Live from the headquarters of Ramsey Solutions, it's the Ramsey show. Debt is dumb, cash is king. And the paid off home mortgage has taken the place of the BMW as the status symbol of choice. We help people actually build wealth, actually do work that they love, and actually create amazing relationships. Rachel Cruz, number one best selling author and Ramsey personality. And my daughter is with me today as a co host. We'll be taking your questions about your life and your money. The phone number is free, so some say the advice is worth what you pay for it. Triple 8825-5225 that's triple 888-25-5225 looks like Mario's gonna start us off this hour, and he is in Atlanta. Hi, Mario. How are you?

I'm doing better than I deserve, as you would say, dave, I'm doing great. Glad to be on the show.

We're honored to have you, sir. How can we help?

So the big point is fairly new. I'm not new to you, but fairly new to the show. And I'm really on fire and on board about just becoming financially free, debt free. The teachings that you and your team teach are phenomenal. And my big question is, I want to know the best way to get my wife on board with implementing some of the drastic changes that we would need to make in order to get. Get to that point. I make a pretty good. I have a strong income. The. I know all of our debt areas. I know the areas that. Where I feel like we're spending too much or overindulging, but I know that I'm going to get some resistance with the changes that we're going to need to make in order to get to where I know that we can get to.

Give me an example of one of the changes that you think you need to make, that you think you're going to get resistance on.

Some areas of convenience, like going out to eat a lot or ordering food.

How much debt have you got?

A lot of. Including house?

No, not so.

Okay. Credit card debt. I'm at about $15,000. Credit card debt. Student loans total around 75,000. And I have one car that's not. I have one car that's not completely paid off, and I think we owe 12,000 on that car.

And what's your household income?

175.

Yeah, that's a great income. So, Mario, what's your. What's causing you to believe that she's going to have a hard time with all of this? Is it comments she's made? Is it something that in your head, you just know her and you're, you know, you know what's going to be coming. Has she given you clues on it? Like, I want to know.

Oh, oh, yeah. So, yeah, yeah, absolutely. A comment she's made. There's other things that I've.

So why implemented so then for her in these conversations, what's the. What are her hesitations?

A lot of it has to do with our kids.

Okay.

Okay. So, like, for instance, I'll say, okay, hey, we've completely paid off this particular credit card. We're not going to use it. We're going to put it up. Interest rate is high on this thing. It doesn't make sense. And paying somebody to borrow from my future self, you know, I do all of that, and she's like, great, sounds good. But then time will go on, and I'll see charges on the credit card. And then when I say, hey, what happened here? Why did this take place? And it was like, oh, I had to do this. I had to make this decision and do this. And so it's just kind of like, you know, these things. A lot of times it's with the girls.

Yes.

You know, my kids.

Sure. And. And it's life. Right? Because you guys have not put systems in place for life to look different. So you're still keeping the credit card. We're gonna put this credit card over here, and we shouldn't touch it, but it's still there. Get rid of it. Get rid of it. You guys. Do you guys have a written budget that you have together, sharing an account, saying, hey, here's. Here's the line item for the kids. This is what we're gonna spend on the kids. Here's the line item for you. Me, food, out to eat. Eat clothes. Here's where every single dollar this month is going.

I've done all of that.

No.

Have you guys together? Have you guys together done that?

We.

Have we done that or have you done that?

So I have done it, and I've shared it, and it's communicated. This looks good. I'm on board. Let's do it. Let's run this plan, and we'll start running the plan and.

Okay.

Totally. So, Mario, I also think. I'm sure Ramsey has become a cuss word in your house, because a little bit of me. I'm fearful that you're using this against her, because I don't believe your wife is malicious. I think she's a great mom, probably a great wife. And so. So these things. Life is just happening to her, and she's reacting, obviously not in the way that you prefer or that even what we would teach. Right. She's going. Charging the credit card, but it's not malicious. And so. So I think that there needs to be a higher level conversation to say, okay, you and I together as a couple, where do we want to be? What do we want life to look like in five years? What do we want? What is our.

Why?

Like, does she have any level of pain or stress around money? Is she worried in any way? Like, I want you guys to.

Yes. Me. For the most part, I am the weights. I don't want to have to work until I retire.

100%. Totally.

And right now, I'm the.

Listen, listen.

She's a homie.

You're treating her like she's your teenage daughter. She's not a partner. She's not a partner in any of this. You're just bringing the budget and laying it down, giving some instructions about a credit card, and then you're shocked that she didn't do what you told her to do. She's not a partner. Rachel's right. You need to get above this. And the two of you need to sit down with the kids away or the kids in bed and say, we have $102,000 in debt. We make $175,000. That makes us stupid people. We need to change some stuff here. We're broke, and we make $175,000 a year. We have got to, as a couple, aim at something bigger than kids clothes. Lord Jesus, really?

Yeah.

Okay. And so we've got to have a big plan that we're going at now. Honey, I know, but this is him and his wife talking. Okay?

Yes.

We have to get on the same page. I do not want to be your daddy. I don't want to be your daddy. I want to be your husband. I need. I need, like, a grown woman beside me, helping me make decisions about our future.

She needs an input in all of that.

And then she gets input. And then, by God, when she gives input, it's a contract. Yes, but she has no reason. She has no contract with you now because you dictated it to her and walked away. And then we're shocked that she went and bought kids clothes on a credit card because she had no buy in. She had no buy in. None whatsoever. She didn't have a voice in this, and she has no belief in the overall vision. She was just going along with you.

Yes. And I would say this, too, just as an encouragement, Mario, that the conversations that I feel like Winston and I, the best conversations we have around money is not really even about money. It's more like, hey, let's just dream. And in five years, what do we want our life to look like? How old are the girls gonna be? What kind of car do we want to drive? What vacations do we take? What do we want to be giving to in general? Like, allow your numbers then, to motivate you, you, to your goals together as a couple, where you guys both want to go. And then the day to day plays into that. But kind of.

I mean, I'm looking at her, I'm going, I make $175,000 a year. I'm really not okay with us being broke.

I think that's crazy. Yeah, crazy. But also, there's a level. Yes, I know. But there's also a level, marriage wise, to get above it, to have a conversation.

I think it's all of that, I guess every bit of that. But I think you got to say, look, we're sloppy, we're disorganized, we're fat.

What can we do to help? Help you with life?

What can we do together to fix this? Hey, listen up. Everyone is at risk of identity theft. I don't care if you're a hermit living off the grid, listening to the show on a battery powered radio. All of your data collected by every company you've ever done business with. Lives online, your bank, your doctor's office retailers, the apps on your phone, the gas station where you have loyalty rewards. They all store your info online, making them ripe for a cyber attack or data breach. That's why I've been telling people for almost 25 years they need an id theft protection plan. And the only one I've ever recommended is from Zander Insurance. They monitor your personal and financial info, even your home title, and take over the work if you become a victim. It's the most thorough and affordable plan out there. I even have it for my family and our entire team. Visit zander.com or call 835. Rachel Cruz Ramsey personality, is my co host today. Parents, if you've got school age kids, the last thing you want is for them to be normal adults. Broke. You want to be weird, not broke like you.

And that's why you've already got them listening the Ramsey show in the backseat of your car, all that kind of stuff. We're 100% on board with that. We got tons of stuff to help you and your kids. Teachers packed into our back to school sale. One of the biggest challenges teachers face is getting students to actually engage in classroom conversations. Doctor John Deloney created classroom editions of his questions for human cards. They're made for elementary, middle, and high school kids. Help them build lifelong friendships and reel conversations at home. You can keep the fun and the learning going with our popular children's books and tools. The adventure pack family favorite that includes the new storytime collection. And if there's a teacher in your life or your kid's life, pick them up. A questions for humans classroom additions good icebreaker gets conversations going among the kiddos. Grab one of our family favorite children's products. Help out with all this. We're all there to help you@ramseysolutions.com. dot Evans with us in Winston Salem. Hi, Evan. Welcome to the Ramsey Show.

Evans hi, Dave. How are you?

Better than I deserve. What's up?

Well, me and my wife were on baby step three b, trying to save for a house, and we've got a chance to buy a house from a family member. She's my wife's cousin and not really like a close family member, but they're offering it to us at 3.5% interest on a 15 year fixed rate owner financing. And I've called around to the banks, the best that I can do is probably around four or a little over four. And so we, me and my wife, were long time listeners, and we just wasn't sure about owner financing or if that was a safe thing to do.

Owner financing is as safe as anything else. If you have a good attorney, draft the equip, draft the documents. It's not a land contract. It's an actual mortgage. And the deed of the house goes into your name.

Yes.

Okay. There's no land contracts at all. We don't do those. Okay. Now, the downside of the whole scenario, you're giving the, the other upside is you're gonna have a lot less costs involved, closing costs, other things that you're gonna not have with owner financing. So that part's all wonderful. How often do you have dinner with this cousin?

This is the first time that we've spoken to them and probably at their wedding about ten years ago maybe.

Okay. So you never see them. You're not mad at them, but you just, it's not a relationship you have.

No, this is not one that we have.

Okay. Because here's the thing. It's going to affect whatever relationship you have. The borrower is slave to the lender. When you borrow money from someone, you change your relationship from cousin to master.

Yep.

Okay. And so if you're, if your father in law loans you this money, I would tell you no, because thanksgiving dinner tastes different when you eat with your master. It will change the tone, the relationship of your. Between you and your wife, your. Her dad, all that kind of stuff. Never do that one. But this one is really. There's not much of a relationship here. This is almost like a stranger.

Yes.

And so I'm probably doing it.

Okay.

I agree. It's another one. Evan, in, like, just the. In. In most of the calls, though, when it comes to borrowing money from family, it's just an absolute no. But there's these exceptions like this.

This is so distant.

Yeah. Where it's so distant, and it's like there's not really. You're not going to be with them. You're not seeing them every day. You guys aren't chatting and talking, and there's not really much of a relationship hinder, because there's not much of a relationship. So. So in that makes.

Nobody's mad. We're not saying, but it's just a, you know, the thing is, if it absolutely, completely went bad and went sideways and everybody was mad, it really wouldn't change your life.

Right.

Yeah. And we're not calling that. We're not saying it's gonna happen, but the point being that, you know, if you borrow from your father in law, that that would you lose that relationship now.

I mean.

Yeah. Somebody. Somebody spending time with.

Yeah.

But, um, like, Rachel's got cousins that she actually has really tight relationships with. Right. That you would not do this. You would not do this deal with him.

I would change. Yeah.

Not a chance. I'm not changing because I'm telling you, man, the old joke is, if you loan your brother in law a, he never speaks to you again, was it worth it? Right. I mean, you know, so. Because it does change the relationship when you loan or borrow money. It just does. So. But the point being here is there's not much of a relationship to change. So that's. I'm doing it because it's a cheaper interest rate. Saves money. Make sure you have an attorney. Close the deal like you would any other professional transaction. Get title insurance, get an inspection on the house, get an appraisal on the house. All of those kinds of things you would do if you're doing a normal transaction to where you. No one's getting screwed here. No one's all very business like. And button up. All the documents are done. They're properly filed at the courthouse. A title company does the closing. You do everything right here. If you do all of that right, you're going to have lowered cost and lowered interest rate. And it's a good deal. Go get it.

There you go.

Matthews with us in Tulsa, Oklahoma. Hi, Matthew. How are you?

Great. How are you guys doing?

Better than we deserve. What's up?

I've just got kind of a career question, but I was going to give you a rundown of myself and my wife's financials first. I make. We're both self employed. No debt other than our home. I make about 120. She makes about 60. We owe 160 on our home. It's worth about three through zero. Five. And I actually sell real estate. Really looking forward to the reality check. And I'm just curious, should I take the chance? Because I have an opportunity to start my own brokerage, but should I take that chance with a baby on the way, with all the risks that we know come with starting your own company?

So you're a real estate broker now, making 120,000 a year?

I'm an agent, yes. I'm getting my license shortly. Yes.

Okay. How long you been selling real estate?

A little over a year.

Okay.

I'm 22. My wife's 22 also.

Okay. I was doing the same thing you're doing when I was your age, and I got my real estate license when I was 18. Okay. So I know what you're facing. One of the things you're facing is it's tough to have credibility with people to sell them houses when you're only 22. Right.

Yeah.

You got an uphill battle there. And having your own brokerage would probably help with that a little or it might scare them even more.

Well, see, I feel like I don't have as much of a problem with customers as I would with people working under me who have been doing it 20 years and think how young you are.

Right. From, like, a leadership perspective, someone respect.

Right.

Yeah.

And just with a kid doing October, it's like, do we take this chance when we're sitting pretty good right now?

Yeah. And we've got a real estate market that is twisting and turning in the wind. It's very unpredictable right now. I think the market's gonna slow down. I don't think house prices are gonna go down. We've already said that out loud, but I think it's gonna slow down.

So my. Yeah. My only concern would be, Matthew, you got into the real estate business in the best time ever. So, like, what you made then, not saying you can't make that again by any means, but it was probably easier to make what you made then. Then it's going to be easier to make that same amount in the next coming years because of the slowing and softening of the market.

So what's your wife say?

She says do it because it's a, it's a pretty good option. I mean, it's a pretty good opportunity with a business partner who has a very good end.

I'm sorry, a business partner. That's new. That's new information.

Yeah. I would be opening it with a, with a partner.

No, don't do that.

Oh, really?

No, you're already married. Yeah, that, listen, the only ship won't sails a partnership. The number of business, small business partnerships that survive one decade is very close to zero. Almost none of them do. We work with Entrez leadership businesses, tens of thousands of them, and have for decades all across America. And one of the biggest problems they have is a stinking partnership. It's gone sideways. Now. The exception is medical partnerships and law partnerships, but they're structured differently anyway. It's a whole different setup. But two guys opening a real estate company, two guys opening up a heat and air company, two women open up a nail salon. This is just a, it's just an, no, no, no, no. You don't, you don't need a partner. Okay. So what I, what I'm going to tell you is, is scary for me to tell you because I believe in getting after it. When you're young and you're an ambitious and smart young guy, and I hate to tell you not to do something, but while you get another 18 months is going to give you a lot of information about life, a lot of.

Perspective, especially if it's your first baby, too. There's just a lot of change.

Let the baby get born. Let's get past some of this rough patch in the real estate. Let's see what's going on. You save up, you open up with your money. Doesn't cost that much to open up a brokerage firm. If you open it up when you're 25 instead of your 22, you're going to be just fine.

Little patience.

Yeah, I think it's going to be good for you. 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 there's no commitment. Go to healthtrustfinancial.com. health trustfinancial.com dot Rachel Cruz Ramsey personalities. My co host today, Emma, is in Pittsburgh. Hi, Emma. Welcome to the Ramsey show.

Hi, Dave. Thanks for taking the call.

Sure. What's up?

Okay, so my husband and I used to own a bunch of rental properties, and we ended up going bankrupt because we listened. We had your book and somebody else's book, and the other person's book said it was okay to have debt whenever you're renting. We ended up being over $100,000 worth of credit card debt, you know, just because things were breaking in all of the houses.

Yeah. And you had no margin because you put nothing down. Yeah.

Right. And we have a family of six, so there was a lot of mouths to feed, and I had some health issues, and I was homeschooling those four kids, so there was only one income.

And y'all lost all that.

We. We did lose all of it, yes.

When was that, Emma?

That was 2017.

Yeah, me too. It was 1988. Yeah.

Okay. Well, we got out of that, got to the point where we could buy another house. And now, as I speak, we've got $16,500 worth of credit card debt, which I'm trying to pay that down. I've got a spreadsheet where we're down $3,538 in the last six months. But still, the total debt is, with a $5,000 balance on a car, is $223,480.

That counts your house?

That. Yes.

How much of that? I mean, that's all your house except for you got the little credit card debt and the. You got $20,000 plus your house, right?

Yeah. Yeah, that's about it.

And what's your household income?

It's right now sitting at 95.

Okay. And so what's your question?

So my question is, I'm finding my emotional relationship with money is bad. You know, the love of money is the root of all kinds of evil. I hate money, and I get rid of it.

You are avoiding evil. It's a spiritual stance on Emma's part.

Honestly, I have some family issues where my one family member has a lot of money, and he is not a really nice person. He uses it to manipulate people and. Yeah, so I don't want to be like him.

Well, money didn't make him that way. Money exposed the fact that he is that way. All money does is. All money does is magnify.

Okay.

If you're a jerk and you get money, you're big jerk. If you're crazy and you get money, big. Lots of crazy. Okay. If you're. If you're kind and compassionate, and generous, and you get money. You're what we call a philanthropist. Like, you change whole worlds because you give so much. So, you know, it's not money. It's just. You just got a jerk in the family. Well, welcome to being in a family. Okay, so you. But you've had. So you have a negative relationship with money, is what you're trying to say. And I'm not making fun of that. I'm just laughing with you because you're funny. I like you. Okay, so.

And so. It's caused a lot of pain, Emma, is what you're saying. Money is a place, and you don't feel like you have a good handle on it because you guys have this credit card debt, and you just think, oh, my gosh, I just feel like I have no control over this part of my life.

It doesn't feel safe by going bankrupt once.

Yeah, I did, too. And, yeah, then you got to decide, am I going to happen to this money subject, or is it going to happen to me? And what's going on is it's been happening to you.

Yeah.

And I think understanding, Emma, it's not just the money part. I mean, I think the money exposes some things, but I think I wrote a book called know yourself, know your money, and I'll give you a copy of that.

Yeah, that book is perfect for this.

But it's to understand, why do I handle money the way I do. And I think for you, Emma, I think it's some good kind of questions to ask yourself. Everything from how you were raised, what kind of, you know, tension was money in the household, what kind of value did your parents place on it? And kind of walking through that, understanding your tendencies, you know, are you more of a spender or saver? Are you more scarcity, mindset, or abundance? What's your biggest fear? A lot of people are driven by fear. They don't want to end up, you know, how they grew up. You know, a lot of people have that fear. So they'll swing the pendulum so far where they save so much because they don't want to, you know, be poor like they were growing up and they saw the hardship or whatever it is. Right? So everyone has their own stuff. So that plus, Emma, being married, you haven't. You have a spouse that has the all different factors of everything we just listed. And so working together and all of that can create. Yeah, just a lot of tension.

A lot of stuff that combined with the failure on the other part and with a house full of kids at homeschool all of those things combine to take away your confidence and your power, your emotional power over money. Does that sound. Does that sound right?

Yeah, that sounds perfect.

Are you guys, Emma, you and your husband, do you guys do a monthly budget?

We look at money, we look at the debt together.

Yeah.

And we're trying to get that number down.

I'm gonna pile you on with some stuff. I'm gonna give you every dollar of premium. Okay. As well in this call. Because I think one of the things that can feel so out of control, and people do this a lot, Emma, so I'm not picking on you, but they're like, oh, yeah. I just have kind of all the expenses in my head. And it's just, it's like, it's this imaginary thing that can suddenly become very isolating. It can be very scary when you don't see the facts. And doctor John Deloney talks about this all the time, that facts are your friends. And I think a budget, honestly, working in that and seeing, okay, here's our income that's coming in because you guys make a great income. I mean, 95 grand, you're doing great. But to be able to say, here's the plan for that. And then for you over the course of time, and I bet you if you guys start that this month, I bet by January, February, there's going to be a level of confidence over this, Emma, because. Because you're going to learn how to live within boundaries and make different decisions.

And you're going to be at the grocery store and be like, okay, we got $200 this week and I can.

Spend that and I don't have to worry.

Yeah. And what do I have to spend to stay within that? And it's this practice of discipline and being in control of what the, that's what the budget does. And I think that really will give you guys a sense of. A sense of confidence, too.

I think the $3,500 in debt that you paid off is absolutely amazing because you've been beating it with a hammer, not slicing it with a sharp knife, and Rachel just gave you a sharp knife. It's going to go a lot easier. You're just beat the heck out of it.

Yeah.

And you just beat the snot out of it. This 3500 was heavy lifting. You gutted that out, girl, because you didn't have it. You didn't have a sharp knife. You're just wailing on it with a club.

You guys should also know that most of my children are six foot tall and our food budget is $1,600 a month.

So that doesn't mean you can't. That doesn't mean you can't get control of money, okay?

That. I know there's places. I know there's other places I can cut spending.

Yeah.

So I think that's what it is.

You don't even know where your spending is because you don't have it all written out.

Right.

You get every stinking detail. You will be amazed. You and your husband sit down and look at where every single dollar is going before the month begins and give every dollar an assignment. That's why we call the app every dollar. So, because you're giving every dollar a mission. Okay? And when you do that, you're both going to go, where the crap have we been doing?

And. And try this, you know, $1600, that's before a budget. Try 1400 for the month. Right? Like, you start practicing this, like, ebb and flow and see. Okay, where can we get an extra hundred, few hundred dollars? Here or there? I mean, like, it's amazing, the. The power that. That really does give you and to be able to cut stuff. But honestly, I think for you guys, getting some quick wins, because I think it's hold. I think you said, emma, confident that it took six months to pay off $3,500. That. So I want you to do that even faster.

No, you're going to do it a lot faster because you're going to have a sharp knife instead of a clock.

You're going to have that. So I think that's going to start to give you guys confidence. But I think it's just rewiring these habits, and it takes time. But you're not a failure, Emma. And that's the other thing, is that this people equate their net worth or their money mistakes to who they are. And that's when they talk about shame. That shame is your identity. So take those apart. But you are not the past mistakes that you've made. You are not your net worth. That is not who you are, Emma. And so there's a level there that I want you to release that, because that stuff will follow you, and those lies will just play a tape in your head that you don't need.

Yeah, you're doing better than you think you are, especially considering how blunt the instrument is you're using.

Yeah, but stand the line, Emma, because, Austin, I want to give her know yourself, know your money and everydollar premium.

You're gonna love that book, Emma, because it's exactly talking about you. It's the number one bestseller and you don't want to miss it. It's know yourself, know your money by Rachel Cruz. And it's all that. Not only family history, but your tendency, scarcity, abundance, all that stuff. It's brilliantly done. You will love it. And we'll put you in the every dollar budgeting app and that will change everything. You and your husband do that together. And turn off the stupid tv and tell the six footers to go in the other room. We're working on the budget. This is the Ramsey show, guys. It's no secret that the real estate market is weird right now. So go with a mortgage company you can trust to have your back. Churchill Mortgage. Churchill is Ramsey trusted because they're stable, reliable and focused on you. At a time when a lot of companies are being bought out or going out of business, count on Churchill mortgage to stick around. They've been doing things the right way for over 30 years, and they'll keep doing them the right way for 30 more. Get started@churchillmortgage.com. dot this is a paid advertisement, an.

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Rachel Cruz, Ramsey Personality, is my co host today. Open phones here at 888-25-5225 hey, if you're brand new to this show and a whole bunch of you are, based on our ratings increases and our ranking increases and so forth, we appreciate all of you being here. And of course, if you want to, if you were to or, you know, you're hearing stuff like baby steps and debt snowballs and you don't know what all that means, you want to get plugged in, go to ramsaysolutions.com for free and click on the get started button. When you click the get started button, it'll help you figure out where you are and what your next steps are. And you'll start to learn the lingo of the stuff we're talking about and figure out how you can best apply some of this and start to change your life. So, hey, that's what we're here for. The phone number here, triple 8825-5225 Brian's in New York City. Hey, Brian, how are you?

Hey, Dave. Rachel, pleasure to speak with you. Thanks for taking the call.

Sure. What's up?

So my wife and I are out of debt. We built up our fully funded emergency fund and we're in baby step three b. We are currently renting. We're about an hour away from the city, so and we commute into the city to work and we're trying to save up for a down payment and we're doing, we're trying to cut corners and take every step we can to increase the amount that we can save each month. And I'm just wondering if I should change my retirement down to zero and what my wife should do with her percentage at work. Currently I'm working part time and I'm also staying at home with the kids. So we're cutting out childcare there and she works as a nurse manager and full time and her job has a 4% match at 50. I mean, I'm sorry, 50% match and she currently has it at 4%. So I'm just not sure what we should be doing to try to get the most amount possible and just try and figure out ways to.

Yeah. Have you guys kind of done a timeline, Brian, to say, hey, if she does pause? Because I would, I would encourage you guys to pause for a period of time while you're saving just to increase the cash flow. Like what you're, what you're what you mentioned, do you know how long it would take you guys to save up a down payment? If you guys paused all retirement and threw all the extra money you guys have per month?

It's probably going to be a couple years. Currently we have 6000 down payment. We have 5000 in a car fund and I guess if need be we can combine them. But yeah, to get a good down payment, especially in this area, it's going to take a couple of years at least.

How old are you?

I am 31 and my wife's birthday is actually today and she is not going to say, okay, so if you.

Started saving for retirement at 15% of your household income beginning at age 33, you would retire a multimillionaire.

Okay.

And so if you take two years off and save up a down payment and then you start, the trick is don't take two years off and then keep spending like you're in congress. You don't need to be going out to eat or saving for a house. We don't need to be going on vacation. We're saving for a house. We're saving for a house. We're sav. We're sacrificing the match. We're sacrificing the compound interest. We're sacrificing our investments to get a house. So by God, let's get the house. Don't screw around the edges of this. You see what I'm saying? You got to play through for this. To make sense. If you, if you just stop retirement and then you lollygag along for five years, this is not good.

Okay. So you're thinking somewhere in the range of one to three years.

Yeah. Three years would be the max. I would be unplugged. And so you got to set yourself a goal and say, how much have we got to save a month to be there? And what have we got to do to make that happen? And that may be working extra, that may be cutting other things or maybe other things involved, but you got to set this as a detailed thing because you do. The danger of some of the stuff that we teach is if you don't do it all, it'll leave you hanging because we tell you to stop retirement and, you know, get out of debt. But if you don't go get out of debt, then you. And you never start retirement again. In your case, you've got your emergency fund. I'm trying to. I'm going to. I'm going to really enhance this three b, because this is an expensive area. I need some down payment money.

Yeah. And Brian, too. We for first time homebuyers, because you said you're renting, you know, we say anywhere from five to 10% for a down payment. So be, you know, looking on that side so that you guys can press play back into retirement. And then you're on baby steps four, five and six, and then you're throwing extra money that you guys have at the house.

But we love 20% down because you avoid PMI. But for first time home buyer getting out, Rachel's right. Let's get the deal done.

Yeah.

And, you know, 510 percent down, something like that. You're going to have some PMI, but get her done and then get that retirement going and then get that mortgage paid down and get rid of that PMI. That'd be your next thing. Arthur's in Richmond, Virginia. Hey, Arthur. How are you? How are you?

I'm good. How are you guys doing?

Better than we deserve. What's up?

So I had a question. I've seen you guys give some career advice. I want to ask you. I am in a job right now, and I don't think my boss is very good at doing his boss job. And so I'm wondering, I really have one main question is, how do I, when do I know how bad it has to get before I leave? And then also if he's doing things that I know aren't, aren't useful to his, to the people under him, including myself, when do things that I just think are wrong? When do I. When would I go to his boss and kind of report things? I don't want to, obviously, stir the pot and just, like, start fights at work with. With his boss about it or cause problems at work, but I just don't know, like, when is. When is the right time to go to his boss about things that he's doing or lack of or not doing? And when would I know it's just time to move on and go to a different company?

Arthur, is any of it moral issues, or is it more just leadership style? Like, he's not engaged where he should be and he's not communicating? Is it more of those kind of attributes, or is there stuff going on that you're like, that's flat out wrong, borderline immoral?

So, leadership style I can get over, but, like, one is competency and leadership. Like, I'm a salesperson. I've been number one in my company for the past five months, and some of the advice he gives me, I'm just like, yeah, I would never do that. Like, I don't. I don't understand where you're getting this advice. And I don't believe he has the experience to back up his, like, role as also a teaching manager in sales and then all.

Have you been there five months?

I've been there about six months.

How old are you?

I'm 26.

How old is he?

Oh, gosh, like 50 something.

Okay, so what do you think the probability that you talking to his boss is gonna fix all this?

I don't know. I. I don't know. Because his boss does ask me questions about him, and I'll give him honest feedback. I don't know what it's going to change, honestly, I really don't.

Well, I mean, there's two possibilities. One is realistic, one is not. One possibility is they move him on. They fire him because he kind of can't do his job. And their number one sales guy is talking to leadership about that. Okay, that. That's a possibility. That's reasonable. The possibility that this 55 year old guy who is not competent suddenly becomes competent because you talk to his boss is precisely zero. Okay, think about it. They can't train him up on the things he's doing in a short period of time. These are long pattern things that have to be fixed.

Hmm.

So you're either going to endure him while he's growing, which is really doubtful, or he's going to be removed, or you're going to be labeled, and you'll be gone, right?

That's something I'm worried about.

Well, I wouldn't be worried about it. You're going to quit anyway, so what's it matter?

So that's, I guess, the other question then, in terms of quitting, like, so I don't know. Like, it's good money and I'm making good money, and I'm happy in that sense, but it's just. It's a mess all the time with, like, you know, management. So I don't know. I don't know at what point I should leave, because I'm not growing personally except things I learned on my own. But I'm not learning from the company anymore, so I don't know when.

I would. I would ha. I would have something else in place. Arthur, before you go in and just quit, though, right? Because there's sales jobs everywhere. If you're a great salesperson, you can find a lot of things to sell and find good culture in other companies. It doesn't sound like it's a great culture.

I think you've lost faith in the entire organization, not just this one guy. And it's probably time for you to.

Go get something else, which, thankfully, your skillset is very broad. Right, Arthur? So I think you could kill it a lot of places, but go get.

Something else and then be aware that you might be 26 and after six months, you don't know it all. That's possible, too.

Yes, I thought about that, too, Arthur. A little humility. Just remember that.

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 Ramsay, personality number one best selling author, co host of the smart Money Happy Hour, and my daughter is my co host today. Open phones at triple 8825-5225 Dylan is with us in Miami. Hi, Dylan. Welcome to the Ramsey show.

Hey, guys. Thanks for having me. I am 22 years old, and I just graduated undergrad and got married the next day. My wife and I don't have any debt, but two weeks after our wedding, my mother passed away.

Oh, no.

Gosh, I'm sorry, Dylan. Was that unexpected?

So yes and no. Yes in the fact that she declined so quickly. She died at 61. So she left us her Ira, which has about 300,000 in it. And then the main, the reason I'm calling is because the house that she left has $60,000 left on it. And I'm just wondering, should I? What I'm planning to do is rent it out and have my renters pay the mortgage. But I also have the life insurance, which is. I got about 90,000 left on that just kind of sitting in my bank account. Should I just go ahead and pay the mortgage off completely and then have that passive income? Or. Or what would you guys do?

Wow, I'm so sorry.

That's completely tough. Two weeks after you're married to make all these decisions. I wish we could. I wish we could slow down. Okay. Here's the thoughts that pop into my head. Okay? Number one, renting a property as a landlord is not passive income. That's humorous. That's crap from tick tock. Okay? Because there's nothing passive about dealing with renters. I've got a bunch of them. I have been.

I am planning to hire a property.

Doesn't matter. It's not passive. This is very active. You. You have a hassle factor in your life called renter. Okay? It's just part.

They'll be renting your mom's home, and.

They'Re gonna be in the home you probably grew up in. Right?

Right.

Yeah. Yeah. That's weird. Emotionally, it's hard. Okay. So that. That's number one thing. So can this be done? Yes, it can be done. You're 22. You're brand new married. In my opinion, the last thing you need is the hassle of a rental property. But if you're going to keep this and give that a try, you should pay it off. Okay.

Okay.

And because that will lower the hassle, you won't have a payment anyway. And so take. It'll take the insurance money out of the checking account, pay the mortgage off. I normally wouldn't like to make that decision on that property that quickly, but I will tell you, like, the current, the rate the home Rachel grew up in is now in my rental portfolio. We kept it. It is weird. I haven't lived in that house in 20 years. It is weird to go over to that house with other people's crap in it still emotionally. And I'm I landlord a bunch of property, and I grew up in the real estate business, so I've got a huge advantage over you. And I'm old. I've done this a lot. Okay. You're 22. This is your first property. I'm warning you that the first time that they screw around with the house you grew up in, they being the tenant, it's going to be emotional for you. Just be ready for that. Okay? No one. It's never going to be the same. It's never going to smell the same in there. Okay. And so all of that now. So if you want to get a professional property manager, that's great.

Are you local, Dylan, where the house is? Are you guys close?

I'm not. I'm about. I'm in Miami. The house is in central Florida.

That's not too bad. I don't like long distance landlording either. So I'm going to tell you that with all the emotions, if we had a little bit of time to digest all of this, I might just sell it. But that's even a harsher thing than letting a renter be in it. So it's not an automatic thing that at 22 years old, two weeks after you're married, you ought to be a landlord. That's not an automatic thing. Okay. So it's an automatic thing you probably shouldn't do, actually, just in terms of quality of life for you, but it's thrown in your lap, and here we are. So if you want to try it, just be forewarned that this is not. It's not passive. You're going to have some emotions around other people and smells being in your house. No pets. I love pets. One of my favorite things on the planet is my little dog. No pets. Not in my rental properties. Okay. We call them $10,000 cats. They devalue your house. $10,000 when they put the cat in there. Okay.

Yeah.

And so sorry. That's the way that works. So this experienced landlord talking to you.

Dylan, for you and your wife, where are you guys at financially? I know you said you have no debt. You obviously have this $300,000 Ira from your mom. Are you, do you and your wife do all rent? Do you own a home? Where are you guys at?

Yeah, we're renting. We're just kind of getting started financially. Our combined income is probably around 70 or 80.

Okay.

I would sell this house and buy you a house.

I know. How much is that? How much would the house, how much is the house worth? Do you know?

Right now it's probably worth 250, maybe 300 jobs.

I would sell this house and buy you a house. And when I say that out loud, two weeks after you got married, your mom dies, that's very harsh for me to say that.

Yeah.

It's hard for you to even hear that and think about that. But five years from today, you having this as a rental property versus you and your new wife having a new home to live in, that. That's a much better, wiser decision. And I, you know, I know I'm asking a lot for you to process of a lot of emotions.

And you don't have to make this decision today, Dylan.

And you don't have to do it because I should do it.

But yeah, you know, give yourself some time and kind of just, you know, and maybe you try the renting thing for a year and I would still pay it off. And maybe you look up in a year and you and your wife are like, man, we want to get settled somewhere. You have a great asset that your mom left you, which is such a gift. And you can use that gift to continue her legacy. I mean, what a beautiful thing that she, you know, has for you guys. So maybe it's not right now, but maybe you look up in six months and think, okay, we can make, we can make this decision. But for you and your family now going forward, you and your wife, if you can really use this to jumpstart.

You guys, if this house had no emotion tied to it, if it was, if she had it as a rental property, you would have sold it already in your mind. You wouldn't, you wouldn't. I'm a buy me and my brother new house. You wouldn't be going, I'm gonna rent. And yeah, this is a rental property.

Let me say this, this may not be Dylan's case real quick, but the idea of having real estate, it's a big deal. It's a big deal. People want a rental property.

You don't want to have a rental property 2 hours away and be renting yourself.

Yeah, no, I agree, but I'm just saying. I know Dylan. I mean, I, if I can get into a 22 year old's head, what the, the kind of content that's out there and what people are saying about.

For sure, tickets, personal finance will tell you, you gotta have a rental house.

Yeah, but it's a very appealing thing, right, to have this quote unquote active income, not passive, but, yeah, so, so there's a, I get where you're at, Dylan, but I think what you have to realize is when you set you and your wife up really well, then in ten years you could get into.

This if you want the rentals you want.

Yeah, yeah.

And you'll be a millionaire. Yeah. And you'll have a paid for home for you and your new bride. The impact on your marriage is positive, the impact on your health is positive, the impact on your finances is positive. I just, and I'm sorry. Sorry you're having to make these decisions, but that's what I would do if I woke up in your shoes, sir. This is the Ramsey show. You know, it doesn't take a degree in statistics to realize this one stinks. 93% of undergraduate private student loans are co signed. So when you're delinquent and drowning, mom or papa or Uncle Joe is stuck in that financial stress along with you. But there is a way out. Why Refi? Why Refi offers a custom refinancing option with a fixed rate loan based on your ability to pay and the average interest rate. Why Refi offers is 3.9%, which can significantly reduce your monthly payment and decrease your total cost. Contact yrefi at 8442 Ramsey, or go to yrefi.com ramsey. That's 8442 Ramsey. Or the letter y, then refy.com ramsey.

Yrefi is not licensed by the California Department of Financial Protection and Innovation.

Why?

Refi is not authorized by the New York state Department of Financial Services to service any New York loans. Funding may not be available in all states.

Rachel Cruz, Ramsey personality, is my co host today. Thank you for joining us, America. I'm Dave Ramsey, your host. Ha. Coming up is Jackson, Michigan. Mike's on the line. Hey, Mike, how are you?

Good, Dave. How about you? Enjoy your show?

Better than we deserve. Sir, how can we help?

Quick question for you. I am retired. We are retired, and we have no debt, and we're purchasing a new car. We could pay cash for the new car if we could get a financing deal, and we can invest that same amount of money in cds over that same period of time. What's your recommendation?

Pay cash for the car. Pay cash for the car or don't buy it.

Okay.

Yeah.

Okay.

Here's the thing. Okay. How much? How much? You're net worth about 2.5 million. Yeah. You didn't get that by playing games like this, you know? Well, you got this by saving money and investing money.

Right?

But you didn't borrow on a car and invest the difference.

No, I know what you're talking about.

But, I mean, my point is, is you steadily invested over a long period of time to get 2.5 million. You did not borrow money and invest borrowed money to become a multimillionaire, did you?

Correct. Correct.

And. And now you're going back on all your old ways. Don't do it. Go stick with the plan that got you here. You're incredible, man. Congratulations, hero.

Thank you. I wish I would have found you a lot earlier, would have made the path a little bit easier. But I enjoy your show.

I don't think it's ever easy. But you, you scored touchdown in the Super bowl, as far as I'm concerned. My man. Well done.

Thank you. Worked hard to get there. Thank you very much.

That's so cool. You know, it's funny that, Rachel, when you start paying attention to money, and obviously, that's one of the things that's required to end up with two and a half million dollars. I kind of thought he was going to tell me that by the. Yeah, kind of felt it. You know, he's just like, but people just. They're thinking about money. Not in a negative way, not in a greedy way, not. I'm obsessed with money, but instead of just, you know, it's like people that drive and pay attention when they're driving, and the ones that drive and don't pay attention when they're driving, and that's what they do with their money. They don't pay attention. Or they do. And the ones that do pay attention, if you just think about it, even though he was getting ready to do a dumb thing. But, I mean, he's a guy that thinks about it. That's why he won.

Yeah, it's why he won. And. And I think this is where people can overthink something and take the math of something and think, okay, well, I can kind of beat the system here because we hear that all the time, right? Paying off your house or even debt. You know, people use debt and want to keep debt around because, like, well, if I invested that amount of money instead of paying it off, I would make more. And you know what I mean? Like, they start to. They start to overthink it where I'm always like, oh, my gosh, you have to, like, untangle it and almost, in a sense, remember what brought you here. Yes. And what is the emotion that you have when you're not attached to debt? What is. What. How do you feel? And that behavior part? I feel like some people, you know, jump. But I. But I appreciated his question because, I mean, I think there are people naturally, that are like, I want to do well with money. What's the quickest path? That's how you point a to point b. Exactly.

Exactly. You're exactly right. And so sometimes what can happen is you try to fix something with the math and you forget the heart.

That's right.

You know, use only your brain and not your heart because your heart measures risk and your head does math. And so if you're. If you. Oh, I work so hard to be debt free, and then all of a sudden, you forget and go back into debt on a car. So absurd when you think about it.

Right.

But. But at least he's on pat task and he's thinking about. He's a person that considers these things and is asking questions.

Yeah, absolutely.

Still curious?

Yeah.

Still curious.

Yep.

Two and a half million dollars in. Well done, sir. Well done. I'm proud of you. Stephen is in Cincinnati, Ohio. Hi, Steven. Welcome to the Ramsey show.

Hey, Dave, how are you?

Better than we deserve. What's up?

Good. Had a question for you. I'm well versed in your program. I'm 52 and I've got three boys. One is a junior in college, or he's going to be a junior. The other one is going to be a freshman in college, and the other one's just going into high school. So he's not far off from college, either. My wife and I have made the decision to try to pay their tuitions in full.

Good.

And we've got. Yeah, we've got good 529 programs, but they're just not going to cover all of it. So we're trying to make up some ground in a fairly short period of time. And I wanted to see what your thoughts are on basically moving the principal that we paid into our Roth retirement accounts and moving that over to the 529. It's about 110,000. That would basically kind of get the deal done. And we ran the hypotheticals. I'm still going to have about $2.2 million when it comes to retirement time, which is more than enough for our lifestyle. So just want to get your thoughts on that.

How much money is in your retirement now?

About 900,000.

Okay. And you don't have any other money?

I've got our emergency fund.

When you're saying pay in full, Steven, you mean just like semester by semester, right?

Correct. For all three boys? For all four years.

What's your household income?

150,000.

Okay, go ahead.

Well, I just want to make sure, Steven, that. Yeah, you're. I mean, you guys will pay each semester when the semester comes. You're not looking.

How much is in the 5.9?

Let's see. There's about a 110,000 in there now.

Okay. And what's the total. What's the total budget for the kids to go to school? The tuitions, they're about.

45 a year or. Yeah, about 45 a year for each kid.

That includes dorm and. And everything. So you're. You weren't talking about just tuition. You're covering everything?

Correct.

Okay. And so you got 80 a year right now?

Correct.

And you got 110 in there, so you got a year's worth. You don't have enough even if you move the Roth.

Well, no. So we can get out. We'll continue to save for our youngest, but we will basically, you know, fund that difference.

Yeah, but you don't have enough even if you move the Roth, because it's. You're burning 80 a year for the next two years. That's 160. And after that, you're burning another in college.

Only two.

I know two are in college now. 40 each, right?

Yeah, that's right.

Yeah, 40 eats.

Yeah. So. Eighty K per year. And you got a freshman and you got a junior. So for the next two years, that's 160. You only got 210.

Well, we'll cash flow some of it. So. Yeah. The math isn't apples to apples.

You're not gonna get what we need. You're not gonna get there. So your freshman, when your freshman graduates, will you have another. We have two in school, like, ever again? Or is it the one going to leave about the time the other one comes in?

The one leaves as soon as the other one comes in, yeah.

Okay. So you're going to be. Once you get past this two years, you're at a 40 a year burn rate, give or take, correct?

Correct.

And that doesn't count them getting a job, which they need to do, and applying for scholarships, which they need to do.

Right.

I just. It just. I. It just goes against everything I am to start cashing out retirement for college. I'm certainly not going to borrow to do it. So I do that before I borrow. And by the way, you can't roll a Roth into a 529. You can just cash it out.

Correct.

Yeah. So it's not. You said, I'll put it in the 529. You can't, but you can just take it out and spend it. And I wouldn't do that until I'd emptied the 529. I'd let it sit there and grow. Grow additional growth before you move it tax free. Right. And so you got. I'm gonna try to make it two more years and get that. Get the first one out of school and then get down to the 40 burn rate. If you got down to the 40 burn rate with this money, that'll get. No, that just makes it one year.

Yeah. It's interesting to me. It's the. You know, it's a. It rubs me the wrong way because it's kind of against the principle of.

It's against everything I believe. Yeah. I just. I'm gonna do everything I can to not do so. So here's what I'm gonna do. I'm gonna use the 529. I'm gonna cash flow like a bandit, and. And I'm gonna put kids to work, and I'm gonna go for scholarships. And try to not touch this. And if you do touch it, make it the last thing you do. And you allow it to sit there and grow until then. And so maybe only in the fourth or fifth year or whatever else. What else can we sell? Do we have any other assets? Do we have anything we can do? Because this hundred thousand is worth millions. If you'll leave it alone and not take it out of there. What it's going to cost you and miss is just ridiculous. Ridiculous. Because you're getting tax free growth on it. I hate to touch it. I really hate to touch it. So it'd be the very last thing I'd do. This is the Ramsay show. Rachel Cruz Ramsey, personality number one best selling author, is my co host today in the lobby of Ramsey solutions on the debt free stage.

Ben and Angela are with us. Hey, guys. How are you?

Hello, Dave.

Welcome. Where do you guys live?

We are from Kennewick, Washington.

Whoa. It's a bit of a trip.

Yeah, that's the sane side of the state.

You know what most of Washington is saying. There's a few spots, though, that offset it. Yeah. A lot of states have that disease nowadays. Welcome. Good to have you guys. How much debt have you paid off?

So $436,959.

Way to go. How long did that take?

About six years, one month.

Love it. And your range of income during that? Six years?

In one month, we started at about 140 and took a quick dip for when the lord blessed me with a job loss. And then bumped her all the way up to a little over 300.

Whoa. What do y'all do for a living?

I'm a registered nurse, of course.

And I help people get mortgages that are 15 year fixed rates.

Very good.

New mortgages for a living.

Very good. So I'm gonna guess the high amount. 437 in six years. Maybe. You paid off your house. We did. I love it. Yes. Weird people.

Our kids have told us we're weird for years, but now we officially are.

So now it's been declared on national radio.

Yes.

Oh, man. A mortgage broker with a paid for house.

That's so crazy, huh?

I love it. Way to go. Congratulations, y'all. How does it feel to have no payments?

You know, it feels really good knowing that's one less stress in our life, but we still live below our means, and we have goals, but we're not certain what we're gonna spend money on here forward. We're just kind of like, okay, what's the next goal? But, yeah, we are very thankful to where we're at.

Six years of focus, and now we're like, wow, what do we do with. With all this? And so we started our next thing fund. We have so many things that we want to do. We couldn't decide, so we just started piling it up in every dollar under our next thing fund, and I'm sure we'll figure it out pretty quick.

So. I like that.

That's so fun, you guys. So you have kids?

We have four.

Okay, what are their ages?

27 is Kylie. JK is 25, Hannah is 22, and Abby is 17.

Okay, so most in their twenties. And what do they think of mom and dad?

You know, they've been our greatest supporters through all of this, and I think it was our goal all along to make sure our kids knew what that journey was like, and hopefully they became smart with their money as well.

Very good.

You guys are great examples.

Thank you.

Good modeling. Good modeling. Rachel always says more is caught than taught. Yeah, very good. So what starts you guys, on this journey? Six years ago, doing this Ramsey stuff.

So, you know, April, tax time, we sat down and we had our. Probably our biggest tax bill we'd ever seen. And we were sitting, chatting, and we're like, we also made more than we had ever made in our working careers. And, wow, how do we make so much money? Oh, so much money to the IR's, and we felt like we were still living paycheck to paycheck.

Yeah, we were one expense away from a disaster. I think that's how we could sum it up.

Wow.

And how long ago was that? Was that six years?

That was six years, one month. Yeah. I had heard of Dave, you know, prior to that, and, you know, some of it sounded pretty cool, but I thought I was smarter, so, you know, mortgage guy, so, you know, but, you know, we just. We'd had our, you know, I had it moment, and we also had a.

Situation connected with us after that.

I had a co worker, actually, that had turned me on to you. I read the book and listened to the podcast quite a bit, and we chatted about it, you know, probably four or five years earlier than that. We kind of did, I don't know what you call it, Dave ish, but we did Dave a little bit. But once we had that, you know, I had it moment. It was. It was all game on.

It was just, you know, amazing. You guys, congratulations.

He decides we're going to do this stuff. Angela, what'd you say?

You know, we talked about it initially. I was like, I don't know if we're ever going to dig out from this mess. But we started, and I think what kept us going in the driving force was paying off the small debts and seeing them go away. And so it just kept us in that momentum and we knew at that point that we'd get there. Wasn't easy. A lot of struggles along the way, but we made it, and so we're very thankful for that.

Wow. So what was all the other debt? Part of it was the mortgage, I guess. A big chunk of it.

Yeah.

So we had two cars and an rv for 61, six credit cards at 39,000, a big honking $78,000 student loan that was mine. The IR's debt that we chatted about, 401K loan and about 190 for the snowball. And then it took us about three and a half years for that. And then we had about a five or six year plan on the mortgage. But the last two years have been super good for my business. And so we accelerated.

Yeah.

And now we're sitting, you know, with no mortgage payment and my business is extremely slow, so. And I would probably be freaking out right about now and thinking about, you know, what the future would bring for us. But with no mortgage, you know, I can. Don't have to worry about it.

Yeah, yeah. We talk about a lot on. Doctor John Deloney talks about it too. That even when you own debt psychologically, like, your mind knows it's not safe because someone else has control over a part of your life. And there is this deep sense of peace when no one has a say over your life, you know, you truly are being able to control that. Did you guys feel that? I know, I'm sure with the consumer debt when that 190 was gone of the consumer debt, and then did you feel it again with the mortgage when you paid it off?

I'd say so, absolutely. I mean, we had refinanced the house and done so many home equity loans that I swear our mortgage probably contained a pizza from college or something like that, some shoes from Sierra, you know, when they were still around. So, you know, I've been in debt since I was 18 years old, when I bought my first stereo for in college, you know, at a little, little mom pop store where you had to go in and pay cash for your payment once a month. You know, so.

Wow.

So it's just.

So it's an ultimate feeling for you to feel like, have you never experienced it? I mean, never a teen.

Yeah, yeah, yeah.

Wow.

You ever go back?

Never.

Never.

That's obvious. Yeah.

Not once you've done what you guys have done. No. This is impressive. Well done.

Thank you so much.

What do you guys tell people? The key to getting out of debt.

Is we have a saying. It's the three c's, communication, commitment, and compromise. And it's really the same keys to being married for 25 years. We celebrated our anniversary three days after we paid off our mortgage. So that was a killer celebration. The constant, the budget meetings that we had. We'd never done anything like that. And it really just opened up a ton. Commitment, commitment to each other, commitment to the plan. You're just committing to it. And there's a whole lot of compromise when it comes to these different things, either wanting to spend money or not wanting to spend. Many different priorities, especially after we hit baby step four, five, and six, figuring out how fast to go after that mortgage and still live.

This is the perfect time for you guys in the mortgage business because it's tough out there. It is absolutely perfect timing for y'all to be free. Congratulations. So well done. Hey, we got a copy of total money makeover for you and the live and give bundle. You can give that away and help somebody get started. The baby steps Millionaires book, which is the latest, number one. And that's the next chapter in your story for sure. And of course, the financial peace University. One year membership. And again, you can go through it, give it away however you want to do with this stuff. It's our gift to you to say thank you for making the trip here and to say congratulations. We're proud of you. Thank you so much. Very well done. Ben and Angela from the state of Washington. They did it. House and everything. $437,000 paid off in six years and one month, making 140 to 300. Count it down. Let's hear a debt free scream.

Three, two, one.

We're debt free.

I love it, I love it, I love it. So fun. Way to go, guys. This is the Ram. Hey, folks. The total Money makeover 20th anniversary edition is now here. I believe the success of this book is all about the hero stories. People who felt overwhelmed and stuck until they found the least complicated money book they ever read and learned how to work the plan and actually build wealth. Go to ramsaysolutions.com store to get the total Money Makeover 20th anniversary edition and become one of the new total money makeover heroes. Rachel Cruz Ramsey personality, is my co host today. Open phones at 888-25-5225 Jake's in Canada. Hi, Jake. How are you?

Hey, Dave. Pleasure to talk to you. I never thought I'd be able actually communicate with you, but it's a blessing.

Well, we're honored. How can we help you?

So a little bit of a backstory. I got married at a pretty young age, so, you know, life is good. You know, we're doing the five baby steps. We managed to pay off a lot of debt and then got three to six months of an emergency fund sitting. And so, year and a half ago, we were blessed with a little baby boy. And so now, you know, our marriage started getting really rocky. Like, we had a hard time. And so now my wife, she's saying how, like, she doesn't want to be together anymore. She doesn't love me anymore. She's talking to somebody else, like, in the middle of the night, I'll hear her on the phone with another person, and I just don't know what to do with that. And she wants to basically, like, live at home still, like, in the same house, and so she could raise our son. But it's like. It's a very, like, it's a very difficult place for me to be in, so I just need some advice on that.

I'm sorry. How old are you?

24.

Dude, you don't deserve this.

No, it's. I mean, it's. I mean, it takes two to break a relationship, right? I'm not blaming her on at all, 100%, but it's like, I wanted to make things work. We were seeing a marriage counselor and everything, and for a while there, I thought things were going good. And then about three weeks ago, she said she was done. Like, she was completely done. And then, like, a couple days later, she was talking to somebody else already, so it's a tough situation.

And how old's the baby?

He's a year and a half.

Oh, Jake, I'm so sorry.

Yeah. I mean, what do you do?

Well, yeah, I mean, in this case, I mean, if she's, like. I mean, in a sense, having an emotional affair and she's, you know, talking to people and all that, I'm like, she's breaking her vows that she made with you and choosing not to walk down a path that you guys can have healing and move past this. And so, sure, no one's perfect in a marriage, but she's making these decisions consciously to go against everything that you guys had in your marriage. And so, yeah, I mean, what they've said earlier, but I'm like, at that point, she doesn't get a lot of votes right now in your life, in my opinion.

Yeah.

So let me back up and just address your initial question, okay? If you guys can work this out and be married and with a marriage counselor, walk through this. This patch, and she can set the phone down and devote her life to you, you can set your issues down and devote your life to her. That's great. And I hope that's what can happen if she actually wants a divorce. You can't stop her. It's her. You can't make other people do things. Okay? I can't make my wife do anything. Believe me. We've been married 40 years. I can't make her do anything.

Exactly.

And she really can't make me do anything either, in all fairness, okay, we all make decisions as individual adults. Okay? So you can't. You can't make people do what you want to do, but what you can decide is what's right for you based on the decisions they're making. And. And, you know, when you say out loud, we're gonna get a divorce and live in the same house and be roommates, that. That's just strange. Weird and dumb. You know when you say that out loud, that it is all of those things, right?

Yeah. Yeah, exactly. Like, it's. It's heartbreaking.

Not even. Not even a possibility. Okay. If we're gonna go through a divorce, that means we're not gonna be married and we're gonna have separate lives. No, we're not living in the same house. That's asinine.

Mm hmm. Right.

She doesn't want to leave Jake. Is that.

He said she wants to stay in the house.

She wants to be in the house with you, or she just wants the house?

No, she wants to because she doesn't have a degree in anything, and for her to right now, like, the way the market is right now for even renting a home would be super hard for her. So she basically wants to just live there and, like. So, like, she does not want to go back to work, so that. Because she wants to raise our son, which, like, it would be better for him. I agree.

No, it would. No. No, it wouldn't. He does not need to be raised by divorced parents living in the same house together. That's so freaking weird. It's psychologically damaging to your son. No.

Yeah.

No, that's not better for your son. It sounds this poor girl, she's so screwed up. I don't want to work and earn money, but I don't want to be married. Well, darling, you can't get to choose one or the other, so. Yeah, I think if we're going to get a divorce, that she's going to have to go get an apartment. You guys are going to sell the house and you're going to go get an apartment.

Okay.

No, you're not going to live together. I mean.

Yeah.

Does that make. I mean, you knew that, right?

Yeah, I did. I just. I just, like, I don't want to be the guy to just, like, decide something, you know, in or to not work out in the end. That's why.

Well, if you guys staying in the same house involves healing your marriage, I'm all for it. Yeah, but not work out in the. There is nothing where you divorce and live in the same house together that works out in the end. You're a highly unattractive single guy at this point that you live in a house with your ex because it says it has a big arrow above your head that says stupid. Okay. No, really, that would not.

You.

You don't want to do this. You don't want to do this.

No, I know you don't know, but.

Oh, no, no, no.

And he seems like such a kind person. So to have the conversation with her, Jake, is that she's doing this. Like, that's my thing. You're not the one putting her out on the street and not letting her be home with her child. She's making decisions about her life that is now choosing to isolate herself because she's chosen to go against her vows to her husband. So, like, yeah, and. Yeah, and you're probably not perfect. I'm not saying that, but, like, man, it is. You reap what you sow. And there's a level of consequences that she has to face because she's making big girl decisions, and now she's about to get some big girl results and she's got to deal with that. Like that. That's. It's unfair to you to be the brunt of all of it.

And she calls me mean.

That was very kind. That was very kind. But, man, it's just unfair to you, Jake. Like, I feel for you because you're a kind person. Even the way you're asking the question. You're so nice.

I'm not sure there's a lot of pretty sure you're not perfect, but you are a nice guy and you don't deserve of this so, no, we're going to set up a normal process that says you have a future away from her. If she doesn't want to be with you. She has a future away from you because she doesn't want to be with you. We can't. And then you can move on with your life, and she can move on with her life. And we've got this connection with this one and a half year old.

And this is all the caveat that for some reason, if there's an issue that she's running from the marriage to all these other relationships that you guys in counseling and therapy can work through and build a stronger marriage, that's our number one. Right. Number one is that you guys can heal this over time, but divorced and.

Living in the same house is not on the agenda.

Yes.

Okay. It's not on the seat. It's not on the agenda. We're just taking that off the table. Just not. Let's just be real clear. If we hadn't already been. The way you can look at some of these things. Sometimes when you're in a fog on the decision making, folks, whether it's something deeply relational like that, where your brain just shuts down because the stress level is so high, and you really can't see clear the way you can. The way you can get clarity when you're overwhelmed with that kind of stuff is just projected out. Ten years. Okay. Ten years after moving in with your ex and living in the same house. How's that working out for you?

Yeah.

It's not.

And he probably knows that, but following through with that decision means confrontation with her, making her move, or he's moving and, like, do you know what I'm saying? Like, following through with the repercussions of that decision is messy. And so entering into that probably sounds exhausting for you, Jake.

Not his decision. Those hers. I mean, she made.

Yeah. Yes.

That's what we're.

But his decision about living in the house with her once they're divorced, that's the right decision.

Instead of instantaneous. Yeah. Doesn't take 30 seconds to make that one. Not 3 seconds. Sorry. You're going through this, young man. I hope it works out. Doesn't sound like it's going to. That puts us out of the Ramsey show and the books. Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. We help folks build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz Ramsey, personality news number one best selling author, and my daughter is my co host. Today open phones at triple 8825-5225 that's triple 8825-5225 Jeff starts off this hour in Indianapolis. Hi, Jeff. How are you doing?

Great. Thanks for taking my call today.

Sure. What's up?

So my wife and I are on baby steps four, five, and six. We have. We have three kids, a senior in high school, a sophomore, and an 8th grader, and we have a pretty good retirement built up, and we have about 130,000 left on our mortgage. And we were just wondering, you know, what. What kind of is our next step? You know, how do we. How do we split? Do we split our money, or do we kind of focus it in one of those three areas over the next six years?

College is coming at you like a freight train, huh?

Yes, sir.

What do you have saved for that, Jeff?

So we have about ten for each kid and probably 20 for our oldest. We think that her college will probably be between five and ten with her guaranteed scholarships to an in state school. So we could essentially finance that pretty easily.

What's your household income over the next?

It's usually around 120. This year, it'll probably be up to 160.

Way to go. Good. Okay. Well, it sounds like you're making good college choices in terms of choosing one that's affordable. That's very wise. If I woke up in your shoes, the college would be my first concern. But it doesn't necessarily mean that it has to get all the math. I just want to make sure that that box is checked, and I've got a way to do it before I move on to something other. I wouldn't pay extra on the house till I knew I had the kids covered.

Okay.

That's why it's five instead of six.

Yeah. What about throwing more into retirement because the market's on sale?

That'd be tempting, but. Be tempting. But before I did that, I'd want to take care of my kids college. 15% of your income going into retirement, and then let's. I would. That's why it's four and then five is kids college. And, you know, now, if you. If you have said, okay, we make 160, and we can cash flow this. If we do this, this, and this, then a, B, and c, then go do a, b and c and cash flow it, and that's the kid getting scholarships. College choice kids gonna work while they're in school. None of those are bad things. It's not child abuse. So. But I want to know that we have a way mathematically figured out. And it's not just, we hope we can do it. We've actually calculated it out, projected the budget out, and said, this is how the math is going to flow for each of the three kids to get through school. Once you've got that, then I would move and start paying off my house.

Yeah. Then the wiggle room starts to happen once you have mapped it out. And I think that that's a powerful thing, too, Joe, of what he just said, though, when you put facts on paper, like when you and your wife sit down and you guys just plan out, hey, in the next five years, here's what 2223-2425 look like, and project out whether it's income but the big chunks, and you start to see it, then, then that kind of gives you more breathing room to be like, okay, we'll set that track going, and then we're going to take this money over here. And we feel good about throwing that extra on the house because we know that that's taken care of. But it just gives you kind of that peace of mind and answers the question because you guys may look down and be like, oh, gosh, like, you know, because of the kids college, maybe we pause on paying off the house early.

May not be able to pay extra. May not be able to pay extra. Especially when, like, how old's the youngest one?

He's an 8th grader.

Okay, so you're, you're going to have to win Max, at the same time, but you're going to have several years of two people on the payroll.

Absolutely.

Yeah. So you can, you can map that cash flow out over the next eight years. Right. And so, you know, that that's just exactly like Rachel saying there. And you can just put the bit. It won't take an hour. I mean, you sit down and do it. Turn tv off and just lay it out on a yellow pad. It's not hard, but you get. But in that, you're gonna make assumptions about where they're going to school. And so you can go and start communicating to all three of them. This is where you're going to school.

Yeah.

Which is exactly what we do.

The boundary conversation.

Yeah.

Or if you want to go somewhere else, you gotta, you gotta pay the difference, which was a conversation we had.

So the other, the other option is, do we try to hammer down on the mortgage and get it paid off in three years?

And then you'll have kids in school, you got a senior, right?

Correct. But again, I think her, her cost is going to be around 5000 a year.

Yeah.

Which we have covered.

Okay.

Four years of her school covered.

Check number one box, check one box, check two box, check three. And then you can play with the variable of jumping in and knocking off the house. And that increases your cash flow which enables you to pay, be more able to pay to cash flow college. That makes me more nervous though than just having it covered and then reaching over and paying off the house. You're gonna get to all three, you're gonna be wealthy, you're gonna have a paid for house and you're gonna get all three paid for. But you just need to have a game plan laid out to do it. And you decide. You called asking what the priority is.

Jeff, that may be the case. Like, I don't know. Yeah, you may look and be like, okay, daughter's taken care of 20,000. That's all she needs.

So before the next one gets to college.

Brilliant. And he's gonna go to in state school and have that. He only needs that. Okay, that's cover. We can do that. I mean, yeah, you can kind of map it out. You may be able to pay off the house in three years if you.

Want to do that, but I wouldn't put the kid, make sure that there's, you're not walking over the edge of the cliff on the kids college. Because if I'm choosing between paying off my house two years earlier versus paying cash for the kids college, there's no choice here. You pay off the kids college first before you pay off the house two years early, you're going to get it paid off. It's just a matter of when. So it's. But just make sure you've got that math laid out. I mean, if you told me a 200,000 in the bank right now, and you're just gonna write a check and pay off the house and say, okay, go ahead and do it because you can, we know we can get to the college, right? That's the thing. So. But you don't, and that's not where you are. So map it out. Map it out, map it out. All you gotta do is be intentional here. You're gonna make good choices. I could tell from talking to you for ten minutes, you're gonna figure it out. It's not like this. It's just a math riddle sorts. And it's not a complicated one, it's just flow.

It's the, it's that, you know, here's September, here's October. I mean, here's September. Here's January, you know, here's April 3 tuition payments or two tuition payments or whatever they are every year. And here's dorm or not dorm, and here's the school cost today. And here's how much we got. And here's what the state scholarships are. And you just map all that in there, and there's about six variables and you can pull it together. It's not going to be rocket science. It's really not. It's not. It doesn't even require a spreadsheet. You can do it with, you know, the calculator on your phone and your yellow pad if you want to. So it's not that hard. But the good news, you're the secret sauce for figuring this out, not some formula or our adherence to the baby steps or something like that. You are the sauce, and you've got what it takes to do this. You're going to do it. I'm proud of you. Very, very well done. That's a good call, Rachel. That's a good.

Jeff, you're a good dad.

He's a good dad.

Your kids better say, thanks, dad.

Yeah, they're gonna look back later and say it. They may not like where he lets them go to school, but, oh, well. Life goes on. This is the Ramsey show. Here's the thing about investing advice. You can find it just about anywhere, but that doesn't mean it'll always help you with your personal goals. Here's another option. Check in with a smart vestor pro. These financial advisors can review your plan or help create one that's personalized to you. To find a smartvestor pro in your area, go to ramsaysolutions.com smartvestor. Go to ramsaysolutions.com smartvestor.

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

Retro Cruz Ramsey personality is my co host today. Open phones at triple 8825-5225 you jump in. We'll talk about your, your life and your money. Thank you for joining us. Joanna is with us in Montana. Hi, Joanna. Welcome to the Ramsey show.

Hi, nice to be here.

Good to have you. How can we help?

Yeah, so I want to build a home on my land, but I'm wondering if going with a construction loan is a good idea. Especially since I have no credit because we're debt free.

Okay. What's your income?

Yeah, it's around ninety k. And that's my husband. I work at home.

What's he do?

Software. He's a full stack developer.

Okay, great.

Do you guys have any money saved? Joanna.

So we have three months worth of money saved. We had a rough year last year, so it kind of depleted. We had six months, and then now we just brought it back up to three after having a rough year.

What's. What's a rough year? What happened?

He lost his job for a year? For a whole year, which was kind of really unexpected.

Does he do contract work?

No, no, he had a regular work as a salary.

Does he work from home?

He didn't at the time, but now he does.

Okay. And where are you all living now? You're living on the land or what?

No, we found a temporary place, so we bought a mobile house gutted because Renton was hard to find rent and renting was expensive. And so my husband fixed up the whole thing while he wasn't work in. And so now we're. That's the reason why we're debt free, because now we're living in a three bedroom, two bath mobile house.

And is that on your farm?

Nope. We're renting the lot.

Okay.

Yeah.

Unfortunately, we weren't able to move it to where land.

Okay. Where are you gonna. What are you gonna spend on the house you're building?

We were thinking around three hundred k. And we're thinking, yeah, about 1500 square feet. Not a huge house.

Okay.

But, yeah. With materials. Everyone's telling us that, you know, it'll be more expensive.

Okay. In order to get a construction loan, you would need a blueprint that has been appraised by an appraiser. The bank that you're getting, the construction loan. Mortgage company you're getting construction loan can help you with that. And you will have to have a contractor building the property, building the house. Okay. They don't loan money to people who just think they might want to build a house. And I've never done it before. Okay. So a licensed contractor, a blueprint, an appraisal, very detailed financial package. And then you would qualify at your local credit union or bank for a construction loan. Even if you don't have a credit score, if you've got a steady job, you've got this piece of property that's paid for. What's the property worth?

More than 100k.

Yeah. Okay. So you got the. Effectively a 25% down payment. In other words, you'd have a $400,000 deal if you put a $300,000 house on a $100,000 piece of ground, right?

Yeah.

And that'd be a 25% equity position from day one. So they'll take a lien against your farm, and then they will dole out the money to the contractor on a schedule, construction draw schedule based on completion points as the house goes up. When the house is completed, you would get a permanent regular mortgage that pays off the construction loan. That's called the takeout loan. And you will need to reran. You'll. So, again, the mortgage company or the bank that will help you with this will probably help you get your permanent loan as well, because you have to have what's called a takeout letter. How are you going to take out this construction loan? And you're going to take it out with a new permanent regular mortgage. All of that lines up as dominoes, and you can build. Now, how long is it going to take you to save 300,000 if you don't? Quite a few years.

Yeah.

I mean, if you save 50 a year out of 90, it's gonna take you six years.

Yeah, it's true.

So that's. That's. The numbers are running through my head now. If you take that out and you get out of permanent construction loan, and then you viciously attack that permanent mortgage after you move in and you pay it off in five or six years, that'd be wonderful, wouldn't it?

Yeah, I would.

As long as he's making 90 or more. And if he's in tech world, he should be able to continue to do that. That.

Yeah.

Rachel went through building a house. It wasn't using a construction loan a while back, but it is a detailed process. It's not something you just walk into and go, oh, I want to put a house over there.

Yeah, no, there's. There's a work. Yeah, you'll have a part time job in that process. But it's fun. But it's great. Yeah. And it's. And I think it's exciting for you guys, and with the numbers and everything, you guys have worked hard to be debt free and to be in the position you are. And so, yeah, making the step forward, I think, is. I think, is great.

Okay, so does that mean you guys think it's a good time to build right now? Because.

Not now, but you're not ready now. You don't have a blueprint. You don't have a contractor. You don't have an appraisal. You don't have any of this lined up. I mean, you're gonna. You're gonna break ground in next spring, maybe in the fall, but I would probably wait till spring and let some of these lumber prices and other things continue to calm down. Lumber's back down, but some of the other stuff's not labor. There's a serious shortage on still in most areas. Okay. Yeah. I mean, but you got a lot of work to do to get ready to break ground in the spring.

Yeah. Well, how do you know what order to do all these things? And like I did, call a contractor, then they can.

They can help you start walking through that. Get in touch with Churchill mortgage and see if they can do a loan there in Montana. If they can't find your local credit union, talk to them about a construction loan and a permanent mortgage. They'll help you get the appraisal. Contractor can help you get the blueprint, but you're gonna have to have all of that. You can't just say, I think 1500 and I think that's 3000. I heard. That's what I heard. It costs. That's. That doesn't work for getting a loan. They're not gonna do. They're not alone. That person, money that does that, you gotta have, like, airtight business case for this whole process, whether you've got a credit score or not. You've got to do all of.

And the land helps her in that case, because she owns it, but for a lot of people.

And 100% debt free helps her.

Yes. Yeah, yeah, yeah. Absolutely. But a lot of you that want to build don't have lands.

Right.

To build.

You have to roll the land into the deal.

Yep.

And then that becomes harder. Now you're talking about a down payment issue.

Right.

When you do all that, and that rolls in as well. So that is a question.

I've been getting quite a few, at least on social media. On Instagram is. Yeah. For the new. New construction home buying. Is it a smart time to build a house? There's a lot of people asking that.

I'm probably gonna build one next spring, but I'm not.

You are.

Yeah. But not today. Yeah.

I was gonna ask you where. I won't ask you on the air.

Well, I hadn't figured that part out yet. I didn't know, but. Well, I mean, you know, we moved out. We moved out of the big house and we're living in a nice home, but we had planned to build.

Yeah, I knew that.

But in the middle all this craziness, we're not gonna.

I didn't realize. I thought you all were gonna take like three years just to, like, do nothing.

Just announce it to you right here on the air. So there you go. But the.

Anyway, it's exciting. Good. Good for you.

The point is lumber has stabilized. I think labor will smooth out by spring. It's still, there's still a labor shortage in general on construction. So construction is a little bit wacky, wonky still. And I think it's going to be for a little while longer. But I think most of the supply chain crap will be behind us and that stuff. And I think we'll have a more normalized environment. And I kind of think the economy is going to be a little slower and so builders are not going to be quite so snooty about like, they're doing you a freaking favor or something, you know, which is the way they act right now or particularly acted six months ago. They can, yeah, because they can, like six months ago. They're doing you a favor or something. And I don't need them doing me a favor.

I need them building that, Dave. We know that.

Oh, my goodness. This is the Ramsey show, folks. Changing your family tree takes more than rice and beans and side hustles. It's also about transferring the big financial risks off your family by having the right kinds of coverage in place. That's why my team created the coverage checkup quiz. It only takes about five minutes to find out what types of insurance you need and don't need to protect your finances. Make this quiz one of your regular checkups starting right now@ramseysolutions.com. checkup. That's ramsaysolutions.com checkup. Rachel Cruz, Ramsey personality number one best selling author. My daughter is my co host today in the lobby of Ramsey Solutions on the debt free stage. Amber is with us. Hi, Amber. How are you?

Hi. Great to be here. Thank you guys.

Good to have you. Where do you live?

Indianapolis, Indiana.

Welcome to Nashville. And how much debt have you paid off?

$37,193.59.

Phenomenal. How long did this take?

22 months.

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

So started out net 52 and ended at 67.

Cool. What do you do for a living?

I got promoted and I'm currently a financial analyst manager now.

Well, congratulations. Very cool.

But these numbers, you were killing it.

Yeah, that's, I mean, you were living on nothing. Nothing, nothing. What, what was the 37,000 all student loan. Oh, got rid of old Sallie Mae.

Yep. Kicked her out of the house.

Love it.

Yep. She'd been a pet. Unfortunately, I started about twelve years ago is really, I had car debt and student loan debt and I was davish for a while. I went out to eat and, sorry my headphone. Sorry. And just didn't. I didn't have the hope. It just felt like a mountain of debt.

Sorry.

I'm, like, losing my.

You're doing good. It's all good. Okay.

I'm sorry.

What got you started then 22 months ago? What jacked you up?

So I finally just. It kicked it in gear when I got accountability for my daughter.

Sorry.

I am like, yeah, it's falling off this back of her head. Just move it up.

Yeah.

There you go. Good job. Good job. Okay.

Sorry.

Perfect now. You're great. You're great.

Okay, so. And my biggest thing was making my daughter, like, being accountable to my daughter. And I.

What?

Finally. Cause I had a debt thermometer I kept staring at for, like, months that, like, I really want to get started. But I finally made up debt change. Cause I'd seen a bunch of debt free screens, and they did the change. And I was like, you know what? Let me get her involved. And as soon as, like, I. We made the chains together, the links together, and I was looking in those big blue eyes, I couldn't let her down.

So she's pretty tiny for all that big accountability. How old is she?

She's four.

Four. Okay. So a four year old whips you into shape.

Yep. Yep. I didn't want her to ever know what college loans felt like, the weight of those student loans, ever.

It just got really, really old, didn't it?

Mm hmm.

Yeah, I got tired. Amazing.

We did incredible.

So what did you do to get out of debt? What was your process then?

So, trying to think here, what was my process? Just the normal things. Getting at, like getting a budget, staying on a budget, prioritizing. Because there's so many. That's why I want to talk to synchro moms about there's a million distractions. Flexing your no muscle and then making that budget and knowing that there's hope. Like, you really do have hope. Like, it might be a mountain of debt. It really can be. But there's still hope. And you don't. I. My personal story is I want to spend time with meadow. And so I didn't do a lot of side hustles, but I worked really hard on my career, and I really tapped into Ken Coleman with making my purpose and really working on my career and just showing excellence in my workplace so that I could add value. And I actually called in to the show asking if I should ask for a raise. And you kind of kicked me in the butt, which is great. And so I was.

I say yes. Of course. Yeah.

Yeah. And you were like, well, how are you adding value? Because, like, yes, you're getting responsibility, but how are you really adding value? Put yourself in the position of your boss. And that really clicked for me. I was like, okay, what's my growth plan forward? How can I add value? And my boss is an amazing leader, and I didn't use exactly all that, but I really kind of took some of those principles and added, like, okay, how can I grow in this? And how can I add value to where I'm currently at, which I've been there for eight years?

So how did you get plugged into doing the Ramsay way of money?

I think I had a friend back in college in grad school that was into it, and I just kind of got connected, started listening on YouTube. That was what really, like, clicked for me when I started hearing the debt free screams. John and Maddie hearing their story.

You heard John and Maddie's story?

Yeah.

Oh, wow.

Ok. Yeah, yeah. So back then, it's been a little bit ago, but, yeah, I finally got, like, really serious 22 months ago.

And if I heard the rumor right, you ended up in their financial peace class.

Close to. Yes, there. I'm in Indiana. And so we've been friends. Like, over, like, virtually.

Oh, okay. Just a virtual connection. But it wasn't a class.

Yeah.

Okay, cool. They've been super coordinators, obviously, all over the court, have led people, mentored people all over the world. So I didn't know exactly how it happened. Good. Very good. Good for you guys.

So, Amber, for me, being the single mom that you are, that's a hard. That's a hard journey in general. And then on top of that, doing a sacrificial work with your money to get out of debt. So talk to all the single moms out there, because I know it's there. You guys have so much responsibility, and I know you're already exhausted. I can't even imagine. And so what encouragement do you have for single moms out there that you did this? You got yourself out of debt. I mean, it's so impressive.

Yeah, I just. Thank you, Rachel. It is, is. It's hard. But I wanted to talk to those single moms because I came out of abusive marriage, and it was really hard, but I had to work on myself. And when I did that, one thing is I lost about 70 to 80 pounds.

Wow.

We're exercise and then getting financially fit, too.

Wow.

And the biggest thing for me was hope. Just hope that you can you. Can you believe in yourself. You work your butt off. But you believe in yourself that you really, and God, obviously, he's going to produce and give you favor, but really believe that you can make that income to make it happen, that you can make those sacrifices. And those sacrifices are so worth it. They're so worth it. So, yeah. Yeah.

You are amazing. I mean, 70, 80 pounds and $37,000 in 22 months, making 52 to 67, that's living on nothing. I mean, when you set your mind to something, ain't no stopping you, girl. This is pretty impressive. Very impressive. I'm proud of you. Very, very good stuff.

Yep. I've really just all the vision casting that you and Rachel and Ken and everybody on the personality team has really. And John Deloney have really helped me give that juice that I needed to keep making those decisions. I'd hear you guys in my head saying, you know, just pushing me on. I remember a pivotal moment. I was driving back, I was commuting in my car an hour away, and it was one of your leadership. And you were talking about be the thoroughbred among the donkeys and just having that spirit of excellence. And that's actually what promoted me. Like, going from, like, 27,000 to, like, 50 at the time. And just hearing that, it just, just really set a fire. So every time I just use the YouTube and books to really fire me up and really just make progress.

Wow.

She's incredible. Amber.

For years.

You're killing it. You're killing it, though.

Hey, we've got the live and give bundle for you. The total money makeover book, the baby steps millionaires book, and a one year membership to financial peace university. To use or to give away. So let's bring Meadow up and introduce her to the world. How old? She's four years old, you said, right?

Are you four years old?

Yeah.

And has she been practicing her debt free screen?

Have you been practicing?

Ready to go? All right. Good stuff. She's beautiful.

Thank you.

Well done. Very well done. All right, it's Amber and Meadow from Indianapolis. 37,000 paid off in 22 months, making 52 to 67. Count it down. Let's hear a debt free scream.

Three, two, one.

The amount of emotional and spiritual transformation to come out of an abusive situation, to go. Go through that much transformation. Amazing.

So empowering. She can. I mean, the confidence. The confidence that she has.

Whoa. Love it.

It's amazing, man.

This is the Ramsay shot. Our scripture of the day, deuteronomy 20 812. The Lord will open to you his good treasure, the heavens, to give the rain to your land in its season. And to bless all the work of your hand, you shall lend to many nations, but you shall not borrow. That's the blessings on the house of Israel, on the people of Israel, the promise when they go into the promised land, the curse is you borrow. The blessing is you are having rain on your land in its season. Jim Henson said the only way the magic works is by hard work. But hard work can be fun. Father of the Muppets.

Yes, I did know that.

All right, Stephanie is up. Stephanie is in Minneapolis. Hi, Stephanie. How are you?

Hi. I'm doing great. Thanks so much for taking my call.

Sure. What's up?

So a little bit of context. My husband and I are three years into marriage. We did a Ramsay ish thing for the past two years, but we have gotten really gazelle intense on baby step two, and we are looking to be out of debt within the next eight or so months.

Congratulations.

Thanks. So after doing this, of course, Murphy comes around, and what we're facing right now is that my husband's mom is looking at about $50,000 in dental work that needs to be done. All of her teeth have to be extracted. She needs dentures or implants or something like that, and she is looking to us for help. So she called and asked my husband to fill out a loan application while she was at the dentist, and he was like, I can't do this right now. I'll call you back later. So, of course, we talked, learned more that she's hoping that maybe we would. If we aren't willing to do that, we take out a home equity line of credit or maybe sell the house. So as a little bit of background, my husband purchased this home for his mom a few years back, before we got married. But by purchase, I mean, she paid the down payment, and she has been giving him money to pay the mortgage, but he had the credit score. He had just graduated from college, and so they used his credit score, his name, for first time home buyer. And this debt has been weighing on him, because if anything happens to her at any moment, then we are now responsible for that house as well.

You live in that house?

We do not live in that house.

Okay. Where is that house?

That house is in Connecticut.

Oh, that's her house?

Yes.

Okay, so she's gonna sell her house.

No, it's technically in his name, so.

Oh, so he could sell. He could sell the house that she lives in and get. Get rid of the debt, and she would have the money for her dental out of the house that is hers. It's morally hers. But it's in his name.

Right. So then we don't understand fully the tax implications of selling the house and then giving her that money.

How much money is it?

The dental work would be.

No, no. How much is the house worth?

Oh, the house is worth about 300, 5360 thousand.

Okay, what did they pay for it? 235,360 and 235. Was that the two numbers?

Yes.

And how long have they had it?

Probably about six years now.

Okay. Okay. All right. And he's not been depreciating it as a rental property on his taxes, has he?

Nope.

Okay, good. And, okay, there may be a little bit of tax involved, but it won't be a ton. Okay. It'll be 15% of the gain. The gain would be 360, minus the selling expenses, which will probably be 30,000. So about 330. So you might have $100,000 in gains and it might be $15,000 in taxes. So I would sell the house and pay the taxes and give her the money.

Okay. And is there a gift tax on.

Yeah, yeah. You're gonna. You're gonna. You're gonna have to manipulate this because this was a dumb, bad deal. It's gonna take a little bit of work to get out of it, but no, we're not borrowing money. If she wants to sell her house, by the way, she needs to get a second and third opinion. I've been doing financial coaching a long time. I have never yet heard of a $50,000 dental operation. Not once. Unless there was some kind of car accident.

Well, if they're taking all of her teeth out, veneers or something, I don't care.

I really want to get a second and maybe a third opinion. Okay. On this. In other words, if you're going to do a $50,000 remodel, you get three bids. The same thing. Here, here. Okay. Cuz I'm. I'm suspect. Okay. So, yeah, I think if mom wants to sell the house, that's hers. We got to figure out what the tax implications are. And that money has to be held back and the rest of the money she can have and use for her dental. Okay, but no, I'm not gonna borrow money. No.

And she doesn't. She. And don't put a heloc on the house, obviously.

No, not in your name. You already got enough debt in your name.

Yeah, exactly.

Yeah. So she's now a renter with good tickets teeth.

Okay. Gotcha. Thank you so much.

Oh, man, I'm sorry. What a mess. Let me tell you though, this is a really clean break to something that's going to get worse year by year. This is going to go sideways at some point because this lady doesn't handle money well, and he's propped her up with this purchase, and it's going to go sideways someday. So this is the. This is a good time for it to go sideways and get it cleaned up and get all. Get his name off of all of her debts, the death that's associated with her.

Okay. So the best thing is to sell this house, let her take the money and just keep whatever this house, meaning.

The one she lives in, that's in your husband's name, right? Yeah. But get to get tax, you got two types of taxes you have to consider. Like you said, gift tax. Is there a way to work around that? And then you also have to consider the capital gains tax on it. Capital gains tax. Probably going to be around ten or $15,000 on this, based on what you told me, something like that. And there, if you can, you can probably move around some stuff on the gift tax and not have any. But you probably need to do a.

How much is gift tax?

It's ridiculous if you get into it. But what is the thing this year? I can't remember. See, get my cheat sheet out.

It's fine.

16,022.

Okay.

So it's probably up a little bit from that. So it's probably 20,000. So you know that. That much of it's not gonna be taxable, but the rest of it they're gonna do something with.

Yeah.

And I don't know. You're gonna. You need tax advice and you need a realtor. But I think this whole story is gonna change when you tell mom the house is sold. Cause right now, all she's wanna do is borrow and now she's gotta move. So I think this is gonna change. I bet you the whole thing blows up. But I'm just. But I'm trying to stir up trouble because trouble needs to be stirred up here because it's going to come sooner or later.

Yeah.

And we might as well go ahead and get it out of the way. Cause. Yeah, you don't have a money problem, Stephanie. You got a mother in law problem. And I'm trying to help you with that. So get her. And that's what's hard about good, clear boundaries.

Yep. And in that situation, like she said, he graduated college, had a good credit score. Mom needs a house. I'll take it out in my name. Right. All the.

And this stuff.

This stuff happens.

Your husband didn't tell his mother no.

When he should have, but he wouldn't know, too, though. That's what I'm saying, is a lot of this stuff, though, this is where it is. It's, it's the good intention. Yeah, it makes sense. Mom can't get the house, but I can put it in my name. She can pay me. Like, it all sounds good until you're married. Exactly. True. And also, it's, that's why you have to be careful with money and the good intention with family members and friends. So, so don't put your name on other people's debt ever. And if you're going to loan, if you want to, if someone's asking for a loan, you either give it or say no. But this whole, like, attached your name to my stuff and my money thing, that, it just gets weird. It gets weird. So remember, it's clean. Everything needs to be clean.

I guess I'm going to get hate mail from dentists, but that's okay. I'm trying to get, trying to get more of them.

I think dental stuff is expensive, though.

Well, yeah, and sometimes, and, yeah, check it. Get a bid.

Yes.

Get another opinion. It's not a bid, it's a, we're not getting, we're not doing drywall. But don't get a bit. But, yeah, let's get several, get several opinions and estimates. And is there other ways to solve this issue?

Yep.

Because this sounds like a complete reconstruction. Like a car wreck or something.

Yes.

Like, oh, man. Nasty.

Extracting everything and whole new set of teeth.

Young, young, young, young, young people, you 18 year olds, 17 year olds, 22 year olds, parents come to you asking and do stuff like this. Don't. I love you, mom. No. I love you, mom. No. And by the way, no is a lovely dad. No freaking sentence. There you go. I love you, dad. Well, this was mom. Where you. Come on. That puts us, our, the Ramsay show in the books. We'll be back with you before you know it. But 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, it's Rachel Cruz, co host on the Ramsay show. If you want to do your debt free screen live on the show, visit ramsaysolutions.com debtfree screen. We'd love for you to come to Nashville and tell Dave your story. That's ramsaysolutions.com debtfreestream free.

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