Shownotes Transcript
Brought to you by the EveryDollar app. Start budgeting for free today. 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. Dr. John Deloney, Ramsey personality, number one best-selling author, Ph.D. in counseling, and host of the very popular Ramsey Network show, The Dr. John Deloney Show. He's my co-host today. Open phones at 888-825-5225. Christy's in Sioux Falls, South Dakota. Hi, Christy. Welcome to The Ramsey Show. What's up?
Hi, Dave. How are you doing? Better than I deserve. How are you? I am hanging in there, holding on to God's promises. I hear you.
- My husband, we have six children together. We've been married for almost 20 years and he wants to file for a divorce this summer. I've been a stay-at-home mom for 14 years. I've had a little bit of part-time income, what works with our kids' schedule, but essentially everything's valued under him, so to speak. Just trying to figure out how to financially prepare myself for everything coming ahead. - Holy moly. What happened, Christy?
Honestly, I really don't know. Back in 2010, when we had our third child, we actually used to teach FPU and paid off all our debt. Things were going really well. Had three more kids. And then in 2020, my husband, when we refinanced our house, confessed to me that he had been using credit cards and drove up some debt. So we took out a little extra money on our home loan to pay off those. He promised me he was going to cancel all those and they were going to be done. And then...
Earlier this year, I found out again, he had driven up almost $60,000 in credit card debt. So we took out a second mortgage against the house to pay for all that, because as you can imagine, all the credit card fees was hundreds and hundreds of $1,000 a month, not to mention the balances. And then he kind of things went downhill really quickly after that. So, um,
Yeah, it's been a very difficult year. Our oldest started college this year. We've got kids from 18 all the way down to four years old. The four-year-old is in my preschool class currently. I'm a preschool teacher to try to make money because I can have my son with me. So, yeah, life's a little chaos. I just want to...
Try to be prepared. I just found out that he hasn't been paying my life insurance, so I'm going to need to get a new life insurance policy as well. Just kind of everything's up on end. When you say he's filing for divorce this summer, is he still living with y'all? Yeah. So, yeah, you don't get to make that like that's like pulling a pin on a grenade and rolling it in the living room and saying that's going to blow up sometime. You don't get to do that.
Like, cause you're, you're, you're, you're dead men walking. There's going to be a cancer in your house. He's not saying you don't get to do it. He's saying your husband. Yeah. He didn't get to do that. If you're divorcing me, then you're out. And because here's the thing, our marriage back in the fall and stuff, and I wasn't allowed to talk to him anymore. And he quit sleeping in our room and started hiding in other parts of the house. And I'm not allowed to know where he's at. And we don't communicate about the kids. It's not allowed to live there anymore. Yeah. He's out.
Because now he's now he's a man who has said, I don't want to be in a relationship with you anymore, spiritually, romantically or legally. And if your spirit leaves, you should take your body. Yeah. Now he's a man that is causing havoc in the lives of your kids and with you. You can't have your cake and eat it, too, on this one. Yeah. I don't know what to do about it, though. So have you contacted an attorney yet?
I'm meeting with one on Monday to figure out what some of my legal rights are. Good for you. And what does your husband make a year? He makes, I think it was $117 on our last tax return. Okay. So your legal rights in most states with six children and a 20-year marriage are, he's not going to have much of that $117 left by the time he finishes with alimony and child support. It's almost all going to go to you and the kids. Okay.
What if he pushes? I was a 50-50 state. No, that's the law, honey. He didn't get to push. Okay. His opinion doesn't matter. Dave, tell me if I'm wrong. I think 50-50 is about assets.
50-50s assets, but I'm not talking about his income. I'm talking about his income, the amount that a judge in most states will give you on a 20-year marriage on alimony plus six children worth of child support percentage-wise. Those two things together are going to take up a lot of that $117, and it's going to go to you to take care of the kids. So you're not going to have to take care of the kids and feed them and pay the house payment.
on a part-time daycare salary. And you can get your life insurance. And by the way, he can go ahead and start paying that now when he moves out next week after you meet with your lawyer. Your lawyer can explain to him that that's what his stuff is going to be, and so he can start paying that now. In most states, the judge will require that. I'm not an attorney, and I have no idea how you do things in South Dakota. But in most states, that's a general rule.
law the way things flow okay and so i'm always um
I'm amazed that guys think they're going to just walk away and take all of their income and they have six kids left back there. Well, they imagine it's like, it's like, I'm going to, I'll be sure and send you $5. Well, Christy, I want you to ask your attorney this one important, multiple questions, whatever you have, but make sure you ask this question. I'm hearing this happen more and more and more where somebody says, I want to divorce you.
But depending on what state you're in, whoever files, quote unquote, looks like the bad guy.
So I'm wondering here if he's trying to force you into filing because he thinks somehow that's going to help him financially on the back end. We can go to a judge and be like, I don't know, man, she just she just filed on me. And here's poor old me. So ask your attorney if it matters who files the paperwork in most states regarding child support and alimony. Doesn't matter. Won't matter. Good. It won't matter. Now, some other things that we're arguing about, maybe.
Okay. A judge might step in and have some leeway, but it's a matter of law. It's not a matter of the judge's whimsical decision. But Dave, I cannot tell you how often I'm hearing this now where somebody doesn't want to, they want out of the marriage.
and most of the time they don't want to be the bad guy spiritually before god i'm not the one that filed although i caused the thing i caused the thing i left you i just i caused chaos in your house and finances but abandoned you with six children yeah after running up credit cards three different times deceptively this guy's a real treat yeah and you dude you just said it is so important people think when they like
They're in a tough spot in their marriage. Everybody gets in those moments. Or there's a bunch of kids running around. You're exhausted, works crazy, the government's – all this stuff. And you think, if I could just extract myself from this situation and plant myself somewhere else, all this would go away. I want to get a divorce. And Dave, you called it out. It's important to know that's just not how divorce works. When you extract yourself and you just plant yourself somewhere else –
Man, it comes with so many other strings and payments and connections and juggling kids' schedules and all that stuff. So many things that the law is going to dictate to
Even without Christie wanting it, the law is still going to make him do certain things in most states. Again, not an expert. I'm not an attorney, and I don't practice law in South Dakota. You need to talk to somebody that does on Monday, and then you need to start taking a position of strength on this. This guy is playing weird stuff going on here. Yeah, it's sad. I'm so sorry you're facing that, man. I hate this for you, Christie.
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Oh, my kids have been saying that since they were tiny, which is what I'm calling about. So I live in Denver and with my husband and our two daughters, our younger daughter, Mary, who always used to say better than you. She got it wrong. I'd say, what does Dave say? But anyway, she's 19 right now. Three years ago, she was in a catastrophic car accident.
And she's okay, but she's got ongoing lifelong things. The settle, I just got a check. So she's 19 years old. She has $650,000. Um,
of which is literally sitting in a high in a, it was sitting in a 0.01% saving her savings account. And until I knew what to do, I at least got it into without commitment or anything, a 4% for six months, um, high yield savings. But, um,
My question is, the only debt she has is the one year of school. She just decided to take a gap year for next year because medically and the appointments are too much. So I don't know if she's going to go back, but we do have a student loan. But if she doesn't, it's going to kick in in six months probably. But the question is...
We live in a really great area for rentals and she is interested in real estate, which is what she's during her gap year this year. She's actually going to be taking some classes and interior design and all that. But an opportunity came up that I wanted to get your thoughts on because I
The rental market here is really strong and solid, and we might have an opportunity. I don't know what to do with the $650,000. I would not buy a rental property for a 19-year-old that has diminished capacity due to a car wreck that gave her $650,000. No, I would not. Okay. She doesn't need the drama that tenants represent and that a leaking roof represents and the heating and air going out represents. Managing property is a pain in the bohunkus.
Okay. So I, I, okay. I would, I looked into it a tad bit, so I'll take your advice and not go further on that. The only thing I was thinking is with the management company and all that, I think it could based on what I've seen after prof after these and stuff again, and talking to a real estate friend of mine who would be doing this with us, it looks like the profit
If we were doing that, and I'm not saying it sounds like we shouldn't, but my mindset in calling in was her prof. I'm sorry. Okay. Is she of such diminished capacity that you're now her power of attorney? No, no, no. So there's not a we, it's a her. Correct. Because it's not your decision, it's her decision. Correct. Okay. We're close in talking about it, but it's zero to do with me. We've already taken back. It's got a lot to do with you in this conversation. You're the one driving this truck.
Well, because I wanted to ask if what she could make. No, I mean, you went out and found a rental property. You went out and found a management company. You went out and wanted to invest in real estate. You're the one that thinks the rental estate market is, rental market is, I'm not hearing any of this from the 19-year-old. Okay. That's what I mean. So let's just take that all off. I'd love your thoughts on what to do. I would sit down, I would sit down with a SmartVestor Pro.
And I would park this money and not touch it and let her go make a living and or finish school. And if she wants to pull enough out of it out to pay off her student loans and finish school with, that'd be a good investment. But she just needs to be really conservative and finish emotionally and physically healing. You said she's having ongoing issue. What is the ongoing issue from the wreck? So...
When she had the car accident, her retina was detached. She makes four months of school. She's had seven surgeries. And part of the ongoing and why it took so long to settle was because we weren't sure what was coming. Now we have a good sense of, I mean, she's got probably...
She's on our insurance right now because she's 19, but our portion up until now, it's probably $6,000 every year just for these quarterly portion of her Botox shots for her migraines and all of her... She's got neck issues and she's had several surgeries, but she's going to be able to work.
But I set aside what I know that we've had, and I just was like, I don't want to touch it. It's not going to keep her from working and prospering, but it is going to cost some money in ongoing medical for at least a while. Correct. Yeah. Okay, that's fair. So, yeah, I would just park that money with a SmartVestor Pro in some good mutual funds where you're making more than high-yield savings, and I would make your life very comfortable.
Very uncomplicated. Let her life be very uncomplicated. Dave, is there a – I'm just trying to think. If I've got $650,000 in an account and I have a 19-year-old, the goal of that money – and tell me if I'm out to lunch here. It's not like $650,000 fell from the sky for me to invest and try to get a maximum ROI on it.
I want to do that, but the goal of that money is to make sure my kid is at least a little bit directionally whole. That's the point of that money, right? Yeah, so we take care of the medical bills. I want to be extra conservative with that because the thought that the house burns down or some tenant trashes it and I need to come up with another $50,000 to get it right, that seems to be the worst thing you could do with that money.
I mean, you've got a destabilized situation with a very young person, and that's not who needs to be a real estate investor. But I would rather make 4% or 6%
conservatively over time and make sure this money never goes away, then... Well, I'm comfortable with some good mutual funds that have long track records and just pull. Because let's say it makes 10% instead of four. You pull off $60,000 and the thing just sits there perpetually. And that can let her go on to school, let her go on and start a real estate career, whatever it is she's going to do. And that can be some massive money. But it's the amount of stress that...
that it takes to make that money compared to managing rental property is almost zero. And I love rental property, but it's the last thing you need to be doing in the middle of a stressful situation. Especially as a 19-year-old. It literally is the definition of stress, being a landlord. I mean, that's how you define stress, being a landlord. And I don't care if you've got a property manager or not, because the property manager is just going to call and tell you
What the tenant was doing. I mean, it's too late. You still got to – you're the one absorbing the blows. And you need to send us $350 because we sent somebody over there to repair something. Yeah, yeah, exactly. That probably could have gotten done for $200. Right. Yeah, that kind of stuff. Yeah, that's – so property managers don't magically make real estate easy. That's not how it works. Even if they tell you that, they do.
And especially if they tell you that they do. Rio is in Tampa. Hi, Rio. Welcome to the Ramsey Show. Hey, how's it going? Better than I deserve. What's up? So I was thinking about trading in my car that I finance now to get a truck for work reasons and just like investing in myself, I guess.
Um, it would lower my car payment and it would also lower, lower my car insurance, but then I would lose all the equity that I already have paid in my car. So I just don't really know what to do right now. I'm sorry. What are you investing in with a truck? I don't understand. Um,
uh, like work. I've always been in like the construction. So I just started my LLC. I want to take my, uh, my painting business more seriously. And I, um, I do sales in roofing. So it's like easier to have a truck cause I have the ladder and then I can take a ladder out and just kind of get up on the roof and stuff like that. So it's hard to do the things that I like. The roofing company that you work for doesn't furnish a truck with a ladder for you to go do estimates. No. How do you get on the roof?
So I usually have my boss meet me or I, it's like a commission-based sales truck. How much did you make last year doing that? I just, well, I just started working with them. Yeah, you don't go buy a truck for somebody you just started going to work for. No. Yeah, no, no, no. I get that 100%. Yeah, no. No, and I'm going to sit right tight until you get to making some money, kiddo. Right now you're dreaming about stuff. Go make some money.
Go make some money. Go work and make some money. And that'll solve a lot of these problems. All right, Dave, you have some strong opinions. Possibly, yeah. I think so. Okay, because you really prefer credit unions over big banks. Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the
the credit union. So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. And what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union. So I find very few credit unions that aren't very customer-centric. Well, and I think we have found one that is incredible, and that's Fairwinds.
They are an incredible credit union that is really out with the heart to help the customer. They're the right kind of people with the right kind of values. And they've done a really, really good job with customer service. And the deals that they're offering, the Ramsey Tribe is incredible. Yeah, absolutely. And I love it. The things that we teach, they so line up with. And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account. And I'm not kidding. It took less than five minutes.
it was so user-friendly. Like the step-by-step approach was unbelievable. And then the next day, my phone rings and it says Fairwinds on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience. And I...
I so, so appreciate that. Plus, anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app. And you'll have free access to over 33,000 ATMs. Hey, you guys know how much I hate banks in general. And so for me to do this is a big deal. Talk to our friends at Fairwinds.
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Ben is in Phoenix. Hey, Ben, welcome to the Ramsey Show. Hey, how's it going? Better than I deserve. What's up?
Hey, so I have a question. I have a wedding coming up, kind of doubles as a vacation, and it's for my brother and the whole family is going to be there. And I have the means to kind of make the experience a little better by spending a couple extra bucks if I choose to. But I'm not sure if I should do that, if I should maybe do it on a budget or maximize this hopefully one time experience for my brother. I'm sorry. Who's the wedding? You or your brother?
My brother's getting married, but my whole family's going to be there. It's kind of a destination thing. Oh, I see. You know, the wedding's one day, but we're all going to be there for probably about 10. I see. And so you want to pay for the family to do some stuff while you're at the destination. Yeah, and unfortunately, my siblings aren't as, you know, financially responsible or savvy as me. How much is this gift going to cost you? Well, so that's the thing. I would probably spend an additional like $1,000,
uh, to do the things that we were interested in doing, but that's, that's probably the most it would get up to. Are you in debt? Uh, no, I, I'm not in debt. Okay. How much money do you have? Uh, in savings, I got about 15 grand and then my Roth and 401k probably combined to be about 55, 60. And what do you make a year?
Base, I make 82, and then I can bonus up to 50% of that. Okay. So can you afford to set $1,000 in the middle of the floor and set it on fire? I can. I think the bigger issue for me is I kind of feel some resentment towards my siblings for not being able to participate as much as I can. They didn't do anything to you. No, I know. I know. I know. Why do you feel resentful of them instead of thinking –
Dude, how cool is it that I've done pretty well and I get to just have a good time? Yeah, I think it's because... Let me ask you this. Why do you keep in score?
Yeah, that's a good question. And I don't know if it's necessarily me keeping score as much as it is watching them live their lives and doing things that have led to them not being able to be involved financially in this situation. But here's the thing. Hold on, hold on. It's not like there's a really cool opportunity and somebody said, hey, can everybody pitch in? And they said no.
Or they say, we don't have the money. Would you give me some money? Would you give me some money? They don't even know you're doing this. You're rolling in there. You're like, dude, I could do something awesome for everybody. How dare you not have the money to do the awesome thing that I want to do for you? You get what I'm saying?
Yeah, totally. So let me backtrack a little bit. The initial thing was the gift, the wedding gift. So my older brother was not going to do a photographer. And I said, that seems ridiculous. Like, why don't we band together as a family and we pitch in to purchase a photographer? You know, everyone kind of seemed on board. And then about a week ago or two weeks ago, when I went to go book a photographer, pretty last minute, I know, it sounded like everyone else kind of wasn't able to do that. So I decided just to do it anyways and told them if they could pitch in, great. But if not, whatever.
Um, it is what it is, but I, I, I guess I shouldn't have said that necessarily if I didn't feel that way. Right. Yeah. But,
And yeah, I know it's definitely a me problem, but I guess, I don't know. I'm just trying to like help them get to a point where they can do these types of things. And that's not for a wedding weekend, dude. Not in my opinion. My opinion for a wedding weekend is to have a good time and laugh. And one of you guys has done great. I don't know. That's Dave. Tell me if I'm wrong here, but bro, you've won. You have the opportunity. Here's what you're going to look forward to in 25 years. Are you going to think back to this wedding and be like,
man i'm glad we all went on that fishing trip we all did that thing or can't believe they didn't have 75 each to go on like man just spend the money go have a good time with your family and friends that's that's my thought on it yeah you've got the money and that's that's what you want to do with it but don't do it if you're going to hold a grudge yeah or if you're doing it and it makes you feel superior yeah yeah and both of those things are kind of coming out in the conversation
Yeah, exactly. Yeah. So, yeah. So, you know, I'd put those things aside or I wouldn't do it. One of the two. Um, and just say, that's the way it is. It's just, you know, we just did the wedding cause you're not like in charge of the wedding. It's not your wedding. It's your brother's. Yeah. And if he says, I don't want to, I don't want a photographer or I can't afford a photographer. Yeah.
Then until he says, well, he already bought the photographer. That's done. I know, but before that, his brother said, hey, we're not going to get a photographer. And then he took it upon himself to say, hey, that's dumb. I'll buy it and or we'll all pitch in for it. But it's it's I'm coming to solve problems that people are asking me to solve. And then I'm getting upset that I'm solving them. Right. Either be invited into this deal or just be really great, gracious and giving and move on with your life, man.
Yeah, yeah, yeah, yeah. You got too many strings attached to your grand, your thousand bucks. It's not that big a deal. So either let it go and let it go freely or just keep it and just keep your mouth shut and enjoy the wedding. And then do the teaching on finances later after the wedding. Brent is in Raleigh. Hey, Brent, welcome to the Ramsey Show. Hey, Dave, how's it going? Better than I deserve. How can I help?
So I'm a full-time fireman. I'm 25 years old. I make about $60,000 a year. I've been contributing to my Roth for the past five years, fully funded. And I want to start a part-time business doing some small-scale excavating residential homes and whatnot. And I'm looking to buy a piece of equipment. And I want to know if it's smart for me to buy it. I have about...
$57,000 in cash in the bank right now, get a used piece of equipment for around $35,000 to $40,000. Would it be smart for me to buy this equipment straight out with cash? Would it be smart for me to finance part of it so I can have some left over in case of an equipment breakdown or truck breakdown? And I'm just looking for some advice on that. Well, most of the firemen that I know and I've worked with over the years do very well on their side hustle.
And because it's a wonderful schedule to be able to get to be able to build side hustles in. But I think I'm hearing that you are. It sounds like what is your experience with driving this piece of equipment? Have you done it before?
I have ever since I've been about 16 years old. My uncle owns a large scale grading business. So I'm pretty familiar with operating equipment. I've been doing it for quite a while. And what makes you think there's a market enough for you doing this part time with this one dozer to make 35 grand back on a side hustle? That sounds awfully deep. Um, so I'd be looking to get an excavator by, uh,
Some of my family does pool business, and part of that would be digging pools for them on the side. A guy that I work with does septic tanks part-time, so part of the business will be from him. Kind of relying on both of them to get my foot in the door. Okay, if you've got some of those things moving, some pools and some septic tanks to dig, what kind of money are you thinking you would make?
I'm thinking anywhere from $1,500 to $2,000 a job maybe. And how many jobs are you going to get a month? I'm shooting for maybe two to three a month starting out with. Yeah, so you break even in a year. So you work for free for the first year. Correct. I think there's better side hustles than working for free for a year. Is it possible to rent one and give it a shot and see how this first year plays out?
Absolutely. Average rental for a piece of equipment like that is about $1,500 a week where I'm at. Yeah. That does sound right. So here's the thing. I don't want to do a side hustle that I break even on in one year. If I'm going to do a side hustle, I need to break even on it in two months. And so I'm not excited about investing $35,000 to make $35,000 the first year.
I just, I, that's not a good business model for you. I think you can use your effort doing something else. Now, I don't know if renting one is the answer. Probably not unless you lined up five jobs in a week and, um, you know, you rent it for 1500 and you make 8,000 in a week or something. You could do that. But, um, yeah, no, I, I, Brian, I would not do this. Um,
But I will tell you, I want you to continue to explore the idea of something you can do as a side hustle working for yourself without such a heavy investment. Because a lot of firefighters make another $60,000 a year doing that, not break even in a year. Statistics show that half of Americans don't have unemployment.
enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids.
And I immediately went and got term life insurance. That's a gut punch. And you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. They don't know what to do next. Me too. I mean, you're going to have a crisis here. And, you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow.
That's exactly right. These are the two options. Take care of your dadgum family, man. Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually...
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Question of the day is brought to you by Y Refi. Y Refi refinances defaulted private student loans that other places won't touch and helps you get your life back. So kick your private student loan debt to the curb. Go to Y Refi dot com slash Ramsey. That's the letter Y R E F Y dot com slash Ramsey might not be in all states. My husband and I are on baby step four. This is from Lauren in Pennsylvania.
Husband and I are on baby step four. We're in our 30s and we have two kids under five. We both worked overtime inside hustles to pay off debt and get our emergency fund in place. We work opposite schedules to avoid daycare fees. I love my husband for his work ethic, but we seldom see each other and our children rarely see us together. We don't live paycheck to paycheck anymore and we have a budget that we stick to.
I can't convince him that work isn't the only thing that matters. Are my feelings reasonable or should we grind it out and hope our marriage survives? Baby step four, you move from intensity to intentionality, and he has not done that. Correct. He's still getting it like his hair is on fire, like he's scared to death. And so, no, we would recommend that you normalize and create a sustainable relationship
Work rhythm. And what you're saying is, is this is not sustainable. Right. And work rhythm, by the way, doesn't mean that there's not intense periods of long hours. You don't see each other very much. Somebody's picking up way more slack than somebody else. That's every that's every job. It's every marriage. It's every life. But that you can't do that forever. Yeah, it's a rhythm. The tide comes in. The tide goes out. Yeah.
So like I put dishes away after a dinner party and cleaned up until almost midnight last night. But next week, you and I will be gone all week. So she'd be on her own for that one. That's exactly right. So, you know, that's you see what I'm saying. So that's that's the tide goes in. Todd goes out. Right. It's a different thing because next week you and I are working. We're going to be working.
We're going to be in three different cities and travel and, you know, all that kind of stuff. So media and all, you know, all the stuff that we do when we're out there running around in circles. But yeah, so that's the trick. And I think what's scaring you is, is that this hasn't, there's no, you're supposed to let your foot off the gas when you hit baby step four. Yeah.
Not all the way off, but you're not pedal to the metal. And not to preach here, but this is that moment of pictures and words. You both said the words, when we get out of debt, we get to baby step four, and you had a picture of what that would look like. And that's you all sitting on the couch, hanging out, laughing, going for walks. And he did have a very different picture, which is I'm going to keep working hard, and I'm going to try to get this house paid off as fast as possible.
What you all need to do is to get away and exhale, even if it's just for a meal, and just exhale and say, hey, we made it. What do we want this thing to look like? What's a very clear picture of baby steps four, five, and six? What's that world going to look like for us? Because this isn't sustainable, and it wasn't designed to be sustainable. No, it was just you do whatever you take to get through baby step three. That's right. That's intensity. But then once you get here, time to make a little shift. And it's not –
Um, it may be that he, he, um, is just excited about finishing off the house and finish, you know, finishing off the wealth building journey a little bit more.
It might be that he's scared. He may be like me where I didn't know how to be a dad and I wasn't super great at it. And I didn't, I always felt like I was doing everything wrong and I was really successful at work. And that just became a place where I knew I could go support my family and not feel like I was a failure all the time. Either way, wherever you find yourself, you'll have to sit down and have that conversation. Yeah. Buddy of mine hit a golf shot the other day. I said, man, perfect. He said, words you never hear at home. Yeah.
Never. Kevin in Sacramento. Hey, Kevin, how are you? I'm doing well. How are you? Better than I deserve. What's up?
So, Dave, I am in baby step five. I currently am renting, but I'm planning on building a house for my family soon. So the main question is, so I know my parents' retirement plan. I know their net worth, their house and everything. And after having calculated everything for them,
They're barely going to scrape by. So I'm wondering, should I go towards baby step six or take a much more active role in my parents' retirement? Have they invited you into that conversation? Are you doing this for them? So we had a financial conversation, and they told me everything, and I actually did this calculation for them because
I got that part. I got that part. But did they say, hey, can you help us? They didn't actively say they didn't ask me actively, but it's just me seeing their situation. And I just feel like they're they're just not thriving. You know, they're barely going to survive. And now and that's because they need to sell some stuff that none of y'all want to talk about them selling. Right. Or they got to keep working jobs that no one wants them to keep working. Right.
Yeah, my dad, he's hitting the retirement age zone. Yep, retirement's not an age, dude. Retirement's not an age. How old is he? He's turning 65 soon. Well, I am too, and I'm not quitting.
And I don't even need the money. My mother has a, my mother's a retired nurse. So she has somewhat of a pension coming. I know, Kevin, you're not hearing what we're saying. They need to keep working. Yeah, it's not like Michael Scott that went out and declared bankruptcy that way. I declare retirement. Retirement isn't just an age you get to. If y'all are looking and saying we're not scraping by, the variable you're not taking into consideration is they can't stop working then.
They want to. That's the world they want to have, but they don't have enough money to do that. What's their house worth? Their current house worth is $600,000, but they paid that off. Yeah, and where is it? North Carolina. Okay, and so the house is paid for, and they have a pension coming in, and they're going to have to work some to supplement the pension and Social Security to stay afloat. Is that what you're saying?
Yeah, so my dad, he's, yeah, so the thing is, like, I mean, I agree that if you can work, you can work. But my mother, she had to retire early due to health issues. My father, he's completely healthy, but recently he's developed, like, a heart condition, and he had to get his valve replaced.
So what are you asking us about your situation? Can you help and pitch in? No, I think you need to coach them on how they take the money that they have and the opportunities that they have to make themselves a sustainable life. I don't think you supplement this. You don't have the money to supplement it, number one.
based on what you told me anyway, because there's not $5 million laying somewhere I don't know about in this conversation. Yeah, I definitely don't have $5 million. You don't even own a house. And so, no, you're not. They own a $650,000 house. They kind of got it up on you right now.
And so I think they need to reconfigure their life to live within the income they can create and or have coming in. And if that means selling the $650,000 house and moving into a $350,000 condo, I'm okay with that. And if that means that they work some and she's a nurse but she can't maybe go walk the floor as a nurse, but she probably can do a lot on remote work as a nurse. I would imagine there's lots of remote things she can do sitting at a computer, you know,
using her nursing knowledge that will make some money to come in and without straining her physically. And once his valve is replaced, what can he do? Probably not going to be digging ditches or running marathons, but could he do some things with his mind that he has learned over the years and bring in another $1,000 or $2,000 a month consulting fees on something? Sure. And those are the kinds of things I want you to coach them on, not you start writing them checks because it's tight.
Because you're not in a position to. And now everybody goes down with this ship because they won't deal with creating a sustainable mathematic situation. Dealing with reality is hard, man. Nobody wants this, but this is just where we find ourselves. Yep. It's a tough, tough thing. Sorry.
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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. I'm Dave Ramsey, your host, Dr. John Deloney, Ph.D. in counseling, Ramsey personality, number one bestselling author and host of the Dr. John Deloney Show on the Ramsey Networks. He's my co-host today. Andy's with us. Andy's in Chicago. Hi, Andy. How are you?
Hey guys, how are you? Better than I deserve. What's up? Okay, so I have a question. I just recently found out that my husband, the total of the credit card debt is
he's got is I'm guessing and assuming or not getting assuming, but I guess in 60 to 80,000 and I just keep finding out little things here and there of more. And my goal, our goal was supposed to be to get a house and move out of, you know, where we're at and the choices that he continues to make, for example, on wanting a couch that's,
That would mean going from like a hundred dollar couch. He wants like two to $4,000 couch and get into that debt. And now he brought up this morning that the easiest way we can get out of debt is to do like, it's a consolidation known where all the debt is put into one payment. And I feel it's like getting into more debt. It's not biblical. I'm like,
At my wits end, I don't know how else I could guide him besides saying it's a bad idea, and I don't know what to do, y'all. Okay. Yeah, that little part of the whole conversation is a bad idea for sure. The worst idea is the way you guys are operating. You're operating like roommates.
And your roommate has a problem over here. Instead of like the two of us together make our decisions together and we manage our money together to go to the dreams that we want to live together. And he's acting like a free agent just running around over here and you can't tell me if I buy a couch and I'll do whatever I want to do and I may or may not tell you. And that's really destructive, isn't it?
Yes, sir. And I don't know what else to do. I've suggested the budget. No, no, no. I've suggested the app. That's not where the problem lies. Here's the problem number one. You don't even know how bad this is. And until you both sit down and pull credit reports and you actually have real data in front of you, pull all three of them. And you look and see who do you owe money to. And here's why you have to do it that way because you don't trust him because he keeps lying to you.
He keeps telling you, no, this is it. And you find out there's a couch note. And then you find out there's another note. And here's the second problem. You tell him, hey, I'm so scared about our financial future. You know how you say those words to him? You're stupid. This plan doesn't work. Why don't you budget?
You don't say those. Instead, you say, I'm scared. Instead, you say, I'm scared. That's the way you talk to him. Hey, this is a dumb idea. And he doesn't hear that. He thinks, nope, you're dumb. And then he's hiding couch receipts somewhere. Instead of you saying, do you love me? Because if you do, I'm so, so scared about what happens next for us. I just brought this up today, and I think this is what led me to the call is I heard –
I just want to give you everything you want. It's not true. That is not true. That's a lie. Your conviction. He's lying to you. Your conviction is making me feel like... No, he's lying to you. I can literally live with an RV, get rid of everything, let's get rid of the debt, sell everything. These are the examples I have given him. Just let's get rid of everything we don't need. Pay off those cards. Get back up float and breathe. And no...
None of that is being heard, and I don't know what to do, y'all. Let him see this right here. He has. It's not working. I feel the devil is attacking, and I don't know what to do. No, it's not a devil. It's your husband being a twerp. It's not the devil. Don't blame the devil. He's not that good at it. No, I think the two of you desperately need to sit down with a marriage counselor.
Because I predict that in six months your marriage is going to be over if you don't deal with this issue. Because you're getting close to that point where the switch is going to flip and you're going to look at him and go, I'm done. You're dangerously close to that. Are some of your tears coming because you know that there's much more to come here? Yes.
Because I'm scared. Yes. He's not listening, and I just, I try to help him lead and find God, and it just is too much. I'm losing all my feelings. How long have y'all been married? We've been together about seven, eight years and married a little over a year. What's he spending $60,000 on? I don't know. He, for the last...
I mean, however many years he's, he's had a work injury. So he's put it on that. He said when he wasn't working, he put that on the credit cards and it just, I don't know. I don't,
I just, what I don't see is why is it so difficult to get rid of material stuff so we can pay this debt off? I don't, to me, it's a no brainer. If that makes sense. You know, I can go with living in a little square with minimal stuff and let's just get rid and work really hard. I can't even go out and work because the excuses is a medical condition. Well, I,
I'm willing to go through that medical condition and work just so we can pay this off. So how come he's not willing to do that? That's also. It could be any number of reasons, but I'm telling you right now, there's a listening to how you're mapping this thing out. I think there's other things going on, whether he's got somebody else on the side, whether he's struggling with some sort of addiction, whether he's wrestling with some bigger demons. I think there's something else at play. And my gut tells me that, you know, that to be true also.
I'm happy to be way wrong, but I think I'm right. Yeah, you won't get help. Am I right? Possibly, yeah. Okay. Okay, so money here is, it's the lights flashing on the dashboard. Your marriage has way bigger issues. Mm-hmm. How do you ask somebody to, you can't, we can lead a horse to water. You can't force him to drink. It's not about the money. You guys need to go to marriage counseling this week or your marriage is going to end. Yeah. Yeah.
If he hasn't left you already, he just hasn't bothered to move out yet. Yeah, you guys. And if he if listen, you say I'm scared and I can't get through to you and we can't get on the same page. We're going to have to have some outside help. I'm going to a marriage counselor. If you want to save our marriage, you should go with me. Yeah. And if he won't go with you, go anyway by yourself. And it's clear you've left me. If you want to save this marriage, you're going to come with me to this one. Yeah. You've got to you've got to rejoin me again. And we've got to build something for the future.
because the thing that the thing we were trying to do didn't work it's a mess and um you know because i andy i've worked in this stuff for 30 years and i'm not a marriage counselor john is but i do know that when people reach a certain point the switch flips and you can't get them back and i don't want that to happen to you i want to catch you before it switches and you're just done y'all go work on this before you're done
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Brittany is in Rhode Island. Hi, Brittany. Welcome to the Ramsey Show.
Hi, Dave. Thanks so much for taking my call. Sure. What's up? So our situation is that we're needing to buy a bigger car because we're about to have our third baby. Some dear friends of ours mentioned that they'd be interested in buying it off of us. And both my husband and I felt called to just actually give the car to them. The car is worth about $10,000. And then, of course, last week, the check engine light comes on. I bring it in for the repair. It's going to cost about $4,000. Okay.
Ah, wait a minute. Okay. What is a check engine light equaling $4,000? Yeah, so there's an oil leak that's kind of, you know, I guess standard to Subarus, and it's kind of all over the engine, and they've said at this point they need to take the engine out, replace all the gaskets, and it's about a 16-hour labor job. That would be the Subaru dealer.
It is, yeah. Yeah, bull crap. Absolute bull crap. The mom and pop shop gave us a $3,800 quote. So we're kind of looking at, you know. Wait a minute, who gave you a what? A mom and pop shop that we trust gave us $3,800 quote. So you've got two quotes and they're both in the same neighborhood? Yes, exactly. Okay.
And verified again. We've got some mechanics that we know. We've had a few people verify like, yes, this is the job that needs to get done. So maybe we find someone to do it for a bit cheaper, but still we're probably looking at like the $3,000 to $4,000 range. This couple offered to buy the car from you and you all wanted to give it to them. Yes. Why does anything change other than you say, hey, we're going to give this to you, but it's going to need $4,000 worth of work?
I guess I just feel like we offered them or committed to them a $10,000 gift and, you know, they can use it. And now we're giving them a car that, you know, may or may not. I don't know if this problem is going to recur. Where did this $10,000 number pop into your head? That's now become a because it's now become a debt. You feel like you owe them this. Yes. Who do you owe?
Yeah, I guess we don't. It just feels like that's what I committed. And giving them less than that just feels wrong for some reason to me. I don't think it's wrong. Well, if it had started with out of the blue, you felt like God told you to give them that car, maybe. But out of the blue, they were going to buy it, and you flipped it to free. Yes.
So that changes the equation in my mind and releases you from the obligation to fix the car. So instead of paying $10,000 for a $10,000 car or $8,000 for a $10,000 car, they're going to pay $3,800 to have their free $10,000 car fixed. And I think they still got a deal. An incredible deal. There's still a lot of generosity coming off of you, like $4,000 or $6,000 worth.
Okay. Yeah. No, I would have this conversation with a smile on my face. Like, all right, here we go, guys. You know how this works. We're going to give you this car. We're still going to give it to you. Here is both of the two estimates that we just got because, of course, the lights came on. Yeah, and if y'all don't want it, it's okay. It's cool. We'll just sell it to somebody else because we want you to know what you're getting into. Yeah. Okay. And everybody rolls their eyes. We don't want to give you...
a broken car and you don't know it. We want you to know what you're getting. It's not as good a gift as we all thought it was going to be because we drove it one more week and the engine light came on. If we, if you'd already had it and the engine light came on into two weeks later, you would have already, you'd be sitting in the same situation. Okay. Yeah. All right. So bring them into the decision and you think definitely don't pay the 4,000 to repair it. No, I'm definitely not paying the 4,000 to repair it. I wouldn't if it was me now. And I, I,
get that you have uh you really feel strongly you've done your due diligence on this but i'm just still struggling with an oil leak turning into four thousand dollars worth of every gasket and the whole stupid thing has to be replaced the engine has to be pulled i can't get there and i you know um i'm not a subaru expert but i have pulled a few engines and
Put in a few gaskets and I'm not a certified mechanic, but I'm also not going to believe in anything. Anytime the dealer gives me a $4,000 quote, that generally means somewhere else. It's at least 50% of that in general, just in general.
Okay, I'll give you an example. A guy called here last week. He 2,000 miles outside of the warranty, the engine in his two-year-old Jaguar blue. They want $35,000 to put a Jaguar engine in it. The dealer does. 2,000 miles outside of the warranty. You think Dave's doing that?
No, no, no, no, no, no. We're going to go down to what we used to call the junkyard, and then they called it the salvage yard. Now it's called recyclable auto parts, and you buy a used Jaguar engine from somebody that totaled theirs for $7,000, and you put that in there, and that's how you fix that car. Is it wrong of me now that cars are more and more like just mobile iPhones?
That there's a, as soon as you get outside the warranty, there's just a button you can push somewhere that just says. Blows up. A little conspiracy theory going, John? I have.
2,000, 2,000, hit the button, hit the button. We need some more business in here. The button I was going to push was call Jaguar and say, you guys are getting ready to get a whole bunch of bad press because I'm going to have 2,000 miles worth of $35,000 worth of fun on your butt for your car melting down right outside of warranty. If y'all don't help me put an engine in this in some way, you got to meet me halfway and help me out with this. That's the other, that's the other thing I told the guy to do. Cause I mean, seriously.
But, hey, there we go. There we go. You never know. Plus, your car should need a new engine. I get if a part fails or a piece fails. He blew the engine. I don't know what he did. But somehow the engine, I mean, I talked to him about it a while. He dropped a rod in it. It was blown.
But a rod shouldn't be thrown too much. Hello. Are you this piss poor at building engines? I mean, seriously. You know, I mean, that's what you get into. So anyway, yeah, I'm always – can you tell I have the gift of cynicism? So, yeah, I'm always a little suspect of these things. And I'm not saying mechanics are crooks. That's not it at all. But dealers –
Let me tell you, I do know this statistically. There's an interesting fact for you people. The square footage in the new car auto dealer that makes the most money for the auto dealer is the finance office. They make more money on loaning you money than they do on selling you a car. The square footage that makes the second most money in the new car dealership is the shop. The shop.
Because the markup is freaking retail and then some. That's right. And so they just make bank on it, man. It's that simple. And you get 50 emails a week saying, hey, you need this, you need this, you need this. So you really get, if you're a car dealer and you understand your business, a new car dealer, you
So you're in the car business not to sell cars, but to sell financing and repairs. And oil changes, yeah. When I bought my last car, I told the guy, he said, hey, you want to go ahead and take out this? It was like some kind of short-term warranty because this is the average amount of repairs this car is going to need in the next two years.
And I said, whoa, whoa, whoa, whoa. If you already have an actuarial table that says this thing's going to break this many thousands of dollars in two years, I'm out of this car. I thought it was a great car. And he's like, no, no, no, no. That's not what I mean, man. I said, no, no. If you're telling me I need to give you extra money. So the brand new thing you're giving me, is it going to break? And he's like, well, that's not really what I'm trying to say, man. And I was like, I don't do warranties, man. I'm good.
But, like, man, if they're already telling me, hey, what we're selling is going to break here soon, and so give us some extra money, that's just not a product I want to be a part of, man. I'm just, dude, Dave, I'm so sick of the shakedown. Can you tell we both have senses? I'm just so sick of it. Here's why. You and I can afford it. There's too many millions of Americans who are just trying to get to work and back, and they're dealing with this crap, and it just makes me sick from the stomach. It pisses me off. Yep. Amen. This is The Ramsey Show. ♪
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Grant is in Philadelphia. Hey, Grant. Welcome to the Ramsey Show. Hello, Mr. Ramsey. How are you doing today, sir? Better than I deserve. What's up in your world? So I was wondering, I know this is a bit of a generalized question, but I was wondering if you had any advice or tips for listeners who feel limited in their potential due to issues with mental health. Tell me more.
All right. So I'm just giving you a little bit of background. I'm not in a deep financial hole or anything like that, but there is a bit of family history. Part of it is addiction. Part of it is mental health. My mother had depression and anxiety. My father, gambling addict. Great parents at the end of the day. Very fantastic parents. They did a good job. But...
family history there that just kind of caused disruptions in my childhood and then into adulthood. On my personal end, my mother passed away in 2017. When that happened, I received an inheritance, obviously, and I just was not smart with it the way I needed to be. Instead of investing it, instead of using that to catapult myself into a stable future, I ended up spending it. I still think about those mistakes to this day.
And now I'm in a situation, I'm approaching 30. I would like to be able to start a family, have financial stability, all these different things. But those past failures combined with the family history really just kind of put a damper on those thoughts. So it's hard to have long-term motivation. Do you have mental health diagnostics? Have you been diagnosed with...
Emotional and mental health disorders? Yes. So when I was younger, I was diagnosed Asperger's syndrome. Now that's changed since then. Obviously, they got rid of that diagnosis. So I think it's just all... Spectrum disorder. I mean, outside of that, there's definitely a little bit of anxiety and things of that nature. So given what... I mean, just the two seconds you just unpacked, your 30 seconds you unpacked your childhood, what I would love to tell you is...
It sounds like for the last 25, 27, 28 years you've been surviving and congratulations, you made it. Did you do something dumb with money? Yes, we all do. And the only thing you can do anything about is what happens next. And so let me ask you something. Any time you sit down and you think about blowing all that money, have you ever been able to figure out how to get some of that money back and deposit it into your checking account?
So, I mean, like in terms of the money that's already gone, like I do think about just how could I have been smarter with it? And like in the present day, how can I budget my money? How can I make sure that money set aside for emergencies for a future? So in those avenues, I'm doing well. I do have money saved up. I have a 401k. I have a Roth IRA. And you don't have a mental health diagnosis.
No, I mean, what you are is like a normal 30 year old person. Yeah. That made a mistake once with money. You don't have any limiting factors. In fact, you've climbed, you scratched and clawed your way out of a pretty hellacious childhood to get here. Thank you for that. Sounds like you're pretty strong to me. You're a lot stronger than you think you are. If I were you, I would go sit down with somebody and get some get retested.
Just to clear your mind. I don't want you Googling. I have some sort of diagnostic or some sort of self-limiting factor. John, correct me if I'm wrong, but I'm not aware of any environmental, but no physical inherited. You know, if your dad's an addict, it doesn't make you an addict.
No, but you can grow up in a pretty traumatic situation. I know, but that's an environment. That's what I mean. That's where you get to decide what happens next. Yeah. So, Grant, what do you think you're doing wrong right now? I think right now it's just I don't think that I'm branching out on my own and being independent enough. So I'm living with my dad now. We both kind of need each other. I think I'm helping him financially. He's helping me emotionally. So we're a good team. Do you need emotional support right now, Grant?
I'm not through a therapist. I've tried this in the past. I'm just a little, I don't want to say cynical, but doubtful maybe. It's just like a little tough to kind of cope up. How does your addict father support you as a 30-year-old emotionally?
Well, emotionally, it's just that, as you could tell just from this brief phone call, there's a lot of self-doubt there. And he does try to be as encouraging as possible. You know, this time a year ago, I was originally an operations manager for a shipping company. And I did really well. And just, you know, some wear and tear emotionally, physically. I ended up losing that job, and that really rocked my confidence. He ended up being the person there that just got me through that.
He got you through or he said, I believe in you can do it. And by the way, I need you to pay the electric bill and the light bill. Can I borrow $100? Yeah, it wasn't the electric bill necessarily. So the original plan when I moved in with him was – Hold on, hold on, hold on. We're going to get all sideways. Here's the deal. I don't understand what you're asking. How can I help?
Because here's the deal. You don't want professional help because you're cynical of it. You don't want to get re-diagnosed because, but you do want to diagnose yourself. You don't want to get away from some of this toxic behavior that you grew up with, yet you want to live with your dad. You want to be secure with money as a 30 year old, yet you still feel compelled to fund his life. All these are choices you're allowed to make. You're a grown adult, but I'm trying to walk you through each one of them and seeing where they're not in alignment with what you're telling me you want your life to look like.
And so how can I help? How can I help? I think it's just, I guess, how can I branch away and become independent? Move away. Get a job and move away. Branch away and become independent. Get a one-bedroom apartment and say, Dad, in two months I'm going to be out here on my own because it's time for me to be a 30-year-old man all by myself. And by the way, confidence doesn't come from someone saying, I believe in you. Confidence comes from actually accomplishing something. That's right.
And yes, we need people to pick us up when we fall and that's awesome. And then we got to go take the next step. That's confidence. That's where you get confidence. I want you to go get some quick wins. Get
get some wins that make you feel good. That make you say, I did this. I accomplished something. I accomplished something. I rented an apartment. I got four jobs. I piled up some cash. I work a lot. I'm good with people and start to build some confidence around these things because you've read it. You've, you've set your identity up as the child of a depressed mother and an addict father and destined to follow in their tracks and
And you are not destined to follow in their tracks. You are destined to make a choice as to whether you will follow in their tracks. And you can't say, I need some help. I want some guidance, but I don't want to take help. And I don't want to take guidance. Those two things are incompatible together. So either you have the courage and the humility to say,
I don't know how to do what comes next. I'm going to go sit down with a professional. I'm going to go talk to an investment professional. I'm going to go talk to a mental health professional. I'm going to talk to somebody who will walk me through this. Cool. Or I'm just going to keep staying in the same situation. At the end of the day, I'll give you a quote from my friend Michael Easter. Do something.
Do something that is different from the situation you're in right now. Otherwise, everything will stay the same except it will degrade. It will slowly decompose underneath you. Yeah, those continuing to do the same thing over and over again and expecting a different result is the definition of insanity. That's what the 12-steppers say, and they're quoting Edison when they said that, or Einstein, one of the two. I can't remember which, but either one. So, yeah, it's...
Yeah, so when I went broke, Grant, I got the eye and lost everything. I also lost a lot of my confidence. And I'm a brand new dad and a husband, and I'm obviously lousy at all of it because the water and the electricity got cut off in the house that my children lived in. Not exactly a non-toxic environment, you know? And so then I get to decide somewhere in the following months,
am I a bankrupt guy who is useless or am I a guy who made some mistakes and went bankrupt? Those are two different sets of identities. And I had to make that conscious. I had to make that decision consciously as an act of my will. And, um, by the way, um, my parents went bankrupt when I was a kid. So, uh,
Does that mean it's always destined for my children then to go bankrupt? Is this like a DNA thing? Well, crap, no. You get to choose what happens next. You get to choose not to do the stupid stuff that causes bankruptcy. And so, you know, in the following 35 years, I've become a multi-multi-millionaire choosing not to do the stupid stuff that caused me to file bankruptcy. And because I'm not defined by that, it's something that happened, something that I did, but it's not who I am.
And that's a different thing. It's not who I am based on my parents and it's not who I am based on my failure because failure is a momentary thing. I found something that didn't work and I changed it. Went to something that does work. It's a definition of wisdom. People ask me all the time, George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously.
How are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the EveryDollar budgeting app a game changer. With EveryDollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional, cut back, and save more money. So how much money are we talking here? Well, the average EveryDollar budgeter frees up $395 in their first budget. That's the hack. And if you ask me, I think you're way above average and you'll save even more.
So what are you doing still listening to me? Go download the EveryDollar app for free and start saving more money right now. Well, next week, Dr. John Deloney and I will be doing the three last stops of the Money and Relationships Tour. You do not have to stay trapped in money problems, money patterns, relationship patterns that cause each other.
Yeah, it's an issue. And we can show you how. You can break the cycle. If you don't have your tickets yet for when we're in Phoenix this coming Monday, May the 5th, you can still get tickets to that. Fort Worth, there's a handful of tickets left for Wednesday. Like six or something. It's almost gone. Yeah, May 7th, almost gone. Kansas City sold out. It's Friday, May 9th. I think there might be some singles in there if you pull up the website and look at it. But if you want to come with somebody, you're going to be sitting apart. So it's sold out.
If you're tuning in on YouTube or podcast, click the link in the show notes or go to ramseysolutions.com slash tour. We would love to have you in Kansas City, in Fort Worth, in Phoenix. Check it out. Amber's in Houston. Hey, Amber, what's up? Hello, I'm calling today because my husband and I are severely in debt and we are trying to find, determine whether or not selling our home would be the best course of action. All right, tell us about it.
Okay, so well basically we're roughly $215,000 in debt. That's excluding our mortgage. What kind of debt is it? So $115,000 is a student loan. Roughly $50,000 is credit card debt. And then another $48,500 is a home equity loan. Okay. I know, it's horrible. It's horrible. What's your household income? About $8,000 a month. Okay.
Now, how much was car payments again? We don't have car payments. You don't have car debts. You have a home equity loan. So what'd you run all this debt up on? What's it all from? Well, for transparency, obviously that's why I'm calling is that we bought a new house a few years ago and obviously we started using credit cards uncontrollably and we
We did a consolidation loan to pay off credit cards. Ah, that's the home equity loan. But it didn't cover all of it. The home equity loan is to pay off the original debt we had on credit cards, but it didn't cover all of it. And you didn't stop spending. You're absolutely right, yes. It was a huge mistake on our part. Okay. So what's your home worth? The home loan is the mortgage. It's $213,000 for the home that we're currently in. Okay. And the home equity loan again was what?
$48,500. Okay. And what's the house worth? About $375,000 right now. Okay. All right. Well, you can work your way out of those two things. How much is the credit card debt again? $50,000, right at $50,000. Okay. And you have $115,000 in student loans? That is correct. Okay. How old are you guys? 48. How do you get $115,000 in student loans at 48? You never paid on them since college? Honestly, very minimal. Okay.
So they've just been hanging around for 20 years? Sorry. Yes. The amount of money we're making now just recently changed probably in the last five to seven years. Prior to that, the income was very low. And so at the time, I mean, we were just barely making it. And then obviously when the income changed. Okay. When did the income change again?
I would say probably in the last five years or so. Okay, but you immediately adjusted your lifestyle up and are spending all of it. Correct. And now we're seeing that we're just, it's out of control. And, you know, obviously we're thinking about retirement, what we're going to do in the next 15, 20 years. And I don't know, it's depressing to be honest. Yeah, I imagine. All right. Okay.
Okay, the first thing I would do is the two of you, both of you sit down. What are your cars worth? Nothing. They're both 2004. Well, I don't want to say nothing, but they're both 2014 models. I'm going to say maybe three grand, three or four grand. I mean, I'm driving a Ford Focus. He's driving a Dodge Charger. Yeah, yeah, okay. All right. Okay.
All right. So the answer to the equation is the problem here is not the credit card debt or the student loan that's been hanging around. The problem is you guys have never in your married life learned how to live on less than you make, and it's caused all of these other things. So the first step is to learn to live on less than you make. Get out all the credit cards and cut them up tonight, and you and your husband sit down and open the EveryDollarBudgeting app online
and fill out a budget that you're going to stick to next month. Then we're going to work extra above the $8,000 and earn some more money. We're going to look around and see what we can sell. We're not going out to eat anytime soon, like it's going to be three years before you see a restaurant unless you're working there. You're not going on vacation. You are broke people. Broke people don't go out to eat, and broke people don't go on vacations.
You've got to change this cycle. You don't need any clothes. You've got a bunch. You don't need any toys. You've got toys coming out your ears. Motorcycles, Sea-Doos, boats, lawnmowers around, any of that? No. Okay. Okay.
I think that's why I'm struggling the most. Well, you've been spending your money on experiences. You've been spending your money on experiences. Those aren't assets. They're problems. But okay. Right. All right. So anyway, so we're going to live on nothing on this budget, and we're going to start putting $2,000 and $3,000 and $4,000 and $5,000 a month towards these debts. We're going to list them smallest to largest, and that'll be the credit cards.
And we're going to attack them in that order. You're never going to use a credit card again in your entire freaking life. If you do, you're going to retire and eat dog food. You have to turn this around. You have to stop this. You've got a 20 year habit pattern that's going to be very difficult to break. And that's why I'm being so in your face.
I need that. We need it. I mean, we absolutely need it. You can do this. I've seen people do it.
But the challenge is it's not like we've been married 20 months and we were stupid. We've been married 20, 25 years doing stupid. So we've got to break those patterns. And you're not stupid, but you've been doing some stupid stuff. I'm not stupid, but I've done some stupid stuff. Okay, so we're all in the human race together. Now, you guys have got to make the decisions to say, that's it. I've had it. We're not living like this anymore. And flip the switch and change right now.
And start aggressively attacking this debt, smallest to largest, living on a written budget that both of you are in agreement to. And you start making a game, an emotional game, out of how much debt we can pay, how little we can buy, and how much debt we can pay, and how much debt we can pay. And here's the equation, okay? You start paying $50,000 off a year, that's $4,000 a month.
If you do that, you're debt-free in three years, not counting your house. Mm-hmm. Should we stop investing in our home right now? No, you drove right past that. No, I heard you. You said that within three to four years, we could have everything paid off if we start throwing $4,000 at it. And that means you're living on nothing, beans and rice, no life. Your friends think you joined a cult.
Okay. That's what it's going to take. You hang on. I'm going to give you the book, The Total Money Makeover, and we're going to give you every dollar premium to help you do this. And if you'll get in that dadgum app that we have built that is so freaking powerful, it's unbelievable, it will take you by the hand and walk you guys through it. But the two of you both have to commit to no more buying of anything.
And yes, Amber, to answer your other question, stop investing. Pause it. Yes, stop investing for sure. Pause it. Even though we got a match. You're crazy. You don't have any money. You don't have any money. You got to free up every dollar you can free up and get this done as fast as you can. Wow. Really scary.
But you've got to get after it. That's how it works. Dave, this call, I think, is more Americans than we want to believe. Oh, it's how? They don't know what to do. 30 years sitting in this chair. Gee. Yeah, every day. This is The Ramsey Show. The Ramsey Show.
Hey, what are you still doing here? You know the rest of the show is happening on the Ramsey Network app, right? So you got to jump over there to continue watching. You can download it for free. Just go to your app store, type in Ramsey Network. It's completely free. And I'll drop a link in the show notes to make it easy for you. So if you're watching on the app, you're in luck. But if you're watching anywhere else, this show is over for you. So jump onto the app and let the fun continue. All right.
Go on now. Don't make it weird. Okay, I got nowhere to go, so you need to go. Okay, bye-bye now. All right, this is getting weird over there, guys. What do we do?