How Are You Going To Change Your Life This Year?
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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. George Campbell, Ramsey personality, host of the George Campbell Popular YouTube show and co-host of the super popular Smart Money Happy Hour, is my co-host today. We're back live and at it, as you folks are. Hey, how are you?

Have you got the cobwebs blown out from the eggnog yet? Are you back at it? Are you ready to rock and roll? Is the game on? Is there a reset? Is there a cycle that needs to be broken?

My buddy Jocko's got everybody resetting, and we're breaking the cycle. So whatever it is you've got to do, there's got to be a thing, and you've got to do something different. You've got to set these New Year's resolutions in process, make a habit happen. And one of the things that we want you to make a habit of is making sure you go ahead and order George's book. It comes out next week. Next week, George? That's crazy. Yeah, so you can just for a couple more days get all of the pre-sale elements with it.

and it's called Breaking Free from Broke, the ultimate guide for more money and less stress, and it's a very millennial cover. But it's not just for millennials. That's right.

I mean, 25 to 55, anywhere in there or a little younger, a little older. 15 to 55. There we go. Well, a lot of people are saying, hey, what is the book I can give to my teen that they'll actually listen to? There it is. This is it. But I hope this is the year people break free from broke, Dave. There's too many people out there. And it's not about income. We're having people call in and make 200 grand. Oh, no. Income's everywhere. And they're drowning in payments. A lot of people would make a lot of money and spend it all. This is the year. Like they think they're in Congress or something.

I think America is going to unplug from the matrix this year because they're sick of this toxic money culture of debt and payments. And they're stressed out about what's going to happen in the economy. And I just want to hold a financial mirror up and go, you're going to solve this. It's not up to anyone else. That's it. That's how it's done. So the book comes out next week. If you order the $20 book today, you get about $100 worth of goodies with it.

including a couple months of every dollar. Oh, that comes with it anyway. That's right. Whether you buy before or after, three months of every dollar premium. The audio book, which is going to be enhanced with some cool production. The e-book. The audio book. It's going to be the best audio book we've done. I love the extra production on it. We've got a live event happening the launch week that you'll get access to, as well as a video talk I did called Show Me the Money, all if you pre-order. Yeah, so about $100 worth of stuff if you pre-order right now, breaking free from broke. So we'll start the year with a commercial, but we'll keep going.

So the deal is that, and I'm actually going to carry this over in the next segment because I just looked up and saw how much time I spent yakking about nothing. Sorry about that, guys. That was one of my New Year's resolutions to not do that. Stop yakking? No, I can't stop yakking. It's like quiet out here if you do that. But the setting and keeping goals, because the thing we have figured out that is unique at Ramsey

that the rest of the financial world still struggles with basically is that personal finance is 80% behavior. It's 20% head knowledge. You really fix the person in your mirror or you're just screwed. I mean, you're just not going to, if you keep doing what you've been doing, you're going to keep getting what you've been getting and continuing to do the same thing over and over again, expecting a different result is the definition of insanity and

And so it is time to break free from the cycle. And that's why we're doing this live stream called that as well. But I want to talk about that in this next segment a minute. But let's set that up a second because I don't think any of you want to miss this next segment. It's really dialing into from a business perspective, treating your life like it's a business. How am I going to set my revenue goals, my expense goals, and my profit goals?

You know, that's what you do for business. You set a budget. And how am I going to do that in my personal situation? Because everybody's a little bit introspective this time of year. You know, I got an email from a friend of mine doing dry January. So everybody's going to try to do something to be a little better version of themselves. Right. And I think you should anyway.

Yeah, I mean, we have a lot of areas. Finance is what we focus on. But now with Dr. John Deloney here, we're covering mental health goals and relationship goals. And Ken Coleman's got work goals. If you want to up your career. And so it's expanded. And you've talked about how you don't want a flat tire in any area of life as well, where you're great with your finances, but your marriage is on the brink. You've got to excel in all the areas. Or you're a great parent, but you're broke all the time. That ends up, by definition, eventually not being a great parent. By definition.

And so if you work all the time and you never see your kids, you got a pile of money, then, you know, again, you're out of balance. And people talk about life balance, but I don't want to talk about it in that sense because sometimes that's code for I want to do. I just want to go over here and not do anything. It can be a justification. I want to kick back.

And call that life balance. No, I want you to kick in. I want you to get it. I want you to get after it. And whatever the area is that you need to attack, I want you to do it, you know, wholesale and wide open. So, you know, basically I'm not talking about dreaming. You know, dreaming is good. Having a dream is a good thing. Being a dreamer.

Has a negative connotation to it. No one wants their kid to marry a dreamer. Yeah. Hey, Dad, I'm getting engaged, and he's a dreamer. Oh, crap, they're going to live in the basement. That's code for unemployed. That's code for I don't do much. So you don't want to be a dreamer. But having vision is a good thing. Well, having a dream is a good thing. Yeah. But just only the negative connotation is a dreamer means without action. Mm-hmm.

And so you want to step into action. And 41% of Americans make New Year's goals or resolutions. Only 8% end up keeping them. I can't believe it's that high. Only 8%? I would have guessed lower than that. But we're going to talk about in this next segment exactly how to lay out for any area of your life, how to lay out a goal and how to make it work and how to stick to it for the rest of this year.

So if you've kind of had a, Oh, I laid out, or maybe you're really game on. Well, I'm going to give you a little bit, a little fine tuning for that next time, next segment here. And we're going to lay it out in a way that you're not going to be confused at all about what it takes to win in any given area. And bottom line is it takes your mirror.

that person that they have to step up well you teach this in entree leadership a lot but i love the business analogy going hey what if we treated our personal life like it was a business like there was really something on the line because a lot of times when it's just us day we can let ourselves down all day long but you can't do that in business and i think we need to have that level of gravity when it comes to our goals this year yeah i'm gonna get around to investing someday but not treat it like it matters well you know how to treat it like it really matters because it does

I mean, retiring and eating Alpo is not a plan. You know, retiring and having the, you know, the dad blame government. You're living on social insecurity after working your whole life. You're going to let the government, which is well known for its ability to handle money, take care of you. That's a dumb plan.

That's a definition of mediocrity minus about six degrees. So you don't want to do that, but that's what's going to happen if you're on coast mode. You can coast through this society and have a

decent lifestyle, high stress, but relatively decent lifestyle. Instead, I would rather just turn up the heat and let's go get it. Let's go do something different. And all that leads to more peace, more confidence, less stress. That's what this is all about. So stay tuned. It's going to be good. Stay tuned for the magic formula. Nothing magic about it. Dave's laying out the secrets for it. Can you believe the show is free? There are no secrets and there is no magic. I just hate to tell you all that. It's just grandma's old common sense.

That'll work. Those of you that want to lose weight, here, I'll help you with it. Eat less. Whoa. You and Jenny Craig, Dave. Just saved your money for a diet book. You and Jenny Craig got something going on. Just saved the money on a diet book. You can use it for one of ours. This is The Ramsey Show.

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That's what Zander is all about. Go to Zander.com to learn more or call 800-356-4282. George Campbell Ramsey Personality is my co-host today. Welcome to the Ramsey Show, folks. We're glad you're here. This is a show that actually helps you want to win at your life. We started years ago talking about your money. We still talk about money a lot. We talk about every area of your life. We were talking before the break there about dreams. Dreams with work clothes on are called goals.

And you better put some work clothes on if you want to get something done. You know, it's funny to me that every time I'm lucky, it's usually around the time I'm wearing work clothes. My luck tends to happen the more I work. It's just this honest correlation. You know, I get more luck the more I work. And that's pretty simple the way this is. So dreams that put their work clothes on are called goals. Now.

A lot of people talk about setting goals, but let me tell you, if you don't set the goal correctly, you have zero chance almost of hitting it. And it has to have, really, there are five components of a properly set goal. And if you dodge any of them, you lower your probability of hitting it almost to zero. The first three, for sure.

If you don't do the first three, you're just done. There's almost no chance you're going to hit it. So I want to lose weight. I want to make more money. I want to have a better career. I want to graduate from college. I want to whatever. So the first two things a goal has to be is if you say, I want to lose weight, you're not going to. That's not enough. That's a dream. It's fuzzy. The first two things a goal has to be specific goals.

and it has to be measurable. So losing weight is a measurable event. Earning more money is a measurable event. I want to get out of debt. That's a measurable event. Now we've got to get very, very specific how much. And by when. That's another piece of the puzzle here. The third one is time limit. Yeah. When you have those three together, it's magic because now it's reality. Yeah. Well, when you put those three together, math automatically happens. So, you know, let's just use the weight example. A lot of people talking about that this time of year. I want to lose...

Wait, you won't. Okay. It's measurable, but it's not specific. Okay. How much do you want to lose? Oh, 30 pounds. Okay. Now we're measurable and specific. Now then the question is, do you want to lose 30 pounds over 10 years? And how many times do you want to lose 30 pounds? That's an important piece of the puzzle. Yeah. So, you know, I want to earn more money. Great. How much? I want to earn $100,000 this year. Okay. How soon do you want to do it?

Now, when you put a time limit on it and you know what the amount is, automatically your brain starts doing sixth grade math. How much per month? Long division, right? So if I want to lose 30 pounds, when? I want to do it over three months. I say instantly everyone said that's 10 pounds a month.

Instantly, you're going, some of you are even going further and saying that's two and a half pounds a week. And then you start automatically saying what has to be true that's not true now. And so I'm going to raise my water intake, lower the bread and sugar intake, and increase my aerobic activity to 30 minutes a day. These are magical things that you do if you're losing weight, right? If I want to earn more money, okay, well, you're on commission. You need to make more sales, right?

right and so how many more calls do you need to make to make the sales i had a guy tell me one time he said i'm gonna earn a hundred he's working for us he said i'm gonna earn a hundred thousand dollars this year and i said no you're not he said what do you mean you're not gonna pay me i said no you i read the sales reports you don't make enough calls to make enough sales on average with our average order value on that call to make a hundred thousand dollars

And so how many, you know, $100,000 is $8,333 a month. That's $2,100 a week. What are you going to do to earn $2,100 a week? And then you figure that out. Then, and what's it take to do that? And you're willing to do those steps. Boom, you've done the long division. You've done the math, right? I'm going to pay off, you know, a lot of times people call in and they go, well, you know, I've got $75,000 in debt. Okay. Well, what do you make? Well, I make $60,000. Okay. If you pay off $25,000 a year, that's three years.

So instantly we're doing, we're setting goals with you when you call in here for you. Uh, but also inspiring you by showing you that, you know, if you did roll up your sleeves, earn a little bit more money and lived on less than you make, you could pay off $25,000 a year. That's $2,000 a month. You do that for three years, you paid off $75,000. You start to do the math.

And then the math gives you hope because you can really do 30 pounds in three months. That's not an unreasonable loss for most people. Now, you shouldn't do that. You would disappear. I would float away into the ether. If I did that, just one of my legs would be smaller. But, you know, that's all. But the but, you know, other people are right. So everybody's got a different thing. But 30 pounds is doable. 30 pounds is doable. You have to make the goal reasonable, but you want it to be a little bit scary. Yeah.

I think it's too easy. Let me tell you what, if you don't write it down, that's the fourth one, it makes it hard to do too. Once you write it out, there's something that happens. The Bible says, write the vision and make it plain. It says it in Habakkuk, one of the Old Testament books. Write the vision and make it plain. So when you write down, I am going to lose 30 pounds, 10 pounds a month, 30 pounds in 90 days, 10 pounds a month, two and a half pounds a week. Then you step up on the scales and

And you're up a pound. You got a baseline. You go, all right, now I got three and a half pounds. I'm screwed. You know, I really got to get out of the cookies here. I mean, you start to make the adjustments of what you've got to do. Put up the Christmas cookies. There's enough already. I'm talking to myself now. Sounds personal. But I mean, I'm going to pay off this debt. If I'm going to pay off $2,000 a month and you look up and you've only paid off $1,000, well, you're off goal. And when you ride out your debt snowball, when you ride out your budget,

which is your monthly goals for money, then you've got it in writing. If you want to earn more, put it in writing. And then start talking about what you're going to do to cause that to happen. Because something has to be different for you to be different. Hello? If you want to be out of debt and you're in debt, something has to be different. So what's going to be different? Well, I'm selling some crap. I mean, we're amputating the Tahoe here. That boat that's been sitting out there in the yard that we act like we use and we don't use is gone.

I mean, you know, yes, I have a $9,000 riding lawnmower. I'm an idiot. So I'm selling it. Yes. Okay. I mean, you're an idiot if you have $9,000 riding lawnmower and you owe $9,000 on it. Now, if you're a billionaire and you have a $9,000 riding lawnmower, that's okay. And you pay cash and you use it. That's great. That's okay. That's an idiotic thing to do. People do that. So sacrifices must be made. Well, something has to change. And generally, change always feels like a sacrifice. Right.

It may not be as sacrificial as you think. It may be you just look up and you go, oh, there's $50,000 in my savings account. I owe $35,000 on this stupid butt student loan, and apparently Joe Biden is not coming to the rescue. Hello, are you just now waking up to that?

And so, I mean, he can't even find my name. But yeah. So, oh, my gosh. Are you just now? So if the change could simply be you're going to reduce your savings account by thirty five thousand dollars. Ready, set, go. And it's still going to hurt a little bit. Tap out. Done. Just like that. And the last one is the goals have to be your goal. That's the unexpected one in the mix here.

Well, other people let people set goals for them. My mama always wanted me to be a dentist. I'm not going to you. My parents told me I should stop wasting money on rent and buy a house. Yeah. It's a terrible reason to buy a house. Yeah. And yet they didn't fund any of this suggestion. Nope. You know, they don't pay your bills. My friend said I should always have a car payment. Yeah, but he ain't paying it.

So hello. You know, people are always, people always got opinions about everybody else's stuff. And, you know, my dad always wanted me to be a preacher. I'm not going to your church unless you're talking about God, your dad, God, the father. But other than that, I don't, you know, for people whose earthly father called them into the ministries, they don't make good pastors. Hello. And so, you know, I always, you know, but you need to say, so my wife wants me to lose 30 pounds. That's it. Is that a trick question? No.

It's not a trick question. It won't work until I want to lose 30 pounds. I could want to do it to please her, but that's really horrible. That's wussified right there. I mean, my wife wants me to earn more money. No, that won't work. My mama always wanted me to. I don't care what your mama wants. It's time to be a grown-up. If you're 25, your problems are now your problems. You can't blame them on your parents anymore. You're like an adult walking around in like a large body and stuff, and you need to freaking act like it.

So you can't, the days of blaming mama and daddy are done. So that expired. Exactly. Now, seven areas we recommend you set goals for certainly financial goals, intellectual goals. You're going to read a book this year. How many nonfiction books are you going to read this year? There's a direct correlation between your income and the level of nonfiction books. You read, read a book, family goals. How are you going to break that out? Spiritual goals.

Prayer time, Bible reading, going to church, physical goals. We talked about losing weight, exercising, run a marathon, career goals, social goals. You should set goals in these areas, and they should be specific. They should be measurable. They should be in writing, and they need to be your goals, not you living someone else's life. Otherwise, it doesn't work. This is the Ramsey Show.

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Find out more at chministries.org slash budget. That's chministries.org slash budget. George Campbell, Ramsey Personality, is my co-host today. Alyssa is with us in Naples, Florida. Hi, Alyssa. Welcome to the Ramsey Show. Hi. Hey, what's up?

Oh, not much. Just taking a break in my workday. Okay. How can we help? So I just got remarried in October and my husband and I, you know, after the wedding really sat down and took a good look at our combined finances. Good. And we definitely made a lot of debt.

debt choices independently and now coming together, trying to figure out how we can tackle that. Hopefully, you know, for the new year planning on, you know, having a kid, um, I already have a nine-year-old daughter and trying to get those, you know, figured out so that we're not constantly worried about savings and being able to retire. Yeah.

Sounds like you need to do all the things that all of us need to do. Yeah, definitely. Feed babies, retire, get out of debt, save money, right? Right. And part of the thing that's a little bit frustrating is, you know, between our combined finances, we're bringing in about $11,500.

500 a month and still feel like we can't, you know, we've only got about 3000 in our savings and not able to really contribute to retirement or anything like that. So trying to figure out how much debt do you have? Um, so student debt, we've got about 140,000. Um, who's the law? I'm the mental health therapist. So I've, I've got, I've got about 90, uh,

He has about 40, and that was from his parents pushing him to go to college. So he has debt with no real... What other debt have you got? Nothing really to show for it. Car payments. How much? About...

$50,000 total in our cars. You owe $60,000 on your cars. Okay. And then we've got a mortgage that's got about $240,000. Okay. That's as far as debt goes. Okay. So Alyssa, looking at these numbers, let's ignore the mortgage for now and focus on the consumer debt. You've got about $190,000 or so in consumer debt?

And you guys are bringing home, what, $130,000, $140,000? Mm-hmm. And so this becomes a great math equation where we go, how much margin can we create every month to throw at that smallest debt? That's all we're focused on. No saving, no investing. We're not eating out. We've got to make some sacrifices here. How quickly could you pay off? Could you throw $3,000, $4,000, $5,000 a month at the smallest debt? What's holding you back? We tried...

I think for me it's the fear with my daughter, making sure that we have enough. Because with me being self-employed and him doing construction and things like that, I get worried about catastrophic expenses. You know what I'm worried about? You make $130,000 a year and you're freaking broke. That's what I'm worried about. I think you need to be worried about that. You're driving cars you can't afford and you have a lifestyle that's absolutely asinine. And that's nothing to do with a nine-year-old.

What does she need that's thousands of dollars a month worth when you say I need to take care of her? It's more just in case. Yeah. There's no but, but you're not doing anything about it. You've got $3,000. So that's a complete red herring. That's absolutely, you're doing nothing about that except creating anxiety.

Right. Yeah. So it's time, it's time for a penchant for action, some urgency here and say, okay, the more dramatic, which more dramatic, we change our life. The more dramatically we change our life, the more sacrificially we change our life, the faster this is going to turn around and we're going to have a pile of cash and we'll be out of debt. The more you just goof around with it, because here's the deal. You guys just, you guys have no idea where this money goes.

Right. And so we're going to get you on a detailed written budget. So here's the thing. What kind of mental health professional, what kind of work do you do? So I do counseling, like therapy, depression, anxiety, stuff like that. Okay. All right. And so what you do is there's some parallels to what we do. So you can be physician heal thyself, okay? Right. Okay.

Because here's the thing. You are an objective observer to someone's misbehavior. Right. And you look at that and go, hey, you ought to try this because the way you've been doing it, not working. You know, this yelling and screaming at your wife, not working. You know, this zero activity sitting in a dark room, adding to your depression. So you need sunlight and vitamin D and activity. So you need to get an exercise and be in sunlight. Helps with depression. Am I wrong?

No, not wrong. So you send somebody, but they're sitting in the dark room. They don't see it. So what I want to do here is I just want you to say, okay, if I hired you, you're a smart person. If I hired you,

Even though you're not a financial professional, it's because the stuff we're dealing with here is sixth grade math. If I hired you to look at this and say, you come in objectively and you look at this family, they make $130,000, $140,000 a year. They have $3,000 in their name. They have $60,000 in car debt. And they have student loans that have been hanging around so long they think they're a pet. They feel stuck.

You could objectively look in from the outside like you do every day and look at this the way George and I are looking at it right now going, these people need to tighten things up. They need to sell a car or two. They're not going on vacation because they're broke. And if they're sick and tired of being sick and tired, you'll change your process. Because if you look at this objectively from the outside, I can see in a three-minute radio conversation with you,

I can see $40,000 or $50,000 a year here that you could throw at this, and you'd be out of debt in no time. But it's going to mean you're driving different cars, you're not going on vacation, you're not eating out. And it's not going to be comfortable for a while until you set some new grooves in your brain. Yeah.

So we definitely already decided on completely cutting out vacations. Okay. We've had like huge conversations, you know, with family of like, you know, even like big family crews and just saying, sorry, we can't do it.

You're going to learn to say no a whole lot. Yeah, you're going to say no so you can say yes. The way we say it is live like no one else so that later you can live and give like no one else. So if I were prescribing to you from the outside looking in the way I'm asking you to do for yourself, I could look at these numbers and say these people have a really tough two and a half years ahead of them so that they have an awesome life the rest of their life.

Yeah. And it's worth it. And it works because it is just math. It's just sixth grade math. But it has to do with controlling my the angry little boy or little girl that lives inside of each of us and making that little person who throws a fit on the cereal aisle and wants fruity pebbles. No.

No, because that little kid, he rises up. I want a new car. I deserve. I mean, I have a master's degree. I deserve a good car. No, you don't. You're freaking broke. You deserve freedom, not this life of stress. And the math does give me hope in this situation. You make $11,500. The beautiful part about your story is, Alyssa, you have the income. And the parallel would be if you were sitting with a patient who is –

master's degree in something, they have the intellect to adjust their mental behaviors, to adjust their mental health with behavior shifts, with directions you can give them. They have the capacity. You didn't call me up making $30,000 with these numbers. Thank God. You called me up making $130,000 with these numbers. So you can do this, and the correlation is very simple. The deeper you cut...

The more sacrificial and weird you are, and it's going to feel very strange for the first 90 days, and then it'll get to be a normal rhythm. But the deeper you cut, the faster you're out. By the way, that works for all of you. The deeper you cut, the faster you're out.

And I'm a rip the band-aid off guy. Yeah. This pull it off one hair at a time thing. No, thank you. That's a lot of pain. That's why you like to amputate the Tahoe. Just do the big stuff. Knock it out. It's a stupid car. You'll get another one later. I'll get another stupid car. There's more Tahoe's. I got a lot of stupid cars now. And, you know, but I didn't use to. I mean, it's a stupid car. It's a stupid house. You know, it's just stuff. And you can get you some more stuff, but you can't get your life back. This is the Ramsey Show.

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NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. George Campbell, Ramsey Personality, is my co-host today. Luke is in Tuscaloosa, Alabama, where they are crying this morning. Hey, Luke, welcome to the Ramsey Show.

Not too many twos to clean up this morning on my end. How's everything going? Better than I deserve. Oh, my goodness. Tell me how we can help today. Yes, sir. I'm just looking to get a plan together on possibly buying a house. Not necessarily in a set time frame. Dating a girl currently that kind of has her stopwatch clicking on me and I don't want to go through the whole renting process if I don't have to.

So we're just kind of wanting to get y'all's opinion on that. So you've got a girlfriend. She's wanting you to propose. You're wanting to buy a house. There's a lot going on here. And you're wondering, when is the time to buy a house? Yes, sir. How old are you? I'm 24. When will you get married? Probably in the next year and a half or so. You got any money?

I currently have about $53,000 sitting. I know you all are going to get upset with me, but in a second count. I'm not upset with you. I'm happy. You're 24 years old. You've got $50,000. You're a stud, man. Way to go. I thought you were going to say, but I have $100,000 in debt. You got any debt?

No, sir. Currently living with the parents and have been blessed that they have given me that opportunity. That's incredible. I would just stack up as much cash as you can until this wedding and we'll cash flow it. And then we'll talk about buying a house, but I wouldn't do it before you guys are married. No, I wouldn't. She's going to want a different house than you, the one you picked out.

Oh, that is 100% for certain. Okay. Yeah. So, um, ideal is you guys pile up as much cash as you can and somewhere around a year after the wedding you're purchasing. Okay. That's ideal. The reason that's ideal is it gives you enough time of being married folk to make a better decision together because you'll make a better decision after you've been married a year than you will one after you've been married one week.

Okay.

But, you know, that's about the measure. But, you know, there's some truth in that joke. That's why it's funny. But, yeah, that's what we look at. But that means you're going to be, like, 26 years old, which is okay with me. It also means you're probably going to have $100,000. Yes, sir. Which is okay with me. Love it. Does she have any debt? Not that I'm aware of. She comes from a pretty well-off family. That doesn't mean a thing. No.

Oh, I know that doesn't mean a thing, but from what I've heard and seen, it doesn't look like she does. Okay. That just might delay it if she did, but it sounds like you guys are both going to get married completely debt-free with a pile of money in the bank, which is the best-case scenario. Before you start talking about putting a ring on this finger as an engagement, you need to know everything about her financial life, and she needs to know everything about yours.

Yes, sir. Now, one follow-up question. What do you suggest I do? Because obviously $53,000 sitting in the bank is not doing me any good. I mean, it's doing me a lot of good just sitting there, but I feel like I could use it elsewhere, you know, finance or some kind of account with a financial manager of some sort. I don't think I'd get fancy. You might do a high-yield savings account.

which might pay you in this current world, what, 3% or 4%, something like that, instead of a half a percent if the bank – I don't know what the bank's paying you. But talk to that bank about a high-yield savings account. If they don't have one, shop around and find one. What are those paying that you're – Yeah, I got one that's about 5% right now. Okay, 5%. But you can easily find one that are in the 4 range. Yeah, 4 and 5 is – but I really don't – I'm not going to try to get rich on this money. I just don't want to lose it. And I want to be wise with it, which is what you're asking. Yeah. I don't want you to pay a half a percent or something silly sitting and checking. Okay.

But you have a two-year time horizon. You don't want to go investing in the market, and all of a sudden your account dipped 20% because of a bad year. Yeah, you're not going to buy a house because of the amount of money this account makes. You're going to buy a house because of how wise you are putting money into this account. It's the savings rate, for sure. That's where this money's coming from. John's in Rock Hill, South Carolina. Hey, John, welcome to The Ramsey Show. Hey there. Thank you so much for having me. Great, man. How can we help?

All right. So my question is, I'm on baby step number two, just kind of started following y'all's stuff, and I'm super stoked about it. My wife and I are teachers, and we are set to have some loans forgiven, not through the public service loan,

because I have learned through y'all that that is not a good route to go. But our state, South Carolina, will forgive loans for teaching in high areas of need. My wife is a special ed teacher, and I teach at a school with low-income students. Yeah. At what rate do they forgive it? They actually don't forgive it. They pay it.

Yes, yes. So mine can be, they will forgive up to $5,000 after five years of teaching. $5,000 after five years? Yes. That's nothing. Okay, what's the other one? So they will forgive $17,500 of my wife's after five years. Okay, so that's $5,000 a year. No, no, it's not. Five years, you said. Neither one of these is worth screwing with. Y'all need to just get out of debt.

Just go ahead, because the total we have is $64,000. Yeah, but $22,500 of that, you're waiting five years on $22,000. Now, I want you to have a life. Yeah. And you won't be locked in. Some of these things forgive like $10,000 a year.

And none of the ones you're doing do that. So that's why I was asking how it worked. But, no, that's not generous enough for me to be wanting to stay in debt and also to have the golden handcuffs. You may decide to change the direction of your teaching career, and you don't want a lousy $1,000 a year motivating you on that. Right. So follow up with that. I'll be to the point. I only have one year left until I can get that $5,000. Well, that makes a difference. Okay.

Yeah, I'll take it then if it's one year. I thought we were starting Ready, Set, Go today. What about your wife? What about your wife? How long to the 17-5? Yes, sir. She has three years left. So that is a little more touch and go. I'm probably okay with both of those now that you changed my time horizon. Would you guys stay in those careers in those areas if this wasn't on the table? For one year, he will. So take the five grand. But her three years... For sure, I will.

Um, the, the question is with her, um, special ed is just a very difficult field. Um, very strange. Your support is, is not where it needs to be. And we have a one-year-old and one on the way. So her ability to stay in the field, we're not really sure with that. So yeah, I'm leaning towards like, Hey, should we just pay it off? I'm with that. I'm with that. Or here's the other thing you could do. And this is what I was going to recommend at the close of the call is, um,

Go ahead and set a separate savings account up with that amount of money in it to where you have paid it off. It's in your debt snowball, but you're holding the money. And then the day she decides I want to be with my babies instead of the strain of strain of this job. Boom, you pull a trigger, write the check, and it's done. Okay, that's very smart. Okay. That takes the pressure off of her to stay in the job.

uh uh passed when she should um with little babies and then uh but your five is going to be here in 20 minutes i mean right right you don't even have to if you want to set that aside too until the five hits you can but um it just gives you an extra bump towards your baby step three emergency fund then because you still got what 40 grand left after even after both are would be forgiven

Uh, pretty much. Unfortunately, we both have masters, um, in teaching. And, um, so yeah. What's your household income? Uh, household income is, uh, teaching salaries is one of five and then I work in the summer. So it's about one 15 altogether. Good for you. Okay, good. Very cool. Well, I mean, you're, you're going to be okay. You're gonna be fine. It's just a matter of kind of analyzing the

You know, where the squeeze meets the juice, right? Yes, sir. So always, even if there's a forgiveness program we go along with, we say set the money aside in savings, which takes away the golden handcuffs. That's the big thing you want to do there. So good question, man. Good question. You sound like you're a good dad, a good husband. Proud of you. Keep it up. Happy New Year. 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. George Campbell, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Thank you for joining us, and Happy New Year to you. Dalton is with us in Indianapolis to start this hour. Hi, Dalton. Welcome to The Ramsey Show. Hello. Thank you for having me. Sure. What's up?

So about a year ago, soon after I got my first job, I invested into an IUL due to talking to my parents' financial advisor. And since after having kind of seen some of your work and I saw one of the videos you guys talking about it and I kind of looked into it myself, I kind of decided I would like to get out of this. However, the problem is there's a surrender charge. So I have about...

I've been invested since last November, and I have about like $1,500 invested. But if I were to try, I can't transfer it into anything else. If I try to leave it, I'd be left with $400. And the surrender charge doesn't go away until like another 10 years, and I'd have to keep investing. So I'm not sure what to do about this. Well, it sounds like you've lost $1,100 to me. Yeah. And make note that this guy screwed you.

mm-hmm putting you into this product i mean put you in a product that the only way you avoid surrender charges is 10 years oh man how old are you uh 20 good lord man i'm sorry this is we file this one under stupid tax and we've all paid our version of it but i hate that you have to deal with this and lose that 1100 but it's not the only other option is continue to pay them money and lose even more yeah what are you paying into this thing you're

It's $150 a month. What do you make? $22,000 a year. My gosh. What do you do for a living, Dalton? I'm a diesel technician. Okay. All right. Well, as painful as it is, and I'm hurting with you right now, and I'm kind of angry at this character for putting you in this thing, as painful as it is, I would stop. Mm-hmm.

Let me just tell you, here's an interesting story. I was 22 and a guy that was in a fraternity that my wife had been the little sister to the fraternity came to our house with Northwestern Mutual, sold me a whole life policy. And I've got a finance degree. I should know better.

Um, and oddly enough, Dalton, that was a long time ago, but it was 150 a month. And when I discovered like you have about a year in that I had to stop that I'd been screwed, then I canceled it. And you know how much of my cash value I got zero. I lost about the same amount you're going to lose. And I was 22 years old, but that doesn't mean that I would, you know, staying in it would have just been worse. Yeah.

Yeah. You're going to pay $1,800 this year just paying into that thing. The bad news for Northwestern Mutual in my case is that I've gotten to tell this story now.

for 40 years about how they screwed me. They've lost a lot of customers thanks to you. You know, it's cost them a lot more than the little bit of money they got out of me, and I've gotten almost as much satisfaction as the money they got out of me. It was worth it. Yeah, but you're not going to get that opportunity, I doubt, as a diesel mechanic. You might. You might tell some other diesel mechanics not to do business with this particular guy, but yeah.

I'm sorry, Dalton, but the actual proper correct thing to do is just if you have a hole in your pocket, sew up the hole. Don't keep putting money in it. Yep. Yeah, that's kind of what I figured, but, you know, I just want to make sure there's no other options. And don't be mad at your mom and dad. They don't know any better. The financial advisor should know better.

But a financial advisor that sells universal life is not a financial advisor. A financial advisor that sells universal index is an insurance agent. They're not a financial advisor. Yeah, that's what I kind of started to learn because my parents also are invested through him, and I found out what he has in mind is also another life insurance product. So I think he just, you know. He doesn't really do investments. He just sells insurance.

Yeah. He makes a lot of money on it too. Like he made as much as you lost on this deal this year. Yeah. That's the other thing.

I talk about this, Dave, in my new book, Breaking Free from Broke. I have a whole chapter on investing traps, and I took a lot of time on the permanent life insurance section because too many young people are falling for this. It's come back around. It's weird. It's come back around. The TikTok idiots have stepped up and are really hammering this stuff. Well, they call themselves, Dave, tax-free wealth strategists. They don't call themselves financial advisors anymore because it's cooler to call yourself a wealth strategist. Here's the dumb part of that, okay?

tax-free wealth strategist. Now, let me tell you how you get tax-free money out of a permanent life insurance policy. Number one, you pay into it for years and years and years and years. You tune up $150 a month. Pass this thing. He's got no cash value right now. After a year of paying in $150, just what we've been telling you for years, they keep it all. Once you get past that, you finally build up a little bit of horrible... Pocket change. ...piss-poor returns...

And you got $2,000 in there. You keep doing it for your whole stupid life, and it would be a stupid life. And you got $50,000 in there. You know how you get your $50,000 out tax-free? Borrow it. You borrow it. Well, guess what? If you go to the bank and borrow $10,000, it's tax-free. Borrowed money never is taxed. It's dumber than hell, but it's not taxed. It sounds cooler when you put tax-free in front of it. That's unbelievable. Of course it's tax-free, you idiot.

Not you. Thank you. Not you, Dalton. Yeah, Dalton. But the guy, I'm a tax-free wealth strategist. Well, of course you are. The way you get your money out, you borrow your own stupid money out of this policy and you pay them interest. Of course it's tax-free. Borrowed money has never got taxes on it.

That's dumb. Don't poke holes in their genius strategy, Dave. It's a bunch of genius. I'm a tax-free wealth strategist. I have a hot take for every investment trap, Dave. Go down to the bank and borrow $15,000. That's tax-free. Here's what I say. I said, permanent life insurance as a wealth-building tool is a legal scam peddled by insurance agents posing as financial advisors. It gives them fat commissions and locks you into a lifetime of stupid tax.

Dalton is exhibit A. And luckily he's getting out. I'm exhibit A. He's B. He's B. Dave did it before it was cool. Now it's trendy on TikTok. That's why it still makes me mad. Oh, my goodness. Of course, the guy, the fraternity bro, right? Makes it even worse. You know how long he was in the business? About 20 minutes after he sold our policy, he was gone.

Because 80% of those agents are out of the business in one year. So much turnover. 80%. Well, they must lose their soul in the first three months selling this crap. They don't lose their soul until they sold all their family and friends. There we go. And then when they try to sell it to individuals who are actually using their brain instead of the relationship to make the sale, then they find out they lost their soul. That's what happens. And they get out of the business. They run out of steam. But the business is set up to, the industry is set up to milk your...

Your sphere of influence. So they put you in there as a greenie. They milk your sphere of influence, your natural market. And they tell you, go after your friends and young people and college students. We're going to serve your natural market. Oh, my gosh. With a tax-free wealth strategy. Shoot me. Brilliant. Just shoot me. This is The Ramsey Show. George Campbell, Ramsey personality, is my co-host today. Deanne is in Atlanta, Georgia. Hi, Deanne. Welcome to The Ramsey Show.

Hi. Hey, what's up? So, my husband was laid off yesterday on New Year's Day. Oh, my gosh. Yeah. Happy New Year. Yeah, really? Yeah.

He was a direct operation, so he was right under the owner for a luxury landscaping and hardscaping company that works in Buckhead. They work on commercial homes and all kinds of stuff. So the business owner basically has lost his behind and is dissolving everything, and we kind of have the opportunity to...

Not purchase the business from him, but get the equipment, purchase the equipment from him for what he owes on it, and then he will give us his client book freely. And he's been very open, like wants to help. So he's closing up shop. He's closing shop, and there's a lot of money left to be made on the book scheduled, and he's washing his hands of it. So my question is, like, how... What's a lot of money?

Um, right now they probably have two to three months on the books and I think there's about $250,000 on the table, give or take. On the table being gross revenues, not counting expenses. Right. Correct. What were those, what were those jobs net? You have any idea? I don't know. Your husband's ops manager. You ought to know his margins. Yes. Yes. What would it cost for you to buy all the equipment?

So, one machine he owes $30,000. It's worth $60,000. Another he owes about $30,000. It's worth $60,000. And then he has another machine that's brand new. It's worth $30,000 and he owes about $30,000. Okay. What are you guys having money?

We have about $35,000 to $40,000 in cash just hidden away. We have $16,000 in the bank, and we still owe $11,000 on his truck, his personal truck. Do you have to buy all of the equipment for this deal to happen? Or would he give you the client book anyways? You bought the two 30 over 60s and leave the 30 over 30 for him.

Yeah, he will give us the client book no matter what. He's very encouraging and will be very helpful. He's very sad about the situation. He just gave up. He just gave up. Yes, he did. He just gave up. Why did he lose his butt if there's all this money laying there?

You know, from an outsider's perspective, honestly, I don't know, but they all drive Porsches. They have a big old house in Buckhead, and it just looks like he's selling his house. He's filing bankruptcy. It's just all not good. Okay. Well, there's a lot going on here. Number one, let me stop with the last statement. If he files personal bankruptcy...

And tractor number one, he owes $30,000 on it, and it's worth $60,000. He can't sell it to you. Oh, okay. Okay.

His plan was, he told my husband this week to take all the equipment that is owed on back to, like, the tractor company and give it back to him and just say, here, you know, I'm done. It doesn't matter. If you buy it from the tractor company, that's fine. But here's the thing. Anything that happens within 90 days of him filing bankruptcy that was an asset can be undone by the bankruptcy court.

Oh, okay. It's called a preference period. Okay. And you're not allowed to give one creditor preference over another. So, for instance, those voluntary repossessions, your husband takes the equipment over there, turns it in, that dealer is not going to turn around and sell it to your husband the next day, that $60,000 tractor for $30,000. Right. Okay.

And if your husband buys it for $30,000 and it's worth $60,000, the bankruptcy court is going to come in and say, we could have got more than $30,000 for that tractor and given it to the creditors. Okay. And they're going to take it away from you. Yeah, that's not good. No. Okay. So this guy, he doesn't, if he files bankruptcy 90 days from now, you'd be safe.

Okay. But if he files bankruptcy immediately, which it sounds like this guy's very emotional and impulsive and is probably going to file soon because he's in freak out mode. Yeah, he's, yeah, yeah, probably. Yeah. Ouch. Okay. What if we... You know, what I would do is do what he said to do.

and see if you can talk the dealer into selling it to you as you take the keys over there. Okay. But you need to turn it back into them.

And then if it's been repoed and what the bankruptcy court would then have to do, I'm not a lawyer, but I deal with this crap all the time. The bankruptcy court would have to come in. The trustee of the bankruptcy would have to come in and come to the dealer and say that repossession that you did, you've got to undo it, which they usually won't do that. But they would undo an individual transaction that benefited your husband versus the creditor. Okay. You see what I'm saying?

Yeah. So here's our strategy. Okay. I mean, I got, I got caught, I got down in the weeds there for a minute, but yeah, the book of business, you sound like you are excited about it as your husband. Yes. Okay. You think he can take it and run it. So in that case, what I would do is the first thing you need to do is do an autopsy and you really do need to know what the crap went wrong. Right. Why this book of business is not worth hanging around for.

Okay. What is wrong? What is this guy doing? Is he doing cocaine? I mean, what's the deal? What happened here? You know, I got to know if it's the business model that's broken, you don't need to book a business of a broken business model. Right? No, thank you. Yes. I'll take the book of business. If I can figure out what caused it. And if the book of business is clean, uh,

and I can still cut the deals with those guys, and I can still make that profit. I'll step into that and go do it, and then I would buy one or maybe two of these pieces of equipment with cash. Okay. If you can get them for $30,000 and they're worth $60,000. So that's more cash than we have. Oh, no, you only have $30,000. You've got $40,000 and $8,000 and $16,000, right? Right, yes. What do you make?

Well, he did make about $80,000 a year, and we paid off all of our debt. Good. Except the one truck. Except the truck, yes. I quit my job working in the banking industry. Okay, so let me stop you. Then you got 16, and you said you had 40 other. Yes. 41 or something? 40 in cash. 40. Okay, so you got 56. Yes.

You get one piece of equipment, you pay off the truck, and the rest of it's your starter emergency fund. Can you pull off the projects with that? You can rent the equipment. Go rent equipment and do the project. Yes, we could rent the equipment. And then cash flow the rest of the equipment you need. Do not let that dealer talk you into financing that equipment. Don't go back in debt. It's not worth it. If this business works, it will cash flow enough to buy equipment for cash.

I agree. So just take your time, buy your equipment, take the, which, which of the two $30,000 worth sixties is the best deal and the best piece of equipment. Take that one. If the dealer will tell it, sell it to you for 30, when you take it over there and turn it in on his former boss's behalf. Okay. If they won't, if they try to jack it up above the loan, then no, don't do it. And do not buy it from your former boss. Buy it from the dealer after repo. Okay. Because the bankruptcy court will come take it from you.

Okay. It's like buying stolen goods from a fenced operation kind of. Gotcha. Even if you didn't know they're stolen, you're screwed when the police come. Yeah, we don't want that. Yeah, that's where you're going to end up. It's called a preference period in bankruptcy. You can look it up and you'll see what I'm talking about. But yeah, I would buy, I'd spend $30 on this.

And I'd pay off my truck, and I'd have a little bit of cash, and let's get going. Let's get going. Resurrect this business. Yeah, sounds fun. She's got her head around it. Oh, absolutely. That's what was giving me a lot of hope. I have hope for this. Yeah. This is The Ramsey Show. George Campbell, Ramsey personality, is my co-host today. Open phones at 888-825-5225. Sabrina is in San Antonio. Hi, Sabrina. Welcome to The Ramsey Show. Hi, Sam. How are you? Better than I deserve. What's up?

Hi, so me and my husband, we are on baby step two. We're almost done. We have about 12,000 left on our car. And my husband keeps trying to convince me that we should trade it in because we have, I guess, equity in it right now. And so we have 12,000 left.

iKelly blue-booked our car. It's around $22,000. He is thinking we should upgrade to a bigger vehicle. So this value of the new vehicle would be $25,000. So about $3,000 more for

And so I just wanted to see your opinion. I refuse to go to the lot because I don't want to make a bad decision. So we have about six months left projected until we pay it off. And he just thinks we should trade it right now and we're going to pay it off regardless this year. So that's kind of his mindset. I just want to get your opinion. How old are you guys?

We're 29, 28, and we've done the stupid 10 years of car payments, and I'm so over it. But he just thinks we should upgrade to the biggest one, which is the Yukon. Right now we have a GMC Acadia, so he's wanting the more. Why do you need to upgrade?

His reasoning, or the big reason would just be more room. We have four kids, and so there's really no trunk space. So I know it's silly, but... You do know they have large SUVs that are cheaper than 20, don't you? Yes. Does he? Yes, he does. So part of the problem is we are not on baby step two. You are. He's not.

He's wanting to stay into debt, it sounds like. He's trading in one car payment for a slightly bigger car payment. Yeah, like his view is, because I told him, you know, the way Ramsey does it is we cash flow and then we trade it in and then we pay the difference. And he's like, well, why don't we just do that now and then pay it off?

um all at once but i'm like no i'm so ready to be done and he's like it's just three thousand more and i'm like well that's just well the dealer's not going to give you 22 for it you trade it in no that's true too but but let's just stay with the concept for a second the concept though is he's willing to be in he's willing to continue to borrow money to get what he wants when he wants it yes you got a fifth kid in the family you didn't even know it yes

So I don't think the car is the issue. I think the car is revealing the issue that you all are not on the same page. Okay, yeah. Yeah. And if I'm you, that's what's disturbing. Mm-hmm. Because here's what you would really do if you wanted a bigger car. You would buy an $18,000 one instead of a $25,000 one, and that would get you out of debt faster, and you'd have a bigger car. Correct? Correct. Yeah.

So I think we have a discussion. I think the two of you need to have a discussion about the fact that the way you feel about

about debt and the way you feel when he acts this irresponsibly and contrary to what you believe and how you want to how you're you thought we were you know it sounds like this honey i thought we were agreed that we were getting out of debt and staying out of debt and now you're coming in here and extending the time that we're in debt to buy something that we obviously can't afford why didn't you come in here and suggest we buy something eighteen thousand that is larger because there's eighteen thousand dollar suvs out there agreed

Agreed, yes. Yeah. And why didn't you bring that in? And then we'd have had something to talk about because that gets us out of debt faster and we get a larger car. But instead, you're scaring the crap out of me that I'm going to have to struggle with you the rest of our lives on this money issue. This is really scary for me. And you ought to bring that up to him that way.

Okay. Because you don't really, you know, you laughed, but you don't really want to be married to a little boy. You want to be married to a man that's walking along beside you. Yes. Shared goals. And it's not cute that you're the mommy. It's not fun for you. That's why I ask how old you guys are, because I was a little bit thinking you were a lot younger, honestly.

Like you were 22 or something and he still hadn't grown up, you know, but, um, but maybe he's 29 and, and I, but you know, no, I would not go along with this. I would not go to the dealership. I will not sign this. I don't believe in it. You're scaring the crap out of me, but the car is not the problem. The problem is that you would bring this in here knowing how that's going to make me feel that you disrespect me on that level. If I'm you, that's how I'm feeling. Yeah.

It'd be like, you know, let's pretend Sharon Ramsey came in and suggested we borrowed money. Can you imagine how that would go? You know, I mean, it's I'd get pay-per-view tickets to see. Yeah, that would be a hillbilly knockdown. Oh, my gosh. Unbelievable. That'd be a one of those fights. Right. But I mean, obviously, we've had those fights long ago in our marriage. We got past them. But

I want you, I'm really concerned that you use this opportunity to get the two of you on the same page more than I'm concerned about the car transaction. And maybe bringing up, we could buy one for 18. Why didn't you bring me that is a good way to start talking about it. But most of all, if I were you, I would talk about how it makes you feel when he, you know, how it makes you scared that, you know, he's going to mess up everything after you guys have worked so hard to get it cleaned up.

You know, it's just at least he didn't come in and go, I want to borrow $60,000 and buy a brand new something. You know, he didn't say that. So he's still thinking he's silver lining. Still think he's going to get paid off in a year. But but, you know, that means he's kind of like a two, you know, on a scale of one to ten. He's not he didn't go to him, take it all away. We'll make the problem slightly worse. Yeah. Yeah. But but but the big problem is, is that.

That's a slippery slope. I mean, once you stick your toe in that water, the vortex will suck you in. You know, it's just like, it's hard to go on the lot of a car dealer and not leave without a car. It is dangerous. It is because they're fabulous cars.

And they're great salespeople. I mean, even if the salesman sucks, the cars are fabulous. Start looking at these new features and you're like, oh, man. They've got a lot more room. These little kids are on top of each other. I'm having to, you know, the one benefit, though, of having them on top of each other is you can discipline them all at once. That's easier. One arm. You can reach them all. Oh, man.

That might be a, that's the parenting style they used to do back in his day. I did. I grew up in the day when your mother would reach across the back seat and you could not find a way, you could not get away. There was no escaping. There was no dodging. It's hard to do in the Yukon. It was within reach. I'm just saying, well, some of them have automatics that do that now. Automatic moms. Is that a thing? I'm kidding. That's a feature moms would pay for. I would pay for it as a grandparent, but there you go. Just, yeah.

Zap you in the seat if you're misbehaving. Just a little zip, zip, zip. There you go. So, yeah, the key here is either sell the car private and she'd have 10K left after that and they'd save up and pay for a car with cash or wait, pay it off, then they can sell it and upgrade with cash. Either way, we're upgrading with cash. Or if you want to reduce the debt, okay, she said she owes 12. It's worth 22. And if you sold it for 22 and you bought something for 18, you would only owe 8.

you know, and you pay that off in less than a year. Yeah. But that does, that's not really the strategy. The reason for bringing that up is to point out that he didn't bother to go that direction. It was going, if he had gone that direction, I'd actually maybe gone with him. You know what I'm saying? Sure. Yeah. You want to move up in car and down in debt. Yeah. That's a plan up in size, but not in value. Yep.

um actually move down in value going down in debt but up in size yeah i'm for that it's like people call up and say you know we owe twelve thousand dollars on our car and it's worth twelve thousand dollars uh or ten thousand dollars or whatever or you know but it's a you know we have a you know a tiny little honda or something and we've got like two kids on the way what are we gonna do well you can move to a twelve thousand dollar

It's a break-even scenario. But don't go further in debt. People use all these events to justify going further in debt. It's so easy to justify going into debt, especially cars. Well, Dave, it's for the safety and reliability. No, it's not. It's for you. It's for you. It's for you, little boy, little girl. I want my twuck. That's how they sound. I want my twuck. That's all I hear. My twuck. Say that one more time. I want my twuck. My twuck.

That's Dave's grandkid right there. This is the Ramsey Show. George Campbell, Ramsey personality, is my co-host today. Lots of things happening here at the first of the year. You know, when you get stuck in a rut, it's kind of like being stuck in an orbit. The gravitational pull of stupid is amazingly powerful. It will hold you in that orbit. Is that an Einstein quote? I just made it up. It's the new Ramsey theorem.

Ramsey theorem of stupid gravitational pull. But I've been stuck in an orbit on something. You know, it's just your habit. You've got a dumb habit. You've got a habit of not paying attention to your money, as an example. And so when we're doing this thing, this huge, it's already over 200,000 people registered for it, live stream on the 11th of January. It's completely free.

And you got to go to RamseySolutions.com and register for it. It's called Breaking the Cycle.

What we're doing is we're breaking out of the orbit of stupid. You got to break the cycle. And sometimes it feels like, oh, it's a family cycle. Sometimes people in my world and the Christian generation call it a generational curse, right? Well, it's not a generational curse. Once you're 26, it's just you're being stupid. It's in our DNA to be broke. It's not in your DNA to be broke. It's in your behavior that's causing you to be broke. And you've glorified it by blaming it on your family. No, you can't do that anymore. You got to break the cycle. Get a break the cycle.

And the way you break the cycle is with new emotions and new knowledge and new ways of viewing things, a new paradigm. And all of that comes from intersecting with someone that can slingshot you out of that orbit, break the cycle. And that's what we're going to do.

It's completely free live stream on January the 11th, and we do not want you to miss it. It's at 7 p.m. Central Time, 8 o'clock Eastern Time. Make sure you sign up because even if you can't make that exact time, we'll send you a link to watch it. And we're doing a special giveaway with this, Dave. This is cool. We haven't done this before. $10,000. $1,000 to 10 different viewers. Now, signing up won't get you in the deal.

Viewing will get you in the deal. Because we're giving it away during the live show. To viewers, okay? But 10 different viewers are going to win $1,000 to jumpstart their new year. We're going to announce the winners live that night as we're broadcasting. So that's pretty cool. Must be present to win, apparently. Like that, even digitally. Yeah. You've got to register to win at RamseySolutions.com slash break the cycle. The whole thing's free. Dr. John Deloney, Rachel Cruze.

George Camel, Jade Warshaw, Navigating Money Anxiety, Bad Money Habits That Keep You Stuck, Practical Money Tips That Actually Work. We're going to help you break free of the orbit of stupid. That's what we're really good at around here. We are. We are good at it. We're probably the best in the world at it. And it's one of the reasons this podcast is so important.

Just showed up on Apple the other day as the number one podcast in the world. That was incredible. Out of all the podcasts, millions of podcasts in the world, and we rose to the charts thanks to you all out there listening, subscribing. Well, we've been hovering around 10 or 15, sometimes up to 7, up to 5, but I don't think we've ever even broken 3. And then we hit number one in December. We beat all the true crime podcasts out there. There's a lot of those. Goodness gracious, we're in the wrong business, apparently. Well, maybe not.

But yeah, so hey, thank you guys, by the way, for spreading the word about the show. You're the ones that did it. Thank you for sharing the show and for clicking the five-star reviews and subscribing and all that kind of stuff. All that stuff helps the algorithms on that, and it drives people to know about what we're doing here. And you are our only marketing plan, so God help us. Thank you. Thank you. Thank you. And you help us. RamseySolutions.com slash BreakTheCycle.

January the 11th, and man, we'd love to have you view it with us. Samuel is in Madison, Wisconsin. Hi, Samuel. Welcome to the Ramsey Show. How are you doing? Better than I deserve. What's up? I just have a quick question. My family, my parents are in financial ruin, and I want to help them out, and so I need some help, I guess. How old are you? 18. What do you make? No.

37 a year. What's the situation with your mom and dad, hon?

Um, well, my dad has been jobless for, since we moved from Madison, um, four years ago, but their plan was to, uh, for a summer, take us out on a camper and travel the United States and stuff. But my mom got stage four cancer, so he's been taking care of her for four years and it's, she's on like hospice and stuff. So I'm the only woman that's currently working and I'm trying to help them as much as I can.

And I'm actually debating on getting a second job. That's one of the main reasons I'm calling you. So your 37.5 is supporting and he's taking care of your mom while she's on hospice? Yes, but I'm getting a second job, so I'm probably going to be pulling like $100 a week because I got money saved and savings and stuff like that, but I'm not paying their bills. I'm just paying for their gas, the phone bills. You don't live there? No.

No, I'm living by myself, yes, but I'm still paying their part of their stuff. You're paying for their what? Their Wi-Fi, the phone bill, some of the propane. How are they eating if your dad's not working? My dad's living off his Roth IRA at 50 years old. How much is in the Roth? That he did not disclose, but it's bad. What's the plan once the Roth money runs out?

God only knows. I mean, I'm setting up. I have about $1,500 in investments, and I just opened up a Roth IRA because my company that I work for doesn't get shipped to my 401k until I'm 21. What hours do you work now? Third shift, so I work a 7 to 7. 7P to 7A?

Yeah, 7 p.m. to 7 a.m., yep. Okay. All right. Can I be brutal for just a second? Because you're in an awful situation, honey, and my heart's aching for you. Yeah. How long does the doc say your mom's got? Well, they just told her that they can do no more. Like, she's untreatable. She has a tumor the size of a basketball. Yeah, and the hospice is saying she's got how long, honey?

Don't know she's just on a bunch of she's on a morphine and that's other This is a matter. This is a matter of days and maybe a couple of weeks am I wrong? No, I mean they gave her a month to live that was four years ago and by the grace of God He's kept her alive. So We're just I mean we're living on hopes and prayers right now, but I want to help them as much as my I'm not trying to be I'm not trying to be mean I'm not trying to break your hopes or prayers or not. I'm not messing up your miracle. Okay, so

I'm all in for that stuff. But if the miracle doesn't come, it doesn't sound like she's in very good shape to me. No, she has major edema, so she can barely walk. She's swollen. The main reason I'm calling you now is because I have people there. Do you have any brothers or sisters? Yeah, but I don't really talk to them because they do other things. No other families helping you?

All my grandparents are taking care of my mom while my dad is doing side stuff. He's jobless, but he's got a friend that hires him for a seasonal work, but that just got done. So all that money went towards paying off the camper and the truck, but now he has nothing until he takes back his, I mean, he opens up his Roth IRA again.

Okay. Your dad is able to work then when your grandparents are there. And if you're able, I would prefer you to spend some of your day taking care of your mom and your dad to be working. And your dad needs to sell his camper. That's what's...

That is the main thing that I want to get to is that he's still living on the dream of going with my mom and all of us and traveling the country, and that's holding him back. You don't even talk to your brothers and sisters. You're not traveling the country with them.

Oh, yeah. And your mom's not leaving with hospice and a camper. He needs to grieve this dream and move forward with reality. Somebody's going to have to help your dad out, hon. You working more is not the answer. I think your dad has got to make some changes. And if you can help him to make those changes, and I don't know how you do that at 18 years old. It's a big burden. That's what we pray for. I don't think you working and throwing another $300 a week at this is fixing it.

Your dad's going to have to make some moves. And I'm so sorry you're facing this, hon. What a horrible thing to have to go through when you're 18. 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.

George Campbell, Ramsey Personality, is my co-host today as we answer your questions about your life and your money. Open phones at 888-825-5225. Ray starts off this hour in Oklahoma City. Hi, Ray. Welcome to the Ramsey Show.

Hey, Dave. I've watched some of your videos and stuff, some of your YouTube things, and I've put myself into some major issues. It started about three years ago, I guess, when I...

medically had to leave my job and it took me about a year and a half to even get social security disability going on. Uh, I am retired. I am retired military and I'm drawing military disability also, but I've had to borrow from some very high interest loan places in order to survive. Um,

for the longest time, and now I can't get out of the cycle because I can't get a consolidation loan to pay off all of them and refigure my cash flow. So what is your military disability income? Let's see. Okay, so military retirement, I bring home about $19,000.

$100 a month. Social Security, I bring home about $2,400. And disability is $39. Okay, on top of that. Yeah. So you've got $8,200 a month coming in. Yeah.

The problem is with car payment and all my loans and rent and bills and everything, I'm shelling out about $88. How old are you? I'm 60. What's the nature of your disability? Bad knees, bad back, PTSD. And the PTSD is what costs the last job?

No, the knees and back is what cost the last job. Oh, okay. Okay. Because I just, I physically cannot work anymore. I can't sit for any long periods of time. I can't lay down for any long periods of time. I can't stand for any long periods of time.

You know, I just, my back is completely shot. I have massive trauma in my back and my knees. And the military has basically deemed me unemployable because of physical restraints. I'm not supposed to pick up more than 10 to 15 pounds at a time. Are you married? Yeah. What does she make?

Uh, she has a, um, she does a consulting business for, um, a company and, but she doesn't really make anything. Everything she makes, she puts right back into it for right now. And she really doesn't make a whole lot cause she just got started with the company. Doesn't sound like a good deal. Nope. I'm pretty much having to cover everything. Okay.

And I've spent the last two years. I'm sorry for the mishearing. Thank you for your service and what an incredible price you paid. And I've spent the last two years trying to rebuild my credit. Well, you don't need credit. Credit is your problem. How much debt do you have? Altogether...

Cars, credit cards, and high interest loans. Okay, how much do you owe on credit cards? Probably about eight. What do you owe on your cars? The one car that I owe on has still got about 22 on it. Okay, and what is the other debt?

The high interest loans. Okay. And how much are those? If I were to pay them out completely, um, we're looking at about 25 K. Okay. All right. You have a hundred K coming in. All right. And, um,

So I think the challenge is that the two of you need to do two things. One is you need to sit down together and get on a detailed written budget. We're going to put you into Financial Peace University and into EveryDollar, the world's best budgeting app, and I'm going to pay for it as my gift to you to say thank you for your service, okay? Okay. But you make $100,000 a year, man. Yep. Okay. You can't work because of your physical condition, so you have zero need for a $22,000 car.

Well, that's the life's car. Yeah, it's gone. Shouldn't make any money. We're selling it. We're getting a cheap car. What do you got? 2015 Versa Note. That's paid off. Okay. We need to get her something that's paid off. Because y'all are broke, and you're out of control, and you're going to have to do some radical things to get in control. And that's the two of you sitting down together. She needs to get a job that actually pays money.

And then the two of you can take the $100,000 you've got coming in and the money that she actually makes and get rid of a car payment. And then you can clear this up in less than a year. You don't have anything here that's not doable. But you've just all this stuff has happened to you. And the trauma of this whole situation is caused you guys to get paralyzed. And you're just not dealing with it. But you've got the math to deal with it. The math is there.

$4,000 a month and you're debt-free in a year if you keep the car. Yeah, I know. But that's the problem is I don't, you know. Well, you got 88 coming in. If I do that, you know, then do I stop paying on stuff and just snowball it? No, we're going to. And pay off one at a time or? I'm going to pay off one of these high-interest loans. How many different loans are there?

I don't know off the top of my head. There's a lot. But there's, you know, there are varying amounts. List them out, smallest to largest, and take out $4,000 of them this month and take out $4,000 of them next month. That's $8,000 of the 25. Right. But that's the problem. I don't have, I mean... You have $8,800. But that's what I'm saying. So do I take...

Do I just stop hanging on them? You pay minimums and you attack these. But you can do this. You can do this. I think selling the car is going to help out. Freeing up that payment will give you a little bit of margin to start this process. Yeah, and you've got to do a written game plan for your money. You write down $8,800 at the top of the page or $8,200 at the top of the page, and then you work down into this. There should be margin in this. It should not all be gone.

Those interest rates, there's not enough debt here to cause that. Hang on. We're going to get you signed up for everything as our gift. George Campbell Ramsey personality is my co-host today. Thank you for joining us, America. Open phones at 888-825-5225.

The Ramsey Show question of the day is brought to you by Neighborly, your hub for home services. There are a lot of things you need to remember when the weather gets cold. Thankfully, Neighborly has a free winter maintenance checklist that can help save you time and hassle. Check it out at Neighborly.com slash Ramsey. Great company. Neighborly.com slash Ramsey. Today's question comes from Lauren in New Hampshire.

She asks, do your parents' debts pass on to you after they die? Things like credit cards or failed business debt? The age-old question. So the question is, is any of this debt in your name? It sounds like no. So let's assume that there's no debt in the child's name. Parent passes away. They have credit card debt, failed business debt. My understanding is that this would come from their estate before anything gets paid out in the form of inheritance. Right.

If your dad lives in an apartment and owns nothing and has $20,000 in credit card debt in his name, it does not pass to you. The credit card company will simply not get paid. He died a pauper. He died with no money. It does not pass to you. Now, if he owns a house...

It's worth $100,000, and he has $20,000 in credit card debt, and he dies. The credit card company will get paid out of the value of the house before you get a distribution. So the house is sold, $100,000, $20,000 goes to the credit card company. You're going to get $80,000 if you're the only heir.

That would be the way it works. So you're right. The estate would stand good for the debts. But when you die, what you own stands good for what you owe. Debt does not pass generationally in the United States. But it does come out of what would have been your inheritance if there is an inheritance. Now, have you seen creditors try to come after the family for debts? No.

Illegally? Unethically and illegally, yes. And people get scared and go, okay, we'll pay it? Yeah, they'll have some, one of these debt buyers that buys stuff at pennies on the dollar, and they'll buy, you know, a bazillion dollars worth of debt, and then they just start calling everybody in sight, and they call you up and they go, your dad...

You owe this because your dad and just see if they can intimidate you into paying it. You know, your dad died and they try to get you to pay it for your dad, you know, and you owe this. And you're like, oh, well, we're going to put it on your credit. They'll threaten you and lie and all that. Some of them are really, really unscrupulous. There was a real movement by the Federal Trade Commission a few years ago to shut a bunch of that down. There's, you know, another batch of things they find in the debt is, let's say someone filed bankruptcy.

And the debt was discharged in bankruptcy court. So you don't owe it anymore legally at all. It was clear. They'll still try to collect it. Just intimidate you. Well, you know, it didn't, it didn't, your bankruptcy didn't clear this. So we're going to put it on your credit and we're going to sue you and we're going to see your wages. And they start yelling at you on the phone and people, you know, people that are,

you know, I don't know, that aren't mean and nasty like me, they'll cave and give them a bunch of money, you know. And so, yeah, it happens all the time. But it's not a, that's an illegal and ethical practice.

So don't fall for it. Yeah, don't fall for it. But the point is, no, Lauren, you don't owe money. If your mom and dad die with a bunch of debt, you don't owe their debt. But it will come out of the sale of their assets before you get an inheritance. That's the thing to remember. Ravi is in Austin, Texas. Hi, Ravi. How are you? Good. How are you doing, Dave? Better than I deserve. What's up?

So I have no debt on my name. There was some debt. I cleared it out last year. The only thing we have is our mortgage, which currently is at $350,000. I have a stable job. I earn around $150,000 from a job. I have a wife and two sons and I have $200,000 in a savings account.

I cannot figure out if I should invest in a real estate and then create a passive income, or are there other better options that I should go for? I don't know if you'll like my answer, but if you filter this through the Ramsey Baby Steps, which people have followed to become Baby Steps millionaires, you would be at what we call Baby Steps 4, 5, and 6. So invest 15% of your income, we're saving for the kids' college, and any extra money we're going to throw at the mortgage principal.

So we have found that one of the keys to building wealth long-term is to get a paid-for house in the mix. And it's not, one of the keys to building wealth long-term is not keep a $250,000 mortgage while I go do real estate that I learned on TikTok. Gotcha. That didn't come up. That never comes up when we interview millionaires. What always comes up is we dump money in our 401k, our Roth IRAs, and we paid off our house.

And I've got 800,000 bucks in my 401k and my house is worth $600,000 and it's paid for. And I'm 53 years old. That's a typical millionaire. And so 800 and 600 is $1.4 million net worth, right? That's, that's a typical millionaire. So we're always going to lead you, uh,

First, to be debt-free, which you've done. Congratulations. Great job. Second, to have an emergency fund at baby step three of three to six months of expenses. And then exactly what George told you, four, five, and six...

It's 15% of your income, which is just out of your 150 income going into retirement, starting kids college funds. You can do that out of your 150 as well, which leaves the 200. I'm assuming you have other money other than just the 200. And I'm going to pay off my home as fast as I possibly can then. And with you, I think in your situation, you're going to have a paid for home in two or three years.

And then you can invest even more and you can invest in a brokerage account, max out retirement. Incredible. Man, Robbie, what I did when I followed that a thousand years ago, I am still blown away to this day. And I know the math. I know compound interest. I know what it looks like. But I took an old house payment and rounded it up 500 bucks when I paid off the house.

And I put that amount of money into a separate mutual fund. And how fast that one mutual fund was a million dollars blows me away to this day. I look back and I go, that stinking, that was a breakthrough.

you know? And so that's why I know the math works is I actually lived it and walked in it. The key wasn't you leveraged debt. The key was you, your savings rate, your income was freed up because you didn't have any payments. I didn't pay off the house and then spend the house payment. I paid off the house payment and took the house payment plus some and invested that plus invested more. But that one account,

Just not having a house payment. How fast that one account became a million dollars in mutual funds just blows my mind. That's amazing. It's just amazing. It's a cool goal to have. You take like $3,000 a month, that's $36,000 a year going in. How fast that blows up. I mean, you're not talking about five, six, seven years. It just blows up. It's crazy. So, yeah. But we don't think about investing $3,000, $4,000 a month.

We don't think about that. Well, we're trying to do 17 things at once. Well, exactly. That's usually our problem. Exactly. Amanda's in Phoenix. Hi, Amanda. Welcome to The Ramsey Show. Hi, Dave. Thank you so much for having me. Sure. What's up?

Hey, so first of all, I just want to briefly thank you for everything that you do. It's so important. I remember listening to your show when I was 12 years old on the radio. Wow. Yeah, now I'm 25, so I wasn't really taught much about finances growing up. I kind of had to teach myself, worked at the bank for four years since I was 18, and so got married young, been married for six years. We're finally on the same page of like, hey, finance.

finances are really important and we're realizing we kind of suck at managing it. So we've gotten ourselves into a little bit of debt. I'm feeling overwhelmed. I feel like I'm kind of in over my head with it. I'm just wondering where to start. We've got about $30,000 in auto loans, $7,000 in more like $10,000 in credit card debt. But that's it. We don't have a house. We're trying to save up for one, trying to get a savings. I just want to know where to start. How much in savings?

We've got about $500 right now. Oh, nothing. Yeah. And how much is your household income? It is between $75 and $95 a year now. So we're in a good place to start doing that. How old are you guys? 25. Okay. Oh, you said that earlier. I'm sorry. Okay. Yeah, no, you're okay. All right. So if we're going to focus on one thing at a time and filter this through the baby steps, your next step would be baby step one, $1,000 in the starter emergency fund. You'll have that next paycheck, right?

Okay, yes. Then baby step two, we're going to focus on consumer debt. So we're not saving anything. We're just focused on paying off all of our consumer debt, that 40K, using the debt snowball, smallest to largest balance, regardless of interest rate. Once we knock that out, which you guys will do probably in the next year, you'll focus on a full emergency fund of three to six months of expenses. So those are your next steps. Yeah, plus or minus selling the car.

$30,000 car is really high in this situation. You may keep it, but it's going to cost you an extra year of getting out of debt. You'll leapfrog this thing if you get rid of that car. Yeah, you'll move even faster if you move down in car. You really bought too much car. It's not the end of the world, but it's close. It's right on the bubble. Yeah, something to think about. Hang on, I'm going to send you a copy of the book, The Total Money Makeover, to get you started. Restarted, after your 12-year-old listening. This is The Ramsey Show.

George Campbell, Ramsey Personality, is my co-host today in the lobby of Ramsey Solutions. On the debt-free stage, David and Ellen are with us. Hey, guys, Happy New Year! Happy New Year to you, Dave. Good to have you guys. Where do you live? I live in the old Pueblo, Tucson, Arizona.

Ah, very fun. Well, welcome to Nashville. Thank you. Great to be here. And how much debt have you guys paid off? We've paid off $87,368. Very good. How long did that take? Two years and five months. Very good. And your range of income during that time? It was between $91,000 and $95,000. Very cool. What do you all do for a living?

I currently freelance in communications and PR field. And I'm a public school teacher. Oh, very good. What grade do you teach? Fifth grade. Fifth grade. That's an awesome grade. It's a lot of fun. They understand the good sense of humor. They're not quite. They're not insecure yet. They've not lost their minds yet. Completely. Yeah. Good for you. Welcome. Very, very cool. What kind of debt was the $87,000?

It was the rest of our mortgage, Dave. Oh, look at it, weird people. It's Ramsey official now. Paid for house. I like it. Wow. What is this paid for house worth? Conservatively, about $250,000. Very cool. And how much do you guys have in your nest egg in your retirement?

I think between all our investments and assets and stuff, we're hovering around half a million. All right. Way to go. Congratulations. Halfway to the Baby Steps Millionaires. Way to go. Thank you. Good stuff. Okay. What happened two years and three months ago that put you on this debt-free journey? Well, it was about a little more than three years ago. My wife came to me and said, I think I want to get the house paid off before our son graduates from high school.

Oh, I like it. And so we had about a six-year time frame. And so I looked at the numbers and I saw that our mortgage statement was, and I said, okay, divide by six years. I said, oh, I think we could do that. Then when I dug into the numbers a little more, I said, I think we could do it in five years. And then we started working on, we had just finished Baby Step 2. We were working on through three, four, and five. And we started doing all that. And as we did it and we started to accelerate the process, we started to see this number was going to come down.

So once we got through Baby Step 5, which was we promised to have a certain set of number aside for Daniels College, we flew through that really, really quick. And so I went down and looked at it and said, you know, I think you could do this in three more years. It had been 12 months. We got like $60,000 done. And I said, okay, let's just attack it. So we started attacking it. And then we were on pace to have it paid off in March of this year. And then...

Came out July, my wife came to me and said we had some money in the next car fund. We were saving up for a babysitter 3B. And she told me how much is left in the mortgage? I said it's just under 15. She goes, how much do we have in the next car fund that we could use? Oh, about 15. She goes, let's pay it off now.

So we paid off in July. And so we ended up spending the rest of the year then kind of building up that fund back up. So really kind of today we're actually on Baby Step 7 now officially. You were there. You're just buying a car is all. Yeah, exactly. Very good. Well, we had a car that we really enjoyed, but I knew that we would not be able to take out a loan to get the next car. And we do about, what, 30,000, 40,000 miles a year? We're heavy drivers.

Not David, though. Thank goodness. The automatic cars aren't out there yet. So I knew that we'd have to have something set aside for the next car. So that was great. We were able to work that out, and we pretty much by now have refilled that. Wow.

Very cool. We'll keep working on it a little bit, little by little. Very cool. It just occurs to me that the people listening on the podcast or radio don't know what we're laughing about. So David is sight impaired, right? Yes. Okay. How much sight do you have, David? I'm legally blind. I'm not totally blind. So I have some things. I have kind of an idea where you guys are, that kind of stuff. Yeah, but definitely not driving. Definitely not driving, flying planes or that kind of thing. Elon's working on it.

We saw the white cane thing going, so we knew something was going on, and we knew what our joke meant, but the rest of the team didn't. The people looking into their microphones and speakers didn't know we were laughing at us. Anyway, okay, cool. So Daniel is with you, and he's graduated now or getting ready to graduate? He's in his sophomore year. Sophomore. Wow. You beat the graduation big time. Yeah, so we got a couple years of...

investing to work on and get some things going so he'll be ready to go. Sounds like he's going to get a sweet graduation gift. He's going to do well. Such a smart kid. I was really worried that we'd have to really spend a lot to get him somewhere good, if not scholarships. But we knew that was very important. You know, paying off the house and giving him this legacy and this fresh start. And he's been through the process.

Every step of the way. There's no way he's going to have a car payment. He saw mom and dad sacrifice and work so hard to get to where they are today. No, absolutely not. He's been through the process, and he especially has been participating lately as far as he participates in some of our budget meetings, or he knows we talk about things. He'll hold us accountable sometimes. We'll go through a storage...

mom, that's not in the budget. Or is that in the budget, dad? Or something like that. So that's fun. There we go. What an annoying, but beautiful piece where your son is like, mom, you really don't need to be buying that. Accountability with my software. I taught him too well. He's almost, he's almost worse than me. So if I, if I recant this story correctly, um, recount, uh, you guys were working the baby steps exactly. Yeah.

And you got to four, five, and six. But in four, five, and six, you just realized you could turn up the heat a little bit. And six years turned into less than three. Yeah, it was funny. It was about the spring of the pandemic. So it was 2020. And I was applying for a disability and getting rejected. I was going through vocational rehab to get my new skills and techniques and stuff so I could be able to get back to work and do the things I wanted to do. And...

That was by the time we got a big windfall. We had the COVID stimulus checks. I got disability approved, so I had a bunch of back payments coming in at the same time of tax refunds coming in. So we had a big block of money. Spring of 2020, we were able to finish the car. We had financed that. We paid off the last of that. We got through Babysitter 3B mostly, Babysitter 3, and then we got to 5 where we had his college fund already set up, but we hadn't really put any real money into it lately.

So we committed ourselves to say, let's start this up. And so we used a lot of that money to kind of speed us through that process somewhat so that we got to baby step five and six. We're going to do those simultaneously at the initial plan.

But because we got so much extra money through her working in her school being a quality school, she gets bonuses and things like that for the things they do at their school. And so we ended up speeding through the – instead of doing $20,000 in like a year and a half, it took six months. We sped through it really fast. And so that's why that whole timetable went from six years to five to four to now two and a half. And it got done. Well, what normally happens when you actually put this down on paper –

Once you start living it and you start winning, you do end up turning up the heat. Right. And dialing and dialing and dialing and dialing and dialing. It's a natural process. People generally get out of debt a lot faster than they initially think they're going to. There was times that it became like a little bit of a game sometimes. We would come out to the last week of...

Last week of the month, we think we have a limited grocery budget. Okay, we got to do 60 bucks this week. And she's like, let's do it. Let's go. And we do it in 55 bucks or something. So you'd be all proud. And, you know, we do these kind of things. We'd have these little games to kind of make ourselves get our push through. And it was just amazing how we started doing the budget six, seven years ago. And we just kind of found our space and said, we're just going to,

figure out a way to do this and do it right and we just find money money pops up everywhere even though nothing really changes our income it was messy messy messy in the beginning yeah when you start paying attention though it cleans up and it dances it gets in a line it dances the way it's supposed to dance it's really it's really been fascinating some of the biggest things we did was when uh we had really lean months and yeah we weren't on credit cards we weren't going to go in the debt but we found a way god provided us the guidance to the way for us to get through our budget be able to manage and

It wasn't easy. We had to drop a lot of streaming services. We had to basically read the books we had in our bookshelves, watch the DVDs in our shelves. That was really all the entertainment we had for a long time there. And now we have some lease margins. We at least enjoy some of that stuff. And we can still put a good amount of money toward investing. Stream like no one else now. There you go. Yes. Hey, we got a copy of the Baby Steps Millionaires book for you, the Total Money Makeover book for you, and a Financial Peace University membership. That's the Live and Give box.

to say thank you for coming from Tucson to Nashville to do your debt-free scream. You guys are amazing. You're heroes. I'm so proud of you. Well done. Thank you, Daniel. Thanks for bringing Daniel to share in the debt-free scream as well. It's something he'll always remember. He's got to be proud of his mom and dad, and he's shaking his head. $87,000 paid off in two years and three months. House and everything. They're weird. They did it making 91 to 95. Count it down. Let's hear a debt-free scream.

scream. Here we go, guys. Three, two, energy. We're Dead Free! And that's how they do it in Tucson, boys and girls. I love it. Well done, well done. This is the Ramsey Show. Our scripture of the day, Isaiah 43, 18 and 19. Don't remember the prior things.

Don't ponder ancient history. Look, I'm doing a new thing. Now it sprouts up. Don't you recognize it? I'm making a way in the desert. Paths in the wilderness. J.P. Morgan said the first step towards getting somewhere is to decide you're not going to stay where you are.

Oh, there it is. That's kind of like breaking the cycle. You got to move. Yeah. Or breaking free from broke. That's what we do. Breaking the cycle is the new live stream that comes out January the 11th, and we're giving away $10,000. Ten people will get $1,000 each. You can sign up for free at RamseySolutions.com. Breaking free from broke is Georgia's new book, which comes out.

January 16th, just a few days later. Just a couple days later. That's the theme, I guess, of 2024. We're all going to break free. We're breaking something. Something's going to break. Breaking free from breaking the cycle. We're breaking free from broke. We're just breaking something. We're breaking stuff. You've liked breaking things for many decades now. If you want a cake, you've got to break some eggs. I'm just saying. Is that an old-timey saying? I haven't heard that one. It could be, yeah.

That feels like a Sharon Ramsey. It could be a really old-timey thing. So, hey, check it out, guys. George's new book comes out in just about 10 days here. And so if you still want to get all the free $100 worth of goodies with the pre-sale, you can still do that, breaking free from broke at ramseysolutions.com. Mary is with us. She's in Seattle. Hey, Mary, welcome to the Ramsey Show. Thank you. Happy New Year. Happy New Year. How can we help?

Okay. So I was an idiot. I was in love with a man that convinced me to co-sign on a 2019 Jetta in the fall of 2021.

I'm not in that relationship anymore. But anyway, last summer I convinced him to turn the vehicle back into the dealer, basically voluntarily repossess it. He could not pay the...

um, payment on time. And I was also helping him and he, he made more than me. Um, but anyway, so, um, Volkswagen hasn't said, it hasn't sold the vehicle yet at auction, but when it's sold, um, of course,

me and him are going to be on the hook for whatever's left on the loan. So I want to know if there's anything I can do. He, he does have a settlement for a Harley that he got in an accident and wasn't his fault. And he's going to get, uh,

compensated for that. I was also a co-signer on Harley because I was stupid. But that bike has been paid off. He's just waiting for the settlement. I'm wondering, can I put a lien on a settlement or what can I do? I have text messages from him saying that he will pay off the Jetta, but I don't trust that that's going to happen. It sounds like that's a correct assessment to me.

Um, where was that girl? Yeah. Oh, Mary, I'm so sorry. What a horrible mess. Uh, what a sad way to learn a horrible lesson too, isn't it? Yeah. How old are you?

I'm 60 and he was 43. So I had a little bit of the share complex going on or something. The share complex. You're great. You're great. Okay. So how much money do you have? How much money do I have? Well, I'm on baby step one. I'm just starting out. You don't have any money.

I don't have any money. I have $3,000 in credit card debt that I have consumer credit. What do you make? $61,000 a year. Okay. What was owed on the JETA, do you know? $29,000 and change. Okay. All right. Okay.

All right, let's just make up some numbers for a second just to give you an example. All right? Mm-hmm. Let's pretend that that Jada, when he turned it in, was worth 20. On the repo lot, let's pretend that it sells for 12.

Okay. It might get 15 for it. But, you know, we could say nine. Anyway, so let's say there's a $15,000 deficit when you're done. Right. And they come to you as the cosigner and they want $15,000. Well, the first thing you tell them is what you told me. I have no money.

Right. I don't have any money. I got $3,000 in credit card debt and I have zero cash saved and I don't have any money. That's the first thing you tell him, which is also by the way, the truth. And you can tell him where he is and where his Harley account is and that he is getting a settlement and that they should get the money from him. Okay. Um, and help them get it from him. That's the best thing you can do. If that doesn't work and you and I are both suspect it won't,

Right. Then the good news is you can usually settle a repossession deficit for somewhere around 10 to 20 cents on the dollar. And so if it's 15,000 owed, 1,500 to $3,000 will settle it.

Oh. Yeah. Okay. Okay. But if you get to that point, that means you're going to, A, have gotten out of debt. You're going to have built up a little bit of an emergency fund of $5,000 or $10,000 or something before they get around to bothering you with this. And then when they call and bother you, you say, okay, you go after him. And they say, well, we tried. And you say, well, you ought to try again because I got no money.

And then they come back at you again. Then you say, hey, just want to settle my part. I don't want to settle his part. So you can still go after him for more if you want. But I'll give you $1,500 for my part and start working with him. And you'll have to jostle back and forth with him and argue with him some. But you probably will get it for $1,500 or $2,000, $3,000. And then let him leave his part there. Don't settle the whole debt.

No. I want the portion, but I need in writing from you that the portion of my name is settled in full, that I owe nothing else. And you can go after him for whatever you want. Right. Perfect. Okay. That's a lot better than I thought. Yeah, you're in better shape. It's not going to kill you here. But you do have to go ahead and get the rest of your money straightened up. Yeah, and then you just have a $3,000 in credit card debt. Is there anything else?

I own a house with my ex-husband, and we both pay half of the mortgage on it, and it's probably worth about $800,000 here in Seattle, but we owe like $170,000. Who lives in it?

Myself, my two sons, and there's a mother-in-law apartment, so the ex lives there too. But we're not together or anything. We get along. It works for us. And that was my choice many years ago when we divorced. Wow. Okay. All right. Well, then, yeah, you've got that asset. You don't want them attaching that asset. So you do want to settle this.

Right, right. So you do need to get the rest of your stuff under control, so you've got a little cache built up, war chest before the war comes. Yes. Yeah. Wow. Perfect.

Well, we're usually talking to a 24-year-old that did something like this, but you can still give anybody that's dating someone the same warning, never co-sign for someone that never buy anything on debt in any way or even co-own something with someone you're not married to. Would you testify to that, Ms. Mary?

I will preach it to the mountains. Absolutely. I will never do that. And it doesn't matter how good looking you are and how good looking he is and, you know, how much of a share complex you want to have. It's not worth it. Wow. That's a great testimony. That's very good. You did a good job, Mary. We're proud of you. You'll be okay. If you need more help, we're here to help you, okay?

Thank you so much. Absolutely. Thank you. Thanks for calling in. What's your old quote, Dave? Testimony is a wonderful thing to have. Getting one's a pain in the butt. Yeah. That's what Mary just experienced with her share complex. Oh, that's funny. She's great. That was a fun way to end. But yeah, the whole cosigning thing, man. Dangerous stuff, obviously. There's proof. Dangerous stuff. If you needed it.

That puts us out of the Ramsey Show and 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.

Dr. John Deloney here. Mental and emotional health challenges, broken relationships, it's all just part of life, but they don't have to define you. The Dr. John Deloney Show is here to help. It's a collar-driven podcast where you can get practical advice on dealing with anxiety, loneliness, depression, relationship challenges, your kids, and so much more.

Listen to questions from our callers, or if you're walking through a tough situation and need some help, give me a call. You were never meant to do life alone, and that's what this podcast is all about. Follow along on Apple, Spotify, YouTube, or the Ramsey Network app. Remember, you're worth being well.