, I think the phrase, and you correct me because you say it, but the idea that your income is your largest wealth funding tool because your income, Travis, the reason we say that is because if you use your money for you, meaning for your investments, you're going to be earning interest for you, versus if you have two car payments and a student loan payment and all these payments debt, and your income is going to those things, and then interest on top of that, paying for the bank, you're, you're making the bank wealthy versus making you wealthy, if that makes sense. So I think it's, I think it's less about the exact number of your income and it's more that philosophy of, hey, I'm going to use my money regardless of income for me and making myself wealthy and not the bank.

Toyota motor credit. Being wealthy is not my concern. My concern is my family building wealth. And so I'm not going to give Toyota Motor credit, a car payment or whatever bank you want to name or car company you want to name. So how old are you, Travis?

I am 41.

Good, good for you. What are you doing?

I run, I manage a restaurant.

Good for you. Okay, and how long have you been in the restaurant business?

About twelve years.

Good for you. It's hard work, man. A lot of hard hours too. And you put up with a serious amount of credit. All right, so our goals, what we teach you is a process called the baby steps, which is to first, have a $1,000 saved as a starter emergency fund. Then second, become debt free. Everything but the house using the debt snowball. Third, build an emergency fund of three to six months of expenses. And then fourth, start investing 15% of your income. In your case, if you had no payments but a house payment and you save 15% of your income, well, 15% of 40,000 is 6000. That's $500 a month. If you invest dollar 500 a month from age 41 to age 61, you will be a millionaire.

Wow.

And that's if you never get a raise and I suspect you're probably going to get a raise. I suspect if you can manage a restaurant in Buffalo, New York, you probably could manage a better restaurant in Buffalo, New York, that pays 75,000 instead of 41. So some career goals are probably going to cause you to make more throughout your life. I doubt you're stuck at 41 in perpetuation. It's just where you are today.

Yes. Yeah, I appreciate that. I mean, I should point out, though, I mean, I don't know if this would matter, but as of today, I have no outstanding debt.

Good. Okay, then you're on your way. You have an emergency fund of three to six months of expenses.

Oh, yeah? Yes.

Good. How much do you have saved?

About. Well, in the savings account, I got about 45,000. A little bit more, and then.

Excellent. You are on your way, Mandy man. Way to go. Way to go. Do you have a restaurant?

Well, I didn't. See, when Covid came, I was with a financial advisor. And, no, the restaurant doesn't offer direct, unfortunately. But when the market collapsed, she advised that we should postpone, maybe looking into investing. You know, you know the beginning phases of that.

Yeah. Okay, so let's get you. Let's get you somebody set up to do a Roth Ira for you and your wife, and let's get going. Going. And let's get $500 a month going in minimum, and it's 15% of your household income. So if you're married and she makes money, that's part of the formula, too, by the way, and that accelerates things even more. But if you want to know who we tell people to go to in your area, just go to ramsaysolutions.com and click on Smartvestor, and you'll find a Smartvestor pro there that has the heart of a teacher, and they'll sit down and show you the numbers I was just talking about. You already know how to live on less than you make. You don't have any debt. You already know how to save money. You have $45,000. You're already a champion. We've just now got to convert some of those habits into making you into an investor, not just a saver. And when you do that with your Roth Ira, if you'll do that every stinking month for the next 20 years, you'll be a millionaire. Promise. So, folks, the numbers are $100 a month, say, from age 25 to age 65 is 1,176,000.

Now, he's 41, not 25, but he's at $500 a month, not $100 a month. You following my math here? I hope you are. I didn't just dream that number up. It actually ran through my little brain. This is the Ramsey show. Live from the headquarters of Ramsey solutions. It's the Ramsey show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality number one best selling author multiple times over. And my daughter is my co host. Today, open phones, a triple 8825-5225 Sarah is in Fresno, California. Hi, Sarah. Welcome to the Ramsey show.

Hi, Dave. I'm so glad to speak with you. I was hoping. Help me with some situation. I have so much. There's just a mounting of stress, death. I don't know how I. I don't see a way how money. Get rid of this. I've been listening to you for a couple weeks now and getting familiar with your baby steps, but I don't know how I'm gonna be able to climb out of this. This pit. Hole that I dug myself into.

I'm sorry. Tell me about. What kind of dad have you got, Kelly.

I have over 165,000 in unsecured debt. That includes cars, personal loan, credit cards. I. Yeah, yeah.

Give me. Give me a little breakdown. How much do you owe on your cardinal?

I have three cars. One is 45. 45,000 I currently owe. I have a $31,000 car and a $14,000 car and a 14 or a 40. 14,014.

So 45, 31, and 14 on cars. So I take it you're married.

Yes, I am. I have $67,000 in personal loan. I have 20,000 credit card. I don't know what I must have. I don't. It just occurred in, like, two years after I had my baby. I just. I guess I went crazy, and I.

Why do you have three cars?

The first one, it was a very old car. I had over 20 years, so that one died. It was over 200,000 miles. So I went and got a car, a van that kids. And then I should have. Had I found you earlier, maybe I would have not made all these decisions, but.

I mean, you still owe money on the car. I guess they. The dead one sitting in the driveway.

I'm driving it.

That.

That's my. That's my personal car.

Your dead one?

You know, work.

The dead one is.

Yeah.

Oh, so it's running. It didn't die.

It's really dead.

No, you drove it to work.

Oh, no, that. That's my new car.

No, I'm asking what happened to the dead car. The 14,001. Where is it. Oh, no, no.

I am so sorry. The one I got to, the old one that I had over 200,000 miles, that one is still sitting on. In the driveway.

That's what I said. That's. You have a dead car sitting in the driveway that you owe 14k on?

No, I don't owe anything on that one.

Okay. What's. What's the third car you owe 14 on? So you have four cars?

Yeah. One debt, three that I still own loans on. One is for my daughter, and one is my husband, and then the van is mine.

Okay.

How old is your daughter?

She is in college right now.

I see. Okay. And how much do you make, honey?

I gonna. I make over 100.

What does your husband make?

My husband makes about 35. So our combined income is. Last year was 156, I think. And this year is probably maybe the same. I'm not working as the, like, you know, full crazy load. So it's gonna be roughly around there.

How do you think we can best help you, hon?

I don't know. I. Listening to your show, watching your show on YouTube, and I've seen that you've helped out a lot of people, and. I don't know, thinking of maybe just following bankruptcy, but it.

You're not bankrupt. You just gotta stop some of this. You just gotta stop some of this.

I don't know if I should return the car or. I don't know why.

Slow down, slow down, slow down, slow down.

It's just so.

It's overwhelming. It's overwhelming. Breathe a second. Okay, take a breath. Take a breath. So here's what we gotta do. Are you guys ready to turn your life upside down to keep from feeling this way?

I am.

What about him?

I think he is, too. And I just need to get out of this. I make him about. Around eight, around close to 9000 a month. And all of those money goes.

Goes to car payments.

Is everything in that house?

You guys just buy a car every time you change clothes? You guys got to quit buying cars. You need to sell some cars. Okay. Okay. So the dead car in the driveway should be sold immediately. And you need to sell the other two and get you two $5,000 cars that you pay cash for. You got. You got $2,500 a month going out in car payments.

Yes.

Yeah. Yeah. No wonder you're broke. It's sitting in your driveway. All your stress is your cars. Because the personal loan and the credit cards came from the fact that you didn't have any money because you gave it all the cardinal company and so you went and used credit card because you're broke, right?

Okay.

Is that right? Okay. So you're gonna have to sell some cars, Sarah. Okay. You have to get out of these stupid cars. You cannot afford them. They're killing you. They're causing you to be on national radio crying, you need to be rid of these cars. Amputate the van. It leaves. You need to get rid of these cars and the one in the driveway. I mean, you just can't keep collecting vehicles and be anything but broke. And that's what you guys have been doing, so.

And a conversation with her, with your daughter that she's not. You guys can't afford a car, so.

Yeah, she can't either. She's gonna get a job while she's in college and start paying the payments on that 14, or we're gonna sell her cardinal.

Okay.

Yeah. Yeah. Rich people give their kids cars. Not broke people.

Okay.

And you're broke and stressed and telling me you think you're bankrupt. You don't give a college kid a car when you think you're stressed and bankrupt. So you're gonna have to undo some of these. And it's gonna be painful, but it's gonna be less painful than the way you feel right now because you can't even breathe right now.

No.

No. I'm sorry, honey. I've been where you are. It's no fun. But I will tell you this. I can show you what to do. And your life is going to be hell for the next 18 months, and then you're going to be free. It's going to be very uncomfortable for the next year and a half, and then you'll be free for the rest of your life. But you're going to sell everything in sight. People are going to be mad at you. People aren't going to like you saying no so much, and I don't care. And you can't care anymore. You've been trying to fix everything for everybody, and you just run around, buy stuff. You got to stop it.

Yeah. And hold on the line, Sarah. Christian will pick up, and we're going to get you fpu the nine lessons. And you and your husband need to sit down this weekend and binge them. Watch all of them.

Yes.

And do a budget, and we'll give you every dollar, every dollar premium for that. And sit down and control these expenses as well. And that's gonna be cutting your lifestyle drastically.

You live in Fresno, one of the most expensive places to live drastically. Cut your lifestyle. If you're listening to this show, you know me as Dave Ramsey, the money guy. I help people get out of debt and build wealth. But I've also been running a small business for the last 30 years. I know what it's like to be a new entrepreneur putting out fires all day. And I know what it takes to become a vision casting CEO with a business that runs like a well oiled machine even when I'm not here. If you're a small business owner, I want to give you the system I use to grow my business. From a card table in my living room to a 300 million dollar company with over 1000 team members. The entre leadership system is the business owners roadmap that takes the guesswork out of growth. It'll help you assess where you are right now and take the right steps to grow your business. To start using the entre leadership system to grow your small business, download our free getting started guide today. Just go to ramsaysolutions.com business guide. Rachel Cruz Ramsey, personality, is my co host today.

Open phones at the. So apparently when I am out on vacation, you guys take calls and the people commenting and on YouTube don't think I would have given the same advice you give or something like that.

It will happen every now and then.

Which is usually wrong, by the way. I mean, you guys are very consistent, just like I am.

Yeah, I mean, yeah, some of it's a very black and white issue, right? What do you do? You sell the car, you know, all of it. And then sometimes you get a call that you're like, oh man. I mean, here's what I would do in your situation. I don't know if Dave would do this, but this is what we would do. You and George had one about an elderly lady a few days ago that y'all went back to his call. So I told Dave today, I was like, I want to go back to a call Ken and I had because it's gotten close to like 2 million views on Instagram. We clipped some of it.

Good lord.

And in the comments, people were very opinionated that we gave the wrong advice. And so I was like, well, and everyone's like, I wonder what Dave would say because he sells, he says, you know, rice and beans sell everything and the kids think they're next. You know, he's on this, you know, rampage against debt and he would not have probably given this advice. So I asked James, did you clip it? James? Okay, we're going to play the clip and I'm just so curious if you agree with me or nothing.

My daughter is 22, and she just graduated from college with some student loan debt. And about a year ago, she was able to get on the pre sale and buy three tickets for her, my older daughter, and myself to go to a Taylor Swift concert in Indianapolis. We got him for, like, dollar 209 apiece. So now I'm seeing these resale.

Oh, it's crazy. Oh, it's crazy.

It's insane.

Yeah.

And so I told her, like, why don't we sell those tickets? And you can knock down so much of your student loan, but you'd be so far ahead. She says, absolutely. It's non negotiable. It's a bucket list item. She's like, probably you, Rachel a swifty. And this is, you know.

And it's her money, right?

No, it was my money.

Oh, okay.

It was my money. So I paid for them. But, you know, I mean, this is. And for me, too. I'm looking at, like, you know, she's iconic. I would love to go to her concert. My daughter. Of all the people that she could take. She wants to take her sister and me. You know, I mean, that's great. It's going to be a fun thing.

What would your. What would your take be? What, Rachel? Now walk us through. What do you think you can make on these tickets?

I'm thinking average out between three, four grand, easy.

Yeah.

Per ticket.

I get it.

So her student loan debt is 24,000.

And she could lock it in half.

And that's what you would want to put the money towards?

Absolutely. 100% of it would go to there.

Would you be putting 9000 plus dollars towards her student loan if you hadn't bought these tickets?

I would not.

I wouldn't resell these tickets. Here's the deal, Jill. You weren't planning to cut a check for $9,500 to put on your daughter's student loan ever?

I was not.

So my whole point is like, a windfall, right?

If I. If $9,500 fell into my lap, I might do that.

I get it. But this is your daughter, and it's a once in a lifetime concert.

Oh, yeah, I agree. You go, Jill, go to the concert.

You weren't gonna do this anyway. And I think your daughter said, absolutely no way. And I think it creates an unnecessary tension. She's 22. She needs to pay the thing off herself. Anyway, there's a lot of reasons I want our audience to know. I'm not just. I just think when I look at something like this, this is about the.

Emotional, not the Rachel I fully expected. You to be a swifty. I'm very disappointed in Ken. Anything having to do with Disney or Taylor Swift, Rachel's completely on board.

So I was shocked that Ken was.

Like, he just jumped in there as a swifty.

I was so happy about it.

And listen, I gotta tell you, I'm a huge admirer of what Taylor Swift has built. I do not. I'm not a consumer of her music, but that's just because I'm an old guy and, you know. But she's amazing performer, business person.

Yeah.

What she has built is iconic.

Yes.

You have to stand back and go, wow. Regardless. I mean, just, we're in the entertainment, the broadcast world. Much smaller degree, obviously, and nobody sell my tickets for 14k. But the. But, but, yeah, but that's okay. So it's not now, but. And, you know, when I try to think about things like, where, is it hard for me? Because what would. Because it would be hard for me personally. Like, if a guy calls up and he's got a bath, he's got a ski boat. Okay. Which I love my Mastercraft ski boats. Okay. That Mastercraft is the best ski boat. I love them. And telling a guy to sell his Mastercraft to get out of debt is very hard for me.

Yes.

So for you, telling somebody to sell a Taylor Swift concert or avoid a Disney vacation is very hard.

Okay.

Disney.

I could put. This is like a once in a lifetime thing.

Oh, whoop de doopdy. It's a concert.

If you had a. Here's this. If you had.

By the way, it's a ski boat.

I'm putting it in perspective for you, though. If you had a trip booked with Daniel and his son Eli, you got. Because this is what it was for her. Right. A trip booked, and you had planned it out. Daniel had student loans. We can go here for a second. Daniel had student loans. No. And you could sell the trip for three times from what you bought it for. Would you do that and have. And put it towards Daniel's loans?

The nuance in the call that does change the answer for me is she gave her daughter a gift of some money. $600 of tickets. No, she gave her daughter $600, and the daughter bought the tickets with it.

Yeah. For the tickets, though, she gave her.

So she gave her a gift. So she's no longer in control of this.

Oh, I hear what you're saying. Yes.

So the mom is not in control. The daughter is in control of it.

Correct.

And she bought tickets. Now, if the daughter called me and said, my mom gave me these tickets, gave me $600 to buy these tickets, and I can sell them for $12,000. I would ask her, if you had $12,000 sitting in the middle of the table and you didn't have Taylor Swift tickets, would you put it on your student loans or would you put it on the things? And I would tell the daughter to sell the tickets, but I'm not going to tell the mom to renege on a gift.

Yes. Yes. Okay. That makes sense. That's kind of what I'm saying.

That's a control issue. When you give someone a gift and then you try to take it back, that's not a gift. Gift. And there's some politically incorrect things we used to call that. Okay, you can't say anymore. But the. And shouldn't. But anyway, taking something back after it's a gift, you shouldn't do that. Right. And so the. And I would never recommend to someone to do that.

Yes. So for the mom.

So. So the. The mom is who called you? You tell the mom, I would advise the daughter to sell the tickets, though.

Yes. So if it was the different person in the situation calling. So Daniel called and said, I'm in.

Debt and I can buy this for three times.

No. And I can sell these tickets from a trip that I have planned with my dad and my son. Should I?

Yes. Yes. Because let me just tell you, I mean, what is more important in the scope of your entire of the next 50 years of your life? Getting a student loan paid off or going to a Taylor Swift concert?

I don't know. The memories are forever.

No, they're not.

Yeah, they are.

I remember. I don't remember a lot of the.

Concerts I went to, I went to for other reasons. For other reasons, Dave.

No, just because it was a long time ago. I can't even tell you that. All the concerts I didn't go to.

But I remember my first concert with mom and Denise. Okay, that's wonderful. And then you still think about it to this day. Celine or woman.

And that's worth how much? Not much. Probably not even what we paid for Celine at that time. Because that was a Vegas thing, if I remember.

No, no, she came to. She came to Nashville.

Oh, she was.

Yeah. This was late. This was way back in. Yeah. My heart will go on days.

Okay. Titanic.

I know, but. Okay, but. But there. That's what's hard about life. That's what's hard about life.

There's a trade off. There's always a trade off. And you just have to make a value to decision. And one way you make decisions is if I had that amount of money in the middle of the table, if I have $24,000 in student loan debt and I wake up and there's $12,000 laying in the middle of my kitchen table, do I go buy Taylor Swift concerts or put it on my student loan? You put it on your student loan. That's not, it's a no brainer for me. Now that's talking to the daughter. But I'm never going to tell the mom to go back. So I'm not really going to say your old advice was wrong, but it's a great, it's a great discussion, particularly because we get to discover that, to my great disappointment, Ken Coleman is a swiftie. This is the full letdown of the call right here. I'm just saying.

So good.

He just jumped right on it. He didn't even let you do it. He's like, you should go. Just go. I couldn't believe it's Taylor freaking Swift. You should go.

It was so great. It was so great.

And by the way, by the way, we all are fans of Taylor in one way or another. Rachel is a worshiper of Taylor. This is the right Ramsay show. Hey, folks, there's a lot of half baked investing advice out there, but here's what you can do to get more confident about this stuff. Check out the Smartvestor program. Smartvestor connects you with local financial advisors who have the heart of a teacher. They'll help you level up your knowledge and build a retirement plan based on your goals, not theirs. Go to ramsaysolutions.com smartvestor to get connected and get more confident about your plan. That's ramsaysolutions.com smartvestor.

Ramsey Solutions is a paid, non client promoter of participating pros. Learn more@ramsaysolutions.com smartvestor.

Buying a home, selling a home in this market, if you do it wrong, it could be a curse and not a blessing. And real estate's not always a blessing. It's only a blessing if you do it right and you do it in the right way, within your own finances. We'll help you do that. And one of the things we've learned to do is to identify high octane, high protein. Get her done. Real estate agents. Now, this is not your uncle Charlie, who got his license three weeks ago and hadn't sold a house yet and wants to sell your largest asset. No, you don't use uncle Charlie. Not if you're smart. You just say Uncle Charlie. I love you. You. But you're not my real estate agent. No. Or your little friend down at church who's never done anything. You got no, no, no. You get someone that knows what they're doing and has done a lot of transactions to help you with your deal, and then you'll get your deal done and you'll do it right. We call them Ramsey trusted because we have vetted them and they are trusted by us. So if you want to find the Ramsey trusted real estate agent for free, that'll help you buy or sell the way Ramsey teaches and that are professionals and that are high producing agents, just go to ramsaysolutions.com agent Katherine's in Salt Lake city.

Hi, Katherine. How are you?

Hi, Dave and Rachel. Thanks for taking my call. I'm excited to talk to you.

You, too. What's up?

Okay, my question is, should we? Well, I hope this isn't my inner child coming out and maybe you'll have to talk some sentence to me, but my husband and I would like to buy a vacation home. And I'm wondering, in order to do that without debt, we would need to sacrifice part of our retirement for this.

Okay.

I wanted to get cake.

Okay. It would depend on the ratio. Okay. Because whatever we put into the toy is going to stop producing income. And what we have left has to produce enough income to make us all smile. So what's the size of your nest egg total?

Our net worth is 3.6 million.

Good. Okay. And how expensive a toy are we buying?

Probably four to 500,000.

I would buy it.

So you would sell an income producing.

Yes.

Real estate and buy it, or an.

Income producing mutual fund and buy it. And by the way, I have. Okay, I have a nice lake house. Really nice lake house. And it's one of my favorite. It's one of my favorite places on the planet. And not only that, I'll go back further. We bought that house for 104,000 in 2000. The lake house the kids grew up skiing off of the dock we put on at that time. And later on, we bought the little house next door, which was the same size, picked them up and moved them and gave them to the local sheriff's department for rehab houses and built a big house across where those two used to sit. And that's where we are now. We've been in that house since 2012. So we upgraded. So I've done it twice. The 105,000 felt like it was a lot more than the big house did. Did. But it was a big, bigger percentage ratio wise. Your ratios are fine.

What's the. I'm curious, Catherine. The 3.6. I'm just curious, what are they in? Is it because you mentioned selling an income producing all real estate, or is it two?

Is investment real estate, and then our home is about 530, and then 401K Iras is 770, and about 160 in the bank.

How old are you?

We're 54.

Okay. All right, so the only way to get out the money, sell one of the pieces of real estate, because otherwise, you'd be penalized on the 401k money. Yeah, that makes sense. Yeah, yeah, yeah. I would do it. I would do. Where's the property? Just curious.

It's in St. George, Utah.

Okay, so it's a mountain property.

No, it's. It's the red rock kind of desert.

Oh, got it. Oh, okay. Okay. That's fun. That's cool. Yeah, because, I mean. Yeah, but I'm looking at ratios. All right. So if you call me up and you told me you had a net worth of 1.5 million and your house was 500 and you want to put 400 into a toy, I would say no, because it would leave you with only one third of your whole net worth working for you. The rest of it's sitting your house and your toys are sitting. That makes sense.

Yeah, that's what.

That's why I answered it by ratios. And so it's a small enough percentage of your world that it won't keep your. It won't burn your world down.

Okay.

Yeah. You guys, you've done a very, very good job. Did you inherit a bunch of money? How'd you end up with 3.6 at 54?

We bought the total money makeover probably 15 years ago, highly indebted, and we worked our way through it. And. Yeah, so we came, actually, a year and a half ago and did our debt free screen, and we just. We never will go back, so.

Your baby steps, millionaires. Way to go.

What do you guys do for a living? Catherine? I'm just curious.

We both work at a university.

Yep.

Good for you.

Well done.

Yeah. Excellent. You're heroes. So, again, it's the ratios. That's what we're looking at. And another way of looking at that, folks, for Kathy, Katherine, is if you're going to buy a toy, if you're going to consume the money, okay. Which is what you're doing when you buy a vacation property, because it does not create income unless you rent it out. And if you have to rent it out, you probably shouldn't do it because it's going to drive you nuts. If you want to own rental property, own rental property. If you want to own a beach house or mountain house, buy it. Okay? But this idea I have to rent it to justify it means you're probably too broke to buy it. So anyway, the rule I use on stuff like that, if I'm going to buy a car or I'm going to buy a toy property or something like that, that's not going to create money, is if I put that amount of money in the middle of the fire pit and burned it, does it destroy my life? In other words, if we took four hundred k of your 3.6 and burned it, your life doesn't even change, other than the tears, right?

Yeah.

And that's. That's the way I'm looking at it. I mean, it doesn't. Your life does not change. I mean, it does not substantially change. You're 54, you have 3.6, which means when you're 74, you're gonna probably have $20 to $25 million net worth. And that's not going to change dramatically by this one purchase. And this purchase will go up in value. It just won't create income while it's going up in value. You know, the lake house has gone up dramatically. It's crazy how much money I made on that. And. Yeah, and you just add Dave Ramsey rumors to it. It even gets better or worse.

I don't know.

Well, I mean, it's just. People just make up stuff. I mean, my neighbor told me the other day he heard I sold it for 22 million. I said I would because it's not worth anywhere near that. Sold. Sold. So. But it's the rumors going around, you know? So anyway, yeah, Katherine, do it. You're in good shape. Great job. Buy the Taylor Swift tickets. Do it.

Dave's in a giving mood.

I'm just.

I'm just unbelievable.

Being so kind to. Oh, my gosh, everybody, do whatever you want.

But is there. Is there an element, though, that you run numbers? I mean, because you didn't hear in the scenario, but to say, okay, by the time you're 62, you're going to be in retirement age. You want to be able to have x amount coming in like that. Four to 5%. You know what I mean? Like, do you get granular with it, though? Like, this is a little flipping, but.

The ratios will take care of that for you. So in this case, she said they had 780,000 or whatever, 800,000 in their 400 case. Okay. If that's in good mutual funds, it's going to double every seven years. She's 54, so it's 61. That'll be 1.5. At 68. That alone will be 3 million. Just her 401K money not count. And the bulk of theirs is not in their 401k. Bulk of theirs in real estate.

Right. Right.

And the real estate is going to continue to go up, too, and create income. So you just run those numbers out, and that's how. That's how it can get to 25 million pretty quick with them, or 20 million. And they're also savers. They're going to continue to save. And they obviously, I'm guessing also that they have a pretty substantial income to create that in 13 years.

Right?

Yeah, they turned that around very quickly, pretty dramatically. So. They're rock stars, man. They're just. They touch down. You win the Super bowl. That's what it's for. And so you live like no one else. So that later you can live and give like no one else. You don't drive a hooptie because it's fun. You drive a hooptie so you never have to drive one again. It's not a badge of honor. You drive a hooptie, so you get a good car later. This is the Ramsey show, our scripture of the day, ecclesiastes 1010. If the ax is dull and its edge unsharpened, more strength is needed. But skill will bring success. Tom Brady said, to be successful at anything, the truth is, you don't have to be special. You just have to be what most people aren't, consistent, determined, and willing to work for it. I would say that I'm probably 80% to 90% in agreement with that. But it's hard for me to say out loud that Tom Brady wasn't special. One of the best quarterbacks to ever live in the NFL. I mean, there's no question he was special, so. But his work ethic and, you know, I don't know Tom personally.

I know Peyton, and I spent time with him. And what was special about Peyton? Not only is he a physical specimen, but, I mean, he's huge, but he's got hands like a ham, and so he has a different grip on a football than I do. I can just tell you that. Okay. But he also had one of the. He and Tom are both renowned for their film work, their commitment to proper exercise and proper care of their bodies, their commitment to the mental aspects of the game. They both had a work ethic that shamed everyone else on the team in both cases. And they were both iconic, some of the best quarterbacks to ever live. And again, I don't know that as much about Tom as I do about Peyton, but just looking in from the outside, I suspect that's true. Malcolm Gladwell said it in the book, outliers. He said, you need to spend 10,000 hours of excellent practice, meaning getting better each time you do the repetition, not just doing it over and over wrong, but 10,000 hours at something and have a little bit of a gift at it. It. To get.

To be Tiger woods, to get to be Brad Paisley at a guitar, to get to be Peyton Manning or Tom Brady with the football. You have to spend 10,000 hours to get to world class.

Yeah, because I think the argument would be you could spend 10,000 hours and never be that, because you're not.

I could spend 10,000 hours and never be. Never be that.

Right. But then I would also say that there's like, you know, athletes, athletic people in the world, in the history, but because of the work ethic and mental game, they never got there. Right. That they had the.

Because they didn't have the work.

Exactly.

Exactly.

Yeah.

Yeah.

Like, so it's. It's a both.

And aggravating is crud for coaches. You know, somebody who's got the talent and won't apply themselves drives you nuts. So. But, yeah, you have to spend and, you know, our situation is not different. I've got more, way more than 10,000 hours on this microphone. You're probably approaching 10,000 hours, hours on the microphone and on stages and so forth at this stage. And, you know, again, major nationally known brands, you look at our social footprint, the number of people that brand recognize one of us. If you were to do a survey on branding and so forth, we know what our numbers are, but I've done this for 30 years. So in this space, which is a fairly little tiny space, but, you know, that's where we. That's where I've applied myself and that's. That's where this comes out. So it's interesting. It's an interesting discussion. There's this combination between talent and sweat, and I think there are people that you could put them in front of a microphone for 15 years and they still would suck, you know, I mean, I think that's true. I think that's true about me in football, right? I'd still suck and I'm not.

I don't have that natural physical ability. Never did. Had a little bit, but nowhere near that stuff. Paul is in California. Hey, Paul, what's up? What's up?

Hey, Dave. It's a pleasure talking to you. How are you guys doing today?

Better than we deserve. How can we help?

So, first of all, I just want to say I took care of my mom for about seven years, and I used to listen to your show every day when we were going through chemo and all this stuff. And we had a ton of debt at the time. And your show seriously got me through it, just because I could see a light at the end of the tunnel of what to do in the future. And so I just want to say thank you genuinely, where I stand today, and I want to hear your thoughts. So I'll keep it brief, is I'm 30 years old, I'm getting married in August. I currently live with family, so not paying any rent. I'm purchasing a home in August and putting $150,000 down. My gross income is 180 a year. I have a $45,000 emergency fund, fully funded for six months or even longer. I have. In terms of investments, I have only r1 investment, which is apple stock. I have about $50,000 that I just never touch. It was something that I just wanted to purchase and I keep. My question is, now that I'm buying a home and putting a significant down payment, and I followed all the rules, I don't know where to start with investing and doing it with mental peace, because a few years ago, I made some money on Tesla, and that was, although it worked out great, I look at it now and it was just a super stressful time, and it almost kind of affected my own relationship, which is, she's amazing.

Now we're getting married. But my question is, where do I start with investing and how do I know how much to put towards paying down my mortgage versus investing? Versus retirement?

Yeah, I mean, it's a great question. And I think the bulk of the stress came, Paul, because all your eggs were in one basket. I'm like, you're not diversified when you were investing and still aren't with the Apple stock, right. The single stock way, it is going to be more volatile and it will be more stressful. And so when we look at investing in general, but specifically with retirement, it will be in more of a mutual fund aspect, which is 90 to 200 of those stock. So your diversification through it is going to give you more peace. And your outlook on it has to be different. You're not worried about what it's doing today or next year or in ten years. You're really saying, hey, I'm putting this money in and I'm not going to see it until I'm 59 and a half when I can take it out without penalty. And so it's a long game you're playing when it comes to investing, where it kind of just sounds. It sounds a little bit like you've played the short game. And so that mentality, I think, would shift and I think would lower your stress, too.

So, Paul, you're getting married in August. Congratulations. And you're closing on a house in August.

Yeah. Ten days before the wedding.

Did she pick out the house?

It was a mutual decision. We both wanted the. We both wanted the house.

Okay, so you didn't buy a house and then tell your new bride, Tada.

No, no, no. It's been a, it's been, it's been a journey we've been on to find the right home. It's a new construction, so it just ends up closing ten days before the wedding.

Gotcha. Okay, good. That solves number one problem.

Dave thought Paul was just taking over.

Well, he's a man on a mission. I can tell that. So the. Now you've been listening to us for years.

Yeah.

So you know the baby steps, right?

Yes, I do.

So you, you know that you don't have any debt and you have your emergency fund in place. And so that baby step four, we would tell you to do what?

15% for retirement.

Tada. There you go. That's your answer. You and your spouse are going to sit down, start putting 15% of your new combined household income. Yeah.

How much will she make? Or is she making.

She's a florist and she's starting her business. It's going to be about 25,000 initials.

Okay.

Okay. So whatever your household income is, 15% of that at baby step four goes into retirement. You don't have children yet, I assume.

No.

Then baby step five is moot. And anything above 15% going into retirement, you either consume it, you give it, or you put it on the house. And you probably ought to do some of all three. With the money above 15% of your income, you should not put 20% in and you should not be doing any investing other than retirement until your house is paid off.

Okay, so I appreciate that. I know you talk about smart investor pros. Is there a specific book? Because I follow all you guys and I watch. There's just a lot of content to consume. Just busy with life. But is there a place to go to understand what to invest in and kind of where to start doing it the right way? I guess.

Yeah. It's pretty basic. I mean, again, if you've listened to us this much, you've heard me talk about the four types of mutual funds. Growth, growth, growth and income, aggressive growth and international. And I picked mutual funds that hopefully have a ten year or longer track record inside your 401k. We're looking for Roth. We're looking for match first, Roth second, traditional third in good mutual funds. Long track record. And that's how I do it. It's not. It's really not much more than that, too. It. I'll send you a copy of the baby Steps millionaires book, which has a lot about investing in it because it shows you what the millionaires have done. And it'll help you and your. Because you're going to be one pretty quick at the rate you're going.

And well done, Paul. Even with your mom's taking care of your mom, and you've done it.

You've been stand up guy across the board.

Yeah, well done.

That puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the prince of peace. Christ Jesus.

Hey, guys, I'm Rachel.

And I'm George.

And you've probably heard our voices before on the Ramsey show.

And do we have a surprise for you.

Yep, we have our very own show, smart money happy hour, where we talk about pop culture, current events, and of course. Of course, money, George. It's a great show. And what else do we talk about?

So much, Rachel. Not enough. And yet too much. We talk about guilt tipping, because tipping is out of control and I won't stand for it anymore, which is why I'm sitting.

I'm glad you were taking such a stand.

And we also talk about something else I'm passionate about. Disney adults. Oh, George, why is it a thing?

Listen. Some adults still find the magic.

Sure. We also talk about toxic money traits and girl math. And if you don't know what those are, you have to listen to the podcast.

Yeah, there's a lot there, you guys. It's pretty fun.

We keep you relevant, is what I'm trying to say.

We help you out.

So pull up a chair to the happy hour you wish your friends were having. We promise you won't regret it. And if you don't have friends, we'll be your friends.

We will. We're great friends. So make sure to check it out on Apple, Spotify, YouTube, or the Ramsey Network app.