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. Thank you for joining us, America. Rachel Cruz, Ramsey personality, best selling author multiple times over, and lately bestselling author of the new book, children's book. I'm glad for where I am the second in a series. She's my co host today and my daughter. The phone number is 888-825-5225 that's triple. 888-25-5225 Adriana is in Dallas, Texas. Hi, Adriana. How are you?

Hi. I'm good.

Thank you so much for taking my call.

Sure. What's up?

So my husband passed away about a year ago, and. Thank you.

How long were you married?

13 years.

Wow. How old was he?

He was only 41.

Whoa. What happened?

It was a rare presentation of colon cancer. And from diagnosis to his death, it was just under two years. So it's really fast.

I'm so sorry.

Thank you. So the biggest issue is that I have life insurance money. Luckily, we had that, and I hired some financial advisors, and they're advising that I invest in whole life insurance for the kids because there's a high interest, introductory interest rate and there may be a genetic component. The other big thing is that I am intending to take over the mortgage on my house because it's in my parents name and I want to take it over. So they have advised some credit, to have some credit in order to build my credit line. I'm not working. I'm homeschooling, and I'm getting Social Security. I'm just wondering, are those the best routes to take? And it's not.

What?

What is?

Well, you obviously smelled a rat or you wouldn't be asking, right? Yeah. And so are you sure these are financial advisors? Not just insurance agents?

They have a financial planning. I mean, that's what they say they are.

Okay. What's the company?

Well, they. They work with. I think the company with the whole life is New York. I'm sorry. It's Eagle strategies, but New York life. New York life?

Yeah. These are insurance agents. They're not financial advisors.

Okay.

Because the insurance people don't know how to do anything but sell insurance, and they're not licensed to sell anything but insurance.

But she said Eagle. Rich. There was another of you.

Yeah, but, I mean, investing. You can't write for a New York life unless you're a New York life agent. So they're captives. So it's not an independent. So, you know, this is just the name of the local New York life office. So now we're not doing business with them. You need to. You need to move. You're getting bad advice.

Okay.

And so here's the thing. You've been through a terrible thing at a very young age. And so there's always a potential genetic component anytime someone gets cancer. That's why when you're doing a life insurance of any kind application, they ask about your parents and if they have died of cancer, because they want to see that. Because there are statistical correlations to that, at least susceptibility, if not DNA issue, and so on. Right? I'm not a medical person, but that's how the insurance world views it, and I do know that. Okay, so. But that doesn't change what you need to be doing. What you need to be doing is taking care of your family, what you're doing, and building some wealth for your future and the kids futures. And then when they face something, if they ever face it, they will. Let's say they're 28 and married with two kids. By then, they should have term life insurance in place. And then if they had some kind of an occurrence like you guys did, then they would be ready. That way you don't buy whole life life insurance on a child because their parent died of cancer.

That's asinine.

Okay.

Mathematically. Okay. And it's just the. It's just insurance age. I mean, if you ask a dog if it's hungry, it always says yes. If you ask an insurance agent if you should buy insurance, they always say yes. So, I mean, it's just, especially in the whole life world. And so now you. And you do need to get the mortgage into your name instead of your parents names. And that's going to require some other things, but we don't need to go get in debt to cause that to happen. So here's what we're going to do, okay? We don't need anything from you. We're not trying to sell you anything. Quite the opposite. As people of faith, our book tells us to take care of widows and orphans. And people that take advantage of widows and orphans, by the way, really get in a bad place. You don't want to be there. And so we're going to do quite the opposite here. I'm going to furnish you a Ramsey counselor, a Ramsey coach that's been through our training completely free, and let them coach you through how to get your investment structured and how to get this mortgage redone and hands on, rather than trying to give you an insurance agent, I mean, give you an answer on the radio, and certainly not going to give you an insurance agent.

So, I mean, you may need some insurance. All insurance agents aren't evil. That's not what I'm saying. I am saying that if you ask a whole life agent if you should buy whole life 100% of the time, they say, oh, yes, it's the answer to everything. And if you ask me if you should buy whole life 100% of the time, I say it's never the answer to anything.

Yeah. And in her situation, she has the two kids. So you hit on the.

So he's taking advantage of that emotion.

Yes. So that on the health side. But the other component of whole life, of what people get sold on too, is the investment idea. Right. And she was even saying, yeah, they.

Have a high up front interest rate.

But for her to know that there's other options on how to invest for your kids, that you actually will end up. They'll end up with more money, a whole lot more than versus even just.

Put it in a fruit jar, you'll end up with more than screwing around with a whole life insurance policy. Because at least if something happens, you've got the money in the jar. These people take it all. It's the payday lender of the middle class. That's how bad it sucks mathematically. It's absolutely a scummy product. And to play on a widow's emotions about her children might have. Oh, God, that's particularly nasty. Yeah. You should be ashamed of yourself.

But they also are convinced agents are that it really is the best. Right?

I'm like, they like, well, there's only two kinds. There's ones that are dumb and are convinced it's a good product. Cause it's the only way you could convince yourself is if you can't do math or you're scum.

Right.

You know, selling something or you're selling something, you know, is bad.

So that's. I mean, for people listening though, that's.

Does it not give you a little bit of a chill to sell a widow her kids stuff based on the death of her, their dad? I mean, does that not just a little bit? Hello, people. I mean, that's nasty. So.

Well, and the good thing is, is that there's other avenues for both of these from the insurance routes, all kinds of revenues. Totally. So that's the, that's the hopeful size.

Almost all of it is better than this.

Yeah. And what happens, you know, I could imagine when she's sitting in their office and they're explaining it. There's not. Option a, we could do whole life. Option b, you could do term life in this. And option c, it's all one thing, right? It's like this is the only option. And so just to know that there's hope that there's so many, so many things out there for her to do and that she's gonna be okay financially and her kids are gonna be gonna be okay. Trying to get some hope. Trying to get some hope.

Hang on. Christian will pick up. Honey, we'll get you taken care of. No cost to you. Zero. This is the Ramsey show, so here's a quick math refresher. There are only 24 hours in a day, so your business needs to streamline tasks that are time suckers and focus on activities that make money. So to reduce headaches as they scale, smart businesses use Netsuite by Oracle, the number one cloud financial system. Netsuite helps you improve efficiency by bringing all your major business processes into one platform. So join the more than 37,000 smart businesses like Ramsey solutions that have done the math and graduated to Netsuite. And right now, you can download Netsuite's KPI checklist absolutely free@netsuite.com. Ramsey. That's netsuite.com ramsey. Rachel Cruz, Ramsey Personality, is my co host today. It's wedding and graduation season. And if you've been changed by what we teach and you want to help a graduate or maybe a young couple start out the way they're supposed to start out, there's a cool way to do it. We call it the live and give box in the live and give box. I'm reaching for it here, trying to get my YouTube self together.

The total money makeover book, the baby Steps Millionaires book, two of my number one bestsellers. But most importantly, you get signed up for financial Peace University all in one kit. And, boy, wouldn't you love to have started out your life with that. Hello. It's pretty cool. And if you've got a graduate out there, too. Ken Coleman's book came out this week called find the work you're wired to do. It includes the get clear career assessment in it, and so, which is really important if you're gonna get started, you know. And so, again, graduation and wedding season, not a bad gift, particularly graduates. Right? And now, yeah, I know you've already got a degree and whatever, but, yeah, I want you to get clear on it. And the live and give box. Check all of this at ramsey solutions.com in the store. If you want to go straight to the box, just ramsaysolutions.com fox for the live and give box. Bryce is with us in Louisville, Kentucky. Hey, Bryce, what's up?

Hey, thanks for having me.

Sure. How can I help?

So I have around 34,000 saved up and I make about 4200 a month. I spend probably 1500 after bills and food. And I was just wondering instead of me putting money into my four hundred one k, and instead because I just invest in real estate and like put like rental properties up and so I can have a say, an income at all times.

Well, you don't have the money to buy a rental property.

I was going to go and take out a fha loan.

Yeah. Which tells me you don't have the money to buy rental property. So we. Bryce, what we have found is that the people that avoid debt, including rental properties, are the ones that prosper. I own a bunch of real estate. I love real estate. I'd love for you to own some real estate since you want to someday as a part of your life, but I want you to pay cash for it. Do you own the home you're living in?

Yes.

Okay. Is it paid off?

Yes.

Good. Good for you. What's it worth?

I got it appraised last year. It's probably worth 120,000, but it was family owned, so I got it for 30.

Wow, you got a deal. Good for you. Well, that's cool. So I'll tell you what I did, and I would recommend you do something similar. Okay. We recommend that if you're out of debt and you have your emergency fund in place, then we do baby steps four, five and six. And baby step four is 15% of your income, which is a, you know, you're making like 50, $60,000 a year. Okay. And so we're talking about seven, $8,000 a year is all. Okay. Going into your 401k, Roth, preferably, if they have a Roth available and with a match, that'd be wonderful. And some good mutual funds beyond that. I started saving once my house was paid off to buy my first real estate after I had gone broke in real estate by having too much debt. So, by the way. But yeah, so anyway, I just took an S and P fund and I started chunking money beyond my 15% into that s and P. And when it got to be enough in there to pay cash for my first little rental, that's what I did. You're probably not that far from doing that. Like, what price range would you spend for your first rental, Bryce.

So I was going to buy a ten acre lot for 75,000 and then I can get a used trailer that was repossessed for 10,000. They redo it and everything. And then it cost me $5,000 to get it put in. And then I already have someone put into my septic for 2000.

Problem is that won't go up in value, only the dirt will, not the trailer. So I would not invest in that as a rental because I want to invest in a home or a duplex or something that's going to go up in value, not go down in value. And so the only time I would look at trailers is if you bought a whole trailer park and they cash flow like a bandit. They make so much money, cash on cash return. It's unbelievable. But you've got the constant problem of taking them out of service because they deteriorate.

Yeah.

And you don't know, you don't want to take a nice subdivision, a good piece of dirt and put a trailer on it.

Yeah. How old are you, Bryce?

19.

You're 19?

Yeah. You got plenty of time to do this, right?

Yeah. And I would say too, Bryce, just to this point, it's going to take you, and you're a smart guy. I'm like, you're already at 19. You're like thinking of ways, how can I wheel and deal, you know, make some money, which is so great. And then this process, it's going to take you longer. But I think having a goal as you do the math out and say, okay, how long will it take me to save up? Because where you are in Louisville, Kentucky, I'm like, save, you know, 150,000 and go find a foreclosure at some point. This may be years down the road and that be your first, like, find the deal on the, on the sale and just say, yeah, this is me, my first. And you just slowly build. But the frustrating thing about this process, Bryce, is that it's slow. But the great thing about it is that it carries so much peace with it. It carries so much peace. You're not stressed.

And by the way, I've bought over 2000 pieces of property. And Rachel's husband, Winston does this for a living now. It's what he does. He's in the real estate business and he was trained here with me running my property. And so he's doing the. We're both doing the exact same things we're telling you to do.

Yep.

And we're. But we're just decades past you. We're you know, 20, 30, 40 years beyond your process. But I remember the first time I finally got $150,000 saved up. And oddly enough, that's what it was to buy that first property. And I had it laying there in that mutual fund. And then I looked around, found a bargain, and there we go. And as soon as you get about three of these that you own that are paid for, the rents coming off of three paid for properties are pure. They're not going to the bank, you're not paying any payments on them. So that pure rent stacks up fast, and you can buy another property. Ever so often, just off of the rents, you get a positive snowball.

And Winston and I, what we've done, too. Like, there was a condo. We got. Our very first rental was a condo, and in foreclosure, nasty thing. It was like a one bedroom, one bath. I mean, it was not much.

It was really nasty.

It wasn't much. But we fixed it up, did it, and then eight years later, it doubled. And so we were like, well, we could sell that, go to and, you know, find another deal somewhere else. So you can even step up in property, too, as you go through this process, if you don't want to, just hold on. We did.

Wow.

We did.

That thing was like a family member. It had been around a while. It was your first one.

Winston was attached. I trusted.

Almost like, not know the junkie condo is gone. That's.

Although it's not.

It wasn't junk anymore.

It wasn't good to it.

That's how I started out.

But it is fun, Bryce, and I think that is. I think a lot of people are interested in that. Like, this idea that investing sounds. Sounds boring, but it's a tried and true way to build wealth, so do it. But then the other. The other offshoot of investing and what you're talking about, and you're actually gonna talk about it at y'all's investing livestream, coming up.

Yeah.

Is real estate, and people really are interested, and it is. It's a great. You love it. I mean, it's a great. It's a great way to kind of diversify even your wealth building when it comes to that.

I've made a lot more money in real estate than I have in mutual funds, and I've also. But I've also put more money in real estate because I'm a real estate person, and the mutual funds. So my personal net worth is probably 80% real estate, you know, between mutual funds and real estate, anyway, not count, not counting this business that I own and that kind of stuff. But, yeah, it's very interesting. So, Bryce, the key is it's very difficult at any age, but it's really difficult to go slow when you're 19. Please listen to the old people go slow. The people who go slow in real estate are the ones that are still doing it 20 years later. The ones that go fast get burned, and they get to start over again, which is what I did when I was. I started buying real estate when I was 22. And by the time I was 28, I was broke. And so went from nothing to a millionaire to broke between 22 and 28. And so I just don't want that for you. I want you to just go slow. I don't want. I don't want your face on the front of Fast Company magazine.

I want your face on the front of slow company magazine.

So slow real estate.

Slow real estate magazine, which is.

You're not going to be everybody in America right now. Let's be honest.

You're not going to be a tick tock sensation, I can promise you. And not if you're doing it right. This is the Ramsay show. If current times have shown us anything, it's that the least expected events can and will happen, and we have to deal with it. That's why everyone who has a family counting on them needs term life insurance. For over 25 years, the only insurance company I've recommended is Zander insurance. Not only because they search all of the top term life plans to find you the best rates, but over the years, they have constantly changed and updated their systems to make the whole process simpler and easier. To get the protection needed, you can now apply with a completely touchless experience. With everything being done, either over the phone or the Internet. They also have plans with super competitive rates that dont require an exam, allowing you to skip a step and get the coverage you need faster. Go to zander.com or call 803 564282. Great rates and a simple process mean there's no excuse to not get this done, people. Rachel Cruz, Ramsey Personality, is my co host today in the lobby of Ramsey Solutions on the debt free stage.

Kevin and Katie are with us. Hey, guys. How are you? Good.

How are you?

Better than we deserve. Welcome. Where do you live?

We're from Keene, New Hampshire.

All right.

A little northwest of Keene, New Hampshire.

Bond. Welcome to Nashville. How much debt have you paid?

$122,836.

Good for you. And how long did this take?

It was four years and two months.

Four years and two months. Good for you and your range of income during that time?

We started at about 60,000 and ended up at about 130.

Wow, nice.

Doubled your income in four years? Yes, sir. How'd you do that?

I asked my boss to just bury me in work.

And he obliged? Yes, he did. What do you do?

I'm an independent insurance adjuster.

Oh, very good. Okay. So it is. You got it. You can do that? Yes. Yep. Okay. And what about you, Katie? What do you do?

I'm stay at home mom and homeschool mom.

Love it. Good for you guys. Well done. All right, so this is all that income changes all. All along. Your boss burying you?

Yeah, pretty much.

Good. Very good. Very cool. What kind of debt was this? 123.

It was a multitude of. Just about everything. Student loans, two cars, credit cards, medical bills. Don't think I'm missing anything else. Yeah, about that. But just normal.

You were normal? Yeah.

Yeah.

How long have you all been married?

Almost 13 years.

So, nine years into the marriage, give or take eight years into the marriage, something happened. What happened?

Well, first off, we just want to thank you and thank God for putting that blessing and that call on your heart to help us and help the millions of people that you've helped so far and will continue to help. And that's really where our journey began, is getting into our bible and getting back to those biblical principles that are buried in there that we just needed to go find. And you really brought them to light for so many people and including us. But when, about four years ago, almost five years ago, we went in to go get diapers for our middle child at the time, and I went through probably about three or four different cards, and I couldn't buy them. And I walked out back to the car and sat down next to Katie and said, we can't do this anymore.

Yeah. I break a dad's heart. Yep.

I couldn't buy diapers from my daughter.

Yeah. That'll put an end to it. And so you go home and you're like, okay, we're selling everything. Yep, yep.

We pulled the old book off the shelf because the book went through eight different moves with us and never read it. Nope, nope.

Which one? Total money makeover. Yeah.

It was the worst. We hear that a lot. We hear this a lot.

This is a very total money makeover. America's coaster on your coffee table.

Yeah, exactly. Oh, my gosh. So, Katie, when that moment happened, you're sitting there in the car. Are you thinking, oh, thank God, let's do something, or were you like, wait, is it that bad. Oh, gosh. Like, what was your reaction in that moment? Yeah. I mean, it was just, like, a feeling of dread, like. Yep. Everything that we've done trying to live normal just didn't work, like, at all for us. It all came crashing down. Yeah. And then. Yeah, we were pretty much all in.

We talked to our pastor at our.

Church, and they were offering FP.

Oh, good. You went through financial peace.

Yeah, we got into class right away.

Yep. We had to travel, like, an hour for it.

Yeah.

We drove an hour for it to Concord, New Hampshire. And then shortly thereafter, the next February of 2020, we led our first class ourselves.

Wow.

Yeah.

Thank you.

Literally, a couple months after we got out, we decided, yeah, we're gonna lead our own class.

And then right in the middle is when COVID hit.

Yeah, of course.

January of 2020.

Yeah, of course.

Oh, man. What? Which debt was it for you guys that you were like, oh, it's gone. I'm so glad. I'm so glad it's gone. Credit cards.

Oh, for you?

Yeah.

Student loans for me.

Okay. Okay.

Okay.

Yep.

It was that last one where it was just over the hump, especially during. When you're right in the middle of it all. And the longer the. The longer that you're doing it, the higher the debt is that you're trying to pay off. Snowball.

It works.

But we.

The mountains to climb. Yeah.

Yep. The back of it's steep.

It was 50,000. So it was almost half of our debt. The student loans at the end. Yep, yep. And we paid that all off in one year. We were just. That was our last year.

Well, see that half of it in three years and the other half in one year. Yep.

Yeah. We may be along the way. So that slowed us down. I had a surgery as well, right after the baby. Yeah. Oh, my gosh.

Yeah. Then that math is fair. Yeah. That's good. That's good. Way to go, guys.

Thank you.

You persevered. You kept with it. You kept with it. You kept with it. Why didn't you quit?

Well, you saw one of them coming.

Up on the seat.

I don't ever want to have that feeling again of not being able to buy diapers. Yep. Yep.

I can't wait to buy somebody a pack of diapers that's struggling with their cards that I see at target or Walmart or whatever.

Wow.

I can't wait to go and buy.

You may buy a whole bunch of diapers in your life before this is over. God may just keep putting them in line in front of you. Yep.

We'll just keep on blessing.

I love it. That's fabulous.

What do you guys say to families out there? Because I have three little ones, too, and I just know life is just tiring. Right? You're in a really tiring season, and as you're home all day with the kids while he's working extra. Right. So you probably feel like a single mom half the time while he's. While he's gone, you're exhausted. So what do you say to families out there listening? And they're like, there's. This is just not the time. This isn't the time to do it. We're so tired. We're barely getting by. Like, I don't know. I don't know. What would you say to them?

I would just tell them to continue to communicate with each other because that's been the key to this whole thing. Don't give up. To keep on going, no matter how grueling it gets, no matter how long the days are, no matter how much time that you feel like you don't spend with your kids, they're still going to be there. They're very resilient. They're still licking lollipops and laughing along the way, but just to keep on going, don't give up.

Yeah, that's good. It's never too late to start.

Never too late.

I mean, we were married for years and years, and at one point we had said, we're always gonna have a car payment.

Always.

He came out of his mouth, and.

Now it's not like a statement of principle, it's a statement of hopelessness.

Yeah, exactly.

We've been there, and you can turn it around.

Yeah.

Turn your perspective around. So good, you guys. Oh, amazing.

Well, thanks to your pastor for teaching financial peace University at his church. And it was there at just the right time. Go figure. Very cool. Good for you guys. I'm so proud of you. Thank you. Well done, your heroes. Thanks. You're heroes to those little kids. You change their whole family tree. So well done, y'all. Thank you. So well done. You're on the opposite of the spectrum from not being able to buy diapers to buying diapers for the rest of your life. There you go. For other people this time. There we go. I like it. If you live like no one else, later, you can live and give like no one else. That's how that works. All right, bring the kiddos up. What are their names and ages?

So we've got Isaiah is nine, Mia is five.

Mm hmm.

And Levi is three.

All right. And we've got matching dresses with mom. That's pretty cool. I like that.

They've been practicing their debt free screaming.

Right here, all the way down. Yep. From New Hampshire to Tennessee. That's a lot of practice. Wow. Lots of advil for you. Yes. Very good, guys. I'm so proud of y'all. Thank you. Heroes. You're amazing. You've done something that's absolutely not normal. Be not conformed to this world, but be transformed by the renewing of your minds. You're amazing. Thank you so much.

Thank you so much.

Well, well done. All right. Kevin and Katie, Isaiah, Mia and Levi. $123,000 paid off in four years and two months, making 60 to 130 of buried in my work. Count it down. Let's hear a debt free scream.

Three, two, one.

We're debt free. Oh, very good. Very cool. Cute kids. And I think mia wins the award. Maybe. I know she got it down and then went right back to the lollipop right after the screen. Very well done. Good stuff, you guys. Very cool. So encouraging. You can do this at any stage of life, with any income, with any situation. When you decide to change, that's when things change. No external force is going to do it. No matter who's in the White House, you still got to fix you. This is the Ramsey show.

This show is sponsored by Betterhelp. Hey, it's doctor John Deloney, and one of the most common questions I get is how to get something off your chest, a deep secret youve never told anyone or maybe something that happened to you, something youve done that youre worried about, because bringing it to light will disrupt your life. Anything. I say this all the time. Secrets will kill you. But its hard to know where to start. When it comes to talking about scary, dark things. Therapy can be a safe, effective place to get things off your chest, to learn how to say hard things out loud and figure out how to work through whatever is weighing you down. I've personally been blessed to have a great therapist who helps me get those heavy things off my chest. If you're thinking of starting therapy, give better help a try. It's flexible because it's online, so you can suit it to fit your schedule. Just fill out a short questionnaire. You get matched with a licensed therapist, and you can switch therapists at any time for no extra cost. It's time to get it off your chest with betterhelp. Visit betterhelp.com deloney today to get 10% off your first month.

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Rachel Cruz Ramsey Personality, is my co host today. Clayton is with us in Charleston, South Carolina. Hi, Clayton. How are you? I'm good.

How are you?

Better than we deserve. What's up?

So I got a question for you. My wife and I just bought our first house, and I'm currently a UPs driver. I make $30.78 an hour, and my wife is a doctor's assistant. She makes about 23 an hour. So, overall, we make a little over $100,000 a year, which is great. But I just got recently a job offer. It is a pay cut, but it is a better quality of life. We have no debt other than our house. We owe $244,000 left on our house. We put about $70,000 down on the house. And I just want to know, what do you think I should do? Should I stay where I'm currently at and work to pay this. This house off, or should I take this job and get a better quality of life? When you say, able to be around with my family and, you know, give me that start having. So we don't have any kids right now.

So your family's your wife?

Yes.

Okay. And I'm confused. How many hours a week are you working as a UPS driver?

Anywhere between 55 to 60 hours a week.

Are you able to cut back on just your hours there if you wanted to?

Unfortunately, no. The way it works is whenever you start is the start time that they give us, and then whenever you're finished delivering is when you're finished.

Okay. So when there's nothing else. Okay. What's the price? Like, what are you gonna be making the difference in income?

So, currently, I'm 30, 75. And then the new job will be 25, 38 an hour.

And have you run a $5 jump? Okay. Yeah. And have you guys run the math.

$5 jump, because you're gonna be doing 40 hours instead of 55.

Correct.

So it's a. It's a 50% pay cut.

Yeah.

You're not gonna be working as many hours, and you're gonna be making less per hour.

Right.

Have you guys run a budget to see. Like, to. Just to see, hey, if I took this new job and with the pay cut and the hours I'm gonna be working, here's what we have left. And, like, this is. This will be our life financially. Have you guys run those numbers?

We have, but I just feel like we're missing something.

And, yeah, you're running at 55. You're running it by the hour. That's what you're missing, right. You need to run the actual totals, and then you're gonna realize that you're taking a $35,000 year pay cut. No, you don't need to take this job. That's bull crap. You weren't looking for a job. This thing popped up, and it's not the answer to your problem.

Okay, well, I was looking for a job.

Okay, well, see, happen that it c is what you want. You want a job that pays what UPS is paying without working 55 hours? Not by. Not by the hour. By the total. So I want you to find a career. You're making about $70,000 a year, right?

Yes, sir.

Okay.

And I also get a page on this year, too.

Good. I want you to find a career that pays $70 to $80,000 a year and start working your way towards that career. Working 40 hours or so. Now, I've done work for Ups, speaking to your guys, executives, and I know a bunch of ups drivers and retired ups people. And the stock plan is incredible. I mean, and I don't know exactly how, where you are, what you're doing works, but my feeling would be, Clayton, that you could probably pick another route over time that got your hours down. Yeah.

I was gonna say, as you move.

Up in seniority, right?

Yeah.

Yeah.

Is that not how it works?

Yeah. As you move up in seniority, you can get a better route and stuff. But there's, at my center, there's over a hundred drivers, and I'm currently night, like number 70. So that's going to be like 1015 years.

No, it's not. They don't stay. You got turnover in there. They don't all have to die off. And so I think you need to talk to some guys around there and find out how long it's going to take you to get into a more reasonable route situation where you can control the thing because you're low man on the totem pole right now. So you're getting crappy runs that have long hours. Of course, holidays. You've got crappy runs that have long hours. It just goes with your territory. But ups is a company of work hard and pays well. That's the company.

Right.

They have a real work ethic culture. It's one of the reasons that they were attracted to me and vice versa. So it's been many years ago that I did that, but just the same, I came away from my time working with their executive teams and stuff with a respect for your all's culture, and so. But no, I think if you want to work less hours, you need to figure out how long it's going to take you to get there at ups as a possibility. Also say, okay, what career field can I start moving towards? And if it takes me a little while to get towards that career with some of the steps that Ken Coleman outlines, I would do that. But this presupposing that I'm going to cut my pay in half so I can work 40 hours and so I can be home with the dog. Nah. Nah.

Clayton, how old are you? Let me ask, can I ask you that? How old are you?

Yeah, I'm 26 and my wife is 27. I actually wanted to say something else real quick, too. With this new job, my hours will be 40 a week, but I go in at six and I clock out at two, so it gives me the opportunity to pick up a second job.

So where's the quality of life increased? Dude, now you're back to 55 hours a week and you're just making less.

I guess. Yeah.

Yeah. Now you picked up a side hustle so you're wearing. Unless that side hustle's taking you into something where you want to be when you're 36. No, no, I wouldn't do that. I'm not saying ups is the end all to be all. I'm not. If you. If you want out of there, I'll help you get out of there. Hang on. I'm going to send you a copy of Ken Coleman's book, this new one. Find the work you're wired to do to get clear assessment, and I want you to take that assessment. I want you to start thinking about what you really want to be, not just what you make. What is it you want to do with your life? And I will tell you folks out there, aside from this, I'm not about workaholism. I'm not about you abandoning your family in the name of work and never knowing your children's names or anything like that. I didn't do that. When our kids were growing up, I went through a season where I worked my tail off 16 hours, days. But it was a season, it was not a lifestyle. And the children were little bitty.

And, you know, their mother would tell you that she was a single mom during that time, but she and I talked it through. It's what we were doing to start this place that I operate today. It was the foundation of this place in the nineties I was doing that. And so it was a period of time. I meet almost no one who has a high quality life that has left their mark on their family and on this earth. That does it on 40 hours, just. I'm going to work 40 hours my whole life. You're just, you know. Yeah, for a period of time. If you're training for a marathon, you have to sweat. Now, do you have to do that every single day? No. When you finish, you know, when you hit the next time, you take a little time down. Okay. But you work like no one else so that later you can work like no one else. And, you know, you're just now getting involved and I don't know. I guess all your friends are out partying while you're working because you're 24 and, you know, that's gonna show. Or you're 26, they're gonna show up in their life.

There's seasons of sacrifice and for Clayton, and I don't know, I'm just making this up, but I'm like, yeah, there could be a season. You're an entry level guy. You got the crappy route, and you do that for two years, and then you get a better route, better pay, and.

You know what I mean?

But, like, there's. You don't get to start off, and not that he's saying this, but you don't get to start off, you know, at the top, necessarily. And so it's funny, I was doing career day at my third graders little class, and they said, where did you start off? I was like, I started off going to assemblies and high schools all across America, and I did that for, like, you know, three years. Who knows? I didn't get paid. Yeah. I mean, who knows where these.

Nebraska.

Yeah. These small towns and all of it. But, you know, again, there's just. There is that level of sacrifice, but then there's a clip going around on you, on, on. On the socials, and you're like, work 80 hours a week, so everyone does think that you're just, like, a work.

Well, I know everybody that wants to bitch and moan, some of that just. But, yeah, if you want something to whine about, you can find a clip of me to whine about. That's not hard. I've done 53,000 hours of radio. There's plenty of me saying something out of context that'll get you where you want to go for your little TikTok. Click through. 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, number one best selling author, including her two book series so far on children's books. I'm glad for where I am just a recent bestseller for your kiddos. It's the second one in that series. Be sure and check it out. She's my co host today, and my daughter. Open phones at 888-25-5225 Katie's in Minneapolis. Hi, Katie. How are you?

Hi. Good, thank you. How are you?

Better than I deserve. What's up?

I'm calling because I have a daughter who's going to be graduating college this month. She's going to have about $80,000 in student loan debt.

Good lord.

I know. So here's the thing. My husband and I knew inheritance money would be coming our way, so we didn't push back on her going out of state where there's higher tuition. And we didn't really tell her we would pay for her college, but we told her we'd figure it out because we thought we might be able to do that. And that would be money coming from his side and my side. So my husband and I divorced when she was a sophomore in college. And then after the divorce, I did get my inheritance money, and so I have enough to pay it in full, and I want to do that very much. I want to help my daughter. The only thing I'm just wondering is, should I pay it in full or have him ask him? He would be willing if he had the money. He's just kind of. I don't know if he has it right now to take on half of that burden of helping her.

Does he have the 40,000?

Not right now he does not.

Does the divorce decree demand that you two pay this, or is this just something you all sort of, kind of had a discussion about once, way back there and never talked about it again?

Correct. There's nothing in the divorce degree on this.

Yeah. Your ex husband's not going to give her any money?

Well, yeah, I. I think he wants to, and he would if he could. So that's where I'm thinking what I could do is just pay it in full and then ask him to pay me later. But I don't think I will ever see that.

Yeah. I mean, if you're on speaking terms with him and you want to pay it in full, say, I just paid it off one time. We talked about it, and you said you'd pay half. If you can ever give her the other 40, maybe she could use that towards a house or something.

Okay. Yeah. It was a quite amicable. Oh, go ahead.

Yeah, it's okay. So if you mean if you can have that conversation, that would be fine, but then, but then forget it. It's over. You know, you don't get to go back later and go, where's that money?

Right, right.

You just, you just drop it. You made a decision and you made a comment and you moved on. That's what I would do. Because otherwise this is going to ride around rent free in your head.

Yeah. And we're quite, we're friendly. It's quite amicable situation, not relative.

If he doesn't ever give her money, yeah. And it bothers you, and you lay awake and he doesn't think about it again, you'll be the only one thinking about this on the planet.

How much did you get from the inheritance, Katie?

Well, quite a bit. I was able to buy my own home after the divorce with it.

What's quite a bit? How much did you do?

Do you feel comfortable saying it or. No, sorry.

Just under a million.

Okay.

Yeah. So you have a paid off house. How are you doing financially? Because that's almost what I want to make sure that, you know, this money's being. Because, I mean, it's 80 grand. So I'm like, I want to make sure, Katie, you're set up well for your future retirement. Looking like we talk about doing that, laying that foundation for the parent first, before the kids, and so making sure that, yeah. Where you are financially is in a good spot. So you bought your house outright, so you have no mortgage?

Correct.

And how are you doing with retirement, investments and everything?

I think I'm okay. I have 700,000 in an IRA. Well, in the IRA, 85. And a house is worth what, 500,000?

And you're how old?

55.

Cool. So you're a 55 year old married, I mean, divorced millionaire. Cool. That's neat.

Well, thanks to my mom.

I know. And so we want to honor that memory by being wise. If I'm in your shoes, yes, I would write a check based on what you have told me and pay off your daughter's student loans. And yes, I would make a phone call to the ex and say, hey, remember when we said that I just paid the whole thing? When you get ready to pay her your half like you promised, someday she can use that for her first house or something else. And I'm not letting you off the hook. I wanted you to know I had done it, though, and drop it. After that, forget it ever happened. Just walk away and never think a thing about it again. Can you do that?

I can do that.

Okay. Because I don't want this becoming this constant thing, like, when's he gonna do his part, you know, and all that. Because you're doing your. The only person you can control is you, and you can't control him. And, you know, you're saying it's amicable and he intends to, and you have faith in him. You know, I've just been doing this 35 years. My faith in the ex following through on a promise is fairly low. You know, it's just fairly low. I just see, you know, I guess nobody calls this show and says, oh, my ex followed through. That doesn't happen because we hear the bad, we get only the other ones. Yeah, but. But, yeah, I just wanted to let you know, Dave. No, I mean. Cause I guess some of them do, but, I mean, we just don't run into it.

And thank God for, you know, that she. Oh, I hate to say that, because it was her mom's passing, so. I didn't mean that, but just that she's in the situation she's in. Because that's another reason why we say don't take on debt, because life happens, and they had this plan.

Yeah.

And then end up getting divorced in the middle of school. And if this inheritance hadn't come, this daughter, you know, if it's a parent plus loan, I'm like, yeah, both could be on the hook. But also, I don't know what the daughter signed. I don't know how they did the student loan agreement, but the daughter signed up for it.

She's got a math.

She should have been 80. I mean, she would have been 80 grand, thinking, like, we'll take care of it, too. So that's the asterisk, too, of this story, is that you're taking on risk. Always, always, always when you take on the stat. And life rarely plays out exactly how we have it planned out.

Like, never.

Yeah. So it's. It's just that. That word of caution. But, Katie, I'm so sorry. That's a hard season, Katie, you know, losing your mom, the divorce in the middle of it, and it's just. That's hard. That's really hard. But this is a redeeming, beautiful thing that you'll be able to do from a financial aspect to be wise with. So I'm glad you called in.

Very good, very cool. Good stuff. So, yeah, the. The cool thing about student loans is they shouldn't be there at all. Almost all of student loan debt is based on someone choosing to go to a school that they could have gone to a cheaper school and paid cash almost every time. You're choosing a school you can't afford, just like choosing a car you can't afford. And so I can buy a car to drive around for $5,000. I have $5,000. Or I can buy a $50,000 car because it's a nicer car and go $45,000 in debt. That's a choice. It wasn't a requirement to have transportation. It was. You chose poorly and you choose to go to a school you freaking can't afford. Moms and dads. You need to. You need to learn a new word. No. It's a new word. Try it. No. Everybody practice with me. No. This is the Ramsey show. Rachel Cruz, Ramsey personality, is my co host. I was going over my notes this morning to get ready to speak this weekend at the total money makeover weekend. I am so excited to get to do this. I haven't done the classic total money makeover material in a while and I'm getting to do some stuff I haven't done before this total money makeover weekend.

I'll be speaking, of course, Rachel Jade, George Camel, Ken Coleman on how to get your income up. John Deloney on how to bring more peace to your life overall, getting out of debt, creating a budget, communicating better with your spouse, easing anxiety, investing and building for retirement. And it's a whole thing. We start on Friday night, this coming weekend and go all through Saturday and live taping of the hit podcast smart Money Happy Hour with Rachel and George. We've got live Q and A all through the thing. It is going to be an absolute blast. And there's still some tickets left. Sadly, I thought it would be sold out by now, but I was wrong. So we'd love to have you guys. It's right here on the Ramsey campus this coming Friday, May 10 and 11th. You could come a little early and watch the show be done. We do the show every day from one to four central time on the glass. Following that, grab a bite, eat somewhere and then come on up, up on top of the hill to the Ramsey event Center. And we'll be doing the event so you can get your tickets@ramsaysolutions.com. Events and handful of tickets left.

You can still get in and we're excited about doing this.

Yeah, it's going to be a fun weekend. It's always fun. Our events are always enjoyable and we'll all be there. And I like that. It's so money focused the whole weekend, which will be great.

Yeah, you'll laugh, you'll cry. You can bring that spouse that needs to be converted or that friend that thinks you're crazy, and they will leave being as crazy as you. Yeah, that can happen. Daniel's with us in Tallahassee. Hi, Daniel. Welcome to the Ramsey show.

Hey, Dave, Rachel. How are you guys doing?

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

All right, just a quick question. So basically, after some few time, after some convincing, I did get my wife on board. We are both on board when it comes to attacking our debt. I want to be gazelle and tansen. If I can borrow the language you guys use. She wants to be more on the intentional side while still taking care of things that she thinks are still important. So I'm the grumpy guy who says, I don't want to do nothing. No more Christmas, no more gifts, no more. No more nothing. That's just.

Did you say no more Christmas?

Well, no more. Yeah, I want. Yes, I.

Well, no wonder you're unpopular. Grinch.

Yeah, I am the Grinch. I'm not a big under. Only because I'm like, how can we strip down to the bare minimum?

I'll go with that. But I mean, you start with Christmas. I mean, I'm cutting some of your stuff before we're getting to Christmas, buddy. Oh, my gosh. No wonder she's not enthused about you.

So my question. Well, I guess I introduced her to we both thinking funds and now we. It seems like we're starting to have a growing amount of sinking funds so we can stop dealing with things as they come up. And it's helped we have the money when we need it. But I feel like the sinking funds are taking a little too much of the margin. I would like to attack the debt at a more aggressive speed. So I don't know how to compromise with her. And we're running at different paces here, it seems like.

What are the sinking funds for?

Let me pull up every dollar just to give a few examples here, but.

So every dollar, every dollar can keep going. Sorry, go ahead.

For instance, the homeschool program. Every year comes around, around August, September. We pay for that. We used to go into debt for that, but we stopped doing that since we stopped this whole.

How is that a waste?

It's not a way. That's. No, some of these are not a way. That's not a way.

We need a for instance. That's one of these things bothering you.

Give us a waste.

That one's not bothering you? If it is, you got an issue.

My girls. My daughter's birthday. It's coming up. This is so bad. Now that I realize. Okay. But she wants. We're saving up some of that because.

How much are we planning to spend on the daughter's birthday?

Um, I have twin girls so it's. We're setting aside 100 a month.

If you're spend $1200 on a birthday party.

No, no, no. It's about 500. It's coming in. It's coming in on August.

So it's so 250 a kid.

Right. Okay.

So your argument is that that might be too much.

No. I feel like they started all add up.

Well, they're adding up because they're real. I mean, that food thing, it adds up.

Yeah. Because I think, Daniel, there could be an instance of like, oh my gosh, life is expensive. We all have just been charging everything. You said, the homeschool stuff, we just go into debt for it. You almost just delayed everything. And now when you're paying for stuff so upfront, it is going to feel like. Yeah. That there, that there is more.

Yeah. You're actually admitting what's going on now by doing a budget with sinking funds and you weren't before. So I.

Unless it's a vacation. Right. Gazelle. Intense. I would say we don't do vacations. Let's pause. Twelve months on the vacation.

Eating out. Eating out. We're going to pause like a couple.

Of things to do, but. But the reality of life and what life costs may be the thing that's like, oh crap, this is, this is a lot. And when we're cash flowing, everything like what we teach you really face, oh my gosh. Our life is eating up so much of our money because life is expensive. So there could be stuff that you guys tweak here or there, but.

Yeah. So Daniel, it sounds like that. I don't think you're on as different a page as you think you are. I think your arguments, not with her, it's with reality. You're struggling. And so let's give it a month or two and just kind of see if this, see if the emotions of this iron out. Okay. I appreciate and embrace your enthusiasm. I appreciate and embrace your passion to get this done. Those are keys to getting it done. And so you keep that part going. Yeah, but just don't blame. I don't think she's to blame. Nothing you gave me here was like that. She's acting like she's not intense. I mean, we're going to buy clothes and we're going to buy food and we're going to pay for the homeschool materials and, you know, we're going to have a birthday party. Might be a lie, but it's not. It's not, you know, it's not throwing you off by 2000.

Yeah, right.

You didn't tell me you spent 12,000 or twelve. You just said 1200. I'd probably say it's a bit much, but. Yeah, but the. And it depends on the age of the kid and all that kind of stuff too. I mean, if you got twin one year olds, they don't even know you're doing this. So you're doing it for you. So then that's a different thing. So you know that. But it. But if they're twin ten year olds, they definitely know. They know everything about what's happening there. And I guess a visit to the magic mouse, Mister Cheesy. What's his name?

Chucky cheesy.

Chucky cheesy. Yeah, the magic mouse. I guess that's probably a couple of. Was like Mickey Mouse, I guess. No, I think. I'm thinking Chucky's probably a couple of go down there.

I mean, per kid. Yeah, I mean, those birthday parties at those places you're paying per kid and you're. Yeah.

When you've had them down there. I don't know what they cost, but. Yeah, I've been down there when it happened.

$20 a kid, $30 a kid for the unlimited stuff.

Me and the mouse are in there.

We've drug day, Chuck E. Cheese, indoor trampoline parks. There's been a lot of great birthday parties. A lot of great birthday parties.

There's not enough water disinfectant in the world. Oh, there are some roast.

It's full. Kids.

Yeah. Little sweaty kids. Oh, all over. All the. Yeah, it's just nasty. Yeah. But. Yeah, I'm guessing that. I mean, I've been to those with the grandkids and I'm guessing you guys are shelling out.

Yeah. Yeah. So, yeah, I would say if you're getting out of debts, the birthday party is probably at home. You're ordering some pizza, having some friends over and calling it a day. I mean, like, you know what I mean? If you're gonna go just like the simple routes.

Yeah.

And it can be done. Like it's. That's.

But the thing here, Daniel, I think is what, as we talked through this with you, everything you brought to us were things that were not out of bounds. And so it didn't sound like your wife with the sinking funds is like destroying your little plan. It's more like reality is destroying your little plan and dampering your enthusiasm.

It's actually a really great point. I hadn't thought about that. But for a lot of people that are starting this process, when you say no debt.

Yeah.

So that we can pay off debt, then those expenses are real. It's not this, like, oh, we can just worry about that later. Yeah. Down, down the road. But then that's the power, too, though, to his point is that's when you can cut some of those things. You're like, oh, my gosh. What were we paying for that? Maybe there's a cheaper homeschool program or whatever. Right? Like, that's when you actually start caring about the expenses because you're. You're seeing it in real time and in real life.

Rachel Cruz, Ramsey personality, is my co host today. In the lobby of Ramsey solutions is the debt free stage. On the debt free stage is Reuben and Kirsten. Hi, guys. How are you?

We're awesome.

Hey, Dave. Welcome. Good to have you. Good to have you. So where do you guys live?

Colorado Springs, Colorado.

Colorado. All right. Well, welcome to Nashville. Good to have you. And how much debt have you two paid off?

We paid off 270,000 in five years.

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

We started at 72,000 and then went up to 112.

Very good. Very good. What do you do for a living?

We both work in the finance department of a software supply chain management company.

Okay.

Same place? Same company.

That's fun.

Did you guys meet there?

We actually met at a different location and we worked together the entire time. We've known each other just different places.

That's awesome. So great.

So how long have you been married?

It'll be six years next month.

So right after marriage. Boom, boom. We're getting out of debt.

Yeah.

Five years. Game on. What kind of debt was the 270?

This was our house.

You paid off your house? Looking at a couple of weirdos. I love it. You're so weird. What's this house worth?

Probably about 425.

I love it. And how old are you two weirdos?

30.

30 years old?

I'm 31. He's 35.

Close enough. Close enough.

He's trying to get some youth.

Good move, Reuben. Well played. Yeah, I like it. Hey, very good in your eyes.

Early thirties. That's amazing.

So you get married and is this the. Was the only debt you've been working on, or did you pay off others before that?

So it started about eight years ago, but we cash flowed. My bachelor's degree. Our wedding, our honeymoon to Alaska just saved like crazy. And then during the payoff, we financed. Or not financed. Sorry. We paid off about 50,000 in home renovations.

Yeah. And paid 270.

Yes.

Way to go, guys. What in the world happened to y'all that made you so weird? This is wonderful. Like a year after marriage, it's game on. On the house.

Yeah. Basically started for me about eight years ago, driving home from work in a job that I hated and just really wasn't happy about who I was and where I was at in life. Turned you on. You just happened to be. Actually turned on the radio. You just happened to be on the radio and never listened to the radio back then and heard your voice, heard your name before, but had never truly listened to you and some context. My grandparents, my dad, there been huge influences on my life. They basically practiced your principles from day one. Pay cash for things, you made gods, and grandma's ways of handling money. And when I heard you, that instantly clicked for me. So I was super just intrigued at that moment. But I also just loved how raw you were with the collars. I don't want to see you in a restaurant without. Unless you're working there. You need to sell your truck. So I was pumped up just listening to you, and you really started talking about changing your family tree and talking about things that really hit me hard. Changing who you are, changing, you know, really just owning up to yourself and taking control of your life.

And that hit me hard. Cause, yeah, just when I heard that, I looked at myself in the mirror and I was like, if I'm ever gonna have the things that I love and really want in my life, then I need to. I need to. I need to do something about it. I didn't have money problem. I just had. I had a me problem. Thank you.

That's amazing. And that's it. I'm like, that's the key. For so many people. It's that awakening of, like, oh, my gosh, I can do this. Like, I can wake up tomorrow and make different decisions. Empowering. So you guys had babies during this time. How old are the kids?

Isaac is two and Ruby is seven months.

Okay. Okay, so you all have little ones. Little ones. So what was the hardest part of this? I mean, this is a lot of money, you guys, that you paid off a lot of, I'm sure, extra work and everything, but, yeah. What was. What was difficult?

I think just staying the track, you know, it could have been really easy to divert the plan or, you know, just make other decisions. We've had hail, damaged cars pretty much whole lives. You know, we just don't care. But it could have been really easy to move, to divert, but we had a better purpose, and we knew we were bringing kids into the world at some point.

Was it worth it?

Oh, it's so worth it.

Absolutely.

Who made fun of you?

We got called crazy a lot, but nothing like down putting. That was just more poking fun. And it encouraged us just in a different way.

Yeah.

Did you have some cheerleaders, people that were supporting?

Yeah, definitely.

Yeah. Good. Good.

And another thing that was kind of hard for us, I guess, is I had a townhome in, like, 2015, and it was super cheap, and it was not the best part of the springs, and there was a lot of crime activity. Drive by was across the street. You know, somebody had gotten killed, shot and killed. So people were like, you need to get out of there. We're like, no, you know, we got a. We got this. We're doing this for a reason. You know, this is for a purpose. So that was.

Yeah, yeah. The location. And then you got the house, though. So you moved out of that house.

Yeah.

We just knew that we wanted to wait until after we were married and do things in the right way. We stayed there longer than we should have, but we did. We're still here. We weren't shot, so.

So there you go. Oh, you guys, that's incredible.

I don't know if I've ever heard anybody say that so pleasantly. We're still here, and we didn't get shot. Way to go, Kirsten. I love it. Good for you guys. Way to go, you guys. I'm so proud of you. I would imagine your mom and dad are jumping up and down proud, aren't they, Ruben?

Oh, man. My mom passed away in 2008. So, you know, part of that was she did have a 30,000 in life insurance that we were able to put down on the house that we're in now. So to honor that or honor her that way has been awesome.

And, yeah, it's incredible.

So great, you guys. So great. So what would you say to people? The key of getting out of debt.

Is for us, we put, and when we initially got the mortgage, we put the extra principal when we did the paperwork. So there was that gap for us. Like, the extra payment was automatically coming out. So we just got used to that being our mortgage payment, even though it was more than double. And it put that gap so you couldn't make any real impulse decisions, and that would take you off of your goal.

Yeah. Yeah, that's great. That's a smart way of doing it, for sure.

Automate your discipline.

Yep.

I like that. Just keep it going. It's a good plan. I used to do that to myself all the time until I had natural discipline. I put stuff on auto, everything, so it just automatically happened. And I went, oh, now I have to live on what's left because I put all that money in a mutual fund. You know, it's like, wow, that's very cool. Good for y'all. Well done. Very well done. Congratulations. All right, it's. You want to bring Isaac and ruby up for the debt free scream.

Isaac, come on. So sweet. Oh, my gosh, she's so cute. Seven months.

Seven months. We're gonna scare her. She's gonna get scared to death when her mom and dad yells.

I know. The babies. Yeah, they are. Get a little frightened with the screams. So great.

I love it. All right. Reuben and Kirsten, Isaac and Ruby's heroes. They've changed their family tree. Early thirties with a paid for house in Colorado Springs. Meanwhile, America sits around in some places whining that it can't be done. These two prove that it is done every day. This is what you call millennials. This is what you call millennials that win. And we see them all the time. Or Gen Z. Reuben and Kirsten paid for house Colorado Springs. 270 paid off in five years, making 72 to 172. Count it down. Let's hear a debt free scream.

Three, two, one.

Debt free. Yay. As predicted, scared poor Ruby to death.

And the guys, it got a little. Got a little scared, too.

There's a lot going on there that's so great.

Amazing. Oh, amazing.

Yeah. So for every time I hear that you and I on the Ramsey show and Jade and George, and we're out of touch, and we don't know what the real world is today, and you're speaking boomer language and all that kind of stuff, all these negative things that are out there. Then we meet people like them.

Yep. Kirsten and Ruben.

And they do, I know, not just purchased a home, but they paid it off in five years in their 31 year.

And I think it was making 1112, not 172, 72 to 112.

I wrote that down. It looked like a seven.

No, no, but I'm saying, you know, it. So it's not like they're making 300k. Right, right, exactly. I mean, it's. It's amazing and it is. It's the discipline and it's choosing. And now it's the. The whole idea that now oh, my gosh. There's no payments. There's no payments. But they did it. Well, Ruben said y'all could replay that monolog for over and over on loop because it's true. I'm like, you have to take response. Yeah. You take responsibility and it's amazing.

Yeah. He said the guy in my mirror had to change.

Yeah.

And he did. I'm so proud of him. What a hero. And he's got changed his kids life.

Yes, Kirsten. Just killing it. I mean, amazing.

Well done. Well done. This is the Ramsey show. Listen up. Trying to reach your money goals without a rock solid budget is like trying to climb Mount Everest in ice skates. It isn't going to work. That's why we built the every dollar app to help you win with money. It's the simplest, most straightforward way to track your spending and give every dollar a job. That way, you can stop letting your money push you around and start reaching those money goals. Download every dollar for free on the App Store or Google Play. Rachel Cruz, Ramsey personality, is my co host. Stephen is with us in Chattanooga. Hi, Steven. Welcome to the Ramsey show.

Hello.

Hi.

Here we go. So I'm about to be divorced. The income disparity between my wife and I is pretty great. So I have a large amount coming my way in a quadro and alimony coming my way. Three years of bonus money of her coming my way. We're going to be selling a home here soon, and I'll get about 100k out of that. I want to get myself into a house and have it paid for in the next few years. I don't have any retirement or anything set up yet. I'm 46. My income is growing rapidly. I'm a brand new barber. I'll be make about 30,000 this year, but I believe every year probably go up about ten k. Okay, where am I. Where am I going with this? What do I do with this quadra? I'm going to have quadrant.

Quadrant's got to be put into an IRA. You've got to leave it alone. If you cash that out, you're going to get penalized and tax. You got to leave it alone. Yeah.

So just pretend it doesn't exist.

Exactly. You need to get with a smart vesture, probably at Ramsey solutions.com, and find somebody to sit down with and they can help you do the rollover and you can move that into your own personal IRA and some mutual funds and have no taxes on it. But if you pull it out and screw with it, you're gonna have taxes on it. So leave it alone. Because it's in her take. All it is is a section of her 401k being sliced off for you. Yeah, that's all it is.

I had thought about using that for a down payment.

No, no. You're getting a hundred out of the home and you're getting what other money? You said you're getting a couple of bonuses and other stuff. How much money total?

Yes. Not. Not counting the clock, four years of alimony, 875 a month and three years, 25% of her bonus. It'll be about eight to ten grand each year.

Oh, it's not all in a lump sum. No, the only lump sum. The only lump sum that we can touch.

You're gonna get eight. 8000. You're 8700 a month? Is that what you said?

I'll be getting. I'll be getting about 1600 a month in alimony and child support.

Okay. Okay. Okay. I got you. Okay.

Yeah. Okay.

Broken up over four years and my income will be increasing over that time as well.

Yeah. So I'm gonna be looking at putting a hundred thousand down on a house. That's what you've got.

Yeah. And just ignore that quadro.

Yeah, you've got to, because it'd be like taking the money out at 30% interest. Yeah.

Because all just gets taxed.

You're going to get taxed. And a 10% penalty. You're going to get hammered. So you leave that puppy alone and just go do you a house of some kind with 100 down based on the current income that you've got. And you can count palimony. You can count shots. I mean, you can count all of that in terms of as long as it's going to continue. And that'll offset the fact that your income hasn't gone up or you can wait a year and let your income come up and then you've got a story to tell to a mortgage company showing tax returns as a new barber that made this and then I made this and then I made this. And here's a trend line. And so it's reasonable to qualify you based on those things. You got have two years tax returns as a new self employed person, and then you'll be able to move forward on that. But, yeah, just. Just take your time. There's no reason to, you know, you are getting some money out of the divorce. But it is. It's not exactly like you hit the lotto. I mean, it's. It's a.

It's a nice amount of money, but it's not. It's kind of not going to put you on Easy street. You're still going to be doing a bunch of careful things there. Today's question of the day comes from Taylor in Mississippi.

Taylor says, I'm currently twelve weeks pregnant with a baby girl from my boyfriend. I recently lost a loved one who left me a large inheritance. I have $40,000 of debt and my boyfriend is debt free. Do I take this inheritance and put towards my debt and then take what's left and put down 20% on a house? My boyfriend and I plan on getting married, but for some reason, he's really against getting married before I have the baby. That's weird. Okay, well, I don't know why that would be the case, but, yeah, I mean, that's what I would do. Yeah. I would take the inheritance, I'd pay off your debt, Taylor. I would keep everything so separate. If you bought a house, I would buy it on what you make, your income, your life. I mean, I. I would be very, very hesitant to put him on anything. I wouldn't put him on anything.

Not hesitant.

And I don't. Just don't do it. And I probably wouldn't do anything until the baby comes. I mean, honestly, I don't think I would make a big decision like, well, pay off your.

Pay off your debt.

Pay off your debt. But I wouldn't buy a house pregnant. I would continue to rent, maybe rent for the next year or two, then. Then hopefully you guys get married, then after you have the baby, and then you guys together, after you're married, look, and say, okay, let's. Let's purchase a house, but while you're pregnant, I probably. I wouldn't take some of this inheritance and put a down payment. I would just. I would rent be where you are for, you know, one to two years. And then from there, see what happens, relationally, if that changes, and then even just financially at that point.

Yeah, I'm old.

Why is he.

There's a term from my generation, okay, careful. Called shotgun wedding.

Oh, yeah.

Which, you got a baby on the way, buddy. You show up or daddy's gonna bring a shotgun and help you show up.

Oh, my gosh. Is that.

That's what that means. That's where that comes from? That's where that comes from. I'm gonna bring my shotgun and by God, you're gonna marry him.

I just thought you meant a fast fight. Okay.

No, that's. That. This is, like, disturbing, but I agree.

Well, I agree. That's weird that he's, like, really, really against getting married ass backwards. It's.

It's just. It's not weird. It's just wrong. And it just. My warning bells are going off like crazy.

Minus two. But I don't want to force her into a marriage with a terrible guy. So I'm like, right. No, I wouldn't. No, I would not say, just go get married right now. He's not a great guy.

For some reason, he doesn't. Yeah. Okay. So, yeah, don't put this guy's name on anything until he is a husband. And period.

Yeah.

Under any circumstances. And don't put anybody you're not married to, period. No matter how sweet and wonderful they are. Their name on your freaking house. You get yourself in a disaster. This just. All right. John's in Colorado Springs. Hey, John, how are you?

Good, how are you? Thank you for taking my call.

Sure.

So I've got a bet with my wife on what we should do with our side hustle money. So we owe 102,000 left on our house. We have no other debt. We have our rainy day fund, our money in savings. We get 15% to our four hundred one k and our pension. Our interest rate on our house is 2.2%. I make between 30 and 60,000 on our side hustle. So I say that we take the 30 to 60 every year and put it in mutual funds because the rate of return is greater than the 2.2% on the house. My wife.

Your wife has been listening to the show and she set you up.

Yeah, she said that we need to just pay off the house.

She set you up. I hope you didn't bet much.

No.

John, what we teach and have the entire time we've been on the air for 30 years is that you pay off your house as fast as possible, regardless of the interest rate beyond the 15%. Because in studying the, doing the largest study of millionaires ever done in North America, we talked to 10,167 of them. Let me tell you how many of those 10,000 said we became a millionaire because we didn't pay off our house and instead made more money by investing the money in mutual funds. Out of 10,167, what number said we are going to go with John's plan? Zero. Zero. Not one. We've never met a millionaire who really did this. We've met a lot of people who have a theory and discuss it the way you're discussing it, because you're a math guy like me, and I immediately go to where you're going to. Because that's how my math brain works. You're looking at the spread. But what your spread doesn't take into consideration is risk. And the two elements of a paid for, the two elements of someone getting their first one to 5 million is typically their 401k being well funded, which is 15% of your income going in.

You're doing that and a paid for house. And so you're on track if you follow her plan to be a millionaire faster than if we follow your plan, based on the data that we've studied of actual millionaires, not with mathematical theory, because the math theory of what you're bringing up is reasonable. But the actual facts are when you pay off your house, other stuff changes in your life, and you tend to excel in your career and do other things.

You can invest the mortgage payment.

Yeah, exactly.

You don't have one.

Yeah, you can invest the mortgage payment like crazy. You go into overdrive. This is the Ramsey show, live from the headquarters of Ramsey Solutions. It's the Ramsey show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality number one best selling author. My daughter is my co host today. Thanks for hanging out with us. Open phones at 888-825-5225 Claire is with us in south Bend, Indiana. Hi, Claire. How are you?

Hi, Dave. I'm doing great.

How about yourself?

Better than I deserve. What's up?

Well, first, I just want to tell you really quick. I met my husband one of the first dates we had. He told me that his dad raised him with the Bible in one hand, a Dave Ramsey book in the other. That's how I kind of introduced you. So I thought that'd be funny to kind of share.

That's a little scary, actually.

It's led us on some good tasks here.

Good. How can we help today?

I'm calling. I wanted to ask you, as you both know, daycare costs are really high. We are expecting our second child in August, which we're really excited about. We both work, my husband and I, full time, and so daycare is our option in life right now. When it comes to trying to figure out in our budget. We're on baby step 456, kind of like how to best budget for the upcoming expense of daycare. We are kind of at a loss with. We can afford it, and that's not an issue, but it's. Where does it come out of. We're trying to figure out with our budget. Does it maybe impact us? Right now, we're putting 15% each into retirement for a season until my older son can go to a less expensive daycare. Do we put maybe 10% into retirement each so we have a little bit more room to give to the daycare for our second child when he goes to daycare or, you know, kind of trying to figure that out.

What's your household income?

We currently make 121 a year.

Okay. So 15% is $20,000. Okay.

Yeah.

And daycare is how much?

Right now we pay $311 a week for our son. So that's roughly, depending on the month. It could be between one five and 121-200-1500. But with the second child, we get a small 10% discount, and it could be anywhere between 2100 a month to 2700 a month of the daycare we're currently at.

Yeah. So it'll be three grand a month is what you guys will be paying. Yep. In daycare. And how much do you make a year?

So I currently make 55 a year.

Okay.

And my husband makes. I think I broke it down. It's 60.

Oh, that's right. You said 121 household. Yep. Sorry, I had that number.

Okay.

That's great. Yeah. Do you guys have. Claire, do you guys have margin in your budget? When you budget month to month, do you have money that you're putting away in savings just for other things? Is there. What does your budget look like?

Yeah. So typically in a month, we put towards retirement and some other savings, about 1300, and then extra we have leftover for, like, you know, gas we donate to our church, groceries, household items, you know, utensils, toilet paper, things like that. And so we do have, you know, we budget as quick, close as we can with everything, but just trying to figure out when before baby comes and everything else, like, how much more do we save? And then that only lasts us for so long. And again, this is only for a short period of time because our son could go to a different daycare when he's four, the oldest, and it would be a third of the cost. So it's not going to be forever that we would be in this predicament, but just for a short period of time, we're just going to be at a higher daycare cost.

Yeah, yeah, yeah. I mean, I think in a perfect world, you're finding that margin other places and what that looks like, because that 15% is. I mean, that. That's a key part for you guys in the future. And so I don't know what. What other lifestyle expenses look like of shoring those up, maybe, you know, saying, hey, we got to find some margin other places in that budget, because, you know, I think that's the hard thing, too. The reality of like, oh, my gosh, kids, they do. They cost. They cost a lot. And especially when you're talking about something, an expense like daycare, it is. It's so pricey. So, yeah, I mean, in a perfect world, you're gonna. You would find that extra 1300 elsewhere, but for you guys, you don't, you know, at that point, though, you don't have an option.

And for me, Chad, 30, for $30,000 a year, I'm gonna start looking at alternatives. So I'm not going to just accept that as the only possible method. Yeah.

And that's something I started to look into as well. One, another option we've discussed was not contributing to the 529 plan for a little while for our son because my mom's contributing to.

I'm talking about other daycare options.

Yes, that, too.

We have looked at other day, $30,000.

Yeah. But 300, $311 a week. I mean, that's pretty standard. I mean, that's not unreasonable. That's not an unreasonable amount. When I.

But it gives me a lot of thoughts when I start talking about $30,000 a year.

Yep.

I can start thinking about a lot of different things then. So. But, yeah, you know, I would look at all that and I'm with Rachel. Probably one of the last places I would go would be to the retirement.

I would do 529 before retirement.

Yeah, I would. I agree.

Okay, great.

Thank you so much.

I'd pull that off. And then I really would honestly look at alternatives on the daycare because it's such an onerous amount as a percentage of your budget that they have priced themselves out of somebody who makes $120,000 a year. Yeah. They price themselves out of it. And so you're not far from affording a nanny for thirty k. I mean, not far at all. So, I mean, it can be done. So I start thinking about it different. It's kind of like, you know, if you're going to charge me $120,000 a year for nursing home, for $120,000 a year, I can hire a full time in house butler.

Yeah.

You can't do everything. Reclining bed.

Yes, I know.

I know.

But I know her feel. And I've, and I've done the research. Even locally, like the moms that work here at Ramsey, I'm like, it is a. It is a crazy expense. And then you start. And then you do. You ask us for so many women, you ask the question, is it even worth it.

Right.

It's the 20,000 extra. So instead of making 121, we make 100. Is that worth. Right? I mean, like, you. You have to. You play out all these different scenarios. But it does this part, though. It makes me, as a mom with little ones, it is. It sucks because they have trapped us, in a sense. It can feel like that with the prices. They go up as people. So they're open. They stay open. They're paying it.

When price raises to a certain point, the volume comes down. That's supply demand. And so they're reaching the top of this because this has been a discussion, like, ten times in the last year.

Well, yeah. And it's like 37%. It's risen. It's risen since 2020. I'm like, it's just. It's. It's crazy. It is crazy.

So they do.

They will end up. And that's what we talked to so many women that just end up saying, hey, I'll just. I'll stay home. Right. Like, if you have three kids, right? I mean, you start to.

Actually, I'm working 40 hours, and after taxes and daycare, I net five grand.

Right.

Screw that.

Right.

You know? No, thank you. That doesn't make sense.

Yeah.

And she's almost there. She's almost there. Not quite with her numbers, but, um.

Well, and the four year old will go to a less expensive school.

Right.

So there's.

You got all you got to light at the end of the time. Exactly.

I know, but that's so hard, Claire.

So hard.

I hope that's helpful.

Yeah. Thanks for calling. This is the Ramsey show. Hey, folks. Our brand new event, Dave Ramsey's investing essentials, is almost here. Do not miss this chance to get the tools you need to build your investing plan and prepare for your dream retirement with confidence. It's happening may 21 and 22nd, and it's virtual, so you can tune in from anywhere. You can even submit your questions to get real answers in real time. Tickets are 199. Get yours at ramsey solutions.com events. Rachel Cruz, Ramsey Personality, is my co host today. The best way to make the most of your money is by creating and sticking to a monthly plan. People that win plan to win. And that includes money. And it's called a budget. Your budget should give every dollar an assignment, every dollar a mission, every dollar a name before the month begins and you and your spouse agree on it. If you're married, every dollar is our budgeting app. The world's best budgeting app, one of the largest these days. Millions of people joining in the last. Just little. It's crazy, y'all. Thank you so much. By the way. It's an easy to use app that fits into your busy lifestyle.

You and your spouse can both have access to it, see what's going on. You can keep a pulse on your spending, make progress on your money goals. Download everydollar for free in the App Store or Google Play today, and you can even get it at everydollar online@everydollar.com. Just for your desktop if you want. Brianna is with us in Columbus, Ohio. Hi, Brianna. How are you?

I'm doing well. How are you guys?

Better than we deserve. What's up?

So quick question. So I'm going to keep this, try to keep this short and sweet. So my in laws are on one income, and my mother in law has not worked in about 18 years around that time, and she's just been making sure that everything's taken care of at the house. And so my father in law doesn't bring in all that much. You know, they pretty much they're okay, but they don't have any term life insurance. No, I don't believe they have anything for savings. My father in law, I'm concerned about him with his work because he does have a risk of more, he's more at risk for injury because of his health. And so my question for you guys is, you know, with us children and daughter in laws and such, is there something that we need to be doing in case something happens to our, my.

Father in law just handling your money. I mean, if you become wealthy, the wealthier you become, the more able you are to help. Right?

Yeah.

And that's why I'm asking, because I am, I'm in my mid twenties and I'm trying to get a good handle on my money. You know, I'm starting the baby steps.

That's the best thing you can do for them, okay. Is to get you strong. The weak can't help the strong can't help the weak.

Yeah. And that's, so how do you, how would you recommend I best do this baby step?

No, just baby steps. Just go, you go become wealthy. If you've got money, you'll have some money. You don't have to have a parent account. If you got a million dollars in a mutual fund and they have a problem, you can help them, right?

Yeah.

It doesn't have to be, it doesn't have to have their name on it.

Should I do a high yield savings or.

No, you ought to follow the baby steps. Exactly. That's the fastest method to you becoming wealthy. And the best thing you can do for them is for you to become wealthy.

Okay.

But no, you should not truncate your retirement savings and say, or your kids college and say, I'm not doing baby steps four and five. Instead, I'm going to have a father in law account. No, thank you. No, no, no, no.

Yeah. And Brianna, have you guys talked to them about their money? Like, do you know all this for a fact? Is your husband, like, you guys know this?

So we do know that they do not have really anything saved.

Have they said anything about what their plans are? Is he just planning on working longer?

He's kind of just planning to work until he can't.

Okay. Yeah. And so, I mean, and too, I would say this too, Brianna, I wouldn't be, like, overly stressed about it because at this point, you can't do anything to help. They can't help themselves. Right. And nothing has happened yet. Right. It's. It's not like, oh, my gosh, my father in law is now on workers comp because he got an injury and my mother in law now has to go back to work. How do I help navigate the situation? There is no situation right now. There could be. So I think, you know, being wise about the people around you, the family unit around you, of saying, this is our life and this could be coming in the future, but right now, today. Yeah, I'm with Dave.

You just.

Yeah, you guys, you and your husband, you guys start doing this, you start walking down the baby steps. And if you have the ability to help, if they need help, then you guys get to choose that.

At that point, Will is in West Palm Beach, Florida. Hi, Will.

Hey, how are you all doing?

Better than we deserve. What's up?

So quick question for you. I'll keep it brief. Long story short, I graduated college last. Maybe I moved back home in, let's see, July, last July. So I've been home, got a job in November. So I've been working. I make roughly $75,000 a year, bring home 4400. I got my masters. I let my mom handle all the finances for that. So in February, it was a little bit of a surprise to me that I was $70,000 in debt, $70,000 student loan. So I've been paying off those trying to throw about $3,000 a month towards this. So I paid off roughly $6,400. I've got $35,000 saved up. And I'm wondering, that's in a high yield savings account. So I'm wondering, would it be wise to put that towards it right now?

Yes.

Or just continue.

And in the same. In the same day that you do that, which is today, you take control of your own money. You have a master's degree. You're a grown man.

Yep.

You need to manage your money, not your mother. And then right after that, when you start talking about where a $75,000 a year college graduates going to live, that's not his mother's house.

Correct.

So three things. Yeah. Move out, take control of your life, and write a check and pay down the student loans. Ding, ding, ding, ding, ding, ding, ding. And all of a sudden, this stuff's gonna start lining up for you like crazy. What's your masters in, man?

Uh, finance investments.

Okay, good. All right, so. So you can handle this then, right? Oh, of course. Okay, good.

I was wondering what would be more wise.

Yeah, yeah, yeah. Pay it. Pay it towards. Pay towards the debt.

Yeah, let's get the debt cleaned up.

As fast as you can for 35,000. I mean, you obviously took advantage of not having the rent, so to pay. Right. Living with. Living at your parents, you took advantage of it because you haven't saved, which is awesome. Oh, you do? Okay, well, I was gonna say you have 35,000 saved, so you're doing something right.

Yeah. You need to take over control of your own money immediately. You need to make plans to move out in the next 30 to 60 days and have yourself a life. And you need to pay down on student loan as fast and furiously as you can. Because your number one wealth building tool is not interest rates. Your number one wealth building tool is your income. And when it's not going to someone else in the form of debt payments, building wealth becomes fairly easy, especially will. For a guy like you who knows numbers and has done a great job of saving money, you did an amazing job. To Rachel's point.

Well, Ann will. I mean, at this season of life. Yeah, I would do exactly what he said. I'd go get a part time job. I would go drive Uber. I would do something four days, four nights a week and just make a crap ton of money right now and.

Pay this off, get this knocked out as fast as you possibly can, and.

Just say, for twelve months, I'm going to just work and get this out of here. Because. Because it can be done. And you're in the perfect season to do it. Right. I'm like, you really are. You're. I find, you know, there. I mean, I think it does get harder when there's another spouse involved. Right. Because you got, you got another person to consider. Then you have kids. And, like, as you kick the can down the road there, there's more elements to your life that you're having to.

The bad news is when you're single, there's no one to hold you accountable. The good news is, is you don't have to mess with anybody else to make a decision to change your life.

That's right.

You can just decide to do it today.

Yep.

Today. It's great.

Well, just like that. Let me say this. I mean, I feel for you, Will, because he had no clue. He had the 70,000. He said his mom took care of all the money stuff during college. And then he realized, oh, my gosh, now I have 70 grand. Isn't that what he said? It kind of surprised him. So, parents, talk to your kids. Say it out loud. Have the discussion, because that sucks. That happened to one of my friends. They went to pull a loan for a mortgage. And on her credit report, there was a student loan that they didn't know about. No one said anything about it. So communicate, parents, communicate.

This is the Ramsay show. Listen, your grad just spent roughly 4320 hours in class, and we're guessing that nobody taught them how to win with money.

But you can still set them up to win with gifts, like the total money makeover, breaking free from broke, or Ken Coleman's. Find the work you're wired to do.

Which includes the get clear career assessment.

And listen.

These gifts could change the trajectory of their lives. And if it helps them earn, spend.

Save, or invest money the right way, you'll find it@ramseysolutions.com.

Store.

That's ramsaysolutions.com store.

Rachel Cruze, Ramsey personality is my co host. Jade is in Ottawa, Ontario. Hi, Jade. How are you?

I'm good. How are you?

Better than I deserve. What's up?

Yeah, so I had a couple of questions. So this year kind of fell on a little bit of hard times when it comes to finances. So I have roughly $237,000 in debt. 205 of that is in a mortgage, and the rest is car loans, line of credit, and credit card. So I'm a single parent, and I am only bringing in roughly $3,500 a month. So the debt is starting to become overwhelming. I'm wondering if, when did you buy the house? I bought the house in 2018. So the house is worth about $630,000.

Now because you don't make a ton of money, the house doesn't sound completely unreasonable.

But my guess is, what's your mortgage payment a month?

So when I first got in the house, I had a really low rate. But now that I've had to renew, my mortgage payment has went from $1,000 a month to $1,400 a month.

Okay. Yeah. I mean, you're bumping up close to 50% of your income paying your mortgage.

Yeah. And then I had.

Why did you not take a fixed. Why did you not take a fixed rate mortgage?

So I did take a fixed rate. I had. I had a fixed rate before, and then when I renewed, I took a fixed rate as well.

Why would you renew if you had a fixed rate?

So here in Canada, you have to renew. It's not like in the US.

So the rate of judge rate adjusts. Pardon? The rate adjusts each time you renew?

Yes.

So there's only variable rate interest rate mortgages in Canada. I did not know that.

No.

There's fit, there's fixed.

Well, it's not fixed if it's. If it goes up every year.

No, you gotta. When you renew. How often do you have to renew?

So you can either choose a three year fixed or a five year fixed. And the five year is the maximum. Maximum that you can hold a rate for in Canada.

Wow. I just learned something.

Yeah.

Unfortunately.

Well, that sucks.

I did know that. Yeah. I knew something around those lines. Okay, Jay, do you see your income going up anytime soon?

So the thing is, I have a business, and because of all the money that I've been spending, I haven't been able to put much into marketing for my business. So it's kind of been at a standstill.

Is that your income is your business, or is that a side hustle?

It's my business.

Okay, so here's the. Here's the straight on solution, okay? You either sell the house or you get your income up, because you cannot keep this house with this income. It's not sustainable. That's why. That's where the stress is coming from.

Yeah.

In a car payment, credit card debt. I mean, it's a lot.

Yeah. Well, the car payment, the credit card came because you couldn't afford the house. And then when you can't afford the house, you don't have any margin left to save. So you rent stuff up on credit cards, right?

Exactly.

Yeah.

Yeah.

The house. The house squeeze is showing up in the credit card.

What do you do? What's your business, Jade?

I'm so. I have a commercial cleaning company.

Okay.

So we clean offices.

Okay. Because you're making pro. I mean, it's around, I mean, 3500 a month, right? I mean you're, you're bringing in 45 a year. I'm just wondering if you can find something that you're making 60 grit, right. I'm like, just any up?

Are you, are you fully booked?

We're not fully booked.

Okay. I don't know why you have to spend money. All you gotta do is go knock on doors and get you some clients.

Yeah. Yeah. So I'm trying, I've been trying to do that. I've been a little bit busy with work and my son, but that's definitely something that I'm going to start.

If you, if you don't do that, you're going to have to sell your house.

I was thinking, would renting it out.

Be a good idea?

No. You don't need to be a landlord. You're broke.

That's a bad idea.

Yes. It's a really bad idea. Yes. Either get your income up or sell it because you know, you and I think you ought to go get your income up. That's what I think you ought to do. I think you're going to have to focus on that.

This is a good, I mean, like, you know, 1400 bucks a month is not terrible, right? And now compared to income it is. But man, if you can get that income up then that, I mean, you're in a good spot. You have so much equity you can get.

If you could get to 4000 a month, it's from 3500. It changes the whole equation automatically.

Yeah.

And then you can start working your way out of the credit card debt. Do away with those and start living on a budget and being in control. But no, there's turning yourself into a landlord when you're broke makes you broker landlords. You need money to be a landlord. You need cash, you need margin. It doesn't make you money. It's a problem at first, especially when you're this tight because this house is not going to rent for much more than your payment. So you're not. No, no, no, no. Don't go that way. Please stay away from that. Dima is with us in Baltimore. Hi, Dima, how are you? One more time. Let's try it. No, we're going to put you on hold until we can get your phone straightened out. Riley's in Salt Lake City. Hi, Riley. How are you?

Good, how are you doing?

Better than I deserve. What's up?

Awesome. Thanks for having me. I've just got a question in regards to baby step two. Working baby step two.

We've got two car loans and they're both underwater.

So I'm looking, we're looking to go down to one car for our family to try and speed this process up. But I just don't really know what to do in this situation where we're underwater.

What are your numbers, Riley? What do you owe on the cars and how much are they worth?

But we have a truck, which is a dumb decision. But it's got 36,000 left on the loan. It's worth 31.

Okay.

And then we have a car, the loans, 8000. But it's probably about. It's probably worth about 3500.

Okay. And what do you, what's your household income?

90,000.

Okay. All right. And do you have any money?

Not too much, really. I mean, we just have the $1,000 saved up from baby step one.

And who said the trucks worth 31?

I just like did Kelly.

Blue book private sale or trade in private cell. Okay. So you need five k. Who do you owe the 36 to on the truck? Who's the lien holder?

It's just a local credit union.

Perfect. Go down there, sit down, talk to them, tell them you want to sell the truck and sign a note for the difference.

Okay.

They'll cut. They'll let you do that because they already don't have fully collateralized loan meaning that truck is not worth what you owe. So they're already have 5000 unsecured. Right. And if you just now have a 5000 unsecured and you drive the old car until you get your mess cleaned up here, which make a 90, you'll be able to turn the corner pretty quick on this. But you've identified where the whole sore spot is and it's this truck. It's killing you.

Right. Right.

What other debt do you guys have, Riley?

That'll be, that'll be the last of the debt.

We. So eight grand on the car and you'll be done?

Yeah.

That's amazing. That's great. I mean, that feels good, right?

Knock that out and save up like crazy. And either move up in the one car family or move into a two car family again and then move up one. Hopscotch. Either one. I don't care what you do, but yeah, I think you're probably moving back into the car business after you get the other one paid off and this gone and you know.

Yeah, 4000 sounds a lot better than 36,000.

Yeah.

Yeah.

And it's great. And then save up and you can get a used truck later.

Yeah, that's what I would do if I was in your shoes. Dump the truck and sign a note for the difference of the credit union. And that, like you said, that just pushes it on out there. Open phones at triple 8825-5225 our scripture of the day. John 1516. You did not choose me, but I chose you and appointed you so that you might go and bear fruit. Fruit that will last. And so that whatever you ask in my name, the father will give you. Bill Murray said, whatever you do, always give 100%, unless you're donating blood.

My gosh.

That'S funny. I have not heard. That's good. Ross is in Dallas, Texas. Hi, Ross. Welcome to the Ramsey show.

Hey, Dave. Thanks for taking my call.

Sure. What's up?

So, I have just over $42,000 in student loan debt at a 5.625 interest rate. And I'm wondering if I should take some of the contributions out of my Roth IRA. I currently have about a $60,000 balance. And put them towards the student loan debt.

No. Simple enough. I never take money out of retirement to pay off debt, unless it's to avoid bankruptcy or foreclosure. Because that money is going to grow tax free that you've got in there to such a large amount that it would just be disturbing to me that you lost a million dollar tax free account for doing this. And that's what it would be at your age. How old are you?

I'm 32.

That's what I thought. So what's your household income?

100,000. We'll be getting married next year and that will make it about 180.

Oh, cool. And you. And you only have $40,000 in debt?

Yes, sir.

Oh, so you'll be debt free in a year? Yeah. Good. No, I would not sacrifice my Roth Ira on the altar of a year.

Okay. Yeah, I just was looking at the repayment calculator, and I. Just trying to consider as an option, because the monthly payments are. I feel like, you know, really only.

No, no, no. You must understand. $40,000 in less than a year. I don't give a crap what your calculator said. I want you to pay off your stinking loan. Now you make 100, you're getting ready to make 180. I want that gone out of your income. Lowered your lifestyle. If you make $180,000 a year, you can't find 40k in twelve months. You know, now that's after you're married. I understand. When's the marriage?

Should be next July.

Okay, good. So, I mean, between now and then, I'd love for you a year from July.

A year from this July? Yes.

Okay. All right. So you have a year at work on it. If you don't get it knocked out during that time shortly after marriage, I want you to knock it out. But I'd love for you to knock it out out of your hundred. Or do you have the ability to work extra and do. I mean, anything else you can sell other than trash in your roth, but, yeah, that kind of stuff. Let's just get in attack mode and say, I'm going to live on 60,000, which is just below average household income in America, as a single guy for one year, and knock this out.

Yeah. I mean, after tax, you get 100. After taxes, 80. Right. So you live on 40. Put 40, that's two years. And, like. But then you're gonna be married. So, I mean, it's. It's a process for sure. But also, I would say, ross, to go work extra up your income. Yeah, you're making 100, which is awesome. But it's just that, again, it's that singular focus of saying, what can I do to pay this off earlier and run those numbers? Those are numbers you could be running if I made an extra two grand a month doing this, or whatever it looks like. Yeah, there's power in that.

Yeah. And it's kind of a thing. What if you made it into a game and said, okay, as a matter of personal pride, I'm going to walk into this marriage debt free now, game on. Just kind of make it a game, you know? And so, okay, now what have I got to do? Yeah. Lots of work, selling stuff, not going out to eat, da da da. And it turns into a game, then it's not life or death. But if you treated it like it was, you could make it. And that's kind of my point. And then for sure. For sure, when you're making 180, if there's any left, if you guys don't knock that out real fast. That's pretty lame. So now you don't need a payment calculator to figure that out. 180 -40 or 100 plus overtime and extra jobs. -40 that. That's your calculator. That's what you're dealing with. And then minus lifestyle. Oh, wait, I don't have a life because I work all the time because I'm getting out of debt. Oh, that's okay, too. I like that one. That's a plan that, you know, I would just make it a matter of pride.

And I think it'd be kind of.

Cool and pausing, too. Ross, your your investing.

No more contributions to that roth.

So, wait, so that could free up a couple thousand bucks, too, right? A year, depending on what you're putting in your roth. So that's. That's good.

Stop all investing temporarily while you attack your debt. That's maybe step two. Okay, for those of you that are new to this Ramsey game, Dan is in Atlanta. Hi, Dan. How are you?

Hey, Dave. Doing well. How are you?

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

Hey, I figured you'd say that. So, wanted to get your thoughts on something. I am buying a house, which is really exciting. Now I'm wanting to maximize my down payment. And really, when I started the year, I wasn't going to be buying a house, so I bought a new truck that I paid cash for. And so my question to you is, should I liquidate the truck, take that down, or take that cash and put that to the down payment of the house just to enhance going beyond that 20%? Or would you say, hey, just go in at what you're doing currently, what.

What is the truck worth?

39,000.

And what's your household income?

Over 100.

Okay. And are you single?

No. Married.

Okay. And what's her car worth?

We actually lease her car for 200 a month. No, nothing down.

Okay. Well, no, I would not worry about putting extra down on the house until we got her car paid off.

Okay.

Her car needs to be paid off. You still have debt on it. A car lease is not renting a house. A car lease is an alternative form of financing. So that is a debt. You're in debt on her car, and you need to clean that up before we talk about anything else. So if you sell your truck or if you don't sell your truck, her car debt needs to be going away very quickly. And if you need to sell your truck to do that, then that's something we can talk about. But that's, you know, you should be doing that before you start talking about buying a house. And certainly before you start talking about putting extra down on a house, we should be clearing her debt on that are the debt on her car. And so that's the route to go there.

Yeah. And we always say anything with wheels and motors, not to be more than 50% of your take home pay and of your income, of your household income. And you're at 40 grand. So you're. I mean, you're getting up there. I mean, it was a nice truck for what you make, right. If you include her car, if our.

Car'S values over ten grand, then. Yeah. Your truck needs to go on that basis.

Yeah.

Right. Yeah, you probably have too much truck, and I think you kind of knew that, and that's why you made the call. So, yeah, let's sell the truck, get you a decent truck out of the. The proceeds, and pay off her car. And whatever's left, though, that is extra down payment. That's what I would do. Yeah, that's a good point, Rachel. I didn't. Didn't keep up with that and part of the math on this, but, yeah, you can really get into a pinch there.

But that's great, though, saving 20%, Dan. I mean, for a down payment. That's. That's a. That's a conversation that, again, people have been having a lot recently with the housing market, so we always applaud and congratulate. There's other stuff for you to do before you do that. But you guys have been saving really well, so that's great.

Yeah, you're way ahead of the game on that. Rachel's right. So congrats on that. I'm glad you're getting. And you're right, you know, the way your brain's working to say, okay, what's more important, houses or cars? Well, financially, houses, by far, your personal residence is going to go up in value. Your stupid $40,000 trucks gonna be worth 10,000 in about 20 minutes. They go down in value like a rock. That's where Chevy got that. Like a rock. And so. Oh, wait, I drive a Ford. No way. That's found on the road. Depreciated. F o r d. So there you go. It's all goes down in value, boys and girls. It all goes down in value. So, yeah, that's. Yeah. Where you're, you know, so your brain's telling you I'm gonna put money in something that's appreciating instead of depreciating.

Mm hmm.

It's like, I drove up in my twenties. I had bought a jaguar. I thought I was just such a fun.

I know that you love jaguars.

I thought it was a ba.

But, like, I never hear of Jaguar. It's not like a Mercedes or a BMW that I feel like is.

That's why I bought it, because I come from a neighborhood where we couldn't spell Jaguar. So. But I drove up, and my grandpa was like, what's that? And I'm like, well, it's a jaguar. And he goes, what'd that cost? And it was, like, eighties, and it was 30 grand, you know?

Holy crap.

Yeah, it was expensive. And he goes, that was dumb. I'm like, why is that dumb? It's a nice car. And he said, it's gonna go down in value. I said, what's an investment? My investments go up in value, son. There's a grandpa lesson right there that puts us howard the Ramsey show in the book. So we'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial piece, and that's to walk David with the Prince of peace. Christ Jesus. Hey, folks, Dave Ramsey here. You know, budgeting doesn't have to be boring. You just need a budgeting app that's made with you in mind, and that's everydollar. The everydollar app has helped millions of people work the baby steps and take the stress out of planning and managing their money. Start budgeting with everydollar for free. Right now. Just go to ramsaysolutions.com everydollar and download the app today. That's ramseysolutions.com everydollar.