Changing Your Money Mindset Is The First Step To Lasting Wealth

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“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, George Campbell, Ramsey personality, one best-selling author and co-hosts of the Smart Money Happy Hour.

These are my co-hosts today. Open phones at Triple 8, 825, 5225, the call is free, and some say the advice is worth exactly what you pay for it. Sarah is in Philadelphia. Hi, Sarah, what's up in your world?

Hi, I can't believe I'm talking to you. This is crazy. What a blessing, thank you.

Well, we're honored to have you.

How can we help? Well, okay, so I am stuck in a apartment lease that is around 60% of my take home pay. What happened? So I find on about three years ago when it was around 45%.

And so they've been increasing it around 10 to 15% every year. And I have to admit, I'm 30 years old, so I was around 27. When I signed on, and I wasn't very responsible with money at that time. But as I've started listening to your show, I've become very aware.

I kind of took the blind fold off and started looking at my finances. And it's just, I have this for about 11 more months. And it's really hard for me to be able to like work my pay off debt journey and have an margin. So I would hope maybe you have some advice.

When's the lease up? So the lease is up this upcoming May. A year? Yeah. Where were you two months ago?

I went there and the way I more gave me, she said you have a week to either buy the new place to live. Or sign on to this increase. And if you don't sign within a week, we're going to raise it to, instead of 2100, go raise it to 2300 for the year.

Okay, and so you decide not to move. Yeah, I--

“Which you should have moved two months ago, right?”

That would have solved the whole problem. Yeah. Yeah. How many bedrooms is this the apartment? It has two.

How many roommates do you have? No. You need one. Yeah, I do. For the next year.

I don't know if I'm able to get one though. Why? If you think a roommate would sign out on for ten months. Sure. A lot of time for 11 or 12.

September is something. Have you been on any of these Facebook groups to connect people? There's apps. There's all kinds of ways. Ask around to your friends.

Someone's probably getting out of a lease, and would love to cut their rent in half, just like you. Yeah. I've been on a couple Facebook groups. I really haven't known what to do, so I should put a little gas in the tank.

Yeah. With this one. Yeah, you've got to fire up here.

“You've signed up two months ago for a mathematical suicide mission, right?”

And so we've got to solve for that and get through the next ten months. Because I don't think the apartment complex is going to let you out of a lease. We're in a single family, and you had an individual landlord rather than a corporate landlord that's a management company that sometimes, like I've got single family properties. And sometimes somebody comes to us and needs to move.

We say, okay, if we can find someone to take your spot, we'll let you out. And we put the house up for rent. And we get a new tenant, and we release them as an act of mercy. Okay. But usually, I don't find that much with a partner complex.

They probably have a bunch of other vacancies. I'd rather fill, rather than fill yours. Yeah. It's a really corporate. Yeah.

Have you read your lease agreement? I would be looking through that thing with a fine tooth comb to see what it actually says. Yeah. I've been looking through it.

They basically said, if I break my lease, I'm subject to pay out the rest of the term.

Yeah. They take up a side hustle, though, I typically make about 4,000 a month. But I recently started doing some freelance works. So now I'm making about 5,000 a month. So I'd be able to hold me over for the rest of the term.

But I don't even know, like, I don't know if I'm trying to think ahead. Because I don't want-- What's your full-time job? I work in marketing. I'm a marketing manager.

So we'll take to get your court income up in the meantime.

I just got a promotion. Um, so.

Yeah, so you're answering side hustles and roommate to get through the ten months.

And then for God's sake, girl, get out of there. Next time the manager says, don't sign up. You go, no, no. I'm leaving like my hair's on fire. Oh, no.

The reason I signed is I didn't have-- I didn't have a plan when-- Yeah, yeah, well. You got to tell me to get you one now. I do.

So get a plan. Get a plan. Get a side hustle. Get a roommate. Make it through till next year.

You're probably going to limit the progress on your other financial goals. Like getting out of debt. And there's other things. Because you're strapped to this thing. You strapped yourself to this thing.

So, um, yeah, you know, so I want you to be very, um, you've been passive in this relationship with this landlord to this point. I want you to be very proactive with this landlord in the future. And that is, I'll go ahead and give you notice now that I'm leaving in May.

“And by the way, if you want to fill the apartment in the meantime,”

I would love you for it. Matter of fact, I'd probably pay you to do it. If you want to put somebody in here and let me out of the lease,

that'll be awesome and amazing too.

And, uh, but I'll go ahead and let you know now I won't be here on renewal. No pressure tactics, no rent raises, no nothing. I am what's known as gungirl. I'm out of here. And go ahead and let them know.

Go ahead and set yourself up and get yourself a plan. So you're not homeless. And you need to market this bare room like a real estate agent. I mean, you need to make this feel like the best deal in a 20 mile radius to have this room at this price and really sell it with the copy.

And then, you know, interview the people like you're hiring an employee because you are and don't hire a crazy one. You know, that's a good thing. So, I mean, you just got to use some proactive things in this process here and some urgency.

Yeah, absolutely. Absolutely. You know, I, um, I think the dumbest things I've ever done

George are when, uh, one of two things.

And I've done so many dumb things.

“I mean, that's why I get to do this show because I've got a PhD into UNB.”

So, um, but I mean, usually it's around two things. One is, I get, I feel like for whatever reason that I'm trapped and I'm desperate. You're painted into a corner. And when I get desperate, instead of getting paint on my shoes,

I stand there in the corner and watch it dry. You know, and I just stay there. I get debt or I lunge at something dumb. You know, desperate, usually equals stupid out from me. And there are a lot of people.

And the other one is, if I'm asleep at the wheel. Hmm. If I'm just kind of co-sting and liar-skid, and I'm not half-put paying attention. And the security alarm here's when that happened to me one time.

It automatically renewed for three years. Oof. To, on the alarm on the house. And it was twice as expensive as you should have been. And I should have cut the stupid thing off and just,

with a pair of side cutters. I mean, sure, just run them off. But I, but it had an auto renewal for three years. Oof. Which actually ended up costing them a lot of money

because I advertised against them. Oh, boy. Using that. So it didn't work out real well for them because they should let me out of it.

But, you know, I, it was my fault. Because I had an auto three year renewal. Like her, like her least thing. And I was asleep at the wheel. Pay attention.

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And hi, Tiffany, how are you?

Good, grateful to be on. Thanks for having me. Certainly, how can we help? I am struggling through baby step number three. It feels like I'm no longer winning if that makes sense.

How do I keep going? How much debt did you pay off? 24,000 dollars. How long did that pay? About eight months.

Once I got serious. Wow, that's pretty cool.

“And how much are you trying to save in your baby step three?”

Emergency fund. I am a single mom, so I'm trying to save four or five months. There's up to six months, over three, so about. How much money? Nine thousand.

Like, ninety-two hundred dollars. Okay, you want nine thousand dollars. But you did 24,000 in how many months? Eight. Eight.

Which means that if we use that math, you would have this done in four. What has changed? It feels like I think it's because paying other people's. You get those wins, and I feel like paying myself.

I know it sounds like a-- No, but mathematically, has anything changed? No, absolutely not. Okay, well, you just need to emotionally create it like a debt then. Yeah, I guess so, huh?

Yeah, I've got to do-- you know what? You're right. I agree with you. Knocking off the smallest debt to the largest debt.

“That snowball gives you a feedback loop.”

And it keeps you motivated and it keeps you moving. Right. And it's easier to do something. Pain avoidance is more motivating than pleasure seeking. Right.

Those are the two things that motivate us. But pain avoidance is more motivating than pleasure seeking. Both things motivate humans, but this is the saving side is pleasure seeking. Wealth building is pleasure seeking. And it's not as--

It doesn't activate the desperation centers of the brain if there is such a thing. Yeah, it's less gratifying. I see babysept three as a financial purgatory. You're not quite building for the future. You're not quite paying--

It doesn't have that like water pistol through hell vibe, but you're just sort of like stacking the acorns for the winter ahead. And so it doesn't feel like you're doing anything in the moment,

but what you're really doing is you are buying yourself a never going to dead again insurance plan.

And insurance is not sexy. It is meant to be boring. But think about that. You're building a fortress between you and a payment ever again. That's power.

That gets me excited. Yeah. That's your right, your right. Yeah. When I finished babysept two,

I was like, oh, I can't wait. And then I'm like, oh, it's kind of anti-climatic. Yeah. You can't wait for the firework to go off. And then it's like, oh, what?

How do I keep going? No one's cheering you on when you add a little bit of money to that high yield savings account. No, absolutely. You don't get to give the finger to city bank. You know, it's just it's not as fun.

No, it only is that. So I agree with you on all that. But now that we've intellectually said all that out loud, then what we do is we use our intellect to activate our will, and say, all right, will,

we're going to be emotional about this and get it behind us. This is a ripped-of-band date off thing. I'm going to take a deep breath and dive to the bottom of the pool. Here we go. And I'm going to knock this thing out right now.

And I'm going to treat it with the same intensity. Even though it doesn't naturally, the intensity doesn't naturally come. I'm going to manufacture it as an act of my intellect. Gotcha. Okay.

That's, yeah. I think it allowed me to be. Yeah. Yeah. Yeah.

And, but let me reiterate, and Joy, what Joy and I both say, what you're experiencing is very normal. But that, I mean, you want to cave into it.

“Well, that's what I wanted to add, because I'm like, what,”

how do I say motivated? I don't want to lose it. I don't want to lose this, you know, intensity. But when it, every month that it's like, oh, it's barely moving.

It's barely moving. Yeah. Yeah. I can't help. And I'm not a natural saver, so that it's saving that up for me was hard.

But I kept saying, okay, I'm going to turn an emergency into an inconvenience by having this. Oh, okay. And I'm going to have it in, sure, and just take all the power between me and the stupid world out there that seems to have its claws out after me half the time.

When you remember the chaos that is ensued when you had an emergency when you're broke, you just remove all the power from that. When do you have an emergency fund?

You go, you don't get to say, and it's amazing.

When you're broke, your life looks like a country song. Everything's an emergency. Like every stinkin thing that comes up. The dog gets a hang nail. It's an emergency.

I mean, everything is an emergency. You know, and all of a sudden when you got $10,000 and no debt and room in your budget,

And you tend to actually have less emergency, because you're doing proper maintenance on stuff.

“You can cash flow a lot of these things.”

Get a nicer car. Yeah. Yeah, when you're broke, you're just desperate at every level. And so I feel you're Tiffany, it is a slog to get through. Michael's in Houston.

Hey, Michael, what's up? Hey, Dave, that's going. Better than I deserve. How can we help? Hey, so I am 20 years old. My girlfriend is 19 and we've been together for four years.

And she talks to me every day about getting married. In that element girl, I want to marry her, but I don't quite feel ready. Am I being unfair to her? You're 16 when they started, right? Yes, sir.

So this is like a high school sweetheart.

Yes, sir. Okay. Is the ship a job? Yes, we actually work together with insurance agents. You're a 19 and a 20 year old insurance agent.

Yes, sir. How long have you been doing that? So right after I graduated, I started working this job. And I got a few promotions. So now a little higher up in the company.

And I'm doing, I'm going to community college at the same time. So I've been doing this since I graduated in 2024. What do you make? Right now, I'm making 40,000 a year and plus monthly commissions. And I also have room to grow.

Monthly commissions for my wife. I just got promoted. So I only got one commission bonus so far. And that was about 700 last month. Okay.

Are you living at your parents' house? Yes, sir, I am. Is she living at her parents' house? I know she's living on her own, actually. What does she make?

She makes 30,000. Okay. How much debt do you each have? We both have no debt, luckily. We've been very blessed.

And I've been listening to you. I've made a read a total money makeover, sir. Then what does she say about all that stuff? She says, "I don't like that guy." Okay.

But she knows it's a good advice. I listen to the show about every day. I love it all. Yeah. But if she's going to be a...

It's not the guy that matters. I couldn't hear her car up with a few months. But if she's not... If you guys are not aligned on how you're going to handle your money when you get married, then you're not ready to get married. Well, you're aligned.

We've had countless conversations. And then I'm confused why she read the total money makeover and hated it if you're aligned. She likes the book. But I try to get her listened to the podcast.

“But I think she might think you're a little too stern.”

But that's exactly what I like to hear, though. Yeah. Well, the tone versus the principles of what we're trying to get after here. Does she actually believe in the principles? When you guys talk about money, is it?

We want to continue living debt for a. We want to build well for the future. We don't want debt to be a part of that. We want to do it wisely without a lot of risk. Yes.

Absolutely, yes. We are 100% aligned on that fact. And where's the pressure coming from where she's talking about marriage every single day? She likes me a lot, I guess. And I like her a lot too.

I think she's just really didn't sort her life together. Yeah. Are you guys by chance involved in a good church? Yes, sir. We are.

“I think the two of you sit down with some of your pastors and get some counsel there.”

Okay. It's to emotionally and spiritually whether you all are ready to be married. I don't hear any reason not to be married other than your very young. But I was just a little bit older than you when I got married. So I was 21.

So, and I've been married 45 years. It was a very mature 21 year old. You looked older than you do today, Dave. There are some 30 year olds that aren't as mature as you at 21. Think about that.

I think you're saying I was a nerd. I think I just caught called a nerd by George about her. That hurts.

I finally heard his feelings, guys.

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I'm great, how are you, guys? I have a question around retirement. I'm 61 years old. I make 37-44 monthly. I have my moments paid off, all my bills are paid off.

I'm getting an extra money on putting money in my roster. I have a $500,000 full on pay. I have $700,000 and I'm just building my roster right now. I only have $3,000 in there.

The 37-100 amount is Social Security.

No, no, no. I'm working. I'm working. You said you're 61 on that, okay? Yeah, sure, sure, sure.

Your question. No questions. So I'm looking forward towards retirement. I feel like I should have, I don't have a country.

“I think for the beginning about investing in something that I could make money out.”

I was looking at an Airbnb situation. And I just wanted your opinion on those. Well, have you ever had dreams of running a tiny hotel? Yes. Really?

Actually, I have. You love that idea of changing the sheets and dealing with all the issues and the damage and the wear and tear from the party. That excites you. Well, yeah.

It doesn't. I don't know how to sit here. I didn't think that all through. I'm just kind of, I'm playing it up a little bit. But Airbnb has been marketed on social media as this,

like get rich, quick hack. And you'll make 20 grand a month if you just do this.

And the truth is it's a lot of work.

There's a lot of risk. There's a lot of vacancy and issues to deal with. And your money might be better off put into the stock market. If you're trying to make quote passive income. Mm-hmm.

This is not a passive. I guess. No. You're running a hotel. Yeah, I know that.

Yeah, I know. But I'm looking also for something to keep me busy in retirement. I'm not going to travel the world. I don't do that stuff. So I guess I'm a little worried about being bored.

Well, I think I, well, you do what you want to do. I, in real estate, there is a spectrum from a hassle spectrum. And along the hassle spectrum goes the income. And so the higher the hassle and the more garbage and trash and weird people

“you have to put up with, the higher your rent.”

Okay. So let me give you an example. So the best rate of return on the real estate is owning a trailer park. Fabulous. Return on investment cash on cash.

But you're running a trailer park. Oh, wow. Okay. I owned a bunch of lower income property in my 20s. Some of it was weekly rentals. About as close to Airbnb as you could have in those days.

But it wasn't really the move in and out weekly. It's they paid weekly because they were irresponsible. So they didn't snorted or drink their paycheck over the weekend. They gave it to me on Friday. And that way they kept a place to live.

And the weekly rentals were high hassle Friday afternoon.

And we made seriously good money. Because we're renting it for 25, 30% more than we'd rented it for by the month. But we had a lot of hassle because of the type of clientele we were dealing with there. And we're having the key people from running prostitution and drug rings out of our houses. It was a constant pain in the butt.

Now that's on one end of the spectrum all the way over on the other end of the spectrum. You could buy a warehouse. That's called a triple net lease where they pay the utilities. They pay the taxes. They pay the insurance.

And they send you a rent check that's much smaller.

But you will never do anything except look up in the mailbox and see a rent check.

They do the maintenance. You don't do anything. But you don't make nearly as much return on investment or warehouse as you do on an Airbnb. But the Airbnb will work your butt off, you turn yourself into a maid, changing sheets after a bachelor at party. Mm-hmm.

No, thank you. Okay. The other part I'm seeing here, I'm going to find a different side hustle. I don't see the money to even buy the Airbnb in these numbers. Yeah, where are you going to pay for it?

Oh, yeah, no, I'm not doing this right away. I'm trying to think of, you know. Okay, I would buy some rental real estate.

“If you want to buy some real estate and pay cash for it later on when you're ready to do this.”

If you did it six or seven years from now, maybe you've got a million dollars. You're half million, has turned into at that point. And maybe you put 300,000 into a rental property and that's part of your deal. And if you want something to do, just go open a small business. Have us a side hustle.

You can sell the portfolio without all this. Yeah. I personally, I'm just not a fan of the Airbnb. I think it's overhyped, overdone. Well, the numbers are now showing there's an oversupply and not enough demand.

Well, in some areas, in some areas there's been legislation come out to stop them from happening. Because you need to run a hotel in the middle of a neighborhood. Because it's not zone for it. And they're stopping it in some areas. So people that bought a house got a big old payment on it.

Because TikTok told them to be an Airbnb landlord. Then now they're screwed. So now, I'm not a fan. I'm not a fan. If somebody wants to do that, and that's, you know, you ought to do 10 of them.

And you ought to just hire four maids that work for you and three repairmen. And you're planning on being over there every week and planning on, you know, have the cops on speed dial. And, you know, then you got your Airbnb ready to set go. And that's what you're dealing with. TikTok doesn't tell you that part.

The neighbors are going to call you. They're going to go, hey, the freaking music over there. Oh, it's cranked up again. This is not a rock venue. It's a house.

You know, I mean, it's just, this is a kind of stuff you don't deal with. All the freaking time. Not a fan, not a fan. I've seen a lot of these videos. David, I know exactly what Michelle got this from.

Because people send me these videos. Saying, what do you think about this? And it's some couple going, we were tired. And we don't work anymore. We just own 17 Airbnb and bees.

And here's our numbers.

We make a million dollars a month.

And you can buy our course. And we'll show you how to do it.

“So that's how you're making a million dollars a month.”

Why are you selling a course? That's the big question mark, everyone. Well, he's not everyone. And the course is only 3000. So I'm going to take, I'm going to sidestep my million dollar income.

And I'll go over here and make sure for 3000 dollars. I'm distracted. This is a war. Untrue, untrue, untrue. Yeah.

Lied. You just lied. They're selling you a dream. A nightmare. Keep it up, Nights.

Michael's in Miami. Michael, what's up? Hi, Dave. Thank you for taking my call. I have an interest in doing.

I'm trying to get some advice. Interesting thing is I work for a credit union. So I'm kind of, I'll think about what I would do. I recently moved from Jacksonville, Florida to Miami. My soul to house.

It was pretty clear. I didn't have any debts. And I bought a condominium here in Miami. Obviously, the lifestyle is a little bit higher. And the condo that bought was 600,000 dollars.

I have a mortgage right now with 154,000.

“Because that's what was left if I sold my house in Jacksonville.”

And I'm contemplating whether or not I should pay the mortgage off with my investments. Even though I would be paying taxes and capital gains on those. A hundred percent. I do it by nightfall. Okay.

I've never had anybody. And there's people that hate Dave Ramsey for almost everything. I mean, there's entire websites devoted to hating me. No one has ever complained that paid off their mortgage. Because I told him to.

I've never had anybody call me back and go.

Oh, you're just so dumb, Dave. I've never heard that. They gripe at me about everything else. The Airbnb call we just got. We'll get hate mail for days from that.

From some of you people that are all twisted up about that. Okay, that's fine. Get in line. But no one ever bothers us when we tell people to pay off their mortgage, man.

Dave's crazy. He doesn't know what he's talking about. I paid off my mortgage. And then I went broke. He can't.

I don't want to ever.

“Now, the key is it sounds like he has non-retirement investments.”

Yeah. And he can sell those. Now, hopefully it's long-term capital gains, which is going to be much lower than the short-term. Capital games. Taxed ordinary income.

So that's the case. Do the math. Math, Newgo. Okay. It's 15 percent of whatever the gain is.

I'll pay 20 grand and never have a mortgage again.

The other thing is, the other thing is this, Michael. The fact that you asked this question on a nationally broadcast podcast with 30 million people listening in tells me you desperately want to pay it off.

“And you just want somebody to tell you to do it.”

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That CHMindustries.org/budget and use promo code Ramsey. So two years ago, for the first time, George and I did an event called investing essentials. And we unpacked my personal playbook on investing. And that includes why I don't invest in some things, for instance Airbnb, like we just talked about. And but other real estate that I do invest in and why and how I choose that.

And other things like mutual funds and why I do those and why I don't do other things. And we get into the detail and George is really good at unpacking some of that stuff as well. We're going to do our third one ever of only done in a couple times September first and second. It's a virtual two night event investing essentials. It's the only place you get this information.

We're going to go through the basics on investing for just a minute. And then we're going to go deep dive into this stuff tickets are $199. This year we're going to unpack some stuff we were just working on earlier today. We're going to unpack some stuff on estate planning and some stuff on legacy. And a few things like that that you guys have requested because one of the things we always talk about around here and people love to use that as their motivation is why am I doing all these things so that I can change my family tree.

And what does that mean? We're going to get into the nitty gritty nerdy details. If you've ever want to Dave, you know, with the formulas and the spreadsheet, this is your chance to really nerd out and learn some things. Dave, there we go. Ramsey Solutions dot com slash events, tickets are $199 September first and second investing essentials. Or you can click the link in the show notes if you're on podcast or YouTube.

Lloyds and Waco Texas. Hi, Lloyd. How are you? Hi, Dave. I'm doing very well. Thank you for taking my call. I hope you're doing well as also we are sir. Good. Good.

I've never, I'm a little bit nervous. I've never put a story out like this for anyone.

My wife was diagnosed with cancer, a rare cancer, three years ago. And we had a thriving business. I'm a block time entrepreneur. I've done lots of things. But we ended up about six months after we found out about her cancer. We were able to sell our business and make some really good financial deposits. And so that I could, you know, be away from that and spend time with her because we, we were sure that

We, you know, what we had gift.

And here we are three years down the road, which we're so thankful to be there. But our living expenses were not making the money from the investments to cover our living expenses. And so I'm just wondering, is there a better place that I need to put money? Or I don't really want to go back to work and start in the business. I want to be available for her.

And, you know, just in the cycle of the anxiety about running out of money and fear and in part breaking sadness. And just all of the above is just kind of all in the end. And I'm just going with you. So how she doing now? She's doing really well.

We've been through three lines of chemotherapy and fixing to start a fourth just kind of general chemotherapy. It's non-specific, you know. She had some progression, which, you know, she'll have progression and then we'll have the fears that come with that. And then, you know, we'll go and everything will be stable. And so that's a win for us, you know.

Doctors give prognosis, but that's according to them. You know, we're believers in Jesus and he can intervene at any moment.

“And so, you know, that's what we pray for.”

But the truth is though that as their interest rates drop,

and you know, so it is the money it's accruing and then going money out, there's less money there to, you know, to have interest on. And so anyway, just let me go and ask other things. What's the size of the nest egg that's left? Well, in Edward Jones, we have about a million dollars.

I had 100,000 in E-Trade with Corweave and that's got up to about 65. So one of my questions is do I sell that and put that somewhere else. I have a half million in a CD at a bank going 3.4. I want to do something. And what is the monthly need? Our built insurance allowance got 50,000.

And my would say our monthly needs absolutely needs are about 120 to 140. You know, they vary depending on if we're, you know, going in 100,000 dollars a year. Yes, yes, yes. So you need 10,000 dollars a year. Okay, sure we need, we need this million five to produce 10,000 dollars a month and it's not. Correct. Okay.

All right.

“Well, if it was sitting in no debt, we own our home, we own our land.”

And then in addition to that, I have a $2 million investment in the company that I sold.

I reinvested with it as a larger company. Does it, does it create revenue monthly? It does not, no, it does not. It will only pay off when that company sells. Yeah.

And I get the, yeah. And there's no buy out provision. No. Early. You're stuck till and they do what they do.

Yes. But I do think it's a good investment. I wasn't questioning that. I'm just trying to learn your terms. Okay.

No, no, there's no buy out.

“So a million five is what you have available to you.”

That's not in retirement accounts. That's correct. It's not returns. Yeah, I mean, six. Yeah, with the 100,000.

No, it did the 100,000 to 65. But yeah. All right. So if it made 10% you'd be fine. I think so.

Yes. Yeah, and the S&P 500 averages more than that. And for the past five years, this average way more than that. This year, it's up 10% year to date. Yes.

So your investments are your portion of your portfolio is underperforming what you need it to. Yes. Do you know what you're invested in? Well, I don't have a call in one. I do not.

I have a copy of what it's invested in. Yeah, but you're as a group. The stuff is underperforming the S&P, which it should because you got 500 in the CD. So it should be. Yeah.

So if I'm you, I'm moving it more to market rates of return and conservative mutual fund investing that has long track records. It's going to get the portfolio performing at a rate that doesn't burn you up. I think it'll run in perpetuation. Okay.

But the problem is you've got, you know, you got at least a third of it.

That's horrible.

“But nothing should be down 35% in this world that we're in right now.”

So that was just a horrible thing there. But that's a side. It's a small amount.

But I mean, if that, if that, five hundred and sixty five thousand plus that million,

that where Jones goes to work to the tune of 10% a year, that's 160,000 dollars a year. Correct. Yeah. And so what I want you to do is probably get a second set of eyes on this other than who you are. And go to Ramsey Solutions and click on Smart Vester for Smart Vester Pro in your area

and sit down with them and with the heart of a teacher and say, I need this million five to conservatively without taking huge amounts of risk to produce enough to feed our family while we go through this cancer battle. And I think you can. I think you can.

And then they need to teach you, you know, what risk you are taking, what market place risk is there.

“And, you know, but if the, if the market place average is 11% and you pull off 10,”

it'll run hypothetically forever, right?

But you don't need it to run forever.

Because either we're going to have some healing. This side of heaven or some healing in heaven. And then there's going to be a resumption of your life at that point. You're not going to be fighting the same thing 15 years from today. Would you agree with that?

I do agree with that. Yeah, unfortunately. Yeah, one way or the other. No, it could be fortunate like she could get healed. Like you said Jesus could touch us.

Yes. And um, I hope he does. Yeah, I do too. I do too.

Our our he could touch her and let her sit beside him and wait on you.

You know, those are those are the two options. That's one of those two things is going to happen. Not a 15 year slog. You're in better shape than you think. You just need to clear plan of what we're going to do with this money.

And I'm sorry you guys are going through this horrible thing. And I have to sit and do math and figure out stuff in the middle of all this emotion. Wow. Yeah, sit down with the smart vester pro at Ramsey Solutions. They'll help you put together portfolio that will work on this.

This one didn't work on it. As a dad of young kids, I'm starting to think a lot more about the world that's growing up in and how I'll help them make sense of it as they get older.

“And that's why I like world watch a video new service for preteens and teens.”

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Welcome back to the Ramsi show in the fair winds, credit union studio. I'm Dave Ramsi, George Campbell, Ramsi personality. Number one bestselling author is my co-host Amy is in Detroit. Hi Amy, how are you? Good. How are you? Thanks for taking my phone call.

Sure. What's up? So my overall question is mostly to do with my son. He's going to be a senior going off to college here in another year. We, my husband and I, I know we can financially cover his tuition room and board for college. But I fear that one, it's not teaching him financial responsibility because obviously the money comes from somewhere.

But on the flip side of it, I'm putting him in a massive hole when I could easily cover it. There's also a little caveat to it where I do have a bulk amount of money set aside, but was given to me by a deceased parent. And so I'm a little tied to that money, unfortunately. So I'm kind of, I go back and forth. Okay.

Well, the last part of it is up to you to figure out. Yeah. There's not a Ramsey answer to you being tied emotionally to an inheritance situation. That's something you've been, you need to work through and you obviously are.

We paid for our three kids college and Roman board.

“All three of them, however, were financially responsible.”

And knew how to work. And we're not entitled brats. They did know the value of a dollar before they went to college. Right. If the guy's a senior and by now he hasn't learned it.

Not paying for his college is not going to fix him. It's too late. Well, he, he has a job. And we, I mean, we talked, talked to him a lot about being financially responsible. We give him a allowance and it's not that much.

And when his money ran out, I didn't just put money into his account and say, Do I mean, how about it? He had to get a job. Yeah. Which he, he now has a job and all that good stuff.

It's just a very much different upbringing than what I had to do with. Yeah.

But my parents didn't have any money. So I didn't have a choice.

Yeah. Right. And it wasn't like there was an option here.

“So with our three, we had them at the stage.”

They were juniors and seniors operating their own checking accounts. And doing a monthly budget that they lived on money that that we gave them. For, you know, for normal teenage operations because we're still their parents. And money that they earned. They looked over their shoulder at that budget and helped them learn the skill of living on a set plan.

They're junior and senior year of high school. So that when they went to college, we said, All right, we're writing a check for the tuition. We're writing a check for the dorm. In addition to that, you're going to get this small amount for campus living.

And that you better have a budget for that. And you better maintain that. And if you want a 200 dollar set of shoes, this isn't going to cover it. So you're going to need to get a job. Right.

And all three of mine at different times did do different things. Either in the summers and/or while they were there. And it worked to jobs while they were in college. So yeah, but what that was was the fulfillment of something we'd already been working on. Rather than a lesson that they were learning there,

they were living out the lessons that they'd already learned. Yep. And so it didn't ruin them. None of all three of them were productive adults today. I think I know that he will be fine.

And he's one of three. So I've got two, and that's the other thought. I've got two more kids behind him. And the money only will go so far. Correct.

And then we need to choose where we need to budget that out. Yeah. And just say, OK, you're going to this school. I'm paying for it. So you're going to this school.

We don't need to go on college tour because we're not going there. Right. You don't have to reverse the country. So have you guys had those conversations thus far? Um, he's very smart kids.

There's a very great possibility that he will get some sort of scholarship. Great. Um, yeah. And you know, my husband and I are still, we max out our 401k's. Um, we have quite a bit in our 401k. So I know, I feel retirement-wise, we're fine.

Um, it's just this cash that, you know, it's kind of set aside. Mm-hmm. Is it the smartest thing to do? How much is that aside for college specifically? Just like right now, 300,000.

That's plenty. No, not for three kids, is not for him to get through. No.

So if you guys do a state school, let's say you might burn a third of that.

Yes. That's reasonable. Correct. And then the next kid, hey, you're going to go to a state school. And we're going to pay for it.

And you've got to finish in four years. You get scholarship to work while you're there. You know, nothing wrong with all of that. That's all a good plan. But the biggest problem we run into with college students is that are with parents in

a situation Amy is they don't ask the question that you're asking. And they don't use any common sense. And they go, well, my kid told me he was going to this school that we can't afford. And I'm like, well, see, there's your problem. My kid didn't tell me stuff.

I told my kid stuff and get that backwards, right? This is what you're going to do. And because I'm paying for it. And if you want, don't want me to pay for it.

“Then you can do a lot of stupid stuff if you want to.”

But if I'm paying for it, this is what we're going to do. Because this is what's good for you. And it's what's in the family budget and what makes good common sense. And so on, you're going to study something that is actually usable. You don't need it to get a degree in left handed puppetry or German polka history.

You end up being a barista. No, with a four year degree. No, thank you. That's not the plan. And so, no reason to go to college if you're going to do that.

We can save all that money and just buy a lot of coffee for you.

The kids don't get to say, well, I want to go to Paris.

All right, guess we're going to pay to go to Paris. You decide as the parent, if you're paying for it. That's a good point. So there's a lot of things in life. And you give the kid carte blanche.

Of course, they're going to go, well, I want to go to this school across the country. That's where my girlfriend is going. This is how they picked a college. Where my girlfriend is going in three weeks after they're there. She breaks up with him.

Famous last words. Yeah. Because you followed your girlfriend to freakin' Minnesota. Give me a break. Then she realized, oh, I got a lot of options.

He wasn't the only girl to dance.

That's personal, Dave. That's personal. That comes up George. I think so. Yeah, that happened to me.

And dancing is a problem. It's a right of passage. Not the dancing part. Not the dancing. Broken up with F.D.

Chase and girl across the country. Did you really do that? I think I accidently. I moved south. And I had a girlfriend who was from the south.

Yeah.

“So I think they told people, God told you to do it though, right?”

Oh, God.

That was my, my least favorite words.

After a summer camp. She got to tell me to go to Tennessee. Because she's, that's where she is. And I go, why didn't he tell me? Why was I not a part of this conversation?

I feel like I should get a vote too. Oh, man. That's brutal. It's got dark real quick. Oh, it did.

It went downhill fast, George. But back to the caller's question. It's, it's not virtuous to let your kid go into student debt because you don't want them to become entitled. No.

They're not going to have a better work. You've got to just because they want to get. You'll get back towards there. Yeah. That's going to take you places you don't want to go.

You are giving them the right kind of advantage. If you do that, and they already have the character to carry. Yeah. But it was to involve them and go, "Hey, all of us have limits. We're not in Congress.

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Since we started this show 35 years ago and started teaching classes and doing live events and writing books, our goal has simply been this to set you free from debt. So that you can build wealth. So that you can be outrageously generous, retire with dignity and change your family tree. So what is the shortest distance between where you are and wealth?

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And you know this if you've listened to the show more than 13 seconds.

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So check out every dollar you can download it for free in the App Store or Google Play. Dylan is in Springfield, Illinois. Hey, Dylan, what's up? Hey, Dave. My question is, how do I have a intelligent conversation with my mom about credit and credit cards? These are realtor, as a 150 credit score, if you have for a long time. And you want me to get a credit card as soon as that turn 18.

And my thing is, I don't want to deal with it. I don't have one. I have the temptation to my pocket. So how can I have that credit? How can I have that talk with her about credit card? Also, I don't do business business and I do not want it to be beeping into them. Okay.

There's not an intelligent conversation you can have with her. She has made up her mind. Yeah. I agree. I have her prepared.

“And so the best thing to do is just not have a conversation about it.”

And when you're 18, just don't do it. Okay. Yes, I agree.

But you don't have to convince her in order to not do it.

Yeah. Then I have to listen to you for the rest of my life. No, you don't. You don't. I've got relatives that I love dearly that vote wrong.

That's there. And I'm not going to have a discussion with them about it because they vote wrong. And they vote wrong their whole life. They have a screwed up political view. And they think I do.

And so in the name of love, we don't discuss it. Get there. They're not going to change. I'm not going to change because I'm right. So then how would I, I want to buy a house.

I have a good down payment saved up. How would I, without her help? Because obviously he wants me to go through the cycle score. How would I get a mortgage son? And that's not a balloon loan.

Because I do not want to, you know, I don't want to balloon loan. George, you've done it twice. Yeah, it's called manual underwriting. And fun fact before the 90s, this is how all loans were underwritten. They didn't have the cycle score to make it more automated.

So all you need is 12 months of on-time rental payments. So you can do that while living at home. You're going to need some alternative trade lines like your utility bills. So cell phone bills and insurance bills on-time regular payments. That's what they're looking for.

And then a strong down payment. And you're going to study jobs, people. Study jobs. Yeah, they were show income, your tax return. If you're self-employed and you own two businesses,

you're going to have to have two years tax returns. You're okay.

“What you have to have with a high-fikos score, too,”

by the way, self-employed. Yeah. So that doesn't affect it. But it's going to take a real person looking at it. You're not even 18.

So you don't even need to worry about any of this, Red.

Well, we always have the conversation.

So it's always been like a back and forth. Yeah. You know, it quit having the conversation. It sounds like you're going to move out as soon as you turn 18. I'm going to try too.

You doesn't want me to do but I want to. Yeah. You know, so you have come to the correct conclusion. She has not. And that's okay.

That's all right. I got lots of friends that I, you know, one of my friends released a car there that I brought it over show to me. How stupid is that? You know?

But what I do. You think I'm a trash to go? You ain't cool car, man. I want nice. Cool car, man.

It's nice car. And I go back in the house when I go. What in the world is he thinking? But anyway. He's not looking for advice.

He's looking for some.

“He was looking for a friend to go for a car.”

Yeah. I'm not going to get in the house. I mean, he did not ask. I quit asking questions. I quit answering questions.

People don't ask. That's so. That's wisdom. You know, it says. You know, you didn't ask me about who you're supposed to vote for.

I won't tell you. It's okay. You know, you don't ask me about this. I'm going to tell you. And that's the problem.

She's answering questions that weren't asked. And. But yeah. So you've decided your values. She decided hers.

No one's going to change. So let's go back though for the sake of everybody else listening. Not for Dylan. The sake of everybody else listening. The FICO score is an algorithm.

Mathematically is made up of five components. All five components. How how you interact with that. The type of debt you have is one.

Whether you pay your debt on time is another.

Whether you have too much debt is another. And those are the components that derive your FICO score. So 100% of the FICO score is how you interact with that. It's an I love debt score mathematically.

“And if you love debt and you continually want to go into debt, you need to build your FICO score.”

If you're not going to go into debt. And you don't want to give the bank all your money. Instead, you'd rather invest it and keep it. Then you don't need a FICO score. It is not a measure of your financial wisdom.

It is not a measure of the growing net worth. It is not a measure of your income. My grandfather died me $2 million today. My FICO score does not change one dime. Unless I use that to buy off some debt.

That doesn't change a dime. That doesn't change one point. And $855 score simply means you borrowed money like you're Freaking in Congress and you pay it back. And you love the bank so much.

You just play kissy face all the time with Bank of America. So you got an $855 score. So when somebody says, "Hey, if I have an $855 score,

I always look at it and go, "I'm so sorry."

That calls to you at least 100 grand an interest.

“To get there because you've been paying a lot of interest.”

Now I just pay my payments on top. What do you think the interest is, dober? It's built in your payments, stupid. It's the wrong game to play. It has nothing to do with your net worth.

Nothing to do with your income. We're going financially. So you need to get that with debt. A credit card so you can grow your FICO score. Why?

So I can borrow money on my car so I can grow my FICO score. Why? So I can borrow money from my student loans. Why? So I can grow my FICO score so I can get a house.

Why? So I can go into debt. It's like a dog chased as tail. And all of America has bought off on this freaking lie that the banking system has sold you.

And so now you've got Samuel L. Jackson and actor saying, "What's in your wallet?" Money because I'm not messing with you people.

It's amazing how that works.

It's amazing. So what's in my wallet and got anything to do with any of that crap? So Dylan is actually right. Oh, and by the way, George explained you can buy a house on a mortgage without a FICO score.

“And everything else you should be paying cash for.”

And you should pay off your house as fast as you can. And if you can pay cash for your house, you should pay cash. And then you really have no reason to ever care again. Which is kind of where I've been for like 30 years. It makes me happy that you could buy the apartment complex,

but they would let you rent there. That's pretty hilarious. Yeah, that is funny. Oh, Dave. Your FICO scores may turn into undeterminable.

You can't rent here. I know I can write a check-in by the whole thing. But I can't rent there because some idiot that makes $26,000 a year has abolished in Atlanta. You know?

What I wouldn't pay to watch that interaction. It's just, I mean, this is the thing. This is how dumb the system is. It's broken. It has nothing to do with your wealth.

It has everything to do with how much money you have given to a bank, a car company, a credit card company, a student loan. This is where your FICO score comes from. It's kind of a measure of how dumb you've been. It's your debt-dumb score.

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Cindy is in Chicago. Hi, Cindy, how are you?

We better than I deserve, how are you?

Just the same, what's up? Nice. I am 55 years old.

“I currently pay about 40% of my take home in rent.”

And I was wondering if it makes sense to get a mortgage that will be maybe $100 more than I'm spending right now. How much debt do you have? Zero. Thanks to you.

I didn't pay it, you did. Congratulations. Yeah. How much you got saved for your down payment? I need $100.

Ooh. Okay. What do you make? I make between 62 and 67,000 a year. And what's your career trajectory look like?

Is it going to increase your income? It can. I almost died a few years ago. Chose to the back to waiting table because I love it. I'm actually making more money than I was managing restaurants.

But I can always go back into management.

“And I can also pick up extra shifts if I need some extra money.”

Okay. All right. Well, the reason we tell folks to have a house payment or mortgage or rent down around 25% of your take home pay, not of your income. But of your take home pay after taxes only, not 401k and not health insurance,

but just after taxes is because we want you to have the wiggle room in your budget to be able to build wealth and invest and to be able to save up and by the next car and to be able to save up for Christmas. But if you pinch your budget with a house payment that's a high percentage of your take home pay, people call that house poor economist say you squeezed out your disposable income means the same thing.

Right? You just pinch yourself and you left no room and then if something comes up, then people feel forced into debt to cover the next thing that comes up. And that's what we want to avoid. Yeah, renting right now. I know it feels like you're throwing away money but you're buying yourself some patience

and reducing your risk because home ownership has its own headaches. Plus all the fees if you need a buyer sell. And so I don't want you to get into this thing thinking that you're trading one bad thing for a great thing. Home ownership is great but 43% of your take home pay for the foreseeable future

is going to put you in a rush. That's going to put you in now. I've been doing that for the last five years because I'm in the Chicago suburbs and rent is about 40% of my take home. Well, I'm just telling you mathematically mathematical.

And you have $10,000. Well, I have a customer down payment and I have ten fully funded emergency funds. Okay, how much is in the emergency fund? $10,500. Okay.

And so in four years, you came up with $20,000. So that's good. That's better than most people. But if you had had a more reasonable percentage of your income going, it's what we're pointing out. And you can't use the argument.

I live in Chicago. Math doesn't count here. Math counts in Chicago. It has to math wherever you are, whether you're in Manhattan or you're in. Silicon Valley or you're in Chicago or whether you're in.

Woodberry, Tennessee, out in the middle of nowhere. You know, the math still has to math. You still got to figure out something to do there.

“And so you need to build some different levers.”

And one might be, I can't live in Chicago. I'm going to move to the suburbs if home ownership is a real dream. Or I'm going to make more money. Those are all things you can do. But I wouldn't go about this plan.

I would not sign you up for 43 percent.

I agree with George. I like where you are. And I think you're doing a good job overall. Especially considering how you pinched yourself here. I mean, you got this thing pretty tight.

And so I don't want to sign up the permanent version of that without seeing some kind of income increasing or price decreasing. So I'm going to be shopping and thinking about what's my commute going to look like. If I go out to an area that I can actually afford. And there are areas in the Chicago land area that people can afford.

That may not be where you want to be. I don't blame you for that, but that's. That's got to watch out. Those Illinois property taxes will get you. Yeah.

For sure. Megan's in Philadelphia. Hi, Megan. What's up. Hey.

Thank you so much for taking my call. Sure. I know. So I'm wondering if I should tell my card to eliminate my. My card at I am currently $36,000 in debt.

10 about 10,500 of that is my card at 9,000. My student or I'm sorry, is my credit card in the rest of the student loans. But I'm wondering I drive a 2018 Jeep Wrangler. And I have 93,000 miles on it. I only bought it for years ago.

What do you mean? And what was that? What do you make?

I am an on the road salesperson.

So I drive a lot. But I make. I should make about $98,000 this year. Okay. All right.

“If you really tighten down your budget and lived on beans and rice and rice and beans”

and quit going out to eat and quit. And quit doing any vacation and you just worked all the time. How fast could you clear up your 36,000? Making 90 by yourself. So I over the last few months I've paid a little over 10,000.

Yeah. So like three grand a month? Could you do that? Consists. Yeah.

Exactly. That's been about two to three thousand a month. Yeah. That'd be one year. So I've less than 12 months.

You'll be dead free if you keep up this pace. Which means if you like the car. Yeah. Keep the car. Okay.

Because I do really like the car. But I'm like, I've been listening to you guys lately. I'm really so excited just getting rid of all this debt. Yeah. I rule of thumb is two things.

One is if your car, all of your cars, if we anything you own vehicle with wheels or and/or motors or batteries, any of that stuff goes down in value. If the total of all that stuff you own that's going down in values more than half your annual income, you have too much tied up in things that are going down. You don't have that.

The second rule of thumb we use is can you be dead free without selling the car inside

of two years? You can. You can. Right. And then the third thing is do you like the car.

“If you want to sell the car anyway because things sucks, that's fine.”

That's a different discussion. But what you're saying is, do I need to do this to be financially wise? No. You keep the car and you pay it all off any year. Okay.

Okay. That's another thing. And I could kick start just getting into my student loans and paying them off because I would like to buy a home. Well, it will kick start it.

But it will only kick start it by about four or five months. Okay. You'll free that payment.

And you've got to have something to drive because you drive for a living.

Exactly. So you got another problem then. Yeah. Well, it's, you know, what I trade four months for this. No.

I think you're doing such a good job already. Three thousand a month knocking off debt. Way to go. I would just stay on that track. And, you know, just go as fast and as hard as you can go.

And where your friend, your broke friends are making fun of you. Like you joined a cult. Right. What's your car payment? It's $490 a month.

Well, here's a challenge. If you can figure out how to spend less and make more to the tune of $490, you've essentially freed up that car payment. Hmm. So that's an interesting scenario. Challenge yourself to go.

“Well, can I cut out of my budget to shave off a car payment?”

Cost goes to apples for dinner. I've seen that video. That was a pretty hilarious one. That's funny. It's the affordability crisis.

The sky's going to Costco to eat from the free samples. Pretty funny. Might as well get the dollar fifty hot dog at that point. Just might as well just lean into it while you can. But you know what I love about this is her willingness to sacrifice was everything.

That tells me she's going to win. She's going to win. Five years from today, she's going to be in a completely different place. Financially and emotionally, then she's ever been in her life. Because of the trajectory, she set herself on three months before she called us.

Yeah. And then all we did was say, keep going, go girl, go girl. Was pretty rare. We tell you not to sell the car. Usually someone is fighting on us of why they won't sell it.

And that tells me it's going to be a tough ride to get them out of debt. No, she's going to win. I'm willing to win. I'm going to pay a price to win, including selling this car that I love, driving a beater across the country, just to get out of debt a little bit faster.

Yeah. That's the energy you need. That's the mentality instead of like, I'm going to keep this. And I'm going to keep this. I need something reliable and I want to keep that.

He's got to have something safe. It's the he had seen. He's killing me. He's prevented now. Even the steering wheel now is needed.

I grew up where the only airbag was your mother-in-law. Oh, gosh. This show is sponsored by Better Help. Somewhere as a time when people escape, whether it's relaxing or going on vacation,

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Visit WhyReFi.com/Ramsie. That's the Better WhyR-E-F-Y dot com/Ramsie. Might not be in all states. Today's question comes from David in Missouri. Together my wife and I earn 85,000 a year,

we have been using the debt snowball to pay off debt. The only debts we have left are $35,000 on two cars and $85,000 on our mortgage. Go to getting a $40,000 extension on our home loan to pay off both vehicles be a good idea.

We would then put every extra dollar we have toward the principal balance. Is there something I'm overlooking or does this make sense financially?

“Well, you're just moving the debt around.”

So it's going to increase your loan payment to the tune of that $40,000 balance. So no, I would not do this. It feels like you did something, but you just played a little shell game.

Yeah, it's the same question of what I borrow on home equity loan to pay off my cars. Well, you didn't pay off you moved your cars onto the home. It's like getting a heloc to pay off your car payments. Well, now you got a heloc payment to deal with with variable rates.

Here's what's interesting.

The Bible says out of the abundance of the heart, the mouth speaks. So if you sometimes, if I listen to my own words, they reveal to me how stupid I'm being. Because my words are coming out of my heart, not my brain, and I go away from it.

So listen to this. I'm going to pay off my cars by not paying my house. That's not paying off your cars. You're lying to yourself. You're just going, moving the debt.

I'm going to pay off my debt by getting a home equity loan. No, you're not. You're lying to yourself. You're going to move your debt from your credit cards to your home equity loan. Which means you went and bought a stake at the restaurant on a credit card.

And now you refinanced it into your home. So you're going to finance your stake over 30 years. Talk about refinancing and appreciating assets. That's long gone. David is with us in Greenville, South Carolina.

Hi, David. How are you? Good. How are you doing? Better than I deserve. What's up? So recently divorced in the last three years. Just kind of financially starting a year again.

Between child sport support and credit card debt that I took on in it. I cannot find an motivation to save money. If you just kind of be with us, whether it's an expense that comes up for spending it to take my kids on a modest education. I'm trying to figure out where to start.

How are you married to? I have before this 10 years. Why were you divorced? Me left. We both raised our kids in a Christian faith.

And that two years' portion left. She kind of walked away and saved.

And ultimately thought she could find a better life than the fact.

And the divorce was final three years ago, right? A year and a half.

Yeah.

This is still so fresh for you.

Your heart was destroyed by this. She took it out of your chest and walked all over it. Not only did she abandon the faith that you and her had agreed to, but she abandoned the commitment that she had made to you. And you are not even close to over it.

“And that's why you don't have any motivation.”

Your heart is still broken. And you have not had any healing this side of the divorce yet. That's what I heard. Am I wrong? I definitely don't disagree that there's healing that will be continual for a very long time.

But I think that I'm a little bit pragmatic and understanding like accepting that this isn't what you wanted. And so that part was easier to deal with. I think the kid is a big hard work part for me over everything. And so I think, you know, financial life, my money goes. And it's not.

He can create it. You know, take it.

So what do you make here again together?

I'll make about 70. Okay. And how much credit card debt did you take on when she walked off from you? I took on all of our kind of card debts so that I could essentially buy more time if I could, which is 50K. Well, that's a lie you told yourself. The court decides how much time you get with your kids, not whether you take on credit card debt.

Well, I mean, we negotiate it. I know, you negotiated it and you lost. It wasn't because she took you traded 50K for your kids. That's not true. You lost an negotiation and that's all this true.

So anyway, you took off 50K and credit card debt. You got 70,000 dollar income. You got your heart trampled on and you feel hopeless. Of course. That's normal.

That just makes you a human being. I think it's going to take you a little while to get your fight back. To get your swagger back. To get your, uh, I'm going to grip my teeth and I'm going to come out swinging. And I'm going to knock this stuff out and I'm going to go have a great life.

“The second chapter of David's life is going to be a great chapter.”

But you're not there yet. I hear too much sadness in your voice. Do you hear George? Yeah. David, this is going to be really tough until you get some healing.

And it would be weird if you called in and you were like, man, I'm so motivated. I'm doing great. You went through a really difficult thing. And the financial math is hard to look at too. Fifty grand and credit card debt with that interest.

It is crushing to look at that. But you can start taking those little baby steps. Getting on the budget, living on less than you make. Even while paying the child support, it might take you longer than working extra. Working extra working extra.

Well, can I sell? What am I holding on to that looks like the past that I don't need to hold on to? Uh, and get this mess cleaned up.

“And, and, but it's, you know, it's going to require a level of energy that you,”

you're frankly don't have right now because it's, they're just sadness in the air. And I, it's not a putdown. It just means you're human. You got the snott kicked out of your man. It's like you run a car wreck and you're still in intensive care and you're going,

but I'm feeling pretty good, you know, yeah, well, not really. And so you're just still in intensive care. So if I'm, you, I'm going to sit down with a pastor with a therapist, begin to continue to talk about this. Learn how to grieve this kind of major life event.

Um, and the further it gets in your rear view mirror from a healing perspective, not a time perspective from a healing perspective. The more energy and hope you will have towards the future. But it's really easy to just sit in the asset of this and play it over and over and over and your head like you have for the last, actually two and a half years with a divorce

being current or being final one and a half years ago. So none of that's a put down honey, it's just meeting you where you are. I understand, I'm scared for you. I hate it for you. I'm sad for you.

I'm mad with you. It's a horrible process that you and these kids have gone through.

However, there is a great second chapter.

And what is it when the sun comes out is mercies are new every morning. His steadfast love is something you can count on. And um, I had a plan for you and it's not to bring you harm, but to bring you hope. And those are all truths very true things for you and for me. And so, when Sharon and I went through that bankruptcy, I was the same way.

It took me about two years to quit talking about it as if it just happened 20 minutes ago. Because it took me that long way to get in your mind. Well, I had to get it. I had to get the bail file on my system. I had to illuminate on, and you just sit in the field, man.

And when you go through a major life, mess like that. And as soon as I started talking about the bankruptcy like it was way in the distant past, that's when I started realizing, oh, okay.

It's a different version.

“You know, but if you're talking about it like it happened yesterday, and it was four years ago,”

then that tells me I'm still back there sitting in the field. Yeah. And um, that we all people, that's a normal process to grieve and to go through the steps of grief and a reset of your life when you go through it, a tragedy that was self-imposed or otherwise.

In his case, otherwise, in my case, I caused it. Yeah. But it doesn't matter really where it came from. It's still you went through the car rack, right? You still went through the time and intensive care before you could get up and walk with a walker,

and then you get up and you move a little bit of more. Whatever metaphor we want to use, right? But you just go into, you know, physical therapy and you eventually, and this case, you're going to emotional therapy, and you eventually get more and more and more healing.

And you, you know, you understand what part you played in it, and what part they played in it,

and you can't control either one, they're both in the past. A lot of banks are happy to hold your money. But Fairwin's credit union helps you make progress. Most people spend years focusing on their financial goals,

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In the Fairwin's credit union studio.

“George Campbell Ramsey personality is my co-host today.”

See you, y'all, is with us in Tucson. Hey, see you, y'all, how are you? Hi, Dave. My name is Celia. I'm going to Celia something. I'm sorry.

I goofed it up. I apologize. Celia. No, okay. It's okay.

It's a really unique thing. Got it. Celia. Great. Dave, how are you? Better than I deserve.

How can we help? Um, so I am probably going to be getting engaged next month. Long story short. I picked out my own ring and asked my boyfriend, you know, is the engagement going to be happening before September.

So I can kind of prepare myself. And he said yes. So it's either happening this month or next month. And I was originally. I actually just found you a couple of weeks ago, probably two or three weeks ago.

It's been less than a month. And me and my boyfriend are both on baby step two. And paying off the debt. I have about $5,000 in medical debt. But combined our debt is about two.

We've paid off $2,000 in the last two weeks. So we're out about $20,000 between the both of us. My question to you is, I was planning on going back to school and January to become an ultra-sound technologist. And I still get federal financial aid.

So not necessarily student loans, but I'm actual grants and things like that.

Since I'm a first generation college student.

And I have already been to some schooling. The program that I want to go to is 22 months. And so we were planning on not getting married until I was done with school. The issue is, I don't know if all of my financial aid will cover the cost of this 22 month program. And so I don't know if I will need a student loan at some point.

And so I don't really know what to do. I don't know if I should pay off all of this debt, which I don't think I'll be done with before the program starts in January. I'm not officially signed up for it yet. How much do you make now?

But yeah. I make about $3,000 a month. I'm a server. And how much does he make now? How much does he make now?

He make our combined income. I don't know. You're not combined yet. How much does he make? I know.

I'm just just a little more than me. About $4,450 a month.

Okay. So he makes over $50K. And you make about $36K. Okay.

And so you're going to have an $85,000 household income.

And you'll have no debt or very close by January. Let's say you were married by then as an example. Okay. Okay. And how old are you guys?

I'm so sorry. Can you say how old are you two? Oh, I am 22 and he's 25.

“The issue is, though, is I honestly have a lot of medical issues.”

And one of those things is I have a progressive hearing loss disorder. So they expect that I may not be able to cure at all before I'm 30. Is my prognosis. And you're old again. I hear you cut out when you don't know.

You are 26. I'm 22. I'm 22. Okay. So hypothetically you will lose your hearing in 10 years.

And the next in the next eight years. Assuming the technology and medical advances don't help you with that. Okay. Given current, given current known knowledge. Okay.

And what does an XMRI technology, or X-ray technology? Yeah. Ultra sound. Ultra sound. What does an X-ray technology make?

Honestly, I should know. I would make about this just less than a nurse. So whatever that is. I'm seeing it can range 30 to 40 bucks an hour. So you're talking 60 to 70, even 80 a year.

Okay. And what does this class cost? So for those full 22 month program, it's just under $60,000. For books everything. Everything is included in that 60,000.

The one place so far that you've priced it. It's the only place in my town that offers this program. So I would have to go through this specific level. What is your voice on the mirror living? Key is a general manager of a restaurant.

Okay. Well, sometimes when I've got things jumbled up like this in my life,

“I always go back to the old, how do you eat an elephant, a bite at a time thing?”

And I start force ranking. What's most important? So if I were in your shoes or if you were my daughter and you came and sat down and said, "Dad, this is what I'm facing." I would say the most important thing in this whole discussion is the two of you get married

as soon as possible.

And the second most important thing in the discussion is that you get out of debt.

And the third most important thing in the discussion. The third, it's not first. The tail doesn't wag the dog. As you go get this certification and you enter this career field. If it means you delay the start of this school one year, fine.

If it means you find other ways to pay for it, because you find a hospital that desperately wants to sign you to a three year contract when you finish your training and they will pay for your training, you go get that. If there's another scholarship out there by a ultrasound company that makes the machine and they want people certified.

So they're pushing scholarships out there for the certifications. And that enables you to go in January, fine. But if you can't go in January because you do life well, and it means you start a year later, do life well first. Yeah, for sure. So you wouldn't. You would just completely ignore the fact that I'm still getting

financial aid and that would go away when I'm not going to build my life around the welfare system. Yeah. Yeah. I'm not going to do that. I would not delay this in order to get free money.

That's wrong motivation.

I've never seen anyone that becomes vastly successful in their life because of a government program.

I've never met anybody. And I've been walking around this for a long time. I've never met a solace at a government program made me prosper. And the chances of a pell grant covering 60 grand slim to none. So that's the other part is the reality of it.

“It's not, do I do this for free with grants or going to student loan debt?”

It's okay if I'm going to pause and delay. Not going to the student loan debt. We're paying cash. It's off the table. So that might mean it does take a year or two to save up cash. We both work like we both work like complete crazy people and we pile up cash.

And like a lot of people who are newly married in their early 20s. In order to hit a goal, you just tear it up baby.

You get after it. That's what people do.

“That's why they leave young people energy.”

Go get it. That's what I would do.

No, I would not plan my life around pale grant system for God's sakes.

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Lisa is in Phoenix, high Lisa, how are you?

Hi, I'm being well, how are you? Better than I deserve, what's up? Hey, I just had a quick question on, I have added a new rescue dog to my household, which has not required me to get a larger vehicle. And I need to try and figure out what is a reasonable budget.

Oh, dog, did you get that requires a car? He, I will just make three, but he's an American bulldog. He's 130 pounds. Goodness gracious. And how awesome do you call my size?

How often do you call him? What we do a lot, our family, we live on the west coast, our family is East Coast Midwest. So, we do a lot of road trips. And I found, time for about six months, and him and the other two dogs just don't,

there's not a firm in the back of the car. So I've been having to rent, larger vehicles to go visit family. Like every one, every couple months. Do you have children? I do not.

I do not.

These are basically my kids.

Yeah, I can tell.

“I think you're the first person I ever talked to who bought a car for a dog.”

They don't want to freak out. That's the funny part. The dog is free, but the car, that's going to cost you. So, okay, so you're thinking about buying a car. Okay.

Now, so, do you have the cash to pay for the car you're thinking about? Thank you. I have been saving and how much is this car? Well, I don't, well, I was by doing like 15 to 20, but I'm finding what he fits then with the other two and enough data luggage.

We're going to have to go. It's, they're turning out to be like more close to 40, which hurts my heart and I don't have to spend hours money, but it's, it's, I think it's not very, but it's a 40,000 dollar dog. I'm so confused why.

Okay, anyway. It takes 40,000 dollars a month. It doesn't. You can buy a 15,000 dollar version of that same exact car that you're looking at for 40.

It's called older. Anyway.

“So, do you have the, how much do you have cash to put down or to pay cash?”

Cash is like 80 in the bank. Okay. And what's your household income? I make one 80. And you're single?

Yes. Okay. And you want to buy 40,000 dollar car. Regardless of the reason. If you have the cash and you want to buy 40,000 dollar car, do you have any of the debt?

It's just my mortgage. Okay. Good. Okay. If you're paying cash for a car and it's less than half your annual income.

Then you want to buy the car. Buy the car. You don't, it's not a dumb decision. I just want to put myself in a financial. It's not a dumb decision.

Less is more than half your annual income. And you're not paying cash for it. And you have other debt. And so on. Now, the thing you keep in mind and the thing that's bothering you and the back of your mind is we all know that cars go down in value like crazy.

And the car you're driving right now is worth what? I drive a 2013 terrain.

What's it worse?

So it's worth like five grand.

Yeah. Okay.

“So your 40,000 dollar purchase in a few years is probably going to be worth five grand.”

That's what cars do. Mm-hmm. So just your turning 40 into five. Over time, you'll get some use out of it. Some enjoyment out of it.

But you make 180 of 80 in the bank. You can afford to turn 40 into five and not go broke. And really not severely limit or screw up your life in some way. It's not crazy. I would point out to you that your reason for doing this is sketchy.

The fact that you want to spend $40,000 for a rescue dog to ride to your mama's in the Midwest is sketchy. Okay. You could rent a car a whole lot of times for that. And I love that you love animals. I'm an animal lover.

George is an animal lover. We love our puppies. We, you know, me and Bella, the 12 pound bear dog. We walk every morning. I love my dog.

And so all of this, we love our dogs. I'm with you on that. And I get it.

But you know, I, I'll be honest.

I hadn't spent $40,000 on Bella. But you, would you recommend? So that's really good. 2022. I just want you to, I just want you to reframe this and go,

I want the car. And the dog can ride in it. It's just bothersome.

“40,000 dollars to ride a rescue dog around there.”

It could sit in a horse trailer in the back. It doesn't care. I'm holding his horse. How you carry it in 50 pounds. She must work out on that guy.

Lisa's got to be ripped to be able to carry 130 pound, friend, you know, English bulldozer. That's a great dog. So we love you, kiddo. We're just, we're, we're laughing with you.

You have the money. If it's what you want to do with your money. You've worked hard. Go get the car. That's fine.

I personally would have to reset the narrative in my head. Because I couldn't.

I just, I need a better car.

My car is old. And it's. And one of the things I do is I enjoyed loading the dogs up and going across the country. That's one of the things I enjoyed doing.

And that's okay. But I, I can't. It's started with, I got a buy car for this dog. No, I can't go there. That one.

The dog needs captain chairs with ventilated seats. It requested that. Homeward bound. Yeah. That dog is living a good day.

Wrong. Wrong.

“That dog was eaten like a king to be 130 pounds.”

No, they're rescue. Cocky little suckers. Goodness gracious. They're good little, they're good little dogs. That's impressive.

I like it. That's fun. I just fun talking to you, Lisa. Thank you. Enjoy the car.

Pick out something you feel good about. And buy it for you. And one, and a part of you is is that you enjoy taking care of this rescue dog. And that's a good thing. That dog live in its best life of Lisa.

Tell you that much. Got a brand new car out of the deal. That one. Going back to the shelter and goes, "Hey, guys, look what I got." My previous owner had a much nicer car.

I got to say. Oh, man. That's fun. Go back for a visit. Just wheel up in the.

In the Sequoia. In the Sequoia. Look what I got, guys. Oh, man. Carter isn't San Antonio.

I hate Carter. How are you? I'm good. How about yourself? Better than I deserve.

How can we help? There we go. Yes, sir. So I recently graduated with my master's about six months ago. And so I'm looking at my finances now.

And I'm going to pickle. I'm making some life changes to help with the repayment of loans. But I want to know there's a. Like a scenario where consolidation is best. If you lower the interest rates.

Yeah. What's your master's? Because I have interest rates. Health care administration. Are you working at?

I am. Yes. Good. What are you making? 100 in size.

What's your student loan debt? 147. Woo. Yes. You pay it.

You're paid for that master's baby. All right. We're there now. I do it. I also improve on your grads.

And so. $90,000 programs are bad school. So the skill. Yeah. You're paid for it.

Yeah. That's okay. You got it. Yeah. You're living on beans and rice and get rid of that.

Get rid of that degree cost. Yeah. Tare into it. Because there is no. There is no debt consolidation where they pay you.

Oh, sure. There's only ones where you pay 147,000 and it goes away. That's what you need to concentrate on. And so the your interest rates. Not your problem.

Your big but loan is your problem. And you will lose the ability to do the debt snowball. Because you just have one giant loan. So you're not going to feel as much progress. If you kept it separated and just attacked it.

Oh, ranging from 2.2% to 18.25.

Okay. You can choose. How many of them are private? Five of them are. So $20,000 of it is private.

Okay. Yeah. That's probably your 18s, isn't it? Uh, yes. Correct.

Yeah.

“If you can get the profits consolidated and get rid of the 18s, that's going to be fine.”

But I don't want to roll that 2.2 into a 6. So you're picking shoes and you leave the low interest rates alone. And you don't have to roll them all together. But you do have to separate the privates from the federal insured. And of the federally insured, you get one time to do this.

And make sure every single loan you do roll in and consolidate lowers the rate. Don't roll the 2 up and the 8 down to 6. That's not going to make any sense at all.

Hey, George Campbell here.

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So if you're ready to take the next steps towards your home goals, go to RamseySolutions.com/realestate. That's RamseySolutions.com/realestate. In the lobby of RamseySolutions.com/realestate. In the lobby of RamseySolutions.com/realestate free stage. Mark and Tegan are with us.

Hey, guys. How are you? Better than I deserve. Welcome. Where do you live?

“Again, it's about two hours north of Detroit.”

Very cool. Welcome to Nashville. Thank you. Good to have you here. And you came to do a debt-free scream.

How much have you paid off? 140,000 dollars and about five years. Yep. Good for you. And your range of income during that time.

Started out around 65-70,000 combined and now we're up to about 120,000. Good for you, guys. What do y'all do for a living? I'm a court recorder for our circuit court in our Bay County area. Yeah. And I am an answer at a local news station.

Great. Very cool. Good for you, guys. How fun. What kind of debt was 140,000?

Well, I had student loans about 61,000 and then we had the mortgage as well. Yeah. 75, 79,000 dollars mortgage. Yeah, paid off house. That's right.

I'm looking at weird people, right? I like it. Wait, it goes. And what's this house worth? Weird people?

It's around 21, 30. Yeah. Excellent. Very cool.

“And what do you get in Bay City, Michigan, for 120,000 bucks?”

Well, it's a little too bedroom house, one bathroom small. About a half acre though. Yeah. So you can get a bigger size house with less property too. Yeah.

And it wasn't, you know, the nicest house on the block. But Mark's pretty handy and his family's handy as well. So we were able to fix it up and make it a nice home. Yeah. How long have you guys been married?

About just 55 years. Okay. So you bought it and started the process. So paying off the student loans and paying off the house. Yeah.

About a modest home with some fix up, get your foot in the door. And now it's 100% paid for your 100% debt free. Yes. And you're how old? 27.

Yep. 27 and you're making $120,000 a year. Yeah. So all of you people out there who say there's an affordability crisis

that you'll never be able to buy a house in America today.

Mark and Tegan said, "Hold my beer." So look at what they did. That's pretty stinky and incredible, y'all. I'm proud of you. Thank you.

Very cool. You're dating and talking about this apparently because it starts immediately after your married. Tell us the story. Yeah. So basically, around the time that we got engaged, I was graduating from college.

Mm-hmm. And I had the student loans, you know, on my shoulder. And I was like, okay. So I'm going to have to start working on paying these off. And we started to make a plan.

I didn't really know what to do. I was really stressed about it actually. And so I felt like I was just going to be carrying these with me for a really long time. And I'm not knowing where to start. And so I was like, well, having her, she was upset.

We were in the car. We were just driving along one day.

And I was like, Tegan, haven't you ever heard of Dave Ramsey? And she's like, yeah, I love him.

But I've never listened to him.

Yeah. And I grew up listening to your show on our local radio station with my dad, whenever we'd be working. So I was like, oh, well, you got 60,000. That's enough that we could pay that off.

And no time. I've heard people on this show that have paid off way more than that. Yeah. Yeah, definitely. Usually worth that.

Yes. Most definitely. So we started making a plan to hopefully going to pay it off in two years. And we ended up doing that around 13 months. Just over a year.

Yeah. Yep. Had the 60 grand. So then we kind of slowed down to pay the house off.

“And then the last you were kind of like, what are we doing?”

So we're really, let's just pay this off. You know, we literally, you know, why don't we do it? So we started up to 11 at the end. Exactly. Yep.

And we were actually cash flowing him getting a bachelor's degree as well while we were working on the house. Yep. So I got a bachelor's on personal finance now. And I work at a community college.

So it helped me along the way. I got a discount for the associates degree stuff. How many 27 year old friends have a paid for house? Nine. Nine.

Nine. Nine. We're fortunate to not jump up and down and make a big deal about it. Yeah. Yeah.

We were very open about it. Especially when I was paying off my student loans because we had to say no to a lot of things. You know, being able to go out to dinner, like, you know, all the fun events cost money. And so we had to say no to things along the way. And I think our friends were really aware of it.

But they were really supportive. And so it would be coming over to our house and making dinner at our house. And, you know, they'd bring it. You know, that kind of thing to be able to still hang out with everybody and make it happen. Yeah.

Yeah. Very old school. We're going to eat it home together. Yeah. And have a community.

Have a pot lock. Oh, my gosh. Very old. I love it. Very old school.

Good stuff. Way to go. You guys. Thank you. Thank you.

Thank you.

“You're parents had to be just jumping up down chair and you on.”

Yes. Yes. It was or anybody that looked at childhood. You're crazy. Oh, yeah.

We had a low interest rate on that mortgage. Oh. We had a low interest rate on that mortgage. Yeah. Oh, I can hear them now.

Yeah. They all sound like that for some reason. Yeah.

It's always the same as that.

It was a dude. I was through that very. What was your rate? 2.6. Oh, my goodness.

What did I do now? You have a 0% rate with no payment. I don't know. I don't know. I'm having that payment at the first of the month.

You know. Yeah. You must know. Yeah. No.

Oh, this is the house. That's it. Yeah. Yeah. Yeah.

It's a great place to start and keep a picture of that. Show your grandkids and that's where it all started. Now you're multi-millionaires. Absolutely. Yeah.

That's where it all started. Now you're multi-millionaires. Absolutely. Yeah. This is where Grandpa and Grandpa started this thing.

Back in the day. Yeah. Back in all 26. We paid it off. Yeah.

I like it. Way to go. Yeah.

“How's it feel to be 100% free five years in a marriage?”

Very good. Isn't it inscribable? Very good.

Like when we didn't have the payment for the first month, we both just kind of looked

at it. This is so weird. We know what the plan for it. Yeah. Yeah.

It feels great to buy name brand foods. The grocery store and not feel guilty going out. It's great not that space in the budget was really nice. Because we found that we saved so much quicker too. Yeah.

We can plan for things in the future because we're not paying for things in the past. Yeah. We can plan for things in the future because we're not paying for things in the past. That's just name and that'll reach. Yeah.

That's a t-shirt right there. Yeah. It's good stuff. All right. What's the secret to five years of marriage?

Being this happy and having your house paid off and everything. What do you tell people? How did you do that? I mean, I don't see anything. We get along so well.

But I feel like we both have patients for each other to be able to listen and like hear each other out. And so when we're making plans for things, we can really talk things through. Yeah.

And that's really helpful. She's mostly like right all the time. As they say. So whenever I have these big bright ideas that are off the path, she'd kind of guide me back in. Because that was how it went a lot of the times.

I'm the Spender. She's the saver. So it was we have that relationship. And a lot of it's just keeping your eyes in your goals. And not lifting one of the people have.

Yeah. We don't care about their goal. It's not going to help me any. You know, just keep it on your own. What you have going on.

And on your goals in general because you don't realize what's going on. It happened so fast, you know. Yeah. So you stayed out of the restaurants. And you stayed out of, you stayed out of trips.

Yeah. About a modest home that you could pay for very, very quickly. Yep. And that was your stepping stone. Now you'll be able to do whatever you want to do.

Yeah. And so there was a level of sacrificing to win in your story. Yeah. And a whole lot of what y'all did was just, we're going to do this.

We're not going to do this.

So we can do this later. Yeah. It's live like no one else. So that later you can live and you did it. You really did do that.

Yeah. Yeah. We can see it in your story. That's very, very cool. I'm proud of you.

Thank you. Good stuff. Very good. That's a power couple right there. Most people live in mediocrity for 50 years because they're unwilling to sacrifice for five.

And you guys are the opposite. You want to what if we sacrifice for five is the next 50 is wide open. All the options in the world. So proud of you guys. Thank you.

That's cool. But he's sitting Michigan 140,000 paid off. By the way, that's the house and everything 27 years old with a paid for house. Not only did they purchase a home, but they paid for it.

Did all of this in the first five years of marriage, making 65 to 120.

Count it down. Let's hear a debt free scream. Three, two, one. We're debt free. Yeah.

I love it. Oh. That's true love right there. That's as good as it gets, man. They're like a joy bomb.

So fun to talk to. They doubled their income. They bought them on a house. Median home prices, 420,000. Everyone's up in arms.

They went, all right. We don't have to buy the median home. There's homes out there. We can afford it. They bought a house that's worth 120 today.

Yeah. It wouldn't worth that when they bought it. They fixed it up. Pretty incredible. Interesting.

There's help. Hmm. Things to make you grow. There's help. Hey, guys.

Dave Ramsey here.

Every day on this show, we help people work through real money problems.

And figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers.

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