Debt Is a Trap That Will Hold You Back From Building Wealth
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Live from the headquarters of ramsey solutions. It's the ramsey show. But we help people build wealth, do work that they love and create actual amazing relationships.

Number one, best selling author Rachel crews rmc personality cohosh to the smart money happy hour is Michael host today? My dr. Open phones at triple late eight, two, five, five, two, two, five.

Carroll is whether Carol is in new york city. Hi Carol. Welcome to the ramsey shop.

Hello, thank you so much for taking my you too.

What's up?

I am. Have a hospital retired within the next twelve months and we'd like to finish paint off the mortgage on the house. Good are yes, but por your advice and um are saying financial advisers advising is not to because the mortgage is that under three percent and our investments are doing well above that. However, that is a matter to us. We want to play ahead and get this done.

And our next question to him is how can we best divest of our investments and pull the money out, make the cash available to do this? And his next year of advice is to pull from our bonds they're earning at tax rate as a post of pulling from our neutral funds that will have to pay capital gains tax design. What do you suggest we do?

You probably got ten no gain on your bonds. They are probably value is down even though the the coupon right stayed the same. But as interest strates rise, bond values go down. And so my guesses is that you bought them during a lower interest rate environment, so they're probably not even worth what you paid for them today. Is that right?

I'm not sure that that's a good question.

I don't think you're going to have any game to amount anything. So i'd like his advice on that basis. Um okay. And and what is your total next stag?

A four million.

okay. And how much is the mortgage?

Eight hundred thousand.

Okay, good, good. And you get here. How old?

Sixty nine and sixty seven?

cool. And how much of you got in .

these bonds that I don't know.

That's a good question though is about eight hundred is enough to do this.

I think so. Yes, yes, are the way he was talking about. I was.

Is he the one that put you guys in the ponds? Carroll, to begin with, there was that something you had?

Yes, no, he he's been. We ve been with him for our entire working career.

Oh, okay.

Okay, yes, I I, I agree with this advice on that. I would use the bonds first to answer your question. Okay, this guy you you need to be aware of, uh, a couple things here with this guy. Um i'm not quite ready to fire him, but i'm close right? Okay, I hear you number one because he his job is not to um take his glasses on the india's nose and speak down to you little people who have four million dollars and you shouldn't be paying off your mortgage. Listen to the wise financial adviser because bull crap, his job is to say, okay, what are your goals and how can .

I help you a them yes.

So I don't like his approach to this. And it's very typical in the financial advising world this level of arrogance, it's just below the it's it's not avert arrogance, but it's A A subversive area.

But this advice is very problem.

Ent, yeah, it's a standard. It's a standard. That's a second problem i've got when there is he used two. He did two very standard things in the financial world that I completely disagree with. One, as he told you not to pay off your mortality and second.

as he put you you in bonds.

right and so these bonds, you have a fourth of your money taught up in something that substantially under performing because of this .

guy get you .

okay and that these bonds so um and because here's the thing again, that simple thing remember about bonds as this in the financial advising world we have been taught and everyone for some reason decided to agree with IT rather than actually making their own decisions.

But the people like me that in him that are trained in this stuff, we've been taught that as you get older, we use what's call the asset allocation methodology or theory, and that as you get older, you should be and less and less and less risk. And so that by the terrier age, you should largely be in bonds and money markets and have very little in equities OK. The problem is that everybody just accepted this as if it's a fact.

It's not a fact. It's a theory. It's an idea. And and I disagree with that. I'm sixty four. I have zero in bonds and almost the same amount of money markets. I got a little bit in money market just because I like some cash, but but i'm not sitting in haven't moved everything away from equities because as you get older, you should limit risk because that's horse crap.

If I live to ninety fower and i'm sixty fower and i've been in an instrument making eight percent instead of instrument making twelve, fourteen, the amount of money I ve lost during that thirty years as millions. So it's bad advice allocation methodology, it's bad advice. And so he put you in these bonds, the second thing you need to know about bonds is that they they are not legitimately safer than stocks, our mutual funds.

Okay, because when you track the volatility of bond values versus the volatility of bond of mutual fund stock values, they are very similar. It's not safer and it's really not. And and the reason is the third thing.

And then I let you go OK is this. But I mean, it's teaching for everybody out there. It's good. It's everybody out there. So bonds, the thing you remember about bonds is there's a set interest rate on the bond.

So when interest rates rise in order to achieve that same, that that a higher interest that you ve got a four percent rate and industry or seven. But so people are expecting seven, but your bond is only paying for. So the value of your bond goes down as interest strates rise.

IT goes up as interest strates fall. Bond Prices are exactly inverse to the prevAiling interest rate market. So in in a rise in A A record low in the last one hundred years, we had a unprecedented three percent interest train environment for a decade, right? Was in the middle of the lowest interest rate environment in known history.

This guide puts you in bonds. And where are you going to go from the lowest and interesting environment and history up as interest strates to go up, your borne values go down. And so i'm afraid you may have actually lost to money on these bonds when you get into them, but i'm hoping you at least broke, given that's what i'm hoping.

So interest rates, folks, IT bond Prices, the value of a bond goes down as interest rates rise. So you never would buy bonds in and a rising interest rate environment, you would buy them in a falling interest very environment if you are gonna bonds at all. And that's because the yield ld on the bond has to have to approximate the prevAiling rate. And yet the coupon rate is fix.

yeah. And I think one of most important things we've learned with the financial adviser is exactly what you said at the top of this is that here are my goals. And if there not respecting, you're hearing that they're they're going .

to do the universe of that going to figure out to me members, you know. So i'm not really far this cap, but I really dislike bonds for him from him and I dislike his mortgage advice, and I dislike that he's kind of telling you what to do instead of asking you what you want to do. This is the ramsey show. I've been doing this show for over thirty years, and some of the sad calls I have taken are from situations that are completely preventable.

Yeah and it's so hard as I feel like one of those, especially the ones that i'm like a it's terrible air people that call in and their spells has passed away suddenly and they don't have life insurance when you have to think through how I going to pay my bills in the middle.

K yeah, in the middle.

All that grief like it's just IT is it's terrible to life insurance is the one thing, especially as a mom with three little kids and like so big on for people to get because it's inexpensive. Sander is the place that once and I actually get all of our life insurance .

and he does much because ander shops among a gazza an different companies. IT didn't call much. You just have to admit that someday you're not gonna be here.

You got to say out loud and you got to say, i'm going to say, I love you to my family by taking care of them and taking the time to put the stuff in place to costa stinking pizza to get a free quote, call eight hundred three five six forty two eighty two. That's eight hundred three five six four to eight two or go to sander dot com. So I remember .

the year .

you were born right til I was standing in line at clock in at the corner .

of .

bill road, and markers were rode over their improved like where we used to live back in the day. Those of you in the nh field market will know that intersection. I think that robe is probably gone now was thirty plus years ago, right? So and i'm standing in line and i'm buying basic grocery is not with your mom and a baby or two in tow.

And we weren't really spending like a tonto money and we weren't buying anything frivolous. IT was just made potato just to feed the family, right? We were broke. And I remember, as i'm back in those days, you would write a check, not use your debit card as i'm writing the check. I'm wondering if by buying these groceries, if there's gonna be enough money left in the account to pay the electricity bill, and I didn't know, but I bought groceries anyway, of course, and then just kind of on to hope and a prayer.

Get home and everything works out and I can pay the light bill, right? The reason I remember that specific experiences, I think it's the last time that ever happened because I started doing right after that share and I your moment, I started doing a written budget before the month begins, and we knew we had a certain amount money to spend on groceries. And that by spending that money, we weren't worried about something, about everything else, because we knew IT fit in the overall, because that was in a line item and the electricity was a line item.

So we knew we didn't spend the electricity money on groceries or first, yes, we didn't worry because I was all laid out. We had a plan in the amount of peace that we got having the month laid out. But as long we stayed within those guidelines, we kit with the whole thing is gone to work instead of going from anxiety, ty, to anxiety to anxiety every time you're paying a bill.

there's a freak out, a question always in the back of this. Okay, okay, OK. And even later on.

when we started having some money buying something, a luxury item, is this okay? And you gotta go, what is that okay? And does IT fit IT in this written out plan for every dollar has been giving an assignment. Folks, if you want to have that change of experience in your life, where you go from when i'm doing something as basic as grocery shopping and that being anxiety and anxiety of IT going from that top piece, the the only step that does that is a written plan, a detailed plan, and that's called a budget before the month began.

You're giving every dollar and assignment you and your spouse degree to IT, and then you stick to IT and that way the electricity gets paid and the uh the groceries get bought and the kids can have shoes and no one died. You know you know it's just like, yeah it's a thing. Most people though have that experience standing in the grocery line crap. I don't know when I finish this if we're okay.

oh yeah, well, and there's A A thought to that. A lot of people have that think, okay, if I know and I plan out and I do a budget and I see a number in a specific line, I don't like groceries, then I can just go and spend whatever I want and that doesn't that that I I hear the opposite to of like, oh, that just that sounds so constructing and like IT, that sounds of controlling and I don't know if I want that.

And then you start to realize there is an underlying level of anxiety, whether you addressed or not, when you still have a question mark in your head of thinking. Okay, i'm taking stuff and putting IT in my car and i'm going to check out I see that total. The feeling of, oh, I thought that was going to be restrictive when I know, oh, this is how much I have to spend each week.

IT actually becomes such freedom where you actually enjoy and have a level of peace with IT, so so on, on both things, right? The level of anxiety of do we have enough? But then also people say, oh my god, I don't want to live on about job because I just means I can have any fun and that feels so restrictive. Well, you don't realize on that into there's a level of anxiety because you don't you don't know what's going on.

You're creating anxiety with mature as IT .

mature to O.

I can just spend like i'm in congress and that just that's a childish view because obviously, ly, we all know what we can. It's not I mean, grown up. You know the money runs out somewhere.

And so you know and you even like we had to go so far as we went, we went hard core more than we recommend today on the envelope system like we had received for everything like on beloved for groceries and envelope for restaurants. And your mother would not buy herself clothing because she's a classic southern bail marder. And she's like, well, i'll just be scarrow here.

I'll make something out the dreams and the kids can have new cloth and it's like, no, that's not necessary. We have the money, everything. So what what happened is we would have clothing budget and he would spend IT all on the kids when, by ourself, anything.

So I had to finally separate in the budget. In the early days, shares closed was a separate category, and he was not allowed to spend that on anything but sharing closed. amazing. What I did, you allowed to give her guilt free spending? Yes.

IT is such permission that okay, we're okay. We can do this.

Not only permission IT was IT became like a man. You have to buy yourself something. I mean not, you know, I mean, really because it's just got weird.

got weird, right the thing you .

know and so we we had envelope for everything. And the first time we had a babysitter at home with you in donation and we're going out to dinner. One of the rare times we got to do that as we're starting our climb out of being broke and we got halfway the stinking in restaurant took ten minutes away and realized we did not have our restaurant envelope. Now we had the car repair envelope, and most people would just go on and use the car repair money. And when you get back home.

switch the money out. I I do .

that today, probably, but we were .

so into .

something has to change. We have to stick to something for the first time in our lives. We cannot keep doing the same stupid crap and expect to be anything but broke. We turned around, went back home and got the food on blob. I .

specifically remember .

doing blue. The baby should mind, because if people come back home ten months after they laugh, oh god, you know so. But I guess so her boyfriend probably ran out the back door. I don't the right, but you but every which so we got i'm kidding. I'm sure andy wouldn't have done this, but remember entry yeah then anyway, he was a great babysitter. But the anyway the yet such this idea that I can with my spouse write down what we're going to do and I have guilt free permission to spend on a category because our plan is accomplished, and IT includes this spending item.

Yes.

that is so freaking powerful people. IT changes everything. And john max used to say, a budget is people telling their money what to do, instead of wondering how that one.

So download the every dollar APP and start budgeting. It's free. You can do that in the APP store or google. Plan is a very simple plan, and IT has all kinds of extra paycheck planning. You can plan out not only the month ahead of time, you can plan out each paycheck ahead of time.

Yeah, the premium version is so worthy, you all because the change you connected to your bank account, so your transactions drop in, so you drag and drop p them, so you some people still use the cash on group system, but most people, this is like we twenty, twenty four.

twenty five ways of but you're sitting there and .

watching IT and you're able to drag and drop these transactions to know per category what's left. And to your point, all the other features, the paycheck planning because some people, you know you are paycheck to paycheck cycle IT is so difficult to break that because you're using that paycheck to find your life up to the fifteen. And if too much is getting taken out of the beginning of the month, you're going to be bounds check more.

I meet IT. IT gets really complicated. So the paycheck planning helps, even within that, to get on a great cycle when IT comes to your paychecks and to stand on top of IT. So helpful. Yes.

you you got to start doing this. That changes everything. You'll breathe different your shoulders or job attention will leave.

Download the every dollar up. It's free in the APP store or google playing git yourself started boys and girls. This is a ramsey.

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If you didn't know, we have the ramsey network APP. IT is a free download, and you can get the third segment, the third hour of this show every day only on the network up and many other things, including you can email us and ask us questions, you can enter a subject and IT will search among the calls on that subject to present them to you. Uh, so you don't have to like culture through twenty two days of stuff to find the answer you looking for M C network APP, you can download IT for free.

There is no subscription upgrade. No salesmen will call from the rams network APP. We get our question from cory. David recently took a call where the person at thirty five credit cards, how do the banks even allow someone to get that many cards?

Actually a good question .

code that sweet that you are not enough to think that the banks even think. That's sweet that you would think common sense would inner into this transaction. That's so sweet cry. No, IT doesn't. And you know this is .

the same .

kind of mentality quality that you've got that people say, well, I I must be able to handle the payment or they wouldn't have given IT to me. Now they'll .

give IT to you the same.

whatever the payment is, the approval for the loan way beyond .

eight year old, two hundred thousand dollars. And just like hand.

so sorry, the most aggressively. Here's an interesting fact. This just take a even to step back further. We now at this moment in twenty twenty four in america, the united states live in the most marketed to, sold to culture in the history of the world.

In the history of the human race, you will receive more marketing impressions on your ears and eyes and brain in this coming calendar year. Then any set of humans ever has in history. That's pretty interesting when you think about IT and when you are sold that much stuff, people buy that much stuff.

And among the most marketed to group of people in the history of the human race, the most aggressively marketed product in the most aggressively marketed time in history is that that is a product. They sell IT. They sell homework ity loans.

They sell student loans, they sell car loans, they sell private lunch. They sell title loans. They sell any kind of home loans, any kind of loan you can dream up, put the, put a word in front of the word loan, and IT happens.

Dog loans, cat loans, there are loans for everything. I was trying to buy A T shirt for god six, and they offered me payments on IT with corner the other day. And like, it's A T shirt, why would three easy payments of a dollar? Twenty six? I come on, you know, it's like .

White five dog t shirt.

I'm kidding. I I don't remember .

that.

that probit was as yes. And they're always easy payments and no one says hard payments, right? yes. And yet when you make them, they're always hard. They're not easy. So and among the most aggressively marketed debt products, the most aggressively marketed debt, public debt being the most aggressively marketed product in, the most aggressively marketed to group of people in the history, the human race is credit cards story. American distress VISA master card.

there are your new master .

and discover bondage together. Spend those four names, spend more american express, I said that american distress, they together, they will spend a billion dollars on marketing is more than beer. It's more than chevy pickup trucks going through mud bottles, more than all your car advertising put together, more than any other category of advertising. What's in your wallet? Says the failed actor, the actor who can get a part now watch in your wallet.

Or the great actors, because they are paying billions or millions of dollars to hurt. So yeah.

because they are got met a Jennifer fan.

There was a of a garner. Yeah, she's actually great.

But ricka dad would not be pressure.

I know, and i'm trying to look up because I was since to me by multiple people.

Now I can't find IT. So anyway, the credit card is the most aggressively marketed product out there. So in the middle of that, they are issuing credit cards in match to people who can't pay them, don't need them, including dead people, dogs.

We used to collect bizarre credit card stories, and I had a guy send me won from Virginia. He, as a joke, which was fraudulently, he shouldn't have done this, but as a joke key applied for a credit card in the name of book naked OK. They issued the card to buck, but got in a card. Another guy sent me from new orleans a credit card, an actual card. He sent me the card and a letter IT was um issued to fufu who was his poodle who had died and that .

was unsolicitous IT.

I picked IT up off the akc registration and minto senate to the owner of the dog, instead issued the card in mass to the dogs. Literally, it's come to the dogs. And so, I mean, this is the credit card world.

So please god, don't think you're special if somebody gave your credit. I mean, when I was in college, I thought, well, they got I got to get an american express in bigod. I'm successful. And if I get a gold piece of plastic versus a silver piece of plastic that i'm really someone because .

of the color of color .

of my asic dictates the quality of my personal identity. So sorry, that's what you're dealing with. Yeah uh yeah we we've had people with two hundred credit cards. Um there are people that um are that that believe the credit cards are excEllent and um they have their own youtube channel and all the stuff on how you can live off of the points and how you can be the card man or whatever and all the stuff, right? So it's a thing because it's so prevalent that any moron can get more credit cards than they can pay.

So that's that's how cry because the you know you're making the sweet and I ve assumption that the bank actually cares about you and would look at you and say you can't afford this. So we're not going to do harm to you. No, they don't that none of that is true. They will do harm to you in a heart day.

If then you have to remember that they they're here to make money off of you and they know how to do IT. That's their job. That's their job. And there was a recent clip that went crazy.

But the yes.

and I found that the president of whoever IT was of master carton VISA IT was the two. They have eighty percent of the market share.

And there in front congress yeah .

and they can't they won't lower fees for small businesses like they give deals to big corporations like walmart and and they have to verbalize and say what they're making their profit. March IT makes you sick. IT makes you realize literally off the backs of americans, this is what they're making.

That is they make and we know, I know, we know that they make billions and billions. And but as you said, they are to watch these two people, you're like, oh, my god and they're not even you know from any level of integrity trying to help small businesses even though were good scrat cards like even that right. I mean, everything is about making money.

It's all there in IT for. And so they know how to do really well and they market IT to you and bring you into this cycle and this mindsets of IT, that is very it's crazy. So just remember, if you're .

issue a new credit card, you're no Better than through through a book.

More of the story. Look at the congress .

clip the dead pool or the naked gathered done. There you go. One of the two.

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Just go to burn dot com slash e to learn more. That's B Y R N A dot. Come slash. Dave regio cruise, rami, personalities of one best selling off of my daughter is my cohoes today, open phones at triple ate eight, two, two, five jaora .

j self Better .

than I deserve. What's up?

I was just calling um regarding how I can stay focused on getting out of debt and not occurring more OK.

How much that do you guys have or do you .

have um I have about twenty thousand um and my friend has about twenty thousand OK.

Why are you getting out of debt?

I just want a Better life than we have a kid on the way, and i'm tired with paycheck, paycheck.

so. Um show that the the thing that we find is that the bigger and more pure the reason for getting out of that, the why why i'm getting out a dead, the more intense and sacrificial and disciplined you will be IT sounds like you have a really good way.

And if you came to truly believe deep down in your soul that the only way you're going to become wealthy and provide an incredible life experience for your brand new bride and baby is to get out of debt, then the discipline starts to become easy. It's almost as if I said if you don't pay off twenty thousand dollars in two years, um your child won will not be alive if you said that you would find twenty thousand box. Now i'm not obviously that's crazy.

That's not going to happen, right? But but i'm saying, you know, if you had to buy A A thing to keep your child alive, and you needed two thousand thousand dollars to buy that thing, and you only were allowed to pay cash, you'd find twenty thousand dollars. agreed.

Yes, because your why would be so huge? Your reason discipline wouldn't even come. I'm having trouble being discipline to save the life of my child. No, that would not be. Something would come out of your mouth.

And so the more deeply you understand and believe that by getting this forty thousand dollars paid off between the two of you in the two of you, getting married and creating a double income and creating A A situation where you dive in and stay out of debt and build wealth, the more you believe that that is the path for your family to have an incredible next fifty years, the more disappoint your be. But if you just kind of go well being out that become a nice and I think we probably be able to be Better off, but itd be cut of nice. Well, that's like a three on a scale, one to ten. And i'm talking about a ten. You see the difference。

Yeah I do. Do you feel that, jake? What do you feel like you are on the scale?

Um I I feel like i'm definitely on the high end of the scale, probably a seven hundred and .

eight I would .

like to be at um her situation a little different um SHE doesn't see I eye with me on the getting at a dead thing.

okay. Have you guys talked about that?

We have an attend to try to explain to her OK us getting out of debt means flash payments. That means more money to take towards our kid in ourselves, in our lives together. And SHE her side of the coin. And she's like, well, he has the mentality is, well, you can have the car and you have payment, and you have a nice.

have a payment.

Yeah.

this is Better than what he dreamed of. And no payments.

Yeah, I tried to explain that to earn. I'm frightened to fix my own debt as much as I can. And we do basically everything together.

Yeah, you're going down trouble, jake. You're going to have trouble being disciplined yeah, as long as the other side of your brain called your wife is tarring you down. So the two of you getting aligned on this is your s biggest issue.

You cannot singularly Carry this household on your back to wealth, while SHE simultaneously isn't an agreement. You guys i've got to get on the same page. It's it's a problem in your marriage going forward.

It's one of the top. It's always in the top five less, sometimes the top three, sometimes the number one, depending on which you look out of reasons for fights and disagreement of marriage. It's it's a really big topic. So I would and I would talk to or two about the why behind IT for you um and even on a deeper emotional level, two jake, not just oh yeah so we don't payments and we can build wealth, but there's a level of value system which you look at life that needs to be so aligns together to enjoy your marriage in your life together.

Crystal in tamp a high Crystal. Al, welcome the M. I.

Hey, David, right? Thank you so much for taking my call.

sure. What's up?

okay. So um i've been listening. You guys actually diving in and actually I look forward to the the uh show every day like a two o'clock.

So thank you.

Um I think i've been talking to my husband about all the things and kind of keeking him in the loop on the main one that does the finances and it's been that way for years.

But um where on baby set to you? And so I have you know our snowball with um we don't have A A lot of line item is just a big amount, unfortunately in total but um obviously listening to your old advice and I know going to take some time and a lot of hard work, but um my main question is um I have not taken into account the five thousand dollars worth of medical bill that we have probably racked up um and so lift my lift my snowball list. How do I incorporate or incorporate the payment for the medical bills with like my runes and my credit card that we are currently working on?

Or do how do you listed in .

how st. Larst .

largest .

business or payment correct .

OK SHE have baLanced on the a medical bills, right?

I do have baLances on them. Yes, just redo you. okay. So that's that's what I was curious. And should .

I just multiple .

different, multiple different to be one single worst? Okay.

no. And you know and the problem, the bad thing about the medical bills and the good thing about the medical bills, some are more tiny, but you ve got a seventy eight dollar from diagnostic just because you're drove near a hospital. Yeah right.

You know i'm talking about yeah we don't know what the flip that is, but they sent us a seventy eight dollar for IT and you got all these low mosquitoes flying around. They're not even big. Bills are just bothersome. And so that's the bad is the good news is you're gonna through like one through number ten really .

fast and you're going .

to get this sense of I just did something.

Feel good. I just feel good. I I paid off.

Most of the little ones is of the mediciner ones that yeah yeah. Most the little. So it's the bigger one.

What's your molest medical bill right now?

Uh, probably one hundred and ninety dollars right now.

Small one yeah is .

still small.

How much total Christal is your death? And no, bob m just curious with your journey how much .

you paying off so um right now without medical bills. Um currently the separate list of .

eighty thousand. Ty exactly yeah and your households income is what?

So um I think we take a really good money. Um we bought two hundred and thirty .

years oh you a year I know .

we've just made a lot of what is that you say mistakes with zeros on the end.

We made a lot. Yeah you pay a lot of stuff attach, but I mean, if you live, if you live on one hundred grand, you're dead for in a year, right?

That's pretty cool.

The more he is, the more helpful he is. I don't want to write and checks because you're the nerd. You're the good one to write the checks, but I do want him emotionally standing there, not just saying, honey, you're doing a good job. I want him saying, honey, we got this.

He is absolutely yes. agree. Thank you. I appreciate IT.

That's good. you. You're, i'm proud of you.

Way to go all thank .

you very that's .

very well done. So yes, it's so fun when you have been going along and you don't know what to do and you suddenly .

discovered fire and you do IT and like now we done in a year.

look at that that's fire. I can could stuff with that. It's knowledge is powerful. That really, really is very cool. That puts a shower, the range show in the books.

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dot com slash ramsey live from the headquarters of ramsey solutions. It's the ramsey show. What we help people failed wealth do, work that they love and create actual amazing relationships.

I'm day rams, your host Rachel crews, rams c personality number one best selling author is my co host. You drop in will talk about your life in your money. The phone number is triple, eight, eight, two, five, five, two, two, five. Sarah is in boston. Hi Sarah, how are you .

get IT so nice to take to David.

Rachel, good to talk with you. How can we help?

Yeah my dream is to achieve financial freedom and continue to build wealth. But I feel like my spending habits are getting in the way about um a little a bit of background and twenty five of making over one hundred fifty thousand a year.

Oh good for you.

Yeah I have no debt and putting myself through school, but um I find myself spending necessarily on um things I don't need. And i'm just wondering if I can get some advice on how to um bring in my spending and um start and wealth, achieve my financial dream goal.

I'm looking for what do you do and what are you studying?

Um I am studying engineering and I am in and pretty much an entry level engineering position and I love what I do. I'm able to work from home um and I have a lot of great benefits but um you I feel like there's more that can be done.

So what are you wanting yeah um when you say there's mark them, you're putting yourself through school death. Very correct. You have no other debt.

So is that investing you're looking at? Is that just you're spending habits that you feel like you're making a lot, but there's not a lot to show at the end of month? What's what's your biggest pain point?

Yeah I feel like I have I don't have boundaries when IT comes to spending. I feel like I could be using my money um for Better things like investing for a little long term but saying a lot of time online shopping or going out um and I don't have a lot at the end of each months to to put in my investment accounts to get back to O K.

Are you on a specific budget .

like A A detailed budget? Not really. I just kind of spend .

if you want. I mean, honestly for you, sara, that's that in an investing goal are the two things that I think completely change your life. I mean, if you if you have a budget because you're doing well financially, right, you're not going deep into debt.

You don't you're not trying to know pay off debt. You really are able to use the cash out is coming in from your income and you're going to be able to spend some. I mean, you're at this point that you will be able to enjoy some of them, but you're not able to really enjoy because you're questioning every purchase.

And so being able able to put a line item and deciding a dollar amount ahead of time to say, okay, yeah, I can go shopping, but i'm going to put this amount and that automatically is gonna give you a guard rail to enjoy IT and still, you know, because you're at point again, I will read a you don't have debt, you have a great income so you can enjoy part of IT. Uh, but you want to do IT with some level of control and purpose and then knowing on the other ends that you do have an investment goal and I would tell you fifteen percent of your income should be going into retirement and knowing you're doing that as well is gonna give you a lot of peace and freedom. Um but that monthly budget, I think this is going to be a really great tool for you to help because i'm the same way I am a spender. I enjoy spending shopping of things and and and I do IT now with such more peace knowing, okay, there's a specific dollar about per month that I have the ability to spend and i'm going to cut IT off after that. And so that that takes a level of discipline, but IT also allows you to enjoy life and enjoy your money so much more.

IT says an engineer. You're learning or have learned to project plan what cover used to say, beginning with the end in mind and with your money. What's happening is you're getting to the end with no plan.

And it's not satisfying because I didn't go where you wanted IT to go. And so IT be like building a bridge and making IT up as you go. What you don't do that we lay out a plan.

We we do drawings, we we run the math to make sure the structure will hold and then we build the bridge. We don't just to start moving dirt and hope IT all works out um and that's kind of what you're doing with your money. So let me ask you this let me see if i'm getting this picture correct OK you're twenty five, your single, you're in boston and you work from home and you go to school.

correct? The school online? yes. So your work is online and your school is online, and you said, I spend money shopping online and I go out, which would make you, thank god, a Normal human being, because otherwise you're trapped at home online.

And instead you actually go out for human connection. good. okay. So you should allocate .

some money hours.

Yeah, you should. You should allocate some money for what's called a social life. Yes, because otherwise your brain is going to melt.

Okay, that's good. Humans are. It's not good that man or woman be alone. We should be out seeing other humans OK. So I want you to do that.

Now the problem is you need a i'm gona recommend a non internet hobby to be done on downtime and analog downtime because your downtime now is instagram, facebook and amazon prime. And there is a direct this research out there that says the more time you spend on social media, the more money you spend. The social media is the world's worst.

Jones is next door, or you see everyone else is. Highlight real and theyve splice suggested products, mix IT into your instagram feed, mix IT into your facebook page and and whatever else you're consuming. Tiktok is even worse.

And so I instead of when i've got ten minutes, i'm gonna doom scroll your spendings and is always going to be there. If you do that, just unplug from take to a social media fast. Instead, i'm only going to do social media thirty minutes a day between five P M in five, that's all, or five and five fifteen to be okay with me, right? That's all.

And your spending will go down and you cannot go on amazon ever again unless IT is to specifically purchase a certain thing that you thought of as a part of your budget. You cannot go on there and scroll because amazon is the world's best marketer. They will sell you crap. You have followed me this.

Does this sound right? Definitely sounds outside of the screen.

Yeah, you know, because it's IT had to be with the way you're living your life, because your life is in front of the screen and you go, okay, I got ten minutes. I'm gonna a little. I'm gonna going.

I'm going to have some brain junk food and i'm gonna doom grow for a minute, just cause my brains hurting from clash, right? That would be, that's what I would do. And i'm sixty four.

I'm not except to IT like twenty five year olds because you grew up with this crap. I didn't, but I still, I have to watch myself. If I get bored, I end up buying something if i'm not careful. That's for mayor.

Yes, that's definitely me. O, K, I am putting money away for retirement. I give every .

dollar an assignment before the month begins on your budget, on your every dollar budget, put your every dollar budget, and you cannot go to amazon and list is to buy something, your budget .

and money to save the rea savings and goal to say, yeah, I need a fully funded emergency fund of six months and beyond that half things you're saving up for to at least have the motivation to put that money away .

and do spend some money on social engagement. You need IT good for you. This is the rampage show. Hey, you guys, i'm not a fan of the big banks and you probably already know which ones. I mean, but I do like credit unions because they're non profit organizations that focus on their members.

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F A I R W I N D S dog slide rama, it's cybermen week. And if you're looking for Christmas gifts that actually make a difference, we ve selling books like breaking free from broke baby step millionaires and more for just twelve dollars, or audio books for just eight box. Now is your chance to give something that'll help your friends and family build wealth, transform their relationships and find work they love.

Visit ramsey solutions that come slight store today RAM c solutions outcome slash store retro cruise ramsey personality is my co host today, the RAM z show. Question of the days brought to you by why refer? We trust.

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Today's question comes from Lucy in nebraska, my husband's daughter and senate law wants us to get a mortgage h on a house for them. Our houses paid for and we have no bills, but were on a fixed income. They want to keep their house they have now and run IT out to pay the mortgage that they want us to gets.

He's a cop and she's a firefighter. We cannot afford a mortgage. But my husband is considering IT and i'm not in agreement with this plan. What do I do? Birth the and Lucy yeah I know I would agree with you. I wouldn't be in agreement with this plan either ends with you in your husband yeah I mean, I think continuing to set down and understand and pack why you're not agreement.

It's not pointing fingers at him saying what you you you this is talking about you and what in your desires, your fears, which you are worried about in this and just a simple math of even though yeah you said you guys your houses paid for and you have no bills but don a fix income. I don't know if you're working towards retirement or what that looks like, but realistic running these numbers out even for a decade, right the next ten years. Um in what the reality is for your situation, I do think some parents, the heartstrings get tugged so deeply that sometimes you lose the reality of your situation and that's maybe what your husband doing since it's his daughter. But I would be looking at not just the emotional side but also the number side with him a lot. Sometimes .

sometimes that helps to reframe the proposal and use words that explain what this actually is. Honey, your daughter and son in law who have two good jobs want us to borrows money so they can have a rental property. When you say that way, that sounds done more than crap, because IT is dummer than corrupt.

That's why IT sounds that way instead of like we're helping them get at home. No, you're not. They have a home.

They want a rental property and they read this and some stupid thing on the internet to go to their retired parents to get a mortgage. Why can't they get a mortgage? They both have a job.

Oh, wait, they haven't been paying their bills on time, and their credit is bad. Oh, hello, now this is, this is streams, stupidity really loud, like what the capital S T U P I D say, the cheer with me, everyone, give me an r, give me A T seriously. Oh no, don't do this.

absolutely. And here's what happens at our house. We start with trying to reason and talk things through. And when one of us just absolutely not going to do IT, the heat just gets turned up.

And so our rule is um that if we both not on board, we can do IT and you're not on board and you're not gonna get on board. Please don't get on board. Please get through the fog of this. What are his kids need? They sell the house and they get their own mortgage.

And not only is IT not good for you guys to see, but this is a disaster. Waiting for them like this could set them up to fail in a major way, too. So it's on both things. Not great. Even though he feels like he's helping, it's actually putting them in a pretty dire situation, having the float a mortgage through a rental property not good.

not much. Yeah, you're buying them a little property. No, absolutely not heard this.

Some tiktok dab is in oklahoma city. Hi, dear. How are you?

Hi guys, so great to talk to you.

You too, what's up?

So my husband and I are on baby steps seven. Um we have just over a million dollars in um our networks and we have run into scenario where we think that we have found our dream house and IT would have us go back into um into dead for IT, we would take out a small mortgage um to basically would sell our house for roughly four hundred and fifty and then turn around and have a mortgage again for about two hundred and fifty.

You don't have the two hundred .

and fifty. No not all liquid.

What's liquid mean it's all in retirement.

not liquid. No I mean yet we have about half million and retirement, we have forty five cash and we have a fifteen thousand dollar emergency fund and then um a little bit act other money in some investments. I believe that's probably about six year sixty and .

you don't own any other .

property. No.

how much you guys make IT your deb .

um two hundred but and not including his bonus, that is kind of fluctuate every year. So two hundred years like a future.

I I mean, you you can do that. It's not gonna bankrupt you that there is no possible way you could get me to go back into debt after I finally got out. That does not sound like a dream that sound like a nightmare to me but um I just a stupid house. There is no way i'm going to do that for IT. But I mean, if you want to do that, you can do that .

yeah in a reasonable time you know because i'm worried just the one type of debt we do talk about yeah but if it's a small mouth and you liquidate the fifty from the retirement, the other forty five know that's all of IT. And if you guys commit to say we want to pay IT off in twenty four months or whatever you mean like if there say you can do that.

should save up the money and buy something.

that's what he thought you were going.

Well, I mean, you never heard me call up to tell somebody baby steps seven to go back and dead. Yeah no, no. And I think .

probably we we did down, we know that that we probably would have buyers remorse. I up a little .

in my mouth and it's not my house, 拿了 一本。

把 钥匙。

H gross. It's just gross. No, I mean, if you want to do IT, honey, I my met, you want to be friends, but I I know we do not tell people to go into that in baby step seven to buy, to buy a luxury upgrade. And if you want to do that, if you want to do that, you're not gonna bankrupt. Ed, it's not a scene you're not going to hell will still be friends and you'll just be my friend with .

a mortgage .

and you know no.

but we have no people that this is like not for a car or anything.

Don't tell people to do I, just don't I the goal is to get out so that you don't have to go back and and voluntarily going back to jail. After i've been sit free, I don't want to go. I'm free.

I I like my free on metal. I love my interest on my orage zero. Um you know I so deb, I mean, I make IT a pocket fun.

But the truth is the borrowers is slave to the Linda. The truth is the fascist weight wealth is to avoid debt period. The truth is there's more peace association with that.

The truth is you guys who work so hard to become debt free that you will have some barriers or more, you will feel ah this regret, this taste on the back of your tones when you go. And I just feel like feel like a decent wrong because you do IT. So I mean it's not that's what it's gonna like, but is IT bancorp? Pt, no.

Is he going to keep you from building wealth completely? no. IT just slows down everything. And there's the emotional and psychological .

the way it's less about the math and debt situation because i'm like reasonably all the things, but that's what we talk that personal finance IT IT is more than just the math you is that element of like we're going back and you .

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Radio cruise, rac personality is my cohoes today. Open phones, a triple, eight, eight, two, five, five, two, two, five jacket. Land is in mini apple is high jacket. And welcome to the ramsey show.

Hello, thank you.

Hi, what's up?

So I have a question on i'm not familiar with the baby steps first all um we have mounting credit card debt and a mortgage and one loan on a car. And I do have some retirement um herb that could be cash in but that sounds like a terrible idea and I just want help and guidance knowing what is the not easy as so this isn't going to be easy but the most efficient way to pay off this credit that yeah it's .

a great question, Jackson. How much how much that is a total .

um credit card. I would get fifty five to sixty five thousand.

Okay, is that over multiple cards?

correct?

How many would you say?

Three cards.

three cards. Okay, what other dad is there?

The car 上面。

就是 car is twenty six thousand。 My sand paid off.

Watch your household income.

Um my husband tired last year. He and I would say hundred twenty currently .

IT is one hundred and .

twenty cork.

O K good good OK. So what do you spend the credit card money on?

Do you think my son um has congenital chronic um tumors? And um we had to pay for those and so we had to put the credit or debt on things for living expenses, some just because they got too much so that it's not like frivolous spending or anything like that. But IT was you know things we needed. How is my husband, my son or my husband.

your son or eight .

as .

you don't know.

IT eps inflows, he just he has a lot of surgery ies and on the state I live in blue cross will shield and come off at all um couldn't come to an agreement and um or who got paid what and so my my son was in hospital and we were on the hook for the bill when he was in hospital.

Have you gotten that striped out?

We're working with the atterley general .

right now on IT. good. So you proud of i'm so sorry you guys have been through this. There's nothing scary than dealing with A A child with medical staff and that's a big deal.

Um so basically you add fifty to sixty thousand dollars of medical bills with your son that you paid for and then use the credit cards to buy the things you would have used that money for, correct? okay. And but the prognoses going forward on your sons situation is that hopefully insurance will be picking up whatever he has to deal with .

going forward. right?

okay. So we've .

stopped we've stopped .

the the problem in terms of the caught that caused .

the credit cards.

yes. How would your husband Jackson because he said he retired?

Yes, he's fifty six and um so when he retired, I had to pick up the family help insurance. So I advise tend to get a job with my company because if it's a dual um if both files work for the company that I work for, the the insurance is free and so that saved us about fourteen. 你 想知道 我是什么？ But I really say he doesn't he was in the enforcement.

So I really say he doesn't really want to be working, but such as life. So i'm happy that he was willing to go back to work. Um .

well, if you're driving a twenty six thousand, not a car, you can afford this kind of one of the things you have to do, right? So exactly. No, that's good, right? So the answer to your questions, how do we efficiently get through this? And the reason asking all these questions were trying to figure out if you know where the spending came from.

So that is stopped because you're going to have to reverse you not only have to stop the trend, but you have to reverse IT now. So in there was now we got to find eighty thousand buck to pay off a car and some credit cards, and we make a hundred and twenty, right. And so if I take eighty thousand box and assemble to forty a year out at one twenty, that means i've got a live on eighty minus taxes, right? So you need to be paying off three to four thousand dollars a month and dead, and you'll be debt free in two years.

Now how do we do that? Well, you're going to sacrifice some other things. There's no going out to eat.

There is no vacations and we're gona take a lifestyle to, uh, ashes. nothing. You get nothing. You've got a beyond beans and rice, rice and beans and both of you got to work every hour. You can work and still take care your baby and and get this knocked out as fast as possible. And that sounds like three to forth thousand dollars a month towards this, which gets IT done in two years and would .

term six months out of a two jacket land, as if you guys sold the car and you got a crappy car for a season.

You know I have the opportunity to um get a different job. I went back to school uh two years ago and I got a per legal degree um and I want to use that. So I do have the opportunity in the next four month or so to more .

double and well.

yes, so I mean that's excEllent. Um you know comes to the sacrifices of you know family time and do what not. So if I do get that job, IT would make more sense to me to live on my current on our current income and put the extra money, you know, the difference in the.

I would look below your current income.

okay, to live in the .

current in cover, nothing. The faster you pay this off, IT goes away. The faster you gets your life .

back and jacklin you want to be a pair illegal long term? Like do you want to do this for the next? Okay, you do. Okay, just making sure I wouldn't do IT for a year just to make more money and feel like you have to go back to old job, right? So I want to make sure you're that career shift.

Was I in the first place a written game plan list these days? IT sounds like there are four debt, three credit cards on one car. So what is the smallest of that a credit card? Which one?

Um that one I believe in two thousand dollars.

O K we're going to pay minimum payments on everything else and I want you to pay .

that off in three .

months and that means no life i'm OK with. It's for a short period of time.

Yeah and the dress now the dress is causing a whole different set of stress so um i'm willing to do whatever IT takes to do this and I know my husband is on board yeah .

there are some .

side jobs that I can also do to pay this off. I just well .

know here's the thing. And and are you .

guys funding retirement to Jackson? Because I would pause that. I would pause retirements par for two years.

Two years to you get this clear, or one year to you get a clear. Depend on how big the job is you get. You get that big job.

You might be done really fast. Both of you pick up semesta income. You might be done very fast. I don't care licious.

Let's put IT on a schedule where we get IT done quickly and and knocked out the twelve and twelve is gone. You don't have that payment more. You take that payment is freeze up and everything else.

We can freeze out the budget and we put them on the next one down and the next one down, the next one down. So you list your deaths, smallish ed, to largest minimum payments on everything but the little one and attack the little one with a vision. Okay, and listen you, you are a great mom and dad.

You've done a wonderful, you took care your baby, and now you're standing up like two grown up adults and saying, what have I gotta do to clean up the mess? Now that I to took care, my baby, I love you guys. You're amazing. We want you to go through financial, a university, our class, and I want to put you in the premium version of every dollar our budgeting up.

I'm going to pay for all of IT just to say i'm proud of you and I like having people like you in our audience that are good human beings that take care of their family and take responsibility even for messes that are beyond their control. Way to go. You're amazing.

You got this. You can do IT. It's cyber monday week and if you're looking for Christmas gifts that actually make a difference, we've got to get best selling books like breaking free from broke baby, step millionaire and more for just twelve dollars or audio books for just eight books.

Now is your chance to give some that'll help your friends and family build wealth, transform their relationships and find work they love. Visit RAM y solutions doc M R today. Rams y luxcom slash store.

Radio cruse room my personality is my cohosh today. Open phones at triple eight, eight, two, five, five, two, two, five era is in philadephia era. Welcome to the ramsey show.

Hi you Better .

than I deserve what's up?

Um I wanted to get advice on upside down car that i'm in I old twenty thousand eight hundred and fifty on IT is twenty twenty 10 vm。 I've been trying to get rid of before a while now, but they are saying the value was down. And now as for seven thousand dollars, and I guess I don't have a little bit damages on, but they were saying like basically the car is is so many of the cars and there being used as runs that the value of IT isn't degree pretty much.

And what's a little bit of damage carica?

Just the the back cover mirrors are off and there's like a couple of scratches on IT, but is really nothing about IT.

Like okay. And when you're saying they are telling us.

telling me who's they the dealer said the deal.

have you just Kelly booked that at all?

I did is Price of now I think with me.

like eight and nine, that rob a what you must .

have had a negative, you must get up, set down another car.

You rolled IT into this one. No, I this is A, I had a cold sign and with great credit because my credit was fresh at the sun.

How long did you buy the car?

Was that two?

And what's your interest? right?

Eleven point eighty nine.

okay. You may be looking at the wrong number. I think you've got a sub prime loan as are screwing you on the interest. And I think the twenty one thousand is not the actual payoff. I think it's the total of your remaining payments.

Oh yeah, no. So when I looked at the one is said we got the car for its twenty seven thousand and some change. I can remember the exact number, but right now the pay off is twenty thousand, eight hundred and sixty four.

That's the pay off, not the total of remaining payments exactly.

But i've made thirteen, almost fourteen thousand dollar payment so I had call them I was why? Where is the money .

going in interest? Pretty thousand.

So I am one in the car. I want to know what to do. I should I pay IT off and keep IT IT is going and then just start a new like be on a new lease and not get a new car.

How many miles did you put on this car?

IT is ninety five thousand and one hundred and twenty .

five right now. IT was ninety five when you bought IT.

No, it's like forty six. Oh.

you but you've running up two hundred and twenty five thousand miles.

那 我在 next 发展 呢？ So safety.

There's something wrong with these numbers, okay, because chevy malibu has not dropped seventy percent in value during .

during that .

period of time. okay. Um so are you look when you would pull up Kelly book book that you look at trade in or .

private sale trade and I believe.

yeah I think you did. Okay, so maybe you could sell the car private sale for, let's call IT twelve thousand, okay, right? And then you would have to cover the difference.

And so you'd still need one thousand dollars to do that. Do you have any money at all? I'm sure you don't .

not that no how .

much do you have um two .

thousand and savings and then a thousand in .

the checking again. What do you make .

fifty thousand a year?

All right. Um yeah, you do need to get out of this. But you know basically if you went to the credit union, then you borrowed one thousand dollars, ten thousand dollars to get a thousand dollar car and cover the difference to sell the thing for twelve to an individual that would get you out of IT. And but you still have payments on one thousand dollars, just twenty thousand dollars. Um the thing I might do instead is I might just go make an extra twenty thousand next year by and paid off in one year by .

working all the time like a maniac.

like six jobs, and then get this off of you.

man.

yeah. Well.

now I don't IT .

depends on you don't have to do that are but you're trapped and in the way you get out of a trap is IT hurts.

do you? Any either dead era is is just this school loans? How much of those uh.

cost to two hundred thousand think is one hundred and eighty nine thousand?

no. What what's the degree?

And i'm for my family family therapy is the win eighty include .

that masters is at the total when you get out? Or will .

that be more IT might be exactly .

two hundred.

okay.

Um and what are you doing now for a job?

Um i'm a case manager at a red.

Okay okay yeah your kids .

it's .

gonna it'll .

be a road.

But but can I just say though the number when we we hear people with these numbers OK and they get out IT takes IT does take years, but this is going to be a total change of lifestyle for for the next party five years yeah and .

you got to quit just every time you want to do something going frequent borrowing to do IT, it's killing you. I mean, you're a quarter of a million dollars and dad. You gotta stop. I mean, you're like an alcohol, like you got got to stop.

What's all this? It's all student loans. It's seven .

twill percent loan on a car should be impulse and then scratched IT if you went out a happy hour. stop. IT, no.

Stop, stop, stop, stop, stop living like this. You're a case manner. You see people doing stuff. stop.

You've got to say no more that next time I want a car, the answers, no, I don't need a car so bad. I got to eleven point eight percent interest rate. What that tells me is I know about the car business.

They not only screwed you on the loan, they screwed you on the car when they saw IT to you because you paid premium for both. They saw you come on my way. They said, here comes to erica, we go take her. That's exactly what they saw you got, had kid. Same thing like when they told you two hundred thousand dollars was a good deal to get a masters to be marriage and family therapy that's a complete screw job to you paid double what you should have paid for that degree and you got us you got a could say, no more borrowing my life is not Better when I borrowed to make my life Better IT doesn't do IT you got ta stop at kito so if i'm you, I want to go get that degree, finish that thing up.

Pass your dad go bars, get out, get your dad gum in, come up to one hundred k live on nothing and raise your right hand and swear I am never borrowing again because IT is not brought me blessings and yes, you have to work all the time um as well IT is as how you get out. You've gotta pay a prize to clean up your dead gun mess. That's why this works.

No other way around IT can do you gotta a do this. You've got to lean into IT. This is what they teach you in the field you are studying.

You can't keep doing the same thing over and over again. Expect a different result. That's the definition of insanity that's cancelling .

one or one well. And and I think you made a good point earlier that and this is good for people to, especially Young people that are entering into adult hood of buying new cars, may getting advanced degrees, getting job like this whole thing is don't take the one offer out there the one car and go and take exactly what they say, the one school you look at and get accepted to and you just take, right, there's a life of options out there.

And I don't think people do that right. You know, they get into a situation and they just, okay, this is great. This is what they are offering. And i'm going to sign my name and do IT. And so thinking through this stuff, when your mind, beautiful of your mind.

tears you, there's only one way to do IT your mind is lying to you in america.

That could be your situation, right? You go come into this car alone, you get accepted to a school, you know, you accept it's just this one option path that a lot of people take that ends up usually not with a great deal like you are saying, and screw in the car whole thing and the degree and you're not you're not are lying things. You're not looking at other options and have five or six different things in front of you to say what's the Better deal.

So guys, for more thinking, education is not good. Some education is overPriced crap. Just to go to school, you got to go to school now.

You know, being stupid when you're doing your education a bad plan. I'm not saying an era was completely, but he got taken is bad. It's i'm sad for her.

What a horrible situation she's in. I'm angry for her. This is the ramp show.

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