Intentional Choices Create Peace in the Chaos

May is mental health awareness month and you know that stress you keep pushing down, it's

showing up everywhere in your relationships and in your health.

“If you need to talk to a licensed therapist, make today the day.”

Go to betterhelp.com/raims you to get 10% off. Brought to you by the every dollar app start budgeting for free today. Normals broken common sense is weird so we're here to help you transform your life from the Ramsey Network in the Fair Once Credit Union Studio. This is the Ramsey Show on Jake Worsha next to me George Campbell and we're taking your calls

for the next three hours to 8-8-25-5-25 gets you on the line where Melissa from Dallas, Texas is now awaiting. Melissa how can we help today? I thank so much for having me on today.

So my question that I'm trying to figure out is if I should sell my house while I'm currently

in a bank rupture that was caused by my husband making investments in a failed Bitcoin mining business. Six. Yes. That's going on over.

Okay, so you're thinking about selling the house your in-bank rupture.

“How much money did he lose in the Bitcoin mining scam?”

Well, there's $250,000 in personally guaranteed business loans and then $100,000 in credit card debt and about $274 on a heloc. This can't all be due to his Bitcoin investment. As somewhat I've seen, it's all related to the mining equipment and the hosting fees. So he went 624 grand into debt for a Bitcoin mining business?

For the most part, yeah, I mean, what I didn't know as all of this was happening is that he was also at certain points covering, you know, just how additional expenses out of whatever he was racking up on the credit cards? Got it. And you didn't know about any of this?

No. Well, I knew that he was taking out loans but I really didn't have a lot of visibility to how much we had a master in what poor of shape we were in. Okay.

“Well, before we get to the finances, how's your marriage doing?”

Um, it's really difficult, um, you know, I feel like I came into the marriage like a huge day grantee fan. I didn't have any debt and I thought we were really aligned and, you know, honestly, I had three babies in a five-year period and I really just kind of took my eyes off of what the finances were and I just completely trusted him to deal with it and I feel like that

was my mistake. Are you guys going through counseling right now? We've gone to counseling twice and, you know, he wasn't super engaged the last time that we went. The counselor started saying, some kind of hard things and, you know, he felt like he was

being really blamed for all the problems and he later admitted to me that he intentionally sabotaged it and, yeah, like we've had conversations about going back to counseling but I've kind of put that in his court and he hasn't taken any action on that. Um, sounds like he's not ready to accept responsibility for how he is destroyed this family.

Yeah, you know, he admit that he made mistakes but he doesn't seem to view it with the same level of gravity that I do.

Yeah, there's mistakes and then there's three quarters of a million dollars in debt behind

your wife's back to try to get rich quick. Mm-hmm. So, okay. Okay, let's neither here nor there. Let's talk numbers.

So you're talking about selling this house, I mean, did you file chapter 7 or chapter 13? So we're currently under a chapter 13, our plan was dismissed or I'm sorry, it's what it's, it's potentially going to be dismissed. So, so the house, yeah, we tried to move to a chapter seven because my husband lost his job in February but now we're in this weird situation where we have about $30,000 in cash

and our attorney told us, don't convert to a chapter seven until you spend down that money. When, oh, because they'll take that money. Yeah. So, if you want, if you're thinking of selling the home, let's talk about the equity

and what you think you're going to do with that money because obviously to your point, the court has to approve you selling the house if you're still in chapter 13. But what, what's your plan? So you've got the $274,000 he luck, what else do you owe on the house and what's it worth? We owe an additional $455 on the house and we could sell the house for around $950k.

Okay, so and then what would you, I mean, would you just turn around and take that money

“and pay off all the remaining debt or what's your plan here?”

So, our thought is if we end up getting the chapter seven, we would take that money and we would really, I mean, we probably have to move to a renting situation and then just use that money to live for a period of time because my husband's not working right now. Okay. Okay.

My question. Why in the beginning, would you have not just done that? Why not just sell the house, take whatever, you know, $200,000 of equity and just clear out as much of this debt as possible and then pay off the $150, why not just do that? Well, the houses in this neighborhood have appreciated so much that we wouldn't be able

to move back here now and we really just wanted to try and provide some stability for the kids and keep them in the same school district. Right. But yeah.

With the bankruptcy, you just lose so much control and you also, there's a redemption

that you kind of want to feel which is getting yourself an MS and then getting yourself out of it. I mean, I guess it's neither here nor there. You're locked in at this point. Or is it, if I'm locked in, well, if the case is dismissed, then we will have, we won't

be able to refile for another 120 days. So, if you don't have to be locked into this bankruptcy, I don't know that I would be because you've got equity to really handle more than half of the debt here.

“And then you're on the hook for 150, what's you guys's income?”

I'm making about 125k when he was working. He was in the 150 to 200 range. Yeah. Plus, you've got the 30,000 cash. I mean, George, what do you think?

Because I'm looking at him. Well, he's the man. Let's say you sold for $950 and you cleared the he lock in your mortgage, right? That leaves you with about $200,000, maybe. Now we have 200 grand to play with.

We can pay off the 100 grand in credit card debt and now we're down to the business debt and we still have 100 grand. So at the end of all of this, you could have 150 grand in business debt as you're only thing to deal with while you rent for a while to clean the mess up. Well, you could also actually be more like 130 because you've got 30,000 cash.

You use some of the savings to knock out some of the business debt. And now you've got 130k to clean up, hopefully making, is he going to be working soon? What's the progress on that? Well, because we're trying to move to the chapter seven, he hasn't really been applying for jobs.

Goodness gracious. And see, that's where I'm concerned because life doesn't stop. Like this is not the get out of jail free card that says, okay, we're done. This is all, you know, cleared up. We don't have to work anymore.

We get to stay in the same neighborhood, nothing changes. This needs to change you. This should change everything. This business of we're just going to file bankruptcy and he's not going to go to work in this, so let us live in the same neighborhood and act like everything's hunky dory.

That's just not reality. I'm not going to do this for the school district. At this point, these kids will be lucky to have two parents who are healthy and present. That should be the focus right now. School we can deal with later.

You guys make great money and you will be for the future. I'm not concerned about you getting into another home that you love right now. We got to clean up a mess. Yes. Do you want to know what I'm going to say this and it might be controversial.

But it's okay for kids to feel the weight of mistakes that happen in life. It's okay because they're part of the family unit and they'll see the family unit go through some rocky times and then they'll see the family unit get their foot and get solid footing again. And that's good.

“That builds resilience that helps them see what life is actually like.”

And so trying to shield them from every bump in the road. You don't need to do that. And you don't have to feel the weight of that because that's not life. George Campbell here. Let me give you three signs.

It's time to stop hoping your debt problem goes away and actually take action to fix it. If you've defaulted on a debt, if collectors are calling nonstop or if you're facing a lawsuit or think ones coming, you don't just have a debt problem anymore, you've got a legal problem. And that's why I tell people about guardian litigation group.

Because here's the thing.

If you're behind on your bills, doing more of the same is not going to fix it. You need a different plan. And guardian litigation isn't just another debt relief company making promises they can't keep. They're an actual law firm.

And from day one, you get an attorney who represents you. So when collectors start pushing, you're not guessing. You've got someone in your corner who knows how to respond when your debt problems escalate into legal problems. So don't wait for it to get worse.

Go to GuardianLit.com/Ramsy right away. That's GuardianLIT.com/Ramsy.

So the phone lines where we have Steven and Chad a new get Tennessee, what's going on

Steven, how can we help today? Steven, my name is Steven and me and my wife are 40 weeks pregnant and our HOA has come up with an assessment and it's about $14,000 and they've given it to us for figuring a 30 days to come up with the money and didn't know how we could come up with that or what we should do in this situation.

Oh my gosh, what's the assessment for? The assessment is for exterior work on our building and it's also for a new roof on our condo building. And was this new information? They came out with it back in January, roughly we're looking to do this and then we found

out a couple months ago that one of the AC units on the roof was not working and so they paused the initial assessment. So we didn't know when it would continue until about a week ago. So we kind of had to stop and pay the assessment for the new AC unit and then now we have to pay the assessment for the exterior work and the new roof.

Have you talked to the HOA yet?

Not yet.

“Okay, I would, I think many HOAs would be willing to extend this out a little bit, see”

if they'll extend it to 6 to 12 months. If you ask in writing, get everything in writing, not just, well, I talked to somebody on the phone and let them know your situation and see if they're willing to play ball. I'm not saying that's your way out of this thing, but if we can buy some time, that will be great because this baby's about to pop.

Yeah, have you been in any of the home owners association meetings? Is anybody else kind of out of sorts about this? Maybe there's something that you guys can rally together and just say, "Hey, we all need time." Yeah, some people are trying to sell and get out of the building.

Some people were okay with it because they know it's going to raise their property value. So. Well, either way, they're not getting out of the assessment. If they sell, they'll have to pay that out of the proceeds. So it's not a good solution.

How much money do you guys have right now, liquid? We have about a full grain in the bank. And my wife is also 40 weeks pregnant, so. Yeah, right. You need that money.

We need to hang on to that because we don't know what could happen. So once Mom and Baby are home safe, now we have a much more clear plan about what we can do with this money.

“But I think first things first, you need to talk to the HOA, write them an email or”

a letter, getting some clarity on this and asking for an extension. Yeah. It looks to be a very reasonable thing and a very normal thing to ask for. Okay.

But the truth is, the HOA just wasn't properly funded, money was poorly managed.

They knew this was coming. And they chose to just make it a special assessment versus, you know, increasing dues way back when in order to save up for this. But this is, it's just part of HOA life. It's part of home ownership.

And we say all the time that owning a home is not cheap. Like there are costs that go along with it, but I 100% would do a George said I would send the letter. And I would make it clear. I'd give a reasonable reason and say, hey, my wife is 40 weeks pregnant.

We have medical bills coming due. We want to stay on top of those. We intend to pay this. It's not you trying to get out of paying it or, you know, trying to fight it as much as it is just saying, hey, just think a little bit more time.

That's reasonable. Most people don't have $14,000 just sitting around unless you've been walking the baby's stuff. Yeah. That's why.

We're going to be able to afford that. Exactly.

“And I think they're probably some power in everybody kind of getting together and saying”

as one band one sound, remember that? Oh, yeah. From Drumline? Good reference. Yeah.

I don't think about Drumline often. I never do. It just came up now. Alright, Caroline isn't Columbia's South Carolina. Hey, Caroline.

How can we help? Hi. I mean, you might be out there getting married later this year. And I am just wondering how aggressive do I need to be with investing? We've gotten out of all of our debt.

I went to school on scholarship so I have no student loads and he has no ice. Any type of debt? And I'm just curious since we're both 21. And just curious what it looks like moving forward and being as wise as we possibly can. I love that.

So just general advice for nearly what? Yeah, but more like investing and trying to get wealthy, not necessarily quick, but just preparing for... You want to be intentional.

Well, time is on your side. At 21. So here's the math on this because I think this will really encourage you. At 20 years old, the power of a dollar, it turns into 73x that at 65 years old. So 20 to 65, every dollar you invest is really worth $73.

So when you're 55 and you invest that dollar, it's only worth about $4 at 65. So you see there's a big hockey stick going the opposite direction over time, where you don't have time for compound growth to do its thing. Where your money makes more money, and that new pile of money makes a little more money when you're invested wisely into a mutual fund, a giant grouping of stocks.

And we're all rooting for the revenue to go up, the share price to go up, which increases your wealth. So I would definitely be, that would be a goal of mine, I would make it the singular goal, because you guys probably also want to become homeowners or go on a honeymoon or take vacations and upgrade the car.

Do you have any money saved? I have about $5,000 saved cash, and I also have like $6,500 invested in a Roth IRA account. Okay. He does not have much savings at all, but yeah.

“You know, the best thing to set yourself up for investing is to make sure that you can”

set that money and forget it and never have to pull it out again, and just let it continue

to grow and grow and compound like George said. And the way to do that is to make sure that you've got adequate liquids savings. And so I would suggest bumping up your $5,000 to six months of expenses, three to six months of expenses, how much do you think that would be in your case? I'm not totally sure we haven't quite had a place to live yet, but once I do, I do plan

on getting that done right before we get married and move in. So that would be, when do you get married by the way? October 1st this year. Okay. So that'd be the thing one is figuring out, okay, what's it going to cost for us to live

once we're married? And then thing two I would say is from there we can decide, okay, we're going to invest. If there's no debt between the two of you, you've got the three six months of expenses. Now you can say, okay, baby step four is what we teach 15% of your gross income combined income going towards retirement.

And usually that's through an employee sponsored account like 401k, a Roth IRA if you don't have access to a 401k. Do both of you have that access? I do, she does not. Okay.

What kind of work does he do? He's in construction full-time, he's with a smaller company, so they don't offer any type of insurance or retirement benefits. Okay. I will be starting my job in the hospital in June, and today do offer all of those things.

Okay. Great. Then he can put earned income into a Roth IRA, what do you know how much you guys will be earning together? Uh, together we'll make around nine and five.

Excellent. Excellent. Excellent.

“Yeah, 15% of that every single month pack that away, and honestly you're off to an incredible”

start, George, are you looking at numbers on that? Yeah. So that, you know, 15% of your 95,000, that's 14,250 bucks going towards these tax advantage retirement accounts.

So we always teach match, beats Roth, beats traditional.

So what that means is if you have a match through the hospital, let's take that first. Because it's a hundred percent return on every dollar you put in. Then if you have a Roth option, like a Roth 401k or Roth IRA, let's fund that. And if we still haven't hit 15%, then we can go to the traditional option if you have a traditional 401k.

So it just gets filtered through that, and he can still open a Roth IRA and invest just like you have. If he has earned income, he doesn't need to have a retirement account through his employer. And you guys will be off to the races at 21. If you guys just stay out of debt, keep the emergency fund.

J just crunch the numbers for you using our investment calculator, tell her what she's one year.

“At age 21, this is just if you did this till retirement age 59.5 or 60.”

You said you currently have 6,400 in there, 6,500.

This is you contributing 15 percent every single month at an annualized rate of return

between 10 to 11 percent. That's $9.5 million, Caroline. And so that just shows the power of starting young to George's point, starting young when you're ready, right? You've got everything, you know, square it away, you've paid off your debt like you guys

have done. Get up your three to six months like you guys have done. This is amazing. You're the poster child for this is what life can be like when you don't graduate with a giant pile of debt and a car payment and credit card debt because you were told you have

to build credit, which is the stupidest advice you could give to an 18 year old. So keep doing what you're doing, stay out of debt, don't rob your retirement, get on the same page, align on your money values and your goals, and you guys are going to be baby steps millionaires and homeowners in no time. Hey, you guys, did you know that there are thousands of data brokers whose entire business

number, and even your relative's names? You guys, that is just crazy. But that is why I use Delete Me because those companies pull information from public records, social media, and all kinds of other places. Then suddenly, all that information shows up on random websites and removing it yourself

means going site by site, filling out forms and hoping they actually take it down. It takes hours and then it can even pop up somewhere else again. But Delete Me's team of privacy experts removes your personal information from hundreds of those data broker sites. And within a week, you'll get a report showing what they have found and what they have

removed. And they keep scanning and cleaning up your data year round. So take back control of your privacy. Go to joindeleteme.com/ramsy and get 20% off your annual plan. That's joindeleteme.com/ramsy.

“All right, big announcement, George, it's May, and you know what that means?”

The Ramsey Cash giveaway is here. That's right. That's right. I thought you were going to hit me with it's going to be May and that would make me.

Well, at first I was like, big announcement, it's May and I was like, oh, there's an M-dash.

It's a pause. A pregnant pause, if you were pregnant pause. Well, he's right, it is Ramsey Cash giveaway and because of that, you can enter every single day from May 1st to May 31st for one grand prize of $10,000. Plus there's going to be one weekly, weekly, weekly, one weekly winner of a $500 prize.

And you can enter daily to increase your chances of winning. Plus, be sure to check out our sale going on right now. You can kick off summer with books and assessments for just $12. Go to RamseySolutions.com/giveaway. Now to enter, no purchase necessary to win.

I love that for you guys. All right. Derek is in San Antonio, Texas. How can we help Derek?

“Yes, man, first of all, thank you for your answer, my call.”

The first question I have is, if something has been bothering me, a lot of calls, a lot of stress in my life, point where I've been sick for the last few months and I just want to make sure you're making a right decision. My wife and I, both retired, former military, both retired receiver pension. There's some disability benefits in there and I got to look.

You got to make a good play if I got a long job in the civilian world, and our current income right now is currently 275,000 a year. Wow. It's our home income. The situation is, it's about buying a new house.

So we currently live in a home that we move into when we PCS here, we never thought it was

going to be a forever home. We thought it was a nice home that we moved into and then we decided to get out of Air Force. And it's not a moving amount of managing or anything, but it's a nice, big room home too storing. And it's definitely better than anything I ever grew up with in my lifetime.

Okay. My wife wants to move to a one-story, but it is almost $800,000, which currently has a

“mortgage, about 4,500 a month, which is currently 25% of our current income, which I think”

is okay. Yeah. Yes. But I plan on retiring officially, because I mean between deployments, I mean, you do name it at overseas, PTSD and everything else, I really wanted to retire and so I focused

on my family, my grandkids, in the next 15 years. 15 years off. And that's going to cut our income in half, so about 150, which turns that now mortgage, which is a 30 year mortgage, and I know it shouldn't be a 30 year mortgage, but I know it's going to turn that mortgage into 40, basically 50% of our pay.

Yes. And I know we're not going to be able to afford that. And that's only based on the current world that we live in. This job keeps me and everything stays functioned, because there's cuts that I see every day, especially in the world of tech and AI.

So just people get cut daily. I'm afraid that if we make this purchase that she really wants to make, then we can afford right now that if anything happens, it's going to ruin us. It's going to ruin us.

She never, ever experienced a financial buying, you know, grew up with a lot of great things.

I grew up poor, so I know what it's like, and I can deal with it, but I know she's, it's going to just, it's going to tear apart. Dude, you, you said to do this, I, I 100% sympathize with what you're saying. There's something to be said for, you've worked really hard, you, you have a really great income, and it feels like, yeah, I want to live at the income that I'm earning money,

but then those fierce creep in and it's like, what if everything goes south, and then if that's the case, I'm, we're really in a bind. And so I kind of want to normalize that, because that's true for everybody.

fund. Yeah.

But it's not like we could just never work again and be fine.

Right. So that points to the, what George just said points to the other side of this, which is your bigger fear is that if you were to lose a job, or you weren't, that you would never be able to get one to replace it. And that's the part that I kind of would want to camp out on mentally if I were you, because

we all, that's all of our lives, is we could lose our job. And even with an emergency fund, it's three to six months, you know, six months of expenses. So you have six months to find a new gig. So you're saying that that would be impossible for you. Yeah.

So what I'm saying is it, so is that it wouldn't be impossible. I could find it with a job. But so the, some issues that the house that we live in right now, we only owe 130 gig. So with our total savings and investments and areas that we have right now, we have over 300 saved up right now.

Okay. So, so with 300 gig saved up right now, that's the time. That's the time. That's the time. That's the time.

“But that's what we have set aside for retirement.”

But, you know, 324 is the exact number. Okay. The house that we live in now, the plan that we were looking at, and I'm sure a lot of people will tell you this is that my current mortgage is only $1100 a month. Love that for you.

And then with the current market, I could easily rent it out for twice that and allow that rent or to pay for itself. Well, I just focus on the new house. I don't think it's, which I don't know is a good idea. I probably wouldn't do that.

I think what it sounds like to me is this is just a meeting in the middle because the truth is, yeah, I don't want you to get a $800,000 house on a 30 year mortgage. I want you to get a house that you can afford on a 15 year mortgage that lands you at 25% of your income. So I do think 800,000 sounds like too much house for you guys right now.

Maybe you could get closer to 600,000, right? So I think that there's a place where you can meet that your wife is going to feel good about the upgrade and that you're going to feel good about, okay, this is not so huge of a piece of my world that I feel anxiety about it. Maybe you get something that's instead of 25% maybe it's 15% or, you know, 20% and it makes

you just feel a little better at night because here's the thing, you said this is a 15 year

play. If you have a 15 year mortgage, do you want to know what your debt free in 15 years? And most of the people who follow the Ramsey plan are a debt free a lot faster. It's more like a 7 to 10 year deal. So your game plan is to retire in 15 years, if everything goes to plan.

Okay. Yes, sir. Then I think that's, that's the play is you get to retire once this mortgage is paid off. That kind of gives you a great carrot to dangle doesn't it? Yes.

So if it's 10 years from now, boom, you've got to retire five years earlier and so I love the idea of setting a goal where she's not having to settle and you're not having to stretch instead you both are aligned going, all right, great, we might need to wait a year to build the more equity knockout this mortgage, which you guys could knock out 130 grand mortgage pretty quick, making 275 with no debt, right?

Right. Have you been putting extra toward it?

“Yes, so I doubled down on it and that's what I was wondering, you know, so I just pay off”

this house and I'm in now. Yeah, triple down. Yeah, triple down.

You have all the equity, so when you go to sell, and here's what I did, you roll over

that 100% equity right into the new house. And do you have any other cash laying around, not retirement, but just liquid? Yes. We have about 100K just sitting between our savings account, right, and I'm sure it's a big cushion.

That's a big cushion. I'm sure probably 50 or 60 would be fine for you to feel good about having six months of expenses. So there's another 40 there that you could put with that and add that to that down. Yeah, the more you can put down the lower that mortgage is going to be and if it's on

a 15 year and it's a comfortable payment, you're going to be able to throw extra at it. And knock it out, what we've seen is average about seven years. If you follow our plan to get rid of that mortgage. Mm-hmm. Does that give you a little bit more peace?

It does. You're going to talk to her about it now. Well, once you get starry out about a home, it's parties over, man. I mean, once you're in a zero doom scrolling, you're like, this is the house, babe. This is the one.

It checks off all of our boxes. That's a realtor's dream. They're like, oh, we got him. Yeah, they're emotional. They're emotional.

They're like, that's the car I want. You don't want to do that. Go in with walkaway power. Go on. We don't need this house.

It's a good house. You kind of want to be nonchalant about it. You do. I mean, Derek, when you call, then you said you've made yourself sick about this.

“Do you think tonight you'll be able to have a good night's sleep?”

I think so. I think I have to get through a full, a full of bed. Good. Good. You deserve that.

I really appreciate that. And thank you for your sacrifice and service to both of you. Yeah, absolutely. You know, what Derek is talking about, I totally understand. And some of the best advice I got was just to like, no matter how well you do no matter

how well you earn, just like, if you can keep your expenses low, it just does give you a peace of mind. That's more flexible.

And if something did happen, it is, it does help you sleep that night.

“Like, I could totally understand what Derek was saying, but then there's a side of it that”

you don't want it to creep into like irrational fear and just kind of like, just kind of scare citymines. Yes. Class half empty. It's all going to come crashing down.

You're dead free with a hundred K in savings, just like, 275, even you go down to 150, that's still double the average household income. Right. If you can't make that work, we got bigger fish to fry. You got bigger fish to fry.

And you know what? The worst that, it's like, play out the worst that could happen. The worst that could happen is you sell your house and you don't go to school. And check out how we might sell the house. Yes.

I can live with that. Yes. I can live with that too. This show is sponsored by Petter Help. May is mental health awareness month and according to the National Institute of Mental

Health, more than one in five US adults experience mental illness every year.

Nearly half of those folks never get any kind of help.

And these aren't just statistics. These are real people who are hurting and struggling. They may be you. And we're living in this non-stop noise. The screen comparison constant notifications is our whole world and our bodies are always

on high alert. We're communicating more than ever and people are communicating with us. But we're super disconnected, we're more anxious, we're more lonely, we're overwhelmed, and we just don't know where to go. And that stress shows up in our relationships and our sleep and our health in the middle

of our chest. We were never meant to carry all of the stuff in our life alone and talking to someone can help. And that's where Better Help comes in. Better Help is an online therapy platform that matches you with a licensed therapist

based on your goals and preferences. Their therapist are fully licensed in the United States and they follow a strict code of conduct. Test your therapist and schedule sessions right in the platform. And if it's not the right fit, you can switch anytime at no additional cost.

Cut through all the noise. Don't do this alone. Go to betterhelp.com/Ramsie to get 10% off your first month. That's Better Help, HELP.com/Ramsie. All right, George, let's go back to the phonemines.

We have Jonah, who's in Cleveland, Ohio. What's up, Jonah? How can we home today? Hi. My Morgan Stanley advisor wants me to get a low-limit credit card.

I was wondering how I should respond to that. What's their reasoning? I mean, just for a reason of building credit to get a car in a home and just the standard reasons. Do you agree with him?

I'm on the fence.

I've never had a credit card.

And I've been doing fine so far, so I'm just wondering what you guys think. Well, you tell me this. The Morgan Stanley advisor exists to help you build wealth, correct? Yes. Now, tell me this.

Them telling you to get credit to get a car alone. Which goes down in value while you pay interest on it. How does that help you build wealth? I'm not sure. I mean, always buying something that's not going to make you more well.

Well, let's play this out then.

“Would you not question the advice of said financial advisor and whether or not you should continue”

working with them if you guys have different values and operate by different set of principles? Right. Right. I mean, this is where I'm confused and looking for guidance.

Well, the truth is 99% of financial advisors out there are going to be telling you the same thing.

You got to get credit if you want to survive in this world. You got to build everyone has a car payment. It's fine. Just make it a reasonable one. All of that.

Get at home as soon as you can no matter what because it's awesome to build equity. This is the kind of stuff that we hear all the time. And the truth is not all financial advisors are created equal. So you want to find one that aligns with your values and principles. Which it sounds like are, I'm dead free.

I want to stay dead free. I want to build wealth with peace and simplicity and not by playing some game. Would you, is that I'm projecting, but you tell me what your principles and values are? That's exactly right. I'm just concerned about if I get to the time when I need credit.

Okay.

“So let's talk about that because that's what you're asking Jonah is something that probably lots of people are wondering about even while they're listening right now.”

Which is don't I need credit, Georgian Jade, to operate in this world. And the honest of God truth is you do not. So George, let's tackle the three. I'm going to go with three main areas where people think that they need credit. First one is, well, what if I want an apartment?

And answer is, some places, yes, but many places know. It's not necessary at all.

“What they're checking for is delinquency, a bad credit score, no credit score.”

And I've done this multiple times. No credit score renting apartments. They just go, okay. Well, it might be a slightly higher deposit. That's right.

Same here. Okay. The next one is, what about a car? How am I ever supposed to buy a car in this world? George and Jade, if I don't have a credit score.

And over here, I'm going to tell you and we're going to break down how to do it in a minute. But we buy cars in cash here. And I know that that probably made Jonah. You might have clutched your pearls or somebody listening clutch theirs. But you can't do that.

Today's world cars are $50,000. Well, don't buy a $50,000 car. You didn't guess? No, what you do. There's two paths to doing this.

One is, let's say I have a car note now. I just aggressively pay off the car note that I have now. And when the time comes in the meantime after I've paid off the car, I'm putting aside a little bit of money extra and extra. And when I'm ready to trade the car in, I take whatever value is from the trade in or maybe I sell it. You know, private sale.

I add my saved money to it. And I'm able to upgrade. Now this is a slight stair step up. Maybe I had a $10,000 car and I go up to a $14,000 car.

“Or I had a $10,000 I go up to a $16,000 car, right?”

We're not buying an $80,000. You know, escalade right out of the gate. Do you see what I'm saying? This is a very slow and magical way. Yes.

And in the value is, you get to drive a new to you vehicle that's paid for. And you have your cash to invest, you know, in build wealth. Now the third thing, George, and this is the big one. How the heck am I supposed to buy a house in this world, George? That's quite a score.

This one's hilarious to me because everybody who has opinions about it has never done it without a score.

That's right. So let me be the guy who's done it. George and I have done it. And it's called manual underwriting or a no score loan. And a lender will look at your actual financial picture, your tax returns, 12 months of rental history of on time payments,

other alternative trade lines, like your utility bills, your cell phone bills, to then grant you the loan. That's it. That's it. And so in Churchill mortgage has been a partner of ours for decades now. And they specialize in these types of loans.

And so it's very possible live without a credit score. In fact, I've been living without a credit card for 13 years now. Same. And I can count on maybe half a finger how many times it was, it was more difficult to live my life. There was one time that I was renting a car.

And because I didn't have. It was like your return ticket. You need return ticket. Yeah. To the same city.

They think you're going to apparently never come back with that car.

If you don't have a return ticket. And that was the only time. And I mean, we got around it somehow. I don't remember what I did. But that literally was the only time.

I have not had a my credit score disappeared in 2015. And then it came back when we got a mortgage, but I've never utilized it. I've never needed it for anything since then, Jonah. And so that's. Are you convinced?

Are you going to number one, not get a credit card. Number two, switch financial advisors? So my only other question was, what if I could guarantee covering the cost on the loan every year? And you could figure that out.

We wouldn't have a show. So tell us how you're going to guarantee. And even then, here's the truth. You're going to spend more than you would have. Would you agree you're going to spend more of someone else's money that you get to pay back later?

Versus your money coming out of your account now? Well, I would just not spend it at all. If it ever became a problem. Well, then it's too late, isn't it? Once it's a problem.

We have $1.3 trillion in credit card debt as a nation. And zero dollars in debit card debt last time I checked.

And honestly, if your thought is like, I'm just going to get this credit card, but I'm never going to spend it.

It's not going to help your credit in the way that you think it is. A credit score measures all of your dealings with debt.

“So in order to have an optimal credit score, you have to borrow a lot of money.”

Frequently, it has to be revolving. So it's measuring things like, how long have you had the credit? How much of your available credit are you using? Oh, you know, what's your total amount of credit? What's your total amount of debt? It's looking at all of that as a full picture.

And so if you're thinking, oh, I'll just kind of like dip my toe and just kind of like what my beak in the water. It's not going to work. You're going to get pulled into it. Because every month it's going to say, here are some things that you can do to build your credit. And next thing you know, you're going to say, well, I'll just put my gas on there.

Or I'll just put my groceries on there. And even if you put it perfectly, all you've really done is make it through the maze. What you're going to have to keep doing, have your herd of cysophys. They guy who pushed the rock up the hill and Greek mythology. And he had to do it every single day.

We're going deep. That's life on even navigating the credit score game. So here's the deal, Joan. I'm going to send you a copy of my book, Breaking Free from Broke. Because I wrote the credit card chapter exactly for a guy in your shoes.

Who goes, I don't want to play this game, but I think it's the only path. And I walk through the eight different credit card archetypes. Yes. The perfect spender and the world traveler and the rewards redeemer.

He's an example in that chapter. I believe. I love that. I think it's a great.

“I like the reference because that's an exotic.”

I look at that guy pushing the rock up the hill with his 16 credit cards. Figure out which one to utilize based on rotating cash back, which is, by the way, is for like restaurants and entertainment, which is the number one area they never overspend on. You've got five percent, Jade, you told me that's free money, Jade.

I flew home for free, Jade. I don't pay for trouble. But she spent double on those Taylor Swift tickets because you knew you were putting it on a credit card. But I get an Uber credit, Jade. But you made a bigger tip at the restaurant.

You got a second drink at the restaurant.

There's a $700 annual fee for the pleasure of using that card. Wow. Oh, but it's thick metal. It's really cool. When people put it down, have you ever been out to dinner with friends that have credit cards?

And you can tell they have like a pride or like a look at this. When they put it down, I actually told fair ones credit union because they have the Ramsey Cobernate Card. I was like, well, you guys make a real thick metal card just to troll the credit cards out there. So I can be like, yo, check this out.

It's called money. You want to know what, what you're saying though is the deeper part of this, I think. I mean, we could go all day about problems with credit cards and what tendencies it causes and, you know, the points are off the backs of single mother. You know, like what you go on the, but at the end of the day,

“I think it's just an identity thing of who do you want to be?”

And when you start walking the baby steps and you draw that line in the sand, and you just go, you know what?

I'm just not a person who borrows money.

I am a person who really enjoys spending the hard earned money that I have. I feel confident in handling the money that I've earned. It is enough for me. I don't need to move a little bit over here and spend a little bit over here on this credit card and get the points over here.

It's just when you're in an order. When your rewards can't tempt me, I'm invincible. I have risen above the system. Yes. I'm outside of the matrix.

And I think that is just a better way to live. It's not that I'm better than you. It's just that my life is more peaceful. So you get to choose and hang on line. John, we're going to send you a copy of Breaking Free from Broke.

Specifically the credit cards chapter. Read that. Send me a message and let me know if you've changed your mind. [ Music ] Dave, we got a lot of calls on this show where life happens.

One day someone's healthy, they're working, providing for their family, and then a curve ball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

“Yeah, and that's why you've always said that having term life insurance”

from Zander is essential because it protects your family

if the worst happens. Yeah, that's right. You need 10 to 12 times your income. In coverage. No gimmicks.

No whole life junk. Just straightforward term life protection. But there's another piece that people often overlook, and that's long term disability insurance. Yeah, it's important to understand the difference between them.

Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income, so the bill still get paid while you get back on your feet. Now, if your employer gives your free disability insurance great,

take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while,

then you need to make sure the money still showing up. And that's why Zander is our go-to. Make it super simple to get the right coverage at the best price. No pressure, no upselling. I've crossed the Jeff Zander and Zander insurance for over 25 years,

and so is my family. To don't wait, it's fast. It's easy, and they could make all the difference. Go to zander.com or call 800 356-4282. Protect yourself, protect your income, protect your family.

Welcome back to the Ramsey Show here. And the Fair Wins Credit Union Studio. I'm Jade next to me is George Campbell. We've got Logan on the line from Orlando, Florida. Hey, Logan, how can we help you today?

Hey, so I was wondering, my grandmother has a property, and she's going to sell it, and she gave me an opportunity to get it for less than it's worth.

And I'm $50,000 in car debt. I live at home right now, so I don't have many bills. You've got a car payment. Yeah, other than that, yeah.

Okay. So that's the only debt just the $50,000 car payment. Is there anything else student loans, credit cards, personal loans, anything like that? Nothing.

How much money do you have saved? About $20,000.

And how much do you make?

Including side jobs and my actual job it's around 90. All right, you're making 90. All right. And what's this deal with grandma?

Why is she willing to give you a deal? What where she got? I guess just because she loves her grandson. I don't know. She likes the property.

It's 10 acres of grandpa died. So it's just too much for her to take care of. And she doesn't necessarily want to get rid of it, but it's just too much for her.

“So I think she'd give me a deal just to kind of not fully get rid of it.”

You think she would or she told you she would? No, she, yeah, she will. Tell me.

I'm just saying I think that's the reasoning.

Okay. Tell me what the market value is and what type of deal she's giving you. Tell me the real numbers. So I would get it for $350,000 and it's probably worth five to 600,000. Wow.

Okay. And do you like the house? Do you love it? Oh, I love it. You know, it's got a warm place in my heart.

Oh, okay. sentimental value. That's sweet. Right. But if this wasn't grandma's house, it was just on the market.

Would it be something you'd like to want to get for this price? For this price?

I would jump right on it.

So here's the thing. You're not there yet. You're not ready financially to buy it for a couple of different reasons. How urgent is this? Or is this a deal that can stick around for maybe the next 12 to 18 months? Well, I know she's ready to be done with the maintenance and everything.

So I don't think it's necessarily like she's ready to move tomorrow. But I think she's ready. She might be able to hold off for the next 12 months.

“Because you've got a couple of things that you some ducks you need to get in a row.”

Number one, we've got to either pay off this car and get it sold. Because we don't want to go into home ownership while we're still in debt. Because then it makes it very, very tight. And this thing is over half your income. So it needs to be gone.

What is this thing? What kind of vehicle? It's a Jeep Gladiator. And how old are you? I'm 22 as brand new.

I bought it brand new, yes. What's the worth today if you went and sold it? So I went to dealer yesterday to see what they would give me. They told me they'd give me 31 for it. Well, the dealer's the worst place to sell a car known to man.

So let's not go there. Because they're trying to make a profit. Just, so yeah, so I looked up just ones that people are selling around me. And they're going for around 34. So it's not too much.

Do you roll over negative equity? How are you so under water? I did. I did. I bought a truck during COVID.

Okay. Well, here's how to get out of this thing. Let's say you sold it for 34. That means that you are 16 grand underwater. Luckily, you got 20 grand sitting there in savings.

So that'll cover the amount you're under water, leaving with a few grand to get you a beater car for now. To get you from A to B. Right? Yeah.

Now, what's your payment? And insurance. Well, man, my payment is $150, but I'm paying $300 a week. Because I was just trying to get it down. So I've been paying $300 a week and it's $850.

And I pay my dad like, he doesn't really charge me for insurance. But every once in a while, I'll give him like $400, $500 just to... Okay. We can easily say it's $1,000 plus for this payment plus insurance and all that.

“So that's what you would free up to then start saving up an emergency fund followed by a down payment.”

Because if you really want this house and grandma's willing to wait, then I would act like this is urgent. And I'll get rid of the stupid car that's going down in value when you're telling me that you want to be a homeowner. And let me give you some real numbers. And this is not intended to bust your bubble. This is just intended to give you a dose of reality because what you're seeing right now is a deal.

And you're only seeing the deal, but you're not seeing the reality of what can I actually afford? Because you're right. For somebody to sell you something that was worth maybe $5 or $600 for $350, that is a deal. But there's no such thing if you can't afford it either way. Okay, so the real numbers on this and I'm just using our Ramsey Solutions mortgage calculator.

I put in, let's say she sells you the thing for $350,000. And let's say it's on a 15 year fixed rate mortgage because that's what we suggest around here. And right now I'm seeing that the weekly average 15 year fixed rate mortgage is about 5.64%. So I put that in here. You would need to put about 54% down in order to get this thing close to 25% of your take home pay, which is where we like your mortgage payment to sit.

We don't know more than 25% of your take homes.

You're talking like 180 grand down. 190. Yeah. And it's still tight for you. That puts you at around 1,800 a month.

And honestly, I'd like you to be closer to 1,500 a month. So that's me being your, your, your buddy here and telling you the truth that even with you going ball to the wall like George said and selling the car and doing all those things.

“What you need to do anyway, by the way, you still have a journey ahead of you, right?”

And we don't want you to be like, "Icarus flying too close to the sun on this thing." That's right. You know, and just because the offer is generous doesn't mean that this is a good deal that you can afford. That's right. Right.

So what should I be at for a car payment? Zero. If, okay. So if I get rid of my truck, I pay the negative equity off. And I buy a beater for, for how long.

And then just stick it out with the beater. Stick it out with the beater while then saving up paying yourself that car payment of 500 to 1000 bucks a month. Well, now you got 12 grand more after the end of 12 months to then upgrade in car. You sell the beater, take that profit, and apply it along with your 12. Now you've got a 16,000 dollar car.

“And the key is you don't want anything with wheels and motors to add up to more than half your income.”

You're sustainable income. So don't include the side jobs that you may drop. What is your actual full time income? Let's say it's 70 grand. Well, then we want no more than 35 grand tied up with things and wheels and motors.

Do you understand why Logan? Why we're saying this? Why we have these framers. Tell us, tell us in your words why you're doing all this. So we know you understand.

Well, I'm thinking just so I'm not paycheck to paycheck living and I'm out of debt before I go into a mortgage. That's a big part of it. But the other part of it is what George is telling you to do with this vehicle. That's a long term mindset.

The mindset is, I never, I never go into debt for cars again.

I'm always going to use this method of saving up and upgrading for cash. And the reason for doing that is over time. You're going to have so much money at your disposal to be able to actually build wealth. We've said it before, George, and I'll say it again. Really the divide between being middle class and being actually wealthy is the car payment.

That car payment, 700 bucks a month, 800 bucks. Many of you are over a thousand. If you took that money and put it back into your pocket, maybe not all of it because you're stacking money for the next car right. But even six or seven hundred dollars.

Additionally, to be investing regularly, that is the ticket. That is the unlocked to building wealth. When you've worked hard to buy a car, the right way. You paid cash with no payments hanging overhead. The last thing you want is to worry about it every time you drive it.

“That's why we trust Christian Brothers Automotive as the official auto repair partner of the Ramsey show.”

See, most people don't stress about their car because it's older. They stress about it because they don't know what's happening under the hood or trust the people that are working on it. But Christian Brothers Automotive uses digital vehicle inspections. You can actually see what your technician sees and know what's urgent and what can wait.

Plus, Christian Brothers stands behind their work with their nice difference warranty. Three years or 36,000 miles, whichever benefits you more. So if you want real peace of mind with the car you worked hard to own, go to cbac.com/Ramsy. Use the promo code Ramsey and you'll save 10% off your visit up to $250.

cbac.com/Ramsy, see store for details. All right, we've got Stacey who is joining us from Salt Lake City, Utah, Stacey. How can we help out today? Thank you, George. Thank you for taking us on our chat with me.

I am wondering if it's at all wise to give my mother-in-law a certain amount of money every month. Just so that we don't keep having her approaches every month to give us money.

Kind of basically just getting ahead of knowing that she'll need money and just making it.

That she has already in kind of avoiding that situation of being asked. Oh boy, so we're going to direct a positive to her account just to avoid her having to talk to you. Well, yeah, like not that I know it's stressful for both of us.

What's your attitude about it?

She, um, I mean, she doesn't act entitled to it by any means. She has six adult children, five of which all have the same job. They're all in the same trade. Most of them make above 100K years. So like everyone's able to help her.

She doesn't have the legal ability to work in the country. So she does work with my brother-in-law. He has he owns a home and she doesn't. So she doesn't have a carping mention. She doesn't have a housing payment or anything.

She does have a teenage independent. How long has she been in the States? Uh, since you were 17, I think. And she hasn't been able to work that whole time. I know she did part of that time.

“And then I think there's just been some.”

I'm just confused who's been floating her lifestyle and income this whole time for decades. Her children. And has that, has that change now that you guys are fronting more of it? Um, I, I think it shifted. My, she lived with my husband for better part of a decade before I met him.

Um, and then she moved in with her other son when he bought a house. Okay. So what is the current situation for how much each siblings giving? Like what is her monthly income that you guys are supporting her with?

Um, I, I, I'm not aware of anyone else giving her like a, basically an allowance every month.

She has been asking us for money consistently for about five months. About 800 dollars every time. Um, what is she using this money for? It's medical bills is big ones, which we were aware of because she had like medication. Like it's not just like, oh, we need it for.

Does she have any health insurance on her own? She does. She has Medicare. Okay. How does she? How old is she?

“I think she's 66 and how she, how she, to your knowledge, has she tried to get the correct visas to be able to work or try to appeal that or whatever it is.”

Has she been working on that or did she just give up on? I mean, I'm not going to pretend to be an expert in that area, but I, I'm just curious. Yeah, she has actually working on it right now. Okay. Um, it sounds like it's just kind of something that takes a little longer than we had hoped.

Okay.

I don't sound like there's much urgency on her part.

I mean, she's got Bank of Stacey. So it's like, why do I have any urgency to go to work when I, so when have any bills and someone provides my income? I, I'm a little worried about that. Yeah, I wonder. Do you have the money?

I'm kind of stacey. How are we doing? Yeah, we made great money. Um, I have an income. And so the rate has been together.

Where you think about 13,000 home met? Okay. You guys don't have any debt. We have a little bit. We just paid down the time.

So we have like 11,000 dollars of consumer debt left. Okay. And so I'll be gone in next few months. And then we have a 488,000 dollar mortgage still. 488.

Mm-hmm. 80. And do you guys have any cash saved? Like liquid funds? We do.

We have 14,000 in a high yield right now. And then we'll be getting tax refund soon as well. Okay. Yeah, 14. Okay.

So I know we can afford to, I guess. You could, you could be in a better situation. I will say that. I mean, the, the, the walls are not claiming in on you, but I definitely, would, if you are going to put yourself in a situation where you're contributing to this monthly.

And that's fine if you decide to do that. You've then got to get very diligent about making sure that this is not at a detriment to you. By, by being very intentional about what you guys have going on. And I mean, anybody who calls a show, I'm going to say, hey, you got to get on the baby steps.

“And I think for you guys, getting off that 11,000 dollars of debt.”

And doing that today, because you've got the money there, right? It leaves you with three grand. Which is the reality of your situation is you have three grand to your day. Okay. So it feels good because you make a great income.

But it is disappearing through a giant mortgage supporting mom, whatever else shows up. And so I think you guys could do a better job of not making sure this money doesn't slip through your fingertips. And I think your husband needs to be aligned here is he wanting to continue to support mom and at a certain level. Um, we just talked about it today, actually, because they're not just the situation came up, which we're not calling. He says, and I brought up like it doesn't seem fair if she's asking us for the entire amount that she needs.

Every month because she does have three other adult children. And what's the entire amount? My husband. Uh, I mean, right now it's another 800. 800.

800. For the last four months, yeah, 800. That's the total amount that she needs.

Yeah.

And you guys have been giving her what?

Four or two, or you've been giving her the entire 800. This month, or this today, we did decide on 200. So that other siblings will help the last three months. We've given her the entire amount each time. So it sounds like it sounds like there's a couple of things.

It sounds like the six adult siblings need to get in a room or get on a zoom call and say, okay, here's the deal. Like mom is going to need this money for the foreseeable future until his visa business gets worked out. We need to set a plan so that we are not all scrambling every month to decide and putting her in this position. And her putting herself in this position. Like, and she needs to be clear on what these new guardrails and boundaries are.

Because if not, it's just going to become well. I can get more out of this month. No, instead go, hey, we're going to support you for 18 months.

“And by then, you need to be getting a job.”

And then once you're retired, we can figure that out later on in life.

But she could live another 40 years. This is a long time. And it's not sustainable. And I think that's the bigger part of this is somebody. And I'm not saying it's you because you're the in law here.

But somebody who's blood needs to be looking at this and going, okay, why can't she work? What is the visa that she needs that she can work? What do we need to do is it is, and is anybody on top of this like it's their full-time job? Because the truth of the matter is of these six adults, you might know what they earned because you know they're trade. But you don't know their financial situation.

And $200 or $300 a month for some people might feel like, okay, we can swing that for other families might feel. Okay, especially if they're, let's pretend they have dead and they're trying to pay their dead off, right? So I want to set the expectation that all the siblings may not contribute. And you can't be salty with them if they don't because it truly is their choice. And we don't know what's going on with their money.

Yeah, that's there, you know.

“Yeah, that's kind of how it's feeling today when I was like, why is all of us every month?”

Because you guys are willing and you've done it. And therefore, who's she going to come back to? The hand that feeds her. So that's there lies the problem. I'm not mad about being generous, but when it becomes expected forever,

that's not really generosity anymore. And therefore, you guys need to be more involved with their finances. Because if she blows this or she is going into debt,

well, then this is just a never-ending money pit.

So you guys need to be working on it. Here's your budget. Here's how much is going to go towards bills. To help support whatever the household. Here's how much goes to insurance.

Here's how much is fun money. And she needs to be on a budget. If you're going to be handing her to this check every month. Oh, what's her country of origin? Mexico.

Okay. Where do you guys live, Salt Lake City? Okay. I was just thinking, like, I don't know. This is crazy, but I was like, oh, I wonder if she lived closer.

If she could cross a border and work and then come. Like, if she lived. Yeah. You know, Southern California, I don't know. My brain was trying to solve for the hearing now.

But that opens a whole can of worms. But anyway. I would just get clarity.

“I think we need to have a come to Jesus conversation with just the siblings.”

You don't need to be involved. That's, it's up to them to figure out. And then your husband comes back to you to go, hey, what do you think about this situation? We all pitch in 200 bucks a month for the next 12 months.

And then we see where we're at and re-evaluate. Yep. [MUSIC PLAYING] Buying a home is one of the biggest financial decisions you'll ever make. But too many people base the decision on opinions or what the market is doing that week.

Churchill mortgage has been our trusted partner for over 30 years. Because they do things the Ramsey way. A lot of people think buying a home starts with going to a bunch of open houses. But if you're buying a home the right way, you start with a budget and a trusted guide, like Churchill before you even think about house shopping.

Churchill will show you the real numbers. Not what a bank will approve. Buying before being ready is how people end up house poor and stressed out. Churchill will tell you the truth and they won't push you into more house than you need. And once you understand what you can actually afford, you can move forward with clarity and confidence.

So if you're ready to buy a home, choose the right guide and stick to a plan. Go to ChurchillMorgage.com and get started. That's ChurchillMorgage.com. This is a paid advertisement in the MLSID 1591 in the MLS Consumer Access.org Eagle Housing Lender.

And we have this encouraging review about every dollar, our budgeting app.

The fans said this, they said this app allows me to keep my budget and goals organized. I love the projection on when we will be debt free and my estimated net worth. And it gives you something to work towards and gives you a light at the end of the tunnel. That's right to hear. I love that.

So true and every dollar's got a lot of really cool changes coming up. Really good things happen when you're intentional with your money. You can live like no one else so that later you can live and give like no one else. So start every dollar for free today in the App Store or Google Play. Okay, Rebecca is joining us from Orlando, Florida, Rebecca.

How can George and I help today? Hey, thanks for taking my call. Yes, ma'am. Hey, so my husband and I are, we're just starting the date defense. We're working on paying off debt.

We have about $50,000 in debt and some student loan, some credit card. And our household income is around 135. So we're 32 and we're kind of behind on the game. We haven't started investing or stating towards retirement.

And we have two young boys and we're contemplating how to ask third.

We would love to be able to pay two or thinking about getting to the bank in this year.

“And I think it's important to know on the $199 contractor.”

So I wouldn't be getting paid from the turn of the leave if we choose to have a third. And we're three little even contemplating what it makes on for me to see it all. And so the question is, is it wise to kind of say all done to having more babies for the sake of where we're at currently financially? Um, I don't think that's the case. But I do think that it would be who view both to really put real numbers on paper and create a timeline to see what's actually possible within the parameters that you guys say you want this to fall in.

You get the values of saying, okay, if I have a third child, do I want to stay at home? And if so, what's that going to cost? You know, and let's run out the real numbers before we just take this thing off the table because I'm a fan of families.

I love families and I love Mama's being able to have, you know, as many babies as they want to and making a way to afford that.

So you are right now, you're 32 years old, you've got the $50,000 of debt. Is there any money saved up anywhere? Yeah, so in our savings, you probably have 8 or 5000. Can I say that again, please? We probably have about $1,000 saved. Okay, for your savings account.

“Okay, 8k saved and you guys are bringing in what 8,000 a month. Is that about right?”

Yeah, more or less. Okay. How much can you throw at your debt every month after all of your bills are paid? So one of our signs has some medical stuff that kind of eats up a little bit of our margins. But I'd say it's safe to say how long you like $700 if we're tight. So your bills are costing you about over seven grand right now per month. I mean, I think it's worth.

What's your mortgage payment? It's over renting. It's $200 a month. Rebecca, speak directly into your phone. Tell us again, what's your rent payment? Oh, I'm so sorry. That's okay.

I said our mortgage or our rent payment is $2500. $2500? Okay. Can you hear me, okay? Yes, yes, ma'am. $2500 is a little over, so there's a little bit there that's eating into there. What else majorly is going on that is?

Because your kids are not in daycare right now or are they? Right, now we don't have to pay for child care, thankfully. Then we have some family health. And so right now and we have our just the schedule on payment, which is about 500 a month. I don't have all the numbers right in front of me, but we have.

Yeah, I feel like, you know, obviously it could be a bunch of things too, but I feel like. I think it is.

“I think there's some intentionality that we can really really tighten up. Are you guys using every dollar?”

We just thought financial case university is dollar than the op. We haven't started. We haven't started. It's structurally yes. I think that's going to be an unlocked door to find out that you can live on way less and carve out way more margin. Because here's why I was asking.

If you can throw, let's say two grand a month of the debt you're done in two years. If you can throw more at it, you're done even faster. And so what I'm trying to do is get you guys dead free as soon as possible with an emergency fund.

But if you're saying, hey, my goal is to stay home potentially.

“Well, if you can't make the current and come work, how are we going to make less income work?”

So we've got to figure this out. If it's true that you really want to have this kid. If that's the priority, then we need to make sacrifices to make that a reality. Yeah, how much of the 135 is coming from your income? Yeah, so we have 65 or 3060.

It's coming from me. I work part time right now. And then 75 from my head today. Yeah, I mean, you're not wrong. You're right now. It's cutting it in half. So the main things that I'd be.

Things we feel it go ahead. We're just going to say, you know, I feel like we already have it there. We would be looking at how we make this work. But now that we're kind of in this decision period, we don't want to be unwise and impulsive, you know.

The biggest, the biggest area where I see it's playing out in a potentially very stressful way is your cost of housing.

“So right now you're paying 2,500. It's more than 25% of your take home.”

And if you go down to 4,500 take home pay, for example. Exactly. That's when you're going to be really strapped. It's going to be, I mean, darn you're possible to accomplish anything like that. So there's another sacrifice is we need to change where we live if we want to make this a reality. So that's where I go.

Go, you can go to a fake budget tonight just using his income just to see where things would fall. And even you can go, okay, let's say we're dead free. Let's take out those dead payments. It's still going to be tight. And really, here's how much house we can afford.

Then you can start to map out, you know, what is realistic for your situation. Now, right now your current kids that you're not paying for child care,

what changes so drastically when the third one comes.

That you'll no longer have access to that. Sure. So I have the laws and then my mom is a doctor and watch the boys. And so they're in their 70s. And we're just thinking with a third, it may be a lot for them. I think for an hour, seven month old and two.

Well, with the dead paid off, if you put one in daycare, you might be able to swing that and continue to work. So you keep the two with the family members and then decide which one would go to daycare. And without dead payments, you know, you freed up $500 in student loans, who knows how much from the credit cards, right? And now maybe you can swing that.

And by then, how old's your oldest? It's too interesting. Okay, so kindergarten for you is going to be kind of like the unlock moment when one of them can go off to school. Right? So I do think that this is possible.

I think you've just got to get creative on what it looks like and get so so intentional now. Before you're pregnant, now is a time where you guys are working working day and night like Michael Jackson said, all the money, right? Because you guys need to pay off this debt so quickly.

“You need to start saving for a three to six months of expenses and potentially a down payment down the line.”

Great. Okay. You know, that is helpful.

Yeah, because I just feel like the third change is a lot.

And in terms of my income and just how we, you know, are like so. Absolutely. That's the thing. If you want to be a state home on with three kids, your lifestyle is going to look very different. And you might need to live further out where rent is 1,500 and set a 3,500.

And so there's just trade offs all the way around. But you'll have the most flexibility and options if you become debt free. And you have the emergency fund. And hopefully your husband has a ceiling, you know, a bigger ceiling for his income. He can start making more.

Then life will get a little more comfortable. But right now, the saving grace is these parents and inlaws who are willing to watch the babies. Imagine they had daycare to cover. And this is this budget. Oh, it'd be tough.

But what I really love about her calling in is this idea of like family planning. Like thinking thinking about what you want to do, laying out the numbers, laying out a timeline, and making a play. And not just kind of going into it blindly. Because like I said, I love babies.

I love families. But there are things that we can do to make that a better situation for all.

And so I always loved being like, it was a huge surprise.

And I'm like, well, I don't know if you were in science class. It shouldn't be a whole lot of surprises. You're not married in the Bible here. Sometimes it happens. George, like, slips past the goal.

You know what I'm saying? Just accidents happen. Hey, guys, healthcare is one of the biggest stress points in your budget.

And most of the time, it feels completely out of your control. But there is a better way to handle it. Christian healthcare ministries isn't health insurance. It's a health cost sharing ministry where Christians share each other's medical bills. And it's not a new idea.

THM has been around since 1981. It's predictable and proven.

And they've shared over $13 billion in medical bills for their members.

Plus, you get more flexibility. There are no network restrictions. And you don't have to wait for open enrollment. Now, let's talk about how CHM helps your budget because programs start at just $115 a month. And many families save hundreds of dollars a month compared to traditional options.

So if you are tired of feeling stuck, check out Christian healthcare ministries. Right now, CHM is offering new members a 50% credit towards their first month of membership. Go to CHMministries.org/budget and use promo code Ramsey. [ Music ] All right, we've got John who's in New York City, Florida.

Is there a New York City floor to help me think that's right? Where are you at John? At New York City, New York City?

“That's what I thought I was like one of these is correct.”

The other one is not. Well, we're glad to have you here.

How can we help you today?

Thank you so much for having me. I really appreciate it. My wife and I purchased a short-term rental in October of 2024. And at the advice of a tax strategist that we hired. And we're bleeding 1,500 to 3,000 a month in this short-term rental.

Okay. And I want to business my wife a full-time nurse. And we get tax heavily, obviously the business does. And that's why I've listed with a tax strategist to understand options, as far as building generational wealth and how to do that.

And that's when we got into this short-term rental. Yeah, we got bonus depreciation, so that was nice. You know, we were able to write off the federal taxes and stuff. But bleeding 2,500 to 3,000 a month is not, it doesn't leave very good taste in my mouth.

You might as well pay that to the government and taxes at that point. If you can believe it.

You're giving it to a lender or to the IRS.

Pick your poison. Correct, correct. So my real main question is, you know, what? I'm really, it's hard for me to trust people now because it's how, you know, this, this leisure's how it tastes.

And I just need really good direction.

“You know, what do we do with our money to help build generational wealth?”

To find properties to cash flow. What's in my next step speed? Well, what's your business here? But I'm there. We own a print company.

Okay, where do the real estate come into play? Because these are two different goals. If I want to build wealth, but also I want to be a real estate guru and leverage a bunch of debt. Correct.

The real estate came into play because of the taxes we were getting. We're getting happy to do. Would you agree that getting into real estate just for tax purposes? Is not a good idea. No, I'm sorry.

You're losing 36 grand a year because of the tax strategy saying, Dude, you want to say what taxes? Just leverage an Airbnb. It'll be great. Well, I think you thought you were going to build wealth too.

“I think you thought you were going to use that as a wealth building vehicle as well.”

Not just the tax owner. That's the goal obviously is wealth building for gender generational wealth. What went south? What went south with the short term? Was it the location?

Did you get the rents you thought you were going to like what happened? Well, I think it's our property manager. So our realtor is also our property manager. And when I met with him, I'm pretty upset. I said, you know, listen, I just need to know what our worst case scenario might be with this property.

He said, your worst case scenario is going to be out of 1000 miles a month. I said, good, let's go. We're good. That's sold. So you did that from the jump?

Oh, yeah. Okay. It was fun with the thousand. I knew it wasn't going to cash flow well, but I also was using the benefit of, you know, how much we were going to save on taxes. And then also building generational wealth and making this kind of a yearly thing you wanted to do. So it's just nothing was looking good.

So what would this property sell property? Property management company. A million three five. It's worth a quarter to zero. A million sixty five.

You also in a home, our personal residence, we bought that for eight 20. It was about nine sixty five. What's left on that mortgage? That one six, six, seventeen. Okay. And what's the mortgage on the short term rental?

That's about eight 20. Okay. So you got, let's call it 150 grand an equity on the short term rental. You could get out.

What do I do?

I don't want again. Obviously, I got to pay. We did do a loan where there's a pre-paying penalty.

So we got a five year pre-paying penalty, which goes down every year. But we'd have to eat that, obviously. What kind of loan is this? Something. It's a call to the FDR loan.

Hmm.

“Okay. What other debt do you guys have outside of the two mortgages?”

Truly, and let's got a car. It's about six hundred a month. Business pay is my car. We have zero percent credit cards that aren't due to the next year. And next year, it's total about 37 between both of us.

Very 7k. You are a credit card company's dream. I'm sorry. You're a credit card company's dream. I know.

Because you're just going to happen when you can't pony up 37 grand out of nowhere to pay the balance. Well, that's, I was looking to give you the full picture. I have one 60 sitting in the back. So, and my wife has everything. And she's getting 10 grand a life.

The between both of us, 170. Okay. Okay. I don't even know. I know it's going to pay off that.

How much? How much? Okay. Well, great. How much? What's a total amount of your wife's vehicle?

Not the monthly payment, the total amount. Total amount. Digital lease. Oh, it's a lease. And what about you?

My car's paid through the business. It's a 524 month. It's a sewer out back. How much is the debt, though? What's the total debt?

I don't know. It's paid. It'll be done at the end of the year. And then I either will lease another car. What's the total debt?

Don't be scared. I apologize. Don't be scared. So, what's 524 time? No, no.

What's the amount that you owe in your car? How much do you owe? Okay. Yeah. We got we owe.

My car is going to be. For grand. That's it. That's all you have left. Yeah.

Can police. So it's 3,000. Oh, you're the lease too. Okay. So it's gracious.

These are the nicest cars known to man. What do you guys drive in? 600 bucks a month for a lease? When's the lease up? On yours.

We're both the end of the year. Okay. And are you planning on buying a motor? What are you thinking here? I don't know.

The total gas I haven't thought about. Okay. So we're going to help. We're going to help you think through that. What I want you to take away right now, John,

you're kind of like a happy go lucky guy and you're fun to talk to. But I'm concerned about your situation greatly. You got a lot going on.

“And the good thing is I think a couple of moves could get you on just a couple”

of small tweaks could get you on really, really solid footing. But you'll have to agree with George and I that you're in a dire situation in order to actually do this because I feel like you kind of think it's not that bad. I just have out earned your stupidity for a long time and you can continue doing that. I just think you will you vehemently disagree with everything we're going to throw at you.

So I don't even want to waste the time. But I'll tell you what I would do. I would sell the short-term rental walk away with it. Everyone you can get. Take your 160 pay off all of your consumer debt.

Mm-hmm. And then anything we're mating becomes emergency fun. Plus paying down the mortgage. But leveraging the debt game. But leveraging the debt game.

Paying down every day.

Pay down all of the consumer debt first.

Get an emergency fun. Focus on paying off your primary mortgage right now. You're just trying to accumulate stuff and assets and car leases. And we're trying to simplify your life. To where you get to keep what you take home.

Regardless of how much you pay in taxes. I'd rather you pay what you owe in taxes and not have all the stress in your life. And go that sucks. I'd pay the IRS more than I thought. But it's a nothing burger if you had no debt.

You should get it now. Perfect week. Because my wife will tell you I just stressed out a lot about it. It's very stressful. It's stressful for me just to listen to it.

So I can only imagine how you feel. You know, when you let your head on your pillow at night. But think about what George just said. You got a hundred and seventy thousand dollars cash. Okay, we pay off the credit cards.

That leaves us with around a hundred and thirty or so. You decide whether or not you're going to buy out these leases. Do you know what the buy out is for each of them? I don't know. I think it's around twenty.

Twenty five. Maybe for each. For each. Would you guys want to keep those cars? I don't care.

But okay, let's say you did. If you want to get your car. Okay, so let's say you spend forty thousand and you buy out these leases. Now you're at ninety. You've got ninety thousand dollars sitting there after you've got none of these leases.

After you've paid off some credit card debt.

“Is there anything else that we need to know of that needs to be paid off?”

No, I just gave you all the. Okay, so now you've got some actual cash. You sell the short term rental. Because I hear you say you bought it for one point three and it's worth one point six.

No, no, I'm million thirty five.

And it's a court in the Brazil. It's worth a million sixty five now. Okay, I'm million. Okay, so you'll probably take a little loss on that. But you'll gain three grand back in your life from not leading.

This is worth it.

Don't have the Sun cost foul.

Say yeah. It sounded like you didn't want to sell this Airbnb though. This short term rental. I mean, obviously, I do love the house. I wish, you know, my wife and I would love to be in Florida one day.

I'd love to be in the house. But if it's going to cause me stress every day. I'd rather do the smart thing than the future, you know, goals. And let's let's let's talk about the why behind it because I think you had. I like what you were thinking about, which is what are ways that I can build well for my family.

I think that that's something that we all need to be doing as as parents and as spouses. But the way to do that, we did the largest study of millionaires.

“And the best way to do that is to have a debt free lifestyle, a budgeted lifestyle,”

a lifestyle that values having the right insurance is saving for emergencies, right? And then investing in your 401k regularly. That's how millionaires are built. They've invest in their 401k regularly. Well, welcome back to the Ramsey Show here in the FairWins Credit Union studio.

Again, I'm Jade.

If you're just joining us and we have George Campbell taking calls from Brandy.

Who's in Huntsville, Alabama? Brandy, you are on the line. How can George and I help you today? Hi, guys. I have an interesting situation for you that we need help with.

My husband and I have been married 10 years. But when we got married, we had a backyard wedding. It was like a 3500-year-old wedding. It was just close family friends. And we did not buy wedding rings.

So we had said, if we make it to 10 years, we would have our honeymoon and buy wedding rings on our tent anniversary. And that is coming up. So we, and there's more story to that, of course. Like, I mean, you propose four times. It's me.

I bring the George to the relationship. I'm fine. You're the funny daddy. I am deferral one, I guess. And he agreed for it.

“Well, you said no to his proposal like three other times.”

No, I laughed hysterically the first time.

And then the second time, I was like, I'm really not going to be married. I mean, we've been married like 10 years. That's like an Olympic gold medal for me. So he deserves a medal for her sisters. The guy just kept getting rejected time at the time.

That's crazy. He is really amazing. He is a great spouse. And I mean, we've made it right so far. So we had to both seem surprised, which I find entertaining.

We both can't breathe right here. Okay. Well, congrats on the 10 years. And I love the idea of finally, you know, getting rings and having a ceremony. But there's probably a catch here.

So tell me what is it? Well, we're trying to buy rings and go on a honeymoon. We're not going to have a ceremony. We've already done that. Okay.

So we are in the middle. Yes. And we're in the middle of baby step two. We've paid off $63,000 worth of debt as of yesterday within the last 12 months. Okay.

There we go. We, right. And we have 49,000 to go. So we were expecting to come see you guys for our debt free screen next spring. Okay.

And we want to delay by a month because my entire paycheck, like my base salary. I don't mind business. He works the state. But my entire base salary goes to paying debt every month. So I get my paycheck.

And then I give it to other people. And it hurts my feelings, right? So I am super motivated to get finished. But we both feel that we need a break in order to celebrate this milestone. And it only sets you back by one month.

Is that what you're saying? Yeah. It would cause the baby steps by one month. So we don't know budgets. We haven't been shopping for rings because I'm terrified to go in there.

“I think I'm going to have thicker shock.”

So then I don't think you know how much it's going to set you back. Because you don't know the numbers, right? Well, we were thinking around $1,000 on rings total. And then we would spend around 3,200 on a trip. And we wanted to kind of set the budget at what we normally would pay towards the debt a month.

Which is about $4,000. Yeah. Between $4 and $5. Okay. And you're saying if you continue this path, you could be debt free in what?

9 or 10 months? I'm probably around 12 because I work in education fields. So I am home. We have six children. And I'm with our youngest children.

And there are many of them. But I'm with them in the summer. So I don't have as much income in the summer. And we plan for that because our own business. That's not a huge loss.

But we don't have as much of a margin during this two months. God. I understand. I'm going to tell you. And again, this could be controversial.

But I think that I would do this. stone of 10 years and it's actually funny that you're calling in because I called into the Ramsey show long before I worked here with the same question. Sam and I had paid off a major portion of our debt. You've paid off more than half. I think we had paid off more than half of ours

but we did it and Dave said that he would do it and we told him the budget and so I will now tell

“you the same thing because I think it's a really important thing and I think it's one of”

those things that comes around obviously every 10 years and this is your tenure mark. I think the budget is reasonable and I like the fact that it's only a month-long thing. It's potentially only set you back a month and what I actually think will end up happening is if you wanted to kick it into high gear after this you could probably make up the time by picking up, you know, cutting back here and they're picking up side-hustles who knows, you know, if friends and family

find out about this you might get some monetary gifts I don't know but I think things can happen that you really don't even have to sacrifice the month. Okay yeah and I have a business to do very well it's growing as time goes along so it will increase every time and also he's getting promotions at his job so we noted it will go up eventually that may take a while right but we really want to pause and celebrate. So you got married in the courthouse no rings. We had a backyard ceremony

at our house and it was beautiful, we have a creek in the backyard it was a beautiful ceremony

“but it was just close friends and family. So are you guys have anything on your fingers right now?”

No we don't. You couldn't have got a silicone band off Amazon for like $10. Well he wears he I think he wears a silicone band and he has another band that he really likes and I feel bad. I mean it took me two years to change my name maybe I have a little bit of a commitment problem but I really I love him we are married is great and I think it's time for me to put a ring here. You want to know it? Okay I'm going to go one deeper for you and now this is your life

do what you want. I almost and I'll just be honest I feel if I feel the money is better spent and this is just me in comparison to the baby steps I feel like the ring would be the thing that I'd want to

spend more money on because you've never had one versus the honeymoon that's just me. What do I know?

George what do you think? What do you think about the whole thing? You may not agree with me. Well again, Brandon you told me ahead of time I'm the funny daddy frugal guy and I love the dang of the carrot I want to earn it you know I want to eat my vegetables before I get dessert and so personally I'm going to go you know what we're already in our 11th year of marriage we're going to celebrate before we're done with year 11 and that will put some onus on me to put some

emergency on this and bust it to get this knocked out as fast as possible so that I can enjoy this. Wait it's not going to happen at the 10 year point is you're already past 10 years? No we will be 10 years I'm coming up in the fall and I wanted to wait till after the death was paid the next summer and he's like absolutely not we had an agreement. Well wait a second you wait wait wait wait I'm going to roll mine back a little bit because I thought that the

whole point was we're doing it on the 10 year anniversary but this is not on the 10 year anniversary you're not getting up at the 10 year anniversary we were that was when we planned on doing the

ring and going on the trip. Right can I be honest Brandy here's what bothers me you guys have been

quote-unquote planning this for 10 years and yet made zero actions to get us here you know what I mean like what happened over 10 years where you guys went yeah we said that but we don't really believe it and all of a sudden it's an emergency that's a good you know what I mean what happened was not an emergency we did take our our savings that we put it back for it and put it on our debt but why aren't you in a better place financially than you were 10 years ago when you guys were broke.

Oh well you probably aren't thinking about it better place or were you I'm sorry were you thinking about this 10 years ago probably not or were you yeah we agreed to do it when we got married that

“was what we said that's what I'm wondering if I had a 10 year horizon to plan for this thing I”

knew was coming I would make sure I was going to get there and so that's what I'm trying to figure out where you guys went backwards got into a hundred plus thousand dollars consumer debt which you guys are crushing I'm really proud of you I'm not trying to knock you I'm just trying to get to the mindset to make sure we've actually changed our behavior that got us here. George makes an interesting point listen I will say this if you told me it's a once in a lifetime thing it's 10 years and you were

doing it on the 10 year anniversary I'm like yes 10 years but if you're telling me we're doing it on a 10 year anniversary and the plan was already do it to do it at year 11 it takes the cash a it's got no cash a at that point you I mean you're not going to regret it if you do it and you guys will still become debt-free whether it's in May of 2020 what until 12 years that's what I'm saying everything feels arbitrary because clearly our planning has not gone to plan I don't know

Hey guys Dave Ramsey here every day on this show we help people work through real money problems

ask your money question and get answers built on Ramsey principles we use on the show whether you're

making a decision or just want something explained ask Ramsey is here to help it's fast simple and free to use go to Ramsey Solutions.com and try ask Ramsey today that's Ramsey Solutions.com The Ramsey Show question of the day is brought to you by Y Re5 if your private student loans are in default and you're not sure what to do next why Re5 can help you explore refinancing with a low fixed rate and a payment plan based on what you can actually afford go to yre5.com/Ramsey that's

the letter Y-R-E-F-Y dot com slash Ramsey remember it may not be available in all states today's question comes from grace in Nebraska my husband and I are about to pay off our last debt which is a credit card but I've read that doing this will lower our credit score as a lot should we slow down our pay off schedule or knock it out and let our credit score go down what a what a hilarious question which just points to the stupidity of the credit score number one the confusion of it

is confusion number two the if I do the thing I know is financially smart I will be penalized well I think people don't realize yeah I don't think they know the truth George so enlighten us well number one a credit score is based off several factors that are weighted differently how much debt how long have you had the debt what's the types of debt mix the variety all of that any new debts and so paying off your debt will not lower your score especially long term

now if you closed all the accounts it might take a a dip because they like to see the open accounts

you know the longer you've had them open the better and all that but I would never say slow down

your pay off schedule in case your score takes a hit because whatever hit does happen it's going to

“be minimal and it's going to be temporary well and you have to ask yourself the the long term”

question on this is why are you doing this to begin with because most of us out here if we're paying off our debt we're usually doing it with a greater intention in mind and over here at Ramsey the whole thought is you can't solve a problem while simultaneously creating it so if debt is the problem if it is the the barrier to you building wealth then what we say is okay then I I no longer borrow money anymore and so me paying off my debt is essentially equal with me saying and I no longer

care about credit because I no longer am going to borrow money so they they're they're kind of synonymous so my question to grace would be what's the point of paying off the debt if if you plan on utilizing your credit score in the future which means you would be working on it and by the way there are a lot of people who don't carry any debt and still have a credit score they have open credit

card accounts and they pay it off every month I know those people exist because they always tell

me how proud of themselves they are for paying off their balance every month and they have an eight thirty credit score and all that so grace the real question is what kind of future are you looking for are you looking for a future where you keep taking on more debt and trying to pay it off perfectly to appease the credit score gods or do you just want to go you know what I'm done we're going to cut up the card close the accounts six to twelve months later your credit score will

“become indeterminable that's what happened to me now if you have a mortgage your score will stay up”

there and it'll stay as long as you make on time payments for any debt in your life your score is going to be fine it's not going to be it's not that much better to have an end seven ninety versus seven sixty no it's yeah and again who cares it's not going to stop you from doing any of the things you want to do because you're living a life without debt and let me just say this uh when Sam and I were in baby step two and uh paying off debt I was a little um late to

acquiesce the credit card it took me some time to feel like I could let go of that but what got me is I hated paying it off every month because we'd spend a little bit on it and then pay it off and spend a little bit and I just got to the point where was like I don't like the feeling of this even if you're paying it off every month it just doesn't feel good it feels like you're only so many exactly because you do even though you have the money to pay I'm used to owe them for 30

“days and I think I just hated the feeling of that and let me tell you obviously people care about”

the credit score for a mortgage that's the big one that's understandable but again we've talked about it on the show yes getting a no score loan manual underwriting it's a very real possibility that and Jade and I have both done it and it's they didn't give it to us because we're a ramsy personality they gave it to us because we had 12 months of rental history on time payments tax returns paystubs and it makes you feel better I did it before I was a ramsy personality

let's go to Kyle so the answer your question I would not slow down the payoff schedule just become debt free go ahead and do it and did you tell him it to it usually takes six to 12 months yes okay all right let's go to Kyle who's in Boston Massachusetts I'm sorry about your Celtics

by the way what's going on Kyle hey so you guys can hear me fine yeah okay so basically we bought a

house I married and my parents live with us in the house and we had a baby and we want to have more but it just seems like the house is getting smaller and there's just a lot of tension it feels like in the home so we want to know if it's possible and if we should look into it more to buy say a multi family like at the rear four unit multi family and as my parents live in one of the units and rent the rest of them to to offset you know that other mortgage where is this code

dependency coming from why can't they go rent their own place and you guys have your own place

“right so I'm an only child and I think what happened was most 90% of my life was”

them not doing well with money and you know is that a me problem though but in my mind like with them living with us I know their financial situation and I know they would be like borderline almost I guess but they make enough to rent because you said they'd be renting one of the units from

you if you didn't multi family or why they would it would not be marked as much as you're basically

you're going to it's charity you're going to let them rent for a couple hundred bucks and if the day comes where they can't pay because they have other bills or they have other priorities they kind of know you're not going to evict them and put them on the street how old are they?

“My dad's in his 70's and my mom is in her 60's are they both retired are they working still?”

My dad's retired my mom is going to retire in about a year and that's based on what? Because how is just what what she had told me? Okay but they don't have the money to actually retire there's sort of needing you guys to float the gap right when you say she's in her 60's is she like 61 or she like 69 how old is she? She is 65 okay and same with your dad as he's 70 70 or 70 he's 75 okay 10 years apart and they don't bring in like what's their social

security you said you know their money tell tell us more about the money because that'll help us understand how dire this is because it might not be as dire as maybe you stepping in and doing as much as you're trying to do okay so for a social security I don't which will be for for my dad I

“don't really know what I think it's probably maybe 1500 to 2000 so something like that about”

that I mean I was so behind to me I'm not sure and so they gave us we wanted it to be a thousand to give us 600 a month towards the house that we're living in now what about your mom what does she make? She probably makes we guess around and maybe a little more than minimum wage okay do you know what that looks like monthly for her? I'm sorry I thought that you knew the numbers I I thought I heard you say that you did know the numbers we know that they can only

afford 600 bucks a month for rent I grew up with like just knowing like how they were struggling

financially and what do you tribute that to is it just lack of financial literacy they or they never

secured careers like what's happening there because what I'm seeing is something that seems like it's gone on for quite some time and I'm just worried that you know if you you want to put this on your plate and say this is just something I'm willing to fund that's your bag and you're allowed to do that what I would not do is continue to take on more debt in order to fund that I think that this is a cart that you've hitched your and you need to get out to more you need to refinance on your own and

here they might need to go to seniorhood housing and that's the reality of the situation if you

can't have them living with you guys hey summers rolling in soon vacations camps all the fun and if you're already thinking man I hope I can afford all this you can enter right now for a chance to win $10,000 in the Ramsey May Cash giveaway $10,000 that's breathing room you can fix the car say yes to plans stick to your budget without stress we're giving away $110,000 grand prize and weekly $500 prizes no purchase necessary

go to RamseySolutions.com/giveaway so buying or selling your home is a big deal in case you were wondering and you want an expert in your

corner fighting for you to find the best deal for the right price the Ramsey trusted program

“is the only way to find a top agent that you can trust who will help make your home a blessing”

and not a burden it's easy just compare agent profiles interview them and choose the right one to work with find a local Ramsey trusted real estate pro for free at RamseySolutions.com/agent or click the link in the description if you're listening on youtube or podcast all righty then Jake is in Boston, Massachusetts again what's going on Jake? Jake are you there? we lost him all right so close we can go to someone else we can go to Tom and Hartford

Connecticut Tom are you there? hey how are you? don't good how can we help today?

good good so just for context I'm not sure how much you guys know a little bit while back about

four months ago I decided to exit my previous business um that year we get about 500,000 in total revenue the reason why I left was just a partnership dynamic primarily for autonomous control independence and really just alignment issues looking back on about four months into my new endeavor and you know I'm in a cleaning space now like house cleaning and I'm feeling a good amount of regret and it's kind of did I make the right choice did I not make the right choice and

kind of just unsure about things looking back in my previous business um and they're on track to do you know really well this year I'm still going to get some guidance and you guys thought I mean can you go back is it something that you could go back to if you wanted to or we just cry and over spill

“yes yes yeah it might be considered crying over spill milk I think that's one of the things”

I'm trying to understand but the biggest thing is I could go back because they're my current one of them was just like really one of my best friends and then the other the partner was my cousin too so and it was just like one of those kind of like missionary businesses you know that like I just walked to my core and I think with a contrast of my current business um I'm just kind of seeing things you know hindsight now why did you what what you explained a little bit about why you left but

what was really the the straw that broke the camels back give us a clear example of what was happening yeah absolutely so I mean they're seeing the business where you're going once you're going to release from my perspective um whether with the new season of the business you start to pick up new responsibilities and kind of transition into new roles and so as we started to transition into new

“roles I looked at where I was heading and then where my other business partners were heading and”

they were taking on more ownership responsibilities and I was taking on more employee responsibilities and so I was in the long scheme and the long scheme of things I was like in my mind at that time like we had that conversation I was like oh hurt I'm just going to be an employee of the rest of the time here like that's not what I want and so you know looking looking back on things now that was the primary reason why I left and of course there's like a whole bunch of other details do you feel

like you got too hot headed about it like were you too emotional about it is that what's best I need that decision yeah like we like eight months before there I started to kind of have the thought of like understanding that leaving could be a possibility just kind of based on the trajectory of things and I started to come like to be an acceptance with that and when it became like crystal clear that like most likely my future responsibility is in the business

what would have just been a employee it was very clear to me and I was like okay yeah I thought we're in your story about it yes you go back tomorrow you're not going to be coming owner all of a sudden exactly exactly so I guess it's a I guess it's more so are you going back for money at that point of just like it's more sustainable and I enjoy the work yeah I think the mistake that I made and

like I left without I'm very lucky like I'm in a spot where I don't have any debt I don't have any like I'm good amount of savings I'm getting an exit paycheck from the business for the equity that I did oh not a fast spot so you'll go back with no equity because you already got it yeah yeah so much

was the equity equity was 50 percent so you got 250 to 150 thousand no no no so we are

with how we basically the exit was the whole like this could be around 50 thousand like pay I was and then I have I have science savings to that and so I just want to make sure I have the straight in my mind so the reason you would go back is you missed the work that's and it would be the employee stuff that you did not want to do before you would now you've decided the thing I did not want to do before I actually now miss it those exact tasks and I would like to go back

“and do those exact tasks you know I think it's I think I made a mistake right and I think”

in when I first made a decision I wanted ownership responsibilities but now looking at it in hindsight I like I understand how hard it is to make it in business right like before I had another person survive on another person to cope with and it was was so much different you know and so you're willing to just go back as an employee not as an owner you don't want to buy in anymore you just want to be an employee no I think I took the book I know I do I would want to go back

as an owner so it's like it is different but why would you just start your own business in that same area like you you've done it before why would it why wouldn't you do it again because what kind of businesses is this okay so if you started your own business today what would you do left your own devices so I would buy a camera and then I would start filming free social media content for sports you know I'm saying so you'd want to go in a sports videography if you could choose any job in the

world today or any business so I I did start another business after that I started a house playing yeah but you don't like that so I'm saying what do you actually want to do versus well you're like going back to your ex because it's comfortable and I'm like well the same reasons you left your ex or the same reasons is not going to work you're going to go back you're going to become resentful as you see them grow the business while you're income doesn't grow along with it while

you're dealing with employees which is not your passion according to what you told us earlier so I'm just worried we're going to make the same mistake twice was it it was it a friendly exit or was it drama filled yeah yeah we're totally good yeah like we're we're good obviously you know it's like you know series conversations but now we're totally good how older you I'm 25 okay and but I just want to play this out so it's out I feel like you're telling

me kind of two stories and I just it might just be because we're talking and it's just a short period of time but on the one hand it kind of sounds like I made a rash decision I made a bad choice and I want to go back on it which we've all made mistakes we said things we you know we've all done that so I can understand that but then another side of you makes it seem like no I really put thought into this this was a long time coming and I finally just pulled the trigger so yeah tell

me which one is it was it something that you really spent a lot of time thinking about and you finally pulled the trigger or was it something that you feel like you had a rash of emotion and you you kind of spoke too soon and now you regret it which one is it yeah so I mean I don't I don't think

it's like I think it's a mixture of things I don't know if the answer is it correct it doesn't

“and that's what I want to get to I think you have to I don't think you have clarity and I don't think”

you can do anything until you have clarity I think right now and this is again Tom we've only chatted a few minutes but it sounds like you went away from this job and whatever capacity you started your own thing and it looks like you're looking back like a pillar assault and you're seeing things over there popping off and doing really great and you're feeling remorse because your current thing has not grown to scale yet and that's okay what I don't want you to go is look

back at the thing that you said nah that's not for me and just because it's doing well and doing amazing suddenly your questioning let me tell you story I played college volleyball and I played for two years and it was it was a toxic situation for me and it was time it was time for me to stop playing and so the next year when I was invited back to the team I said no thank you I'm not

going to come back that year they won championships and did really amazing the two years I played

we had two losing seasons for a moment I was like dang it like this is a regret I made a bad choice but I made the choice I needed to make for me because I was pursuing music and it was the right choice for me even though they were doing amazing even though do you see what I'm saying just because somebody else is doing great doesn't mean you did the wrong choice and I just think

“you need to I'm not saying we're the same but I am saying there's no I get it do you know what I mean”

absolutely absolutely I don't think you have clarity either way I just think that you're seeing fruit in each place and you're like yeah I want to what we can help with the clarity part

show you where your talent is where your passion is where the mission that you want to see

“impact in all that's going to help you get clarity and it may be man I really just want to I want”

to be the boss that's really the heart of it no matter what the thing is or it might be sports and I go work for someone else doing something making more with a bigger ceiling I just don't want you to jump back to the old comfortable thing just because you thought the grass was greater on the other side yeah this is tough this is tough hey guys Rachel Cruz here and I love summer there is more fun on the calendar more time with

your people and way more chances to make memories but you know what else there's more of spending

oh between the extra groceries and gas and camp fees and family trips it all starts to add up so fast and before you know it money stress starts to steal the fun out of everything and that is why I love the every dollar budget app because it helps you plan your money track your spending and find more margin in your budget so that you can put extra cash towards the goals that matter most enjoy your summer without the money stress download the every dollar app in the app store or

Google play and start for free today

our ransy show scripture in quote of the day proverbs 1815 says the heart of discerning

the heart of discerning acquires knowledge for the ears of the wise seek it out Thomas Saul said you don't have to listen to anybody you can learn everything from your own personal experience of course you will be at least 50 years old by that time by the time you know

“what you need to know at 25 who that's deep Thomas okay so it's a negative cell it's a negative cell”

it was a tone up yeah sure you don't have to listen anybody you could learn on your own in 50 years or you could get wisdom from other people and learn in half the time yeah learn 25 that's good Thomas I think you could have said that in a cleaner way oh you know it's old time me it's old time making more complex I know I had to really turn my brain on go to work twangin if you want simple on brevity that's true jake is in Boston Massachusetts jake you're back how can we help

I am back sorry about that that's all right I found you guys recently on social media so figured I would would reach out I guess let me give you some background information before I asked the question I might be helpful sure so I get a 170k and debt 150 of that is student loans 20 of it is for my truck I got 150k saves right now just literally sitting in a bank account doing nothing and I guess my overarching question is should I pay off my loans call it in like in one

check or you know over the next few months or so or over the course of a few years make the minimum payment and really don't even worry about it really just you know looking for some guidance that's been done about me now I'm I missed what you said you have saved how much did you say you have saved 160 okay so the whole amount of the student loans now I mean a little a little bit less um you tell me what you think the benefit would be to kind of peddling this out and just

making minimum payments tell me what you think the good part of that is that way it'll help me

“craft my answer for you sure I think mainly just being able to keep building the nest egg”

eventually you know buy a home hopefully soon and look I know it's bad to let debt pile up but you know I'm 25 I feel like I'm doing all right the careers on a good track what do you do I work in sales for you know in a fintech space oh nice so how much are you making a year now I meet 220 last year I should land around like 250 this year if I had all my quotas and everything way to go so let's just play out the scenario where you have 150 saved you knock out your student

loans and you got the truck left you knock that out in maybe two three months is that realistic exactly yeah yeah that could be a realistic now look where you are you freed up all of those payments would you if you add it up all of the payments for the student loans and the truck where we at per month um close to like two grand call it okay so now we freed up two grand on top of our

and then be investing 15% of our income yeah which is pretty wild when I look at that so if you're

talking about wealth building a nest egg your best path is to get out of debt as fast as you can to free up your income which is your greatest wealth building tool to then invest from 25 to 65 40 years of compound growth making what you're making even a 15% putaway you're going to be a multi-multime multi-millionaire and anything else I just did some fun math because I love to see the number I mean you're 25 today if we did this till 59 and a half which is when you're

likely going to want to get at some of that money I'm assuming you have zero investments now but I I have a feeling that's not true but if you just started putting 15% away that's 15 million dollars

“at age 60 if you've already million at sixty six or sixty seven that's really good that's what”

happens when you have the full power of your your income and that's assuming I mean that's assuming

you'll never get a raise that's assuming you're not you know I'm saying ever investing above

15% which I'm sure that you will so all of that to say that I think this is a pretty and then the other side of this is we don't know what life's gonna throw at you you're going to get married you can have a kid will be a job loss a health scare and so we're you're sort of assuming that yeah I can float these payments just fine I make great money you're very successful especially at your age and so yeah you could out earn your stupidity for a while and just hang

on to debt get more debt if you want get a bigger truck nicer car that's the American way and we're telling you to swim upstream do the weird thing which is take that giant chunk of money and pay off the debt and then free up that income for the rest of your life I think for

me it's like you know I've saved this over the course of you know three four years and

“then I would have zero one day you know when you wake up so that's what you have here on now”

let's let's do real balance sheet if you were running a business you would find that you are in the hole yeah you're 20,000 in the hole right now you don't have a 50,000 yeah it's assets minus liabilities what you own minus what you owe that's your net worth and I want to see your net worth as the scoreboard and not what's in a savings account while the interest piles up now if you want to give the navian people some new furniture in their office building let the executive team take

a nice vacation you can be a part of that if you want to support it I'd rather see you build well from said though I think you'll do the right thing with that Jake the hard part with money is when you decide I'm going to start doing the math then you got to start doing the math for better or for worse not to say that money is just math there's more to it there's the behavior there's the numbers and there's the emotions of it and what Jake is getting at is the emotion

of it's so hard to feel you're right and you work too hard to have 150 grand sitting around yeah that's right and it's gonna feel different when you wake up in the morning in that number that you're used to seeing sitting in your ally or sitting in your fair winds account is not there you're going to be like okay 18 months he could save that back up if he had no payments that's right as a single 25 year old but what it is what's it what it's forcing him to do is feel the weight

of his actual debt as long as that 150,000 is sitting in savings he doesn't really feel the weight of it but once he transfers that over and actually pays it off he's going to go oh that was a lot of debt I didn't need to get rid of that and I think that that's a very mature thing to do a very mature thing to do to let yourself feel it if you will all right George do you think we can get to park let's get to park let's do it all right park around nine three we're up against the clock

my guy so let us have it you say so me and my wife are now transitioning to single income she's going to nursing school soon we've about 11,000 and $1,000 in debt which is just my car and a credit card we paid off her car, the credit card and some of the line that someone used that prior to going to to more income and we have around $11,000 in the saving trying to figure out how to navigate that debt sooner than later and before she finishes nursing school

what's stopping you from just knocking it out I mean next month you'll have enough saved up that you could knock out the debt and still have a thousand two thousand bucks left over right yes so I mean the minimum payment on the card which I have $1,500 on is about $40 but it's at 24% interest and why does it mean payment 100? Well yeah correct I mean to your point

“it's a super high interest rate you need to knock that thing out get it out of your life right”

they'd make the minimum payment a dollar if they could let all the money just pile up an interest right so I would just go man if you want to be free and you want to be able to survive on single income having less payments in your life is better would you agree? Yes and you can build up that savings and how quickly how much could you put away if you didn't have any of these payments in your

$1,500 a month probably a little bit more great so now doing the math we're going okay talking six

“months seven months and you're back to where you are but with no debt. And if you just keep it that way”

you'll be able to survive off the sink on what is your what is your income now as a house so

I make around 60 I'm not hearing so it's around 60 okay great so now we can do a budget based on our 60 grand with no payments and make the sacrifices needed so that she can go to nursing school and you can cash flow it that's a really important part of this yeah making sure we're not

“going further into debt while trying to pay debt off that's why I come all yeah and and the thing”

I want you to just remember Parker is well the people have asked how much poor people ask how much per month and that goes both ways so if you're so focused on oh the monthly payments only $40 I

“can do that you need to be focused on the entire balance of the debt that's when you again you”

feel the weight of it and you feel the need to pay it off because you do all right George we had a

great time hosting thanks for hanging out with us guys remember there's ultimately only one

way to financial peace and that's to walk daily with the prince of peace Christ Jesus