When Life Gets Hard, Choose Financial Stability

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“>> Normal is broken, common sense is weird.”

So we're here to help you transform your life from the Ramsey Network in the Fair Wins Credit Union Studio. This is the Ramsey Show. And I'm Rachel Cruz hosting this hour with my good friend to co-host this smart funny half-hour George Campbell.

And we are answering your question. So give us a call, a triple eight, two, five, five, two, two, five. All right starting us off is Ann in Bend, Oregon, high-end. >> Hi, I'm calling because so I've been very blessed with my family and how much I support me.

And so like that and I have been building this house. They're by bit and we're hoping to have it finished by fall. But to do this, the parents have a heal up on our house where we've been using it to kind of cash full of bills. And so I'm at this point where I went to the baby step.

I started $1,000, paid off the debts that I had, close my credit cards, have a $23,000, $6,000. And I don't think he found it. >> Oh, good for you. >> So now I'm sitting at this point where,

as reading close there, two, finishing the bill, my mom and I are trying to decide what is a better option.

“I've been paying on the heal up as if I have a mortgage, right?”

But if I'm deciding if we should be refighted, if I should refinance it and just have a mortgage, that would be all on how to heal up. And I'm there good on their place, and they're on their place, right?

>> Right. >> But refinancing means that I'm adding the cost of insurance. I'm adding clothing costs, and all the other costs, and so we're trying to decide, is it worth it? Is it worth it to do that at a benefit to save,

like half a percent on a fixed rate versus the current? Adjustable rate, that's on my keylock right now? >> Well, it's a great question. So how much, how much did they take out in the heal up that would become the mortgage for you?

>> It's sitting at a hundred and it's about 130, 140,000. >> Okay, and that'll be the total mortgage for you, right? There's nothing else, or is there another loan that you would? >> The total is going to be 135, we're finishing building the apartment,

and so there's some stuff that I thought to buy. >> Okay. >> So finishing it off well, and stuff like that. >> And do your parents, are they going to own this home, or is this going to be yours?

>> No, it's under my name already. >> Okay, so they're just helping pay, okay. >> Well, I know what I would do, and if I was in your case, Georgia be curious if we're on the same team or not, but I would move it to a mortgage.

First and foremost, for me, it's the relational aspect.

I wouldn't want any level of risk from my parents, from a financial aspect, considering its equity, and their residence, and so separating it out. And I would push to say if you can't afford the closing costs, and also see it with getting a mortgage,

then that makes me nervous to be like, okay,

“can you even afford this house, right, as this too much?”

But you have a great emergency fund that you can maybe pull some from to kind of cash flow it, but I would do it out of out of more of the relational aspect of keeping the separate and that, yeah, this is yours. This isn't theirs anymore.

>> Yeah. >> Well, do you say Georgia? >> This is a gift that is wrapped in the liability, so it just feels achy. Like I want to get out of it as soon as possible. So what was the balance on the heel off remaining?

>> Currently, it's a 140, but I can't refinance until I final occupancy. >> Yes, right, so we're looking at a couple of months. >> But have you actually looked into the math to see if you can afford this mortgage on your own? >> Yes, I have.

>> One straight finance, okay, what is your take on pay every minute? >> Take on this three thousand, but I have a partner who has an additional 2200. >> And are they going to be paying into this as well? >> The mortgage? >> Yeah, we're going to be getting married. >> Okay, okay, perfect.

Yeah, so together, it'll end up being what, probably 1200 a month. Do you know what the payment will be? >> I'm thinking it's going to be in the payment being probably about that. Some are between a thousand and 1200. Currently right now with the heel off, I'm paying a 60.

>> Okay, but it has the adjustable rate attached to it too. >> Yeah. >> Yes, yeah. >> Yeah, I would contact our friends at Churchill mortgage and they can walk you through all the scenarios, the numbers, the refinance and walk you through.

Maybe there might be a third option, we're not even thinking of, that they can help you with,

but I would just get out of this weird relational quagmire first and foremost before any of the math comes into play, whether it's a half percent or a payment closing cost. This is sort of the cost of salvaging this relationship before anything happens.

You're sort of getting ahead of it because it is putting them at risk.

>> Yeah, and there's something so true about, you know, when scripture says the borrowers

sleeps at the window, there's something about when you owe money to someone. And you're, you know, having things giving dinner together. Like it just, there's just this money piece in the middle of it that is there. >> And you go on a honeymoon after you get married and they go, wow. Look at that nice vacation, they took while they owe us 140,000 dollars.

>> Yeah, they could have put it to the heel off. >> Yeah, and even if it's all goodwill, there's still a, there's a new label on your parents. Like whether you like it or not, but they are your bank. You know, instead, there's just, there's the separation of that. Like let them just be your parents.

Don't rope them in with all of that. So it's very generous of them. You know, I probably wouldn't have even, you know, we wouldn't suggest to heel off to do this. >> That's love.

>> But, you know, like it sounds like you guys have a great relationship.

You've worked really well, but I, you know, I would have my parents be my parents and not my lender.

“All right, let's go to is it a parissa in Tampa, did I say that correctly?”

>> Yes, you did. >> Wonderful, welcome to the show, how can we help? >> Yeah, so my husband and I just paid off about $70,000 in debt. >> Awesome. >> And they're happy.

>> That was a month. >> A month? >> A month. >> A month? >> A month?

>> A month? >> No. >> So you said? >> Yeah, seven months.

>> Oh, my gosh, some presents.

>> Did y'all sell something or how did you get the seven K per month? >> Um, he has a good job in finance. He does mortgages. >> Oh, good, okay, good for you guys, that's awesome. >> Yeah, great.

>> So all things to him, and so we kind of want to know when we can go on vacation. We haven't been since we've been together for four years. >> Okay, how much more don't you have?

“>> Like, we have two cars, but other than that, that's how much is it about it.”

Together, probably about 70. Okay, so another seven months, then yeah, you would get the green light from us. Ideally, you would have some money saved in an emergency fund before you do the vacation. So it may be one more year for you all, for, you know, if you're doing the ramsy plan, that's what we would, what we would recommend.

No vacations or anything while I'm babysept to while you're paying off debt. Everything goes to get out of debt. >> Okay, we put it in the cars. >> Okay. >> Yeah, including the cars, everything, but the house.

And then, ideally, again, having some emergency funds, you know, we say three or six months, but that three months, but what you guys may be able to do in, yeah, I don't know. >> Yeah, if you're saving, if you talk about 10 grand a month, once all of those payments are gone, even the car payments, you'll save that emergency fund a couple of months. >> Yeah, so I would plan for next summer.

>> It's a 2027 trip, make it a big one. >> A May, going May. >> What's your house on income? >> Well, I mean, it's obviously varies, because it's sales, but before taxes, like 25 to 30 year months.

>> Fantastic. >> Yeah, that's great. >> Making a couple hundred grand. You can go on a real nice trip, and so use that. Dangle this carrot up for that.

>> I mean, if you pay cash, you're not spending 50 grand, and you got other financial goals, so let's make it reasonable, but also you guys make 360 grand. >> It's okay to go on a trip to cost 5 or 10 grand. >> Yeah, oh, easily. >> Yeah, for sure.

Just save up and pay cash for it. And it's kind of the mentality of if that, if you put that money, you know, on a table,

“and burned it, and it was just all gone, like, would it emotionally affect you?”

With your income, you guys would be able to save that quickly, and it shouldn't overly affect you to go on a nice vacation. [ Music ] >> Hey, you guys, did you know that there are thousands of data brokers whose entire business is collecting and selling personal information, things like your home address, your phone number,

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>> Up next is Brad in Atlanta.

Hi, Brad, welcome to the show. >> No, I'm actually taking my call. >> Absolutely, how can we help today? >> Well, I, of course, name my wife and daughter, we live in our home and what not. We have a mortgage.

We also have 33,000 in secured and uninsured debt.

“Let's see, I think, my wife is looks like this, and you're the lawsuit, unfortunately,”

over some medical bills. Is the lawsuit already happening? >> No, not yet. We just, just under the collections, you know, we're under the phone calls and that kind of thing. >> Okay, when you're done with this call, would you please reach out to our friends at GuardianLidigation?

Because they help with exact situations like this, and fight for you. They know your consumer rights, they'll help you settle the debts. So, please go to GuardianLid.com after this reach out to them. I think they can help you through this process. >> Okay.

Thank you so much, appreciate that. >> Okay, so walk us through this. You got 33-k in debt, and you guys can't make the payments?

>> We are, everything, you know, between the liability or the mortgage, we have a second mortgage as well.

And then all the other debt, everything comes, you know, at different times. And it's just they're all scattered. So, we're not able to save a dime, basically, it's like we're, we're paycheck to paycheck. But in 13, I was diagnosed with cancer. And so, between, I've survived cancer, four different times.

Believe it or not. And so, actually, I've had my wife's kidney. But nevertheless, that's where this secured an unsecured debt, because my wife takes care of the bills. It's not about the law, but then through 13, through 16, on work, off work, on work, on work, back of work. >> Okay.

>> Now, that kind of thing is like, >> Yeah. >> It's a very, veryable income.

“>> So, Brad, right now, what are you guys bringing in a month?”

>> I'm, let's see, a month is for me, a roughly 4,000. >> Okay. >> And hers in a month is roughly, let's just go with 2,000, maybe 21,000. >> Okay, and did you say you have a son or a child living with you all? >> I have 18 year old daughter.

>> A daughter, okay, and she's 18, living there too. Okay, okay, got you. >> Yeah, and of course, she's wanting to move out so bad she can't spend it. >> Oh, it's a great girl. Yes, well.

So, one thing that you can possibly do, Brad, is when these bills hit, depending on which part of the month, you may be able to call the companies, even utilities, like that kind of thing, and see if you can get a restructured schedule to at least get to this point where when a paycheck hits, you have enough in the account to pay, right?

Because if you have nothing, all the bills hit, and one paycheck doesn't cover all the bills, then you're stuck, right? So, there's one option, yes, to kind of reschedule when those payments hit, and see if they can help you do that. And then the other option is for a few months, even just taking a side hustle,

you or your wife, and, you know, putting some money aside, even, you know, 3, 4,000, if you can, and letting that be the bucket at which you pull money, just to get you guys a float, because we don't want you to get behind on anything, obviously, and so there either has to be a pull back on expenses, or and/or, and up on income, if you're not able to kind of get to this point of schedule,

but even if they're scheduled the right way, the fact you guys can't save, in general, tells me when into the equation has to change. And to get your head above water, there may be some deeper issues here with these payments, so what is the mortgage payment?

“The mortgage payment is, yeah, 8050, I think it's 8050,”

then you have the second mortgage, which is another 250 or so, 25025.

Okay, and then on top of that, you get the 33,000 in consumer debt. And that is in secured and then secured my trucks on it, and so forth. What's the truck worth, and what do you owe? Oh, shoot. I have a really, just see what the truck is worth.

It's probably $5,000, I guess. Oh, okay, so it's not worth much. What do you owe on it?

Nothing, nothing, it's just kind of secured debt.

I mean, I did have the title until we had to get along this way.

“Oh, you did like a title loan against it.”

Almost, it's like a security finance, which they take titles and things like that. Yeah, I've seen those, look like old pizza huts. They'll give you a check, and they'll still hang on to your title and pay a back, right? Okay, how much is on that deck? Because I don't want you to lose your truck.

Uh, that one's is 19,000, that's actually the bulk of the secured debt is 19 grand. Man, I'm not sure what the payoff is, it's probably a little less, but, but yeah. Yeah, and what's the interest rate on that? Do you know? Well, I don't tend to, I'm sure I'm assuming it's very high. Yeah, usually those.

Okay, so what are the total payments just to make the minimum payments on all the debts in your life right now? What does that cost you a month? No, no, no, no, no, no. That's okay, I'm trying to figure out your $6,000 coming in. You got a little over, about 1100 going towards these mortgages.

And that should still leave a good chunk to pay the minimums on the debts, cover your bills, put food on the table. So when we're trying to figure out where the rest of the money is going to see if there's room or not. Yeah, $4,900, where is that going? Do you think throughout the month? Right.

“Yeah, you would think so. I mean, that's what I was thinking.”

I also think too, but like I say, it's, it's like paycheck comes. And then it's got to go out. It's got to go out to say, you know, one of the debts. And then maybe car insurance or something. Just using some for sure. Yeah, life is going to happen.

Are you guys on a pretty detailed budget, Brad? Do you know exactly where your money's going for? No, no, no, okay. So I think, yeah, I think that may really help you Brad. If you hang on the line, Christian's going to pick up because I think the budget could be

the silver bullet in this whole situation because you got $4900 left.

And yes, you will get payments that hit, but I also, it's amazing how much money can leave

if you don't have a plan for it. And so I do wonder if you guys are tightened up. And actually say, hey, let's, let's be on a really strict budget. And we're like not going out to eat. We're not spending anything on anything we don't need. It is just going to go to these things. And I wonder how much will be left in margin at the, at the bottom of that every dollar budget.

So could I see on the screen here, so should I sell my house to pay off the debt? I would not do that until we've tried everything else.

“We've solved the behaviors. We tried to get out of this debt.”

The selling the house is like a last ditch effort. The house isn't the problem mortgage wise. If you're a mortgage was three grand out of your six. I'd say, yeah, this thing probably needs to get sold. So your homework is to create that budget, sit down with your wife tonight.

Put down the next paychecks. That's the income. Write down all the expenses. Each one should have a line item. So you fully understand. And then every dollar will tell you, hey, you're above. You're below. You're in the red. You're in the clear.

That should show you. If you did things this way, here's what would happen.

So there's your homework. It also is a paycheck planning tool that's really helpful for what Rachel talked about. You can actually see where the bills fall when you're going to run out of money. And your second piece of homework is to get in touch with Guardian litigation. You're going to Guardian, LIT dot com slash ramsy.

And they will fight for you because they are huge fans of ramsy. They want to see our fans win. And they hate seeing people get hassled and harassed by creditors and lots of money. Well, I mean, litigation. Yeah, I mean, and not knowing, you know, your rights and everything.

And so it is really. When you're already overwhelmed and so stressed. And then you get served. Yes, from a credit card company. Totally.

Yeah, and medical your medical bills. So it's super stressful. We're hoping the best for you guys to climb out of this thing and keep the house. That's the goal if we can. For sure. Yeah, because again, the house payment is is well within that 25% of your take-home pay. So you're you're you're good there.

And you don't want to lose such a big asset. You know, to 30 or $3,000 of basically consumer debt. But you guys, the budget is everything. Like it is.

It's amazing me and Brad's not the only one.

But how can people call in and they just don't really know. And you don't feel like you're necessarily being terrible with money. But you don't realize how much money is leaving. That you don't actually. Encouraging.

And now you think it's scary to put it all down. Yes. And you look at it and go, oh, there's the actual facts. Yes. We make $6,000.

Let's get control of this thing. Yeah. And if you're not doing a budget, just go back to your bank statement last month. Last month. You know, use a march as an example and add up how much you spend on restaurants. And then actually check the math.

And be like, oh, wow. You OK. Shook it. That's what the kids say. I think.

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Because they would advise you and will advise you on the best move to make for your situation. If you have a small business, especially, or any big life changes. So go to ramseysolutions.com/text pro to find CPAs and enrolled agents that have been vetted by the Ramsey team. All right, let's go to Gary in Dallas, Texas. Hi, Gary. Welcome to the show.

“Hello. Hello. Welcome, welcome. How can we help today?”

Yeah, just looking for some advice.

So for the past 12 months or so, my wife and I, we've kind of had a 24 month plan of moving out of our house here. And closer to some family and we would be, we would be buying a house that's probably about twice as expensive as the one we currently have. My, what has just become an issue with this decision is I'm pretty sure in two to three years after we make the move. We will not be able to afford it. I don't think we're going to have the income for it in that amount of time.

Okay. Is it the area you're moving that's making it more expensive or the type of house that you guys are wanting to move into? If they're a little bit about, you know, we're looking for, you know, under normal circumstances, it would be okay. But I mean, the reason I don't think we're going to be able to afford it is now that the doctors are saying if things continue with her, you know, she should probably be dead in three years.

Oh, my goodness. She's, she's the soul and come. Oh, my gosh, you're wife, so she's sick. She's not called. Oh, wow, Gary.

Oh, I'm so sorry. Oh. So what's causing the urgency here? Sounds like we shouldn't be making any big life plans. Are you willing?

Well, you're wanting to be a close family because of her. Yeah, yeah, we live from the middle of the country. We have no family within about 1500 miles. Okay. I need my son here, some stability and some family. Yeah.

I got to get him out of the house sometimes away from her. Wow. Can you guys rent out there for a while? Yeah, we could. That solves this problem temporarily until we figure out what's going on with the finances.

And it's, you know, Gary, it's really, it's really, really hard to make, you know, financial decisions and big moves when you have someone who has a level of addiction that it sounds like she has.

“And I'm assuming I know the answer to this, but I'm just wondering, you know, how she has she been in any level of recovery, has she gone to any kind of treatment?”

Um, years ago that she escaped from as, as a 20 year old. We've had multiple interventions. She's been hospitalized for alcohol three times since we met. Yeah. There's been some, we just got done with cancer treatment that was caused from the drinking and, you know, two-month after treatment ended. We're already back to lying and hiding alcohol.

Yeah. I mean, I'm not stupid, but I know what's going on. I see it. Right. And you're saying, you're saying in the marriage, correct?

So I mean, this is, you know, you're under percent.

Yeah.

And your son, you guys are in from like a physical safety, okay?

But you know, yeah. Okay. But it's just the instability that she brings.

“And when you say that he needs to get out of the house, some, because I would understand wanting to have a support system, which I think is wise for you guys.”

So we'll try to kind of talk through it to balance, not making any unwise big decisions with money that could be to your point. Disasterous in the future. Let alone having to deal with what could be coming for the next couple of years for you all if she can't, if she can't stop. So, so the area you guys would be moving to. It is more expensive because you said you guys are in the country.

Um, so it will be. For on average, you know how much from a housing perspective, you can sell your home for for where you guys are now. Yeah, you know, we go to 80 on something we could probably get 375 for. Okay. So you'll have, you know, yep.

You'll walk away with probably 80 grand or so on. That's 100. Okay. And the homes in the area that you guys would be. Wanting to be, do you know on average what those are costing.

The stuff that we've been looking at for the past 12 months and we've had we've been out there twice. Viewing homes. We were, we actually had made two offers before the cancer diagnosis and we put everything on hold. To deal with that. So we're looking at stuff in the 700's.

“Um, my wife makes about 250, 300,000 years.”

How is she able to keep a job? She works from home. Okay. And you're not working. Correct.

I've never made more than $50,000 in my life.

Okay. What are you doing for work? She's not working. What are you doing? I'm a stay-home father right now.

What were you doing before that making around 50? Uh, I was in management position if I'm on profit. So how old are you son? Okay. Okay.

Because what I'm worried about Gary, just in general not only the housing situation, but if something. I mean, if the doctors are correct in everything stays course, you are going to have to find work. And you know, obviously support you and your son. And I'm just wondering, getting some level of experience under your belt. Getting men for life would help.

Yes. And it may not be obviously tomorrow. And then the next probably 12 months I would be looking and seeing, hey, what could I be doing?

“Just to be getting some experience, you know, to move into a position if you need to.”

Um, I have been looking at some jobs just to get something on my resume. Yeah. Worked in about five years. Right.

Now the problem is I have to work around.

I don't feel comfortable leading my son along tight wife. Sure. Sure. I wonder if there's level of family support when you guys make this move. Um, you know, I mean, I've been incredible sport.

My parents will be an hour away. My sister, three sets of cousins, three sets of aunts and uncles. Now why are you all moving an hour from your parents? I thought you're moving close to family. They were living in the mountains in the area that we're looking at, you know, three far away from the metropolitan area.

So it doesn't really solve that problem. You know, if they're still far away, you're not going to have an hour better than 22. Yeah. Well, I mean, I'm zero problem making an hour dry. You know, I'm not more today.

Right. And I hear you totally. Yeah. So I wouldn't. I'm, I'm a little bit with George.

I don't know if I would make a financial move a big purchase like a home right now. There's a lot of instability going on. You guys are moving to a new area. And you may get into this Gary and there may be a chance you're like, holy crap. I need to be, I need to be 10 minutes from mom and dad.

And so, you know, whatever that looks like, I want the housing not to be a permanent situation for you guys right now. And so I would find the place to be renting. Yeah. And then you guys could look up in a year, year and a half and see where you're at with her health. And your job situation, family situation, all of it.

But I wouldn't tie myself down to a big purchase like a home right now if I were you guys. I think the move is smart. And I would want that probably if I was in your case. Yeah, personally, I would not buy a home until she is sober. Because it just put there's too much risk that her income is floating this entire thing.

Yeah. If one thing happens, you got a $600,000 mortgage with no income or even a $50,000 income. And now you're going to be facing foreclosure or a short sale. And so it's just, it's too much stress with the stress you guys already have. I mean, it's, yeah, I mean, to be clear, you know, my parents.

They are going to be putting, you know, either under $250,000 towards the down payment.

It's not a gift.

Is that a gift? It's a security net. Yeah, it's a gift.

And would they just cover rent for a year?

In the meantime, as you guys kind of find your footing. If I ask, they certainly would. I might use part of that to say, hey, cover rent. We just kind of figure out our life. And then you'll know a whole lot more a year from now.

If things are going to get better or if they're going to get worse. Yeah, I think the thing to challenge is going to be convincing her to rent as opposed to buy. Well, I don't think she's, she's created that option for her. I mean, I think this is where you really have to step in Gary. And I had to say it.

She kind of loses a vote when she chooses not to be well for her, her husband and her son. And so I don't know what that conversation looks like in the midst of your marriage. But I would not. You're putting a boundary up with someone that doesn't have boundaries, but I would not purchase a home if I were you, Gary.

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Very cool. Thanks, big McAll. Yeah, absolutely. How are you doing today? Fan, past, and I hope you are too. Right, we are doing good. How can we help?

So I'm wanted to purchase my first luxury watch.

“And financially, I believe we're in a position to do it.”

But I can't, I grew up with a scarcity mindset and it's really hard for me even though I have the money allocated in my budget to pull the trigger on it. I just can't get over actually doing it even though I actually want it. And I wanted to kind of get an objective of piss and, you know, to see if I'm really I'm in a good place to do it. All right. Any guy who used word allocated would have a hard time pulling the trigger on a big spend?

Yeah. I love it. Well, George loves a good watch and I'm a spender. I'm called at a good time. I want to know what watch this is.

Yeah, yeah, what's the watch and how much you can spend on it? It, it's going to be in a mega planet ocean and I'm looking to spend right around 9,000 on it after tax. Okay. All right, Peter, how much you make a year? So I make my base is 102, but I normally make closer to 140 and my work makes 85.

Oh, nice. Okay. You guys have any debt? No, debt. Baby steps six. No, nice. Okay. And so you guys have been talking about this purchase and you have the money for it. It's sitting there under watch savings fund is what you're telling me.

Correct. It's in a separate pile. It is ready to go. We've been saving for about six months for it. My wife is 100% on board wants me to get it.

It's just I struggle with the emotional, you know, I know I could use that money. I could paint my mortgage off quicker. Oh, oh, oh, oh. Not a whole lot. So I want to.

Well, let's play this out Peter. Let's see. You got off this call and you hit add to cart and you purchase this watch and it shows up.

How are you going to feel amazing?

“Okay. You will you feel guilty at all when it shows up and you go, oh, gosh, what did I do?”

I probably not. I think once I put it on, it's all going to go away. But it's getting too pulling the trigger on it. Yeah. Can I ask why do you want to watch? Why 9,000 this versus a car or something? It's curious. So I've been stupid having for about a decade now and it's a watch that's been famous in the

down community for a long time. I think it was the great border and it was great. You know, when you're diving, you're talking about a lady who is scuba certified. I am a certified scuba driver.

She understands that.

I understand the luxury watch market.

I need to notice when I go on the pool. I bought forever and you know, it's not like it's an impulse overnight. I probably wanted to watch her. Yep. I've probably saw it eight years. It's just been dreaming, but I know that I haven't been there.

Okay. Okay. So here's here's like my categories. Financial. It's a check. And then you go over to the emotional side. And that's why I asked why the watch.

What is it? And there are some green lights for me, Peter.

“Honestly, the fact that there is a reason for it, like in his mind, right?”

Like he's been in it. The motive is not, I want to impress my friends. Yes. Or I need to like prove to myself that I made it. Yes.

It's been this thing in this niche part of life that you love. You've been thinking about it for eight years. It's not an impulse purchase. Like all of those things because you can have the money. And then the motivation behind buying a nice, you know, purchase.

That could be a purse for a woman, a watch for guy, whatever it is. You know, could come out of a place that you're like trying to scratch this Itch inside of you and then you get it. And then you're not satisfied because it came from the wrong motive. And then you're tracing the next thing, the next thing.

And it just becomes like this whole world of just consumerism. So that's what we don't want right to happen. But I don't feel like that's you Peter. I feel like there's a there's a reason for it. And yeah, and you've had this in the fact that it's been eight years since

He's been wanting it. It's time. I think your wife is sick of you talking about it. Honestly. That's why she's like, I can't go for it.

I can guarantee you you're right. It's really kind of hearing about it. And then play it out. Is Peter 10 years from now going to go, well, that watch did us in shouldn't have done that.

What a dumb idea. Or is it going to be something you want to hand down to your kids and grand kids and grand kids and you're going legacy. And you're going legacy will help me justify anything. Boom.

And I'll tell you this, Peter. I am not a watch guy, but Rachel's saying that because I'm wearing a nice watch. And it was handed down to me from my wife's now to see his grandfather. And so truly it is legacy. And it's a Rolex.

Yeah, it's a nice night from the 90s. It's an oyster day just oyster courts from the 90s. And it like it makes me feel like it makes me feel closer to something bigger than myself. If that makes sense. Wow.

And I don't feel like it's a flex because if you know me, you know I'm like Mr. Frugal. So no one's like, well, look at, oh, smooth talk and camel over there. Do it. So.

Peter, what's your net worth? So we've got. We saw 140 on our house. The house is worth. Probably 350ish.

And then we've got 83,000 between our retirement accounts. Okay, so I'm 28 my 29 my wife is 28. So we're towards the beginning of saving. But I think we'll be just fine. Yeah.

I mean, you're on your way to baby steps millionaire.

“I think you'll get there in your 30s without any issue.”

And this watch is not going to be the maker break. So I would love for you. Like right now just to get all I'm buying. You know, that'd be fun.

It's always the people who we want to give green lights to have the hardest time.

And so now who should not do it. Who are like, I'm going to do it anyway. All right, let's go to John in Springfield. Hi, John. Welcome to the show.

Right there. Thanks for taking my call. Absolutely. How can we help? I'm real quick.

I got an unpaid medical debt. And I wanted your opinion. So in the summer of 2023, I had the necessity to take a trip and an ambulance to the ER. I'm seeing all of the loans, so I'd rather cut off my leg than do that. But that's where I was.

And so, you know, time passes. I get the bill for the ER. And you know, that's not cheap. I pay it. A little while later, I get a bill for the ambulance.

And it's $1695. You can take me to two miles over there. And I get that. So, you know, what caught my attention is my. Health insurance paid nothing.

They paid zero dollars of that. And I was confused. So, when I when I called them, what they told me is that the ambulance service is out of my network. And so. So I think that's ridiculous.

Yeah.

“I think, you know, one of my supposed to do when I call 911 is.”

Sure. Yeah. So that's what I'm saying. Yeah. So, you know, I have the money.

I've never, you know, I've never had a bad debt.

Yeah. I just, I'm being pigmented about this one. So, this was, you know, two years ago. Yeah. You know, almost three now.

Yeah. It went to collections. It's not a very aggressive collection agency. They sent me a couple letters. They called me twice in last.

So you're not. You're not paying out of her from him in eight months, probably.

You're not paying out of business.

You're out of a strife.

You're just like, I just don't think that this is fair.

Exactly. I don't know what to do if I should just try to settle with them and then come up with a number that makes sense to me. If I should just pay him and get it over with it and get about it.

“Well, I think there's an emotional tax that you have been paying because it's been in your mind.”

And even though it feels unfair or, you know, it's like taking advantage of a situation. You know what I mean? Like, there's a lot of feelings about insurance and how all this works, which we agree. Yeah. There's parts of it.

I'm like, absolutely. But the amount of emotions that you've put into this may not be worth 1600. And so there is a part of me that says, yeah, see if it'll settle just for the game of it. In fact, that it's in collections now.

You may be able to pay half of it and just say,

thanks for the ambulance ride and and we're done. You know what I mean? But I would look to move on with my life, especially since you have the money and it's 1600 bucks. You know. Right.

So have you fought the insurance company already? Did you play that game? I mean, I talked to the insurance company and they said, well, talk to the ambulance service because maybe they can do something.

“And I talked to the ambulance service and they're like, oh, well, you need to talk to the insurance people.”

Yeah, because it was dispatch by 911, right? I'm sorry. It was dispatch by 911 when you called. Yes, yes, sir. Okay.

It wasn't like you reached out to this specific service.

And so I would use that pull your explanation of benefits. And you can try one more time to fight it and have them verify that they processed it claim correctly. There was no billing errors, all of that stuff. But you got to become an expert because a lot of incompetent people out there who are just not really wanting to do the most. And against the solving your problem.

For sure. And 1600 bucks sometimes it's just worth having. What's your peace cost at this point? That's it. That's it.

And so you got to kind of put a price on that too, John. So I'm glad you're okay. That's you, you know, you made it through and everything. But I understand how frustrating some of that stuff is for sure. Dave, we got a lot of calls on this show where life happens.

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

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Yeah, that's right. You need 10 to 12 times your income in coverage, no gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die.

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We'll come back to the Ramsey Show and the Fair Wins Credit Union Studio. I am Rachel Cruz with George Campbell, and we are taking your calls at Triple 8-825-5-225. All right, up next we have Adrian in Mesa, Arizona. Hey, welcome to the show. Hello, how can we help today?

So I'm a little nervous, sorry, I've been debating to call, I'm not used to it. So we want the debate, that's good. So I've been pretty good about my finances for a while. I'm not saying I'm a greatest, obviously, I've made bad choices. I've been dengaraged twice, and I made a bad choice.

I got a June position, and I run a restaurant. And I just came across some money, and I was making really good money during COVID. And I was brought a house, I got that in in here, and I did some, you know, I had money in the bank about, you know, in so forth. And then I went and wanted to upgrade my truck, which during the time I was okay.

Then, you know, I bought this truck at 52,000, and I make about 55,000 before...

Now, before I was making 75, there was a little more higher at my husband.

“He makes about 40, but we keep our finances separate, I know.”

That's, you know, but we just don't do it that way. The question I have, the main question is, is, I don't know what to do with the truck. Because I am living paycheck to paycheck. I literally pay 945 for a car payment. I pay 300 in $10 for car insurance.

And probably around in about $200 every four days per death. I was living the life before my truck. You know, I was not struggling as much.

We were able to have food on there, and, you know, and now I'm just don't know what to do.

But I'm upside down in my truck about the car. They told me, it was the whole mess up your day.

“Fold it to me for 50, with a roll over from a previous car.”

They gave me that had a bunch of problems. And I'm like, oh, no, we'll get you out of there. We'll put between this and roll over that truck onto this truck. Before I know it, I'm 51,000. And I, they're only going to give me like 30, 31 for the car.

And I had to go straight into that. For trading value. That's right.

On the street, it will myself because it is a women truck.

But they'll take it for 31. They'll take it for someone will. But I can't get a loan because they don't have no credit. I'm not good. My credit is great.

I mean, but I can't even be getting one to qualifying you for even a small loan to cover the difference. Because I tried that with you guys a mention before. But no one will take me to cover the difference. And I got to come up with like at least 20,000 other say. Yeah.

What other debt do you have? You know, I have 5, 4,500 and just, you know, a credit card and a personal loan to put some concrete. Down in my backyard. And that's it. I thought, oh, you know, I don't own nothing else.

That's honey. I don't think we need any more. You're right. That is plenty. What is your, does your husband have debt as well?

Yes. If I were separate. He has back child support that he owes. We've been current. You know, we've been up to date on it.

He paid every month. We just, he did not grow up financially smart. He was trained as thought is. We're going to die. I don't know. It's trying to find it completely different to mine. On that, I just, she just thinks that, you know, that's not stress about it, you know, it's what happens happens. And I'm like, I don't know what to do. You know, like, I'm not going to have groceries. I'm literally, I do the thousand dollars in the month. And I at least take $200 out of it each time we get paid. To do what? I, to live on to the groceries in the house, you know, because I don't have it. Does he contribute? Does he contribute to the household?

Yeah, he does. We put him a split, but he's kind of hooked on for a while. He was a fun gambling. I got him up with that thing, God. And then he turned around and he got hooked on. He's like, paid 18s. Like, always paying the bank. You know, it's like groceries on a van. Let's do this on a van. And I first thought, okay, because I wish you're hoping me because I'm not the only one conking in. And now he cannot even do keep. Okay, okay, okay. Yeah, here, here, here, okay. So yeah, right now, I would not recommend putting your money together.

I think from a, from a marriage standpoint, you guys are on not only different pages with money, but it sounds like how you view life. And so much. So I, I would just have in the back of your head, like, hey, we need to be doing some marriage work. We need to be learning how to create goals together, have a level of synchronization of of what we want life to be. And all of that, because he shouldn't be a deterrent for you in your life, right? He should be a helpful person and same with you to him.

“And so making, healing that ends, I think we'll help with some of the money stuff, but you called for the car. So yeah, if you said you're, you're credits great. I would check a local credit union.”

Don't go to a big bank and see if anyone local can, can help you with this. And if not, Adrian, then you're going to have to work extra. You're going to have to work nights and weekends to save up to get, yeah, to get the difference of this truck. If you, if you can't get the loan by getting out of this, it's one part of the equation, but honestly, you just, it all sounds a little chaotic. And so I think having some direction is going to be huge. So doing a monthly budget, stop going into debt, cut up the credit cards, have this no more debt for the rest of my life policy in your mind.

And start working your way out of credit card debt and then attack the card next. And hopefully once you've been paying off this credit cards, you know, that could, I don't know, get you in a different place. I don't want to see you go to a third bank cryptocurrency. The third time is not the charm in this case. And so you got to go, this is it. I'm not going to go through this again. And, you know, even with your husband the way he is, you're going to have to climb out of this on your own income at this point.

That is going to take, let's get every bonus we can get.

Yeah, that's what's, sometimes difficult about a chaotic situation, George is that when they're, when there's such high emotion and high fear and seeing like, oh my gosh, I don't want to fall off this cliff.

Sometimes even in that desperation, we make bad money decisions, right?

You're not thinking clearly. That's right. That's right. That's right. Yep. So yeah. So if you hold on the line, Adrian, Christians going to pick up and let's get you George's book breaking free from broke.

“It's a great title for for the situation. Yeah, that's why we did it. Let's get out of here. Here's what you're going to, what's going to happen for sure.”

We get you the audiobook version as well. If you're busy, you know, managing a restaurant hard to find time to acquire a place to read. Yes, but yeah, listen to that. And then we'll even throw an every dollar for a year. So we'll get you a code to that. To start budgeting your income. And again, I want, I would love to see some, some synergy with your husband. And I know his mindset is one way. And you can't control him. And I would say, I don't think you're the one that got him out of the gambling.

You know who to be in situation? I think he did it. Like there's something in him that could be changing to, which is wonderful.

Yeah, I mean, looking at these numbers, a thousand dollar car payment, three over 300 for the insurance. I did the math.

She's spending over 1,500 bucks a month just in gas for that truck. Mm-hmm. So you've got to think through this. She said, honestly, well, the time I could handle it. And so the whole point of the show is that there's going to be a time where life's going to happen.

“And you need to get all of the risk out of your life and all of the peace you can get. And that's why we tell people,”

be dead free even though it's conservative and not a cool thing to say to save up and pay for the cat car you can afford. But it's because you don't know what's going to happen. You don't know what's going to happen to your income, and to your health, and to your spouse. And so living without debt is just going to create a more peaceful environment. [MUSIC] [MUSIC]

This show is sponsored by Better Health. Financial stress is not just damage or bank account. It can also take a toll on our mental and emotional health and our relationships. Money worries cause anxiety and they're one of the leading sources of conflict for all types of couples. We know this. My wife and I have struggled with money conflicts for years. Listen.

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Alright, let's go to New York City and we have Jake on the line. Hi, welcome to the show. Hi, thanks for taking my goal, guys. Absolutely. So I'm just calling because I'm in a situation where I make about $50,000 a year after taxes.

But I took the 401k loan for about $25,000 that I defaulted on when I got laid off. And I currently owe about $12,000 in taxes. So my question is, is how I go about if I should tackle the 401k loan off, because that has interest occurring, or tackle the IRS debt. And I owe about $2,000 in credit card debt as well.

Okay, so the taxes are 12k. How much did you say that the 401k loan was for? 25,000. 25,000. Okay.

Would you take out the 401k loan for?

I was currently moving out and when I took it out.

So I was just doing it as like a buffer. But I did that when I was about $22 or $23. So I just made bad choices with the money. I spent some of it on a vacation, gambling with friends, and the rest I just spent on bills, sadly.

Okay. Did you just stop making payments on the 401k loan?

“When I got laid off, that's what happened.”

I'm going to union. But I was only in the union for about one to two years when I took out the loan. And I didn't realize 35, how short of a time they were going to default me on. You got to see where laid off and then it came due within 30 days or something, and you couldn't pay it in time. Yeah, about like 90 days, like a couple months.

Okay. So that became likely an early distribution. So you don't owe money on that now. It's just going to be taxed heavily. So that's what increased my tax bill from about like 6,000 up to the 12,000 now.

Okay. So really we're dealing with two grain and credit card debt, and another 12 in IRS debt. Yes. Okay.

So you would tackle the IRS debt first.

You want to get them off your back because they can actually destroy your life. Versus this cute little credit card company who can just be like, pay us. So I would work on knocking that out first. The bigger issue to me is getting out of the cycle, because I don't know that you have the money to pay this off in a reasonable amount of time. Yes.

No. I would have to call the IRS to make a payment plan. Yeah. And I would just pay it off as aggressively as possible. Can you work extra?

Um, my union doesn't really offer that much over time. But I could pick up like another job. Side jobs. And you may jake another option with this kind of thing. Since it's 12 grand, as you may be able to go get a loan for it for 12 grand.

And just pay off the IRS and then deal with the credit, you know, bank that you get the loan from. Honestly, sounds crazy, but sometimes they're better to deal with the IRS than having a payment plan. So there's, there's just a lot of power the IRS can have. Um, and so kind of getting them out of your own limited power. Yes.

So getting them out of your life, I think, is feels more peaceful to me. So that is an option depending on how your credit is. To go get a loan and just pay it off and then tackle that loan. Okay. And you guys would say don't focus on getting back to 25,000 to my 401(k).

“Well, what that's what I'm saying is there's no longer payback.”

It's over. It was counted as an early distribution. So you took it out and now I just won't be back in your 401(k). Well, the only reason is if I, if I was to pay back the $25,000 and cure the defaulted loan, they would give me the rights to access capital again.

But if I don't ever pay that back, let's say for like the next 30 years in my career,

I'll never be able to access using my 401(k) as like a loan option again.

Yeah, we don't want to go back into debt, though. So considering it's not an option, it's fine. And you're not with that company anymore, correct? But I'm just laid off from that specific shop. But the union is all five boroughs in New York City.

Okay. So you could get back once you're completely debt free and you want to go back and start funding that 401(k). It would be the same 401(k) as what you're saying. Okay. No, I'm asking.

“Is that right with the union and how it works with the five boroughs that you mentioned?”

Oh, it's your question, I'm sorry. Sorry, will that be the same 401(k) you're laid off now from a certain shop, but you said you will get back in and start working again within the union. So will that mean that that's the same 401(k). Okay, perfect.

Okay, because I was going to say usually when you leave a job or you quit or are laid off, you would roll your 401(k) just into a traditional IRA and then you move on with your life. The ability to invest until it's paid back. I can invest. I wish it's thinking like you guys said, isn't it maybe it's a bad habit to even consider

like borrowing against my 401(k). It is because we're going to get you Jake. Yeah.

I never, never, never, ever, ever.

You don't sound, you don't sound happy about it. Do you want to be back in this position again? No, you guys are right. Yeah. Yeah, debt is not a tool, Jake.

It's not a tool. Peace, solving for peace.

Our friend Dr.

You can try to play the games, do X, Y, and Z.

“But honestly, Jake, to become wealthy and to actually have options in your life that money can provide.”

It's going to be you. It's going to be you working hard. You're staying out of debt. And instead of paying payments, you're investing. You're saving.

You know, you're being wise with your money. That's how you build wealth over time. If you keep trying to play this debt game by I'm going to loan money here and loan money. There, you're going to be broke for whole life and you're paying $12,000 and freaking taxes. So, so no.

Think about it. You've got 14k debt to pay. If you can scrape together $1,000 little over 1,000 bucks a month, you're done in a year.

And then decide, I'm never going to go back and debt again.

And the way you do that is with an emergency fund and a budget. Because that becomes your never going to debt again, emergency account. So that you're not needing to borrow from other people. Yeah, that's right. Yeah, Jake, what kind of work do you do?

I'm in the electrician union, but I'm not an electrician yet. I'm just pretty much, yeah. Have you looked in the private sector in that? Because a lot of electricians are making a ton of money. You might be making more the union.

I'm not sure. Have you looked into that? Well, right now, I'm, yes. I have thought about that. But right now, I'm just trying to stay with the union

and just get my journeyman of. Okay. Hard. Yeah, right. Yeah, that's the main reason.

Will you get a pay bump at that point? Yes, I'll get a pay bump. To what? They make about $56 an hour here in New York City. That's great.

All right. See you'd be clearing six figures a year. That's great. And how long will that take to get the driving cart? It takes about five years.

Right now, I may, um, about $40 an hour. But I haven't started the apprenticeship. I'm just, I wish it's promised that like, hey, you stay in the job. And we'll upgrade you without the five years of the apprenticeship. Because that's about making minimum wage in New York City.

Well, you're making over any grand right now.

“So you should be able to clear 14 grand real quick if you just get really focused.”

Which means no spending no vacations. You're basically like, that was old Jake. New Jake spends nothing on anything unless it's food, shelter, utilities, transportation, insurance, and his debt payments. Yeah.

You know, if you get laser focus, you'll be in a very different place a year from now. Even six months from now. Yep. That's right. Yeah.

It's, uh, it's amazing what can happen when you don't give debt in option in your mind.

Like if you really do go as hard course we talk about. Yes. And make it a black or white issue for it's your money. And just say, I'm not borrowing money. With that forces you to do is forces you to look at other options,

forces you to take it different route. And it's amazing when you actually start to see it. See that debt as, I don't know, kind of the enemy. I mean, I want this out. The sacrifice that you will do to finally just be done with it.

Your brain gets creative or gets real patient or gets real sacrificial. Yes. That's what happens when you take debt off the table.

“And I think it's the only way to create a great life.”

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That's GuardianLIT.com/Ramsi. It's very advertising. Results may vary and no specific outcome is guaranteed. All right, let's go to Stacey in Billings, Montana.

Hi, Stacey.

Welcome to the show. Hi. Hello.

How come you're up today?

Um, so hopefully I'm not too long-winded for you guys. But um, I'm calling for kind of some relationship, help as long as financial advice. Um, my husband, five years, unfortunately, has a history of impidelity where he talks to other women on line. Well, well, well, he's, I've caught him with his ex girlfriend. Things like that talking to them inappropriately.

Oh, sorry. Yeah. And so things are going well, though. Um, yep. And then, uh, sorry.

He also has a little bit history of alcohol, but that has gotten better. Um, sorry. But things are going well. Uh, and we're expecting a baby at the end of the summer. Oh, wow.

And because we're, uh, expecting a baby, we bought a bigger home. And we literally just moved into it a couple of weeks ago. Um, and, uh, I still have the old home that's under my name and my dad's name because I got that prior to, uh,

Mary, my husband, um, but unfortunately on Friday, I found an explicit photo.

Uh, on my husband's computer, like that he recently received from his ex girlfriend. Oh, stay Sam. Oh, sorry. Yeah. So, um, it opens up old wounds.

Oh, of course it does. Did y'all go to marriage? Did y'all go to therapy at all for all of this? Has he done any work on himself? We did some therapy in the past, but um, it's all online.

It's so hard to get, like, someone, a couple of therapy together. Um, and he kind of just says, I'm going to get better. I'm going to get better, but out of the zone. Yeah, no. He's said there's something, yeah, there's something off going on.

Um, that he needs healing from. And only he can do that because it's a repeated pattern. And, and it will continue.

You know, like, self-will doesn't just get you out of stuff like this.

I mean, he has some deep work that he has to do if he chooses to. Um, has this become physical in person anyway?

“No, I don't think so, like, and I, I believe him and I don't think you would ever.”

Does it treat on me? It's just a emotional cheating over time. Yeah. I mean, it's still the same pain. Yeah.

The infidelity is, yeah. Um, self is very real. Okay. So how can we help with what's your main question? So sorry.

So then going to financial advice. We just moved into this new home. Higher interest rate, bigger home, bigger loan. I, um, the next day, after finding out about this. All right.

This is all kind of new. No, you're fine. Be talking about it. Take your time. You're good.

Um, the next day, I got all cash offer on the old home. Um, but I was sitting there in the big home alone by myself. And I was like, there's no way to stay in this house. If things don't go well, I'm a single mom. Like, this home is more expensive.

Bigger a lot to take care of things like that. Yeah. Um, so I kind of have like a conference call with my parents. Cause they kind of know about the history. And my realtor and I said, but I don't want to sell the old home.

“I think I, I guess my question is, and I hope I'm making the decision.”

Go back into the old home. Less interest rate, less monthly payment, less loan. So sell the new home. I just have a lot of guilt. Okay.

Yes, obviously spent all this money. Like, and I'm going to have realtor fees and things like that. Sure. Okay, tell me this. Um, say see how much is the new mortgage payment?

Uh, the new mortgage payment is probably going to be around like, 2500 a month. The new. Okay. And how much do you guys bring home a month as a household?

What? With my husband would be around like 200 or so? 200,000 a year? Yeah. Okay.

And then what would you be making if you, you know, down the line? If I ended up being on my own, I would make around 140. 140. Okay. Um, and on the old home is, um, like 1500.

Well, a month, what's half the interest rate? 1500. Okay.

“But you, you probably clear what close to 10,000ish a little less a month?”

Yeah. Yeah. Okay. Because the mortgage isn't completely. Yeah.

Where's comes worse? You could afford this new house mortgage on your own and still have cushion. Yeah. How much would the, would your other home sell for?

How much was the cash offer?

Uh, 420. 420.

And what do you want that one?

Yeah. 410. 410. And I owe probably around 140 left on it. Okay.

Um, and what other debt do you guys have? Um, I probably have 15,000. I could easily pay off. But I. Okay.

It's old student loans that I should just pay off. All right. A little guilty. I'll listen to you guys. No, you're good.

No guilt. No shame. No condemnation. Yeah. Yeah.

Do you love the new house? Like, would you want to stay there? If it made sense financially? Um, what's the baby? It's a big house.

And, um, I guess I'm still like, I'm still like, do I? Do I want to do this on my own?

“I think I'd be harder to do that big house on my own?”

Like, it's just such a-- Just to make an incentive. It's dumb. It's dumb. So you're talking, say, see, very, like, you sound finalized in your, in your conversation

with us about him. That you're new chapter to solo. Yeah. Is that-- No.

I mean, I can't imagine that the heartbreak is-- Yeah. Solo for now, for sure. I need some time to separate because, obviously, whatever I've done in the past, has not worked out.

Okay. So I need it. Um, I obviously, like, sorry, there's so many things emotions and it's kind of a new-- Sure. But there--

I obviously want to have a family. I want to raise our son and-- Yeah. --a good environment with a good dad. But right now, I think, just--

I need to take some time, and so I don't have, like, 100%-- Sure. --will happen in the future. But I like to be serious and make sure he-- That's fair.

That's fair. --that's on himself and gets help. Yes. Yep. 100%.

And I-- Yep. I get that. It's not a healthy situation. And to live with broken trust or whole marriage--

Yeah. --is not a great marriage. And so the work-- Yeah, we always--

I mean, our prayer for situations always--

You know, is-- is that redemption and reconciliation. And the prayer is that, you know, two people find healing, and it stays intact. Like, we want that. But also, also, we know the reality,

“and also know that you have to take care of yourself”

in this new baby, too. So, um-- I have an option that maybe we haven't thought about. What is the mortgage on the new house? Uh, the-- Sorry, the mortgage on the new house

would probably be around 2,500. No, I mean, the balance of the mortgage. Oh, sorry, the balance of the mortgage would probably be-- It's-- like, around 300. So, if I sell my old house,

are depending on equity and things like that, then it'd be probably around 300. Oh, God. So this is all-- Oh, for the loan.

Sorry, for the loan. So you haven't taken out a mortgage yet on the new house? Oh, no, sorry. Sorry, I'm bad with these finance. 560,000.

That's the current balance. Is that-- Oh, God, no, we put 200 down. Um, that kind of was-- And that's without your home soon.

With my parents. Oh, so you owe them that money back? No, because I have equity in the other house with my dad. But I'm saying, if you sold it, you can't use that money toward the new mortgage.

You'd use that money to pay back your parents. Um. Probably the difference. My plan was just to pay them back. About 200 grand?

Yeah, because of the equity.

I know I first heard have at least 200 and equity.

You probably walk away with like 250. That's why I'm trying to get out. If you use that 250 to put onto your new mortgage, and then did something called a recast, it would drastically lower your payment.

You basically throw a lump sum at the new mortgage and they can take it down. So you're saying sell the smaller home. Yep. Pay off the parents.

Take the remaining pay on this new house. You might take your payment down to 2100, for example, just to give you a little more cushion. But again, it does solve all the problems. I thought you could throw all 250 at it.

That would really lower the mortgage and make you sleep better at night. But that feels like the least of your worries at this point. I honestly say, see, I'd probably just stay put. I don't think I would make any big decisions right now. And if you need the separation, do the separation.

I wouldn't do much right now.

“And if you're from now, you need to sell.”

Yeah, I probably would wait a little bit. [MUSIC PLAYING] So we wish we could get to every call and question here on this show.

If you do have a money question and you want to answer for your situation,

head over to ramseesolutions.com and use Ask Ramsey.

“So this is our free AI tool that is trained on Ramsey principles.”

We have done every show over the last couple of years. Articles books, everything that we put out into this tool. And so it will answer you, like we would, if you had called the show.

So it's actually pretty amazing.

And it's getting some traction George. We're seeing a lot of people using it. Oh, yeah. Because it's conversation. You go back to, if you sign in, you can go back to your old chats and follow.

Keep going with the conversation. You can put in specific numbers and all of it. It really is amazing. And so if you have a question, go to ramseesolutions.com or if you're listening on podcasts and YouTube.

You can click the link in the description. All right. Let's head to Knoxville Go Falls. We love to see it. Hey Michelle.

Welcome to the show. Hi. Thank you for taking my call. You are welcome. How can we help?

Well, I would like to know if I can afford this $25,000 vacation. Ooh, that sounds fun. Where's the vacation, too? Okay, I don't know if I'm allowed to say names or anything. But there is a certain cruise line putting out these big huge ships with tentals and water slides.

And I would go crazy. I bet it is. I thought you were about to say. I'm going to go get a suite on the live like no one else cruise. I know.

You can be draw that.

I thought you are going to come cruise with us, Michelle.

Because we have a cruise. I don't even know that was a thing. But I'm going to look into that.

“I think it's probably cheaper than that.”

Yeah, how many people are going? It's just me and my longtime boyfriend of eight years. And he is side eyeing me crazy for the last three weeks since I mentioned this. He thinks I'm nuts. Well, the main question.

Do you have $25,000 to spare? I think I do. I mean, it's a yes or no question. It's not a thought. You don't need to think.

I'm going to look into that. You're going to look into that. You're going to look into that. You're going to look into that. You're going to look into that.

You're going to look into that. You're going to look into that. You're going to look into that. You're going to look into that. You're going to look into that.

You're going to look into that.

You're going to look into that. You're going to look into that. You're going to look into that. You're going to look into that. You're going to look into that.

Oh, you know what?

That's the new proposal in 2026.

We proposed with a Louis. Oh, my God. She's Michelle. Your voice is so fun. I love her spirit.

You've done so well, Michelle. You've got green lights from us. This is the way to do it. Your baby step seven.

“It's your time to live like no one else because you've lived like no one else.”

You got no debt. You saved up. This is a drop of bucket for you. I think you can afford it, Michelle. And go to ramsysolutions.com and check out the live like no one else crews.

You're going to look into that. You're going to look into that. You're going to look into that. You're going to look into that. You're going to look into that.

You're going to look into that. Not on board, but sure. Well, I think the value system needs to be aligned. And I think you guys can talk about that. And you can speak from your experience, Jenny, of what.

How you want to see money going forward. You're creating a life together. You guys are starting, you know, starting off. And just to say, you know, I want a life that is that I have lots of margin and lots of peace with money.

I don't need to live up to the edge and above and beyond what we make. And so I don't want debt to be part of the picture. And what, and just paint a picture, Jenny, of what that does for you.

“And then he, you need to be able to talk to him and he needs to be able to communicate”

what he sees, what he thinks.

And yeah, it may not happen in the first conversation.

But hopefully you guys can get to a point where the goal is to pay off the debt. And realistically, yes, you will be using some of your savings for that. But if he has guilt over that, you know, number one, you can't fix that. That's going to be his issues to work in. But also, I think that is marriage and like you take on the other person's stuff.

Like when you get married, you're choosing to combine lives. The good and the bad, the past mistakes that you know, I mean, like all of it, like you are choosing to combine the life together. Past, present future. Yeah, and money is money is part of that.

And so it's kind of this, you know, intrigued and to marriage, if you will. You know, but it's there with numbers instead of emotions, I guess. Great. I just don't want to like put a debt burn in confidence, you know? Yeah.

Well, as a man, he has this like bow up. I want to provide. I want to, you know, give my wife security. And so this makes him feel a little bit small for him to be in the weaker position. And to you, for you to be in the place of strength.

And your, your entire vibe here is not giving guilt. Like I don't know how you could share any of this with him. The way you're sharing it. And he goes, man, you may feel so bad. Yeah, because it's all on him.

It's his stuff. And it's a thing too.

“Like, there's going to be weakness in life.”

And so yeah, his ego may be bruised a little bit. But that actually shows a level of humility to say, hey, I'm like surrendering all of this. And like, I hate there's some guilt behind this and some shame. And I hate this. And like this is what it's doing to me.

You know what I mean? And you guys talk through it.

And it's amazing what can happen when you just say those things out loud.

And so it is not weakness in my opinion at all. Because it is what it is. And the goal is to move forward and to build wealth as quickly as possible. And so we want to do this together. I like that.

Don't focus on the debt. Focus on the future. And part of that is becoming debt-free. What's the fastest way to get there? Let's look at our resources.

Great. We can knock out this debt. We're all one. Let's move forward. [MUSIC PLAYING]

Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I am Rachel Cruz with George Campbell. And we are taking your calls at Triple 8-825-5-225. All right. Let's go to Ken in Little Rock.

Hi, Ken.

Welcome to the show. Hi, guys. How's it going? Hi. We're doing great.

How can we help?

I just recently learned about money.

And I continue to try to learn about it. And I'm trying to figure out how I want to position my income to pay off the debt that I have. All right. Sounds good. Well, how much debt do you have?

I have about a hundred and forty-ish.

“Is that consumer debt or is that include your mortgage?”

It's consumer debt. I don't have a mortgage or rent or anything like that. The job I have, I pretty much just live in my truck. Are you truck driver? Yes.

Okay. What's the hundred and forty thousand dollars of debt? What does that consist of? I have a car that I keep up my dad's house. How much is that?

Not really. It's I owe thirty-five, seven on it. Okay. It digs into my income, but I don't feel it as much as if I was to have like all these other bills.

Which was kind of the thought process that kind of freak me out.

Like if I had these other bills, this would be a problem. Yeah. If you actually had to pay a rent, you'd be screwed. Yeah. All right.

So thirty-five on that car, what else? I have about sixty-five on a solar loan that I put on my dad's house. But I'm going to inherit money when his time comes. But then I have about forty in college loans that I've just been slowly tinker and with to try and get off home for two last couple months or so.

Yeah.

“Is that one big loan or is that separated out until like ten or eleven different ones?”

It's like sixteen different loans. Okay. Very easy. Good. And the solar is one big loan?

Yes. All right. And then the car loan is one loan. All right. That's what we're working with here.

Is there anything else? No. But it feels like there should be as much money as I feel is going out the door. Yeah. What do you make?

Sometimes on a short month they could be around four thousand on a bigger on a good month they could be somewhere upwards around fifty-five hundred. Okay. So that's a take home. It's about fifty to sixty is your take home pay.

I mean it's bad when you have a hundred forty thousand dollars in debt. Yeah. That would have been a great income if you were debt free. So let's walk through this as how we're going to tackle this. Can you work extra?

How does that work? Can you say a low month, a higher month? What is stopping you for making more? A low month is when I have to go home. Okay.

Because I can stay out for a month or two at a time. And I'd probably take home almost six hundred grand for those months. And then if I need to go recharge at the house. I miss out on a week of income. Yeah.

Okay. So in your home you're essentially taking time off. Right. Got it. So we need you on the road constantly.

Yeah. To get out of this debt. For sure. Yeah. I mean for the car can the car make no sense.

Number one of just how much it has compared to your income. And how little you're not using it a lot.

“So if you sold it, do you know how much you could get for it?”

Probably somewhere between 17 and 20. Has it gone down that much or was there negative equity? It's an EV. It went down immediately. Okay.

I was like the second I got the loan of looking at it.

Like this sucks. Yeah. Well, I'd rather have. Fifteen in debt. I don't know.

Yeah. Even if you. But you know what difference you're under water on. You're going to either need to save up the difference or get a loan from like a credit Union to cover the difference.

Yeah. And then go get a crappy car that just sits out your dad's house that you drive when you come home. You know what I mean? Which isn't even. All the time.

So I think justifying getting rid of the car. I think it's going to give you a little bit of breathing room. And then start knocking out these college loans. Smallest to largest and considering there's 16 of them. You know, staying on top of that and making sure they all get paid obviously.

But that you start. You know, Jim, I'm going out a couple months. Yep. Chipping those away. Right.

So it'll take you. It's going to take you about probably a good three. Maybe three to four years. If your income doesn't change, it will take years. And so the hope is we can get you making more.

If you are home, I want you to do inside hustles. Yes. Doing something else to create another 1500 or two grand a month. To get out of this thing faster. Because just the napkin math says, I can do it for you here.

$140,000 over four years. You need to be throwing 35 grand a year at your debt.

Which is it.

You know, not all are off from how much you're making total. Yeah. So that's, you know, almost three grand a month.

“You need to be throwing just to do it in four years.”

So this is a mountain of debt. And I feel like you don't have the urgency that I would have. And partially it's because you don't have rent and a lot of bills. Yeah. The average person has.

Yes. So I mean, I would have some sacrifices.

Can so the car would be my first one.

I would get rid of it. Get a small loan for the difference. And start tackling this because that car payment that you're paying every month could be going towards paying off this debt. All right.

Let's go to Milwaukee and we have Helen on the line. Hi, Helen. Welcome to the show. Hi there. Hello.

Good morning. How can we know? Are you a ray of sunshine? I am right now. Yeah.

Good. Good. What's going on?

“My husband and I are currently expecting baby number four.”

Baby number four was not planned.

However, it's a pleasant surprise. And I am doing. I'm doing July. And what baby number four means is we now have to get a larger car. Yes.

Our car is currently only five. We're going to be a family of six. And as I'm doing July, we have a timeline of 15 more weeks. And we haven't had a car payment in 10 years. We don't want a car payment.

But we're exhausting our options to just save up in the next 15 weeks to avoid a car loan. We actually went shopping with the $5,000 we had to see if we could buy anything. Because we have $5,000 we've done for a car currently. And we were actually turned away. I used dealership saying that they couldn't get us a family friendly car that they're

comfortable putting us in for $5,000. Yeah. Yeah. At that price point, it's probably going to be coming from an individual somewhere. You'd have to find the Facebook.

How much would your car sell for?

“Because you have $5,000 say how much could you get for the other car?”

So when I looked on Tony Bluebox trading, it's around 900 private sales. About 2000 at the highest. Okay. Perfect. 1000 lowest, 2000 highest.

Okay. Great. And how much could you save in the next two to three months per month? Like if they could you put a thousand bucks away? Probably not.

That's kind of like the issue we're facing with it. We could see a saving up if we had six months for it, but not the next 15 weeks. How much can you save per month? Right now we're living paycheck to paycheck because I am a full-time student at UWM. Okay.

I gave my degree in biochemistry and come me. Our budget opens up a whole bunch more. Okay. So where are we? So maybe 700.

Okay. That's great. So what I would say is number one. And the expectation of a super nice car is not really there because you sell yours for 2000. So that's great.

We're not looking for anything boozy. You're not boozy. It's great. I would put that in the 7,000. And you guys could survive with two separate cars.

If you got to go somewhere. You both, you both get into cars for six months. It's a house with everybody. That's the goal here. No vacations.

That's the dad of two. We're not going to go see grandma. When people hear my story of paying off debt, they say things like, "Dang, that must have been so hard. I can never do that." And I tell them, "Sure you can."

It's a short-term sacrifice for a long-term gain. But do you know what's really hard?

Working your whole life and never having anything to show for it.

Never having the long-term gain. Just feeling broke, stressed, and maxed all the time. And sadly, that's the hard that most people choose. Listen, you're capable of transforming your situation and living a life of freedom. But you need the right tools to do it.

Like our every dollar budget app. In minutes, it'll build you a step-by-step plan that's tailored to your money situation. And every day it finds ways you can free up extra money in your budget. So you can get rid of your debt and actually build wealth. So make the choice today.

Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the every dollar app and start for free today. So we were just talking to Helen about buying a new car. We had a jump off because we had a hard break.

We had to get to. But George and I were talking in the break. And you know, there are options, you guys. Well, if Helen hopefully she'll listen to our advice. Because we get the call of people that get in a dire situation.

Like, well, you know, I couldn't get this.

The car dealer told me this.

And so we just went and got a $35,000 van just to make us feel good about it. And then they're trying to pay it off and they're back in debt. And so hopefully it's not what's going to happen to her.

“But here's the way you have to think about.”

When you take debt off the table and you say, okay, we are not going into debt at all. What does life look like? And so for them specifically, they had $5,000 saved. They could sell theirs for $2,000.

And it's a $7,000 car. And then she said, our income's going to open back up. I think she said, may or Juneish. And so once she's done with school. Yeah, and she'll, they can save 700.

And if you do that for five months, you think through, you know, baby will be three months at that point, October. You know, that's some, that's some cash. $3,500 that you could easily save on top of that. And you could go get a $10,000 use car.

Like that's a big upgrade from the $2,000 car she's driving out. And that's just in, you know, five, six, seven months.

And so yeah, well, there'll be three months of,

it being inconvenient. But you don't travel. It takes two cars. Yeah, we take two cars. But again, the reality of how much you are probably,

well, you got three other kids and other that you're toting around too. But there is, you know, a way to look at this and it sounds extreme. But I'm like, if you just are patient for five, five more months, this come for five more months and go get a great $10,000 car. And you were looking at vans online.

So yeah, I like to just go, all right, you walked into, she said, I went to the dealership and they laughed me out of there. Yeah, well, don't go to the dealership. Of course, they're going to try to get you in a brand new 20, 20, 26 Honda Odyssey and most people go,

well, I can't afford a $7,000 car. So I'll take on a car payment on a $50,000 car. Right. Or it had some issues. So we had to get a brand new car.

Or I was worried about my family's safety. So I'm like, all right, go Honda Odyssey, because you know that thing's going to outlive you. And so I looked up. I went to just cars.com, filtered,

she's in the Milwaukee area. So I just looked up a random zip code. I went 50 miles out. I'm willing to travel to get a deal. And I sorted from lowest to highest.

And I found multiple Honda Odyssey's. Now, are they the prettiest thing in the block? No. It's got 100, one has 160,000 miles for 4 grand. The one that I like, 137,000 miles on it.

8 grand for a 2010 Honda Odyssey ex. Yeah. And that's fine. I said no accidents, clean title. Yeah.

So just don't go out there buying a lemon. Get a pre-purchase inspection from an independent mechanic of your choosing before you go buy a thing. But don't tell me that $7,000 car is don't exist. Right.

That's right.

“And what's wild about that is that's what $8,000.”

And if you did our plan, they could almost cash flow that right now with what they could sell their car for. Yeah. And then you save up over time. And let's say you save, you know,

for another, you know, year, right? And if you're able to put, you know, I mean, 500 bucks a month is six grand a year. Six grand. It's going to 16 grand car by then selling that one and upgrading.

Yes. And then year 22,000. And one year. Like that's what's wild. It's like you just have to have some patience with it.

And think through the math and the reality. And it's doable. It really is you guys. So Helen, we're excited for you. And maybe number four.

But don't go get the car loan. You guys can do this. All right. We have our question of the day, George. And it has brought you by Wi-Refi.

And defaulted private student loans can leave you feeling stuck in overwhelmed, but why Refi helps you explore refinancing options. With a low fixed rate and payment base on what you can actually afford. So visit wi-Refi dot com slash ramsy.

“That's why R E F Y dot com slash ramsy may not be available in all states.”

Today's question comes from Austin in Washington, D C. He says, weren't babyseps 45 and six and contributing the full 15 percent to mutual funds. Despite these contributions, we have lost over $6,000 this year. Our contributions aren't even keeping up with the losses.

Any advice or encouragement for us? Lots. So much. Welcome to the market today. By the way, it recovered already.

Did you know that the S&B 500 is back? Back to what it was. It's back 60 days ago. Yeah. It was like a few months.

Everyone got spooked. It took a dip which felt like a crash. If you zoom in on one day or one week. 100 percent. And we're already back.

So no, you didn't experience $6,000 in losses because you didn't cash out. So you're you're right in the roller coaster. And right now you're out of dip. And now we're back to level. And soon we'll be climbing back up my friend.

So you got to have a long-term perspective when it comes to investing. Investing is for the long haul. Yes. So keep your savings in a high old savings account for short-term goals. And know that your investments are five, 10, 15, 20, 30, 40 year game.

And then you know, the he never checks it when it's up.

Whenever it's he's 6,000 up, he's not going to go, hey, I'm 6,000 up. Am I doing this right? Yeah. How well the market did the last two years?

We didn't really hear much people talking about it.

Yeah. Like every 10 percent and 20, 25. Yeah.

“Plus 18 percent of your prior was like 23 percent and 25 percent.”

These are unheard of numbers. Wild. Wild. And yeah, it's just, it's kind of like, oh, that's good. And good.

I'm glad. And then it goes down a little bit. And then you have a flat year. Even a negative year and that's a normal part of the process. Yes.

You go look at the S&P 500 returns over the last 50 years. You're going to see some down years. You're going to see a whole lot more up years. The market is up way more than it's down.

And it has always recovered.

Absolutely. All right. Let's go to Ashley in Houston. Hi, Ashley. Welcome to the show.

Hi. How are you, guys? We're doing great. How can we help? So my husband and I are new parents.

And we're trying to make a wise financial decision for our family. All right. We would really love to be able to stay home with our baby. But on one income, we feel like it's going to be a little tight. We would be decreasing our income if I say home by 55%.

We have a couple options. But we're not sure which path would be the life as long-term decision for us, financially. Okay. What are your options?

Um, so one option would be me staying home with her. I'm working evenings and weekends. Um, just to keep our house and our like six expenses afloat. Another option would be me just continuing to work and not staying home with her. Um, until my husband increases his income.

Is in the third option would be that we sell our house.

And we move into a camper on my parent's land until he increases his income.

“Well, if, okay, don't like that option, can we take that one off the table?”

We'll take three off the table. Just because of for long, you mentioned the word long-term. Long-term financial that is not wise. Um, because you're selling an asset and you're taking one that's going down in value. So let's take that one off.

Okay. Have you run a mock budget actually on if you guys just lived on his income? Um, where what expenses would not get paid? Like where does the line cut off? You able to pay mortgage utilities insurance?

Like where we're we're down the line or you like, okay, we are. We're having to draw this line. Is it in the middle? Is it up with the expenses? Like where where is that at?

Um, most of our six expenses would be covered.

It would be more so groceries and gas and then taxes that are up in the air.

Okay, well, those are important. So those are awesome. No, I'm negotiable to count. Yeah, food, shelter utilities and transportation. So you're saying your mortgage would get paid and utilities would get paid.

But you may not have enough for gas and food. Yes, so that would be where I would be picking up additional. I hear you. What is the mortgage? Our mortgage is 7th or 18, but we put 2,000 at it.

All right, what does his take on pay? Um, he makes 43 a year. 43,000 a year. Is this taken? Okay, so we're talking 3500 a month and your mortgage is 1,800.

What? That's tight. Yeah, you may not be able to. Yeah, um. I do think you need to make more.

I don't think this is like on fire. You could try the route of working nights and weekends.

“I think it's going to be exhausting real quick and get old.”

So we need a clear path that he's going to make more otherwise. You're going to need to continue working until we have a different financial scenario. Yeah. Um, you know, I, I don't mind the idea of moving. Actually, it may be a two guys moving to a smaller condo.

Maybe in a different part of town. Like, I don't know what that looks like. Because you could change your housing situation. Maybe a little bit. I mean, a 1,800 bucks isn't like crazy.

But if you could find something for like 1,000 bucks, right? Um, 1,200 bucks even for a small mortgage. That would be ideal. So you're almost shifting your lifestyle downgrading it so that you can have the value of saying home. Or you value saying where you guys are.

And yes, you probably would have to contribute financially a bit until his income comes up. Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting. But there's a lot to think about.

And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources. For help to get prepared to buy or sell your home with confidence.

You'll find calculators start to finish guides, a podcast, and even an in-depth video course, hosted by yours truly. What's not to love? So if you're ready to take the next steps towards your home goals, go to RamseySolutions.com/real Estate.

That's RamseySolutions.

Find or selling your home is a big deal with all the clickbait headlines out there and conflicting data. It's really hard to know what's happening in the housing market. So we're here to make the latest trends easy to understand. So median home prices say steady last month.

Add about $439,450.

And the number of homes on sale hit $1 million for the third month in a row.

So buyers have more options and negotiating power while sellers face more competition. So the average 15-year fixed rates dipped a bit to 5.86% last month. And if you are debt-free, you have a fully funded emergency fund and a sell-at-down payment. Now is a great time to sell your home to buy a new home wherever you are in the process. That's where you want to be in the baby steps.

“So if you want to learn more about housing market trends and get free tools to help you when you buy”

or sell your home with confidence, go to RamseySolutions.com/market or click the link in the show notes if you're listening on podcast or YouTube. Alright, let's go to Blake in Panama City, Florida. Hi Blake, welcome to the show. Hi.

Hello, how can we help today? Hello. Okay, so my question is, to me, I want to have our house paid off at 34. Whoa. I went back to school and got a degree at 30.

So we were struggling before and I was like, I can keep doing this. But the thing is now her family is per press or nothing. She's fallen for to go out and buy a bigger and better house and new vehicles. But they're all paid for houses paid for and she's fallen for it.

What do you mean fallen for it? You guys haven't done anything yet, right?

You're just saying she's in on it. She's like, I'm ready. Let's go into debt. That's right. Do you guys have the money to upgrade cars and do you want to? No, I don't want to.

But do you have the money to? Yes, I do. Okay, but you're just like, that's not a priority for you. Is there any merit to what she's saying and that you could use an upgrade on the cars or the house? Or is it totally fine?

Well, with the house, it's about 1,600 square feet and we do have three children. So there become a teenager. So it is getting cramped in there. But what's the amount? About 290,000.

“Okay, and how much money do you have outside of that?”

And our bank account to come by and we have about 1,000. Okay, so that's kind of your emergency fund. That's right. Okay. Anything above that savings?

No, that's all of our savings combined.

Is with that. Okay. And what do you guys make a year? I'll make a variety of 170 and she does insurance and she makes 70. You make 170 and she makes 70?

That's right. Okay, so you guys make 240,000. Do you have no more savings? Just 15,000? Well, I just started making this about four years ago.

And that's what I started paying for. That's what I'm talking about. That's what I'm talking about. Okay, so you've been on a debt payment journey. And now you're at a good spot.

And she's already gone. Let's go back in. And you're like, dude, we just played this game.

“We were in debt since we were 20 years old.”

Yeah. Yeah. We're sure we've got a degree. And what you guys are making, say you lived on a hundred grand a year. You could bank 140, right?

And go get to nice cars. If you wanted, you don't care about it. But maybe she wants a nice car. You guys make good money. She should get a nice car.

What car is you driving right now? So she has a 2018 arm. Durango, a month or 2018 ram, 1500. Okay, but you're fine. You're content.

But she's like, hey, I'm going to have a great car. And I think that's how I'm looking. What is she want? Give me like a ballpark. What kind of car?

What price point is she looking at? Well, she was looking at the wagon. She was looking at the wagon. She was looking at the wagon. She was looking at the wagon.

And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon.

And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon.

She was looking at the wagon.

And she was looking at the wagon.

And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon.

And she was looking at the wagon.

And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon.

And she was looking at the wagon.

And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon. And she was looking at the wagon.

And she was looking at the wagon. So she's been in a season of sacrifice. And she's been a great teammate. I'm assuming for you guys to hit these goals, which is awesome. So now you guys need a dream in the future.

“And just say, hey, in the next 18 months, what do we want our life to look like?”

And Blake, you may be like, I'm great driving my truck. And that's great. And she was saying, I would love a new or car. OK, great. Let's put that on the table.

And I would love some more space. All right. Let's go look. Let's just see. All up Zillow for the heck of it, a dinner.

Just for fun. Just for fun. And just see what's out there. In your budget. Yes, but you guys start kind of dreaming in your budget.

Don't go look at millions of homes. Because then she's going to only see millions of homes. Yeah, yeah. But you guys need to have an agreement. We're not going into debt.

But we can spend some money and enjoy some of this, too, right? So otherwise, what's the point of you working so hard of being this successful? If your family can't enjoy it and reap the benefits while they're alive? Well, that was another thing.

That was about to be 16. She's going to need a vehicle. And I know you don't go out by a young kid. That was super expensive. But my two boys are up behind her.

Okay. So scared. So that goes on the list. Like when you guys sit down for dinner. Okay, wife wants a new car.

The dream would be to upgrade the house. We got three cars. We got to pay for. We're going to give each. You know, maybe the kid pays for some.

We put some in. I don't know. I'm just making up. Maybe you guys set aside 10 or 15. Anything they save up goes on top of that.

Yeah. That's so easy. Yep. Yeah. So she's thinking.

Yeah. That sounds reasonable. A little cheaper. But yeah, 10. So 10 grand per kid.

We got to have. So it's 30. This is rare that Rachel goes cheaper than me. I just feel like that's actually getting a word for that. Yeah.

“I think it's just a statistic where all most young kids write their first car anyway.”

So I didn't want to go so expensive. Yeah. I get mad when I see kids in my neighborhood driving nicer cars than me. I go. That's bad.

Get off my lawn. Kids. Yeah. I get a sense. Yeah.

I have that freedom. No. But so like you guys need to sit down and make a priority list of the goals that you guys have in the next 12 to 24 months. Put dollar amounts next to them.

Look at your income and you guys map it out. And this is going to be fun. Don't stress. Don't please don't squash her dreams. Okay.

Your dream. She's dreaming too big. Let her dream. But let her dream. This is part of it.

It's fun. Everything you want. That's not the point. But the point is like here is what I'm thinking and wanting and seeing and whatever. Like let it just happen.

Let it be a fun conversation. You guys aren't broken anymore. And you're not going to be broke again as long as you do this slowly in cash. Avoid debt. Let me free you from that scarcity mentality, my friend.

[ Music ]

Hey guys, Dave Ramsey here.

Every day on this show, we help people work through real money problems and figure out what to do next.

“Now, you can get that same kind of help anytime with Ask Ramsey.”

Ask your money question and get answers built on Ramsey principles we use on the show, whether you're making a decision or just want something explained. Ask Ramsey is here to help. It's fast, simple and free to use. Go to RamseySolutions.com and try Ask Ramsey today.

That's RamseySolutions.com. [ Music ] Our scripture of the day comes from Proverbs 134. The soul of the sluggard craves and gets nothing while the soul of the diligent is richly supplied.

Leslie Nielsen said, "Doing nothing is hard to do.

You never know when you're finished."

Ah. Something to chew on there. Did I get it? Doing nothing. Yeah.

Doing nothing is hard to do. You never know when you're finished. I don't think anyone's waiting for it to be done. Does that what she means just don't do nothing?

“I think it's Leslie Nielsen, the famed actor, R&B.”

Yeah. So just keep doing something. Don't think too hard on that one. I think it was meant to be like a riddle of humor. Humor.

Humor.

He was a comedian, an actor.

So you know, I'm excited. I'm excited. I'm sure none of the rough. Airplane, the naked gun. It's before your time, right?

Oh, airplane. No, I got that one. Yeah, all right. I see. I see.

When did he pass? Yeah, 2010. Okay. Oh. All right.

Let's head to-- Not recent. Not recent.

To Rolly and we have Mary Rose on the line.

Hi, Mary Rose. Hello. Hello. How can we help today? So we, um, kind of a little bit of a longer story.

We moved from Washington State to North Carolina in October of last year. And we wasted all of our resources doing so. It was about situation in Washington. We weren't making it. We were making good money, but we still weren't making it.

So the Lord made a way for us to get to North Carolina. And we had an idea of two years to buy a house. Well, we are in process of buying a house right now. The Lord made that happen as well. We don't have to put anything down at all.

The mortgage is going to be less than our rent payment. We do have some debt in cars and some credit cards and stuff that we were planning on paying off.

“And my question really is, am I thinking about it correctly?”

And I'd rather pay a mortgage, build equity than pay someone else's mortgage by renting. I think that's a short-sighted approach because you're not thinking about the full picture. Because we don't know what the mortgage is compared to your income and what these debt payments have to do with it. So I don't know that the Lord is, you know, in charge of zero-down mortgages. But you're here.

I mean, you already did it, right? Yeah, I mean, we told the mortgage payment. Mortgage payments are going to be right around 15, 50. And we pay 16, 15, a month in rent. And what's your income every month? What comes into your bank account?

Well, so we make about 98,000 a year. Okay, is that your gross income? That's yeah, that's our gross income. Okay, so, but you don't know what's coming up. Well, every month, my, I can give you a guess.

Is it around six grand a month? No. So I'm actually, I just got a new job in the town that we're moving to, which is about five dollars more an hour than I'm making, plus $300 extra in bonuses a month.

Okay, so what's your new hourly wage? My new hourly wage is 20 and he makes 27. Okay, yeah, that makes sense. You're making about a hundred grand gross. But my guess is your take home pay will be about six grand.

So 1500 bucks on a mortgage. That's about a quarter of your take home pay. So you're in line there. Now how much debt do you have? Well, we pay probably $800 a month in car payments.

And then probably 400 in credit card payments. Because we, I like I said, we exhausted all of our resources getting out of Washington state. What's the balance of the loans? The credit card debt. I think the credit card we've got about 15.

Our truck is 16.

My car is nine and the Harley's three something.

“But my husband has, he's listed his truck for sale.”

Okay. So we're trying to get the truck out so that we can, you know, save somebody that way. And then we can really, you know, start building a savings so that he can get something that the truck in Washington made sense.

Doesn't really make sense down here. His job actually provides transportation for him to get back and forth from work. That's good. Is he there? And his, yep, and his is a 16,000.

Yeah. Okay. So he can possibly sell it. I told him to list it for 27 and maybe get 25 for it. Okay.

So you could walk away with cash. Yeah. Yeah. Which could knock out the Harley and maybe close to paying off your car. Right.

And what he wants to do is pay the credit card golf. Because it's a higher interest rate. And then we just cut the credit cards up and we're done with the credit cards. Because that was kind of just. You can cut the credit cards up now.

You don't need to wait to pay it off. And I would do that. Right.

“We recommend that debt snowball method because it's the method that actually causes people to get out of debt.”

And it's, it's all about momentum and psychology.

So it's smallest balance first instead of the highest interest first.

Well, you're talking about his debt avalanche method on paper. Yeah. You could maybe save some interest. But right now, we're not trying to save interest. Right.

If we were playing math, we wouldn't be in all this debt. But Mary, right. I do want to say though, when we, when we look at the order at which we buy a home, even if it's a great deal. You even if it's cheaper than rent on paper. Yes, on paper.

I still would not have bought a home until I had this clear out. Because you guys have no money. Yeah. 43,000. And if the heating and air goes out, you're 20 grant.

Like what are you going to do? You know what I mean? Well, so, but I'm saying this, the rent. Listen, the rent. Yeah.

Even though you're paying $1,000 less, that's $12,000 a year you're saving, which is great. And I get building equity and all that. But if something goes wrong when you rent, things are taking care of. So just know the expense of home ownership. Even though you don't see it in the mortgage, you're keeping up with the yard, all of it.

So just know that it's still going to feel, you may still feel tight. So really for the last 15 years, we've lived in situations where we take care of everything in the house anyway. Like if the heating or air goes out, my husband takes care. He does everything. Well, as a traditional renter, though, that would not usually be the case.

The landlord should be, should be paying for it, though. Right. Right. Okay. So just saying.

So we understand the taking care of those types of things. You know, like my husband is a master of all. He does everything.

So we haven't, I mean, this is the first time we've rented from a property management company in 15 years.

And so.

“So when is the lease over and have you actually closed on the house?”

So we closed on the house may first. The lease is over in August. But the sellers agreed to buy us out of our lease. Okay, it's part of a concept kind of mortgage, you guys get with nothing down. In the USDA loan.

Hmm. Okay. So I know that you guys don't recommend USDA loans, but my husband got curious. He got on his phone and he put a request out. They approved this.

About 250,000. Yeah. They approved this up to 250,000. And by some chance, you know, we took a left and there was a house on the right hand side. That was a two bedroom.

And we've only been looking at three bedroom. It was 215,000 for, I mean, you can make it five bedrooms. And entire parcels and a huge work work, woodworking shop on the back. So I'm sure. Yeah.

Yeah, I bet it's great. I bet it's great. But the issue is if that house goes down in value, you're now underwater in a house. Because you have no way. Right.

And USDA loans. They include an additional premium. There's an initial fee of 1% and a 0.35% annual fee after that. So it's not as great of a deal as it sounds. It's like saying, I got zero down on a car.

Great. You just took on the full loan instead of having anything down. So I want to tell you that you can do this house. I wouldn't personally. If you can back out.

I would kind of clear the deck a little bit more and step into this from a place of strength. Right. Now you're stepping into it out of more desperation from getting out of a bad situation. But it's not going to tank you if you guys can keep up this income. Yeah.

But I would focus heavily on knocking out these debts. Yeah. Yeah. And he's been in his job since December. I will move into my job actually next Tuesday.

And that's great. Yeah. I'm excited for you guys. Yeah. I think it's great.

I think whatever you're choosing to do.

But you guys have to knock out this debt.

“And yeah, there's a lot of deals and a bank are giving you a loan, a zero percent down.”

Is that Jesus? Keep around. Is that God or not? I don't know. I don't know.

But George, thanks for a great show.

Thank you.

“Thanks everyone in the booth and remember.”

There's only one way to financial peace.

And that's to walk daily with the Prince of Peace. Christ Jesus. [BLANK_AUDIO]

Transcript

[MUSIC]

You're sort of getting ahead of it because it is putting them at risk.

[ Music ]

Nothing, nothing, it's just kind of secured debt.

If you're looking for a more budget friendly way to save on medical costs and...

Yeah.

It's not a gift.

She understands that.

You're not paying out of business.

Then, you know, I bought this truck at 52,000, and I make about 55,000 before...

That is going to take, let's get every bonus we can get.

I was currently moving out and when I took it out.

Our friend Dr.

Hi, Stacey.

How much was the cash offer?

If you do have a money question and you want to answer for your situation,

Oh, you know what?

Hi, Ken.

Which is it.

Like, well, you know, I couldn't get this.

We didn't really hear much people talking about it.

That's RamseySolutions.

She was looking at the wagon.

Hey guys, Dave Ramsey here.

Our truck is 16.

I think whatever you're choosing to do.

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