Don't Get Scared Then Get Stupid With Your Money
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Thanks for joining us, America. Merry Christmas to you. We're so glad you're with us. Jade Warshaw, Ramsey personality, newly minted, brand new author,

Money's not a math problem. Breaking Free from Broke is George Campbell's new book, and I'm glad for what I have is Rachel Cruz's new book, all in the Ramsey store right now. But Jade's with us to help me answer the questions this hour about your life, your money, your work, and your Christmas budget. Oh, wait, we'll just put that in there. 888-825-5225. Kristen starts this hour in Tulsa, Oklahoma. Hi, Kristen. How are you?

I'm good. How are you doing? Better than we deserve. What's up in your world? Well, thank you for taking my call. So my husband of 16 years passed away two months ago. Oh, I'm so sorry. Yes, thank you. Y'all are young. How old was he? I'm 39. We have five children, and he was 46.

Wow. What happened? Well, he had been battling cancer for...

um, three years and then he had a really intensive radiation treatment to his liver and then he had some neck issues. So it was on lots of pharmaceuticals. So with, with that and the disease and the treatment, his, his body just gave out. So, um, it happened very quick. Yeah. Thank you. I appreciate that. So, um, I never paid a bill in 16 years and,

And so I'm left to steward our five children and all of our finances. And I want to steward it well, but I'm feeling zero confidence without him leading in this area. Yeah, because he was in charge of it for all of that time. Yes, 100% in charge. How old are your babies?

My oldest is 15 and my youngest is four. So was there insurance that came about? Yes. And that is actually my primary question is, so he had a few life insurance policies and I was going to tell you what debts we had and to see if it's better. I remember him telling me a long time ago that,

to take the insurance money and pay off the mortgages. But I know we've refinanced since then, and obviously situations, it's just different now. So I wanted a non-biased opinion on what would be... Well, you called the wrong place for that. We're extremely biased. Oh, no, no, no. But we're biased to try to help you. So how much insurance was there? Okay, it's going to be about $720,000. And how much debt do you have?

So we have three mortgages. Our primary mortgage, the value is $496,000, and the payoff is $267,000. Now our rate is $2.65. Doesn't matter. So to pay it off is $267,000. You said the value of the house is $500,000? Yes. And you owe to what?

six seven okay do you have any other debt other than that mortgage you said you had three mortgages yes so we have two rental properties actually um we net about twelve hundred dollars yeah what is the value what's the uh equities in those properties what give me the value of rental property number one in the mortgage rental property okay it's 319 319 value and the mortgage on that one is

Is $109,000. Okay. And the other one is valued at what? $231,000. Okay. And the value is what? I'm sorry, the mortgage is what? We owe $88,000 on it. $88,000. Okay. Oh, wow. So you've got a little bit of equity, not a ton in both of them, but you could pay off everything and still have a substantial amount of money left. Yeah, yes, yes. Now, who was handling all the tenants and the landlording? He was.

yes he was okay so we have two complicated things here that you have to learn uh in a cram course how to handle the the monthly personal finance issues at home and learn how to be a landlord yes okay which i do have a lot of family here i don't care um i mean it's nice that they're there but they're not gonna do it for you they're not gonna do it for you well do you want to be a landlord

No, not necessarily. The good thing is, I mean, the rent. You've been a full-time mom all this time? Yes, and I actually just got my master's last year, and I am actually a counselor. Oh, cool. Okay. So you have the ability to create some income. I do. Okay.

And so I do have, I've been going to have social security. Um, and I have a better idea now what that's going to look like. Um, for me and the kids. Okay. I,

Jade, jump in anywhere you want here, but I'm pretending like at this moment that you're my little sister. Okay, yes, I love that. And if you were my little sister, what would I tell you to do? I personally love real estate. I own a bunch of it. But it sounds to me like you don't need landlording on top of five kids and trying to learn how to handle money for the first time in 16 years. That's what I would say.

So I'm probably selling these two houses for one reason and one reason only, and that's to simplify your life. Okay. Your life doesn't need to be any more complicated in the middle of the pain and the newfound stress of having to handle some other stuff.

Plus you said they cash flow $1,200 a month combined? Yeah, that's not much. You can go out and make that and way more. Do you see what I'm saying? So if you were to sell those, take the money from those, and pay off your home, you'd have $700,000 to invest in

and sit down with a smart investor pro with some mutual funds create an investment account you've got a pile of money coming in for social security for the five kids you can use that money the money you earn as a counselor and a little bit of money off the 700 and easily mathematically by the math would be easy not the life but the math would be you could easily take care of your family yes yes and that's really what i want i don't want you dealing with some tenant

Okay. Yeah. I do have on my car, I owe $20,000. Well, pay it off. Pay it off today. Okay. What else do you have? Is that it? That's it. It was a three-year just very long interest. And never borrow money again. Okay. That's rule number one. Because you have a paid-for house, a paid-for car, five kids, and a big old pile of money. And you're going to live on less than you make so that this is sustainable into perpetuation. Okay. Okay.

Okay. Okay.

into every dollar and i'm going to assign one of our ramsey coaches to you to get you up and get you trained and help you get sustainable with your knowledge and it's all on us thank you so much thank you so much merry christmas honey merry christmas i'm so sorry you're going through this but we're going to walk with you okay thank you so much you hold on the team will pick up and get you taken care of this is the ramsey show

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Find out more at chministries.org slash budget. That's chministries.org slash budget. Jade Walsh, all Ramsey personality is my co-host today. Thank you for joining us, America. Open phones at 888-825-5225. Those of you that are considering getting on the EveryDollar app this time of year and getting into Financial Peace University,

The last call we took from the lady with five children who hadn't touched a bill in 16 years tells you that you need to go through that class because while I don't mind and I'm honored for us to be helping her, I don't want you to be in her situation. You should never be in a situation where one spouse does everything and the other spouse has no idea what's going on. Yeah, that's...

When you set yourself up like that, you never know what's going to happen in life. And of course, you hope the worst doesn't happen, but you've got to know what's going on with your finances. Even if something catastrophic doesn't happen, it's your money and you work hard for it. You can't even argue intelligently if you don't know what's going on. That's true. You lose every argument. Oh, my goodness. That's a good point. You can't. I mean, because you end up being the little boy that's being taken care of by his mommy or the little princess.

who the husband or whatever i mean those are extreme dysfunctions right but uh hers wasn't that he just she had a bunch of kids and he's taking care of the bills that's okay that that and i do the majority of the finances no kidding at our house but i can 100% assure you that sharon knows two things about every item of ours and ours is complicated um

you know, with businesses and real estate holdings and other stuff that we have, she knows two things. Number one, she knows exactly where everything is and where we stand on all of our money. Okay. No question about any of that. And she knows where the bills are and how they get paid. And number two, she knows who to go to

for the various information, for insurance information, for investment information, for business information, you know, and so on. So, and that's all planned out and laid out. And so, and she actually got me on something the other day that I hadn't done. She said, you need to go in and the will's got everything in detail. Everything's laid out in detail, but I don't know what you want done with your

collections of things. Ah, hey, that's the first time you've talked about Sharon and not said it in her voice.

Okay. Dave. Dave, what am I going to do with all those dadgum guns? There you go. I don't know what to do with 300 guns. Do you do? I think I need to make a list and tell you what to do. How to sell them or which kid needs to get which. Yeah, that's right. That's important. Even something as simple as passwords. Passwords.

Oh, and knowing how to get. I've got that, that I got them all in one. You know, I've got one of the apps. I don't endorse it. So I'm not going to say what it is. Yeah. But everything's in that. And my personal assistant and my son, who's president of the company and my wife all have access to that. And it's a, it's a treasure trove of passwords. So important. It gets you in everything. So it's all store, including safe, safe codes to get in the safes in various houses and stuff. So all that, but you got to.

Guys, you cannot, you leave yourself at a disadvantage. The husband felt like he was serving his wife, but she didn't have to fool with that. But he leaves her set up to now she feels completely lacking in confidence. But to your point, talking about every dollar, the great thing about it is. Makes both of you do it together. You're both on it. It's on both of your phone, right? You know, they've got the mobile version and of course the desktop version. But if you have the mobile, it's on your phone.

There's no you know, you open up the app and yeah, you can. It's the same login. Right. So there's no reason for you to not even if you're not the one that actually sends out the payments or even if you're not the one who actually types in the amounts. Right. Because there usually is one person who kind of takes the lead on that. There's no reason that you can't spend three minutes a day.

Right. You first get up, get up in the morning, look at look at the app, look at the budget and see what's on there. That's just part of adulting. Hashtag adulting. There you go. Yeah, it just it is. It's just you make better decisions. The preacher, when you went down the aisle, done, done, done, done, done, done. And now you are one. So when you make a decision without the other half of your brain.

Mm-hmm. Because now you're one. And so if you're doing this by yourself, you're just a half. That's a really good point. You're using half your brain. Yeah. So you are now redesigned to use your entire brain. So Shannon and I make large giving decisions, large financial decisions, large time block decisions. If we're going to do, you know, what are we going to do with our time? Yes. We manage our calendar, our budget.

our future planning together. And it keeps a, it's a really good marriage tool because it keeps us in high levels of communication. And so I just want to encourage all of you, both of you need to know what's going on.

That's just healthy. Now, again, one of you is always going to be, you know, maybe your wife is a CPA and she loves doing numbers. She's going to take the primary lady. That's right. And that's cool. There's nothing wrong with that. But you don't need to be completely freaking clueless. It just sets you up for problems. I know. That's right. Rob is in Cincinnati. Hey, Rob, welcome to the Ramsey Show. Hi. How are you? Better than I deserve. What's up? Yeah. So my fiance and I are getting married next October. Yay. Thank you.

Thank you. Thank you. I have $97,000 in the traditional brokerage account, two grand in a separate checking account to help pay the remaining seven grand for our part of the wedding, which includes rings and whatnot. Right now, our household income is around 120 grand. You don't have a household yet. And my fiance. It will be next year. In October, it'll be a household. Right now, you have you and her. What do you make?

We make $120,000. What do you make? There ain't no we yet. It's we in October. Now it's me. What do you make? I make about $60,000. And so does she. Okay, great. Okay, thank you. Yeah. Thank you. Okay, so when you are married, it'll be $120,000. Right now, each of you make $60,000. That's awesome. Very cool. How old are you guys? I'm 28, and my fiance is 26. That's good. And you're going to go buy a house after you get married?

Well, that's the thing. We want to save for a little bit. We don't know. I've lived in apartments my whole life. I just don't know where to begin. We only have one type of debt, and it's her car, which is about $14,000 remaining. Does she have any money? No.

I do not. Well, yes, she does. She has a savings account that her dad started for her. It's not a Roth IRA. It is around $21,000 to $23,000 last time we talked, which was a couple weeks ago. So she could take that money. And she should pay off her car. Yes, and that was going to be part of my question, too, if we just pay that off immediately with that. She should, yes. If you suggest her to pay it off, will she pay it off? No.

I think so. I don't know how her dad would feel about it, but she's an adult. It's her decision. I think she should. Yeah. That's interesting that you said that. I like that. Okay. All right. So you've got to finish up the wedding, and then you're going to get married, and then you're thinking about buying a home when? Ideally, maybe 2026. Oh, wow. Maybe for a couple years. Okay. So you're going to pile up cash like crazy and then go buy a nice property with a good down payment or pay cash, huh?

That's the goal. I just don't know how to go about that with saving up for a down payment. If I should just keep that money separate, like in a checking account? No, you got it in a brokerage account. That's fine. Put it in some mutual funds or something like an S&P 500. Or you can put it in a money market. High-yield savings is fine. You're only going to do it for a couple years. You don't want to take a lot of risk with it.

And you do need to keep it separate. You want to make sure you've got three to six months saved up first. Keep that somewhere else. And then when you start saving up for that down payment, keep that like where Dave said. I love the idea of saving like crazy for two years and just pile it in that high-yield savings account or whatever it is. It's just the house account, we'll call it, right? You just dump money in there, dump money in there, dump money in there. Let me tell you, there's two things that are very good about that, Rob.

Thing number one is being married a year, 18 months before you make a decision on which house to buy is very wise because after you've been living in the same house, married people for a year, you will make a different home choice than you will today. Facts.

Right. We always laugh and say it takes, in this case, maybe more true than not based on the father comment, but it takes about a year of being married to know how close to your mother-in-law to buy. Not too close. That's the thing, right? So you got to get to know each other. You got to get to know life. And so then during that time, the

Second wise thing is you're going to pile up a big old pile of cash. And you're either going to pay cash or almost pay cash for this house. I love what you're doing. Me too. Go do that. Do not do any of this together until both of you have the same name. This is The Ramsey Show.

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Merry Christmas, America. Jade Walsh, all Ramsey personality is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Tom and Teneca are with us. Hey, guys, how are you? Good. Great. Merry Christmas. Good to have you. Merry Christmas to you. Where do you all live?

We live in Kansas City. Actually, Atchison, Kansas, but it's about an hour from Kansas City. Yeah, I know it. Yeah, wow. Welcome to Nashville. Thank you. How much have you guys paid off? $214,944.27. I love it. How long did this take? 48 months. Good for you. And your range of income during that four years? It was $160,000. All of that time? Well, it...

at the end it was about $170,000. Wow. Good job. What do you guys do for a living? I work in health IT. And I work in law enforcement. Very good. What do you do in law enforcement? I'm a contractor for Homeland Security. Oh, wow. Good to have you guys. Welcome to Nashville. Hey.

Hey, I love it. Yes. So what kind of debt was this $215,000? We had, well, I had student loans of about $42,000, $43,000. And we also had some consolidation loans. We had credit cards, lots of credit cards. We had, I think it was like 21 credit cards that we ended up having. That's gracious. Yes. And just... Just getting rid of those makes your hip work better. Yeah. Yeah.

That's for sure. But we also had a loan out against our 401k prior to FPU. Wow. Okay. So we were paying that off as well. So just lots of personal loans and just student loans. What happened four years ago that got you guys on this Ramsey process? Because, I mean, you went from one direction all the way to the other direction. This is a completely turnaround. Yes. We were doing pre-marital counseling. And we...

put our finances together, obviously. And my wife looked at me and said, we're not getting married. It's not happening. Whoa. I did. So I looked at her. Pre-marriage counseling fail. Yes. Yes.

So the Holy Spirit came upon me and I looked at my wife and said, it's going to be all right. And at the time, I didn't have anything to back that up with. But later on, we were in church and up on the screen came FPU. We looked at each other and said, that's us. And here we are. So how long have you been married?

We got married July 27, 2019. Okay. And within a couple of weeks, we were sitting in church, never heard of FPU, and it came across the screen. Shout out to City Center Church, Pastor Matt and Jeannie Perkey at our church. Thanks, Pastor. Yes, for offering your program. We were there and saw it come across the screen, and as soon as we saw it, we literally just looked at each other and we knew that that was us. The Lord had confirmed what he had said before that,

So we both knew we were on the same page and knew that God wanted to do something. And also you were like, I was right. Yeah.

Financial Peace University. So you guys jump in there and boy, are you ready? We are ready. You're ready. It wasn't like you had to be talked into anything. You're like, something's got to change and this is it. Yep. Follow the baby steps. They work. There you go. And treat your budget like it's the Bible, like it's a lifelong commitment. Okay.

Stick to it, in other words. Stick to it, yeah, absolutely. I like that part. And we knew God was behind it, so that gives you a drive of confidence. 100%. Yes, 100%. Now, you guys had a... It lowers the whining. It does. It does. If God said there's something, it's like, okay, I really can't whine. I can whine about it, but it's kind of particularly lame. Yeah. That's a good point.

But what a journey through it to watch how, I mean, there were so many times that we just looked at our bank account. We were like, where did this money come from? How are we paying off all of this? And how is it? It literally did just snowball, you know, like you, like you say, Dave, it's just, it works. Well, I wanted to ask you guys, cause you guys have a nice income and you've had it. It sounds like the majority of the time. So what was the hardest part? I mean, did you guys have to side hustle or was it truly just looking at the budget and just cutting back?

We really did. And I have to give kudos to my husband. He worked overtime for over well over two years. I mean, he just we both went in with gazelle like intensity and he was working 12 hour days. I mean, he was working 60 plus hours every week consistently and

And on top of that, we have, he had an hour or more drive just to get to work every day. So literally he was going, driving, working, coming home, falling in bed, getting up and doing the same thing in a couple of hours. And thank you for that. But he did. That was our number one thing. We also, we have about an acre, a little over an acre of land. And so we've got some cattle.

And so we sold beef just off of that little, you know, what we can do. So no major ticket items. We just kind of like put everything together. We did Poshmark and just got rid of things that we didn't need. And on eBay and he did Facebook marketplace. I don't get on Facebook, but he does. So he did Facebook marketplace and just being intentional. Yes. Just being intentional and constantly to keep that going. So, and God did the rest. Obviously paying attention, working on it together were the keys.

What are the big things that you took away from Financial Peace University that you went, I should have, I knew that. That's brand new information. I never heard that before. Anything? Just that, just follow your steps. I think that the one big thing that I got from it is that with man, it's impossible. But with God, all things are possible. Amen, I'll go with that. And I thank you for hearing God's voice with starting this. Yeah.

And to know that you can't do it on your own, you know, but if you trust God and you are obedient and you follow the steps that it really does work and it makes sense. It makes sense. I mean, the principles are our grandma's common sense, but they're also biblical. Obviously, get out of that. Stay on a budget. Live on less than you make. Be generous.

Absolutely. Be saving and investing. Every one of those things show up in scripture and they show up in grandma's common sense. But most of us refer out in both things in America. And so when you come to them, it's like brand new information almost. Common sense is not common. And it just wakes you up and it energizes the crud out of you. You guys are amazing. I'm so proud of you. Thank you. And I'd have to say, Dave, when I was growing up and everything, credit cards were

around my family and stuff. It's like if you didn't have a credit card, you weren't normal. Right. Well, that's America. Right. And I was, yeah. And I grew up very resourceful. So I was already eating beans and rice. But we had to learn how to. She's country and I'm city. Love it. Well done, you two. Thank you. Well done. Okay. So somebody's listening. They're brand new. They're thinking about getting married and pre-marriage counseling. They look up and they got it.

$200,000 in debt. What do you tell them? I tell them to trust God. If, if we can do it, if God can do it through us, God can do it through you. There is nothing that's impossible with him and follow the baby steps. Like, like Tom said, they do work. Wow. Don't give up. Stay diligent. God's got it. I love it. Well played you too. Well played heroes. Well,

Wow. Love people taking control of their lives and stepping up. And, man, you start your marriage off on a great foot. And pre-marriage counseling went a little rough, but the marriage started off great. Yeah. This is great. Way to go, guys. Hey, we got the Live and Give box for you. It's got the Baby Steps Millionaires book in it.

because that's where you're headed next. Total Money Makeover book, you can give that away and get somebody started. And a Financial Peace University membership, same thing. You can go, this is what did it for us. This changed everything for us when our pastor and church started teaching this. By the way, you pastors and churches out there, listen to that. It's important you have this class in there because there's someone sitting there going, I need some help. And it's like your job to help them by having this class available. Thank you, guys. 10,000 Financial Peace University classes last year were taught.

10,000. So it's important. It's very important. Thank you, guys. Tom and Teneca, Kansas City area, a little about an hour west of Edison. Count it down. 215,000 paid off in 48 months, making 160 to 170. Let's hear a great debt-free scream. Three, two, one. We're debt-free! Yeah! Ah, this is how it's done, ladies and gentlemen.

Man, Jade, that's fun. Very good, very good. This is The Ramsey Show. I've been doing this show for over 30 years, and some of the saddest calls I've taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through how am I going to pay my bills, how am I going to pay my

I'm going to eat next week. Yeah, in the middle of all that grief. Like it's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here.

You've got to say it out loud, and you've 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 this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282, or go to zander.com. $5,000. Yeah, we're going to be giving away $5,000 this week. Wednesday, December the 20th is the last day to register for the free Ramsey Cash Giveaway.

Go to the website, RamseySolutions.com, slash giveaway and sign up. You can sign up every day. Somebody's going to win it. No purchase necessary. $5,000. You ought to check it out. And do it today because tomorrow's the last day. That's tomorrow. Yeah. That's right. Well, depending on when you're listening, Wednesday the 20th, that's what your cutoff time is. And so don't miss this. John's in Orlando. Hey, John, welcome to the Ramsey Show. Hey, Dave, how are you? Better than I deserve. What's up?

I am calling. I have 10 rental properties and I am considering selling two of those to pay down two of them or put that money towards my house. I'm just trying to get your advice on that. Okay. How did you come to this conclusion?

I don't know. I've been buying over the past like three years and with the interest rates high right now, I've just been trying to kind of hold off on purchasing and then just using the equity that I do have to, you know, move that around and use it to make the most sense for me, I guess. So do all of the rentals have mortgages on them? All 10 of them? Yeah.

Not all of them. One of them is paid off, and then the other nine do. Wow. And the two that you're talking about selling have some equity, but they have mortgages. Yes. If you sell those two, can you pay off your house?

No, I can't. So between those two, I have about $210,000 worth of equity. So I could use that to pay off two of the rental properties that are worth around $100,000 right now. They have about $100,000 on the mortgages. What do you owe on your home? I owe about $555,000. Listen, if I'm honest with you, my goal, numero uno, would be to sell whatever I have to sell to get my personal mortgage debt-free.

Because it's crazy to me to have all of this real estate and juggling all these balls in the air, but your own personal mortgage is not paid off. Right. Yeah. And the only reason I...

Wasn't considering selling them all or putting everything towards paying down my mortgages just because I can comfortably cover it just with my job. So the end goal is to have a real estate portfolio and do that full-time at some stage. Well, I mean, John, you can certainly go any direction you want to go. I love real estate. I've got a large real estate portfolio myself, several hundred million dollars worth.

And, um, I pay cash for everything I buy, including real estate, or I don't buy it because two, two things that happen when I do that particular three things happen when I do that in real estate. Number one, it's the best way to get great bargains is close it Friday, right?

And I'm paying cash and I want a deal. Okay. And so you can buy distressed situations. You can buy into bank REOs, everything else. Right. And you can do it quick. And the quick means a lot to people if you're looking for a bargain. Number one. Number two, when I pay cash, my cash flow.

since I don't have any payments, is astronomically amazing. It's flowy. Number three, my risk profile goes way down because you just said some really dangerous words like nothing, like no one ever lost a job in your industry. Right. Well, we know that's not true.

Yeah. I was considering taking that extra amount of rent that I'd be getting in from those two properties that would be paid off and throwing that towards the mortgage. That's fine. What do you make a year? The payments can be the same.

about $250,000. Good. You got a great income. So here's what I would challenge you to do. You're sticking your toe in the edge of doing things the way I do it. I'm way over here on the right. Most real estate people are leveraged all the way over on the left, correct? You're kind of in the middle and you're thinking about moving in my direction, but at a slower pace maybe than Jade was trying to get you to go. You follow me?

Yes, sir. Okay. So I would challenge you to consider establishing a strategy to become 100% debt-free before you add to the portfolio. Now, we can do that two ways. There are three variables. One is selling some property. Two is utilizing your fabulous income to reduce debt. And three is time. How much time is going to elapse while we do this? Okay.

Because five years of making $250,000 is different than two years of making $250,000. Okay? So if you said, all right, I'm going to sell two. I'm going to use that rent that's freed up. I'm going to crank on my personal lifestyle and start throwing it at something in this mix. And every time one of those is debt-free, we're going to add to the cash flow of

to get another one debt-free and the cash flow to get another one debt-free to where at the end of the story, and the story is a three-year story, a five-year story,

We haven't added anything to the portfolio. We have subtracted two properties or maybe more and have become 100% debt-free rentals and home. Dude, do you know how much money you're going to have coming in then and how quickly you'll be able to buy that next property for cash? It'll be amazing. That's kind of what I was thinking too. But you've got to dip back to bottom and clear the table first before you see that increased cash flow.

Substantial increased cash. But so, I mean, if you want to go at it, my point is if you want to go at this a little bit more gradual than Jade was suggesting, I'm not going to yell at you about that, but I do want you to lay a strategy out. And you're a, you like running the math and running the spreadsheets, don't you? Yes. Okay. So run a scenario out where you're done in five years and then ask yourself, okay, what would I have to change to? What variables do I have to change? What else have I got to sell, in other words? Or what extra lifestyle have I got to cut to do it in three years?

And when you do that, you're going to look at it and go, it's going to make you think about it. All right. Because it lowers the risk profile and it raises the cash flow every time you do this. Does that make sense to you? Yeah, it does. Yeah. That's a great plan. Very cool. Thank you for calling in. Very interesting. I wondered if he had any other debt. I didn't. I'm sorry. I didn't give you a chance to jump in. Well, here's what I was thinking. This is what Jade's brain said.

The average person gets out of debt two, two and a half years. I'd want a plan that gets him out in two, two and a half years. And then it, go ahead. You're the real estate guy. He's just, the guy is a processor. I could see that. I think he's going to, when he lays it out for five years, the math is going to talk to him.

And he's going to dial it back and do it in three. I really, because that's how my brain works. That's how I kind of think. I kind of get that guy. You were that guy. I was that guy on the other. No, I really wasn't. He's much more conservative than I was. I borrowed on everything. I borrowed on the dog and the cat it was chasing. I mean, I borrowed on everything.

So he's much more chill and he's got some equity and that kind of stuff. Wait, so that's chill? Because I'm looking at this, my heart's beating fast. I'm thinking nine out of ten properties. No, I was like one of those idiots on TikTok. That's what I was like. That's why I'm willing to call them idiots because I was one of them.

The nothing down goobers. Oh, yeah. You know? Yeah. Yeah. I would go and borrow 100% of the value of the house. Oh, here's worse than this, okay? I would buy a house for $150,000 that was worth $250,000. And I'd borrow $250,000 on the $150,000 purchase.

Put $100 in my pocket to go do the next deal with. Oh, yeah. I'm clutching my pearls. Yes. All right. Yes. Yeah. Your throat's tightening up now. But that's how dumb I was. And I didn't think anything about it. To me, it was just a Monopoly game. Yeah. Well, that's what everybody's doing. And that's what these idiots on TikTok, they're doing the same stupid stuff. But, I mean, the only thing TikTok-ing when I was doing it was a clock. You know, that was it. You know? But, I mean, there wasn't anything like that. It was TikTok, right? All right, Dan. All right.

I mean, it was just not, there was no cable TV even to tell you how to do it.

It was just like, you know, nothing down guys selling cassette tapes. It's like you go to the ballroom of the hotel room, the tired ballroom at the hotel and the guy with a polyester suit and the disco chain starter set gets up there and he's going to tell you how to get rich. And I was such a redneck. I believe the idiot. Oh, my God. And I signed up for all of it, man. I did every bit of it.

And that's why I get so, you know, exercised about people putting out the same stupid butt information 35 years later and acting like they discovered something. Like, this is new. No one doesn't know this. You boomers don't know this information. Honey, we invented stupid before you were a gleam in your mother's eye. Wow. This is unbelievable. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth,

do work that they love and create actual amazing relationships. Jade Walsh, all Ramsey personality and author of the brand new book. Money's not a math problem is my co-host today. As we answer your questions about your life and your money. Merry Christmas. We're so glad you guys are with us. Thanks for hanging out. Christie starts this hour in Louisville, Kentucky. Hi, Christie. Welcome to the Ramsey show. Hello. Hi, how are you?

Doing great. Thank you all for taking my call. Really appreciate it. Sure. What's up?

Okay. Well, I used to be a single mom of three, divorcee, and my plan was after I got the kids out of the house, because my budget was really tiny, to start tackling my student loan debt and purchase my house that I live in for my parents for what they put in it to get it going for me. Mm-hmm.

Two years ago, and kids are out of the house now, so two years ago, I remarried, and I knew my husband had some credit card debt from his prior marriage.

However, and I know things have been tight since we've been married. It's like we're robbing Peter to pay Paul, robbing Paul to pay Mary. And after listening to y'all for the last couple weeks, I'm here like, I can do this. Do the budgeting app, the every dollar, the free version. We can do this. However, we sat down. He's got...

22 credit cards. Ay, yay, yay. Well, how much does it total? That's an oh, crap moment. Oh, I'm sorry. That's an oh, crap moment. Yeah, so this is where a lot of our money's going to. Yeah, I think. Yeah. Yeah. How much does he owe on these 22 credit cards? $18,000. And I guess he knew this.

I'm assuming he did. I hope he did. What was his reaction to your reaction? He's like, well, maybe, you know, after the holidays, take a debt consolidation loan. Yeah, because you can always borrow your way out of debt. Right. That's dumb. Okay. What was his reaction? Is he ashamed of this? Does he think it's stupid? Did he feel defensive about it?

I think it's kind of defensive on it a little bit because a lot of it he said came from his prior marriage. So he's not, is he currently using credit cards or is all old? He used it this past weekend. He's still using them? Yeah. Okay. He put a battery in his car. So you guys have some conversations to have. So what is your income and what is his income?

Okay. Mine is $33,000 a year. He's doing DoorDash. So it's anywhere... Why is he not working? Five to six days a week. Why has he not got a job? That's a good question. He likes working on his own, he says. Did he have a job when you met him or he was doing this when you met him? Whenever I met him, he was doing lifting Uber in Asheville. Okay.

And making $1,200 a week on that. Gross before taxes, gasoline, and wearing terror on the car. Exactly. You might be breaking even. Okay. So there's some problems here. How much student loans do you have, by the way? $110,000. Okay. Yeah. So sometimes when we get into debt...

It's as easy as saying, all right, I make my budget and I cut back here and there. And, you know, over time, I'm out of it. And then sometimes there's more to the equation where there's an income side of it where you can side hustle till you're blue in the face and you're going to be working it forever. And in that case, that's kind of where you guys are. Your core income is not where it should be.

And the challenge here is for both of you guys to really begin looking at what's it going to take for me to get my income higher. I mean, 33,000 is the average is 67,000. So you see where you're at on that, on that spectrum. What do you do for a living? Um, customer service. Who got $110,000 worth of student loans? That's me. And getting a degree in what? Psychology and counseling. Cause that was the quickest thing I can get. I've always wanted to teach.

And why are you not utilizing that in some way? I really don't know of any job in our little local area for that degree without getting a master's. Yeah, okay. It is probably limited because if you're going to do counseling, in most states you do have to have a master's. Okay. Yeah. But there's a lot of things you can use psychology for.

For instance, you could move into the marketing area of a company and make three times what you're making. So Jade's right. How old are you two? Your kids are grown. You're 40 or 50. Yeah, I'm 46. He's fixing to turn 50. Okay. All right. So this is the time that you all have the first conversation.

most lucrative careers of your lives and the both of you have to decide what that is and start working on it you don't want to be an 80 year old uber driver this is not a plan you don't want to be doing door dash at 76 this is not a plan you don't want to be in customer service at 76

especially when you're looking at 110,000 student loans and 18,000 credit cards and everything you do, like put a battery in your car, looks like more credit card debt. Something's got to change. Would you agree? Oh, yes. Yeah. So I'm with Jade. I think you guys do need to get on the same page, and I think you need to make a commitment to borrow no more and to begin to reduce these debts, and you're going to have to rethink both of your careers because you're going to struggle.

This is going to be very hard 20 years in front of you. Very difficult if you guys do not deal with this core issue. You can try to ignore it, but it's the elephant in the room. It's going to stomp around and leave the furniture broken. Yeah. Is this making sense to you? Yeah. You've avoided this and kicked the can down the road as long as you can.

And now the can has come home and hit you in the back of the head like a boomerang. 110,000 on student loan debt. How long ago were you in school? Graduated 2009. No, 13. 15 years was my guess. I wasn't far off. Okay. Yeah. See, it's time to deal with this. Do you agree?

Oh, yeah. Kids are grown and gone. Okay, so we're going to get out the credit cards. We're going to have a plastic surgery party tonight, honey. We're chopping them all up. Every stinking one of them. This has to end. That's how I would have reacted had we found this. Okay? It wouldn't have been as nice as you. You're a little sweeter than me. This is stupid. It has to stop. How about that one? Let's try that. I like it. There we go. This is the Ramsey Show.

Jade Warshall, Ramsey personality, author of Money's Not a Math Problem, our latest quick read release. 57 pages. You can blow through it in one setting, and you will learn a lot from Miss Jade. Check it out at the RamseySolutions.com store right now. The Ramsey Show Question of the Day is sponsored by Neighborly, your hub for home services. There are some things around the house you can handle yourself, but electrical problems probably aren't on the list. Zzzz.

contact mr electric for licensed professionals that's what you want there you don't want this you want the licensed professional it's a good idea yeah they'll give you upfront pricing and they'll take care of you from your neighborhood mr electric online at neighborly.com slash ramsey today's question comes from arlo in texas are those companies that say they will help you deal with the irs legit my

My husband and I had several years of unfiled taxes in fear that we owe the IRS a huge amount of money. Can those companies who claim that they can stop the IRS from garnishing your wages actually do it? Well, I'm just wondering why you're waiting till you get to the point of garnishing of wages. Why not just do it?

Dig a little deeper, contact the IRS, and find out what you owe and pay it. And by the way, if you're in baby step two, if you're working on paying off your debt, this is going to go right to the top of the list. This is going to be numero uno, nothing ahead of it because you don't want that to happen. I would change one thing in that suggestion. We're not going to contact the IRS. We're going to contact a tax professional.

and file our taxes well yeah you gotta file your taxes tell the irs what you owe they're not going to tell you what you owe you don't want to ask the irs anything because they don't know either they're dumber than a rock that is true they send those statements yeah they just make up crap yeah so but no you need to catch up on your tax filings and figure out where you are and the answer to your question is no those companies don't work yeah okay so here's the thing if you file your taxes

and get caught up, the likelihood of you being criminally charged for failure to file is very low. When you come forward, come out of the cold, so to speak, get back on the grid, so to speak, and file your taxes, they very seldom criminally charge you. Because failure to pay the IRS is not a criminal offense. Failure to file is a criminal offense. Mm-hmm.

So about 2,572 people or something like that every year. Last year it was 2,572 get put in jail for not filing their taxes. It is a criminal offense. So you don't want to screw around with this. You need to

Right now, before Christmas, immediately, get online at RamseySolutions.com. Click on our tax professionals, our ELPs, our endorsed local providers for taxes. Get your crap together. Go over there and get your taxes filed immediately, even if you don't pay them a dime and you don't have a dime. That's right.

That's step one. Get rid of the probability of a criminal issue. Then we'll deal with the mathematical issue of can they garnish your wages and are there reductions? Okay. So let's get into that for just a second because people are spending more time at home during the holidays and watching TV.

Cable TV and cable news where you see we have former IRS agents working for us and we can reduce your tax burden. If you have $10,000 or more in IRS debt, contact us and we'll make your life okay. In the fine print, it says bull crap, okay? Because that's what it is. So here's the deal.

that you can have a tax professional represent you that is not on cable TV and they can help you with the process. There's a couple of things you can do. Thing one is what Jade said, scratch the money together and pay them. If you're not anywhere near that, at least contact them and you can get on a payment plan. Yeah.

It's ridiculous penalties and ridiculous interest. You don't want to do that. If you can get the money anywhere else, including borrowing it somewhere else and changing your IRS debt into credit card debt, I would have you do that because it's a better deal. Hey, say that again because I told somebody that one time and they had my head for it. No, you've got one kind of debt that's bad debt. I would rather you have a different kind of debt that is better debt. I agree. Okay, let me just tell you. Credit card debt is bankruptable.

Credit card debt has to go through a legal process to garnish your wages. IRS debt is not bankruptable. IRS debt has a higher interest rate than credit card debt has. IRS debt can garnish your wages without going to court.

They don't have to get a judge's permission. All other forms of debt have to do, have to. So this is the worst kind of debt to have. So if you can make it into another kind of debt, you got a $20,000 IRS debt. I would a lot rather you owe $20,000 on a credit card than $20,000 to the KGB. Amen. Okay. And if you guys don't like Jade saying that, well, you're stupid.

Okay. So Jade was right when she said that. Don't be stupid, okay? It makes life painful. So now the next thing is this. You do the payment plan. Now, the other thing they say is we can reduce your tax burden. Bull. Yeah, they'd have to do something shady. No, there's one way you can do it legally, but it's so thin and narrow is the door. It's called an OIC, an Offer and Compromise Plan.

And you can submit to the IRS your situation and ask that they accept less than the actual tax debt. Try to get them to settle with you. Like as a hardship? Yep. When do they approve an offer in compromise to take your $100,000 debt and allow you to pay $20,000 instead? Okay. Well, you'd have to prove that... You have nothing. Yeah. No income, no potential for income, no assets, no house, no...

No car, no money. You have to prove what they call pauper status. Wow. Poor people. You've got to be homeless, basically, penniless, and then they will approve a compromise that

Because they don't think they're going to get their taxes anyway. But I'm telling you, to get an OIC through, and I've gotten a few of them through. I've worked with clients over the years that were in hardship situations and had massive tax bills. And we worked with tax attorneys that we paid good money to, not some goober on cable television. And you can get an OIC through. But I'm telling you, out of 100 that I work on or I have worked on over the years, I've gotten three or four through.

It just doesn't happen. Yeah. Okay. You don't want to be on that status. Well, you got the things you, that, you know, it's like, well, I, it's inconvenient, inconvenient. They don't care if it's inconvenient. You have a car, sell a car and pay me.

You have a house. Sell your house and pay me. They don't care if you're homeless. You don't care if you have your grandmother's diamond brooch. They don't care. Sell it. They want to know everything. And not revealing assets to them in this process is also criminal fraud. Yeah. So this is just, you're just playing with Tiger here. You don't want to deal with these people. What you want to do is get your taxes filed, get on a payment plan, roll up your dadgum sleeves and clean up your mess and quit looking for easy money.

fixes for major stupid stuff. Usually major stupid stuff comes with major problems to fix it. Yeah. There's no quick and easy. You don't get out of debt quick. It took you 20 years to make the mess. You're not going to get out in 20 minutes. And for the self-employed people that are listening. Pay your dadgum taxes. Just file your quarterly.

Just do it. And if you don't want to do it yourself, invest a little bit of money and just hire a bookkeeper to stay on top of this and make sure that that is going through properly for you. I'd rather pay them a little bit of money every year than deal with a tax burden and deal with getting myself in hot water with the IRS. I'm 1099 and I forgot I had to pay taxes. You forgot? You know, I mean, this is what they... I made $100,000. I paid no taxes for two years. That means you made $200,000. That means you have a tax bill of $50,000 laying around. Mm-hmm.

or more and so you know that's a lot you do not want to have this crap sneak up on you it's not really sneaking up on you you're just pretty much uh we just discovered denial is not just a river in egypt you totally stuck your head in the sand how's that okay so let's make it clear dave because

We say all the time, don't use a professional for this. Don't use a guy for this, but use a guy for this. So make it clear. Do not use cable TV people to fix anything in your money. We don't do consolidation. If the commercial runs between Snuggies and walk-in bathtubs, it's not a credible operation. Okay? Hello. Not Snuggies. Think about it.

You know, if your financial advice comes between walk-in bathtubs and Snuggies, you've got bad financial advice. I'm just telling you, okay, that this is what you've got. Think about what's going on around you, okay? This is The Ramsey Show. Jade Walsh, all Ramsey personality is my co-host today. Thank you for joining us, America. Merry Christmas to you.

I'm Dave Ramsey. The phone number here is 888-825-5225. William's in Charleston, West Virginia. Hey, William, how are you? I'm doing pretty good today. Can you hear me, sir? Yes, sir. How can we help?

Alrighty, Dave. I'm William. I'm 25 years old. I make $90K a year as a truck driver. I'm currently on baby step two with, I would say, less than $10,000 of debt. A vast majority of that being medical, no credit card debt. My cars are paid off, and my wife, she's 25, working part-time, and she's able to go to college for free.

through my employment. Cool. And...

Our ultimate goal is we are wanting to, in two years, be able to homestead and start our family. And what I've came across and I've heard is to consider looking at getting a homestead property under a business or LLC loan because it's a lower interest on the loan than most mortgages right now.

and it could allow that property to be more of a tax advantage with being able to write off different things and different equipment for the homestead. I was wondering what your opinion was with this. Well, to start with, it sounds like you're reading –

people that are proponents of homesteading and reading lots of articles and hanging out with folks that do a lot of homesteading. And so it made you susceptible to reading this stuff because that's not mainstream information. And it's also not accurate. Okay. So having an LLC and getting a business loan is a higher interest rate than a mortgage.

than a personal mortgage rate. So when you say homestead, you're talking about buying a piece of ground with a house on it that you're going to live in and raise animals and food and so forth, correct? Yes, sir. Okay. So what you need is you just need to go get a mortgage and buy your house with some property with it. It's going to be cheaper. And it is not your personal residence interest. I mean, uh, uh,

is not a deductible business expense under any circumstances. Now, if you operate a business on a piece of property that is your residence, for instance, let's say you bought, I don't know, make it up, 30 acres, and you put some cattle on there, okay? Yes, sir. The cattle operation is a business, and you can deduct expenses associated with raising the cattle, but not expenses otherwise, okay?

So it does not need to be a LLC? No, no. You could buy five cows, okay, and sell them at a profit and deduct the vet bills and deduct the feed and deduct if you had a piece of equipment you were handling the cattle with. You could maybe depreciate that piece of equipment, okay, to the extent you use it on the cattle.

But if you buy a truck and once a year you touch a cow with it, you can't write the cow off except one day a year, one 365th of the truck. So it's a useless bunch of crap to try to write your truck off, okay? But if you've got a very specific piece of information that is a livestock trailer and the only thing it is used for ever is

is to transport cattle in or out of your operation, then that trailer could be either expensed or depreciated depending on the particular portion of the tax code. But you could do all of that as a sole proprietorship. You don't need an LLC. It's called a Schedule C on your taxes.

Schedule C is a small business, and a small business, you write on there what your income from the business was, what the expenses from the business were, and what the profit, the income minus the expenses is the profit, and the profit is taxable. So you have deducted, you've had a deduction for the expenses on the Schedule C. Does that make sense? Yes, sir. And you do not need an LLC to do that.

Okay, this is the first time I'm hearing of a Schedule C business. Yeah, it's called a sole proprietorship. You would open a separate checking account at your bank, cattlebywilliam.com,

or William Smith, or whatever your last name is, DBA, Doing Business as Cattle by William. It has your social security number on it. You don't even need a tax ID number for it. Okay? And then run all of your business income from the cattle into that account, all your business expenses out of that account, and everything that's written down about that account ends up going on the Schedule C, and thereby you have deducted your expenses from the income that the cattle created. But it's not a...

faux tax deduction that you get on your lawnmower because you're homesteading. You don't get that. Okay. Does that make sense? Yes, sir. Homesteading amounts to I'm going to grow some of my own food and I'm going to grow some food and sell it to other people, right? Yes, sir. Okay. The food you grow for your own use, no tax deduction. The only savings you get is you get really good food, A, and B, you get cheaper food. Agreed?

Yes, sir. I've been looking at homesteading with my wife as we're getting more and more into the Bible, and I'm reading a lot more about how everybody back then was having farms and getting food, and I think, one, financially it makes sense, and two, it is the best quality food.

that I feel like I can get to give my future children. Hey, being a kid, being raised on a farm is about as good as anything can be. They know how to work. They know how to get dirt on their fingernails. They know where babies come from. I mean, everything being on a farm is a good thing, right? And it's just, uh, when all of America has spent some time on a farm, uh, three generations ago, this was a better place. And so I, I completely agree with you. Uh,

From a common sense perspective, I mean, we can bring the Bible into it if you want, but I just think it's a great place to raise kids. I got no issue with it at all. I mean, my kids are suburbanite kids, and they survived because I made them do work. But, I mean, what you're talking about is a fine standard of living, a fine way of doing things, but there are no magic tax pills that go along with it or better interest rates that go along with it. You're just buying a small farm.

to operate for your family. I mean, it's the same principle that rolls into anything else. I mean, even if you operate a business from your home or you work from your home, there's a certain amount, but it's not everything. Like it's only what is directly related to that business. Well, and here's the problem. Like for instance, can you write off a home office at home? Sure. Yeah. You buy a $300,000 house and...

and it's 3,000 square feet, and you have a 300-square-foot bedroom. Okay. Well, that's 10% of your house, 10% of the 300,000. Oh, wait, we've got to take out the lot.

because you can't depreciate the lot. So the lot is $100,000 of the $300,000. So now it's only $200,000. Now it's only $20,000. And then you divide all of that by 27 years. And, oh, by the way, when you get ready to sell the house, you have recapture. All of that depreciation you took is added back as a taxable event. Otherwise, if you had sold your personal residence, 100% of your growth on the value would have been tax-free. So screwing around, writing off your home tax,

one of your bedrooms as a home office ends up actually being a stupid idea. That's a good point, Dave. I think in long term. Yeah, but I mean, because when it comes back to bite you when you sell it, because you got 100% recapture on that appreciation that you took. So it's just, you know, and people are going, I wrote off, I'm going to write off. You can't write off that. You can only write off what actually is attributable to the actual function of the business. And home office or homesteading,

you know, just because you saw it on TikTok, it doesn't, it does not change any, you know, it's not real. We actually have a great article on rs.com about that very thing. We do. Yeah, we do. I, I, I bylined it. So written by Jade. It's on there. Check it out. Yeah. About knowing what to write off and knowing what not to do and just all that good stuff. So if you have a chance, check it out. Um, here's the thing. Homesteading,

is a great idea. Running a business and starting it up out of your house, great idea. Doing either one of them for the tax benefits, dumb idea. There we go. I'm with you on that. This is The Ramsey Show. Jade Walsh, all Ramsey personality, is my co-host today. Thank you for being with us, America. Merry Christmas. Parker is in Portland, Oregon. Hey, Parker, how are you? I'm good. How are you? Better than I deserve. What's up?

So I just bought my first house six months ago, and I just wanted to get your opinion as to whether or not I should turn it into a rental to start paying it off faster. No. No. No. How old are you? 21. What's the house worth? $245,000. What do you do for a living? I'm a tax accountant. Okay. What are you making? $63,000. So you can pay the bill, right?

Yeah. Do you have any other debt? Nope. Good for you. Okay. So first thing I'd do is just sit down, do a budget and pay your house payment. Enjoy the house. Sounds like it's a very nice property. How many bedrooms? It's not as big as you sound. It's just a two bedroom, two bathroom and unit condo. Okay. All right. Um,

Well, I mean, at 21 years old, it's a pretty impressive purchase. Okay. If you want to put in a roommate to try to help you with the cash flow, that's not a bad idea or an unusual idea. But no, you do not need to be a landlord in order to pay your house off faster. That's going to work backward. A landlord is expensive. Right.

People tear up stuff. I was going to say moving back into a house that you've turned into a rental for the last five years. It's not the same house anymore. It's not or the same apartment in your case anymore. It's going to feel totally different. OK. Are you not liking the property or you're not liking the bill?

No, I can afford the bill and I love it, but I was just trying to think of, I was planning on moving in with my boyfriend in June and then having, turning it into a rental and then making extra principal payments on it. How long have you been dating the boyfriend? A year. I wouldn't do that. Okay.

I definitely wouldn't do that. I like Dave's idea of getting a roommate. I feel like that's the quickest way to get extra income in, make those extra payments that you want to pay so that you can pay down this mortgage quickly. What's your goal? When you say, I want to pay this down quickly, what's the timeline in your mind? Timeline is 10 years. Okay. I like that. You're 21. You're going to get there with no boyfriend and with no renters.

And if your boyfriend turns into your husband, we can have a different discussion. But if I were you, now, again, you called us to ask what we would do. And that's what we are. We're duty bound to tell you based on the fact that I am old and have experience. I have to tell you these things. So it's just like a rule and all. Yeah.

I mean, let's talk about why, though, because when when you suggested the boyfriend thing, what came to my mind is I'm thinking if you go live with the boyfriend, if something happens, you guys break up. You broke up tomorrow night. You've got a renter in there who's under a year lease or however long the lease is. Now you're kind of homeless because you've got a renter and you and your boyfriend broke up. That's what my brain immediately goes to. What's your mind go to get married if it's time to get married?

I was your age when I got married and we've been married 43 years and you know, we've had lots of renters and all that kind of stuff. So, um, you know, actually Sharon and I were 22, but yeah, same here. So, um, that, that's the thing. So 42 years coming up, I guess it is. But, um, anyway, yeah, that, that I would just tell you if, if this guy is worth doing all this for, he's worth marrying. And if you're worth, um,

all this, then you're worth marrying. So, or not, uh, but don't, don't make financial and economic decisions that are inter woven with people you're not married to. It gets you in all kinds of pinches. And one of them is, was just outlined by Jade right there. So you can do what you want to do. I think you're, I think you're fairly, um,

level-headed and ahead of the game for a 21-year-old. You purchased a property. You're a tax accountant. You're making $65,000 a year. You're living in Portland, Oregon on your own. You're making it. Life is good. I think you've got a lot on the ball. You sound like you're really sharp. Don't blow that by trying to speed something up artificially.

whether it's the relationship or whether it's the pay down of the house. Just be the tortoise, don't be the hare. Be steady. Boom, boom, boom, boom, boom, boom, boom, boom. As a tax accountant, if you're doing accounting for individuals, you are going to discover people that tried to get rich quick and how quickly they went broke. And I'm trying to keep you from that side of the equation because you seem to be very wise about

beyond your years and um i want to keep you back on the side of the equation that somehow your parents got you on to start with and i want to keep you there if i if you know so if i sound like an old fogey then chalk it up to the fact that i'm an old fogey so there you go open phones at 888-825-5225 and jade truthfully i mean the truth is this okay um if you call into the show

Our duty bound thing is to love you. That's right. Enough to tell you the truth. And sometimes that's funny and sarcastic and sometimes we're a little mean. And sometimes we tell you, oftentimes we tell you something you didn't want to hear. It's not unusual either. That's right. But, um,

You know, our goal is not to, we're not taking a poll for popularity. No, we just want the best for you. Our goal is to actually help you. That five years from now you go, you know, I wish I had done what they said or I'm really glad I did what they said because they know stuff I didn't know and they've been down roads I haven't been down and I'm

They've helped people in more complicated situations than I'm in. And so it's what we do. That's right. It's what we do. We spend our whole lives doing this stuff. And we're heavily invested in it intellectually, emotionally, spiritually, prayerfully, financially, everything. We're invested in this. That's right. And so never confused that we're doing anything here except out of an act of love. We love doing this. We love helping people. And we love you guys. We want you to win.

and uh if that freaks you out hey that's okay we love that emma's in milwaukee emma what's up in your world hey dave hey jade how are you guys doing today better than we deserve how can we help awesome super excited to talk to you guys today my question for you is i recently got a promotion and it over doubled my income what are you making

About 150 right now. Wow. How old are you? 27. You're way to go. Love it. I don't want to tell you what I was making when I was 27. It wasn't that much. How can we help?

Yeah. So basically this has brought me to Baby Step 4 a lot quicker than I was anticipating. I am a master at Baby Step 1 through 3, however. So I have my two to six month emergency fund saved away. I also have a little extra on top of that, totaling in $23,000. I'm single. I currently rent. I have no kids, no other major payments.

been living low maintenance for quite a while now. What I'm wondering about is how to go about investing properly. I can give you some of my company's 401k situations. And then also on top of that, is it a wise decision to purchase land from my family farm right now through a land contract? Well, let's start. You're doing everything right. Go ahead. I was going to say, well, let's start with the investing side of it.

Yeah. How about that? So my company will match my 401k contributions at the rate of 25 cents onto the dollar up to 8%. Okay. They also offer a Roth that they will match 8%. Let's do that. Do that. Okay. And you're going to put up to baby step four. You know this stuff, Emma, 15% of your income. And you're going to put it in four types of growth stock mutual funds, growth, growth and income, aggressive growth, and international. On the other thing, never do a land contract.

Because you do not have title to the property. And if you paid the property down in half and have half equity, and the person who actually owns the property gets in a car wreck, gets sued, they have a lien against a property that they own, you don't own it, but you have a contract they can't deliver on. So you never do a land contract. If they want to deed it to you and give you a mortgage, you can talk about that. But no, we're not doing any land contracts ever. Very weak position for the buyer.

very dangerous position for the buyer. Never do a contract for deed or land contract, which are the same thing. That puts us out of the Ramsey show in the books. Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love, and create actual amazing relationships.

I'm Dave Ramsey, your host. Thank you for joining us, America. Jade Walsh, all Ramsey personality and author of the new book, the new quick read, Money's Not a Math Problem. She's my co-host today. Thanks for hanging out with us. The phone number is 888-825-5225. Merry Christmas! Kendra is with us to start this hour in Houston. Hi, Kendra. How are you? I'm doing all right. How are you doing, Dave? Better than we deserve. What's up, sir?

Okay, so I was calling just to get some advice. So I am about $61,000 in debt. I make about $55,000 to $62,000 a year, just depending on, you know, what kind of jobs we get. I drive a concrete mixer. So, you know, our business is generally driven by, you know, what kind of contracts we get, the weather, you know, anything can affect, anything and everything can affect the paycheck. So,

I have about $19,000 in student loan debt, about $4,000 in credit cards, and the rest is a $35,000 car loan, which I pay about $762 a month for. Whoa! You're feeling that. Yeah. Yeah. So I think we found the problem. Yeah. Are you upside down on it?

So, yeah, definitely. I owe $35,000 and the car is worth $25,000. Yikes. It's a 2021 Jeep Grand Cherokee. I got it with no money down. As Dave would say, I got put into a situation where I got scared and then I got stupid. You did. Okay. What kind of condition is your credit in? My credit is now in...

Worst condition. It's around the mid-500s. Who's the car loan with? It's with CIG Financial. It's through a company, through the dealership AutoNation in Houston. Mm-hmm. Okay. All right. Well, the net result is you've got to sell the car. We have to figure out how, okay? I imagine, yeah. Yeah, because the car's killing you. I mean, it's safe to say that if you didn't have this car, you probably wouldn't have even called us. Mm-hmm.

yeah definitely and i'm assuming you don't have any money laying around no savings nothing i have half of my baby step one uh the other half will be going in at the end of this week and after that no nothing okay so you got 500 bucks are you married are you married did we lose no sir i'm not married okay uh all right um and so you're you're driving the concrete truck what 40 hours a week

No, I generally work anywhere from 55 to 70 hours a week. Okay, and that's making the $65,000? Yes. You're renting a house or apartment? We're renting an apartment. What's the rent? $1,100. Okay.

All right. So it may take a little bit, but here's the formula is we got to come up with 10 grand fast. And that means beans and rice, rice and beans, all the OT you can pick up or side hustles you can pick up if you're not picking up OT. All right.

and i you know i want you to sign up for everything they'll let you drive anything you can do and beans and rice rice and beans no restaurants no vacations no nothing till we get 10 grand to cover the hole that you're in and then you sell the car and cover the 10 grand get you a thousand dollar car okay do you have anything else you can sell anything associated with the business that you don't need need uh

No, other than this car, honestly, I've been a minimalist for a very long time. I don't really care. Until you met the Grand Cherokee, yeah. Yeah, exactly. That was the first and worst big thing I've ever gotten in my life. And I'm sorry you're stuck in this, but really, you've got to have the $10,000. The other option, and I don't think it will work, but I'll put it out here just because it is a slight possibility, you might slide over there to AutoNation and say, guys,

I'm about to get repossessed here because I'm having real problems with this car. And I need you guys to let me sign a note and pay payments on the $10,000 and let me sell the car for $25,000. Now, who said the car is worth $25,000? Where did you get that information? So I went on Kelly Blue Book and got the quote. Private sale? Yes. Not trade-in? No trade-in. Okay. All right.

So they might say, we'll give you X number of dollars for the car and let you sign a note for the difference. And if you pay $700 a month on $10,000, you can get it paid off pretty quick. Right. And let me tell you, I give you less than a 10% chance of that working. I was going to say, what's the likelihood of that? But I would haul my butt down there and sit in front of them and try it.

Right. In person, not on the phone and not by email. Drive up with the car, sit down, talk to the finance manager in person and say, I'm screwed here.

And don't blame them. You're not a victim. You signed up for this. Right. But don't go in there and go, you guys did me wrong. That's not the point. We know they did you wrong, but that's not the point. So if he tries it and it doesn't work. Then you've got to come up with 10 grand. Is there a situation where you would say, listen, if I can get a credit card for that 10 grand. Yeah. Yeah. I'd take a credit card for the 10 grand because I would rather you owe 10 grand on a credit card than 35 on a grand Cherokee. That's what I'm saying. Yeah.

I don't know how I would go about getting the same ground on a credit card. I don't either. Not with a 550, I don't. But, you know, I mean, it could be that your credit union will loan it to you, but I doubt it.

That's why I was asking about your credit. But if you've got a credit union that you've got a longstanding history with and the guy knows you in there, you might go in there and get $10,000 to cover the hole, or $11,000, which is one to buy a car with. You get your little garage sale car to get back and forth to work, right? Or maybe it's a half and half. If you get rid of 25 of the 35, you can deal with the other 10 pretty quick. Okay, so if I...

If I were to pause the baby steps until I can come up with like a $2,000 for a little cash car and then sell the $25,000 car. Yep. You've got to cover the 10 grand difference. But the difference is that's where the problem is, is that 10 grand difference. You can't sell your car until you can get the title for it and you have to pay them 35 to get the title. Right, right, right, right, right. Okay. That's why I keep trying to come up with a 10 grand somewhere. Listen, even if you can get... And don't go down there and let them screw you and put you into another deal.

Oh, no, definitely not. No more deals with these people. Yeah, I'm not trying to get any more notes, any more debt. We're going to help you out by selling you a $20,000 car. No, you don't need a $20,000 car. You need out of the $35,000 car completely. Right.

No debt. That's what we need. And then if you don't have any payments, when we clear this mess up, I mean, you can then you can deal with the other two things pretty quick. You can knock out $4,000 in credit card, $19,000 student loan because you're not going to stink at $750 payment anymore. Right? Right.

Right. So that's why we spent the entire time talking to you about getting out of this car. Well, that's the lesson. The problem is in the car. Almost every time. Man, we used to call this the sell the car show. Yeah. Dave, my dog is ill. Sell the car. Dave, my marriage is struggling. Sell the car. It was the answer to everything. Sell the car. Sell the car. This is the Ramsey Show.

Jade Walsh, our Ramsey personality, is my co-host today. She's the author of the new quick read, Money's Not a Math Problem. Check it out. 57 pages later, you will be smarter than you were when you started. Check it out. It's right there at RamseySolutions.com.

By the way, if you guys didn't know, our EveryDollar app, where you give every dollar a name, the world's best budgeting app, it helps you manage your money the Ramsey way. It works wherever you are, iOS, Android, online. You can do it anywhere you want. You can start EveryDollar for free and immediately see where you stand with your money. You can get organized. You can work with your spouse. If you're married, both of you have access to it, so you know what's going on with your money. There's no...

No two tracks here. There's one track we're running together. And new to EveryDollar, we'll show you a long-term financial roadmap.

You track your net worth, your debt-free date, your retirement date, your baby steps dates, and more. You're going to love this brand new thing. Those of you that are really into this stuff, every dollar just took a whole new step, boys and girls. We're going to proactively coach you to build wealth and reach your goals. Nobody else does that.

You can download the free app for iOS or Android. Go to everydollar.com and get started. And if you pay just a little bit, you can have all the connectivity to your bank and get access to a whole bunch of other things as well. Be sure you check all that out. And by the way, some of you, for some reason, I guess you've been living in a cave or something. You didn't know this. Mint is closing up shop January 1. They're done. Wow. They're done. They're closing it. So you got your budget stuff over on Mint.

You got to have a place to go. Yeah, because they're not, they don't have anything for you. They're done. They're done. They're running Credit Karma. That's all they're doing. And there's no budgeting tool there. And we're the best and the biggest budgeting tool out there. So your natural movement is to move your stuff over to EveryDollar, and we can help you do that. Yeah. And it's completely free if you want it to be. If you want to connect to your bank, do the other stuff, we can show you how to do that. But we're not going to be selling, you know, Mint's whole thing was,

they were using it as a lead magnet. They gave away mint for free because they tried to sell you rocket mortgages. They tried to sell you credit cards. They tried to sell you consolidation loans. All kinds of debt products are being sold in there every day, and they made their money selling debt products. We don't sell debt products, obviously,

We sell education, and part of that is educating you on operating this app with every dollar. And we're running all kinds of free webinars with Jade and George and Rachel are all doing free webinars pretty regularly on how to operate every dollar. When's your next one? My next one, oh, gosh. Right after the first of the year, I'd say. It's right after the first of the year, but for the Mint folks...

I just posted, matter of fact, if you go over to my social media on Instagram, at Jade Warshaw, I just posted a deal where if you're leaving Mint to go to EveryDollar, we're giving you two months. I think it's two months for free. Wow. Yeah. So check that out because the link is there. It's in my stories and you can click it and get that deal. Yeah. So just check out Wade's, or Wade, Jade's Instagram, jade.com.

Jowade Warshaw. Yeah. Jade's Instagram. And she'll get you a deal there. And if you're moving over, if you're navigating, migrating from

uh the every dollar from the mint close-up shop situation because you just got a few days and you know you're i don't know when they're going to shut down the access to your information but you want to get your information out of there before they shut the whole puppy down well yeah certainly january 1 is their shutdown date that's what they're saying so you want to bill be ready john's with us john is in johnson city tennessee hey john merry christmas merry christmas dave how are you better than i deserve what's up man

Well, me and my wife are looking to buy a home sometime this year. Good. We're about $34,000 in debt. Bad. Yeah, that's what I'm trying to get situated. I want to get this, at least the biggest part of it, knocked out between now and sometime this year so we can get situated to buy a house. Now, you need to get it all knocked out. What do you make? I make about $55,000 a year. She makes... Oh, good. What does she make? She makes...

probably $25,000 or $30,000. So $85,000 and you have $34,000 on what? Got $13,500 on a car. She's got a student loan that we're paying on together. How much is that? Her student loan is a little less than $7,000 now. What's the other $14,000?

We have got a loan together where we bought something stupid. We had to get out from under it. I'm not going to lie to you. That's what it was. What was it? $300. I bought a motorcycle. Oh. I got stupid, and then I got out of it. She got sick. She started having some health problems. I saw the writing on the wall, so I got rid of the motorcycle. It cost you $8,000 to get out of it? It cost me $6,000 to get out of it. You got $14,000 more. What's the other $8,000?

I've got $1,600 on a credit card, and we have got a $7,000 in a mower. A lawnmower. So we're selling that? Yeah. Okay, so you're selling a $7,000 lawnmower. We're selling everything else we can get our hands on. Sell so much stuff the kids think they're next. Okay. I want you to get a house. All this other crap goes down in value. The house goes up in value.

If you're going to keep that car, you guys need to work like 10 extra jobs, be going nuts from now until summer, and let's be debt-free by summer. But you're going to have to sell. You need to sell the mower. You may need to sell the car, but if you're going to keep it, you guys are going to be working like crazy people for a short period of time here. And no eating out and no vacations. Okay. The bad thing about the car is I'm not ever going to get out.

what I owe in it. Never going to get it. What do you owe? You owe $13,000. What's it worth? Last time we looked, it was worth about $9,000. Okay. So you've got to pay it off.

It's easier because it's not $35,000, it's $13,000. It's not the problem. It's just part of the problem. And after we sell the lawnmower, it's the biggest part of the problem. So the thing is this, John, if you and your wife sit down, okay, let me back up two steps. I got just a second. I'll make sure I lay this out right.

One of the great speakers and teachers of all time on self-improvement said, Earl Nightingale used to say that the problem with people's not hitting their goal, in your case, your goals to buy a house is not what you're willing to do to get there. That's not the problem. It's what are you willing to give up to get there? Those are the things that block us. If you want to lose weight, uh,

It's not what you're willing to do to lose weight. It's what are you willing to give up that you're blocking. You see what I'm saying? And so what you guys have got to do now is you've identified the goal is very clear and it's a great goal and we're endorsing the goal, right, Jade? That's right. I want you to have a house. Yeah, we want you to have a house. It makes good financial sense, good relational sense, everything. And a bunch of this other crap does not. $7,000 lawnmower does not, okay? No, it doesn't. Unless you paid cash for it and you make a lot more than you make.

So your wife is working more than she's ever worked in her life in the next six months. You are working more. Your family is doing nothing. We're not going out to eat and we're going to have a bunch of sales and we're going to sell a bunch of crap left and right. I mean, eBay, Facebook marketplace, everything's going to be activated at your place so that we can hit the goal. Do you guys have kids? Got to. Yeah.

Because this is it's just a good investment for your family, man. And so I would prescribe in order to have a great life in the future that you prescribe yourself six months of hell. Because if you move into this house with no payments, John, the house will be a blessing.

Right. Well, see, I've got $12,000 extra dollars coming in a year because I'm pastoring a church. I'm a pastor, so I've got that on top of what I'm making. Okay, then that goes into the budget. That goes into the budget. And every time I get a church check, I throw it at a bill. Good. I want you to do more than that. I want you to add up all the checks and cut all the expenses and put everything towards these bills.

And work smallest debt to largest debt and get rid of all of them. Cut up the credit cards, knock the credit card out. Then let's get the car and let's get the student loan knocked out and let's get the lawnmower sold. And so, I mean, you got $21,000, I mean, $26,000 you got to come up with. And that's $2,000 a month for a year. That's $3,000 a month. You do it in six or eight months and you're starting to talk about buying a house by fall.

But I want this to be a blessing to you, not a curse. And if you buy this thing with a bunch of debt hanging around your neck, it's going to be a curse. And I don't want you to do that. Jade Walsh, all Ramsey personality is my co-host today. If you're out running around during the holidays, we do this radio show podcast, YouTube thing every day from one to four central time.

We will be off between Christmas and New Year's. You'll get best ofs on those days. But we're on the glass in the lobby of Ramsey Solutions. So you can come into the lobby and we have free homemade chocolate chip cookies. We like to celebrate our listeners and our viewers. We like to have you come in. We'll sign your books and take pictures with you. We like hanging out with you at the commercial breaks. We're here every day, Monday through Friday, unless it's a holiday of some kind. And again, we're not here between Christmas and New Year's.

But otherwise, you can come out. And there's usually 50 to 200 folks hanging out. It's a completely free experience. We take care of you. We want to say thank you for hanging out with us. And in that lobby, we put a little stage. It's called the debt-free stage. Standing on the debt-free stage is Jason and Cassandra, which can only mean one thing. Well, most likely means one thing. That you're debt-free. Guys, where do you all live?

We're from Houston, Texas. Oh, welcome to Nashville. And how much debt have you paid? $124,000. Excellent. How long did that take? 48 months. All right. And your range of income during that time? Well, we started at $107,000 together and we ended at $158,000. Excellent. What do you all do for a living? I am a math and stats professor. Excellent.

I work in software development. Okay, very cool. What kind of debt was the $124,000? There were two home loans, two school loans for graduate school, and two adoption loans. Wow. So this pays off the house? No, not the house. Did I say house? No.

The first house was from when we lived in East Texas. That's what you're talking about. The home loans. Two home loans. I'm sorry. I'm very nervous. That's okay. Two car loans. Two car loans. Got it. Two car loans. Okay. We're just going to let him translate. That's okay. No, you're fine. It's good. Very good. It's nerve wracking to be on the microphone. I understand. Not for me anymore after 30 years, but the first time you do it, it scares the crap out of you. You're doing good. Very good. All right. $124,000 paid off in 48 months. Tell us what started this whole story, this journey, this connection to Ramsey.

We did FPU as a couple in 2015. We were having trouble in our marriage. I'm the number person, right? I'm the math professor. But I was doing it by myself. And so in 2015, we almost didn't make it. And so we were like, we got to do this. And so we paid off all of our consumer debt in 2018. This whole time, cash flowing fertility treatments, trying to get pregnant for about 13 years. In 2017, we did get pregnant and got evacuated from Harvey.

and came back and not so pregnant. Oh man. And so 2018 May, we decided to adopt and we announced it. We started a GoFundMe and we started cash flowing and they said, probably going to be 18 months. Y'all want two kids under two. You want biological siblings.

Good luck with that. Everybody told us that it was going to be a year and a half wait to even start. So we filled out our paperwork and we did our little home visit. And then like two weeks later, they were like, hey, guess what? We got a match for you. So we believe that God had a mission for us. Oh, mercy, yes. These are our little girls' stories.

Without a doubt. Yeah, they're amazing. The best thing that ever happened to us. Amazing. Yeah. So what a story. We stopped paying. Well, no, we, so in 2019, our youngest was born in October, um, 2018 and we have an open adoption to this day. She's still in and out of our house. Um,

Anyway, so in January of 2019, she placed the oldest with us. There was a delay. And so in 2018, I was on maternity leave. 2019, I go back to college and...

Now that we have both girls, which is what we always wanted, we now have a basically $2,000 plus a month take care bill, as you might imagine. And there was room and then there was not room. And even with grants and GoFundMe and all of that, 2019, we had a lot of food insecurity. Some that he may not even have known about. So, yeah.

We were very frugal with our budget. We did not have credit cards. It was car loans and adoption loans and school loans. Medical. Medical. There was medical debt.

Anyway. Anyway, so yeah. We wanted to get out of that. We wanted to get. So you were debt free and then all of this happened and there's another pile of debt. Yeah, definitely some. I had some school debt that we had been working on. So you weren't debt free when you started? We were not debt free when we adopted the girls. And getting out of that.

was important to us so that we could make a firm foundation for all our family's future. We were consumer debt free. That may have been what I said. The credit cards. We had paid off all of our credit cards. But you still had the cars. We did. We were doing small to large. You're not consumer debt free. Okay. Oh, am I saying on credit cards? It's okay. I'm sorry. I'm trying to get the story straight in my head. So, okay. You're good. So you had some, you'd reduced some debt. Yes. And then the girls came along and you got some more debt because everything got real tight. Yeah. Okay. It happened a lot quicker than we expected. I got you. And then you decided four years ago.

What happened? Right. Lily turned one and both of their birthdays passed by and there was no room for gifts. People gifted us things to pretend as though those were our gifts from food banks and things like that.

And it just wasn't working. And I blame Ken Coleman calling me a chicken by using statistics online that said basically that 25% of all people are in jobs that weren't so great. And they are just too scared to do anything about it. And I did apply for another job. And I started a new job in January 2020 and got an immediate 50% raise. Oh, my goodness. Oh, there we go. And I have since become the STEM department chair and doubled that.

from where I was previously. Oh my goodness. Like we didn't have big enough shovel. And in 2020, we did not have daycare bills because no daycares were open. And, um, and so we, I was a full-time working stay at home mom, changing diapers on web calls with no camera, but you know, just, yeah, but doing both of those things. And, um,

making the best of what was a very bad year for a lot of people financially it helped us push us in the right direction yeah you were able to turn the corner yeah and your your bigger shovel as you said so that enables you to get the whole mess cleaned up so you kind of knew what to do but it was just tight and then you change the shovel size and then COVID helped not COVID but I mean being at home from the quarantine helped I guess the better way to get some expenses COVID didn't help anything but yeah uh

But anyway, I mean, Fauci didn't help anything for sure. Well, $2,000 is a big savings. That's big. That's huge. Yeah. Yeah. Well done. Well done. So proud of y'all. How's it feel to be free now? Oh, it's been great. What a journey. I...

And we just closed that door, you know, we just closed the door of being in debt. So we still feel, we still feel like, you know, keep everything as tight as we can. And I'm okay with that. Yeah. Yeah. That's fine. I haven't changed my grocery budget. It's been, it was about 300 in 2019. It's now gotten up to about 600, but I'm still very proud of myself to have been able to stay under that grocery budget. Yeah. That's money is not a math problem is so true. Like from the math professor, like I was the,

solution and the problem all at the same time. I knew the numbers. It's just sticking to them. That's right. That's right. Wow. So what do you tell someone who is in your situation? Talk to that person who they're in the fertility battle. They've got debt. They don't see the light on the horizon, right? Talk to that person right now. And you know, God is bigger than your problems. And just because you can't see the exit doesn't mean it's not there for you. You can get through this. And surrender. I mean,

I would love to say that it's this, that, and the other. It's Jesus Christ alone. Come on now. The point when we get to just surrender and stop trying to control it and I'm going to make this work and I'm going to get myself pregnant and all of that. Like, no. The best thing I ever did was just let go. Just to let go and let him direct the way and him direct the story. And just him seeing us on the other side

I didn't do it. He didn't do it. I mean, we did some stuff, but I don't think we could have alone ever got there had we not got to the point where we just surrendered and say, okay, Lord, you handle our storyline. Yeah. It is amazing when you surrender and plant corn and go, I'm not in charge of sun and rain. Wow. I'll plant the corn, but I'm not in charge of sun and rain. Yeah. It helps.

Helps a bunch. There's a huge release there. Proud of you guys. Way to go, heroes. What a testimony. That's great. A couple of beautiful babies, and these girls, they're with you. So it's Lily and give me the other one's pronunciation. Jalixa. Jalixa. Jalixa. Lily and Jalixa.

I love it. Look how pretty they are. So beautiful. I love it. Very good. Well done, you guys. Hey, we've got the Baby Steps Millionaires book for you, the Total Money Makeover book, and the Financial Peace University membership. Count it down, guys. Jason and Cassandra. Here we go. $224,000 paid off in 48 months, making $107,000 to $158,000. Let's hear a debt-free scream. All right. Three, two, one. We're debt-free! Woo-hoo! Yeah!

Love it. A great story. Wow. Merry Christmas, America. Wow. This is The Ramsey Show. Our scripture of the day, Colossians 4, 5. Be wise in the way you act toward outsiders. Make the most of every opportunity. Charles Dickens in A Christmas Carol. It's the 180th anniversary of the book publication today. No space of regret can make amends today.

for one's life's opportunity misused. You don't hear that kind of language syntax used when you're talking about it was the best of times, it was the worst of times. Bah humbug, right? But no space of regret can make amends for one's life's opportunity misused. Very powerful. Brandon is in Cincinnati, Ohio. Hi, Brandon. How are you?

I'm fine. Merry Christmas to you and Jay. It's a pleasure to talk to both of you. Merry Christmas to you. How can we help? So, uh, Dave, my wife and I, we are, uh, newly in baby step three. We are renters. Um, I have a, I just spoke to my HR department because,

Because I have a corporate credit card, so my company's name is on there, and my name, I have it as an authorized user. So I have it to pay for my work expenses when I travel, submitting receipts and expense reports. And so I was calling today to ask about... Who's the card with? It's with my company. No, I mean, is it American Express? Is it Chase? Is it...

Visa, MasterCard? Citibank. Citibank. Citibank, MasterCard, or Visa? I believe it's either one of those. It's one of those, right? Correct. And it's in the company's name and you're an authorized user? Correct. That's right. Okay. I'm with you now. I'm catching up. Okay. Good. Okay. So, yeah. So, I...

I spoke to them and to one of the HR leads, and I was asking about, like, can I do a business debit card or could you advance? You don't need to. You're not liable on this card. Oh, I'm not? Okay. No, you're fine on this card. You don't want a corporate Amex because the corporate American Express requires you to sign for liability.

But a corporate visa or MasterCard with a standard bank like a Chase or a Citi is not going, you're not liable. You're just, your name is on the card. Let me give you an example. I did not know that. Yeah. Like, I've got Visa debit cards here at the company. Okay? Right. They're our company's account, our company's card. Okay.

but I don't know. Do you have one of them? I do. You have a company card. Yeah. Okay. She's an authorized user on it, but she has no liability. If there's misbehavior with that account, the company is the only thing that's liable, not Jade. Now, if she misbehaved with it, that'd be different. But I'm saying if some kind of thing happened, it doesn't come back on her. Authorized user just means you're allowed to sign for the company.

Well, what's the difference with the Amex? Amex is a bunch of shysters, and I can't stand them. And their Amex corporate cards require the employee to also be liable. What? Wow. And I've had several clients over the years come in that their company went bankrupt and left Amex.

them holding a $15,000 or $20,000 Amex bill. Wow. Yeah, but that's not going to happen with Brandon. Brandon, you're safe. You're fine. Don't worry about what you got. You're good. Well, Dave, can I ask you a question on behalf of other listeners? Okay. Let's say if they had like an American Express business card, a credit card, if they were in my shoes and baby steps three, like just starting out, how...

I would turn it in. I would get off of it. I would cancel it. I would not participate with American Express in any way. It's dangerous. Should they prioritize, like, hurrying up and finishing day three? It doesn't have anything to do with it. I would go into the company and go, get my name off of this. I'm not going to sign for anything using this, period.

Gotcha. Here's what happened. I had a guy who went to his company, sent him to Europe, and he was picking up some tech equipment. He came back, and the tech equipment was shipped in. It was $25,000 worth of stuff, and he put it on the company Amex card. When he got back home, went to the office, the office had a padlock on it. They were in bankruptcy and shut down. Amex chased him down for the $25,000, and it was a company card. Right.

Now, that's not true with your Citibank Visa corporate card. Or it's not true with the debit card that Jade is carrying. You're just allowed to sign for them is all. You have not signed an agreement to sign for liability. Wow, a lot of people just got a wake-up call on that. Yeah, really dangerous.

Yeah, but for those that are in that situation, how should they cash flow it? If they were in Baby Step 3, should they finish that first? If they had to get reimbursement, like pay the expenses up front and then get reimbursed? Yeah, I guess they're going to have to cover their own expenses. I'd set up a separate debit account just for travel and that kind of stuff if Amex is the only way your company will do it. But I'm telling you, man, most companies have moved away from Amex because of that.

Most of them are doing what you're doing. If they're using a credit card, they're furnishing a corporate card or they're asking you period. They don't have anything and they just ask you to use yours and then they do a reimbursement monthly. A lot of companies still doing that. But we furnish the equivalent of what your company is furnishing. Only ours is debit. Yours is credit. But like Jade has a Ramsey Solutions for travel because Ramsey personalities do a lot of travel.

I probably got 100 of those things out in the building here, give or take. I signed some stuff today, this morning, for one of our senior VPs who was moving some stuff around on it. But anything she buys, I mean, she's not liable for the bill. And you're not liable for the bill in this case either. So you're fine. I wouldn't worry about it at all. PJ is in New York City. Hi, PJ. How are you? Hello, Mr. Ramsey, Ms. Warsaw. Thank you guys for having me on. Sure. What's up?

So just to, I guess, uh, set the foundation. I'm 23. I was home little to no expenses. Um, I have term life insurance for 35 years. I have a Roth IRA. However, at the moment I have little to no income. Um, I do have a, uh, well I was, I joined, uh, uh, I guess you can call it an MLM for about a year, year and a half thinking it would, uh, work out for myself. And, um,

and I realized that is not the way to go. Okay, so now you're looking for a job? Well, I actually have one lined up. I'm taking some of my securities licensing exams at the moment, and I'm lucky to have a connection in the industry where once I pass those exams, I have a job lined up.

So that'll be by the, should be a little bit after the start of the new year. Good. So I'm blessed to be in the position that I'm in. Okay. So now we're in February and you're making money. All right. Now what's your question? Correct. So the thing is, I really have little to no education and knowledge on credit. Of course, I don't want to live at home forever. I've done my research online. However, I'm just slightly confused. So I figured why not ask

ask you guys i just really don't even know where to start i don't have a credit card i pretty much just have a debit card yeah so why do you need credit uh that's the thing i'm not too sure if i do or don't need it i don't think you do credits for people who want to credit is for people who plan on taking out debt and borrowing money for their lifestyle that's that's the only that's the only reason it exists

So if you have said, I don't want to borrow money and I don't want debt. I'm going to pay cash for my life. Then you don't need credit score, do you? I don't believe so. Just I guess would be, I guess the noise I've been hearing growing up and whatnot is if you want to get a house one day, you need good credit score. Yeah, the two areas most people are going to push back on that is A, if you're going to buy a car, but we plan on buying our cars in cash, right? Is what it sounds like you said, which you can. You save up, you buy cash cars, right? Yeah.

The next one is the mortgage. People push back and say, yeah, you can't buy a mortgage without credit. And you actually can. You can buy a home with a zero credit score. So if you never take out debt or maybe you pay off your debt, eventually your credit score will roll to zero. And if you never take out debt, it'll stay at zero or indeterminable. And a zero credit score is just as good, I would say better than a good credit score or high credit score. You can do just fine.

the same thing that you need to do when it comes to buying a home. And so you're just doing what's called manual underwriting and you get a mortgage company that knows how to do that called like Churchill Mortgage that we endorse as an example. So PJ, I like what you've done. Just keep it simple, man. Don't go in debt so that you have the opportunity to go in debt so that you have the opportunity to go in debt so that you have the opportunity to go in debt. That's called dumb and people do it every day.

That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

If you're a leader, your personal growth matters for your organization because whatever you lead can only grow as much as you do. I know from experience. I've been CEO of Ramsey Solutions for over 30 years and now I'm sharing that leadership and business coaching experience with you on the Entree Leadership Podcast. I'm taking your calls and helping you figure out how to overcome challenges within your organization. One episode could change your business. Check it out on Apple, Spotify, YouTube, or

on the Ramsey Network app.