Stop Starting Over and Break the Cycle for Good

The time to fix your budget is before you're in debt.

“And the time to deal with stress is before it becomes a crisis.”

Talking to someone can help you find a path forward. Go to betterhelp.com/ramsy to get 10% off. We're on to you by the every dollar app, start budgeting for free today. Normal is broken, common sense is weird. So we're here to help you transform your life from the Ramsy network in the Fairwins

Credit Union Studio. This is the Ramsy Show. And I am Rachel Cruz hosting at this hour with good friends, and my other co-host is my one and a half-yard George Campbell. Excited to be with you.

Always fun, George. The new hairdo, by the way, if you're watching on YouTube, I want to call it out. The extensions are gone. If you've been following the journey of Rachel Cruz. We've got the hair.

I changed my hair every six months. So yeah, this is the new and improved. We'll see. I look the same as I did four years ago. George, I'm a man of consistency.

You always predictable George Campbell.

So yeah, give us a call at Triple 8-825-5225, because our advice is as predictable as George Campbell's looks. There we go. There we go. All right, let's go to Hannah in New York City.

Hi, Hannah. Welcome to the show. Hi, Rachel and George, thanks for having me. Absolutely, how can we help? OK, so my question is, how can I keep my husband

dedicated to paying off this debt with me? Where we are back at baby step one for the fourth time now. And he is overwhelmed and wants to separate finances. Oh, wow, man.

“What's caused you guys to be on at the fourth time?”

What's happened? Yeah, we've had a lot of bad luck. I'm just going to wrap it fire a time flying for you here. We got engaged in 2019, and that's when we started this journey. Started paying off.

We had no major major debt every time. Credit card debt, student loans, nothing major. At that same time, we found out that his mom stole his identity, and everything mainly student loans, and his name that he did not know he just did, that he was getting the refund checks back to her.

So that kind of muffled things that we were working towards at 2020 came, COVID. We got married that year, but we canceled our wedding. We kept working at at 2021. I got pregnant with our daughter, and we lost our jobs because of COVID. It was really hard here.

We had to move because our family had more died, and then from there, we kind of

wiped out our savings for the first time, and we had to start over at 87th one.

Okay. So it's been started over four times over the last eight years. So it feels like every other year going backwards. Okay. And is that the main reason of his him wanting to separate finances, because maybe

“decisions you guys made, and the midst of some of those he doesn't agree with?”

So, so it's more so that he has really bad ADHD. He wants to be able to focus on he works in sales, and he wants to be able to focus on his work, and not have to worry about like the bank account being too low or anything like that, because it's basically we were hit with something every year, and it's kind of we've assessed, and I'm throwing all the extra money at paying off this debt.

And now he's trying to focus fully, and he's saying that if we say a bank account, that it's too confusing for him, because he gets overwhelmed, because he doesn't know what's going on, what's coming out, and we've tried every app, every spreadsheet, everything, and it just seems like nothing's working.

And he thinks the solution is just to work on two different pages.

It's his solution. Yeah. He thinks that's going to make this go better for everybody. For you to do that, he can't concentrate on one account. Yeah, so he wants to focus, so he wants to focus, so like all those things are just already

not working together. Okay, so Hannah, how much debt do you guys have? So currently, we have, we fell back into credit card debt, about two years ago. We have 15,000 just about on that, and then we just have my student loan debt left, which is 23, thousand.

Okay, how much do you guys make a year? Our take home is 7,500, and then on top of that, he will get commission and bonuses. What does that mean? So, he just, right now, he just started a new job, because he was laid off two months ago, and then went right into a new job, so he worked it out that he will get a bonus

at getting a settlement from his last job, because he was laid off while he was on page

“family leave because of some sports, and he's negotiating that, but that's working”

to be about 10,000 too. Okay. I want to throw that up the debt, and he wants to have that as kind of like an extra next egg. No, him more secure.

It's going to disappear just like it has every single other time. So here's the, here's the napkin math hand of just to give you some clarity. If you knock this out in 12 months, that's a little over three grand a month, which means you guys live off of 4,500 plus the extra, the bonuses all of that. Can you guys do that?

It's a little tight because we live in New York. Our rent is a little bit over 3,000. That includes all our utilities, everything in it. Are you working on that?

That'll, yeah. I work from home and stay home with our kids.

Okay. I'm assuming we're home about a thousand a paycheck, but that's after my insurance and everything. How much are you? How many paycheck?

“Do you get two paycheck a month, or you paid weekly?”

You pay tax a month. And that's the top of the 7,500, or is that combined? No, that's included in it. So he drinks the 70,000, and then I get the 2,000 and then he'll get the missing bonuses.

Got it. 5,500 plus is what we're working with. Have you guys tried every dollar? Our budgeting app, yeah. Oh, we get a while ago.

Okay. I think we need to restart this process with a whole different mindset that we are doing this together. We are going to cut up the credit cards. We're going to freeze our credit because so far you've given yourself every opportunity

to take a shortcut to go backwards. And so if you make the only path forwards, you will move forward. Yeah. I mean, we're on that, we're just kind of want to throw everything at those and get it over with because I feel like we're paying about a thousand dollars a month at credit

cards every single month, and I just want to get it over with. Okay. So the fact that you guys, because I mean, if you're saying what you're saying is true, and if you're as hard-bent on like, hey, we're not going into debt anymore. And if an emergency comes up, the thing about taking debt off the tables at forces you

to be creative in your options. And so it forces you then to say, what else has to be true for us to move forward in this emergency? So if that's where you're at, and that's not where he is and what he's wanting to do with money is so different to the point of wanting separate finances, then at that point,

you guys just are not a line, Tana. I mean, you and your husband are at this point. Like this now becomes a marriage problem, not as much a money problem. It's not the budget's fault. I agree.

I agree. I agree. I agree. I agree. I agree.

Have you seen anybody?

Have you guys brought in a third party at all?

We, this is difficult, too. We were seeing kind of like an ADC therapist for his ADC because a lot of it stems from that. Does he have some medication at all? Yeah.

He is on medication for it's a very severe case. Okay. Yeah. I don't know what else to do about it, like it's very hard to do. Well, what you can control is the safeguards you can put in place so that you can't

make any more mistakes that you can't go backwards.

“And that's why I'm telling you, if you cut up the cards, you don't own a credit card,”

you can't go into credit card debt. If you freeze your credit, you can't go into more debt. So I only stop that at a hell. And it sounds like you guys need new patterns in your marriage because his ADD ADC, it's affecting youth, what it's sounding like more than just the money.

It sounds like it's kind of coming in. So you guys may need some more guardrails and processes of what you make decisions within your marriage and new communication styles almost in general. And then that will actually bleed over to the money thing. So I'm glad you guys are seeing someone at some level, but still engage your marriage

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the switch today. That's boostmobile.com/ramsy. $25 forever requires customers to remain active on boostmobile unlimited plan. Have Anna in Sacramento, California, high-savanna, welcome to the show. Hi there.

Hello. Hello. How can we help? So I'm a mom of two little girls, and I work two full-time jobs, and I go to school full-time, and I'm in about $37,000 of debt, and that includes my car and everything.

And I suck in like this loop of like cash advances and everything, and so when I get paid, I feel like I have nothing, and it goes by so quickly, and I just don't know how to get out of this. I want to get my debt back to zero, and I don't have to worry about any of this anymore. Yeah, absolutely.

Are you single, Savannah?

Yes. Okay. And you have your two girls, how old are they? I have a seven-year-old and a two-year-old. Oh, wow.

Okay. And you said you're working two jobs.

“Is there one that's full-time, and then one is part-time, or are they both part-time?”

No, they're both full-time. I work both of them at the same exact time, one's remote, and one's in office, and I just do both at the same time. Wow. And you're in school full-time?

Yes. And I'm in school full-time. How many hours in a day do you have? Do you have more than I? How are you doing this?

No. I know. It's crazy. It really is crazy. I just, one of my jobs is a little more laid-back, and so I'm able to do my other, because

I do customer support on one side, and I do property management on the other, and I've just been really blessed with my property management one, so... So what's your income? I've been able to make it work. I bring home about 6,500 a month, to maybe $7,000, and it just depends, because sometimes

I get, you know, like, least bonuses for the property management one. So give or take, it's about 6,500, 7,000 a month.

“And what's causing you to go in the hole every month and turn to these cash advance apps?”

I think it was just a cycle, because I just got this second job maybe two months ago, so

I think it was a cycle with my other job that whenever I'd get paid, it just wasn't enough. I have my rent, my bills, daycare, I drive a lot, so gas is expensive, and I just got stuck in these, and then also my credit cards, you know, I have these minimum payments, so I have to, you know, keep up with. So I just feel like I, I don't have enough ever, and so now I just, I need to get out of

this, like, cash advance. Have you felt, you know, have you felt different the last two months considering you just added a full part time job, or I'm sorry, a full time job. Have you felt any, any relief in it at all, or were that money's going? You know, it's funny you say that, because everyone asked me that, and no, I don't even

feel that there, that I've even made any more money. How much extra are you making per month now with this job versus in January? I would say it's about an extra $2,500 a month. Okay. Are you on a super strict budget?

No. Okay. That might be our problems, Savannah, honestly, because, I think so, because what you described,

“you should feel a immense amount of relief with $22,500 extra, and the fact that it's just”

slipping. It disappeared. Yep. It's going somewhere. And I'm not saying you're being irresponsible or anything like that, but I think there

is something about having a plan for this money, because if there is no plan, then it is going to just disappear. Some of else will have a plan for it, like cash advance apps, or whatever, they want your money. And so you need to want it more than they do.

So, well, we teach Savannah as a zero-based budget. So every single month before the month begins, you're going to look at the month ahead and say, you know, in this case, it will be June, which we're at toward the end of May. This is actually going to be a great experiment. And just as a little side note, we will get you every dollar premium for a year.

Well, that's our gift to you, because with every dollar premium, you're able to attach your bank account to it, and you're going to cut up the credit cards. There's no more swiping. They're going to be gone. You're going to just use your bank debit card, and you're going to create a zero-based

budget with an every dollar. And every dollar, that's the way the app is designed. Some people do budgets, you know, like a 50/30, like people have like different philosophies

what you do is you take your income.

And then under that, you're going to list on everything you spend the money on it. And again, in every dollar, there's going to be some pre-categories that everyone has, right? We're mortgage or lights, electricity, cable, whatever. So you can add subtract some of these categories, but the goal is for that $7,000 every

month has a plan, and you know exactly where it's going, including debt, including extra on the debt, because you're looking at your food category, and you're like, "I'm only spending. I'm making this up." 500 bucks a month on food, like, that's it.

For me, in the two girls, like, that's all we're spending, and we're going to get creative, and it's going to be beans and rice, rice and beans, peanut butter and jelly, ramen noodles, like, we want nutrition, but that may come a year later, we have our money under control. You know what I'm saying? Like, genuinely, it is like stripping down to everything, and you're going to be cutting

your lifestyle, because when you do the budget, it's going to be very revealing of, this is where all my money is going, and there's going to be categories of it, and you're going to get pissed, and you're going to be like, "Get this out." No, we're cutting that subscription, we're not doing this, because it starts to actually visually show you, like, here's some freed up money, and here it is, that's going to be tackling

the debt. That's where that margin's going to go, and so that would be my number one for sure, and then, George, obviously, starting to pay off some of these, still with the debt snowball, even though the payday options are in there, which are terrible, and terrible interest rates in all of that.

But, talk to us about your debts, Savannah, how much, if you break it all down, what's all the categories of the debt? So, I mean, most of its credit cards, I was $7,000 on my car, but that one, I make sure

“I pay that every single month or, you know, but what made me, honestly, reach out, is one”

of my credit cards, I got a letter from an attorney that they were going to try to, you know, sue me for the money, and I'm like, what do I do? So, all these credit cards, they're all maxed out to about $5,000, and then I have one that I share with actually my dad, and that one's maxed out to $10,000, and it's not his fault, it's my fault.

So, I just, it's a lot, you know, I need to get these little hearts under control. For sure, yeah.

And so, cutting them up, and them not even being an option, it's going to be your first

bet, but then you can also, if they have gone into collections, there are some great options with, actually, calling them and negotiating your debt, and it's actually some resources that we're going to hook you up, Savannah, hang on the line, we'll hook you up with Guardian litigation, they're a partner of ours, they're a nationwide law firm, and they help people exactly in your shoes to make sure that you're not getting bullied and harassed, and they

can actually help you settle these debts for what you can pay, and so we'll hook you up with that, you can go to GuardianLit.com/Ramesy, but we'll make sure that when you're off the line, our team connects you to those good people, and that's part of the solution, and the rest is, how do we debt snowball these things, delete the cash advance apps and go, like Rachel said, we're going to get creative, debt is no longer an option,

because we're not going to be able to get out of debt if we go into it, and so that's going to be your hard line with the budget, that's going to be your hard line with spending less and making more, clearly you're doing a good job making more, but you're finding out, there's a ceiling to that, we have to learn how to spend less to in order to create that margin.

Right, yeah, and don't let the credit card companies scare you Savannah, I mean, if anything

“if they are in collection, honestly it's more an advantage for you, because what happens”

is they end up selling the debt to another company, and then they call you the collections company, and then they end up selling it, you know, next week to another company, and it's just a disaster, that whole industry, and they're going to try to freak you out, but they're going to sue you, they're going to garnish your wage, you know, they'll just talk it up, and honestly, if it isn't collections, that gives you the power to negotiate.

Now, if you have the money people listening out there, that's not in Savannah's case. If you have the money to pay your credit cards off, you pay them off, but when you're in a case like you Savannah where you're like, I don't have the money to pay, then when they go into collections, then again, it's a little bit to your advantage, because you may be actually able to negotiate, and depending on how deep it is, I mean, sometimes pennies

on the dollar. So, but yeah, but that company that law firm will be able to help you, yeah, they're amazing. And then I just want to encourage you Savannah, you're a single mom, and any single parent out there, just in general, rather, you know, you have your finances in order, or you're

stressed about them, that in a self is exhausting, like that is so hard, so hard, and you

are doing an incredible job setting up a life for your girls.

I mean, you're going to be doing the groundwork for the next probably two years to get yourself out of this, but Savannah, when we talk about changing your family tree on this

“show, that's what it's about, that's your wife's fighting for these girls, so that you”

guys have peace and control over your money, and you're a hero to say I'm going to strap on that cape, and I'm going to take this journey. So, we're here for you, stay on the line though, we're going to hook you up with everything

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All right, let's head to Jordan and San Diego. Hi, Jordan. Welcome to the show. How are you guys doing today? Hi, we're doing great.

How can we help? I'm doing great. So my name is Jordan. I'm from San Diego, California. I'm 24 years old, and my current income is about 120,000 dollars a year.

But the reason I'm calling you guys today is it feels like my entire life, people that were sold me, we're a college, getting a job, making a lot of money, and everything else will fall.

“I think I've been a pretty good job at getting to that point now, but it seems like the”

more time goes on and the more money I make, the life I always imagined myself having,

having keeps going further and further at a reach. The reason I say that is, as I said, I live in Southern California in San Diego. I look for houses in San Diego too far out of my reach. I make a broader circle, and I go further, and no matter how far I go, it still feels like houses a mortgage is going to cross me around 3,500 to 4,000 dollars a month, with my income

doesn't sound so bad, but I think I've finished most of steps I want to in the next thing I want to do is start a family and have kids and focus on that, and it just feels so way to reach for me to keep contributing to my savings accounts, to pay off a mortgage, to be able to support my wife or she stays home, and to take care of kids and make sure that they have some sort of support going to school, and I don't really know if I'm doing

something wrong, or if there's something I could do differently.

Here's what you've done wrong, Jordan.

“You've assumed that you have five years left to live, and that you must accomplish all”

of this in the next five years or else. So all you need is patience, you're doing so well at 24 far better than I was, and yes, you have a high-cost living area, but there's no rulebook that says if you don't own a house in San Diego by 25, you screwed it up, man, and so release yourself from the guilt, and from the lies that you were told that if you just do all of these things your life's

going to be great, those people meant well for you, but they don't live your life. And so I would just be very patient, go, you're crushing it, let's learn to live on lesson we make, put money in savings, and then do this for the next six years, and then call us and see where you're at. Okay, I appreciate that.

Something I did want to ask, I'm currently putting money into my work to ESP, I work for the development suite of their savings plan, I put money into my personal investment account that

and I know a lot of people are in a much worse situation than me.

So I feel like there's a lot of things I don't do, because I'm just so addicted to saving my money, I'm so afraid of bad debt, that I think there's nothing I haven't even done. I have a $7,000 remaining on my car now, okay. So other than that, you're working on paying that off? Yeah, I just paid off, I think it's too many a month, and it's easier for me to just have

do you have savings? I currently have, in my individual investment account, I have it on $20,000 savings, liquid cash, or my savings account, I have $5,000, and then I have personal off IRA with 25, and then, like I said, my TSB has another 25 in it. Great.

Well, you're doing great on the investment side. I would just have some focus with your financial goals, and right now my singular focus would be getting out of debt. The next focus is to have an a liquid emergency fund of three to six months of expenses, and as a young single guy, this is also the best time.

Because you have no other responsibilities, no one else to answer to. It's just you and your own goals. So you can actually make a lot of traction right now until you meet that wonderful person, start a family, maybe they'll be working to, your income's going to grow over that time. And so you're all you're seeing right now is this little tiny snapshot of your life

right now, and then you see these very big goals far away, and I think you're closer than you realize. Yeah, and I don't think you're comparing your life to reality, either Jordan.

“So you either have expectations that you should be, you know, where you should be at 34”

and you're 24, or you're, you know, seeing people on social media or your friends are talking with you. Whatever it is, and what's being painted in front of you is probably not the full picture either. And so if you are in your early 20s, making six figures, no debt, so I'm going to count that

for you, because I want you to pay off your card tonight with some of the savings. Okay, just be down with the car, and then, and you have cash, you know, saved, you have investments. Like everything that you're doing, you are doing it well. And the hard thing about building wealth the right way is that it takes time and patience.

It's not going to be as flashy as the people you see on TikTok that are like, "I bought 18 VRBOs," or "Varibo," whatever, like, or, you know, everything is, and like, you know,

you're going to see, and I make one million a month, they're like, "What all the crazy

stuff you see?" majority of the time, number one, is not even true, or number two, they've built their entire financial life on a house of cards. So, slow and steady wins the race, and it's not going to be flashy, it's not going to be exciting, but it is going to be solid, and it's going to be all yours, because you're not going to be borrowing money to do any wealth building, it's going to be you actually

making decisions about your life.

“And so, that's what I would encourage you, that I think what you're wanting is not bad”

or wrong, but I think feeling like a failure because you don't have it right now to George is born at 24, we just want to be like, "You're Jordan, you're good, you're doing great. You're doing great." I think one of the reasons I'm so overwhelmed now is because I have, I have to say, I've already met a little of my life, we're talking about marriage.

Oh, great. I'm talking about kids. Yes. I don't have a ring, I don't have a wedding, I don't have a honeymoon, which is obviously I'm not playing on spending and traveling and I'm out on it, right?

I kind of imagine bringing kids into the world until I feel ready, which you'll never

be with. You'll never be with me. You'll never be with me. You'll never be. You'll never be with me.

You'll never be with me. The best thing you can do is feed that free with an emergency fund and be aligned with your spouse on your goals financially, spiritually, all of that.

“That's the best thing you can do to be ready other than that.”

Don't wait until you have a certain amount in your investment account to have a kid. No. I'm going to get married, Jordan, if you guys know, do it. What's holding you back right now? Was it finances?

I'm so afraid of not having money. How did you grow up? I grew up, so my dad is the hardest working guy I know. He doesn't have a requirement. He doesn't have anything.

That's your favorite. That's your favorite. Yeah, I'm so worried. Yeah. I love my dad, but I want the opposite.

Yes. I want the idea where I know the booze is going to get paid. That's why I love my job. Everyone talks about owning a business. I love having a stable paycheck.

I love having investment savings to my account automatically, and there's no other way to rather do it. There's just the idea of me, like when you're telling me to pay off to $7,000, right, which I know it was a great idea. The idea of me losing $7,000 in cash and it goes into my car.

I know it's a good idea, but it feels wrong because in my head, if I don't save, I feel like I'm failing. Right. Because at that point from where your psychology is, is that saving is the only thing you should do with money, and out of good reason because you're looking at your parents

and I call it crap, they have nothing, they're not going to, they work so hard, but now

But here's the deal, Jordan.

“There's two other parts of money that you have to engage in to have a holistic, healthy,”

financial picture, giving and spending. But you may go through seasons where you're going to be saving more, maybe you and you're soon to be fiancee, soon to be wife, you're saving it for that down payment on a home, and you guys are really like, hey, we're going to pull back on life salt to really get that down payment.

That's great. But over the course of your life, Jordan, if you have this mentality, the rest of your life, that's where money can become an idol. You will hold on to it so tightly and have this sense of security that this is going to be your answer.

And then you're going to look up and realize, I'm like, I have, I have wasted my whole life because fear has driven my financial decisions, not a healthy balance of all of this. So I want you to budget as your answer, budget for the fun stuff, budget for some giving, and budget for the saving. Yes.

And realize, I'm young. I got a lot of time on my hands. You're doing so good.

“And Jordan, go on, ramsysolutions.com and pull up the investment calculator and put in what”

you have right now with investments at 24.

And if you, and just do the math, if you never put another diamond, what you'll have at retirement.

40 years from now. You're going to be doing great, even where you are now. You're doing great, Jordan. So chill, relax, enjoy the ride. You know, one of the first things I discovered working in the financial world is how absolutely

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whole life crap posing as an investment opportunity, what you need is level, term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company.

This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you, the best options, and they've been around for over 95 years. So you know they'll be there when you need them.

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years. Trust them, and you can too. Visit Zander.com for instant online quotes, or for a more personal touch, give them a call at 800-356-4282. Well, George, when it comes to investing, we were talking about just the previous segment

of how powerful time ends, and even if you just do the boring stuff, time is on your side, so the earlier you can start the better off, you're going to be. Yeah, and the first milestones are really hard, and then it's like a hockey stick with compound growth.

So getting to that first 100,000 invested is such a marathon, and then from a million to 2 million,

you sort of blank in your there if you do it the right way. So I want to take Jordan's numbers, who is on the call with us, he made 120 grand a year, and he felt like it just wasn't enough, he was behind, he can accomplish his goals, so he was like hoarding money to invest, and couldn't enjoy any of it, and I just wanted to show the audience at home, even if he never invested another dime where his investments

would be. To help with the scarcity mindset that he was experiencing. So he's currently 24. We're going to pull up the screen here if you're watching on YouTube or Spotify, or the Ramsey Network app.

So 24 years old, let's go to 64, so that's a 40 year career. And he currently has, he said 25k in a Roth, 25k in the TSP. So we'll call that 50k, and he's never going to add another dime. So how much will you contribute monthly? Zero.

And I'm using the Ramsey Investment Calculator. We'll put a link in the show notes to plug your own numbers in. Annual return, I'm going to go with 10%. Now, in the last since 1950, the S&P 500, which is the top 500 companies in America, have ever turned about 11.8%.

So 10% is very real. Let's do both. Okay, both. We'll go conservative 10. And then Rachel will be the optimist.

Glass have foggle. Always more. All right. I'm going to calculate 2.68 million dollars. Oh, George.

64.

If he never adds a dime with $9.2.7, see if he runs it up again.

Now, 12% you're looking at $5.9 million. That's a two. That's pretty wild. $6 million.

I hope he hears this.

But let's go back and let's say, if you never do another thing, and that wild, never

do another thing. And look, the contributions, he didn't contribute anything but the 50. And it turned into that. That's right. So if you could imagine continuing to invest 15%.

What did I do? 15% of his 120 grand, that's 1,500 a month from 24 to 60. Let's see what happens if he continues this. 12 million dollars at 10% rate of return, Jordan. There you go, Jordan.

So if, and that's if you never get a raise in your spouse, never works. That's right. Yeah, it's a good point. So let us free you. Enjoy some of the money, because you're going to get to 12 million ago.

Should it went on a vacation, probably, probably would have been a good idea. I got a lot of money now, and so we have time to spend it. Some furniture that we actually enjoy and want to pick out. You know what I mean? There's, that's okay.

One of the things that happens. We talk about this book, Die was Zero, which we don't agree with everything in the book. But the concept is, do not wait until you're 70 or 80 or at the point where you pass away to then hand your kids a million bucks when they don't need it in their 60s. That's right.

That's right.

“Use it, enjoy it while you're alive and even giving them some too, right?”

But while you're alive, actually be giving people like Jordan to leg up to be able to buy a house in San Diego at 24, if you're that boomer. That's right. There you go. Some encouragement that you don't have to retire broke in the younger you are the more

every dollar counts, because it has more time for compound growth. We hear that all the time, people like, why did I not start this earlier? Why did I not get out of debt? And start, you know what I mean? Start the whole baby set before I started.

I started when I was four years old. It had an extra 20 years. No. George. But that's the idea.

The best time to plant the tree was 20 years ago. The next best time is today. So, start. Start where you are.

Always we could have started earlier.

That's right. All right. Let's go to Oklahoma City and we have Lindsay on the line. Hi, Lindsay. Welcome to the show.

Oh. Are you guys? Hi. We're doing great. How can we help today?

Yeah. I had a question. I have a credit collection services bill in the amount of $1,000 and $1,035 and I'm about $70,000 in debt and or $77,000 in debt and I was just curious. I tried calling them earlier to see if they could make a settlement for $400 and they

denied it and I was just taking days advice to do that and so I was just curious what you guys would do. How old is the debt? Oh, as of April 17th. Oh, so it's like a month.

Yeah. Okay. Yeah. A fresh debt like that, they're not going to be as willing to settle as one that has been sitting for three or four years because they kind of see the writing on the wall.

They'll be lucky to get anything out of this debt. And so not that I would do wait on purpose to pay this off but the reason they're not going to take $400,000 on a $1000 debt is because it's only a month old. Yeah. Yeah.

If it was a year or two, that's when you can really, really negotiate. What do you have, Lindsay?

“Do you have extra margin every month that you're trying to pay off debt?”

Yeah. For sure. I've got a lot. I've got a lot. I'm just trying to figure out where you put your money.

Yeah. So let us know, so you have that $1,000 bill and then what's the other $77,000? What kind of debt? Well, $70,000 I've been in my car. 70,000 is just in your car.

That's one car. Yeah. How much do you make a year? Well, 225 days. Okay.

And then test commission. Okay. So last year I made 270. Okay. Okay.

Well, that's not completely out of proportion just for an income standpoint. I was nervous. You're going to say, you make 75. We get that call sometimes. But all of your problems are solved if you just sold the car, right?

Yeah. Yeah. How are you?

“How do you have a credit in collections making 270 a year?”

Well, because I'm not very good at, I'm very good at my job. I'm not very good at taking care of everything else. Okay. From like a detail standpoint, getting everything paid. I have a problem with details.

Okay. I have a thousand dollars to pay this debt, though. I do. Okay. Okay.

Well, so then I wouldn't, I wouldn't go shared with you. It's not worth the brain calorie. Yeah. I would just try to negotiate. Yeah.

You have a fight at this point. Be done. And then what's the other 7,000? Oh, quite a cardet and like, oh, some credit card debt and then a little bit of like, oh, I put something on a furniture plan, but I'm just trying to figure out how to spend my money.

Um, I was just curious what you guys thought because Dave always talked about, you know,

you guys can call a credit collection company and, you know, offer 30% and I offer more you not made it in settle. Um, but they also, yeah.

you either.

So I didn't know if they did or not.

Okay. Yeah. Yeah.

“I would say Lindsay, I would, I would start to put some parameters in place, some”

identity statements, if you will, about who you are with money. Okay. So you, if I were to like wave a wand, I would want you to say, I'm a person that doesn't borrow money. I don't need to borrow money because I'm a really hard worker.

I'm very smart and I can make a lot of money. And I am. That's, that's part of who I am. That's part of you, Lindsay. So details are not my strength, but I am a person who works at my weakness, especially

when my weaknesses are costing me all this money. Like the amount of interest you're paying Lindsay on credit cards, when you make $270,000, you should be like. That's wild. What do you do for work?

I'm curious. Sorry, you brought that. Sorry, you brought that. I'm hiding something for commercial. Alighting sales rep?

Yeah. I imagine that involves some details, right? You got another customer. There's no the products. How many?

We represent like 208 different manufacturers right now. Sounds like you know some details.

“And so I think what's happened is we lack a days ago with our money because we can sort”

of out-earn our stupidity. But the problem here is not settling a $1,000 debt. The problem here is you're going to make a $1,000 at work today. If you make $220 a year, that's about every work day you have an year.

So let's take advantage of this amazing income and go, I'm cutting up the cards.

I'm only going to use money I have in the bank. I'm going to sell this car just because I know it was a mistake. I'm going to purchase something in cash and I'm going to be a kind of person who can save up for that. And guess what?

Your next few paychecks, you could buy a used car that is wonderful that will get you from A to B without any debt attached to it. So you would suggest buying something else, I mean, obviously I know it was kind of a dumb decision, right? What kind of car is this?

America wants to know. It's the Defender 130. Oh, so you knew the details there? You didn't just lock up and sell, take any old car you got. So here's the number.

Ladies and gentlemen, what's she wants to know? The hard part is going to be swallowing your pride and selling that car and buying something that is not a Defender 130 brand new. Yeah. Or if you can pay this off in a year, Lindsay, I would be okay with you keeping it.

But you actually have to do a plan and say, I'm putting all of this extra money towards paying off debt. So you're going to live on nothing. Like, $6,000 a month just going to the car. Everything is going to be going to this car.

I'm willing to do that. It needs to be sold tomorrow. Hey, George Campbell here, let me pull back the curtain on something you may not know.

“If you're in debt and collectors are threatening lawsuits, the worst thing you can do is ignore”

it. That's exactly what they're counting on. Because when you do nothing, they can take you to court. And if you don't respond, they can win by default and even get access to your bank account. And that's why I tell people about Guardian Litigation Group.

Guardian Litigation is not another debt relief company with some bait and switch tactic and empty promises. They're an actual law firm with real attorneys. And from day one, you get an attorney who represents you. They step in when collectors are trying to push you around and they handle it.

So instead of panicking, you've got a plan for peace of mind. So if you're back into a corner and facing imminent legal action, don't stick your head in the sand. Ignoring it will make it worse. And Guardian Litigation is who you contact when it gets worse.

So go to GuardianLit.com/RAMSI. That's GuardianLIT.com/RAMSI. It's very advertising. Results may vary and no specific outcome is guaranteed. I am a Rachel Cruise hosting this hour with good friend and co-host.

It's my money half-hour, George Campbell. We are answering your questions. So give us a call. Triple eight, eight, two, five, two, five. And we do this show every day from one to four central time.

So you can come and visit us. We are just south of Nashville and Franklin. We got a full house today here on Memorial Day weekend. And it's always fun.

And it's always fun when we get to see people and interact and say hi.

Sometimes lonely. He has a lot of emotion when he finds ourselves in. But when y'all are out there, we appreciate it. And George actually went on the road and did the show live and in front of a bigger audience than once again.

Couple hundred people is awesome. And it was so fun. We did these. We did these in April. Yeah.

We did these like small kind of theaters around some in Southern California. We were in Orlando, we were Charlotte Denver Phoenix and Anaheim area. Black town. He'll be to be specific. Orlando is last fall.

Orlando is last fall. Yeah.

It's been a wild ride. Yeah. May has been something.

But there were some great moments and the team did a great job with these events

in the video side of it. Yeah. And you get to see the emotion on their faces, the laughter, the tears, the awkward debates with their spouse standing next to them. That's right.

So make sure to check those episodes out. You guys, I think we have three out of the four that are out. And so you can check them out on the channel. And yeah, it was just kind of a fun, different way to do the Ramsey show, but we loved it.

Love to be in there. All right. Let's go to Atlanta, Georgia, and we have Katherine on the line. Hi, Katherine. Welcome to the show.

Hi. Thank you. Yes. Absolutely. Thanks for calling in.

How can we help?

Several years ago, my mother-in-law moved in with me and my husband.

And she's been living with us since then. And despite the mother-in-law, the stereotypes out there, she's actually been fabulous. But, while she watches our kids, I started that four years ago, she didn't pay anything for like a room in board. She had talked a lot with like household items and things like that.

But when you think of the whole stuff of it, I'm like, oh, that's a lot of money.

“And I don't know if that's something you should ask her.”

My husband siblings to help contribute to, or even my mother-in-law herself. To contribute to like a, like, paying rents and for utilities, is that what you mean specifically? Yeah. Like, tort, yeah. Like, essentially like, remember, we do pay a lot, it's like the food, too.

Like, he pretty much every day, like, necessary. And it's expected on her part. I guess that would be it. Yeah. I expected not to pay.

You mean?

Yeah, it's expected that she doesn't pay.

Is it because of groceries? And just because of child care, how often did she watch in the kids? And watch as the kids. So it's been one kid every day or when I was working full-time for four years. And then I just had a child that's going to be a four-year-old, and a little baby, and

then there will be five days of week. Wow. And you're not paying her for that. Correct. Yeah.

I feel like she's kind of earning her. You guys are getting the deal out of this. Not her. Yes. Because what you would pay for someone to watch those kids?

I mean, you're talking about a nanny, a live-in nanny situation. I mean, you'd pay a full salary, you know, 40, 50 grand a year for that person. So you're not paying that. Correct. So I think she's probably earning her keep if you ask me.

Yeah. That makes sense. And was anything established early on of, you know, who's decision was it for her to live with you guys? Um, it really was me and my husband's joint decision.

She was in an abusive marriage. So we essentially got her out of her house and per safety reasons. And then she got divorced. And I was like, you stay here like as long as you need.

“And even if you want to stay, stay that's fine.”

And that's just what it turned into for like a year and a half. And then I had my son and things just stayed the same. Okay. So I do wonder if there's any level of you, Katherine, having a low level. You sound very pleasant and peaceful.

But a little level of frustration that that an urgent thing needed to be done. And I think you guys made the right decision right. I think if anyone was in that position and their mom was, you know, in a dangerous situation, come live. But then the fact that there was no, that that act now has become the rest of your life

as you see it because there's no other conversation of her leaving. So I think that's probably more of the problem that I would be. I would think for myself, Katherine, you know, pretty intently like, hey, what do I want my life and my household to look like in the next four or five years? Is it that you're going to be working full time until these kiddos go to off to kindergarten?

You're going to need help and actually it's a gift that she's there. But you know, when that time comes, maybe, you know, she can find her own place or maybe it's in 12 months that that happens. I don't know what that looks like for you and what you're desiring. But I would find that.

And then in a very kind way, obviously, you know, bring that up to your husband and like, hey, I'm having this feeling, can we just can we talk about it? Because it just feels like it's like ambiguous and and that ambiguity is causing probably some level of like, oh crap, this is now forever. Should she be paying towards the mortgage?

Because she's living here. She's a roommate. Yeah, yeah.

“And I think that just was never established because you sort of all stumbled into”

this situation and you all love each other and it all made sense. And now you're going, we probably should have some level of boundaries here. But what this looks like, what is the responsibilities for everybody? But the plan is. Because she might also get resentful and go away.

I just realized, I'm not getting paid for this. This is crazy. I'm watching two kids five days a week and she can't create her own financial independence at all from you all. Unity means because you, you know, I don't, I don't know how anyone's thinking you're

feeling. But I think starting those conversations and again, nothing's on fire. But when this drags out another 12 months, I would not want that to happen without

Hey, what are we desiring?

What are we wanting? What's the plan going forward? That makes sense. ambiguity doesn't make me anxious. Yep.

And that's mayor. I got that. Do it. That makes sense. Yeah.

Yeah. And I don't think that's mean of you or you don't even know that you're a bad daughter and law or, you know, anything like that.

But especially when you start mixing, you know, families and living situation,

when it's not talked about and established and expectations and desires and wants and fears, all of that has pushed out on the table and talked about, it can get messy really quickly. And some people do it well. I think we had a call maybe this week, even about that George Reynolds on with you on my day.

There's ways to do it. Well, that takes a lot of communication to the front end and it takes healthy people on every side of it. That's the other part. Yes.

And Catherine, you know, opening that conversation may end up in resulting possibly of her saying, you know what? I want to create a life for myself and get some independence, which may mean she moves out and gets a job and you got to figure out, you know, child care stuff. I got, you know, I don't know what that means.

“But I think being true to yourself in which you guys want is going to be the most important”

long term. There's a saying around here at Ramsey to be on clearers to be unkind. That's right. So it's actually the nicest thing you can do is to communicate with clarity. And if you go, oh, that didn't feel good in the moment, but at least we all know where

we stand. There's no ambiguity. Okay. That quotes good. And then what does Deloni say about resentment versus chew?

Oh, no. Sorry, Deloni. Do we run like that? Do we run like that? Yeah.

That's it. Chews guilt over resentment. So you're going to feel guilty. Maybe trying to have this conversation, you feel bad about it. But you'd rather have that emotion than resentment build over the next couple of years.

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All right, Woody is in Atlanta, Georgia. Hi, welcome to the show. Hello. How are you guys doing? Hi, we're doing great.

How can we help? So, my wife and I, we've been married for a long time, and we start financial peace and university around 2007, before we got married, at Jungle First Baptist Church. And so, we follow the baby steps pretty much, we're 40 and 41 now, and I've noticed that I can't seem to switch it off anymore, because I'm constantly just thinking about

like savings and investing, and we actually have a pension at our workplace. And I've noticed that are like a 41K, you know, 457, and stuff like that, have actually

reached to like $1.2 million already, and wow, it just definitely got into the point

“where am I really enjoying the money that I'm saving?”

It's almost like I get anxiety when I spend on three of the things, but I will give money

like, I don't get enjoyment out of just spending money, and I'm not sure what, you know, my plan is because like we only have really, because my wife is a teacher, and I'm in public safety, so we retire pretty early, like at 52 years old, so we got about 11, 10 years left to really work, and it's going to be about $150,000 a year just for the pension alone.

So if you're basically saying we're good on the investment side, how do I unlock this

spending side? Because even when I do spend, I don't enjoy it. Right. Yeah, because I mean, we paid off our debts, you got to work it, you know, no, we paid off our house.

Oh, all the big steps. We're totally, well done, you guys.

“As a teacher, and what did you say, you said, I'm like safety?”

Public safety. Okay. Yes. Well done, you guys. That's amazing.

That is amazing. What's your wife now? She's like, what's money? She just, she's really, she's six to the plan that I just kind of go, hey, we need to just do this and she's just kind of step back and just allows me to invest and just do whatever.

And then, you know, we go on vacations, we enjoy just hanging out with each other, but we live very, I guess, minimally, because we really don't spend that much money on just random things anymore. Yeah. Is there things you want to do, but you can't get yourself to do it?

All the other things. All the other things.

Well, if I always interested in the fire movement, just, you know, because probably safety is one

of those things where I can't just weed work because things may happen that I need to be there for. So I, you know, I deal with emergency management, so it's pretty much for a whole county. So it's not something that could just weed and go on vacations. So I guess my big thing right now is just focus on, like, financial independent retire early, but we're there.

So you want to go in more vacations, but you can't do to your role. Yeah. If I could snap my fingers. That's where I'm going.

“Where would you put your money if I snap my fingers today?”

Is it a hobby? Is it a thing? Is it upgrading the car? Is it, you know, buying back your time? Your guys are doing things you don't want to do?

Probably buying back time. I mean, that's pretty much what I focus on. I've noticed that. That's all I kind of think about right now is like, hmm, can I actually retire early? 'Cause, I mean, our house is, you're not even part of the net worth our house.

I don't even count the houses part of our net worth. Sure. Do you guys have kids with these? Yes, ma'am. I have a three year old, and we've already funded his five, 29 in this gentleman's.

I believe you. I believe you. I believe you. You have been, yes. You have been good to do it.

You've got an A plus plus for the financial peace university. One would, you won the prize. Okay.

“So, you know, when I think about Woody a lot, when it comes to spending, is a couple of”

things. One, you want to have that muscle built, right? Because like you said, you're going to just end up hoarding, not enjoying anything. And part of the gift and the blessing of being diligent is that you repurchase so, when you guys have so, really well, right?

You've put in a lot of patience and wisdom and sacrifice. And so, now you're going to have the ability to do some really fun things in life, but you won't be able to have fun with those things if you don't enjoy letting go of some of the money. That's one guy.

And then Arthur Brooks, who we just love so much, he talks about there's five things you can do with money. And four of them will actually bring you a level of happiness, okay? One generosity, which you already mentioned in this call, which I love that about you.

So, yes, always looking at ways to be generous that actually has a level of happiness in

your life. One of them is buying your time back, just what George said. So, are there things convenient in life with having a three year old that maybe your wife's like, hey, I would love grocery delivery, I don't want to go to grocery anymore. Let's do that, or let's have someone come clean the house.

Like, I don't know what that looks like for you guys, but what are things you can spend money on to actually get your time back or your wife's time back? And do something productive with that time, he says. The third is to spend it on experiences with people you love. So, find, if you can't find the time I hear that your job is very taxing in that way.

And if there are moments of reprieve that you can say, no, I can't get PTO here, go enjoy those and take your, you know, take your son, take another couple with you guys that you love, or I don't know what that looks like, but go and have some experiences with people you love. And then the fourth is actually saving.

You actually do get a level of happiness by saving, because there's progress and you've been doing that. And then the fifth thing you can do with money, it's not a bad thing, you just won't bring you happiness, it's just buying stuff. But again, there's a little bit of me, what do you kind of want you just to buy some stuff?

I kind of want you to, in your, in your budget every month, have a line item, I'll just like force that line item, that's the one thing you have to do in the budget is spend on

And it can be as tactical, like my husband and I, we will spend differently.

Okay, I will spend on probably cheaper stuff, but more stuff. She's a quantity gal. I love Winston's a quality guy. So, Winston be like, let's upgrade the water hose, or whatever it is, you're right. And he's like, there's a purpose to it.

It's tactical, but he's like, let's go buy a nice one, like that's where he'll spend. But find things that you can spend money on throughout the month, because that will help you let go of some of this, because it will, money can control you, it can control you

“on one end, if you're broke and you have no money, right?”

There's a level of control there because you're stressed out all the time, but it also on the other end of the spectrum can have the control where you have this false sense of deep security and opening your hands and letting some money go kind of counteracts that. So what has been a film for you is now a bug. That's the problem.

The feature was that you're so good at living on less than you make, so good at saving. And now that you made it, it is a bug that we need to debug. And that's good. I do buy random stuff. I mean, we got two Tesla's, I mean, I literally bought two back to back.

And then I was like, well, those are paid off. So I think given away my money at this point, it's going to be what, to my family members and stuff, I think it's going to be the best bet because we put away a good bit of money into vacations soon now. And so it's kind of hard for me to shut it off because if money is just sitting around

in the bank or something, I feel like I'm not getting a lot of interest off of it. So I end up just investing it and that's all I seem to do with just standing money.

“Yeah, and I think that's okay too. I mean, my husband and I, I mean, we'll get to a place”

where we have a high yield savings account, we'll put some money in and then we'll look up and we're like, okay, you know, there's some money in there and it's just sitting there. We could invest that and so we'll take, you know, some of that money and put it back into investment. So like, I think that rhythm is not, is not bad.

And what it sounds like what you just said gives me some level of relief. Maybe you're doing better than you think you are. What do you think? Yeah, I think some therapy would be the next good purchase to go, what's underneath all the scarcity mindset?

How do I, you know, kind of unlock this abundance mindset now that I actually have it?

Nothing is on fire and yet I always feel like something's on fire.

That might be part of your wiring. I mean, your in public safety, you're always like waiting for the other shoe to drop. Well, that might be part of the coming this country. So that probably had a lot to do with it. Oh, yeah, where'd you come from?

Well, we, I was from Vietnam, I'm like, you've been Vietnam after the, the, the war and everything. Yes. I mean, I was, I was a little kid, but it was just like years after, and I lived really poor.

So I, I guess that, I can't switch it off my brothers the same way. So yeah, which makes sense, right?

“When you can connect those dots, like you're not crazy, right?”

I mean, what you've lived through an experience, right? There's no way I want to, I want to go back to that. But again, that's a good motivator to get you to a place of security and safety with money, which is what's happened. So now, not still depending on that same wiring as what's going to be key.

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If you've been turned away by other lenders because your private student loans are at

“a control, why ReFi may still be able to help.”

So they specialize in refinancing options built specifically for borrowers in that situation. Go to WhyReFi.com/Ramsay that's the letter WhyR-E-F-Y.com/Ramsay may not be available in all states. Today's question comes from Grayson in Maine. I'm having trouble with baby step two.

I've saved the $1,000 emergency fund but can't seem to make any headway on paying off our debt. I have three daughters under 13. It's difficult for me to go fully scorch girth when I want to still give them a decent childhood and provide the things they need.

How can I stop feeling stuck?

What a good dad. The dad guilt. It's real. Wow.

“I think there's the issue here is we are pinning getting out of debt and not spending”

money to bad childhood. And I think you can have a great childhood and not buy your way into it. And getting out of debt doesn't take their entire childhood and may take two years but not their entire childhood. And I say this by my kids, I don't know if you feel like this George really what they want

is you and you playing with them, being involved in their lives, doing things not necessarily

that cost money but just spending time with them, being around them.

There's something to do that that I think we gloss over and think they just need more stuff and just keep pushing that agenda when at the end of the day, yeah, do teenagers want stuff absolutely not saying that, but truly the priority of what is being built within them and their characters really and I come from you in the time spent with them. And if you're in debt, the whole time they're going through childhood, you're not going

to be fully present. You're going to be stressed. There's going to be financial burdens that will take you away from letting you enjoy them as children.

“And so I think a short time of sacrifice for long-term gain, especially as they enter”

their teenage years, which is when things really get expensive. You know, they're going to start wanting, there's clothes, there's prom, there's all the activities, the sports, college funding, all of that. You're going to be able to do so much easier without this debt in your life. So some of this is just not feeling the dad guilt that you're doing a bad job and some

of it is going for a short season. And your parenting might look different than other people's parenting in that season. And that's okay too, right? So and so maybe do an X Y and Z with their kids and you're not because you are putting that money towards getting out of debt again, which is not forever.

It's not their entire childhood, they're going to promise promise they're going to be okay. All right, let's go to Eunice and LA. Hi, welcome to the show. Hello, very nice to hear your voice, guys.

Oh, well, thank you. You was well. Thanks for calling. How can we help? So I've been in USA for almost four years.

My background is about like meat shops, businesses, back in my country, from my family. And when it came here, I started working with somebody that he owns the retail store in a good location. And right now he's going to retire. So he was offered for me the store for $300K and I have like $50,000 to give it to him.

So I'm thinking, the question is, I'm thinking, if I go ahead and buy the store, I mean, buy the business or go and take that $50,000 and open my own shop, so that's my question. Okay. Would you be able to open your own shop with $50,000 or are you going to plan on borrowing money as well to do that?

Yeah, I do have a friend that you can borrow for me like another 75 without an interest. Okay. Um, you just think it's a terrible idea to borrow any type of money for anything, and especially when it comes to small businesses, and especially in the food industry, that's the number one industry that ends up closing its doors, and then people end up owing so much.

And not because you're not great at what you do, it just is what it is. And so when you add debt to the picture, you add on stress, you add on a lot of risk. And you add in levels of decisions that you make in order for the business in order to pay the payment that may not be great decisions long term for the business.

of cash to grow something that doesn't lock you into a small business loan or worse owing your friend money that he's going to get for you. And then when the if something happens, and then the shop closes up, now you owe your friend money, and it may take, you know, four or five years to pay that off. And so staying ahead financially is not going backwards and going into debt.

Okay. What's the net profit of the business every year? Like 120, okay. Okay.

So they're basically valuing we had at little under three times that at 300,000.

Yeah. Okay. Now about a potential agreement where you basically pay him income out of the profits until he hits a certain amount. We were thinking about it.

Yeah.

“That's a much safer way to do this in the only way I would do it is this sort of sweat equity”

agreement where you pay him a certain amount of the profits, maybe it's a certain amount, a certain percentage, until you hit 300,000, and at that point he's cut off. And it's almost like you, yeah, you're paying for it as you go versus going getting a 300,000 dollar loan, and then having the bank be the one that's, you know, in charge of it all, because with this other agreement, you have not borrowed money at that point under your

name. Right. But actually, he's offered for me like 300K and there is loan. So I'm going to think like a set of finance method. Yeah.

But that's a very different situation than you paying him out of a percentage of profits. Let's say 25% of profits to him until it's paid back. You see what I mean? Because then if the profits aren't there, you're not on the hook. And so I would have a business attorney draft this up to avoid you having curing all of this

risk. Okay. So if you look at 25%, you're talking 30 grand a year, so it'd be 10 years to fully pay him back. Now you guys might agree on a different percentage, maybe it's 40%.

So he gets paid in less than 10 years.

But this idea that you're going to take on a quarter million dollar debt, hoping this

all works out perfectly is just, you're jumping off a cliff. Yeah. Right. Yeah. So yeah, saying away from any debt situation, and if you can, yeah, create some kind

of agreement with him.

“George was saying that's, that's what we would recommend.”

So thanks for the call. George, we have a question from Facebook and Natalie asks, we are planning an out of state move, and we'll be paying off our debt with the sale of our home. This feels like we are cheating on the plan. So how can we make sure that we feel the pinch and don't go back into poor money habits?

Go, that's it. Wow. That's very self-aware.

So they're going, hey, we'll knock out the debt with the sale of the home, but we know

we sort of short-cutted it. And it worked out. That's right. But our behavior hasn't necessarily changed. How do we make sure it's changed?

Foof. I mean, that's the honor system at that point. But one way to know that is, have you actually been budgeting, are you living on less than you make? Is there margin every month?

“Have you shut down all of your debt accounts, including your credit cards?”

Yeah. Have you frozen your credit? So you can't get back into debt even if you wanted to. That tells me that the behavior's changed. Yes.

That kind of friction you can put into place is going to be huge, and especially on the debt side, and just like what you're saying, George, closing accounts, you and your husband saying, hey, together we are agreeing, we are not borrowing money. So there's going to be no avenue for debt, so we're going to get rid of the credit cards. We're going to rid of this or that, and start living on a budget.

So start practicing, living on less than you make now, and that will create the habit. So pain is a great teacher, and people that have a lot of pain and sacrifices that go through baby step two, they're like, I'm done. I'm done on that. I'm done on that.

I'm done on that. But if you bypass the hot stove, you may not have learned the lesson. That's right. But I think you can still do it. We still people, we see people do it, but I think it's very, very wise that you're cautious

about this. Prove to yourself that you are worthy of trust when it comes to finances. And over time, you will become that person. If you run a business, you already know this. Bad information leads to bad decisions.

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All right. Let's go to Sylvia in Seattle. Hey, welcome to the show. Hey, thank you for taking my call. Absolutely.

My, I am interested in your thoughts on paying off my mortgage as a whole and one payment or splitting up in two years to reduce the amount of tax burden I would have to pay with a large sum. Where is the tax burden coming from? Are you selling off assets?

Well, no. I'm just saying my income tax is if I pay 150, 130,000 in one sum that will take me into a higher tax bracket where if I split them amount in 50 to 50,000 dollars per year, then that keeps me in a lowest tax bracket. I'm retired, I'm 73 years old.

I have self-sacurity in my 401(k) the funds to pay for the mortgage with the loan. Oh, so you're in my 401(k) that's traditional and therefore increase your income tax. Got it. Okay. How much do you have in the 401(k)?

“About 600, 700,000 and how much are you going to pull out to pay off the home?”

It's 129,000 right now. Do you have any other assets? I did.

Well, I have $3 million in property and those are all paid for that.

There are everything paid for by my house. My husband died in 2018 and I got on to the day brands, the program and paid off my debts of about $300,000 in my house. How much do you run the numbers and do you know exactly how much extra you'll be paying because of the tax bracket if you paid it off all in one lump sum?

What my income is 60,000 a year so I can pay off about 40,000 safely to 50,000 safely and keep me in a lower tax bracket, the lowest tax bracket for my state. Okay. I mean, I wouldn't wait because of the taxes, I would calculate and go, okay.

“I know it's going to be an extra let's say $10,000 total and what I actually will owe”

to the IRS and I'm okay with that for the idea of being completely debt-free, not paying any more interest on my mortgage and having that peace of mind. And so that's kind of the trade off here but I also wonder if there's a different way to do this and I'm wondering if you would maybe sell one of the properties, pay off your mortgage and sock away the rest in an investment account to sort of diversify your portfolio

anyways. I mean, that is a thought the kids have interest in the property and housing properties and they're resistant wanting, not wanting to sell it because their vacation, it's a vacation property that's worth about $250,000 that would easily pay it off but- What are the other properties?

The other property is timberland, I live in a rural area and I grow timber in the crop. That's when we launched $100,000,000 for six acres of timber. Where did that money go?

and roof, put a new roof on my house, and could you sell more of that? Not for another four years. Okay. We have a plant out because the timber market is very, it's a crop, it's like gold, it goes up and down and right now with the political climate, the American woods are lumber

is not doing well as well as it could. Yeah, well, I don't think you're in any kind of trouble.

“So if you decided to do this over two years or something, I mean, I think you're going”

to be fine either way. So it would just be the peace of mind that you just have personally to say it's worth paying a little extra in the penalty of the extra taxes just to know that I'm done, that I'm done and I can just live my life and I'm to worry about it. And for a lot of people, it's kind of worth it and especially because you're going to be

fine and because you have these other properties that have something you ever gotten trouble, you could sell.

That essentially is going to get this point because you'll have little over half a million

left in that retirement account, which is awesome, but the real value here is those 3 million properties. That's why I asked. If you can offload a little bit of that, maybe you're a least favorite, but it sounds like it's mostly land plus the vacation home.

Right, right. All right. Let's go to Sophie in Austin. Hi Sophie. Welcome to the show.

Hi. How are you? I were doing great. How can we help?

“Okay, so my husband and I have been together for about 15 years, we're about 10 and get 26,000”

in medical debt. He currently is not working and hasn't had a paycheck since the four December. I only make part-time income a work. Tell your break and up on a Sophie. Can you speak directly into your phone?

Um, so I heard 26 came out of the debt. He hasn't worked since December. You're working part-time. What are you making? Um, well, part-time I make a lot of 120 days, depending on how many days they can work.

What does that turn into a month? 16. It just depends, sometimes it's 600 a month, sometimes it's less than that, come August, I'll be making 2600 a month. Okay.

How are you guys paying bills right now? Well, I don't know, I paid all of the month of May, I found out, so my husband left he went to a different state and kind of left me and the kid here, like, he kind of threw a bomb and were taking care of it on our own, my parents' health, but- Oh, wow.

Okay, so your marriage is falling apart, he's left. Yeah. Is he wanting a divorce, like is he going to be going through some proceedings? Um, we've tossed it around, but that's not in consideration- Why didn't he leave?

She said that he left to go work with some friends, but he's been gone about a month now and

he's only sent us maybe about $700 since he's been gone, and that has basically not covered

much of anything. So I've had to leave. Do you know, do you know, said, do you know, said, friends? I know the friend, yeah, and they're really working. Yeah, they see that they're working.

“Okay, well, I mean, I feel like you should just come home and work because he can do, you”

know, minimum wage job and make more than this. Yeah, and before he left, I practically begged him to stay and was like, you can work here, you don't need to go work there. I think our priorities are different and I get that we're both stressed, you're both overwhelmed, but his tendency to leave is very much a pattern, and I'm at the point where I'm like,

should they kids might just call it quick, just move out and file for divorce and start fresh and develop everything. Do you guys own the home?

If I'm being honest, we do own the home, but the problem is, I tend to think, God, and

I've been having to deal with all these finances, everything's in his name. My name's not on anything, and so I can't actually sell anything to help. And I don't have all I have is $1600, they opened up my own bank account and moved my paycheck over there and that's all I have and that's not enough to move out.

So I mean, I would make one last ditch effort and saying, it's kind of an ultimate.

If you don't come home, and us work on this marriage together, then yeah, you probably will be looking at a future where you're not together, and that will be his choice, Sophie. That's his choice to do that. And then in that case, you need some good family and community around and stable income. Yep, and you'll have to go through the proceedings and then he will probably have to

pay and you know, the death of the split, but again, the prayer and the hope is that it's

“reconciled and you have to be able, and I would give him that option, but he has to choose.”

Welcome back to the Ramsey Show. I am Rachel Cruz hosting with George Campbell. We are answering your questions, so give us a call at AAA-8255-225, we're talking about your life and your money, all right, kicking us off. This hour is a jet of Jason in Jackson.

That's a tongue twister. Hi, Jason, welcome to the show. Hey, how are you? Hi, we're doing great, how can we help today?

So I'm basically contemplating if it's a good decision to go back to school and accrue about

$65 to $8,000 worth of debt. Okay, I would be going back part time, so I'd be remaining a full-time worker during this. All right, what are you going to school for? Civil engineering. Nice.

It's a good field. What are you doing now? I haven't associated with an AutoCAD technology.

“Okay, so you're kind of adjacent to the Civil Engineering world now and what you do?”

Yes, sir. Yes, sir. Pretty much do it. I just don't have the degree for it. What are you making?

I'm making around $62,000 a year.

That's a pretty good income to not have an earlier degree. Yeah, and I would be increasing it to about 82. If you had the degree, yes, sir. Okay, so we're going to spend 80 to make 20 more, take you four years to break even, that's without interest, without the payments.

I'm trying to figure out how we can cash flow this thing. As I love the goal, yeah, I'm sure. Are you working for a company right now that you would probably stay out if you had this other degree? Yes, and that's a big thing pushing this.

My top-out right now, my current position, isn't all that much compared to what it could be if I do. Go get that four-year degree. Okay, and I would be, I would be increasing my top-out from $77,000 to $111,000.

“Okay, okay, and the company now, have you talked to their HR department?”

Are there any benefits of any level of tuition that's paid if you choose to stay to work with them? Um, so right now that's a gray area hasn't happened in the past. Okay. Definitely not.

So I'm too roll-out. Okay. But so what makes it gray and not just like, no, that's not an option. Did they kind of open a door because of a conversation you had with them? Possibly, but no sense of guaranteed as a friend now.

Okay. And what college have you gotten accepted into? Um, Oregon State University, which is the only college and the United States that offers this program online. There's no other civil engineering programs that are online in the country.

No one that are a bit accredited. Oh, interesting. Hmm. So they can charge what they want for it. It sounds like pretty much.

How many years does this program? Um, so you can, the math you can go on is PN. So they don't require you to be very aggressive at it, but I'm guessing I'll be doing it since I'm a, I'll be part-time, probably it'll probably take me about six years. Oh, no.

I guess the lighting. I don't love that. It's already going to take forever to get there, and then it's going to take you another, another whole bunch of time to pay it off. That's right.

Yeah. Um, it doesn't sound like a great plan, not only from the debt aspect, but also the timeline aspect. So I'm just wondering, is there, there's no colleges in Jackson or near Jackson or in your state to do it locally.

To do this at all. Yeah. There you use, but it's in person, and you know, that would take away from my current income, and I do have deals, which would be the one, or even I couldn't do that. For sure.

What would that, what is that option look like? I'm just curious. Would it take you two years to complete or is it for? It would be probably about four years now. OK.

And do they offer any tracks of having classes at night that if you did go work full

No, man.

You'd have to be during the day.

Yes, man. OK. Yeah, I don't know. I mean, yeah, Jason, I just and good faith.

“I couldn't tell you, and I mean, the jumping income is it's good, right?”

But it's not double, right, what you would make. And if it takes you six years to complete. And then actually, I mean, you won't see that money for-- Yeah, I wonder, can you just stack cash for two years and then pursue this? I'm potentially in as of right now.

I'm on track to be that free in about five years. How much debt do you pay in that? Um, 58,000. What kind of debt is that? So I have about 20,000 in a vehicle and then another 35 in a house.

Oh, on a mortgage? Yes. Wow, how is it so low?

So y'all aren't going to like this, but it's a mobile home.

It was a very temporary fix to a problem. That was my fear, I'll tell you. OK, so this thing's like going down in value. Yes, yes, that is. What is it worth today?

Um, about 64. I had it a pretty last year. And what's the car worth? The car is worth, uh, let's say, and that's on two vehicles.

“One is on, I think it's worth 18 last object and the other one's 16.”

Why do you have two vehicles? So one of them is a, um, it's a side-by-side up. Y'all will consider that a vehicle, all right? I consider it a toy. That is, in the way if you are doing your dream, one is a toy thing, yes.

And you won't have time to do that if you're pursuing school and working full-time, right? That is right, which is mainly just used around the house and all the way. Can we do some math together? You ready for this, Jason? You're telling me you got 20k worth of these car loans in the toy.

They're worth 34 total, right? Yes, sir. So you could profit 14 off of that. You could profit about 29 from your mobile home if you sold it. You tracking with me?

Yes, sir. That gives you $43,000 and you go rent somewhere and use that 43 grand to start cash flowing this degree and you save up the other 20 over the next couple of years. Because you'll be debt-free. You freed up those payments, now we can save that cash.

Yes, sir. I think we just found the answer.

“I don't think you like it, but that's what I would do if I was in your shoes.”

And a heartbeat. Because everything in your life right now is going down in value and you owe payments on it. So what if you rented for a season, worked on this degree, and finished it even sooner? Yeah, finished it in four years versus six because you worked your butt off, doing it online.

And yeah. Save a couple hundred bucks a month to cash flow the final years and you're there. Okay. Okay. The only problem is in the small town that I am from there is not very mean, real options.

I bet you can find something, Jason. Nobody would be willing to rent a room to you. Nobody would. It's just a extremely high from what I've seen in the past, which is why I went with the mobile home option.

What's high? I think last time I looked, I tried to find the cheapest, it's about $800 during a mobile home. No, no, no. We're not talking about renting a mobile home.

We're renting an apartment. Oh, an apartment? Or a house or a room in a house with roommates that they're looking for a roommate. Let's just take mobile homes off the table. Okay.

Yeah. I haven't looked at that market at all. So that's probably what I would do. Yes. Because you're bringing home over four grand a month right now?

Yes, sir. So let's keep that rent to no more than 1,000 bucks a month. Yes, sir. And you'll be better off than being underwater in the mobile home in a couple years. And it's worth nothing.

And Jason, too, your income can continue to go up. You said you're the ceiling was around 75, I think you said. So you still threw these next four years while you're in school and you're going to go to school. You're cash flowing at the way George just laid it out.

Your income's going to continue to go up. So yes, I think it's a great move to do it, but you would have to cash flow, which means you're going to make some big decisions. .

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Head to RamseySolutions.com/smartvester, the get-connected. RamseySolutions is a paid non-client promoter of participating pros, learn more at RamseySolutions.com/smartvester. So AskRamsey is our free AI tool that is built and trained on proven Ramsey principles. And we now have so many people, and they're asking questions, George, so we can actually start to see some trends of questions people are asking.

It's fun. It's like being able to see people's Google searches. Yes, I know. It's financial. It's not around insurance and investing, and so one of the main questions is how do I know

how much house I can afford based on my salary and financial situation. So again, insurance and investing was asked a lot, but I just saw here, the most asked question is around buying a home.

So the core rule here is that your monthly mortgage payment should never exceed 25% of your

monthly take-home pay, and that 25% will include your principal interest property taxes, homeowners insurance, PMI, HOA fees, all of that is included in that 25%. And why we say that a fourth of your take-home pay is so that it frees up the rest of your money. 75% of the money that you have then can be going towards debt if you have consumer debt,

you can be using it for investing or saving. And so what happens is people can quickly get into a home, and it's 50% of their take-home pay, and they just don't have a lot left when it comes to even food, right, and pay based bills. It's a burden instead of a blessing.

“So that's why it's conservative so that you have more money left over to pay off the”

mortgage early, invest for college, go on vacation, upgrade the car, so you actually have a life instead of just a house. So ask Ramsie is a great tool, can help you determine how much house you can afford based on your specific financial situation. Go check it out for yourself.

Ask your question today, go to RamsieSolutions.com or click the link in the description if you're on podcast or YouTube. Yeah, it's a, have you, have you gone on an online church? Oh, I use it. It's fun.

It's my only friend is I just chat with Ask Ramsie because it'll talk back to me. And it talks to you. It gives you some encouragement. It's only one who wants to nerd out with me. We're like, what's coming to me?

Are you wondering about this?

As I was always my follower.

“I love the follow-ups of like, have you thought about this?”

Oh, yeah. Show me more. Tell me more. We love it. All right.

Let's go to Mary and Tulsa, Oklahoma. Hi, Mary. Welcome to the show. Hi. Thank you so much for taking my call. Absolutely.

How can we help? Well, I am $100 and $78,000 in debt and that probably another 20,000 will be added to that by the end of the year. I make about 125 a year between 120 and 125. And I'm kind of wondering that the problem is, is my monthly cash flow.

It's getting a head as it stands on the LLC and I am not currently taking out enough for taxes and that just keeps adding every year.

“So I'm wondering if it's time to consider bankruptcy?”

No. Wow. Okay. Go ahead. For a thousand reasons, but number one, you're not going to be able to discharge

the IRS debt in bankruptcy. How much you owe in taxes? Oh, goodness, I owe 46,000 in back taxes and I had yet to file 20,25, which will be the most likely additional 20,000 by the end of the year. Oh, that's for that 20.

Okay. Did that 46 count in your 178, that number you gave us? Yes. Okay. What's the other debt?

So the other debt is $100,000. It will about 96,000 in student loans. And then I have probably $35,000 in credit card debt. I'm paying $25,00 a month right now on credit cards 500 to a debt relief program, which would only take about 20,000.

So since bankruptcy is not an option, I'm wondering should I throw my money at my credit cards that the debt relief would not take and increase my monthly cash in flow or do I just need to crunch it and focus on taxes? Well, the IRS always gets moved to the front of your debt service. So unless, which I don't know if you can, if you want to go try to get a loan for that 46,

a better deal.

And if that's the case, then you'll just put that in your debt snowball.

The issue is that debt relief company tank your credit. So I don't know if anyone's going to give you a dollar at this point, because that's how these companies work. They tell you to stop paying on the debts, give us that money instead. Collections comes after you, and they try to settle with collections.

Yes. So, have you talked to the IRS yet? Five months. Um, I, I haven't, I'm on a payment plan. Okay.

That's what I wanted to know. So I'm good with that, um, but it's the now taking out current taxes to not get more in debt. Yeah. That's right.

Yeah.

“You need to start paying your quarterly.”

Especially here in 2026, Mary.

Have you done that already? Like have you set that up for this calendar year? Um, no. I'm taking out my CPA takes out monthly payroll, and they take out taxes there. Um, but they did not do that in 2025.

And you know, uh, no, I did just not enough, um, and which is why I've not filed yet, because I was kind of shocked at how much I owed in 2024, uh, even with my, my, uh, right off. So I've just not filed yet because I know I'm going to owe more in, and I can't pay right now.

How long have you had a CPA? Uh, two years, three years. Um, they didn't catch any of this? Um, no, I, no, they kind of sent me an email, and they're like, let us know when you want to do payroll.

So I'll just say, hey, let's do 2000 payroll, or let's do 3000, or whatever I was able to submit in billing, because I'm really bad about getting all my billing submitted.

Um, so, and that's, that's kind of it.

Um, not really even sure how much I need to be keeping out. Um, that's where I'm going to be. Do you need to fire CPA? Yeah. Sounds hot.

What are they even doing for you? They're giving you zero advice.

“They're not telling you to withhold enough for taxes and pay your estimates.”

We're giving you more tax advice than your CPA has. Okay. Based on what you told us. I don't know. But how much are you making a year, Mary?

Uh, I win 25. You said that. I'm not. I'm 25. Yeah.

What kind of business is this? I'm a mental health therapist, and I'm an LLC, so I contract. Okay. Well, the, you're not going to bankrupt on the student loans or the IRS. So this is a, I'm going to point anyways, and I wouldn't tell you to file anyways.

You can clean this up, but it's going to take a lot of focus, and it's going to take some time. Okay. Are you able to pick up extra clients, Mary, and work more? I am, I'm really working at my max right now.

I'm working at about six days a week, and I'm a single mother, so I don't want to take that extra time from my child. Okay. Yeah, well, there's going to, you know, I'm glad you're working that much. That's, that's encouraging, because the income is going to be the thing that's going

to matter probably the most in this situation. But yeah, it's going to, it'll, yeah, it's going to take you a four to five years to kind of clean all this up. You're going to be throwing thousands at the debt every month, and extra, more than just a minimum payments.

Otherwise, this is going to be a, a 10 to 20 year journey. Are you on a really tight budget, Mary? Yes, I am, I keep myself on a tight budget. Good. How much margin do you have per month to throw a debt?

I have, after everything, all necessities, I have 1,400 a month left. I currently pay about 360 a month out of pocket for counseling, and if need the, I can, I can throw that for a little bit.

“How's that for maybe a year or something, if you need to?”

Yeah. Okay. I think the, I think the goal would be, gosh, even 2,000 a month, it's still going to be. Yeah, because you're going to have about $200,000 to clean up.

And so if you factor in, you know, 24,000 a year, that's still 83 months at two grand month being throw the debts. Now, you're throwing a lot of the debts already. You said you had 2,500 in credit card payments, plus the IRS, plus the student loans. What are all those payments at up to a month?

Oh goodness, let's see, the IRS is 700, the credit is 2,500, and the student loans are 1,000. Okay. So $4,200 is already out the door every time you get paid. And my guess is you probably take home around 7 grand a month, if you factor in taxes.

I, on the low end, I bring home about 10 with and before taxes. Okay. When you start factoring after taxes, I think what got us into hot water is forgetting that taxes are part of the game, so if you make that 7, so paying those taxes will go. And the positive thing, Mary, is as you start paying off that lowest, even the credit card,

that's going to free up a couple hundred bucks a month to keep throwing at that. That's where the debts snowball them and some really happens, but yeah, you've got to, you got a, a marathon ahead of you, Mary, but you can do this, you can do it.

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We'd have thousands of extra dollars and we can just throw it at the mortgage." Absolutely amazing. Well, if you guys want to take control of your money and find some extra margin, make sure to start every dollar for free and you can do that in the App Store or Google Play. All right, let's go to Brittany and Raleigh.

Hi, Brittany. Welcome to the show. Hi. Thank you for taking my call. Absolutely.

How can we help?

“Um, so we are currently on baby step 2, you need my husband.”

And we have a little over 100,000 in debt.

We have personal loans, a credit card, and a chart payment.

So my question is, which one do we start with? I know that maybe set two calls for the lowest amount, but one of our loans have a lean on my card with it. So would that be where we start since it's such like a high risk loan or should we start with the credit card, which is the lowest amount?

What kind of loan is this? Is like a title loan or is that a personal loan secured against the title, like from a credit union? It's a personal loan. Okay.

With it. Yeah. How much is that? It's 18,000 now. And what's your other debt?

What did they amount to? Um, we have a credit card that's 13,000, a chart that's 36,000, a 401k loan for 15, and another personal loan for 28,000. Okay. What's the truck worth?

Um, we're looking on Kelly Blue Book, it's worth between like 22 and 25.

“And do you guys have anything in liquid cash right now in the bank?”

Um, we have our $1,000 emergency funds. So, how much do you guys make a year, Brittany? Um, well, I'm going to say it home on currently, I do go back to work during the summer at like a preschool. My husband, he makes, um, roughly, nanny to 95,000, and he made more, and we recently

moved and he took an unknown pay to it, so he was making more, and it was helping with a debt. That said, an unknown pay cut? Yes. Like he didn't know.

Yeah, he was the same company, yes, it was the same company and the same job position, but he has job runs on like the routes and stuffy delivery suits for a living. And when he runs route, he gets paid for certain things, and it doesn't pay as much where we move to. And he didn't know that ahead of time when he was, you know, signed in the paperwork?

Nice. Hmm. Well, you got 100k debt and about a hundred to pay off, the goal would be to get out from under this truck. What's the payment on that thing?

It's 6/20 enough and what about the personal loan? Um, against the car. The one with the, against the car, it's 4/80 enough. Wow. So right there, you'd free up a nice chunk of change if you got rid of the roads.

Just get rid of the truck. What's the smallest debt? That's up next, based on the balance. Um, the smallest debt that is up next would be the credit card in the 13,000. And that's all on one credit card.

Yes, it's a bank credit card. Okay. Or are you all using it for? Um, well, it's max currently. Um, the it was just used for groceries, gas, just kind of making up for the little off

of income that he had when we moved about a year ago.

So that was the personal loan. As well, what was that used for? Which one, the lean? Both of us. From the car.

One was for our old house, where we lived, we used it to do renovations and fixing it up and when we followed it, we didn't sell it for what we wanted to be able to pay that one back. And then the other one was for moving calls and just catching up on everything. What caused you guys to move?

Um, well, it was kind of for each choice. We decided that we wanted to, and the job, we knew move for work as well. You moved for work, but you get paid less. Um, yeah, we, it was unexpected though, like we, he was told that he would be making about the same amount as he did and then when we got moved and everything settled in, it

just kind of lowered. It's not a huge significant amount, but it's definitely enough to notice. Like a thousand bucks a month? Yeah. I don't know.

Yeah. Which is what you guys are used to living on, which caused the 13,000 credit card debt thousand bucks a month that you lost. Are you guys in the hole every month right now, or do you have enough to cover all the

“bills and debt payments and have anything left over?”

We have some left over. I would say we have this between like 300,500 left over every month. Okay. So the goal now is to do a detailed budget and to find all the money we can in this $95,000 income and then some.

That might mean he's working a second job and you're picking up more work and you guys

tag team and he high fives you on the way in and you go to work. Because right now, we need a couple of thousand dollars a month to throw it to step. Yeah. That's the only way out. I mean, and again, getting out of that truck is going to be a real blessing if you can

find the amount you're under water on about 10 grand and then sell it. Do you guys have any other vehicle you could use right now? No. That's your one car. That's your one car?

Well, there's a car with my lean on it and then the truck payment and the truck. So the TV equals that guy says it and one has a lean and one goes wrong for a car. Right. But if you got rid of the truck and you took it down from 36,000 to 10,000 and you were a one car family for a bit, that would be you could do that.

Okay. I mean, yeah, I mean, are you both on the same page that this is just crazy and you're

never, ever, ever, ever going to touch dead again?

Yeah. Do you both feel that? Yeah. Yeah. Okay.

Yeah. So I mean, this is going to be a, this will be a journey Brittany, but it's going to create a lot of sacrifice for you guys, meaning like that, like that kind of thing, right? You're taking from 36 to 10, right? And that's a sacrifice, but for one year or two years until maybe we save up some cash

“on the side and buy a crappy $5,000 car for him, like that's what it's going to be.”

You know, so like there, there has to be something drastic that changes from a lifestyle perspective and income perspective. And it's going to cause you guys to be really, really uncomfortable. And it's going to be hard. It's going to be really hard, but it's doable.

That's the wild thing is that you guys may look up and be like, okay, maybe he can actually work, work longer and pick up some more routes and bring in an extra two grand a month. And then Brittany, on the weekends, you're working somewhere, you know, bringing in two, two grand a month. That's an extra four grand, just you know what I'm saying, like, it's these these opportunities,

but it costs time, it costs energy. You guys are going to be really tired, but it's not your whole lives. It is going to be for a season of your life, probably two to three years. But then you, you look on the other end of this storage and it's like, okay, we did it. But the only way out is that's the hard thing.

I wish there was an easy button. Well, you tried those easy buttons and there were shortcuts into more debt. So now we got to do it the hard way, which is make more, spend less, use the margin to knock out the next small step, the next small step.

“So no, the lean doesn't need to go to the top of the debt snowball.”

You just need to put these all in the debt snowball and attack the little one with the vengeance and cut your lifestyle down to nothing. And the good thing is to, you know, once I credit cards, I'm sure the interest rate is 25, 28% who knows, you know, once that's paid off, you know, the interest and the payment rate is freed up, so that's a couple, you know, hopefully a hundred bucks, right, that

you keep throwing at the other debt. And so you'll start to get some momentum, but it's going to be a trip around the sun, George. It's a stark reminder. It's so easy to go into debt.

So easy. And every corner, you can rob the 401k, get the personal loan, max out to credit card, get a lean against your card, even if it's paid off, and then it's so hard to get out. Like, uh, take a little bit of an income, you know, set back and you just fill it in with the credit card, and you just keep on moving.

I mean, you see how it happens, right? My problem is even when you make more doesn't necessarily mean that you're going to save more. No. Or have more, because your lifestyle creeps up with it.

That's right.

And we find that a third of people making six figures, it's even getting edging up to about

Yeah. And killing them. Here's a good example. You guys are making great money. Well, above the average household income in America, and there's not much to show

for it because of all these debt payments. So that would give me some anger and urgency to get out of this once and for all, if you're family for those kids, for your future, you guys are worth that. So find whatever income you can, cut whatever expenses you can, and get on the same page

and get on a plan to go, never again.

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and tools that help you stay on track. So when it all hits, you are still on track. Two for 20, go to randysolutions.com/door. Our scripture of the day comes from Deuteronomy 818. Remember the Lord your God, for it is He who gives you the ability to produce wealth and

so confirms his covenant, which he swore to your ancestors as it is today. Ziegler said rich people have small TVs and big libraries and poor people have small libraries and big TVs. Sick burn from Ziegler. There you go.

What? What do you value?

“He was a big in the '80s and '90s world and do you remember those big, big old school TV?”

The old school big TV.

I mean how you got into your house, they looked like there were 2,000 pounds.

No. Oh man. Too good. All right. Let's head to Noah and Springfield, Missouri.

Hi Noah. Welcome to the show. Hi. Thank you. I'll take my call.

Absolutely. How can we help? I'm 19 and I'm looking at buying a house every year and I just want to see what you guys would do in my situation. Well nice.

Why are you wanting to buy? Well, I'm thinking $200,000 is the max that I can buy. I have 34 and a half grand say that I make another eight grand. That's a base pay minus my monthly expenses by the end of November. The big focus my money is high on CDs, you know, expire until the end of November.

I got close for $7.41. Okay. What kind of consumer debt do you have Noah? None. Zero debt?

Amazing. What are you making a year? Are you said A.K. a month? Is what you're bringing home?

“You said that's how much you can add to the down payment fund?”

Yeah. Okay. So I'll make that. I'm making another A.K. What do you make a month?

What's your after tax income monthly? Um, 21 or 2200. That's so much you make per month? Yes. So you're making like 24 a year take home?

No, it's 21 grand a year. Okay. So you're talking. I'm just confused on the math. Okay. I would budget for get paid by monthly, so 1100 to paycheck, base pay.

And that's two times two times a month? Yes. Okay. Is that a 2200 a month? Yeah.

Did you get a big tax refund? No. Well, here's our housing parameter. No, I just see what you understand. We recommend the mortgage payment be no more than a quarter of your after tax monthly income

on a 15 year fixed rate mortgage. So I just crunched the numbers here for you on our mortgage calculator. A $200,000 home with 42,000 down on a 15 year fixed. You're looking at about $1,700 out of your $2,200. So that is you're going to be poor.

You're going to have $200 left over to basically fund everything else in your life.

Are you living with family right now or renting?

No, I'm not free with family right now. Okay. I would work on your income. That's going to be your greatest wealth building tool. It's going to give you the ability to buy a home one day in a four to mortgage payment.

“But right now, you should be focused on how can I make more in my career?”

Okay. Yeah, because that monthly payment's going to be kind of your make or break now, just on what you really can't afford. And if you keep saving up a big down payment, that'll be great. And hopefully you'll continue to get raises over the next few years.

And I went and I went and rushed into the housing market when you're ready to buy a home. That's going to be a great time. But it may be in another three to four years and that's okay. And you can rent in the meantime or you know where you are. But I and when the CDs expire, I would take them out of CDs and I would put them in a

high yield savings account.

Our friends at Fairwins Credit Union is a great, that's a great place to open an account. You can get a free checking account and they have a great high yield savings option too. And so I would put my money in there versus a CD and yeah, and just keep piling money. Because you do want a fully funded emergency fund as well on top of your down payment. So some of that 34,000 can be set aside as an emergency fund.

And just continue. Yeah, I would say I love the motivation that you have Noah and where you are financially is amazing. Like the fact you have no debt the fact you have $34,000 saved and you have a goal that

“you're working towards for this home like all of this is so great.”

And so I would say I just I wouldn't be as urgent as maybe you are and give yourself a little bit of time to get that income up. Okay, so just right in the meantime. Yeah, just rent or keep living with family. I mean, you're 19.

I would just focus on what can I do to grow this career grow this income so I can speed up this process. Yep.

But you're on the right path.

All right, let's go to Nathan and Rochester, New York. Hi, Nathan. Welcome to the show. Hi, thank you. We haven't.

Absolutely. How can we help? So about nine months ago, I bought a truck for about $29,000. I set down a new thing with that everything again. I still owe $29,000 and then making my payments every month and I need help trying to figure

out how to get out of the situation. What's the interest rate? Well, that'll do it. Ouch. The interest payment you're making is probably as much as your monthly payment.

So they're just washing each other out. Mm. How much can you sell it for Nathan? I just got it quoted for 17. Five.

Why is it so low? Did you roll over negative equity? No, I did not.

“Was it for a trade-in or a personal sale and where'd you get it quoted?”

I was not a local dealership. I was looking, I was just trying to figure out what I could get it for a man-valuated 17. Yeah. Who's there?

The dealership? Yeah, the dealership. Yes. Well, that's the worst place to get it valued. I would look at the private party value on Kelly Bluebook because there's no way at $29,000

car. Nine months later, it's worth 17 grand. No, it should be more like 22-ish probably. Now, obviously, you got screwed on this deal. So they may have sold you a $17,000 car for $29 grand for all I know.

I'm especially charging you 14% interest. Was your credit just shot? No, I don't know exactly what it was, but it was around the high, 7/80s. How did you get a 14% interest? I mean, I just don't understand that.

Do you have any other debt? No, I do not. So when I bought the truck, I was, yeah, my job was making $28 an hour and then, at the end of the beginning of this year, I will come to you, I'll let go, and I've taken a almost $7 hour pickup at my current level.

What are you making now? I'm going to be selling around $21,62 an hour. Okay, so about 44, 45,000 a year, probably. Correct. Okay.

Well, this truck needs to go, and so you might need to save up the amount you're under water on just to get rid of it and that would still be worth it, and you go get you a beta car to get you from A to B in the meantime, until you can save up and buy something used in cash. But there's no other way to get out of the pads.

That plus all like the insurance comes 21, my insurance is around $300 a month. Yeah, that's expensive for younger, a lot of risk for the insurance companies. Yep, and with all of the gas and everything at the end of every month, I'm scrunching at the penny store trying it out. If you're credit score is still good, I'd go down to your local credit union and see if

they can give you a loan for the difference you're under water on, but still try to get top dollar for it. That might be private party, that might be like a car v on our car max, but just see how small you can make that gap you're under water on, get a loan for the difference plus

to save up.

And your payments are going to, it's going to, you're going to feel with the difference

“of what you're doing now, and it's not making a dent, right versus A?”

I don't know, a $12,000 loan from the, you know, that you pay off the difference. And then go get it, go get it, be your car, you don't have a lower interest rate. Yes, for sure. And yeah.

What's your payment right now?

I'm paying $5.86 a month. Wow, it's plus the $300 in interest. So you're going to be, and it's not even doing it, it's $100 a month. That's just hurts.

Because you're probably paying $586 in interest.

So every month, it's just, it's not moving the needle on the balance. And so that's the issue.

“I looked at the, I looked at the loan, it's a, I think it was like a $11 in 14 cents a day on”

interest. Ouch. Yeah. And Nathan remember this rule of thumb, too, that you're, what you have in motors and wheels should be no more than half of your annual take-home pay.

And you exceeded that, getting a $30,000 truck while making $45,000 a year. So keep those vehicles below that so that you don't get stuck in the situation again, thanks for the call. Thanks to everyone in the booth, George, thanks for a great show.

“And thank you, America, and remember, there's ultimately only one way to financial peace,”

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