Building Wealth Means Defining Needs vs. Wants

Normal is broken common sense is weird, so we're here to help you transform your life

from the Ramsey Network and the Fair Wins Credit Union studio. This is the Ramsey Show. I'm Dave Ramsey, your host, Jade Washall, Ramsey Personality, number one best-selling author is my co-host today.

“Jeff is in Tupolo, Mississippi, hi, Jeff, how are you?”

I'm doing well, how about yourself, Dave. Better than a dessert or what's up? Yes, sir, so the question that I have is, is it okay for me to pause my debt snowball to buy a more reliable, bigger vehicle from my growing family? Tell us more about it.

Tell us about the vehicle that you have now, and tell us about your growing family. Yes, man, so the vehicle that I have now, it is a 5-seat SUV 2015 Volkswagen, and I inherited it from my mom and my wife, currently we have two kids and my wife and I are expecting

and she is doing January, and we just are really going to need something that has third row

of seating.

“Okay, and everybody's in car seats, the other two are in car seats?”

No, no, no, no, one's in a car seat, and then the other, he's a nine-year-old. Okay, well, how much debt do you have and how much have you paid off so far and what do you want to spend? I know, it's a lot of question, but I want to know. Yes, yes, I understand, obviously.

I have a total of 16,000 consumer debt, 8,000, a little over 8,000 of it is in a personal loan and then the rest are credit cards, my mortgage is paid off, so I don't have any rent or any house payments or nothing like that. That's good. What's your house out of income?

So it varies, I do get about $4,100 a month from VA disability benefits and the GI Education benefits, and then on top of that, my wife and I, we run our own HR Act Electrical and Plumbing Company, and I usually get anywhere, it goes from like 2,000 a month upwards of, you know, 8,000 a month that just drastically varies. Okay, so, you know, I get it, you're looking, you're looking ahead, and you're feeling

the stress of having another trial. What's the focus on me? What's the focus on? worth. Uh, private party, Navy about 7,000. It'll sell it in by 7,000. Well, our fan. That's, that's what I'm thinking. It doesn't call. It doesn't require pausing the baby steps. Okay. Yeah. Well, we were looking at. I know. You were looking at upgrade. My wife is. Yes. Well, my wife wants to get enough grade. Yeah. Well, we were looking at was something in maybe like the 10 to 12,000 range. That's a little bit lower mileage.

I'll let you argue with the pregnant woman. I'm not going to. But no, I wouldn't do that.

“Okay. That's a pregnant woman talking that she wants a new car for a new baby. And no, you need to get yourself out of that. You have a 7,000-dollar car.”

If you want trade for a different 7,000-dollar car that has third row seating, well, you have now addressed the need, not the want. The other is a want.

It's $35,000-dollar Honda Odyssey. But I'm broke. Makes perfect sense. Yeah. Okay. And then I guess the, the other thing also. So I'm, I've only been listening for about a month. And, and I love it. And y'all have seriously lit a fire under me to, to get that free. I want you to talk about what you're talking about. I want you to talk with your wife more about why you're excited about that. Not what? Because right now, she's just all she's seeing is all these new rules and all this new enthusiasm from you.

And, and she's not sharing in the vision of why we're doing this. We have three babies. And I want to change our family tree so that we're going to live like no one else. So that we can live like no one else and drive anything we want to drive and take these kids on trips and pay for these kids education and not be worried about bills. And that's why I'm so enthused about all this mom. And right now she's starting to see, you're going to turn my name into a cussword in your house if you're not careful.

Oh, I think it's already become now. And now I said she came by cars. I'm definitely Satan incarnate.

Your business should be a separate account.

Right. You should not have materials for your business and your every dollar budget. Your business needs to be running on its own budget. Separate checking account. All of the revenue from your business goes into that account. Only expenses for the business materials come out of that. And then whatever is left in that account by definition is profit. This is cash basis accounting. And what I'd also be doing is I'd be working to make to basically get a month ahead and make a peaks and valleys account to where if you know.

“I think you said it was anywhere between two and eight thousand dollars that you can bring in. Did I hear that right?”

Yeah. Okay. So let's pretend it takes four thousand dollars to run your household. You need to make sure that at all times you have four thousand dollars set aside. So on the months that you do really well and make eight thousand dollars, that's the time to fund that account.

Make sure it's always there so that if you have a month where you only make two thousand, you can pull over from that account and make sure that you're balancing your budget.

Does that make sense? But I appreciate and I'm honored by your enthusiasm for what we teach because it's going to change your life. I'm happy for you guys on that. But you're going to need to stop. You've done a classic husband move and it's a bone head move. And that is you got all enthused and you start talking about what instead of why.

“And what is I don't think we can afford a car. We can't buy a car. We're in baby steps and they're like, what's the freaking baby steps? Why am I in a baby steps?”

I don't want a baby step. I want a van. And so I'm pregnant. What's wrong with you? And this is what's going through her head because she's not caught up with you on why this is because this is going to make you all wealthy. Because this is going to get you away from the stress of money because it's going to get you on the same page. Oh, by the way. And so what I would start with if I were you as an apology, honey, I'm sorry. I got way ahead in my enthusiasm because I'm really excited about what this can do for our family.

But I want to stop and would you give me a few moments and let me go back and tell you why I'm gotten so excited. Because I can see where we're going. I can feel it. And I want you to feel that with me. And then it's we are making the decision to buy a car that is the same price but that gives us the functionality that we need as the Volkswagen. So that we can clear this debt because you're debt, you know, getting rid of your debt, freeze up your most powerful wealth building to which is your income.

So that you can become wealthy so that there's margin in your life and generosity in your life and these kids lives are permanently changed.

And you never again worry about having a third row of seat. You really won't.

I mean, this is the last time you'll worry about it if you all apply through. And I don't worry about having a third row of seat if I won't want to just go get one. And you don't you don't either. You don't say I'm a few if you need something. You just you got a nice car the other day. I did. You know, and that's because you paid a price to get there.

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Yeah, I've had a good question to go. I currently have like 59 years old and I work in the service industry of the server.

So my money fluctuates all the time and I'm worried about my retirement that I'm going to be living on the street and pushing a lot of shopping basket around. So how can I work on saving money so that doesn't happen? I'm currently in BS2 so.

“Good. All right. So you're paying off some debt. How much debt have you got?”

I've got like 38-300 and credit card debt and then I have my car loan. How much are you on here? 18. 18. All right. What do you make a year? 50. 50. And how quickly do you think you're going to have these two things paid off? The car loan is set to be paid off in three years and then that I'm looking to put it together to pay off the credit card debt by the end of the year.

Okay. I want to have a little more urgency on both of those. Okay. Crank your lifestyle down and your hours up. Can you pick up more hours and work more? I can't but not until the holiday season because right now it's the summer season so that the hour is a cut.

So what can you do with those hours right now to earn some money then? I'm not probably giving them a job or a day. There we go. Something. I don't care what it is.

“There are other restaurants that will pay you that you can earn more. Have you listened around town or their better spots for you?”

Were your basing talk to be higher?

I checked around town but basically because it's a seasonal and we're in for everybody's kind of pretty much on the same boat is where I am.

Are you on the beach? I know. I'm not on the downtown center. Okay. I'd be looking around. I'd want to know if I can get in the restaurant that's right on the beach in a high end area where people are really high tipping. It's high dollar all the plates. You know what I'm saying? I'd be trying to really get into one of those restaurants.

I don't know where you're at now but I agree with Dave. Side hustling is going to help you a lot but I would really be interested in getting your base income up because you're going to have to be at this for a while. And I'm worried that having a side hustle and this job for the long haul you might drop the side hustle and you might give up and I don't want that. So getting that core income up is going to be a really, really big deal for you. And but I think your ultimate is you have a skill at 59 this is not you know you didn't just start waiting tables last week.

You know how to do what you do your pro. I assume. Yes. Okay.

So I would apply that skill as my second and third and fourth job and my new core job.

“And how can I use that skill to make the most possible money in the shortest period of time?”

And that's that's what I'm going to do. I got my hours cuts not really an option. You got 18,000 our cars got to get paid off. And that's standing between you and starting to really seriously build retirement to stay away from a shopping cart that you're worried about. Do you have any money saved as of now? I have 4,000. Okay. Okay. I'll pay off the credit card today.

Okay. Cut it up. Is it cut up? I don't use them. They're not cut up. They're the freezer.

Get them out and cut them up. Destroy them and close the accounts. Okay. And pay them all off and go get six serving jobs and work like a maniac and get this car paid off. And as soon as that car is paid off, I'd like to have it paid off by Christmas. Absolutely.

You're going to be really tired, but you're not going to be so broke. Are you renting? Oh. Yeah. Okay. Do you have a roommate?

Yeah. Okay. That's good. Okay. So all we're doing here is doing everything we can to cut your costs and increase your income and squeeze the margin out of your budget. As much as we can at the wood at that car because when you don't have a car payment, you don't have a credit card and we're living on a written game plan.

And then you get in a tack mode with every dollar you can squeeze out. Now we can talk about, okay. How much can we set aside? Let's set aside $2,000 a month. That's $24,000 a year. What's that going to turn into in by the time I'm 65? Yeah.

Okay. That's $125,000 plus growth. So we're probably going to have 200,000 bucks if you do that. But you're going to be saving $2,000 a month because you don't have a car payment. And you're living on a detail plan and you've increased your income and you don't have a credit card. And when you start doing that, I think you can get, you know, 65, 67 somewhere in there.

You're going to have a pretty tolerable nest egg, a long way from shopping cart.

I think so if you, as he said, he's 59 years old.

If you can start getting aside household getting that income up. If you can put away, find a way to scratch $2,000 away by 72, you can have $687,000. And so it's very doable. Yeah. So if we're half wrong, you still got 300 grand and you're no one near a shopping cart. And you're homeless and all that.

So but you've got to have to have some urgency about this that just turns up the heat. And you're just this stellar singular focus on this thing.

“And if you want to know how Jade calculated that, it's the Ramsey calculator at RamseySolutions.com.”

The retirement calculator, you can put in the numbers you want. If you don't like the 72 number, put in a 67, you can probably get about 300K. And which is what I did a minute ago in my head. And I didn't use the calculator. I put any 11% rate of return, which is a fair.

In good mutual funds. Yeah. In good mutual funds. In your 401 case, if you don't have one in your Roth IRAs, and sit down with the smart Vester Pro after you get rid of this debt. And then say, I've got to catch up. I'm in a panic.

I'm trying to stay away from the shopping cart. And my goal is the shopping, no shopping carts. Yeah. And for those of you listening, we'll drop the link to that calculator in the show notes. But I think Alan Alan just painted the stakes for anybody listening beautifully.

We're always talking to people with a level of urgency.

We're always pushing people to do it now. Do it today. Be intense. Get it done because you don't want to be 59 calling in the show with zero dollar saved. That is what awaits if you don't move and start action today. Yeah.

Yeah. So I mean, those of you that are 22 that are listening, this is your cautionary tale. Yeah. And so you don't want to have to, you don't want to have to be pouring in like this. And if you just start setting side 100 bucks a month right now, you're going to be multimillionaire. Yeah. Do you work or in your 59 and 10?

2,000 bucks a month's going to be your minimum to get your next act built up, dude. And so you're going to, I mean, you're going to increase your income. Decrease your out, go and have a lot of focus on money. You've not been real focused on money in your life. And now money is requiring that you focus on it.

It's not giving you a choice anymore. And that's what you're facing.

“Open phones that triple 8, 825, 5, 2, 2, 5. Kevin is in New York City. High Kevin, how are you?”

Hello Dave, how are you? Great, man. How can we help? It's a thing you're taking my call. It's a very heavy question. And a lot behind it, but to make it simple, I'm a lawyer a month ago.

I left my law firm job to start my own law firm. And then last week I got an in-house offer and I'm debating between two options. Whether to kick the can down the road and give up my firm that I started or to go in-house and kick that stability. So what's the new get the new offer? How much? 150.

Okay. And what are you projecting you're going to make on your own? So it's only been a month and doing a lot of business development.

But in the first month I made about $7,000,000 with a few in the pipeline.

But obviously someone will be up. Someone will be down. Obviously. How old are you? I'm 28. Okay. And how long have you been practicing law? Three years at this point.

“And your mind, what's the advantage of the in-house offer? Is it just, I know no matter what I'm making 150k or is there upside down the line?”

That you don't think you can accomplish your own on your own. Yes. So there's no bonus. There's an equity component that they're giving. I'm not sure exactly how much that is. They won't disclose that. It's really the stability. I have student loan debt that's really not only debt and it's a little bit family about $10,000 to family, but then I'm pushing it. Are you single?

I am. And my expenses are lowest delivery. So that's. What do you want to do? What do you want to do?

If I was told in a year from now, the law for review successful, I would just keep doing it. Then do it. Then do it. Working for someone else and calling this stability is an illusion. Your only stable is your ability to get up and leave the cave, kill something, and drag it home. If you've got this 150 offer, you can get another one a year from now if you've failed. Go get her done, baby. Get her done.

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Matt is in Raleigh High Matt. How are you? Here, how are you, Dave? Better than I deserve. What's up? So, me and my wife are kind of trying to decide we're about to sell our house here at the end of the month. My wife has student loans, so we're going to use some of the proceeds to pay off her student loans.

And the biggest question that we're kind of going back and forth on is what to do with the rest. I have any money on the phone. So, we're selling our house. We are moving with the military, and we're actually going to be where we're moving to. It's really expensive, so we're actually going to be living on military housing.

“So, we won't have to buy a house, the only thing that's required is buying renters insurance.”

Okay, so how much are you going to take from the sell of the house total? We're roughly like $38,000, and then my wife's student loans is roughly $17,000. How much is in your emergency fund? So, in my emergency fund, I have about $3,000, and then I also have a high yield savings account that has $21,000. And how much debt do you have?

Once we pay off our student loans, we'll have zero debt. And obviously sell the house. We would have absolutely zero debt. Okay. So, would you call that a fully funded, that's a fully funded emergency fund for you today? So, I'd probably take the money. I park it in a high yield savings account. How long do you think that you're going to be in this next military assignment? Do you have any indication?

Roughly two to three years.

“Okay. What does she want to do with that money this leftover after her student loans paid?”

So, she wants to put it into a high yield savings account because she doesn't have a job lined up just yet. And she kind of wants to use it as a rainy day fund. And I've explained to her that we kind of already have that. So, she wants to increase from $21 to $38,000 on her rainy day fund until she gets a job. What she want to do with it?

I have no idea. We've been just very frugal with our money. Right now we save roughly 35% of our paychecks. My told her I'm worth it going. It's going in. We had a kind of broken up. Some of it is going into my personal Roth IRA. Some is going into a brokerage account. Some is going into a custodial brokerage account for my daughter.

And then some is going into a high yield savings account. Okay. And so, how much is in the brokerage account? The brokerage account has about $2,000. Okay. What's that for?

Just as a way to again, the stock market kind of separate my funds get better yields from it.

“Because my high yields right now is, I think, only getting like three and a quarter percent back.”

All right. So, I think that you have a, I like your thoughtfulness on trying to do the best you can with this money. I actually think you're doing too much. And I think you can simplify it back a little bit. You've got what I would call a fully funded emergency fund for now. The next step in the process is what we call baby step four,

which is where you're investing 15 percent of your gross income.

And you're investing it into growth stock mutual funds. And that would be, you know, your TSP Roth C plan. And it would be your personal Roth IRA.

Call out the house fund.

“Okay. Would you, so in my TSP, I do have part of that because the match is going traditional and I have about 40.”

Yeah, I have about 40,000 of that that's traditional.

Yeah. Would you suggest using some of the house proceeds to convert that into a Roth or kind of square? Not today. Not today. You're too young. I mean, you'll get to that. By the time you get to a show paid for a house and it may be, it may be not 40,000. It might be 140,000. And you're going to pay taxes on all that when you move it over to Roth. But I wouldn't do that today. Yeah, you spend a lot of time nerdin' out on all these plans. And you've really got it. And you've done a great job, by the way, because you're nerdin' out on all of it.

You know it. When we ask you what's going on, exactly what you're doing. And I can hear why you're doing every bit of it. That's the only thing that I didn't understand was the little brokerage account. And now I do it makes sense. So I'm going to rename that brokerage account house fund. And I'm going to dump this money that we're talking about into that house fund as either now or as soon as mom gets her new job on the two. And then I'm just going to all over a job of 15%. No more than 15% of your income going into retirement.

All over each of that from this point four goes into that house fund. And then when you do either retire from the military or you land in a location where you're going to be a while.

And it's an affordable housing market and you're going to be there and you make some money on it. Then you write a check and pay cash for a house at that point.

“And that's what we're aiming towards there. And I do that before I worry about converting the 40,000 traditional and a Roth.”

And because that's your match over on the TSP make sure all your TSP's in a sea right now. The other stuff is sucking wind is just horrible. All right, Chris is with us. Chris isn't for worth. High Chris, how are you? I don't know how are you. Good. How can we help?

Not really sure. I have a couple of questions. So I have been in an easy and the corporate world tech world did that whole thing and went and started selling roofs when I was like 28, 29. Then doing it. I'm 36 now started my own company for multiple reasons now that I actually know everything I felt comfortable doing it. What from on average, like making about 160 to 200,000 a year to I think this year we could do around like 500 to 600. Wait a gallon. The profit are great. So much profit.

Wow, you're killing it. What do you go? Yeah, yeah, we're very blessed. And we actually just became obedient to the Lord with our money very seriously as soon as we started our company and he's taking care of us. So I guess my question is this. And so I let a ton of IRS debt rack up. I didn't know what I was doing. I was a 1099. All of that is about to be paid off completely.

And we have, yeah, it's going to be amazing feeling my wife is an angel and kind of helped me become disciplined around money.

So extremely, I'm an extremist. I kind of just. Well, you know how to sell your stupidity. Yeah. Hey, man, I could not agree with that. Literally. And if it wasn't for my wife, I'd probably be living in an apartment.

Yeah. So proud of you. So, yeah, thank you so much. So we own a, we own a home. We owe about 470,000 on it with a 6% interest rate. We own two cars. One, my truck, I hope, 52,000 hers. We probably owe like 44,000. Other than that, we have zero debt.

And much cash is up in the 190,000. How much do you owe to our investment account? 114, but that's, that 290 was after I paid that off. So I have 114,000. Did you say it was in an investment account, though? It's not liquid. The 290. It's about 100,000 if it is the rest of it.

“Honestly, like you said, I am actually pretty stupid.”

So I don't want to say that. I said you tried out earned your stupidity. That's different than being stupid. I've tried that too. It means you're good at earning money and it gives you an excuse to not deal with details. And now today, you've grown up and decided we're going to deal with details.

I'm proud of you. So take some of that 290 and pay the coup cars off tonight, okay? Oh, really. Oh, definitely. Why did that surprise? Why did that surprise you, Chris? Um, I don't know.

I figured that we would do that first and then look at the house.

Yep. Yep. That's right. Okay. And we have a very volatile business.

So we take another.

“And that's why we're telling you to do that.”

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Paula is in San Diego. Hi, Paula, how are you? Okay, so my husband and I have been married for almost two years now. We have a baby, we got married in the church, all our friends and family were there.

But we never filed the paperwork legally to be married.

And that's for a few reasons. One is I wasn't a previous marriage and it would. My child support would be re-evaluated. And then secondly is because I was defaulting on a credit card at the time. It was a whole, you know, mess.

And I really didn't want to mess up my current husband's credit and his chances of, you know, us ever buying a house or something like that. I just was wondering, your thoughts, I know you're all about, you know, getting married. And we work together with money. I'm just wondering what your thoughts are.

So it's been two years. Did you clean up these things? I know that the judgment still out there. I'm my, at the time, like before I met my current husband, my lawyer said, that I'm judgment proof and she said, just don't even worry about it.

Like don't answer if they call me. I'm sorry about this on this credit card. Well, it was 38. I think when it's $3,800. No, $3,000.

“And then now I think it's like they're trying to collect $45,000.”

I called him made them an offer of 15 because I got a settlement. Oh, good. And they didn't, they didn't take that.

Shocking.

No, you have to negotiate an argue.

That's not one conversation. Oops, they didn't take it. So you're sitting on some cash to settle this with. No, my husband and I put it towards his that. How much does he have?

I hear, well, now he's down to about 30,000. Okay, let's go back to your initial question. I would not wait to get married.

“I think that at the core of marriage when you do marry somebody,”

you're taking all of them and they're taking all of you. And that includes all the baggage that comes with you. And I think it's going to simplify all of this. When you guys can get on the same page and start attacking this together, instead of letting technicalities get between you.

So I would go down to the courthouse and file the, file the marriage license. Sign it. Yeah. And then let's lay out a game plan to clean this up.

And so he has 30,000 in debt and you have 38,000 dollars.

We're the bad debt that you can probably settle for something. Who's that owed to that credit card? It was Chase. Now, what's that? Some like a lawyer firm.

Perfect. That means somebody bought it for pennies on the dollar. Now, you can settle it. Did they give you an amount? Did they say we won't settle it for 15?

We'll settle it for X amount. Did they give you another offer? Yeah, 38. Okay. We're like some of the money down from the 45.

That was all that. And then to day point, that's all crap. Like they'll.

So what, what, are you working outside the home?

No. I've got four kids. Okay. And what does he make? He makes about 3,000 a month.

Why? And I bring in 1800 from child support. What does he do for $3,000 a month in San Diego, California? Technical support? Not much.

No. It's really not.

“Do you have to stay in San Diego because of the custody?”

Yeah. Yeah. We share custody. Okay. But for free right now with my mom.

So we don't have friends. The most of his paycheck is going towards his debt right now. Okay. Well, he doesn't have a paycheck. We have a paycheck.

And we have four kids to raise with $1800 and $3,000 in San Diego, California. And so I want him to look at extra jobs on what you look at what you can do work from home, while you're managing the four kids to increase your health income. He needs to double his income. Okay.

Soon. His career sucks. Okay. Yeah. I agree.

I want him to make more money. I want you to make more money. And then you guys get on a game plan. And a good rule of thumb is you can't hide your way into wealth. You can't deceive your way into wealth.

And you're deceiving your ex husband. This is an attempt to not engage and get the proper amount of child support according to what the courts say. If you're raising that many kids and they're all his kids, you're going to lose $1800 with child support. It's not like you're getting $18,000.

You're going to get $1800. And so you can't deceive your way into wealth. And you can't hide from your past enough to become wealthy. So the hack that you were attempting to pull here is really holding you back more than it's gaining you. Yeah.

I agree. To Jade's point. And so if I were in your shoes, I would finish up the marriage. But I would also as a part of that. Let's figure out how we can prosper.

And if we got no child support, how we can prosper and clear these debts. And if you need some help negotiating next time, get in touch with all the Ramsey coaches. This has been trained by us and they can help you with that negotiation. Because you just called up a law firm and they thought, "Oh, she's got some money now." And we'll say no and see what she comes back with.

And you say 15 and they say 38. And you say, "That's not good enough. What would you do? This reasonable, because 38 isn't going to get it. We know you didn't pay 38 for this debt.

We probably paid $2,000 for this debt." And because that's what debt buyers do. They buy it for somewhere around a nickel on the dollar. Two and a half to three and a half to four and a half cents on the dollar somewhere in there.

“And so if this law firm represents a debt buyer and they probably do, that's what they've got in it.”

I'm kind of surprised they didn't take the 15. But they probably smelled on you that they could beat on you a little bit more and get some more out of you. And that was obviously wrong, they didn't work. But I want you, let's try to scrape together some money again and come at them with another settlement. And let's clear up your husband's debt and let's get your income's up.

Here's what's weird.

If you reevaluate the child support, you might get more.

That could happen. Your marital status does not keep you from getting child support. Child support is not based on your new husband makes money. It's based on what the old husband makes. And the number of kids he's sired.

That's where child support comes from. And so it doesn't, you know, reevaluating it would only be down if his income is down. And so no, I wouldn't try to hide my way or hack my way around into a prosperous life. I'd be doing that. I'd have the opposite mindset. I feel like the mindset should be, how can I set up my life in such a way that I don't need to depend on this money. And even if the courts rule that in a way that's not in my favor, I'm still just fine.

I don't need the money. Exactly. That's where you want to go. And, you know, my lawyer, oh, you're paying a lawyer to fight this 38,000. And they didn't call and try to negotiate it to the other law firm for you.

That's interesting. Not good. Open phones here at Triple 8, 825, 5225.

So basically folks, if you have a credit card debt that is in default.

And it's been in default six months, a year, 18 months, something like that meaning you haven't paid on it in that period of time. They have no indication that you're going to pay. City Bank and all the other ripoff huge banks that have screwed you, they don't keep defaulted debt on the books. They sell it off. They give up on it. And they sell it to somebody for a nickel on the dollar.

So $50 buys a thousand dollar debt. That's what happens.

“And so that's what she's negotiating in. That's what we're talking about.”

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And the fair wins credit union studio. Amy is with us and Raleigh. Hi, Amy. How are you? I'm good. How are you guys doing? Better than we deserve.

What's up? Yeah. So I have kind of a two-fold question. I'm just wondering if you could give me advice. I feel a little bit financially behind. So I want to go through that and just see if you have any general advice.

And then also I just have a few questions on how to approach first-time home bind.

Okay, we're going to pick one. We can't do a full counseling session.

“Um, so what is the main thing you need to know today?”

Um, I think that it's one time to give you an overview. And see if you can kind of decide where areas or we could be improving. Yeah, we can do that. Tell us why you feel financially behind. Yeah. So I, my husband or 30, we've been married for eight years. Um, we have two kids, two and five.

He actually stays home full-time with the kids. I work full-time. Um, so we're kind of working with one income. And I just feel like, at this point, we should have more space. Um, but what do you have saved?

Yeah. So right now I have about 60K in retirement. Um, and then we have about 35K in a high yield savings account. We have no debt at all. Your home is paid for it. What do you say?

Your home is paid for? No, we rent. We don't, we don't own. Okay. So we rent our home.

“Um, is that that's probably what you feel behind is because your renters?”

Yeah. I would say that that's probably the number one piece. Yeah. All right. Uh, I don't think you're as behind as you think and feel.

You don't have any debt.

You've got an emergency fund. That's excellent.

And you've started retiring. Uh, I'm sorry. You've started funding your retirement. Yeah. That's why I was step four. Uh, and so I think that's great.

I think that's the only missing piece to your equation or of what you think is next is okay. How do we get into a home? Yeah. And it's just going a little slower than you feel like it should be going in my right. Right. And I mean, obviously we've made the choice to have one income and I wouldn't change that.

Like I think that that has been great for our family. What is your income? Um, so I make 155 pre-tax. Um, and that is split between 70% base and 30% commission. But what do you bring home every month?

So we bring home after retirement health insurance about $660 to $6600.

“Okay. And how much of that is margin when you after you've done all of those things you need to do.”

What's the amount that you're like? Okay.

We can do whatever we want with this money. Yes. So after we pay all of our just regular occurring expenses, we have about $2,757 left over after all of our bills. Yeah, that's not counting commissions though.

That's correct. So the way that we approach it is because my commission is monthly and it's kind of all time, we just put all of that and high yield. So we put that in savings and we live only off my base today. Yeah. Okay. Okay. Well, that's $6600.

It's not your real take-home pay. It can't be. Okay. That's just take-home pay on your pay. Yeah, that's just the base. That's correct. Okay. So if you if you continue saving $2,000 plus commissions are going in high yield for your

payment on your house, right? Yes. Yes. You're doing great. Yeah. If you continue saving at that rate, what do you have at the end of the year? Well, yeah. You got ready. She's going to be $2,000 is $24,000 a year plus commissions.

And she's making $155. So she's got another $3,000 a month. So she's going to put $40,000 a way. So all you've got to do is look out at the housing market. Look at what it is that you guys think you want and do the math backwards. It's work backwards and it's okay. What must be true? How much do we have to save in order for this

“house to be no more than 25% of our take-home on a 15 year fixed rate?”

And then you're running it back and it's okay. We'll be there in three years or we'll be there in two years. Yeah. You'll be there in two. That's what it sounds like. And you stay out of that. You have your emergency fund.

And you can decide I'm not putting more money in retirement today. Because I'm going to put it all on this house down payment. Or I am going to put some on retirement today. And that's going to kick the can down the road a little bit further on when we're able to by the house. Either one of those answers is fine.

But you're not behind. You're not. And more and more people are buying homes in their 40s. And I think that that just opens a bigger conversation on just comparison and making sure that you're running your race. And you're not comparing everything that you do to tick-tock and

Instagram and other people at work and what your friends are doing. Your races, your race to run. And you don't have any apologies to make for that. When you read out your numbers, I thought it was excellent. I thought this person is doing what they have to do.

Another person is going to call and they're going to be 30 years old. And it's going to look totally different for them. But as long as you're taking the next right steps for you, you have something to feel good about. Yeah, you're moving towards you're going to own a home in the next three to five years.

That's a conservative, good purchase.

And then you'll start and begin to continue putting 15 percent of your

150 five away, by the way, it's going to increase over time. And so you're going to be putting 25,000 dollars away a year for towards retirement and you'll return multi-millionaires. So now you're not behind. If you keep doing those things, now if you go out and buy a stupid car,

then you can't pay for $1200 a month car payment. When we had to have one our puppy needed to seek to sit in,

“or some kind of bull crap that people do to buy a car, right?”

Then no, no, you're going to get yourself in trouble. But you're not doing that right now. You've been very wise, very smart, and you're right on track. Cheyenne is in Fresno. Hey, Cheyenne, what's up? Hey, how's it going, you guys? Thanks for taking my call.

I'm with me with your advice today. Well, thank you. How can we help? So I'm newly divorced. And I'm wondering if a refie with a cash out is my only option. As I need to pay off my father-in-law who was carrying our note,

as well as the ex-husband. And my concern is that I'm going to be living paycheck to paycheck. And I don't want that to be my future. I have two young boys, three-year-old, and a six-year-old. What is the old on the lighthouse?

Right now, with the father-in-law carrying the note, it's $123,000. Plus, you got about your ex-out for how much? $1400,000. So $227,000.

Yes, sir. Okay. And what are you, man? Sure. 64,000. I just renewed my contract.

And so I work at a private school. And so my salary... Okay, okay, you went up to $200,000. Am I going to 64,000?

the best rate that I could find for a refie is 6%

“which would be about $1,300 a little bit more for a mortgage”

for a 30-year-fifth rate. So my take home is about $3700 per month. What's the house worth? $355,000 at our last appraisal. Okay.

And what other money do you have? So I do get child support. However, because the divorce is new, I just don't want it considered. No, I'm not. That's okay.

How much child support do you get? $1700 a month. How much does it get?

I have a million dollars in a 401(k) or something.

Is there any other money? We didn't touch each other's retirement or anything. And I do have like, my side hustle is I make kind of do my own little cottage business, so I make decorated sugar cookies. So I try to do that as much as I can.

No, you have any money in an account, like a brokerage account or anything. Oh, I have 101,000 in my like every second account. I have savings. I have about $20,000 in emergency savings.

Why don't you use 101,000 to buy out your eggs? I wonder that my tax advisor has been not due. You said it's a brokerage. Your tax advisor is a moron. Okay.

You know, your tax advisor doesn't need to be advising you anything on your life. You've got kids and a father-in-law in your ear. And an ex trying to figure, and now you're going to go borrow money because your idiot tax advisor told you, no. No, absolutely not.

Health insurance is confusing on purpose. You call one company get transferred three times. Sit on hold for 45 minutes and end up more confused than when you started.

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That's healthtrustfinancial.com. The Ramsey show question of the day is brought to you by why refie if you fall in behind on your private student loans and don't know where to turn. Why refie works with borrowers. Other lenders won't.

And it helps explore low fixed rate refinancing options. Go to why refie.com slash Ramsey. That's the letter why R E F Y dot com slash Ramsey might not be in all states. Okay, today's question comes from Carmen in Virginia. She says my husband and I are on baby steps six.

And have a question about paying off our home.

“Should this still be our focus, even though we are sure this isn't our forever home?”

Or should we be saving up more to put down along with our current equity on the right one when it comes along? Okay, so for anybody listening, baby step six is the baby step that you do in tandem with four and five four is you invest in your retirement five is you put towards kids college and six is you put any extra money towards the house if you were wondering.

And you know, if she told me we know exactly the house, you know, that we have our eye on. You know, it's just we need a little bit more time. I might have a different feeling about it. But you don't even have your eye on on a property. I think it's just something that's living in your mind as an option.

And until then, I would put the money on the current home because.

Here's what's interesting.

The way she phrases it. She feels like if she puts it on the current home like it's like she's going to lose it or something. Yeah. If you pay down your mortgage and increases your equity when you sell your house.

You get a bigger check.

Your equity is to savings account.

“When you pay down your mortgage, you're paying your putting money into a house.”

It's just hard to cash out of. Yeah. You can't just go down the bank and take an ATM with all on your savings. But, you know, it's forced savings and the beautiful thing about paying down in your home. Instead of stacking it over in a high yield savings to use as a down payment later.

It doesn't accidentally buy a bass boat. Right. That health savings account. Those high yield savings accounts sometimes. Oh, we went a little over on Christmas.

Oh, that cruise.

It just came available and I've always wanted to go.

And don't have the money. So I'm going to use the down payment money for the next house. On that. That doesn't happen if you pay down on your house. So abs, it's forced savings.

It's trapped savings. It's not lost to money. No. You do not put money in a high yield savings account to the side for a future down payment when you're already on a home with a mortgage. No, you pay down the mortgage instead.

Every stinking time. Because it traps you and it makes you behave. Protect you from your biggest problem, which is you. Jenny's in Denver. Hey, Jenny.

What's up? Hi. Thank you for having me today. Sure. How can we help?

My husband is a mortgage loan officer.

Has been coming up on three years. And what he is bringing home isn't covering off the bills. We have prayed about it a lot. And we were wondering what you would do in our position. He could go back to being a police officer when he was there.

He made about a hundred and eighteen to hundred and twenty a year. We do have a base pay from the military and a little bit from hit the mortgage company that he works for. But that's about six to four hundred a month. Now those are about seven to five hundred. What are your bills?

I think we have a home insurance. How much is your home mortgage? Things that don't. It's twenty three hundred. Okay.

Well, that's not seventy five hundred. Where's the other five thousand dollars going? I feel like we are. We are pouring some into business doing, you know, trying to market things.

We have a couple of kids and our cars are paid for gas.

We have groceries that sort of thing. So you don't know where it's going. We do have a budget. Apparently not. You can't tell me where the five thousand dollars is going.

Sure. I do think that. Part of it is. I'm not sure.

“I think our gas and groceries are a lot of it.”

No, it's not. That's not five thousand dollars. Sure. I agree. Okay.

So you guys don't have a budget. You don't have a budget that the two of you have agreed to in that we stick to. And that we live on every single month. You have a general idea of where you think the money's going. But right now we can't figure that out.

Right. Well, no, I. I do it every dollar budget. I do it monthly. We both looked at it out.

Tell me where the five thousand we. Sure, I think we have spending money. We have things that come up. Like he has had trips that he's had to do for work. We ties.

The 40 let's see. Twenty two hundred. We get from his mortgage company. Forty four forty two hundred. We get from.

We get from past the A mortgage is twenty three. We ties about. 750. The ten percent. We set to sixteen hundred to two thousand dollars for.

Not just groceries, but that also includes any total paper and things that we may use. 400 for. Yes. I can't think of anything else. I mean, I can pull it up if you if you truly want me to.

So my question is, okay, so you've got your home with the kids. How many kids are there? Two. Okay. And their ages.

Fourteen and nine. Okay. I think that you. I love that he's looking at ways to get his income up.

“I think you can do more to contribute to.”

That's where I see your biggest opportunity. If you told me you had little. It would be a little tougher, not that you couldn't do it, but it would be very tough. But with a fourteen and a nine year old. I actually think, I mean, I know I'm not wrong.

That you've got some time that you can put into this and close that gap. Because it's not a big gap. It's a thousand dollar gap. And I think that's exactly where you fit into this equation. Okay.

So number one. The reason he changes careers is not because he.

That we don't know what it is. And so you're $7500 minimum to get by sounds very high.

“And so I think you guys need to look at that.”

So what are we spending money on? What's out of control in this household? And what things are we trying to do with this money? We shouldn't be doing with this money while we're tight. Number one.

Number two, we could add some income from you. And then number three, if then he can't, he's not bringing in enough to support his household. And he has the opportunity to change to another career. He should.

But there's a third option other than stay.

Okay. One option to stay with the mortgage company. Option two is go back into law enforcement. A third option is do something else. Mm-hmm.

That makes more. Then the mortgage business right now. The mortgage business is tough right now. Yeah. It's hard right now.

So maybe he should change. But just running back, I mean, he left the law enforcement world for a reason. Yeah. What reason was that? And that reason is probably reason enough not to go back to it.

So yeah, I might go to something else. But does your husband need to take a career that will support the household? The answer is yes.

“Do you need to do some things to add to the household?”

The answer is yes. Do we need to look at this budget and figure out why we're, I think that takes a $7,500 to exist. That's high. Okay.

When things are tight. No, that's, you know. But you act like that's a template that that's. I think it's what they were used to when he was doing law enforcement. That's what you used to do.

That's what you used to do. When you, you know, act like we can't make, we can't make ends meet. Well, that's and doesn't make sense. Yeah. Well, it was a little high to begin with.

Even on the $7,100 a month, it was a little high. It's really cutting into your margin in a major way. Yeah. So yeah. Yes, he does need to consider changing careers.

But necessarily go back to where he was. Thank you. But maybe go to the third option, which is something new. Yes, you do need to consider having a career. And yes, you all need to go back over this budget together and figure out what we have called a need that is actually a want.

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Well, two years ago, for the first time ever, we decided to unpack that playbook. We called it Investing Essentials. It was a done as a two-night virtual event with me in George Campbell talking about investing and going through my playbook.

That's pretty cool.

Well, we've only done that two times. We're getting ready to do it for the third time.

We're changing some of the content if you've watched the other ones. And now we're going to add some stuff on will planning estate planning, reducing taxes, and some stuff on building a lasting legacy as well. So, which is part of my playbook. I do all of those. And so this year, going to be new content in there. It's going to be September 1st and 2nd, a two-night virtual event investing essentials.

Take it start at 199, get [email protected], or click the notes in the, in the, in the, in the, our click the link in the show notes. If you're listening on podcast for YouTube. Matt is in Knoxville. I'm Matt, how are you? I'm doing good, but so I forget back in touch with me.

I had a quick question on if you have equity in your home using that equity to pay off your other debt. So it's all consolidated into one thing or into one loan. And if it's a bad idea, can you tell me why no one else can. Okay, it's a bad idea.

“And the only time we suggest you do that is if you're on the edge of bankruptcy and it's the only way to stay, keep from filing bankruptcy.”

And you're not. So it's about identity and why is it about idea? Well, in 35, almost 40 years of doing this, of coaching families on money. What we have discovered, including my house with me and Sharon, is that personal finances 80% behavior. It's only 20% head knowledge.

So math is not, is most of the time, not our problem. Most of the time, it's our behaviors. And the data tells us, the research tells us that 88% of the time that you take your debts, your miscellaneous debts, your student loans, your credit cards, your car loan, some medical bills, whatever this is piled up. And we move them over to a home equity loan.

We no longer feel the pinch of all those bills piling up. And we don't change our habits.

And nine out of ten, 88% of the time, people run up more debt because they didn't call, they didn't fix the habits that caused the debt in the first place.

So how much debt have you got? Let's see if we can figure out what to get you out without doing that. But as of right now, I have 80,000 left pay on my house. And I got my wife's car that's 25,000. And then one course paid off with my work car.

And then my truck only has 2,000 left on it. Everything else has been paid off credit card personal loan.

“So the only thing we're talking about rolling is these two cars.”

Yeah, it'd be 27,000. And how much, what do you all make? How much have you paid off so far? As of right now, we make 80,000. My wife's still in doctorate school. So graduate next year.

And doctorate was your occupation therapy. Is there any student loans for that? Or she's you're cash flowing in? A lot of grants. Her parents have helped him.

We've just stayed to the grindstone. Good for you. Very good. Okay, so she's going to come out making 80, right? Yes.

That's so your double your income. 160. And that's when does she do that?

“She probably in about two years because we want to have our second tier after she graduates.”

And didn't want to have to go into work and have just a newborn child. Okay, I got a call. All right. And so, and you make 80. Okay.

All right. Well, you can do a couple of things here. But what I would do is simply get on the every dollar budget and the two of you sit down and say, All right, we have a plan. The plan is for her to graduate.

Have the second child and then begin work.

And so in the compass in that plan is that we also need to clean off this $27,000 in debt, which is $2,000 a month for $24,26 months. Okay. No, it's not. No, it's not.

It's $2,000 a month for 12 months. Okay, yeah, okay. Yeah. And so it's for 13 months. 13 months get you out 14 months, whatever.

All right, so $2,000 a month. We need to put on this debt and we'll be done in 14 months. But if we're not willing to cut our lifestyle enough to do that, and you pick up a little extra work, maybe she picks up some side hustle. I don't know whatever it is.

Maybe we sell something else.

Approximately right now, $5,000.

“Well, that was before we we put it all towards the truck that we was doing.”

Yeah. The snowball effect we put everything towards my truck. It was a $19,000 last year or a year and a half ago. Okay, so you've been working on this. How much debt have you all reduced so far?

Round about 35. About $30,000. How long did that take? Two years. Okay.

All right. So 14 months to do 27,000 is not too far off. All right. So you're not ready living like that. You're already living like this.

Well, and the authorities up until this year, I was only making $45,000. So I got it. Wow. Big. Okay.

She got a huge increase. And so we're going to live on nothing.

“Finish her school and get these cars paid off.”

Or we're going to sell it stupid $25,000. That's what I would do. Because when I'm looking at this, I'm going, okay. You just told us you used to make $45,000. You're already up against the rule of it being more than $50,000.

More than 50% of your take home at 80 because she's not making the other 80. Yet. So if I were in your shoes, I'd actually sell the $25,000 one now and go down in car and get you something that is more reasonable for what you're earning today. And then when she starts making 162 years from now, then you can upgrade your view.

Your household income goes to take second year of your income.

Yeah. That's probably the best thing. If you're unwilling to do that, you're going to have to sacrifice hard for the next 14 months to stay on. I mean, being sunrise schedule to clear these off, you cannot borrow your way out of debt.

You're tired of hustling and grinding and pushing this debt monster. And you were called us looking for an easy way out with a heloc. And it does not get you out. It just moves it. And it keeps you from addressing the issue.

And the issue is really about a car you're shouldn't have bought. But if you're going to keep that car now, and it's not horrible, it's just bad. Okay. It's not like the scream at you. This is the dumbest thing I've ever seen in my life.

It's so bad. But it's just bad. Yeah, it's me. It's causing you to move slower than you see. Yeah, it's just causing you walk away.

Walk with a lamp. Yeah. And here's the interesting thing, Matt. You guys are so gold oriented and you're so focused that you've detailed out every part of your lives. You've done a really good job of planning your life out.

I mean, you got her in school with grants, moms help, and mom and dad's help. And some hustle and grown, we pay cash for that school. She's going to come out with a freaking PhD in PT and going to walk in straight into 80 to 90 grand whenever she wants after.

And but wait, we're going to have a baby first.

We've laid everything out. And it's well thought out. You've done a good job of planning all of this.

“The the only thing that doesn't fit in there is this car.”

Yeah, and you've got to view it as making your journey easier, not as a negative. You know, that's the way you've got to view it. But no, under no circumstance, whatever role these cars on the my home. Because it's going to make you feel like they're not there. And you're going to relax and you're not going to deal with the issue.

And so, um, absolutely, absolutely. If you want to keep it, roll up your sleeves and get her paid off. Otherwise, it's dump it and get the other two cars paid off and you got your old truck. She's got a smaller car, a less expensive car, and we're fine. She's a student.

She's not a PT. She's a student. We're driving 25,000 r-car. [Music] [Music]

[Music] Joe is with us in Philadelphia. Hey, Joe, what's up? Oh, man. I can't believe you're speaking to you guys and speaking to big kinds of levies.

I have a lot of fans in my family. Oh, there's just something else. What are you talking about? We're honored to have you, sir. How can we help?

I'm honored to be here. I would like to know, I would be blessing on this. If you think it's a good idea to pay off the mortgage that I'm still on.

I no longer live there. And this would be as a surprise. Wow. That's an unusual thing to do, would you agree? Oh.

Not many people call me up and I want to bless the ex-wife. Well, it's an awesome woman and she is the mother of my kids. Wow. That's, I really want to slow clap right now. I've got a lie.

Well, I don't think you're saying it first.

“I know it's a great, I think it's a great idea.”

But I also like, Joe, you got to do this. You got to deliver on this. You can't just dream it up. Are you financially able to do this? Tell us about your money.

I think it may pull in about 200K. I work multiple jobs. So it's hard to get it exact figure. But I am, you know, starting, you know, in the Ramsey plant. Take off my debt.

Piling up a big. Trying to pile it up, a emergency fund. And then I'll be the last part of that. We'll be saving up a flush fund to do this transaction. Okay, and what's owed on the home?

In 70,000, I believe, right time. Next year, it will be around 25. Okay. And how much debt? So let's calculate your journey.

So you've still got debt to pay off on your own. How much do you still have to go? About 20 grand. But I will be done with that in about two months. Okay.

And then how long will it take you to save up three to six months of expenses? I am shooting for an arbitrary number that should do it around 60. Okay. Okay. I think we'll take around seven or eight.

Okay. Okay. I want you to-- How old are you? 43.

And how much do you have in retirement today? I have over 500,000.

I would not work about 1.2 million.

Okay. And so 500,000 in retirement. Where's the other million? Well, I have-- I'm sorry, I should cut that down to about nine.

Stipy because of some of that is the value of the house.

“If you have to split it when doing that.”

I also have my own Roth. I have kids for 529 plan. And have some other-- There's an other investment spaken there, too. Do you have--

Tell me about the other investments? Oh, it's-- Well, I mean, that's like-- I think investments are running around 800,000. A lot of that money devotes my kids.

I also have about 30,000 and it's just-- I mean, you have 800,000 devoted to your kids? No, no, no, no. It's total investments. Okay.

Investments and what?

Oh, 529 plans, I can put it in my kit.

I have a 200-- No, you don't have-- You don't have 800,000 in 529 plans. That's not true. No, no, no, no, no, no.

No, no, no, no, no, no, no, no. I'm talking about-- Well, since that's not my net worth. I know. I'm trying to understand how your net worth is broken down.

So the total in 529's-- the total dollar amount is how much? Uh, to-- I'm $210. How old are your children?

Uh, $410. Okay. And how much is in your 401(k) and Roth IRAs? Uh, total of that is $510. Okay.

So that's $110. And then what other investments do you have? I have-- It's just a-- I have--

I'm around 30. You have any non-retirement brokerage accounts or anything like that? Um, around 300. $3,000. Yes.

Okay. All right. All right. You give it mine. I'm just starting on this journey.

Yeah, when were you going to-- I'm talking to-- Yeah, 2023. I'm sorry? 2023.

Oh, three years ago. Yes. Okay. All right. Okay, so back to your question, then.

Okay. All right. All right. We want you out of debt and emergency fund employees. And putting 15% of your income away for retirement.

“Beyond that, if you want to do a generosity move, you would pay cash for the generosity”

move, which is going to be around $65 or $70,000 in this case. Um, and then the question is, should you do that generosity move of paying off your ex-wife's house that has your name on the mortgage? One benefit of that is you no longer have that liability of that mortgage if she pays to low it doesn't screw you up.

If she doesn't pay it at all, it doesn't screw you up.

Okay.

What I want you to visit is this before you write that check because you're thinking about the kids

and you're thinking about the guilt from the divorce and some of these other things. I want you to visit, how old are you today? 43. Okay. Let's say it takes you two and a half or three years to get there, so you're 46 years old.

And you're sitting there with that money in the bank ready to write this check and pay off her house. Okay. That's about what we're talking about.

“I think if I understood all these numbers right.”

All right. And I want you to ask yourself, I'm 46 at that point. I will have been divorced for many, many years. The kids will just be at home a few years more. So you're not really doing it for the kids because they're going to be gone from that

shortly at that point. They're already teenagers.

So they're going to age out of that house.

All right. And so I want you to ask yourself, when I'm 56 and I'm dating someone and she says you paid off your ex's house. How's that going to feel? She actually accuses of that. She doesn't suit this show.

Oh, you're already dating someone. Yes, she's awesome. I think she has to read J's book here. She loves J's. I think that I think what you really want here is the option.

And I like that you're working towards it. And I think that you have the option that in two years if this suddenly doesn't make sense. You don't have to do it. And so in the meantime, I would keep this aspiration to yourself. I wouldn't go telling the ex wife.

I wouldn't go telling the kids. I wouldn't be talking about this as though it's something that you're definitely going to do. Because today's point a lot can change in two years. And you might change your mind.

“But I think it's awesome that you're thinking of that.”

Let's pretend they're later your married that you're dating your month. Y'all want to get married in by a house. And you say wait.

I have to buy my ex wife's house first.

I have to pay off her house. I get it. Yeah. That's going to feel weird. So I'm not saying it's a dumb idea.

I'm not saying you're not going to do it. It's unusual enough. And I think it sounds like you're thinking about this only in the moment. And you haven't visited the 10 year from now. Version of yourself and ask that version of yourself.

Is this really something I should be doing? I wonder if there's and we didn't ask him. But I almost think of it almost like a bankruptcy. If you feel like you owed someone something. Yeah.

And it was absorbed. It got absorbed and it was fair in the divorce. But you still feel like there's something that you owe. Yeah. I wonder if there's something there that he just feels like he said.

Be real careful with those kind of motivations because they don't age well. That's what I'm talking about. So, you know, especially when if it means you can't do something else that is in the present. Because this money is being written into the past. It's not being written into the future.

It's not being written into the present. It's just pat money going to the past. Which is not the end of the world. It's not the end of the world. You can do that.

It's your money. You have that right. It's not a moral. It's not a horrible thing. It doesn't make you a saint.

It doesn't make you a sinner. Doesn't make you any of that. It's just a guy that felt like that's something he wanted to do. And it's his money.

“So if that's what you want to do with it, that's fine.”

But I can't say I'm not going to say I don't recommend it. I'm not going to say I do recommend it. Yeah. I want you to get an financial shape to do it. And I want you to think about what this means that you can't do.

And what this is going to sound like in your head a decade later. And if it still sounds good, and you still think you want to do it, then fine. Write a check. [ Music ] Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio.

I'm Dave Ramsey, your host. Thank you for joining us. Open phones at triple eight eight two five five two two five. Jade Washaw, Ramsey personality is my co-host today. John is in Raleigh, North Carolina.

Hi, John, how are you? How are you doing? How are you doing? Better than I deserve, what's up? Yeah, so just a little bit about myself.

I'm a financial advisor. In March part because there's questions here show for the years and seeing how you all help people with their money and wanting to be able to do the same. More recently, also I've stepped into a leadership position with my church as an elder.

Is you know, developing things on and of course follow you.

“And you're getting on a whole life insurance.”

And so one thing I've realized in the past couple of years is we have a member of our church that is another financial advisor for more of an insurance based firm. And I've noticed that you started working with more and more couples at our church specifically. What I've seen is around a whole life. Insurance policies and more recently confirmed that when one of my closer brothers and Christ told me that he started working with him. And when I thought to him about what he had, you know, bought from him and invested in one of things was a whole life policy.

And so I've been sometimes educating him on hate why I feel like it may not be the best solution for them.

And, you know, the young couple helping accomplish their goals.

And really wanting to better understand and see your all thoughts on how can I address this with the other leaders. Of the church, maybe for those that don't fully know how this product may not be beneficial for them. And how do I potentially confront this member of our church too. I'm not sure I do believe that it could be doing what he believes is the best for the people that he's connecting with. Wow.

Okay, there's two separate issues here for me. All right. Issue number one is the guy simply is in a business that you disagree with. And he's doing business with some members of the church. Okay.

And you're not going to be able to keep that. That's going to happen all your life. Okay, because there's going to be a banker in there and people go to open a decent card at that bank. And, or the worst yet, there's a payday lender that goes to church there. Or a card dealer who leases people cars that goes to church there.

And they may be elders on the board with you. That wouldn't be unusual for bankers and card dealers and insurance agents to be right there on the board with you. Or right there on the deacon board of the elder counselor, whatever it is in your situation, you name it. Governance wise. So they simply are in a business doing things.

They will give them the benefit of the doubt that they love Jesus and that they think that what you said, that they think what they're doing is good. So I long ago, 30, some odd years ago made the decision on those folks. I don't do anything. Okay, it's just my job to educate and my job to help the ones I'm supposed to help, but it's not my job to be the police officer of what I deemed to be a good product for the entire church. And so, and what happened was a guy who's a strong believer in an elder and another church that owns a local card dealership called me.

When I first started the radio show almost 40 years ago, and I was tearing his head off. I wasn't naming him, but I was just saying card leases rip off.

“You're screwing people with a car lease and I'm on the radio saying this, and he's leasing cars every day at the Lincoln Mercury dealer, right?”

And so he calls me and he wants to sit down as two brothers in Christ and resolve this. Well, we weren't, it was a dumb thing to do. I did sit down and I don't take those meetings anymore. Because at the end of the meeting, he still selling cars on leases and I still think they suck. And we both had to agree that both of us are probably going to be in heaven. And so, you know, that's, you know, we just had to go, that's the way it is. By guns would be by guns.

And so, I wasn't going to change jam and you're probably not going to change this guy. And you're probably not going to keep him from doing business with somebody in the church. Now, that's spuck at number one. Bucket number two is if you feel like he's going to church there and using his church membership as a prospecting tool, then he's in there. He's a wolf in the middle of the sheep pen then. And I don't care what he's, I don't care what he's selling then.

Okay, he's freaking selling aluminum siding. You know, that stops. That's church discipline. If his reason for being there is not, has nothing to do with church. And he's just looking at this congregation as a feeding pin.

“If that's how it's actually going down, then that stops.”

Yeah, and I'll tell you one thing, one time I did do that, I got church leadership involved was, as you might imagine, a very enthusiastic guy in a multi-level thing. One at everybody in the church to join his multi-level thing, because Jesus had told him.

And we did get a agreement with in church leadership on that, because the guys motives were not pure.

“He was there to do business. He was not there to worship Jesus and to be of service to a few members of the congregation.”

But if you, and John, if you as a valid financial planner with ideas that I agree with are in there, and your reason for being there is you're just looking across the Pew every week trying to figure out who you can prospect. I'm going to call you out on that. Okay, so if he's in that bucket, I'm shutting him down.

And if he's just in the bucket of I disagree with him, I'm not going to say a thing.

Yeah, I mean, you've been in church leadership.

“I mean, yeah, I think there's a community aspect of church where it can be an advantage, you know, you can find a lawyer, you can find somebody to work on your car, you can find somebody to help with this and that, right?”

But that's different. That's different. Yeah. And unfortunately, even in that situation, even if you're using it as community, one person has the ability to talk to another person after service and find out that they sell insurance and they can say, I'm in the market for insurance and they sit down and talk and it's fine. And I agree with what you said, Dave, you can't, you're not the police of that. There's there's plenty of people who are going to find methods of how they want to live their life has nothing to do with what you believe when you walk into the place.

Yeah. Yeah. And I, you know, I sat on a church board with a whole life guy who absolutely could not stand me because his business was suffering greatly because of yeah. And I was real pleased that his business was suffering greatly. You know, I think the bigger discussion here is there are things there are products out there that we, we view is villains, right? Like we view car leases as villains. We, we view payday loans with villains. We, we view credit cards, all those things. But it doesn't mean that the people who haven't figured that out yet are bad people.

If they're in that business, do you know what I'm saying? Yeah. There's usually some level of them that they think that they're doing somebody a service when they give you a car loan. They think you're doing the, you a service when they put you on a lease. So, but if you have the sense that this guy is in there, he just got his hair clippers out and he's sure in the sheep, then yeah, we're going to put his clippers up. I'm going to put an end of that for sure. In any business, legit or ill legit, that's not the reason you go to church.

[Music] Dave Ramsey here, for more than 30 years, I've been talking to folks on the air and I can tell you that most people are broke.

“Not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job because when you do that, something changes.”

You stop guessing. You stop worrying. You stop stressing. Our every dollar budgeting app will show you how to find extra cash, pay off debt and finally start winning with money.

But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change. It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the App Store or Google Play. [Music] Well, we wish we could answer every question on here, but we just simply can't get to everybody, but we do have a solution for you.

Go over to our website at RamseySolutions.com and use the Ask Ramsey tool. If you ask Ramsey, it will tell you what Ramsey thinks about this. And so everything that Jade has said on the radio or any of us have said on the podcast in the last three years is built into the data, but set. All of the articles and books that we've all written are built into the data set. So Ask Ramsey knows what we would say here on the air, very accurately. And it's free. It's an AI tool that we have trained only on Ramsey data. It doesn't have any of the sewage from reddit or something else tied into it.

Or tick Doc, it's Ramsey data only. So it gives your Ramsey only answer. If you want to answer this, not Ramsey, don't go there because it's going to be a Ramsey answer.

James is in Charlotte, North Carolina. How are you? Hey Dave, I'm good. How are you? Better than I deserve. What's up?

So a family member of mine is I get rid of the cellar home in Key West. And I am wondering, when is it okay to buy your second home or vacation home?

When you pay cash, can you? No. Okay, then you can't. Pretty simple. Yeah, because a second home is a toy. It's a luxury item. And so it's like I'm going to buy my fourth car and there's only two of us.

It's a toy. It's a luxury item. And it's going to get used about as much as the fourth car. Okay. And so I was able to make it my full time home and rent out my home and Charlotte. What would you just sell the home and Charlotte and pay cash for it? Okay.

“If you want to move to Key West, you want to live in the house?”

I mean, it's pretty great. Okay. I love it down there. Your career is. Yeah, I am able to move.

Wow, that's pretty cool. Well, that's an option. I would do that.

I mean, that's not a second home, that's a transfer of primary residence.

Got it. Yeah, the second home is on a bicycle. I don't want to buy a beach house, I want to buy a mountain house. I want to buy a house in Mexico, whatever it is, right? That's second home.

And you need, that's a toy. And you need to pay cash for those because you're going to be disturbed at how little you actually end up using them. Okay. And so, I mean, even if you work at using them, you're not going to be there,

but six or eight weeks a year, right, on a second home. But now if you're going to live in it, that's not a second home anymore. So yeah, sell the house and Charlotte and go buy it. Maybe that might be your best move. But, um, and I want you guys to get a second home.

I'm not against second homes.

But, uh, the other thing, Jay, we don't want to do is we don't want to rationalize it and say we're going to rent it out. And the renters, the Airbnb renters are going to pay for it for me. I feel like you're not going to show up and it be the same house. You know, I feel like you're going to have a wear and tear.

And you're going to be mad that when you came back, it, you know, it's not the way you left it every single time. I don't know that I'm right, but I feel like I would feel that way. You're right. You're turned your house into a hotel room.

Yeah, I want it to be mine. And you know what they do in hotel rooms? They take stuff and screw it to the walls so people can't steal it. Yeah, I don't want to know that somebody else was in my shower. We're in my sheets.

That bothers me. It bothers me beyond belief. I just got creaked out. Jayson is in Denver. Hey, Jason, what's up?

Hi, Dave. Jayden, that's talk to you guys. You too, how can we help? We've got a question for you. So, quick back.

So, I guess I'm 27 year old. I only have a one year old daughter. Congratulations. We're technically in babies. Well, thank you.

“We're technically in baby steps for and five, I believe.”

Good. But for my families, our background, and we come from the armistment of night. College isn't really a thing. Is it still smart to do a 529 plan? If we know chances are she won't be attending college or is there a better way to invest?

Okay. I mean, I'm vaguely familiar with Amish Menonite thing. I wasn't aware of a prohibition against higher education. Yeah, are you saying that you're not good? It's not like they're, well, I'm technically the Amish Art against it.

Now, we're not in the Amish anymore. So, we're not against it. It's just like my background was, I got a full time job at 14. You're homeschooled at 8th grade, and that went into the work. And you were doing a trade of some kind.

Correct. Construction. Yeah. Okay. So you're in the construction business, all right?

And this is your one-year-old daughter. Correct. Okay.

“And so, what do you perceive in your all situation?”

You're not technically Amish anymore, but the culture and the belief system continues to influence you, which is fair. If I understood you, right? Yeah. So, what do you perceive that this lady, this young woman, of 20 years old, is going to be doing? Man, it's hard to say career-wise.

I mean, my guess is, I technically come from a family of entrepreneurs.

But chances are she's like my wife.

“I mean, her dream is kind of to be a fat homo.”

I mean, not really career-driven. Right? Okay. So, well, so what education gives a young lady in that situation, whatever the education is, I don't care what it is, but something beyond a homeschool, high school education. What it gives them is options.

Right. And as her dad, what I wanted to have is options. In other words, if she had a degree in a two-year degree from the Associates College, local community college and entrepreneurism, and then she would decide if she wanted to be a stay-at-home full-time mom, I can make the case that she's better at being a stay-at-home mom because of that education.

Could you? Yeah. I can see that.

“She's raising the next generation of entrepreneurs, and she actually knows something about it.”

Okay.

And so, education, you know, again, but it, she also has the option of joining her husband's business and helping him run it because she knows something about accounting.

Right. So, education has a value in the value. If it's, if it's usable, education, I don't want her to get a degree you've heard me. We don't want them to get degrees in left-handed puppetry. That's a waste.

Well, I want to well-rounded left-handed puppetry. No. That's bullcraft. That's just you want to go to school and play beer pong. That's all that is.

And that's not what we're talking about here. But if there is some kind of, let's call it continuing education after high school. Trade school of some kind. A entrepreneurialism program of some kind that is a formal certification program. That would add options to her life, even though there's a probability that she's going to be a full-time mom.

Because she's been taught to enjoy that and devalue that. I don't care. I mean, I'm fine if she does that. My wife's been a full-time mom for 40 years and we're not on this. So, you know, I mean, I mean, well, I place a value on that.

So, but I would wager that her having a four-year degree has influenced the confidence and poise of the daughters and son that she raised my wife. Mm-hmm. Mm-hmm.

And she's never actually used her four-year degree in the marketplace.

So, you know, but I did a little look at it. So anyway, that's a thing to think about. So I would be setting some aside. Yeah, I wouldn't continue education. Yeah, I wouldn't overfund if I wouldn't go ham on that.

I wouldn't go 200k in it. No. And you don't even have to do 529. You can just have a mutual fund in the kitchen. Absolutely.

You can just do that. This is for you. This is for you to continue your education because more knowledge adds to the quality of your life. Useable knowledge. And honey, we want you to do that.

Because it gives you confidence and gives you dignity. It gives you poise as a young woman. Particularly as a young woman, young man too. But particularly, that carries yourself well, knows what the flip she's doing, right?

“You should not feel uncertain about investing.”

And you don't have to. That's why we created investing essentials. A two night virtual event where George Camo and I walk you through my playbook for investing and wealth planning will simplify everything from 401k's and mutual funds. To passing on wealth.

So you can invest with confidence. Take it start at $199. Get yours today at ramsysolutions.com/events. Or click the link in the show notes. Thanks for joining us America.

Leslie is an Auburn High Leslie.

Welcome to the ramsyshow. Hi, David. Thank you so much for your time today. So yeah, my, I have a boy friend. He's on disability.

He served as a marine and has PTSD, which really prevents him from going out and getting a traditional job. I haven't heard him to develop some flexible five businesses related to skills that he's expressed interested in. Interested in such as landscaping or woodworking, but he doesn't really seem to show much

initiatives.

“And I'm wondering, how do I approach this topic with him?”

Since we both agreed that if we were to get married, that we want more traditional setup where I can stay home at least part time and homeschool the kids. So you know he's got PTSD. Is he, is he also depressed? Like is he feeling like he doesn't have purpose in the world?

Because that's what I'm hearing. You describe. Right, it's on and off. He does have a bit of a kind of free time addiction right now.

He's kind of always watching TV or gaming.

And I think that's just taking up all his time. But he does have the PTSD is better now. But he does struggle on and off with depression. And he's working to see working with the counselor on that? Not at the moment.

So what, why would it get better? Um, time, you know, he said the PTSD is a lot improved. No, it's not. Okay. He's hiding in games.

So they're all future games. And he's depressed because he doesn't want to go out in the world. He doesn't have any hope. And so he doesn't want to go, he's ambitions gone.

Yeah, I don't think there's anything you're going to be able to say in

this in one sitting to convince him of that. Yeah. Okay. Okay. He is not a, if he is not progressing in his healing and doing the work to progress in his healing,

he's not going to have any change. And you don't want to be connected to the guy that you're connected to right now ten years from now. Right. Yeah. If he doesn't, if he's not getting better, then then you have a dream of the way things

are going to look, but they're not going to look that way unless he heals considerably from where he is right now. Is that fair? Yes, I think so. He also had a really hard childhood.

“So I think there's a lot of healing, but he's on a lot.”

There's a lot of reasons we could be here. But the reasons are all in the rear of you mirror and the question I've got is hope about the future and hope about the future means, okay. I'm dating a person that's bipolar. I'm dating a person that won't take their meds and won't go to counseling.

Well, they're not going to get better. I'm dating someone who has a gambling problem. And they just won't do anything about it. They're not going to gamblers anonymous. They're not sitting down with a therapist.

They haven't cut off draft king shit. And so, you know, they're going to continue to have a gambling problem. And then, but you have this idea that they're going to be something they're not. And it's wonderful that you have that hope for him. I actually have that hope for him.

And I don't even know him as an American that he served in the military on my behalf. I have a hope for him. I want him to heal. I want him to get his childhood and the horrible things that happened in the military and his rear view mirror and move forward with the healthy life.

And I know many, many, many men and women who have. But they don't sit in the basement playing games all day. Right. Right. Yeah, so, in other words, I might, I might reframe this.

“If I'm going to be, can I be your old uncle, ugly uncle day for a minute?”

Yes, please. If he's not going to get better, don't keep dating him. Right. For your sake, for your sake, don't believe a, don't believe mythology about what you wish. Actually, observable things that he is doing, actual behaviors that he's doing,

that are moving forward for him becoming the man that God designed him to be. But if he's not going to engage in those movable, observable patterns, then this is a, this is mythology that's in your head. Don't, don't mess yourself up on that kiddo. So he, he needs to be moving back to earn the right to date.

My niece, the princess Leslie, this guy has to earn the right by working on his healing.

And you need to have some very clear milestones in your mind of what that looks like

“so that if the box is checked green, you can go great.”

He's doing that. And if the box is checked red, you can follow that down the line and go, okay. Now it's time for me to move on. Exactly. Exactly.

That's what I would do. Yeah. But you can't, take your ambition and inject it into someone else's veins. No, you can't. And that's the part you can take your hope and inject it into someone else's veins.

You cannot, you can lay out a plan and say if we did these things, here's what would happen.

Yep. And give someone a reason to have hope. Yes. But you can't make them accept it. No, you can't.

Horses don't drink just because you let them to water. Shoot. Man, that's hard. That is tough. Yeah.

Emily's in Dallas. Hi Emily. How are you? Hi, I'm good. How are y'all?

Better than I deserve. What's up? Okay.

“So my husband and I are in baby step number two.”

We have three kids and one on the way.

And I want to start planning to be able to stay home eventually with my kids and we've got to get out of that first.

Okay. So my question is should we pay? Should we sell our home? Our current home that we have quite a bit of equity in. Use that to pay it off most if not all the debt.

Downsized as a family of six and live in a small home for a few years while we get that debt paid off. Wow. You're really willing to embrace some some discomfort here. How much debt are you trying to pay off? I believe it told about 84 to 86,000.

Oh, no. What? All right. We have two credit cards and a line of credit that's about 12. My student loan is 13.

My husband's grad school loan is 25. We have an auto loan that's 16,000 before you tell me to sell the card. The card's only worth 8700. We consolidated debt stupidly a few years ago and so the loan is more than the card's worth. And then we have a home improvement loan.

That's tied to the mortgage. It's 20,000. And then our mortgage is to 12 with a lovely 3% interest rate. And what is the home worth? I think if we sold it, we could maybe make 340 to 350.

“We have not gotten serious cons on it yet, but just in my research, that's what it.”

And what's your household income? We bring home about 95 to 10 per month. Sometimes a little bit more. I'm in sales. So I occasionally have a bonus.

Yeah. So you bring home $9,500 a month? Yes. My husband and I. What portion of that is from you and what portion is from him?

Oh, gosh. I think his after taxes and everything on a budget is 4,731. Okay. And mine is the rest. Okay.

So we've got to get this to the point where you can live on 4,700 bucks a month. Assuming nothing changes in his income. Yes. And he is trying to up his income. And he is trying to up his income.

And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income.

And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income.

And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income.

And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income.

And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income.

And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income.

And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income.

And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. And he is trying to up his income. All right, let's cut to the chase.

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Let love and faithfulness never leave you.

Find them around your neck, write them on the tablet of your heart. Then you will win favor and a good name in the side of God and man. Hmm. Conrad Hilton said success seems to be connected with action. Successful men keep moving.

They make mistakes, but they don't quit. Almost what we are talking about leisurely. A session involved. Martha is in Nashville. Martha, how are you?

I'm good, how are you? Better than I deserve, how can I help? Yes, I'm calling because about nine months ago. Actually, I would say eight months ago. Me and my husband decided to pull our kids out of public school and homeschool them

for a bunch of different reasons. And we have done that. And now I'm actually eager to go back to work for a bunch of other reasons. As I'm calling to see if it is the best choice and that can be. To put my kids back in public school and go back to work full-time.

What changed? Um, well, about a year ago or actually right before we started homeschooling our kids. We were in, um, marriage counseling for about almost a year at that point. And, um, the very last session that we had had with our marriage counselor. He had recommended to me that I separate from my husband due to some verbal abuse.

Um, an emotional abuse that was going on.

“That, um, and I'll honestly, I'm not really for sure.”

I would consider verbal abuse or emotional abuse. But he had picked up all the few things that we had talked about. And so I let it go. And we said that we wanted to take a break. And counseling also got very expensive for us.

Well, about a couple of months later or a month later actually. Um, something changed where I just felt the need that we needed to homeschool. And I brought it to my husband and we proceeded forward. Well, the last eight months. I'm sorry.

What does that have to do with the homeless? Yeah. Um, I, I, I really don't know. I don't either. It's very confusing me as well.

But, um, I guess I had just ignored anything the counselor had said.

And I had proceeded just to move on with my life as if he had never went to marriage counseling.

Okay, so, you know, a pro sure has been and said, let's do homeschooling. You started doing homeschooling. It's been eight months. And now you want to go back to work. What is changed?

Um, we're not on the same page financially. Um, so I got brought up in there counseling as well. And I ignored it then. Um, and so homeschooling.

“And honestly, has brought out a lot of things that I, I guess I was blind to before or I had ignored.”

But being home as much as I have been and seeing the chaos that has run a mother in my house where the discipline is not there. The interest and the baby sets me out there. The interest and about anything in our marriage is not there. And I guess I needed home school to actually show me that. Understood. So you're seeing the money is a mess.

Everything's a matter of feeling you want to get a job so you can leave. Um, I don't necessarily want to leave, but I do want to get out of the house. And I did realize how much I was going to miss working until I stopped working. And um, since we are not on the same page financially. I don't know how you getting a job is going to fix this entire soup that you have explained.

I don't know. You're in the middle of a soup being stirred around. And um, you getting a job versus homeschooling is is just one item in the recipe. And you keep jumping from one thing to another thinking that have nothing to do with your marriage problems.

Thinking it's going to fix your marriage problem and it never does because you refuse to address the marriage problem.

See, I don't, I don't think I'm trying to avoid dressing the marriage problem. Yeah, you both quit and then you quit work. To come home with the kids for not that has nothing is not connected at all. The marriage problem. If, if you tell me just seems random and impulsive. If you tell me you wouldn't saw marriage counselor because you needed a professional to step in.

And then the professional said you've got a problem here. You've got a problem here and a problem here. But you've said I've ignored what he said. And you've done your own thing. Yeah.

I think that's where the issue is. You got to listen to the professional. 99% of what will be fixed in your home is going to be fixed when you guys get your marital issues aligned. And get and spend your time on that. I would spend all of my energy on that.

“If you want to go back to work while you're doing that,”

That's fine.

I need some money because I need to hire an attorney and this is over.

Then that's a decision. That's a logical decision. I'm not sure it's a good one but it's a logical one at least. But this just, I'm going to come home and then I'm going to go back to work and then I'm going to come home. And meanwhile, everything's burning down around me and I'm ignoring that. Yeah.

And that's not okay. That's not going to help you. So yeah, go home back to work. That's fine. I don't care. Doesn't matter.

But you're still going to have hell on earth until you deal with this. That's not going away until you deal with it. So my suggestion is you use some of your new income to pay the marriage count. Another marriage counts are a different one. And the two of you lean into that.

And if you're not going to lean into that and heal this thing, then call it. If you're not going to fix it, call it because your children are suffering in the middle of this cesspool right now, that you call a relationship. It's awful. Bill is in Raleigh, North Carolina. Hey, Bill, how are you?

Howdy. Howdy, how's it going, doing well. Good. How can we help? So my grandma rarely wants her childhood home to stay in the family and my wife and I listen to about buying it from her. And so we've actually been renting it from her to kind of test drive it and see if we like it.

And I pitched her last weekend the idea of doing a rentown situation rather than going through the traditional bank because I've never had a loan in my whole life.

And I don't plan to get any debt ever and she long bored with it. So I just want to know where from here we should go to get like a lawyer involved to make this official. I would not do a rent home, but I'll see what you're after. I'll give you a different structure, okay?

“Okay. What's the house worth and what's she going to sell it to you for?”

It's worth about one 30 and I think she's going to sell it to us for about a hundred. Okay. And how old are you, too? We are in our early 20s. I'm 23. Then what are y'all make? I make around 62,000 in my wife's as if they own mom.

Okay. All right. Well, a couple things need to be addressed. How old is Granny? She's in her eight seven leads and we have talked about the situation in which she passes away. She's, you know, that's been in the conversation.

Yeah, she passes away. You've got to have legal documentation that protects you.

Exactly. Okay. And so what I would do if I were her and I wanted you to have this house is I would sell it to you. For a hundred thousand dollars, put it in your name. Okay.

And I would carry back the note. And when I die, the note is forgiven. Okay.

“That's what I would do if I were her and I wanted you to have this house.”

Okay. Okay. Now, the downside of that is is that the your parent and siblings, your aunts and uncles, might feel cheated out of a hundred thousand dollars. Right. And where the home actually in my wife and I have been putting out a lot of work.

You don't need to put work in somebody else's house. Stop that. You're not on this house. Do not put any work into someone else's house. Okay. Don't do that.

That's going to end up in disappointment and anger later. Note it. Okay. She dies. You got nothing written down if she dies tomorrow.

All the work that you put in is going to be taken by your aunts and uncles. And they're going to sell that house and they're going to make money on it on your work. Do not do this anymore. Until this house is in your name, stop working on it. Well, well she's paying me for the labor piece.

I'm it easy, I feel like, but I understand what you're saying. Okay. Yeah, but the tube got your heart and soul going into this and you're going to get your heart broken. If you guys don't get this written down and quit acting like it's all going to work out. So get it written down.

So everybody has go to a real estate attorney and come up with a structure of some kind in writing that protects you and the benefit of her death. And then lastly, I'm going to go ahead and disappoint grandmother. There's zero percent chance you're going to be living in this house when you're 70.

Zero. Keep that in mind. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it in the meantime.

“Remember, there's ultimately only one way to financial peace.”

And that's to walk daily with the Prince of Peace, Christ Jesus.