Debt Is Always the Symptom of a Bigger Problem

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“>> Normal is broken common sense as we are,”

so we're here to help you transform your life. From the Ramsey Network and the Fair Wins Credit Union Studios, this is the Ramsey Show. On Dave Ramsey, Rachel Cruz, Ramsey personality number one best-selling author, co-host of the Smart Money Happy Hour, my daughter, is my co-host today.

Open phones at AAA 825, 5225, thanks for hanging out with us. Fill is in Orlando, high fill, how are you? >> I'm deal well, Dave, how are you? >> Better than I deserve, what's up? >> Yeah, so I'll keep this as short as possible.

I'm 28 years old, I've put myself into kind of a corner of the past, couple of months after some bad decision making. Somewhere around 200 grand in debt, which is a mix of credit cards and personal loans that I took out, which I shouldn't have. I also have a mortgage, which is relatively new.

I make good money, but ultimately, things are quite right now,

and I'm curious to get your thoughts on whether or not that consolidation is a wise choice or if I am better off, just essentially figuring it out and, you know, counting back into a better place. >> What do you make? >> I'm sorry, it's about 140, but I make probably, well, this year I'll probably net 400

after stock units, and that includes caching those in, or those restricted.

“>> Good day, I restricted, yeah, so what is your income that you can use this year?”

>> Yeah, well, this year, like I said, I'm going to put like 400 total. >> But you can't, you're restricted stock units. You can't sell them, they're restricted, that's the nature of the beast. >> Right, yeah, like 150 vestible, share of a sellable throughout the remainder of the year. Plus, you know, 140, been spotted by two, call it half way through the year, so I mean,

I would call it 200 coming in through the remainder of the year. >> For the rest of the year. >> Correct. >> Okay, what do you do? >> I'm on a data analyst.

>> Okay. And how much do you owe in your cars? >> You owe. >> Okay, and you ran up $200,000 in credit card debt and personal loans, that's it.

“>> That doesn't include the mortgage, or does that include the mortgage?”

>> There's not included mortgage. >> How much is the mortgage balance? >> A mortgage balance is just under $600. >> Okay, are you married? >> Not married.

>> Okay, what did you do for 200 grand worth of mass? >> It was a bad sprint of gambling plus poor decision-making. >> Oh, yeah, that's fairly easy to come up with the last part of that. >> Is there anything you bought that is sellable in this, or is it all gone? And things like gambling or other things?

>> No, I mean, home improvements have definitely been a thing. So I mean, I just bought the house, maybe the last one a year and a half ago. I'm definitely, but money into the home, because we have some issues. But otherwise, yeah, sort of just bill payments slash, yeah, through money away, which is--

>> Okay, so here's the thing.

A personal finance is 80% behavior, it's 20% head knowledge. So debt is never, including one, I went into debt and lost my butt, because I was stupid, debt is never the problem. It's always the symptom, yeah, okay. So this is the symptom of gambling and in air quotes, poor decisions, whatever the flip that means.

Okay, and so it doesn't matter if we waived a magic wand in the 200 one away, it's coming back quickly if the gambling and the poor decisions haven't come to a screeching halt. Agreed? >> Agreed. >> 100%.

>> So has it? >> Yes, it is. >> No more gambling, no more bad decisions. >> No longer. >> Yeah, it took longer than it should, but yeah, it's clicked.

>> Okay, all right, so you're a single guy, you have no bills except a house, and you have $400, well, $200, $400,000 to get a hold of, and you owe $200.

You've been wasting and pay off your debt, you'll be debt-free in a year, and you lived on 200 grand.

>> Right, right, yeah, I guess the issue is more serious, the short term liquidity, and I've been getting bombarded with calls from some of these, you know, that's consolidation. >> Well, you have enough coming in to pay minimums. >> Oh, debt consolidation, people are advertising to you. Well, so what, I mean, that's not a big deal, you could do this, but you could use like

guardian litigation, and they can put you on a four-year plan and walk you out of this, but I wouldn't, not when you had the income to pay it off in a year. >> Yeah, it's your income, and the debt consolidation may get you quote unquote a better interest rate, but it's not really going to matter in 12 months, because you'll be debt-free anyways. So going through a company and paying for that is something that you can do yourself.

“>> Yeah, honestly, if I were you, I'm going to sit down and go, I'm going to look at the stock options”

and what they release, the vesting and the release on the restrictions are, and have you got a pile of that stock laying there somewhere? >> I don't, right now, I do everything that, because that's the drug this year already has already been liquidated. >> And so, right now, right now, yeah, like I'm pretty much a translation, you know,

more than 200 grand with this behavior. >> Yeah, I woke up in your shoes, I'm sorry, I'm sorry, I'm sorry to interrupt. If I woke up in your shoes, what would I do? Knowing what I know, having taught this stuff and walked with people in these situations, okay, you have this wonderful brain that allows you to be a data analyst, and I want you

to apply it to a new company called Phil Incorporated that needs to be turned around. >> Yeah. >> Right, and Phil Incorporated has revenues of 400 grand and liabilities of 200 grand. And so we're going to put Phil Incorporated on beans and rice, rice and beans, no life, $20,000 a month on these bills for 10 months, and we're done.

“That's what I would do if I was in charge of Phil Incorporated.”

>> Yeah, that's kind of what I have, yeah, that's sort of my approach as well, it's really on certain, I don't know, anybody that's done, you know, work with that's been consolidating. >> Yeah, you can tell. >> Again, we have one, we have no. >> The Guardian litigation, guys, responders, we can send you them, they can put you on three year plan or whatever.

But I wouldn't do that. >> Yeah, and that's usually when you're in lawsuits and stuff too, you know what I mean? So like, yeah, yeah, yeah, I think you're fine. Yeah, you don't need that Phil. Honestly, what's probably going to affect you the most is the ego side of you killing it,

making a crap ton of money, living like you're making that much money and more, and ratching down everything, like that's going to be, that's a, that makes you really, put yourself in a completely different mindset Phil, I mean, it's not so. >> Exactly.

“>> So that humility, which I think you already have, because you've realized crap, I'm not good at this,”

and I've messed this up, so you have a level of that now, but it'll, it'll, it'll, it'll, it'll do inner work in, yeah, for sure. To, to go backwards in lifestyle, that's not easy. >> Well, and, and yeah, what I'm doing with this prescription is more than just mathematical. It's also behavior, because if you go this intense, it's going to be, it's going to burn all

that other crap that you were doing completely out, you're going to go, I never want that again,

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Hi, David. How are you? Good, how are you? Better than I deserve. What's up?

Yeah, I was just wanting to figure out how to get more organized, who's my budget.

We were doing pretty good, and then we ended up having to start putting two kids through daycare, and that's beaten up a lot of our flexible spending room, I guess.

“I don't do it, I'll do it for sure, so what's your income, sir?”

Mine is at 75 and a half or 75, 500 a year. And does your wife work outside the home, if you got to take her, I assume? Yes. What's she make? She just started a new job, so at the moment, she's at 27,000 right now that expecting

her raise in the next few weeks. By how much? What would that be? Probably close to between $3 and $5 increase an hour. Okay.

All right, and how much debt do you guys have? So my total is right at $212,000 with a mortgage.

How much of that's mortgage?

$184. Okay. All right. Okay. See, you got about $60,000 in debt?

No, $40,000 in debt. 40 in debt. Yeah. Okay. On what's the 40 in debt on?

All right. Yeah, $22,000 in credit cards, I got $9,100 on a bad h-back loan that I had to take when I bought the house, and then $0,900 on a zero turn off over, and then I have $14,000 in 4.8 loans. No car loan? No, sir.

Okay. All right. And what do you pay in for daycare? $270 a week. $1,000 a month.

Okay. For both kids. Yeah. Okay. Yeah.

You're right. It's a matter of getting organized, and, you know, we've got to stop some of these decisions that have put you into this debt, and reverse that, get the debts cleared, because if you were on a game, if you were on a written budget, you and your wife were in agreement. And you had no dad except your house, you'd be in really, really good shape.

Yeah. Yeah. Yeah.

“And so, stuff like the next time a zero turn lawnmower speaks to you, you have to look”

at it and say, "No, thank you. I'll use the one I have." We're not financing it. No. We're not using a credit card to do anything.

We're cutting them up tonight. No. We're not borrowing money. No. We're not borrowing money.

No. We're not borrowing money. That's a new thing you have to learn to say, like over and over and over again. Any kind of a crisis or a desire or an impulse or a wish or a dream that comes up, it cannot result in debt ever again, because it has made your life tight and miserable.

And we have to get rid of it and keep it gone. Does that sound familiar? Oh, yeah. Okay. Cool.

Yeah. So, what's the part of the organization that's been hard for you, guys, David, is it doing a budget and sticking to it?

Is it trying to figure out what debts to pay first when you ask about organization, what

specifically are you all struggling with? Uh, I guess, uh, had a problem or ties maybe, uh, because it just, it suddenly comes up, you know, it starts stretching really thin and, uh, we can get on sometimes. Yeah. Just like, like, monthly expenses that come up with you didn't plan.

Yeah, for sure. Yeah.

“So, I think that's one reason the budget is so helpful.”

We'll give you a year of every dollar because it is, um, knowing that you have a plan and anything outside the plan, there's kind of, you know, the simple word of no of, like, we just, we can't do that. We didn't plan for baseball signups that's an extra 300 bucks or whatever and you're like, nope, can't do that.

Like, I mean, it just, it really kind of forces you, especially where you guys are, how, how tight everything is, like, it really does kind of create a black and white scenario for a lot of these situations where before you kind of finagle it, like, I'll just charge on the credit card and figure it out later. When you live on a zero-based budget, it really is directing you to your decision-making,

which is fabulous. So you guys sitting down and doing that and then starting to pay off this debt, smallest

And so, I don't even know, can you sell the lawnmower and get some cash back? Uh, I think it'd be a wash on that. Good. That's $2,000 a debt gone. All right, this weekend gone.

“Now, here's what Rachel's talking about.”

We're going to give you this every dollar budgeting app and we're going to give you the premium version. We're going to pay for it free, okay? And then you and your wife are going to sit down tonight and you're going to look at,

okay, here's what our take home pay is for me and my take home pay for you for this month.

And then we're going to take this month's income and we're going to give every one of those dollars and assignment in the budgeting app, this much for food, this much for house payment, this much for electricity, this much for water, insurance, yeah. This much for whatever. You go right down your life and you say, this is where the money is going to be.

You're going to go and every dollar has an assignment before it comes to you. And then when it comes to you, you simply do exactly what you had already planned to do on paper. And if something pops up and it will, then you look at the paper, you look at the digital app together and you say, if we're going to do this thing that popped up, what are we

not going to do, that we take off of here so that we can do the pop up or we look at the

pop up and say, no, we're not doing it, I don't care if you popped up or not.

We don't have the money because every dollar has been assigned.

“But I mean if a tire goes out and you have to buy a $200 tire, then you look over there”

and you go, okay, I got to increase car repairs by $200 and I got to decrease something else in the budget by $200 so that this continues to match and we don't get behind. So you work on that together and you need to have a budget committee meeting and go over this and stick to it once a week minimum right now until you get the feeling of organized. So you're telling your money what to do on that digital app.

And then that app is going to tell you what to do so that you do what you said you wanted to do. That's how this work. And it's easy, David, with the premium version, you connect your bank account. So anytime you guys swipe your, your debit card because no more credit cards when you swipe

your debit card out of the checking account, a transaction pops into that app and you drag and drop it so you can see literally how much you have left in each category. Like it is right there with you and it really does it force it, if you follow it, it forces you to stay within the bounds. But the great thing is is there creates a level of peace too and then you're going to expose

and see, okay, how much have we been spending out to eat, how much have we been spending, you know, here or there and you start to actually see your spending habits and because you guys are in debt, you cut all those categories because you're doing nothing, I mean, but just survival at this point, there's no shelter, clothing, transportation utilities and get out of debt.

That's all. You're not going to see the inside of a restaurant unless you're working there as your extra job, you're not going on vacation, you're broke, you got to get this bread mess cleaned up. Not until you get it done.

And you can get it done really quick once you start doing that because you sell them or you cut up the credit card, you look around the house, see what else we can sell. You look around, I can pick up a side job this weekend and make 2,000 bucks, though, what if there's a credit card and it'll be gone. I mean, you start getting creative on knocking these things out and then you get your

life back at the end of the story and the end of the story is only about 12 or 18 months away.

At the end of the first chapter of the story, I guess.

Because then when you're out of debt, you can build an emergency fund and when you're building an emergency fund, then you can start investing and do you literally could retire a millionaire, if not a multi-millionaire, if you follow this stuff through exactly like we teach you. And you go from disorganized to $27,000 a year, looking for a $3 an hour of raise and two

kids in daycare and I can't breathe all the way to millionaire and it takes you 10, 12 years to do all that. We can show you how.

“That's what this app, and the Apple guide you, it'll tell you what Ramsay says next.”

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Kate is in Sioux Falls, South Dakota, I Kate, how are you?

“Hi, I'm great, I can't believe I'm talking to you.”

You too, what's up? So I'm calling to get your advice on how we can help my parents. So my parents are in their late 70s, their faithful Christians, they have been their whole life. As they've gotten older, me and my siblings have been considering how we can help them

to age well, and whether we'll need to take care of them.

My dad has worked a ministry job in his whole life, and they've never had much money, but

they're very private about money. So recently they've expressed several times that they don't have enough money to retire. I don't think they understand money at all, and we're also concerned that they're giving a lot of money to various ministries, because they're really looking forward to being in heaven, and they want to spread the gospel far and wide before they get there.

They've also told us, and I do think they firmly believe that they're going to be raptured before they die. So we all love them very much, but we're also concerned that they may not have enough to take care of them, and we also want to be prepared to take care of them if we need to do that, but they aren't willing to talk to us about it.

Is it something we just let go, or how can we respectfully love them for the rest of their years without any information?

Well, first, as a fellow Christian, I hope they're right.

But I don't think we lay out our plans. The Bible that I have read doesn't teach me to lay out our plans, as if I'm not going to retire, because the rapture is going to be my bailout. Instead, the Bible says in the house of the wise, our stores of choice food and oil. The Bible does talk a lot about God as our provider, and that he cares about us, and he

is a plan for us, and not to worry, and all those kinds of things. And that's all very true as well. But the Bible, then, on the other hand, it says, if you don't work, you don't eat. It's in the Bible. And it says, if you don't plant corn, don't expect corn.

You're going to reap what you sow, and if you sow sparingly, meaning very few kernels of corn, please expect very few corn stalks to come up out of the ground. That's a cause and effect thing in Scripture. Okay, God's talking about this is the land in which we live, the world in which we live. And as Rachel said, the other day on the show, God gave us a brain and we're supposed

to use it to reason as well. And so spiritually planning for the rapture, I agree with, and I'm on board for, let's go slow.

“That's all out where's the line, I'll get in the line, okay?”

But also while I'm here, and we don't know the date or the time, very clear in Scripture that we're not going to know the date or the time of his return, then out of Jesus's own mouth, those words were spoken. And so given that, then we have to plan as if we're going to be here and then that plan works if we're not here or if we're here.

Their plan only works if we're not here.

Okay.

Thank you for your touch.

But yeah.

“Now, how do we love these sweet, precious people who care about other people wanting”

to meet God, meet Jesus, and they're willing to live on almost nothing and barely get by so that they can accomplish that. What impact they can have on the world for the Lord, they are having, and their thumb prints are going to be all over people's names and heaven, and they're just wonderful people.

So how do we love them? Yeah. And they're secretive, partly because we take care of them. Yeah. They're partly secretive because they're a shame.

They're partly secretive because they're ashamed. They're not ashamed of the gospel. They're not ashamed of their ministry mindset, but they know that they haven't done a good job with money and it bothers them. And so we got to keep it.

And it's almost easier in a weird way to have an excuse for the fear that, oh gosh, we're not, well it's okay.

We're going to, you, you cling on to something.

Yeah. We didn't do a good job. I'm going to blame it on the rapture. Yeah. Yeah.

And so now, how do you help them gently and lovingly? Because a hundred percent chance of 78-year-old with this mindset is not going to change. Right. 90-actually. What's a 98 percent?

Okay. We'll give you two percent. Yeah. But I mean, I don't want to go in. They're going to change.

I don't want to enter the conversation thinking they're going to be transformed financially. Yeah. I don't think they are. I think they're pretty well set on giving everything away in Jesus' name. And I got to say that's a wonderful person.

Oh, my goodness. Well, wonderful people. So I think you siblings band together and you just check in on them ever so often. Make sure that the property taxes are paid, that there's groceries in the cab that don't open the cabinet.

“The only thing in there is dog food and they haven't got a dog.”

Right. Right. Right. Right. That kind of thing happens in these situations.

Again, on the refrigerator and how it's stocked and hey, we just bought a beef and the three of us are going to share it and we're going to bring a bunch of it over and put it in your refrigerator. And hey, I just got a friend that's got some chickens and we all bought a bunch of eggs here and we're bringing you some stuff.

And I just went by a crocker and they were having to say oh, and publics just haven't to say oh, and mom, I brought you a bag of stuff to put in there. And so just make sure the electric bill is paid. Yeah. You guys can just kind of subtly poke around without getting them on a full plane.

I'm like they actually should be. Well, and thankfully, you know, and I guess the positive side of some of this too, Kate,

is there's so low maintenance they're used to live in them, basically nothing versus

some people call it and their parents are live in the high life and have not been an retirement and they're going to expect the same and they expect their kids to take unity. I mean, there's like a whole entitlement side where this story could have been. But for them, their their motivation and attitude in a weird way is, you know, I don't

say endearing because I don't think it's wise, but it's easier to help someone that has a level of humility and sacrificial heart. Do you know what I mean? It's not an adult. To do all that.

Yes, they're not. They're not brass. Are you guys, Kate, are you and your siblings in a good place financially just to do a bear minimum? Like what he was just explaining?

We are. They're certain of our families that are going to be more able to do it than others. I think specifically our family would be able to contribute more. And so those of us who may be able to contribute are just wanting to understand what they mean by the fact that they don't have enough money so we can prepare for how we make

to help them. You know, it really haven't been able to prepare it all. Yeah, you can just do it in an honoring way. So mom and dad, you all have done such work for the kingdom and, you know, scripture says that that your children will rise up and call you blessed and we're standing here calling

you blessed, blessed and one way your blessed is your children are standing here and we want to love you. If you'll tell us some of the basic things, we want to help. But you're going to tell us what we need to help with. Yeah, do you even know Kate, if the house is paid off or anything like do you have any

range? It is. They have a small home, but it's paid off in two paid off cars.

“So that's why good consolation is that they have a place to live and not worry about”

that. Yeah. Food, light, water property. Yep. Yeah, check it on the food, check it on the property taxes and then what about like

again, we have a little bit of concern that they're still giving a lot of money away. Mm-hmm. I just don't think there's much we can do about that. No. But if they're money and probably some of the ministers that they're giving to this.

Yeah, probably some of the stuff they're giving to. They shouldn't be as probably irresponsible. But so what? There's nothing you can talk about. And less they ask.

you think we ought to do this one and you say, well, mom, let's look at how they spend their money.

“Let's look at how they're, you know, oh, wait a minute, mom, they spend 90 cents of”

every dollar on the guy that runs its salary. And the hungry kids only get 10 cents of every dollar. Well, I don't think we need a big mom. That's not a very good deal for the hungry kids.

And mom, let's make sure you're in a hungry first.

Yeah. Yeah. Take care of your own household first or your worst and unbeliever. These are all scriptural things. , hey, guys, George Camel here.

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So I'm having a disagreement with my dad, and I want to know if I should sell my house to pay off my student loans.

“Yes, so we bought it together, so that's why I'm talking to them about it in 2020.”

Yes. So you don't own it by yourself? Not by myself, but he will let me make the decision. He thinks that you're going to tell me something different. I think you're going to tell me to sell it.

Interesting. Okay. We'll know about it. Two minutes. Yeah, this is great.

It's a lot of power. I'm kind of scared. Yeah.

So how much student loan have you got?

I've got about $33,000. And what is your income? I make $54 and change as an accountant. Mm-hmm. I work in 40 hours.

Yes. And you're single? Yep, single, no kids. Okay. All right.

And what other debts do you have? Other than the house.

“I paid off my car in December early, but all I have left is $1,700 on a credit card.”

But I have 32,000 and savings, and I could pay that off today and still have some left. Oh. Well, Barry, the lead there. You'd sell your house instead of cleaning off your savings and building it back up in 24 months.

So the reason that my dad is hesitant is because my mortgage is like $800,000. No, no. We're asking you. Why would you sell your house when you have the money in the bank to pay off the debt?

I don't have the money in the bank. I have $30,000. I said it wrong. $3,200. Oh.

Okay. Okay. Well, that's a little different. All right. Sorry.

You may have said $32 and we put a zero on it. I don't know. Okay. Okay. All right.

$32,000. Okay. Gotcha. Yep. Yeah.

And then you pay off the credit card debt. You've got your $1,000 left. Then we're working on the student loan. And you make $54. What is your house payment?

$8.85. Okay. How long have you owned it? Six years. How much card debt did you pay off?

And how long did it take you? I think I've paid it a year and a half off early.

What was the total debt?

“And how long did it take you to pay that total debt?”

Once you attacked it.

It was $13,000 and it took five years.

That's not attacking it. Were you ever, were you ever off my job when COVID hit? Okay. All right. I'm talking about what I was trying to get at was,

did you pay off $13,000 in five months or something? And no. You didn't. You just pitled away at the thing. Okay.

And if you looked at what you bring in each month. And if you lived on nothing, you paid rent. Some groceries kept the lights on. And that's about it. Like if you really had no life.

No life. Yeah. How much extra would you have per month just with your salary? Um, I take about 33 a month.

So I would probably need like.

Depending on gas and groceries like 1,600 is. Okay. What if we just said $2,000 just to. Play it a little safe. So that's $1,300 extra.

“And if you got, you know, a part-time job at night and weekends,”

which I know is not. Well, keeping. Not fun. Oh, yeah. Yeah.

Yeah. I've been looking into that. Yeah. And you brought in an extra $2,000. You know what I mean?

That's. That's $3,000. And 10 months should be done. A month. And yeah.

And you just look at that in the calendar.

Go up your 401k temporarily. And did you get a tax refund last year? It was like $200. Okay. So you got that dialed in.

Good. Okay. Anything else? Any other crap coming out of your check?

“Like crappy insurance that you don't need and stuff?”

No, just health and dental. And that's it. Okay. Health, dental. Do you have 401k coming out now?

I do not. Okay. I don't know why you're only getting home with 35,000 or 38,000 dollars. 33 is what you said. 3300 a month, which you're 38,000 a year.

And so why are you only getting home with 38 out of 54? Mm-hmm. Much is your stinkin' health insurance. Uh, all of my insurance together is 53 per paycheck. Okay.

All right. Uh. This feels a little low. Yeah. That's still a low.

I mean, because you're gross, you're gross and almost five grand a month. And you shouldn't be having 1,700 come out of this check. No, I gross 3300 a month. No. I get 1,600 per paycheck.

Now you take home 3300 a month. 54,000 is your income, correct? Yeah. 60,000 a year is $5,000 a month. Okay.

I can't get down to 33. There's something wrong with your check to me. But aside from that, I'm going to investigate your check and see what's coming out. Make sure nothing is coming out except health insurance. That's it.

And taxes. And the appropriate amount of taxes, not too much. Then I'm going to pick up an extra job, side hustling, bookkeeping, and pick, bring $1,500 to $2,000 a month. Then I'm going to take the every dollar budget and get on beans and rice, rice and beans.

And I'm going to be clear of this $33,000 in debt in less than 14 months. And your dad wins the argument. Because I wouldn't show my house. I would not sell a house where you've got a great payment like this on a great interest rate. And you like the house.

I would not sell it for 14 months where the hustle. And I'd go, I'd lean in with 14 months where the hustle and clean the student loan out and get rid of it. The only reason you're selling it is you didn't have hope that you were ever going to get rid of it otherwise. And I just gave you a 14 month detail plan and Rachel did on getting rid of it. And if you get rid of it in 14 months, it'd be silly to sell your house.

Because how much equity is in it? And I have so much, well, that's the thing is that the houses that are sold for what mine did around the time. And are selling now are selling for between 200 k to 220. And what do you buy all of that? My loan, I bought it for 149, put seven down to my loan.

That's for 142. You said that you said this, we'd spot don't want it. Yeah, I wouldn't. This is perfect. There's, there's people all over America going, I could have a $200,000 house.

Oh, my God. Yeah. You know, they existed. And they do. They do their mortgage payment.

They do insurance, borrow Arkansas and a single lady making 54,000 owns it.

If it's the only way I have hope to get you out. And I got a lot of hope. A lot of hope mathematically, they, you're going to be out of this without it. So you can do this, oh, and by the way, let's just fast forward. What happens to your life when you don't have a student loan hanging over your head

and a credit card hanging over your head and a card hanging over your head? And you've learned to live on this budget. Oh, we can start putting money in that Roth 401k. Oh, then we start to talk about how fast does your income at 15% of your income turn you into a millionaire?

Pretty stink and fast, kiddo. It's about 18 years as my estimate sitting here today.

So you're, you're gonna retire with a million dollars in your 401k.

18 years from now.

“And then that's how to pay for house that by then it'll be where 600,000.”

That's right. 600. Yeah. I just tripled it. Yeah, all right.

18 years from now. Sure. Why not? Yeah, why not? It's a $2,000 house.

It's already doubled once. Yeah. Just like that right now. Yeah. Just like that.

Just like that.

You just, you just move your nose from one side of the other.

Just like that. Just like that. Yeah. So. No, but that, but honestly, yeah.

“The, that people selling their house is if their house is the problem.”

And for some people, their mortgage payment is huge. They have no margin. They're not able to get out of that. They have some equity. Yeah, and you're wanting to move anyways.

Sure. Like, there's a, yeah, there's some reasons. But the amount of effort and time it takes for moving, selling. And then you're going to go buy something else.

And it's going to be double.

What, you know what I mean? You're going to, that increase that you are on the better half on. It's going to be there waiting for you for the new house. So it's not worth leaving. So, sorry Anna.

I want you, I want you to get a little dirt under your fingernails and get this done. Baby, you can do this. I'm sorry for your sake. Your dad wins the argument. [MUSIC]

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That's boostmobile.com/ramsy. $25 forever requires customers to remain active on boostmobile and limited plan. Welcome back to the Ramsey Show in the Fair Wins Credit Union studio. Cheryl is in Boise, Idaho. Hi Cheryl, how are you?

I'm good, how are you, Dave? Better than I deserve. What's up? Thanks for taking my call. My parents are to the point in their life where they need extra help.

They are 8788.

“And instead of putting them in an assisted living, I would like to take care of them and that's what they would like.”

I'm not old enough to retire yet. I have about five more years. But they're willing, if I retire, they're willing to pay me the same monthly wage that I make right now. And then they want to give me $50,000 CD, which would make up that's the difference of whether I retire right now or in five years. My question is, they do not want my siblings to know.

They're working with them knowing about the monthly wage, but they do not want them to know about the CD. Because I have some siblings who I think they think would be unhappy about it. And they don't want to stress, they don't like confrontation, they don't want anybody to be unhappy. I personally think that my siblings should be happy because the monthly wage is way less than if we put them an assisted living. So my husband has been a little, where a little concerned about it, causing trouble in the future, but my mom and dad said, "Nobody knows about our CDs.

It's under the table, nobody will ever know about it because they don't know about that." So we're wondering what to do. Should we answer that? You do what you want to do, but you do what you want to do, but I do not participate in deals that involve deception.

I don't like the secretiveness of it. It's going to come back and buy it all of you. And it's going to come out. It's going to come out in the settling of the estate, and they're going to accuse you of having stolen from your parents. That's what we're worried about.

That's what's going to happen. Absolutely. I mean, we've played this record on this show before. Okay.

“I mean, for sure, that's what's going to happen.”

And so if everybody can't get along, here's the other thing. If they want you to handle the confrontation, I would be willing to do that. Hey, brothers and sisters.

Here's what mom and dad want to do.

Here's what's going on. I'm taking a pay cut, and I'm losing part of my retirement. To cover the retirement, they're giving me a $50,000 CD. And I'm taking a pay cut because I really want to go over there. It's a better quality of care for them.

It's cheaper for the whole family. Me doing it than us putting them in a thing. So you get a deal, but I want to make sure you guys all know about it. You don't really get a vote. I'm just telling you we're doing it.

Okay. That's there. And if you don't like it, pounds pound sand. But this is what we're doing, right? Okay.

So it's not. Don't put it out there and say, are you guys okay? I'm not taking a vote. It's not there money. It's not there money.

It's not there money.

“It's this is what mom and dad have decided to do.”

And I wanted to just make sure you guys knew it.

It's your fault that you're in the loop. So that you're in the loop and not a thing. Okay. I like that way of approaching it. That way.

Yeah. So there's no argument. It's just what it is so that it doesn't come out in the end. Okay. Yeah.

We have a family member that had a small business. One of the brothers was involved in the small business. The rest of the family was not. And when the dad sold the small business. He gave half of it to the brother.

And he told everybody. But he didn't ask everybody's permission. He said, this is my freaking money. And this is what I'm doing. He didn't say it that way.

He just did it. Okay. And then just said, this is what happened. And then you get to choose if you're the brother or the sister then. Whether you're going to have a hissy fit about somebody else doing what they want to do with their money.

Okay. And that makes perfect sense. Yeah. I just lots of clarity and kindness and legacy. What you described had no malice, no theft, no no weirdness.

It was a you're probably coming out on the short end of the stick except you really want to love your mom and dad well through this legacy stage of their life. And good on you. That's perfect. That's exactly.

I just have always promised them.

I will take care of you and I'm the one that's willing to do it. Yeah. And I get along well with them. Yeah.

“And almost as factual as it can be to Cheryl doesn't have to be all emotional, right?”

It's like here's the facts here's the numbers. Here's what's happening. And that's about it. Yeah. You know.

And let me go ahead. This is happening all over America at this moment. This scenario. And for you brothers and sisters out there that the other sibling is the one stepping up. And going to do the doctor's visits and going to be in the house making sure stuff gets cleaned up.

And going to make sure the bills get paid. And they end up with more than you and you're not there. Shut up. Rise up and call your brother your sister blessed and say thank you for taking care of thank you. Thank you for doing this and you get whatever you want.

You're the one on the front line at the rest of you out there. I mean, because this is like a normal I hear this almost every week among my friends. You know, it's crazy. I saw a study. I just saw this actually yesterday.

That the role within siblings if there's an older sister. She usually is the one that ends up taking the responsibility. Yep. That that's like the number one like predictability if you are the older sister. The older child.

Period. Yeah. But usually it's usually the daughter. The daughters are usually the ones that kind of gather. But end up kind of do it. Yeah, doing that and then talking about retirement all of those fascinating.

But there's data coming out all around it and there's a whole article on it and it was. Yeah. That'll be that'll be Denise for you for you. I'm I'm all noticed. It's not going to be you.

No, I will. I'm so sorry. I'm a Paul. I had no idea. You'll do a drive by and what give us a parade way from the car.

No, but that it, you know, and even, you know, when we look at friends and even, you know, even Winston's parents. Like, like, like, our pap, my, my pap, all my mom's mom's mom's mom's dad is still living. My husband's mom's mom is still living, right? And it is. It's like a full floor is taking care of things.

Yes. And it's a full floor. And it's taking care of them. The rest of need to support the ones that's on the front lines. That's right.

Thank you. Yep. And not be going to any game.

You can't see me. Oh, my god. You petty people. Yeah. And it's not even your money.

It's their money. And if you split it between all these siblings that Cheryl has, everyone probably gets 10 grand. And for 10 grand, take care of your, have your parents been taken care of.

You don't even mean, like, it's not like it's a million dollars sitting in there and they're fighting over that.

So anyway, Cheryl, well done. Okay. I hope the, I hope the conversation goes well. Yeah. And I have John Deloni in my head, too, but there is a point when you do put a scenario out there of what's going to happen.

They are adults. You're siblings. And they get to make a choice of how they respond. That's not up to you. That's not your responsibility to care, take their emotions either.

Yeah. It's what's happening. And they're going to have to be adults and decide. And if they decide they're going to come up my 87 year old parent after I make the announcement to them, then I'm going to deal with them. That's the other thing.

“So you have to step in between and go, because your mom and dad don't do confrontation.”

Remember they'd rather do deception. No, that's not a good idea. Not a good idea at all.

Because that confrontation's going to come back and it always grows.

Was it less parody says it has a high rate of resurrection? It will come. It will rise up. You have zombie confrontations. Wondering through your backyard.

All from former dead things. Oh, wow. That's because you tried to bury it and it came alive. Here's what nobody warns you about. You're behind on payments. You signed up with some debt settlement company.

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Learn more at why refi.com/ramsy. That's the letter why R E F Y dot com slash ramsy might not be in all states. Today's question comes from Gabriel and Delaware. We recently sold our house and did not anticipate buying another one for at least four to five years. We have $350,000 that we want to invest into the S&P 500 and index funds until we are ready to buy again.

Several friends who invest regularly have suggested that because it is such a large sum. And we should do a dollar cost average by investing 1/12 of the amount each month instead of investing it all at once.

“Do you agree with that suggestion or would you recommend investing the full amount immediately?”

If you understand what you're putting money into and you've looked at the track record of it, the S&P 500, the math would tell you to put it all in at once. The only reason to dollar cost average is if you're emotionally not committed to this process in the first time, Trump decides to bomb my ran and the market goes down, you freak out. Because he's going to do a Trump thing, you can count on it. I don't know what the next one's going to be, but there's going to be a Trump thing.

Sometimes it causes the market to go up, sometimes it causes the market to go down. And there's going to be other things that happen in the world other than Trump that are going to cause the market to go up and the market to go down.

Let's say that you had a hundred thousand dollars for round numbers and you put the money in at the beginning of 2024. All of it.

“The end of 2024 the market unusually high went up 24 percent, 25 percent.”

So you'd have a hundred and twenty five thousand if you put a hundred thousand in January one.

And at the end of the year, you'd have a hundred and twenty five because it went up 25 percent.

If you put it in a twelfth at a time, you'd have about a hundred and eleven thousand. But if the market went up or went down, you wouldn't be as scared. But you did not have it invested the entire year, the entire amount. And so you did not get what the market made the entire year. Now, if the market goes down ten minutes after you put it in, which is kind of like Murphy's Law.

It's going to, it's like God saying this is a test of the emergency roller coaster writing society. And see if you can ride the roller coaster or not, right? Like you're going to have a test right ten minutes after you put the money in the market's going to go down. And so you just got to say, I'm not going to look at it, I'm just going to put it in and it says p 500. And so, you know, we'll see what it does, right? This year year to date as of this broadcast, the market is up seven percent.

And it's June. If it continues on that track, that's going to be about 14, which would be fairly normal. It's averaged about 11.8. Okay. And that includes the big deal.

After the Iran bombing, it came back up. And we've had a couple of those when you look at the chart. I mean, you can just Google S&P 500, right? You'll see.

“But the amount of recovery time, which I don't know the exact date, but it's, it's maybe 30 days, right?”

I mean, like, it's pretty quick. It depends on what the event is. But most of the time, this stuff comes back very, very quickly. Even the big newsworthy drops. Okay.

One of the ones I always remember is when COVID hit in 20, go back and look at the 20 charts.

All right. And from February and down into March and less than 30 days, the market dropped dramatically. I mean, it didn't go in half, but it went way down. It lost like a lot. And everybody's freaking out because they're freaking out about COVID and they're freaking

about everything. And they're freaking out about masks. We hadn't gotten around to vaccine jet, but at that moment, but they came later. But job markets were closing. Yeah.

People were worried about the businesses. We're about what's going to happen on the economy and the market dove. Okay. It hit bottom in April. We didn't know that at the time.

“How long did it take it to recover what it lost from the COVID scare in the 30 days.”

Prior. Fifty seven days. They came back. So COVID wasn't even over, but we're up in September and the market has returned because

the market figured out that there wasn't going to be two million deaths and the market figured

out that a whole bunch of this was a bunch of who we. And they did. I mean, the market looked around and said, we're not all going to die. Um, this is, you know, and the economy is not going to turn into dust bowl and and and then. And so the market recovered.

The market recovers common sense over time. Well, anything back to 07, 08, which was obviously the massive huge drop. And was that a how long did that? I mean, that was. It took a bit.

It went in half. The Dow Jones went from 13,000 to 6,500. Now how quickly did it get back to 13,000? I'd have to go back and look. But I think it was almost a year.

So that was probably the long, you know, that was a long one. But it also went in half. But even the iron thing recently, right? That dropped, it came back within like two weeks. It was not long.

It was less than a month. Yeah, it was not long. Yeah. Because we had just put money in. And then every time there's a new cycle on it, you'll see it like this week.

If you go back and pin on when you're listening to this. But I'm doing this real time. You'll see a little blip right now. And, you know, latest new cycle on the same thing. And, you know, because there are bomb in each other again for a minute.

Right? So all this stuff. So all that stuff comes into. All that to say, the answer to your question is, invest immediately if you have a 405 year window. Because these wrinkles iron out if you give them time.

No one gets hurt on a roller coaster, except those that get off in the middle of the ride. Don't jump. Don't jump. Now, so if you think you're going to jump,

dollar cost average, because it keeps you from freaking out quite so much. Because you're like, oh, it went down, but I don't have all my money in. And so, but if you're going to be one of those people, this is, I lost all my money in the stock market,

which, by the way, is a lie. If you put money in an S&P,

lost all your money.

“Zero times that the market went to zero.”

So you didn't lose all your money.

If you put it in at the top in 2008, you're talking about, and it goes in half, put 100,000 in. It's worth 50,000. You could say, I lost half my money,

because I bought at the top and sold at the bottom. I'm the worst possible timer in on the planet. You know, and so, but even then, you didn't lose all your money, you lost half of it.

And, and because you're the worst possible timer on the planet. So, yeah. So, if you just ride it, you're going to be okay.

So, if you're willing to do that,

and you're willing to understand that,

“then you're going to make really, really, really good money,”

as a long-term investment in good mutual funds. And an S&P 500 is a great place to park stuff when you've got a photo of five-year window. Longer term, I'll go with different mutual funds, but I use the S&P for short-term parks like that myself.

And just while we're on it, this is a fun stat. I pulled this up the other day, because I got curious about it. 23, the market went up 26%, 24, it went up 25%, 25, it went up 18%, three very unusual years. This year, as I said, it's up 7%.

So, if you compound those numbers in four years, three and a half years, today, because we're all the way through those three calendar years and halfway through 26 when I'm saying this, that's 100% return on your money.

So, if you put in a hundred thousand,

you put in a million dollars in 23,

it's not two million dollars. If you didn't add anything to it and just set there. Now, that is a very unusual three and a half year period of time. Unusually good. I don't recall one, and I'm old,

and I've been doing this a long time. I can probably go back and look if there is another one,

“but I don't remember emotionally, it doesn't come to mind anything.”

That's sweet in my memory. There are three years in a row, 20 plus percent. That's crazy. Yeah, that's crazy. But I mean, I've got money sitting in the S&P, and I got twice as much right now,

just because of that three and a half year period of time. It doubled. Meanwhile, I've got my money in checking, because I'm scared of the stock market. You'd probably need to do some learning.

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AskRamsy is our free AI tool. The only data in AskRamsy is Ramsy data. We took three, four years of this show

We took all the books we've written and dumped a man.

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of them on our website and dumped them in. There's no reddit in AskRamsy. If you don't know what reddit is, it's a sewer. Okay. And so, the way AI works is it can only

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It's just like calling into the show. They should make a version someday, where you can click what type of answer. Do you want a day of answer? Do you want Rachel to tell, like, in the tone

at which you get your answer, right? And it would be like, I feel like, hey guys, it's all, it's going to be fine. Here, here's what you do. And days of like, you're stupid.

Don't want anything to be like, Rachel. How's your dad? How's your dad? How's your dad?

I just don't think that that's smart.

And Dave's like, stop it. You're cool. Stop it, you're cool. Yeah. And it's alone.

He's like, how's your dad? How's the relationship with your dad? You know? Jay would be like, girl, let me tell you. I don't know.

That could be good. I'll tell Allison the need mail after the show. Give him my acting. George will pull. Oh, George might let me get the calculator out.

And we will see. He's going to nerd out. He's going to send investment calculator. All right. There we go.

All is in the Hollywood North Carolina. Amishel, what's up? Hi, Dave. Hi, Rachel. I've been playing with the Ask Graham beat.

And I always imagine George Kimmore.

That's not funny. Thank you. Thank you. Well, it's a very precise answer. You will get a good answer.

Especially if it has to be with investors. So that's great. But I wanted to ask you all this one. A quick background. I'm very cute.

My husband is 34. We make about 100k here. We have 230,000 in retirement. What a go. Thank you.

My husband and I are both military. He just gave money or GI bill to our two children, which are five and two. And we have 10k and they're five 29. And I'm we're investing 200 months into their five 29. But I just wanted to see, like, is that enough?

Should it be more?

“Again, we get 12 months of his GI bill, which I think actually equates to more than just one school year.”

So his GI benefits for children's college education is one year of his income. No, so the GI bill would cover 12 months of school for each child. I thought it covered all of it. Cool. Interesting.

All right. So you got 12 months. All right. So what I would do is just say, all right, where are we going to be living? Do we think when we retire from the military?

Because we will be the state school that we are the resident. Any, you want to guess? What state? North Carolina. North Carolina.

You'll still be there. All right. So, you know, University of North Carolina or whatever. That's a state school. All right.

And what is the tuition? 14,000 dollars a year. What's room in board? Probably about double that. Probably about that much again.

So probably 25, 30,000 bucks. Times four. So 120,000 bucks. Oh, minus one year. Because military is big enough.

I'm sorry. Yeah. So time three instead. So now we got 90 or 100,000 bucks. So our 10,000 at two years old.

“What's it going to turn into by the time we get there?”

And plus our 200 bucks. Is that going to turn into, you know, 100,000 bucks. You're going to be pretty close. Yeah. But also looking at the rate of tuition increases.

Yeah. What the average has been year to year. Because it's, it's one of the wildest. Yeah. And I would under fund the 529 and over fund some of your other investing that you could use at that point.

Because what happens a lot of times is by the time you get there, two or three things can occur. One is they get scholarships for whatever reason. A, they applied for them. B, they're academically or athletically gifted. If they get a scholarship at the amount of their scholarship can be removed from the 529 with no penalties or taxes.

But that money now is set free instead of being trapped in the 529 growing tax free.

So that's one thing that can occur.

“Another thing that can occur is you guys are sitting on a pile of money by then because you're doing a great job.”

I mean, we're talking 15 years from now. You know, what's that going to look like? You're being millionaires easy. And you're going to have other money laying around and you might decide all kinds of different things. Oh, see, they decide not to go to college. They want to go and be in the trades and get a certification in whatever it's called 15 years from now.

We might call it AI today. And they want to be a tech person and they don't need a four year degree to do that. They want to be in cyber security and you don't need a four year degree to do that. You don't need a four year degree to be a programmer for God's sake right now, for sure. And so on, right?

And so that's, you know, maybe they want to maybe they want to be a diesel mechanic.

It's a two year certification.

By the way, diesel mechanics right now, I'm making 120 a year, which is more than a lot of lawyers make. So, you know, let's just think through what is it they're going to do. They may or may not be four year university of North Carolina. I recommend college if they study something that's actually usable. You don't want to degree in left handed puppetry.

You end up being a barista. But you do need to get, but if you get a good solid degree and something that's usable in the marketplace, I still recommend college. So, that's how you plan it out. You just look out there and go, what's it cost and then you back out what you've already got covered.

And then go, I want to come up a little short because I'm going to have other money. Yeah, because a hard thing, especially Michelle, which is such a great position to be in. That you guys are looking at baby steps four, five and six. Like you're looking at college and you're able to fund it. And because of how younger kids are and how fast that money can grow.

Is that, yeah, that's a scenario where it can be overfunded. So, you do want to just be watching the numbers and make sure.

“For majority of people out there, that's not an issue for them, right?”

They're trying to say for retirement and their kids are 16, 17. And they don't have money for college. So, you're on a good scenario, but you are one that you do want to be looking at. Like Winston and I, I mean, we funded a ton. Amelia's 11 and we slowed down hers just because of all that.

You probably don't. Just to say, I mean, again, I don't know what she's going to do. And financially, whatever's in there that will grow for the next, you know, six years. And then if it's not enough, can we cash flow behind it? But that's because we've been doing the baby steps for 15 years too.

So, it's, it's all, but it's something to think about, especially because your kids are so young. I love this question. By the way, thank you for your service to the country. I'll give you one other thing. Go ahead and start brainwashing them on two things.

I mean, parent them. Okay. To the thing number one is that you want to brain more. I mean, parent them on is that they are going to engage in some kind of continuous learning after high school.

They need to learn something beyond high school. If it's a trade, if it's college, whatever. So this is your college fund. This is your college fund. This is your college fund.

Show them when they're 12. This is your college fund, which presupposes in their little mind that they're going to college. That's brainwashing number one. Brainwashing number two is where you go to school does not matter. So you're not going to school at a super expensive school.

We're not paying for it. So we went to the University of Tennessee. We're in Tennessee, Sharon, and I did. We taught our kids to say govalls. Early.

Govalls. Presupposes you're going to be a vault. All three of them were brainwashing works. Okay, guys, let me ask you something. What would it take for you to switch your bank?

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That's FairWins.org/Ramsey. Ensured by the NCUA. The Elizabeth is in Pennsylvania. High Elizabeth, how are you? Good, how are you?

Better than I deserve, what's up? So my husband recently lost his job and he was working in the trade, but now he's considering reopening the landscaping and home services business that he ran a couple

years ago when we first got married.

He started to pick up some sidewalk and it's showing some strong promises that he's making about double of what he was normally make in his weekly. There's a group of papers checked for his normal job. So our situation is a little bit different now than when we first got married. I'm a state home mom.

And I'm nervous about him taking this business on full time, which is what he wants to do. So he's pretty much stopped applying for jobs, and I want to support his goals and what he wants to do, but I'm just concerned about putting all of our financial security on a very smooth business, since it didn't produce a lot of income in the winter last time. And I'm just curious what your thoughts are.

“Well, he's making how long has he been making double?”

How long has he been doing it? So he just lost his job a couple weeks ago. So this is just like very, very fairly. Dang. Well, so if he could, good for him, if he can present double his income for six months,

that's the same amount he would make in one year. Ray, why would I be nervous? I'm just, I'm, he could last time when, like, I was as a calendar and I did all of his numbers for taxes and everything. So I just end getting like the accounting flashback.

When he had his business when his first thought married, pretty much relied only on my

income because he didn't, we didn't save for the winter and everything. I won't, he didn't, like, know to do that. I guess the first time around, and he does have that mentality. Why did the business fail last time? I'm so it didn't fail.

We actually moved across the country. So he closed it down because we moved.

“We just recently moved back to Pennsylvania in the area for that why he was, you know,”

now what the job law is thinking about reopening it. Okay. Well, a paycheck coming from someone else who's out hustling and trying to keep a business open is no more stable than you out hustling and trying to create some business. They're both unstable and they're only a stable as your ability to leave the cave kill

something and drag it home. You just have the illusion that someone else does it. Oh, until they fire you or lay you off because they can't figure out what to do at their place, which is what just happened. So the security is as an illusion.

What I don't want to engage in on yours for, I want to come along side you. What I don't want the two of you to allow to happen is that you ignore trends that are negative. Okay. But also don't want you to say, well, last time we didn't save up anything for the winter.

And so it was tight during the winter. Well, then don't do that again. You know, I mean, but if you're making double, why would you not figure out a way to handle that and handle winter? Right. I guess I'm just nervous that it's that trend.

You're nervous about something that hasn't happened. Yeah, because we have a daughter and I have to think about her. You're nervous about something that hasn't happened. It's happening.

It happens the first time around what you're saying Elizabeth.

But now can you not shift mentality and say, okay, going as long as we're making double, I'm happy. Is that not correct? Yeah. I'm just, yeah, I guess I just the worry word.

As long as we're making double, yes, you're a worry word. And then Elizabeth, I would say, though, in the winter months, November, December, January, February, there's something else you could be doing for a month. Two things have a plan to create income during winter. And be, save up, act like the squirrel.

But some money in the nest get ready for winter.

Okay, so you would not recommend to in applying.

No, not if he's making double. In two weeks, the guy's already doubled his piss poor job. I don't want another one of those jobs. I love this one. But get ready for winter.

He has a baby to feed and a worried wife. So let's get ready for winter. Let's double down and give you a bank half our check. Let's live on what we were living on. But when I had the horrible job from doing this last time Elizabeth,

can you guys challenge her out?

“And when did business start slowing for you guys in Pennsylvania?”

Is that October? Is that September? When does it start going into winter months for you guys? I would say like, end of October, early November. What's that?

What kind of work is he doing? Landscaping.

Yeah, he's doing landscaping in home like home services, which is what he did before.

I have to find home services. It's pretty much mostly landscaping. But like in the, you build some snow removal and stuff in the winter time. But that's very dependent on whether or not we yes. No.

Okay, but he has that. But what else can we do around landscaping? Tree removal? In the winter. Yeah, he does tree removal.

You can do that all winter. It's better to do it in the winter. And maybe Elizabeth for a period of time, maybe for this first year. Just to settle some of this that he's like, hey, I'll go, you know, drive UPS for three months during the holiday season.

No. What? Just to get listen. Just make double. Make double between now and September and set half of it aside.

But he can be doing something in the winter. Just to know. No removal and stomp removal and crere removal. Yeah, and holiday driving. Whatever it is.

But figure it out.

But I mean, here's the thing.

If you can make double, it's real simple math. Six months give you all 12. But that doesn't, but you're Elizabeth, you're not. That doesn't. That's not.

It's computing mathematically to you, but you're feeling something different. And why is what I'm wondering is it because he didn't do a good job. You guys didn't do a job saving last year.

“Do you think you have the ability to save this time around?”

Yes, and I mean, we've been. I want to say we've been doing like your baby set since that could be. They did a much better place financially. And I'm just nervous that to see that progress potentially stop it. Things don't work out perfectly.

How old is your baby? She's a year old. Okay. And so, you know, you got to look at him. And he has to hear loud and clear that we have to do this.

In a way that makes sure that the family is okay. Meaning we're going to make double and bank half of it. We're going to pay our taxes on time. We're going to have some alternative things that we do during the winter, as to make sure that we don't even need that savings.

You know, and honey, if you're not doing that, I'm going to go from worried to a problem. I'm going to be a problem for you. If you are doing that, I'm going to be your cheerleader and support you. But if you're going to engage in a pattern that looks like this family is going to be in jeopardy,

me and you are going to have a problem. So, let's keep me cheerleading. Let's work together and let me do my accounting stuff. And we're going to work real closely together. We're not going to go along four months and not talk about this.

We're going to talk about it every month. We're going to look at the trend lines on the revenue on the business. Like we're running a business. And we're going to say, okay, this type of business is making us more profit. This type is not.

Let's let's engage in that.

“And let's start thinking about, do we need to buy a piece of equipment for winter?”

Snow removal, snowblower? Do we, what do we got attachment for one of the moors? I don't know what this is. But let's just start running a business and anticipating what is coming. And let's do it together and talk about it.

We're not going to just go along and like, I'm living my dream. And my family is hungry. And we're not doing that. And I don't endorse that. But I also don't want you to have the illusion that self-employed is less stable than employed,

especially when you're making twice as much. It's more stable. So I like him. He's a hard work. That's the problem.

That's impressive though. He turns around real fast. Yes. Really fast. And he knows what he's doing.

He's done it before. The actual doing the thing he's good at. Yeah. She's got the accounting skills. That's right.

So she can come alongside and they can have adult discussions about how the business is creating profit. And what we're doing with the profit. We're doing our quarterly estimates. We're not going to get behind on taxes.

For making sure all bills are paid. We're keeping the profits. You know, set aside getting ready for winter. We're going to squirrel.

It's what we call it, the south. [MUSIC] Welcome back to the Ramsey Show.

“In the fair winds, credit union studios.”

I'm Dave Ramsey or host. Thank you for joining us. Rachel Cruz is my co-host today. Jim is in San Jose, California. Hi, Jim.

How are you? Good. Hi, Dave. Thank you. I had a question.

I'm getting married. And my fiance is 50. I'm 60. We're both retired. And based on our wealth differences.

We should probably have a pre-nup. What is the wealth differences? So she's got 3 million. No debt. Am I got 45 million?

No debt. Okay. Yes, you should have a pre-nup. Yeah. The question involves what's in the pre-nup.

What's to go in it? She wants to feel like we're building something together in our marriage going forward. And she talked about slowly. Maybe moving some of my separate property into community over time. You know, like 5% a year.

You know, over 20 years.

You know, and first I thought that was fine.

But then I started looking at the numbers. How much of your 45 mean is real estate? Just a couple million. Okay. So what is the rest of it?

So the rest of it is stocks. Mainly. Okay. Yeah. And the way some people do it.

And you can do whatever you want. It's kind of like a will. You make it up.

“And what if you both like it, you've got your deal, right?”

Um, but what some people do is, uh, we, uh, A, we exit with what we entered. Three million in 45. And any growth from then on is ours. Some people do that. Or a percentage, you know, a ratio of some kind.

Any growth from this point forward is 70% gems and 30% hers. Or whatever. I just made that up. Okay. Um, and so, but if, if yours is only growing for you and hers is only growing for her,

that does kind of leave a negative light on what she's concerned about. And she's concerned fairly then we need to grow a life together from this point forward.

The main purpose of this is that she should not come out of this with 20 million bucks, two years from now.

Right. You know, that's what I was afraid of. Like, yeah, that's the main purpose. So we, we exit with what we entered with. And then have a formula for how the growth would be dispersed. Okay.

And I don't think that 50 50 growth is fair because she would, if she, if you make 10% on your investment, you'd make four and a half million a year and she'd make 300,000. Right.

“So, but I mean, if you want to be generous on it and say, you know, 70% of the growth from this point forward”

on our whole thing is mine and 30% on the whole thing is yours or whatever. Make up a number. I don't care. But I mean, so the two things you have to address is leaving with what we entered. And then how do we build a life together and address the growth?

Right. Okay. That sounds, that sounds pretty reasonable. Yeah, but I would not, I would not set up a roommate situation where what your manager is a manager is a manager and we have to decide who pays for the muster and the refrigerator.

Oh, that'll drive you nuts. Yeah. Do you guys have kids too? Yeah, yeah. We both have kids.

We have team kids and I have a couple older kids. Okay. So, I set aside some of the money and trust for my kids. Mm-hmm. You know, so that's, that's already, you know, separate.

Okay. You know, that we're not talking about splitting that up. Okay. So if I saw the 5% a year and if that seemed reasonable, you know, a little bit each year.

But the problem is there's no reason to not the problem.

Yeah, there's no reason to it. Only benefits are if we get divorced and then that's something a lot of money. Well, but if you took a percentage of growth, it's going to have the same effect. Mm-hmm. If she gets a percentage of growth without changing the name on the asset.

Mm-hmm. If she gets a percentage of growth from this point forward and you get a percentage of growth from this point forward. Unless it's exactly in ratio of 3 to 45. And I wouldn't do that. You give her more.

Just them. No, I mean, if you gave, yeah, I would be, I would give more than that. So, you know, so if you said, you know, we got 48 million to deal with. You get 3/48. I get 45/48.

Of the growth. That's a little heavy.

I probably would light it up on that personally.

Mm-hmm. But, um, so that's like she would be getting about 6%. Yeah, that's an area of the growth, but not of the asset. Right. Not the principal.

Yep. The principal is your starting point as of today. That's how most people address it. Now, you can sit down with an attorney. They may have some other ideas if they're used to doing these things.

We don't generally recommend pre-nups, accept in extreme situations. And yours, my man, is an extreme situation. Okay. And it's really good to talk about it and think it through. And here's the other thing.

I would be sure I get under the numbers and address the concern. And meaning, that's a former pre-marriage counseling, in other words, where you say, "Okay, what is it you're trying to address when you say you want 5%. Mm-hmm.

What does that do for her?

What is it that you're wanting there? What do you trying to do?"

“If we did it this other way, does that address it as well?”

You know? Okay. And you know, that kind of thing. The thing I do, the thing I really, whatever structure you use, make it from this point forward that you're building a life together in some manner.

Yep. I agree with that. Yeah. That's the danger of a pre-nup where you just turn your marriage into a roommate. Yeah.

Because I mean, you know, you could have another 25 great years of marriage with her, you know? And 14 grandkids. Yeah. Each. Mm-hmm.

You know? And that aren't related to the other one at all. Yes. Except by this marriage. And so, yeah.

Yeah.

I've got a friend that has four kids and he's on a second marriage, third marriage.

And she has five kids and they've all got kids.

“There's a busy and people in these two combined families now.”

Right. And you've got to address that. Because there's a lot, you know, just Thanksgiving becomes a thing. Mm-hmm. You know, you got to think through yours mine hours.

And there's not any-- That probably is the wisest way with the kids. Like in his scenario. It drops on in the truck. But if the pre-nup says the first 45 is mine.

Anyway. We're only dealing with the growth. And it can go to him wherever he wants it. That's right. Yep.

And that can be in the-- that can also be in the will. You know? So, trust does that. But it's not 100% waste. That's very interesting, Jim.

Good discussion. The pre-nup said become a hot topic around here all the air. I was just telling you I was doing an interview. They brought it up in the interview. And the guy doing it with us.

I don't know the guy's podcast. Yeah. And he was like an anti-pre-nup.

“And he said now, over there's he has shifted to more of a pro.”

Yeah. And I do wonder if people if there's like a discouragement of just marriage in general. Like seeing the stats that you, you know, have to time it's not going to work. You know what I mean? Do you prep for that?

What wears the wisdom and that? Yeah. Versus the attitude going in, preparing for the end of the marriage is not correct. You know what you mean? The way you slice it is tough.

Yeah. The other thing is the marriage statistic that half don't work is incorrect. If you start adjusting for a few variables. If you have four years of education. If you have $50,000 a year or more in income.

If you are shared in your religious beliefs. If you're feeling about five more things. Yeah. And it goes to about 90% probability of success in marriage. So it's, if you get married after you're 22 months old.

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[ Music ] Better than I deserve, how can we help? [ Music ] Well I just have that kind of a very question. But I just kind of looking for some advice on which way to go.

I've got myself on some financial waters that you could say. And I guess one of the things too is during that way. I wasn't, I guess, open all the way with my wife about it. And actually I guess that just with Rachel's article about financial fidelity. Just know that she sent me.

I don't know why it's done. So I just kind of, you know, looking for advice on which way to go. I don't know if you just try to do that. But I don't know if you just go the way out that it didn't be. So just a little advice on which way to go.

Okay.

“So you ran up credit card debt that she didn't know about as I would you're saying?”

Yes, you're pretty much, yeah. How much? You're getting over here. Well, it's probably three, five. So I asked the hard party to ask you.

I've never really kept track.

I've been very bad at budgeting until about a couple weeks ago. And why are you not telling her? Were you running all the bills and you just couldn't pay them all? And you didn't tell her that you were putting on cards or what was the deal? Yeah.

It's a pretty much. And he's got, it's a sign that's very ill. And he's helping insurance every month, 1400. And then, um, like I said, injury of medical injury, um, the two years ago. And so it's been hard for her inside the state.

I guess my thought was, you know, I was doing good. You know, trying to keep some stress. But I didn't tell you that there were a lot worse. Yeah. Yeah.

Okay. That's one way this happens. Yeah. And it's just like, I'm trying to do it. Doing the best I could.

And I'm trying to keep it off of you. So I didn't tell you. But that's a mistake. Okay. Gotcha.

And what's your household income, Garrett?

Uh, it's right around 70, 400. A month, take home pay. Yes. Okay. And does your wife work outside the home?

Is this just you? Yes. You said you have a special lease child? No. He just did.

He just had a lot of health problems. We've been testing surgery coming up. How old is he? He's 20 years old? Yes.

Yes. Yeah.

“Your, your child is 28 years old and has health problems?”

Yes. And one of them here, we've been in places trying to figure out what the answers are. And, um, you know, it's having really got the answers to, you know, is he a, is he a functioning adult? Does he support himself?

He does a much the chance.

He's having to make sure right now with arms and things like that. We're using a lot of things all the time. I'm, I'm, I'm asking this. Does he live in an apartment and support himself? Oh, no.

He lives with us. Okay. So you take care of him. Is he, so he's disabled to the point that we need, is he able to work? He's not, you know, he's not.

You haven't even able to drive or do some of these things right now because the pain is on. Okay. And this has been going on for years. 28. Yes.

And it has. It's been going on for a while. And it shouldn't, to the point where he's keeps getting worse. And, you know, we're trying to find, we've been all over the country trying to find some of the answers. I think the, but I don't think that's the issue you really read.

You know, hopefully we're going to get those fixed. And maybe I'll get things on the right track one. Okay. Okay. I'm sorry.

What a deal. Okay. Somehow I had it in my head. This was a baby. Okay.

It threw me off. Okay. All right. Now, so the 35,000 in debt on the credit cards that she didn't know about. What other debts do you guys have?

We have a mortgage. That's pretty much the only other one. You don't have a car payment or a student loan. How much do you owe on the student loan? I think it is roughly 14.

I think there's two of them. It's one from like 10 to 10 years ago. 14,000 dollars. Yes or on the dollar. Okay.

And any other debts? No, car debt? No, sir. No. Okay.

And what's your mortgage payment? It's $25.80. Okay. All right. Okay.

Well, there are several parts of this and they're all interconnected. So we can't leave one out. Part number one is you and your wife are carrying a burden with your son's health. You're emotionally carrying the burden. You're logistically trying to help him find solutions and get him to those solutions.

You're not doing it by yourself. She's not doing it by yourself. The two of you are carrying that together there.

“That way is the only way we can carry the emotional weight of something like that is together.”

The money is the same thing. She needs to carry the emotional weight of the money also with you. Okay. And so the way that's going to work is and it's also going to give her actually more peace

not knowing if there's a hidden credit card that anymore.

“Because she's going to be involved from this point forward.”

All accounts that I think you said. Yeah, everything. So we're going to put you on the every dollar budgeting app. We're going to give it to you guys. And both of you are going to sit down and spend $7,400 on that app and say,

this is what this month looks like. What we're going to do with this money. We're going to put this much on groceries. This much on the house payment. This much on the utilities, lights and water.

This much on medical bills for our son. This much on whatever it is. We're going to just label out every one of those dollars is going to have an assignment before the month begins. We're both going to look at it.

We're both going to give it a vote. And when both of us vote on the budget. Now we have a budget. And then we agree to live on that budget. If anything comes up, it's not on that budget.

“We have to sit down together and change it.”

That's both of you carrying the money emotionally. And that's not that stressful. It's less stressful than what you've been doing. Unknown, unknown, and hidden is more stressful than known. Then you just look at this and say,

I'm cutting up the credit cards.

We're never borrowing money again.

And we have $50,000 in student loan and credit card debt that we need to clean up. And we make $145,000 a year and we're going to go do that. Yeah. Stop your 401k temporarily. Stop saving temporarily.

Do you have any money in savings? I don't know, sir. None at all. No. Okay, you have any 401k's in retirement.

I do have a retirement. But actually, did the app that I should recommend to stop them. Put me in that a couple weeks ago. I stopped that thing. Okay.

Good. Good. Sure.

“I mean, when you look at the math of all of this,”

if you guys can find an extra 2,000 a month, which sounds like a lot.

But if you limit your lifestyle, right? And maybe even work a little extra or your wife, maybe get to part-time job or something. Just two greater than a month, you guys are out in two years. Yeah.

Yeah. Yeah. It is, yeah. It is possible for you all. But also with the asterisk of knowing that medical bills,

as part of the equation, too. And so it might slow down the process a little bit, making sure that your son is being cared for for sure. But if you guys really just say, hey, no matter what, we're finding $2,000 a month.

And no matter what, we're going to live on what comes in. We are not borrowing money. Yep. Yep. And you stay out of that.

Ever again, you cannot get out of a whole while digging out the bottom. Yep. So cut up the credit cards tonight in front of her. Sit down and do the every dollar budget together. And lay this out.

And you can walk straight through this. Mm-hmm. You'll be able to do it. And that gives her the benefit of rebuilding trust, because she knows that we've got a hundred percent transparency here.

And the longer that we work together and have a hundred percent transparency, the longer the more the trust will be rebuilt. Mm-hmm. And because, you know, this was not in malice or you were buying yourself something. This was you were simply trying to keep stress off of her.

Mm-hmm. And it had the unintended consequence of adding stress instead. Uh, what in your intent? But that's where it ends up. So you learned your lesson on that one.

So now we just, all cards are face up. You know, there's no, no cards under the table. Everything's on top and everything's face up. And, and we're going to do with it together. And it's less, it feels like it's more weight.

But it's less stressful than the unknown for her. So you help her by carrying the weight of the medical issues with your son. She helps you by carrying part of the weight of this. And we've got, we're a team and we're going to work on both of these things together and be successful. [Music]

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[Music]

“Buying or selling real estate is a big deal for most people.”

It's the largest transaction they ever do. And so you need a pro when you're corner, not someone who got their license three weeks ago. I don't care if your mother plays bridge with them. You don't buy a real estate with them unless they sell a bunch of houses. That's the deal, period.

So get a high quality, high octane, high protein, real estate agent if you're going to buy a property or sell a property.

And then you'll have a good experience because you have somebody knows what the flip they're doing because it's not their first ride on the cabbage truck too.

If you're- if it's your first ride, you want someone's driven it before. Hello, not road in the back. So here we go. Yeah, go to RamseySolutions.com/agent and you can find a Ramsey trusted agent that we recommend. Real estate pros that we have vetted that are high octane, high protein that get her done.

Melanie is in Phoenix Arizona. Hi Melanie, how are you? I do, and well. Good, what's up? Okay, I really want to buy a beach condo.

And it's in Mexico, that's the thing. That's why I'm asking.

“I just want to know if I can justify paying cash for it.”

Do you have the cash? I have the cash. How much is it? 350. Well, that's cheap.

Good.

Well, no kidding, okay, good.

Okay, and what's your total net worth? Okay. Oh, I didn't expect that question. I thought you were going to ask my income. That's okay.

What's your income? My house is paid for six or seven hundred. My little condos, couple hundred thousand. And then that's it for property. And then, you know, maybe, maybe, you know, that's the thing.

My income is a little bit. But, you know, a few hundred thousand. Okay, and how much is your list? Pardon, pardon, the income is not a few hundred thousand. I know you're used to big rollers.

My income is a little 60,000.

Okay, but your, your nest egg is how big.

Where are you getting the 350 from? Well, so that's interesting. It's actually from my, it's from my inheritance. And I thought it would be a beautiful thing to do with the money for the all the kids. And, you know.

Okay, so that's the total inheritance is 350. And you're going to put it all in a beach condo. Well, I, I know that sounds terrible. That was the house that, you know. But I do have a few, a few hundred thousand that, you know, just making a little income.

How old are you? 64. Okay. All right. We're in Mexico.

I understand. Curiosity, not that it really makes. Yes. Well, it does. But Porto Pignoscow.

So really, it's only an hour into Mexico. So you're driving the three hours in the US. And then you're crossing the border. It's one hour, one drive. Kind of loaded with Americans.

So. Yeah. Yeah. Yeah. Okay.

“Now, if, if you just lost the condo after you bought it, is your life still okay?”

Yeah. Yeah. Everything doesn't burn down around you because you've got, you're pretty much in the same situation. Yeah. I don't think you're going to, I don't think you're going to lose it.

That's not what I'm suggesting. Now, in Mexico, American citizens are not allowed to own real estate. It goes into a Mexican trust. Mm-hmm. Okay.

And the state runs the trust. It's a, they use a, a notary and the notaries in Mexico are way different than a notary in the states. The notary in Mexico is like a big deal government job. And they, they, they build the trust out and it's very complicated. It's like 73 pages and it's crazy and you don't technically own the house.

The Mexican government technically owns the house and you're the beneficiary of the Mexican trust. Okay. So it's a little weird, but there's billions and billions and billions of dollars of American money in these trusts in Mexico. The likelihood they're going to go through and take all these American money is a way and not have an invasion from the North is very low. So there'll be a problem.

Okay. So I'm not worried about it. You know, at all, in terms of the you being scammed or something like that, as long as you've checked out the particular condo you're going into. Yeah.

Well, yeah, make sure you got all that nailed down and at the condo. I'm going cost to make all going coast to manage it may make the purchase price look small by the time you're through. Well, I've kind of looked at it and it looks like and I'm very conservative and usually push things up just because I don't like surprises. 12, I'm saying 12,000 a year for all the expenses and things like that. And who's covering that? How you covering that? You make 60.

Correct. But so I was planning on renting it. So most people that rented they were used to in the past years renting it like, you know, 50,000. Now it's way way down people are freaking out. They say now half of that 25,000.

“But let's just say, I really just want to use this for family, okay?”

You're also really expenses with a rental on the rest of its family. There you go. Yes, just, you know, just make what I can make and pay that. You know, that's probably harder than the salesperson is making it sound. Okay.

But it can be done. It can be done. Okay. I mean, I have friends with stuff in several different neighborhoods around Cabo and Porto Vallarta. And maybe even a few into loom and some of those spots. And they all get the pitch that the rentals are not easy.

It's a process and it's basically a VRBO situation.

And it's kind of a pain in the butt. But you can make your expenses back if you lean into it a little bit. And you'll probably be okay. I think I would do it if I were you. Oh, my God.

I told my whole family you're going to eat my lunch. Oh, my God. I can't believe this. Holy, Toledo. Okay.

Oh, my God. Okay. See, see, see, see. Okay. You're like, oh, my God.

But, well, okay. There is one little thing I will say. Just learn to say Margarita and Fiesta. Okay. I'm like, oh, okay.

“Well, I don't really want to say anymore, actually.”

Because I don't want to argue with you. I don't want to take a chance to change your mind. I'm getting off the line. I'm going to get off the line. I like it.

Good bye. Yeah. How do you stay? How do you know some me go hostile away. I'm head to Mexico.

Oh, my God. That's so funny. But yeah, the emotional exercise of, if you had the money there and then it's gone tomorrow, are you still okay?

And that's such a key point.

It's not just an emotional exercise. It's also an actual because if, you know, what people don't think about when you're buying something in a foreign country is, it's not in the United States. People, the laws aren't the same. And people don't view the laws the same.

They don't view private property rights as this name. And. Oh, you're, okay. I'm not suggesting that the Mexican government is going to jerk the rug out from under all of these tens of billions of dollars of American money. No.

But it was the exercise of put the money in the middle of the table and burn it. Can you, are you still okay? Yeah. If it goes down in value, it could go. That, that community could become a cartel crime written.

Right. And the condo be not inhabitable. Right. That could happen. That's more likely to happen than the Mexican government scarfing this under the name of socialism.

But I just got back from Argentina. And two generations ago, the state came in and took private property away from everybody. Left and right. Yeah. And in the name of, you know, the little people needed the money.

And so they took it away from the big people. Hello socialism. Mm-hm.

And so we forget in America that because we've never experienced that that's pretty much common place.

And a banana republic. And so I honestly believe it's very stable. I really don't think it's a bad investment. I think you'll make some money.

“But you need to stop and think that this is a different culture.”

It is not Anglo. It's Latino. Mm-hm. And there is a difference in the way people think. And there's a difference in the way the laws are written.

The way the government functions everything. And so the police force everything's different. So you just need to be aware of that and embrace those differences and enjoy the differences. But don't go in there naively. Like I bought a condo in Mexico and it's the same thing as buying one on 30A in Florida.

It ain't. Yeah. It's different. And so is the rentals. [ Music ]

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That's RamseySolutions.com. [ Music ] Our scripture today, Psalm 113, from the rising of the sun to the place where it sets the name of the Lord is to be praised. William Arthur Ward said opportunities are like sunrises. If you wait too long, you miss them.

April is with us in Lynchburg. Hi April, how are you? I'm going to tell you better than I deserve. What's up? Well, I'm curious about how to prepare signing into the child that's on the way.

So basically, I was working and then in November we had a miscarriage.

And so I decided to take some time to heal. And so I wasn't working when we were expecting this child that's doing too long now. And so we're just relying on one income right now. And we have our monthly mortgage of $1,787. And the monthly income is about $3,400,000 depending on if my husband is able to work extra hours.

So we're just trying to be in a better position. We have use on the tools that you have. Like, are you dollar up to get out of debt? You just have 7,000 dollars. And to get right now for an HVAC system to decide your mortgage.

Congratulations on the baby April. And you're doing two months? Yeah. Okay. And how old are you guys?

I'm 31. You're going to be 36. Okay. What does he do for a living? He works very precisely.

So it's like a printing company. So he makes about 24 hours.

“And what were you doing before you took time off for the child?”

I was a career navigator. So I would help people figure out what type of position would be good for it and help them get into training. Okay. What were you making doing that? It was similar.

I think he was about 21 or 22 hours. Okay. All right. Are you planning to go back to work after the child comes? I'm not immediately after.

Just because we don't have child care. Well, you don't have enough money coming into the house to pay this house payment. Yeah. Your house payment is on his income alone. It's not something you're going to be able to do.

You can pull it off for a few months. But it's not going to work over the next three years. You're going to get yourself in a pickle. And so either your all's income is yours hours is going to go up within the next 10, 12 months or so. Or you guys need to start talking about selling this house.

Okay. So that's the other part. Basically, my mom gave us six other dollars to buy down the interest rate. When you bought the house two years ago.

And then, always with all her happenings, she continued somewhere in London for us to be able to finish the basement.

And that who is going to use to help us with extra income. But it will be finished in March and it's still not done. Yeah, I would be pausing any type of renovation. And I just would make sure the mortgage is paid in their food on the table.

“I think that's your priority versus finishing the basement.”

Yeah. Okay. You can't afford a $1,800 a month with $3,000 coming in. That doesn't work. It can work for a little while, but it will not work long time.

Unless his income's going to go up dramatically in the next few months.

And I don't think it is. You're a house payment ought to be a fourth of your take on pay not more than half. And this is way more than half. Yeah. Okay.

I feel like once the way he's going, or he gets a different type of position or additional income. Yeah. And you know, he's going to have a lot of extra hours somewhere. Or you'll sell the house. I mean, it might be more important for you all to be for you to be at home with a baby than to live in that house.

I don't care which one you do. I just am not going to participate in you being in denial about this math. I want you to face it head on. Yeah. I mean, around six grand would get child to that good place from an income perspective with that type of mortgage.

So if that's through you doing some work right after maternity leave and all of that. Or his income going up. But yeah, it's going to be. Yeah.

I mean, he brings in three thousand April, right?

And it's a $1,700 mortgage payment. Yeah.

“Babies, babies are the best thing ever to happen.”

But they don't get a pass on math. Okay. You still have to do math even with awesomeness of babies. Yeah. That's probably not going to kill you.

But it's going to put a pinch on everything. Yeah, you'll feel it for sure. Yeah. But I'm, I'm congratulations. I'm still happy for you.

I still think this is awesome. I just want you guys to address this. So that the, the house doesn't turn this financial situation into a nightmare. Yeah, and your housing situation April. I mean, even if you guys sold and rented somewhere for three years,

that's okay. And then you go buy something later. Like it doesn't have to be a home ownership conversation either, right? So you guys want to look at the totality of your life and say, hey, whatever our priorities, what income will be coming in that meets those priorities and then how do we live a life out of that?

That's kind of the backwards way of thinking about it. And it's sweet that his mother gave you some money. But she gave you money given this change of the baby coming to put you into a trap.

“She didn't mean to trap you, but you're trapped in the house, you mean?”

Yeah, I mean, if you don't, if you can't sell it because mommy helped by the house, mommy gave us the money for the down payment. So mommy. Oh, no, toward the interest. She said 6,000, not toward the end.

So we can't get rid of it because mommy is, you know, we're locked in here. Oh, well. Oh, well. Then mommy, mommy isn't a blessing then.

If mommy's trapping you in the nightmare. No. So sorry, mommy. Marcus is in Clarksville. Hey, Marcus, what's up?

Hey, Dave, thanks, Jake McAll. Long time listener for some color. Great. I just want to hear from you. How you doing, Dave?

Better than I deserve. What's up? Yeah, I love it. I love it. So I'm actually getting military.

I am retiring medically after 12 years.

“Four months and 14 days of active duty service.”

We are moving from Clarksville for Camel to Florida to be in a system pastor. Our monthly take on pays when we go from $12,000 to just over $7,000. We are wanting to buy a house. The mobile wife and I are at an impasse. She wants a big house with a large mortgage in a low interest rate.

I want a small house with a low mortgage with an average interest rate. What should we do? Well, you don't have a choice on the interest rate. Both are going to have an interest rate. That's, I mean, big houses don't have lower interest rates than small houses.

Or you think in like a 15 versus a third of it?

Well, no, I mean, the lower interest rate would come from a brand new build. That the builder would pay the incentive at a 3.99% rate. Whereas the natural average of being a mid 6%. So 3 and basically 4% per 6%. That's 6%.

And bond down the playing 4% on the dollars package for the entire mortgage. Yes, sir. Yes, sir. On an hour. On an hour.

He had 350,000. Is that an arm versus what's that? Is that an adjusted arm? No, it is not an arm. It is not.

No, sir. That is for the length of the loan. Hmm. One doesn't get desperate. I want a dollar house.

That's some. There's a serious margin in this house. Yeah, this house right now. The large house would be average rate. Yeah, he's right.

The builders writing a large check. So this thing's got a lot of margin in it. I got a profit in it.

350,000.

“And then you're talking about buying something.”

Now do you own a home there in Clarksville?

We do, yes, sir. Yeah. And so we have.

I would recommend doing neither one.

“I'd recommend moving there and renting for a year.”

And continuing the discussion.

Until you get on the same page.

The page you're trying to get on is not the size of the house. The page you're trying to get on is how much debt we're going to be in. How long is going to take us to pay it off? That puts us out of the Ramsey Show. In the books, we'll be back with you before you know it.

“And the meantime, remember, there's ultimately only one way to financial peace.”

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