Your Financial Situation Is Not Hopeless
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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 amazing relationships. I am Rachel Cruz, hosting today's show with Jade Warshaw, bestselling author. Good to have you, Jade. Glad you are here. Good to be here. And we are here to answer your calls, America. It's a free call. Why do I say that? I always say it's a free call anywhere in the country, but it's always been a free call for a long time. Yeah.

Toll free. Toll free. 888-825-5225. So give us a call. Again, we're talking about your life, your money, your relationships. We are here for you. So first up, we have Debbie in Raleigh, North Carolina. Hey, Debbie, welcome to the show. Thank you so much. First, I'd like to say thank you for all the education you guys have given me over the last few months. It's been very helpful in my journey. I'm so glad. Thank you. So

So here's my story. I got divorced about four years ago, separated for it took about four years to get divorced. I was married for almost 25. Oh, man. So I've been navigating my life for the last couple of years trying to figure out what works for me.

I was fortunate enough to get a nice alimony through my divorce. And I had, my ex-husband had to give me a vacation home of ours that I sold for twice as much as what we valued it for. Oh, wow. I have $1.6 million in the bank. Okay.

And I'm looking to build a house. And my financial advisor is telling me I shouldn't pay cash for my house. And I am just like, it's stressful for me. I don't know what the right thing is to do. And is he giving you a reason? Is he giving you a reason? What's his reason for that? He says it just doesn't make sense to take 37% of my money to build a house. Like that, that it just doesn't make financial sense.

And I haven't, you know, when I was married, you know, my ex-husband took care of all of our finances. So this is so new to me. And I listen to your show a lot and I hear all the different things, you know, that you guys say about what they claim. If the interest rates are lower, you're getting more for your money if it's invested. And again, I get super confused. And so I just don't know.

I'll be 60 in two months, looking towards retirement. So Debbie, what other debt do you have? Do you have any debt? I have no debt. Okay. What's your current home? What's your current home valued at? I don't have a house right now. I live in an apartment. Okay. And how much are you looking to, how much are you wanting to spend on this build? So the quote for the house is 630. And you just want to plop down the cash, pay for it outright, and then you're good to go?

And that be that. Yeah. And do you have retirement? Do you have anything, any other savings? Well, I have the 1.6 million. Which would dwindle to 1 million, which would, you'd knock that down to 1 million, right? Okay. And what's it, what are you living off of right now? Like, what's your, are you still working? So I,

I get alimony, which is about $62,000 a year tax-free. Okay. And then I have what I call then my side gigs for my jobs that I absolutely love that I make about $25,000, which is I'm a nanny and I truly love my job. So, again, I'll be 60 soon, so I don't know how long all this is going to last as far as my income goes. Yep.

Well, my alimony's lifetime. Alimony's lifetime. Okay. So Debbie, your financial advisor is naturally always going to yield in the sense of investing your money. Of course. Because that's

You know, how most of them make money. And again, we're not mad at that. You know, there is a time and a place to invest money. And that is a wise thing to do. But it's also really stupid, Debbie, in my opinion, to go and take out a loan for something that you have money for with a plenty of other money of a million dollars left over. If you said you had a million dollars, you want to go buy a million dollar house, I'd say, no, Debbie, we can't do that.

But you're spending six. Yeah, you're gonna have a million dollars at 60 years old as a net worth of just cash plus a $600,000 paid for house. And if you invested that million dollars, Debbie, and you did that, you know, for 20, 30 years, you're okay, Debbie. You have a paid for house. You have no bills.

I know that sounds so. I almost would just fire your financial advisor because I think you're on different pages. I think I think the way they view money is in a in a very stereotypical way. And again, Ramsey, we're known as being a little bit different in this arena anyways. But from a mathematical standpoint, this is not a massive risk. You're going to have a million dollars still still in a paid for house. Mm hmm.

And, you know, there's always that equation of peace. Who wants to enter into retirement with a mortgage payment? Right, right. That's just more that you'll be, that's more money you'll be pulling out of that investment anyway. I mean, it's going to get paid for regardless, so you may as well pay for it up front. Yeah, and Debbie, the $630,000, that's everything, right? Land, build, and all, correct? I've already bought the land. The land is already purchased. Yeah. Yeah, and it's,

It's on a beautiful lake. Like, I feel really special and fortunate. Yes. If I woke up in your shoes, I would definitely do this. Yeah. And you mentioned earlier, Debbie, and just to kind of give some clarity around it, you said you'd listened to the show and heard about interest rates and all of that. So one deterrent for people for paying off their house is they may have a low interest rate on their mortgage at 2% to 3%, right? Yeah.

Where in the market, you could be making 10%. So a lot of people say, why would you take money that could be making 10% and pay off something that you're only paying 2%, if that makes sense. So people have that argument a lot. And mathematically, we understand that. We know that that is the math. But what people don't put into the equation is,

Number one is a level of risk. Whenever you carry any level of debt, even a mortgage, there is a level of risk in your life. You owe someone something.

And then the second, Debbie, is that they don't calculate and put into a formula, a spreadsheet, peace. Like what Jade mentioned earlier. That's right. This level of peace that you don't, again, you're not strapped to anyone. You are free and clear financially. And that is the most powerful thing that you can do. So, Debbie, I'm so thankful you're listening to the show because I'm so sorry you went through this horrible divorce. But we talked to a lot of women who...

are in a similar situation that for the first time, they're kind of out on their own financially and they're having to learn and all of this. So Debbie, if you stay on the line, Christian's going to pick up and I want to throw in Jade and I's book, both of our books. Yes. Do you just to continue just to learn and to grow in this area? Because personal finance, it doesn't have to be

that complicated but you do want good people in your corner and I don't trust the advice of your financial advisor if I were to be honest I just think it's you know money is so much more sometimes we're just looking at the numbers and the dollars and the cents but in this case it really humanizes because it takes into account like our psychology and our emotions and the way we feel not just a math equation and so honestly you're right this is one of the one times where the math it's not always about the math and how the math maths that's right that's right yes yes

Yep, sometimes it is, sometimes it isn't. But when it comes to debt and borrowing money, there is a truth that the borrower is slave to the lender. And when you are free of that, it's an amazing thing what happens to your body, your soul, your mind when you don't owe anyone anything. So Debbie, I think you're in a really, to go through such a hard time

situation. You have a beautiful life ahead of you that I think you can do really well. And I think trust your guts because Debbie, you were right how you're feeling. It's the way we would go to. So thanks for the call.

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

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

You got to say it out loud, and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282, or go to zander.com.

Welcome back to The Ramsey Show. I am Rachel Cruz hosting today with Jade Warshaw and we are taking your calls at 888-825-5225. Up next is Emily in Pensacola. Hey, Emily, welcome to the show.

Hi, thank you so much, y'all, for taking my call. I appreciate it. Absolutely. How can we help? Okay, so my husband and I had gone through a financial piece, gosh, over a decade ago. But, you know, life happened and five kids happened. And right now we're back on it but finishing up baby step number two. We have no consumer debt, a little bit of student loans left that we expect to be paid off by the end of this year, and then we'll just be left with our mortgage. Okay.

We are in a 30-year veteran loan, but we plan to pay it off early within hopefully 10 to 15 years. My question is, so right now we have, my question is kind of regarding my credit score. We have four credit cards right now that are open but frozen. We have not used them in probably about a year. We're kind of frozen.

I guess I'm not sure what to do with those accounts. We're kind of leaving them open right now so that if we close them, they don't affect our credit score. Our hope is that...

If we have the opportunity in the next few years to refinance, to get a lower interest rate, that we would do that in order to help us pay off our mortgage even quicker. But we're just not sure. Do we close our credit cards and risk that affecting our credit score? Would that affect...

affect it drastically or do we leave them open and frozen and kind of maintain our credit score? We just don't kind of want to tank it and lose that chance to refinance in the future. So

So there is something to be said about when you're going through the process of paying off debt. There's kind of this spoken or in some cases unspoken thought that, okay, when we do this, we're not borrowing money again. Therefore, we wouldn't need our credit score again. Therefore,

We can close our credit cards. And so in your case, you're kind of thinking about, well, we don't plan on borrowing money anymore, but we want to refinance. And I can just tell you just from personal situation, we have a mortgage and we don't have any other credit cards and we don't have anything else. And before we had our mortgage, our credit score went to zero. We purchased a home with a loan and...

Our credit is like almost perfect. And all we have on there is our mortgage. So you might see an initial drop just because you're closing accounts, but it's not going to go to zero and it's not going to be terrible because you're still have something major like a mortgage that you're paying every single month on time. And so there is part of that, that it's, it's going to make it okay. And it's going to keep it, you know, in the upper range. And so I don't think you have to be worried about that, but I kind of, my question for you is, um,

Do you have any other qualms about your credit score? Because I do think that when you go and set out to follow the Ramsey plan, you have to know eventually your credit score is going to go to zero and you kind of have to cut ties with that old way of thinking.

Yeah. And I, so ultimately like we do want our credit score to be undeterminable. Like that is our ultimate goal. We don't plan on taking out any more debt. Like you had said, like we have two cars, they're old, they're paid for. So we, um, have basically our credit cards are frozen in a safe. So we, we haven't even kind of activated the new ones that they send us all the time. Um, but it's been more of a concern that, um,

Because that was our extended length of credit attached to some of these cards that, you know, with wanting to potentially refinance in order to get the house paid off that we just didn't want to. What's your interest right now?

uh like 6.8 okay so you guys just recently bought in the last year too okay we have we bought it then if i were you i'd cancel them sooner than later so that your score has the ability to kind of do what it's going to do and then even out to where it's going to even out and then when the time comes who knows when these interest rates get lower then you will have a clear indicator of what it will be and it won't be in that fluctuation stage

Yeah, and Emily, when you look at the calculations of how a credit score is even mathematically determined,

one of the pieces of the pie is new debt and you guys aren't doing that. So in one sense, you got everything frozen, but you're not taking on new debt. So you're not playing the game naturally anyway. So there is a chance even because of that, mathematically speaking, you may even see a downtick slowly because you're not playing that game. And so if you're not playing it, I would just cut ties with it. And like what Jade said, even it back out or, you know, if, if all else fails, like you're going to be fine. You know what I mean? So, um,

So in my head it is it's just that I don't want I don't want to count out there floating around even if they're frozen. No way. So just just being able to get rid of them getting guests like Jade said when everything is back then and stabilized and sadly the truth is who knows who knows what's going to happen in the future. So I'd rather take things under my control and do something that I can do which is just get rid of them close it out and

And then see how the world shakes out and then go from there. 100%. All right, next, let's go to Kyle in Charlotte. Hey, Kyle, welcome to the show.

Hey, how are y'all? We're doing well. How can we help? So I got a little dilemma. I just started watching the Ramsey show probably two months ago. And I'm currently in Babysitep 1. I did get the EveryDollar app. I'm using that, created a budget. So I have me and my fiancee. We have a three-month-old baby girl. She has a 14-year-old daughter that actually lives with us as well.

We bought a home about two years ago. Mortgage is around $157,000 left on it. She has two vehicle loans. One's around $18,000. The other one's around $8,000.

So she also has three credit cards and she has a personal loan. So all of, so I don't have any debt currently in my name, but her debt, all of her debt together is around 42,000, not including the home mortgage. Okay. So,

She stays home. She's a stay-at-home mother. I'm a full-time firefighter. I have two part-time jobs as well. And I'm trying to figure out, you know, I am going to snowball the debt after I do the baby step one, which that's baby step two. But I'm trying to get her on board with the budget. When do you get married?

We actually don't have a marriage date yet. That's what I was going to say as well. So our relationship is actually hanging on by a thread because we don't see eye to eye on the financial state. That's a big deal. Kyle, has that changed in the last two months since you've been watching us or has it always been like that?

So it's been like that more since my daughter was born. Yeah. Okay. You know, I've always been a saver. And, you know, now that my daughter's born, you know, I grew up, my parents separated when I was 12. So I've seen, I know how that affects the kid and I don't want that. Yep. And, you know, I look at the future like anything can happen. So, yeah.

And she's not like that. Like I asked her the other day because I was listening. I was like, you know, what is your 10 year goal? Where do you see yourself in 10 years? And she's she's told me she said, you know, I just I worry about today. I don't worry about 10 years. I'm like, you know. So when you ask her her philosophy on on money and you're asking her, hey, like, are you at a point in life where you're done borrowing? How do you feel about paying off debt? Is she able to give an answer that has any promise?

So she will say she don't want to borrow any more money, but it's just like now, you know, she's made some financial decisions that I didn't agree with. And, you know, I don't, I don't have, I didn't have the control over that at that point. Well, listen, the hard part is you guys are in a, the situation is made more complex because you're not yet married, but you're kind of in this situation where you're,

life seems like you're married. So you, you feel like, listen, I have to step in and pay off this debt. Her debt's my debt. And so the whole thing is very confused. And I think that as much as you can put some clarity around that and either marry her or not, but I would not start paying off this debt until you've decided if this is the person that you're going to spend your life with. Yeah. Yeah. And Kyle and I would have the conversation with her from a vulnerable, you know, not just, well, what are you, you, you pointing? Um,

Tell her you like what's going on in Kyle. What is the fear that you have? What is going on? And, and, and, and start these conversations. And you've said this before, Jade on different shows, but like it takes, it sometimes takes time, right? You've had a mindset, a natural shift. And then Ramsey's probably confirmed that. Cause we lean probably more on your side, Kyle, but you guys together need to sit down and have these conversations. But for now, keep the finances separate. You don't need to be paying on her debt. Cause if she's not getting out of debt, she's digging herself deeper in a hole.

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Welcome back to the Ramsey Show. Today's question of the day comes from Taylor in Missouri. She says, my husband graduated college about 10 years ago and has not paid off a dime of his $80,000 in student loans. Anytime I approach him about it, he just blows me off. I'm a stay-at-home mom with our third baby on the way, and I'm afraid the government is going to garnish his wages. What should I do? Oh, yeah.

Well, I mean, yeah, you're getting up to it. 100%. Like if you don't pay your student loans, that first day that you're past due, that's considered delinquent. And then if you're delinquent for 90 days, you're considered default. Right.

And then at that point, like a lot can happen. Number one, your loan can go into acceleration where basically the whole amount is due at once and you're no longer eligible for payment plans and you're no longer eligible for forbearance or whatever those other things are. And they can start to garnish your wages amongst other things. So if I were you, I would be very concerned about this. Here's these are those times where you have to have really clear boundaries in place and you have to have a balance.

a what if like if and kind of I hate to say it like an ultimatum but this is the way I feel and here's what I believe needs to be taking place and if these few things don't start to take place then this is what's going to take place on my end and so that's the way I would approach it my guess is she doesn't say what the conversations have been but I would approach it

Yeah, yeah. And if he's a husband that blows me off... That's a problem. It's probably not just in this scenario either. Right. It's probably not just about money, that that is how your marriage functions. Because it's not like, oh, he's so...

Empathetic and listens And we're a team here And there With everything else And there's one thing He's just not He just turned That's usually Not the case Usually there's a pattern In who you are as a person That's pretty consistent Through all the situations In life And so My fear Taylor Is that there's probably More of a marriage issue here Than the fact that He's just not paying His student loans Which is an issue too So Yeah I think there's A lot of work to be done I think on the marriage Side of this Because a husband That just blows off

what a wife says or a wife that just blows off what a husband says. There's obviously not a level of respect and empathy and humility there. And those are some ingredients that you need to have a lifelong healthy relationship. And so I would work on that aspect. And then out of that hopefully comes... That's a case for counseling. And if I'm in your shoes...

In the effort to keep my family safe financially, I'm just going to reach in and pay the bill. I'm going to reach in. I'm going to say, what's the login? And I'm going to pay the bill. And if that causes a problem, again, to Rachel's point. The fact that he's functioning, like he doesn't even own, owe the money. That's crazy. He doesn't even pay on it. Yeah. It's pretty wild. Yep. It's the same thing. Like if the mortgage wasn't being paid and you knew the money was there, pay the mortgage. Like don't wait for somebody to do something that you can do to keep your

the family safe financially and then deal with everything else in counseling. That's that's Jay's take. I love it. All right. Up next, we have Emily in El Paso. Hey, Emily, welcome to the show. Hello. How are you? Hi, we're doing well. How can we help?

Um, I want some advice on how I can start tackling my student loans. I'm still in school and I have about two years left and I'm, I want to try to get ahead of it even though I don't have much income so that I'm not really drowning in it when I get out. How old are you? Are you a traditional student? I'm 25. I'm in my, I'm about to start my third year of medical school. Okay. And what, how much income are you bringing in?

Um, my income is really just allowance that I get for my parents. It's $400 a month and I realized I don't need to be spending that much on food every month. So what's your plan? Take half of it and start paying student loan payments? Yeah, I thought I could probably manage to do two or $300 of it per month and put that towards my loans. So this is medical school, Emily. So how much how much do you owe now being two years in?

I currently owe a little over $23,000. Okay, that's not bad. Oh, that's not as bad. Wow, okay, good. How are you doing that? Is it the school you chose, or do you have scholarships? Do you have a situation that you're getting help? It's a combination. I am doing school in-state to where I live, so the tuition's already a little lower. And my school pays for about half tuition.

On scholarship. So in general, I usually only need to take like 10 or 12 grand out per year. So I think on the conservative end, I'll probably need to do the same for the next two years and probably double what I've taken out now. Honestly, if I were in your shoes, I would flip it because these student loans aren't due yet. I would focus on piling up cash for the coming semesters so that you're not continuing to take out more debt.

And if possible, I don't listen. I know medical students. It's crazy. If there's any way to pick up any extra work that you can on your off days, on the weekends, whatever it is, I would do that. And I would see, OK, like, can I stack up a thousand dollars a month? Is there any way where I can find that and make that happen? Because if you can do that, then you're well on your way to taking care of the next 10,000. Did you say 10,000 per year or per semester? Yeah.

Per year. Okay, then yeah, I love that goal. Try to get $1,000 a month and then you're not taking on any more debt. And then when you graduate, you can tackle this $23,000. My guess is they're subsidized so they're not going to gain interest while you're in school. Emily? They're unsubsidized. Well, that sucks, but I still would not change the course of action. What do you think you'll be? I shouldn't worry about them right now. No, I'd worry about not accumulating more debt.

When you graduate, Emily, what type of work are you going into? Do you know how much, on average, people are making in that field? So I want to go into surgery, but in general, a first-year resident, regardless of specialty, I think that the general average in Texas is around $50,000 a year. Okay, and then what's your earnings beyond that? Like, what do you see your potential being in, you know, year one, two, three, four, five?

It goes up a little bit per year, but it depends. I might be able to find better numbers. I'm not really sure. No, no, you're fine. I was just trying to get a gauge because the goal would be, like Jade said, if you can do something where you work weekends...

even some nights throughout the week and bring in a thousand bucks a month, that would be huge to cashflow the next two years, which means you'd have $23,000 left to pay. And at that rate with what you're making, I mean, it, it, you know, it could take two years at that point, but if you work extra above your normal salary, you can get it paid off even faster. Right. So I think it's just, it's this idea of looking at the math, looking at the numbers and,

and making a plan knowing when you graduate, you're probably still going to be living like a college student while you get these paid off. Yeah, I don't mind that. Yes. No, that's great. Well, I appreciate you even thinking about it too in mid-school because for a lot of people, it's once they graduate and the bills start coming that they're finally like, oh my gosh, how do I, how do I do this? How do I navigate this? So she's probably seeing that balance grow because the interest is accumulating and she's probably like, oh, crap.

Yes, yes. So, yeah, what Jade said, though, I think is wise is to be able to do as much as you can to cash flow that next semester. But, man, this is a great story, though, for all of you that want to go to medical school because usually when we get these calls, law school, medical school on the show, it's six figures in debt. And so listening to somebody that stayed in state, picked a school possibly because she got so much money

Yeah. Scholarship on that side that half is getting paid for, which is just incredible. So again, all these, you know, advanced degrees to go into these fields that are so needed and we're so thankful for, right? Medical degrees and other things. There's still options out there. And so for those of you, you know, that may be in that situation, be creative.

creative in the way you think about this. I think the hard thing is people fall into the normalcy of, well, it's just medical school. There's nothing else I can do. I'm going to go to whatever school, pay it, figure it out when I graduate. And so I was talking to someone like Emily is so encouraging because she made a couple of calls right there and turned some things and

and it was great yeah it's possible where there is a will there's a way clearly yes when there is a will there is a way and those student loans jade for you and sam that was a big chunk of listen your debt so i'm like it's the one that just i feel like people it it gets dragged uh-huh and i i think people

think that they can just forget about it and oh I'll just you know put it on the shelf and it won't bother me I'm like yes it will bother you and it will continue to accumulate and even if your wallet's not feeling it because I know a lot of people are on zero payments because of the administration your body feels it yeah don't make no mistake as John Deloney would say your body keeps the score and your body knows when you're not safe and debt puts you in an unsafe position that's right this is the Ramsey show

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Welcome back to The Ramsey Show. Let's go to Anne in Pittsburgh. Hi, Anne. Welcome to the show. Hi. How are you today? Hi. We are doing well. How can we help?

Well, I hope you can help. That's my question. Is there any hope for our situation? We have been married 19 years. We're in our 50s. We have one special needs son. We're both self-employed. I have a business from home, which has been very helpful with our son and being home when he gets off the bus, all that kind of stuff. My husband has always controlled 99% of the finances. I don't know if he's

My name is not on the bank account. I don't have a login. His business and our home bills are combined on the same account, which I know probably should not be that way. We have a home loan of about $243,000. If sold, it might be worth $700,000. The big problem I came to realize is that our credit cards are at $209,000.

Wow. We have a car loan for 21.

And, um, some of the credit cards are his business only, but as far as I'm aware, you know, in certain States, your, your debt is your debt and half and half debt and assets. So I guess I'm trying to figure out, I can't get through to him. Um, he just blows up when I try to say, Hey, let's try a budget. Hey, here's all the credit cards on an Excel spreadsheet that shows all the percentages like, um,

It's just kind of banging my head on a wall and I don't know how to protect myself, how to protect my son. The only good news is that I do have a 401k that is in my name from before we were married. And then we also have, I have a little bit of savings and then he does have a life insurance policy. God forbid anything happens, but he's, he's not well mentally and he's been, you know, threatening a lot of things. And I thought I should try and,

Get some advice. Are you thinking about walking away from this? At this point, I really can't right now. I can't right now. My business is here on the property. And if I would leave...

The other thing is I would be taking my autistic child away from the only home he knows that he's had his whole life, his dogs, his everything that's comfort to him. And your husband's not, is he, it's, I'm guessing based on what you said. I think he knows that he's in the toilet. I think he realizes, I mean, he's paying the minimums on the credit cards. That's it.

And where's the revenue of your business going in? What account is that going into? It's going in with everything else. I mean, I don't make much. Last year, he had it written down here. Hey, do you suspect that there could be IRS debt as well? Because when you tell me that all the business bills and all the personal bills and everything's together, that sounds like a mess.

I don't. I think he's pretty OCD about keeping track of stuff. Last year's gross income was $233,000, but then by the time we got to the bottom of the income, the income is $26,000. Once he takes off depreciation, vehicles, all that kind of stuff. What type of business does he have? He's an electrical contractor. So he's making $26,000 a year. He's paying himself $26,000.

Technically, yeah. And it's just him. He doesn't have employees. And what about you? Just myself. And what do you bring in? What's your payment from your business? I'm lucky if I bring $10,000 or less. So you guys combined are living off of $36,000 and you've got the $21,000 in car debt. And how much in credit cards, $206,000?

$209,000. $209,000. Okay. And is there anything else that you think might be out there, not including the mortgage? No. And of that $209,000, $40,000 is just for his business. But of course, I'm pretty sure I'm liable for that as well. But everything else. And so is he using these credit cards to keep you guys afloat just month to month? Yes. And when you said he's not mentally well, do you mind going into a little bit more detail on that? I mean, there's increased...

alcohol just you can tell there's depression upset we'll even mention the debt we'll mention my wife told me that we're this much in debt and you know she must be full of it I don't believe it and he'll say this in front of his best friends and it's like oh my god now he's like sharing it with folks but I think he's embarrassed I think he doesn't know what to do yeah I do too

Yeah. So I think, you know, and it just sounds like my first protection is for you. And the fact that you don't have any access to anything. And I mean, there could be, there could be a whole other life he's living. Right. I mean, on, on different levels, on different scales, financially, not, I'm like, you have no clue what's really going on. Because the money is kind of the paper trail to a degree on life and, and being able to see that. And you have no access to that. Um,

um which is a hard line i draw you have to be able to have access and be have everything visual that you see i mean it's one thing if you're like oh my gosh he's a spender i'm a saver i don't know what to do it's a whole other thing and you cross another line into another level of seriousness when you don't have the ability to access your money so so this is a it's it's a it's a um

It's a more serious weight there that I that I hold now in this conversation that that creates more ultimatums. And I hear you say, like, I can't leave all of that. And but what I would do is is that there's other ultimatums in this marriage that has to change because you don't you're not safe at that point. Right. Right. How did you find out about the 209? Just curious. Did he tell you or you discovered it?

Oh, he did not tell me. I discovered it. I started going through his files. Okay. And I made like the biggest Excel spreadsheet you'd ever want to see in your life. And I just...

you know, tried talking to him and, you know, we were okay there for a while. Oh, I'm working, I'm paying it down, I'm paying it down. And then, you know, once a year I'd pull these files again and get everything sorted. And I did it again this year. And I said, this, this is, he's to the point now where everything is minimum. Yeah. For me, this falls into what I, what I would call a level of financial abuse.

abuse and infidelity because he's keeping everything on his side he's making moves without sharing them with you and they're at the detriment to you and your family and your son and I would push back on the fact that there's nowhere for you to go there's always an option um

But I can guarantee you this. It is not going to be a comfortable option. There's going to be no piece of it that feels comfortable or easy or... Right. You know what I'm saying? So I do think that you have to give yourself an ultimatum and you need to say, all right, what am I going to do? What are my limits? What are my boundaries? And what is my timeframe for me to... And what is an indicator that this is...

moving forward or that it's staying the same. Like, does that make sense? You have to have something very real and very measurable for this situation. Anchor, yeah. Yeah? Right. Right. So whether that's...

Whether that's I'm going to offer counseling and I'm going to give him 60 days to agree to it, or I'm going to ask him for these account passwords and I'm going to ask him for complete transparency and I'm going to give him 45 days to wrestle with that and get to that point. You've just got to make it very clear, write it down on paper. If you have a friend, get a friend. If you have a pastor, find a pastor. But you need somebody who knows. Does anybody else know this is going on besides you?

Us two girls on the radio? Yes. Okay. A few friends, close friends and family members. And what are they suggesting? What are they saying since they know the situation even more?

Um, and they know him and they know he's not, he's not right. He's, you know, I married a 37 year old man who was fed in his ways. And unfortunately he is a collector. He, and that's where the money has gone. He collects things. And, um, to the point I said, can we sell some stuff? So is he hoarding too? Like, are you in that sort of a situation?

No. Okay. No, it's just enormous collections of things that are really our only hope. These assets that could help us get out from under this, but...

He's not willing to touch. I'm not selling any of my stuff. He says, like, oh, great. Because years ago he did. He would sell a stamp collection or he would sell another collection. So you're just seeing a deterioration. So, Ann, I would bring in a third party in that. And again, and it's so hard to say this on this side of the desk because now, Ann, we have to go, but you're going to be living this life. But

Not only is it a secret, but you're also behind. You're trying to live on $34,000 a year as well. So there's two ends of this that are really urgent. So I'm so sorry. I hope this was helpful to give him some ultimatums, but I so appreciate the call. 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 amazing relationships. I am Rachel Cruz, hosting this hour with Jade Warshaw, and we are here to answer your questions. So give us a call at 888-825-5225. All right, up first, we have James in Mesa, Arizona. Hey, James, welcome to the show.

Hi, Rachel. How are you? Doing well. How can we help? Well, a quick question. So recently, I'll try to give you a little background or context here. Recently, my brother, who is 57 years old, and a friend of mine, who is 42, I believe, they recently came to me and asked me for some advice of how they could get out of debt.

based on their circumstances and situation, I felt the best advice to give them, even though I've given them Dave's book, even though I try to have them listen to the show, that based on their situations, bankruptcy, I think, is the best option. So my question to you, when is taking baby steps or filing for bankruptcy is the better option than taking baby steps?

Well, I mean, I'd want to know more about their situation, but I'm almost I'm almost I mean, I honestly this is just me and Rachel will give her take. When I think about bankruptcy, they're either going to sell off your assets and put you on a payment plan.

or they're going to just put you on a payment plan. And to me, those are all things that you could take on and do yourself. Like you can look through your assets and sell them off and you can call and make a payment plan. And like, there's so much of that that you can handle on your own. Obviously, yes, some of the debt they can, you know, will be written off, but I, I'd want to know more about their situation. Well, first of all, Rachel, they have no assets.

They have no assets. All the assets that my brother has, he is turning 58. He will be able to retire from the police department in a year. He has a pension. He has $210,000 worth of debt. Okay, then the answer for me is automatically no.

automatically know that I would not file bankruptcy because I think that $210 of debt is an amount of debt that can be paid off, especially when you are able to make an income. If you told me

That there was something, a disability, something that was keeping him from being able to work. You're talking to, listen, you're talking to someone on the line who paid off $460,000 of debt with my spouse. So it's going to be hard to convince me otherwise, but keep going.

Keep going. Yeah. But so but so some of the debt, I would say, well, there's student loans, which I think you if I'm not mistaken, they do not. That does not not bank reputable. That's right. But a lot. Some of the debt, even some of the debt is to me is personal loans that they owe to people.

We're talking about when you add it all up, they probably owe $100,000 worth of debt that they just owe to people that they cannot pay back. I was in a situation like that myself at one point where I loaned people money trying to help them out because they got behind on their mortgage and this and that.

I went to each of them and just said, look, just give me as much as you can. And the way the only way the best way for me to put it is, is I probably left 50 grand out on the street. I just will. Does he owe you money, James?

Pardon? Does he owe you money? Are you one of those $100,000? Yes, I am one of those. My mom is one of those. How much does he owe? And is it in a formal state? Because if you file bankruptcy, is it formally money that has been lent out? It's not through a bank. It's just people giving their own personal money. So even bankruptcy and that. So it's personal. In the case with my brother, it's personal money. It's car debt. It's title loan debt.

So you were loaning him money to pay his car note and his title loans? No, no, no, no, no, no. No, I will not loan him money.

I will not loan him money. Hey, help me understand. Help me understand this because I understand it's not your situation. You're calling on behalf of a brother and a friend. What you told me he was a police officer, law enforcement. He's got a pension. What was keeping him from what got him in this situation? What was it? Habits? Was it a bad business? Yeah. Living beyond his means. Credit card debt. He has a time.

taking trips that he really couldn't afford. Here's the thing. Bankruptcy doesn't change that. He probably got $50,000 worth of credit card debt. Did you hear what Rachel said? And it's a good point. Yes, I did. Yes. And bankruptcy is not going to change that. And here's the thing. If he was ready to change his behavior, he'd be calling us, not you.

And like you said, you gave him the total money makeover. Like, it sounds like you've been inserting yourself into this situation. And he's, I mean, you can lead a horse to water, but you can't make him drink. So it kind of sounds like he's just not interested and you love them, right? So you're trying to, and you see that this just ends in, this ends badly, but-

There's a part of this where you really just have to shake the dust off your feet and keep walking and doing what you know to do and living by example. And when he comes to you for help, when he's ready, you'll be there to help him. Yeah.

Yeah. Okay. I was wondering if that was an option. When is that option? When is, when he, when is that point of no return? Yeah. When I say bankruptcy, Rachel, I'm not just, I'm talking life bankruptcy. That's going to every person that you owe and just say, look, I can't pay you. I can't go. I, I'm talking about literal bankruptcy, but also life bankruptcy for all the personal loans that he owes to people.

Yeah, he can do that. He can go to someone and just say, look, I can't pay you. I have to reorganize. I got to get out of this debt first, which is not fair to me, his mom or a friend or whoever. Right. I agree. I agree. But he's never going to pay them back. Yes, that's right. And I think he can have that conversation because this is the reality of what it is. They're not going to get their money. So the reality is... No, they're not going to get their money. That's right. That's right. So...

So he can in good conscience. I realized that at one point where I, with all the people that I tried to help, I'm not going to get my money. So I went to them, like, for example, there was someone who owed me $8,000 because they were behind on their mortgage and I helped them out.

I asked them for 10%. I said, could you give me 800? James, James, you need to stop. You need to stop loaning people money. Hey, wait, wait, wait, wait, wait. We've been talking about the brother and the friend. Now I'm going to talk about you. You need to stop. You're not a loan shark and you're not a bank. You need to stop lending people money, especially family members. Don't lend them money. Give them money if they need it. And you get to decide if it's wise for you to do that. But

I think that you need to stop lending people money as well. That will be your piece of medicine to take away from this call. 15 years ago. Okay, good. 15 years ago, I made that decision. I said, I will never loan anyone money again. Good, good. I think that's a great lesson. And I've stayed on my financial plan and my investment plan. It's my brother, my mother, it's everyone.

You got to pray for him. You got to pray for him, James. And it is tough. And I totally hear the care in that. But also, James, there is a healthy boundary for you to draw. This is not your life.

And you sound way more concerned than maybe your brother even is. And so he's a big boy. He's a grown man. He's a police officer. That's right. He can be able to deal with it. You're not going to be able to convince or change him. He has to be the one to do that. And so bankruptcy is an option. It may be 0.02% of the situations that we hear. Majority of the time, it's people's habits and their ability to put income towards debt and pay it off in sacrifice. This is The Ramsey Show. ♪

One thing we're so excited about, Jade, is that we are having an entire weekend here at Ramsey Solutions headquarters. And we're going to be hanging out for an entire weekend for the Total Money Makeover weekend event, May 10th and 11th. So this is one weekend and it's going to be

A full of content This is basically Your crash course To everything that we teach Around money It's going to be All new content From all the Ramsey personalities We will all be there So regardless of what Baby step you're on This event is for you And I'm going to

And we're going to be doing a live taping of the Smart Money Happy Hour with myself and George Camel on Friday night, which is always so fun. And throughout the event, you guys, throughout the whole weekend, we're going to be doing so many Q&As. We're going to be hanging out with you, answering your questions. We're going to be, it is such a powerful thing when you've come, if you have come to a live event event.

To be in a room with thousands of people that are like-minded, they're walking the same journey as you. It is so encouraging. Hopefully you learn something new. You're empowered again. It gives you hope and you're able to keep going on this journey. So again, it's Dave Ramsey, myself, Rachel Cruz, Dr. John Zaloni, George Campbell, Ken Coleman, and Jade Warshaw. So get your tickets.

Today Our platinum tickets Are already sold out But you can still Our platinum plus tickets Are sold out But you can still get Platinum or VIP And early bird pricing Ends today March 7th It is done With early bird pricing Today So make sure To go get your tickets Today

now before they sell out at ramseysolutions.com slash events and again if you buy them today you can save up to a hundred dollars for the total money makeover weekend events here may 10th and 11th so we hope to see you guys there big deal that's a big deal all right next is jenny in oklahoma city hey jenny welcome to the show hey thanks for taking my call absolutely how can we help

So a little bit of backstory. My husband and I have three kids and one on the way. Congratulations. Thank you. I just started listening to you guys probably about consistently for like a month or so now. So I'm really fresh and I got super excited. But I realized after listening that it was probably the worst

worst time to get excited because I know you guys have something called stork mode. Yes. So I'm just curious. I'm due in April and I have a student. We have a student loan for forty nine hundred and then a credit card that's about at forty five. And then we have our car loan. And then I just filed taxes. So we owe about how

Haven't finished e-filing them, but I believe they're going to come to around 3,000 or 2,800. And so I just wanted to get your advice on what exactly to tackle first. We do have a little bit in savings. We've got about 8,000 savings. So based on prioritizing what the best thing would be to do once I have the baby and then also wondering, um,

Should we sell the car and get a beater? Or should, after we pay off these two little small ones, should we just work on paying off that car? How much do you guys owe on the car? $26,000. $26,000. What's it worth if you were to sell it? About $22,000. So there's that little gap there, too. Yeah. Okay. And how much do you guys make a year? Well, I'm just currently on leave. So what we usually make would be about $98,000. Okay. Okay.

And then you have another vehicle that's paid for? Yes. And what kind of vehicle is it? It's a Honda 20. It's a four-door Honda Accord. So if you were to sell this $26,000 one and put $4,000 with it from your savings, this is assuming after the baby, by the way. And then let's say you took the other $4,000, maybe put another $1,000 with it and bought a $5,000 car. I'm assuming the main car would be the other car you have.

Right, because once we have the baby, we won't all be able to fit in the little car. Okay, are you able to fit in the car you have now that you owe on? Yes. I see. Okay, so yeah, I mean, April's coming up fast, so you're good. So the first thing I would do is the IRS, which you owe in taxes for sure. That's my A1, so go ahead and get that out of the way. That leaves you with, yeah, $5,000.

Yeah, and then I would pay off the $4,500 one after baby's here because that'll get you guys down to your $1,000 emergency funds. And then I would knock out the $4,900 next.

And then looking at the car situation. I might keep it. Yeah, I think I will too. If you think you can pay it off in two years or less, which you can, I think I'd keep it because the size of your family and the option, if your family were different, it might, if things were different, it might make sense for you to sell it. But honestly, in this case, with the amount of money that you guys earn and with the size of your family, you need a vehicle that will fit your entire family. Yes, yes, yes. So,

Yeah, and it's not an outrageous percentage to your income either, right? If you owed $26,000 and you made $36,000, then yeah, we got to get rid of this car. But you guys make $98,000, which is great. So I would keep the car, like Jade said. But the great thing is so many of these are like little ankle biters, Jenny, that within 60 days after having the baby, you could have a majority of this paid off and just have the car left. What's the car payment?

It's $450. $450. Okay. I've heard worse. Like it's not great, but it's not like $768. Or $1,100. Yeah, exactly. So yeah, I would do it exactly like Rachel said. When you have this fourth baby, what's the plan? Are you going back to work or you stay at home mom from here on out? And how will that affect the income?

Well, I currently have the option of hourly pay. So like I've got a job that I can go back to or I can do real estate. Real estate hasn't been exactly the best right now, as you guys probably know. Starting from scratch real estate or you were doing real estate before?

No, I've had it on the hook for about seven years off and on, just kind of. I'm pretty established, but kind of going back into rebuilding because I did take some time to just work hourly and more consistently. So it would be a little bit of a rebuild, but nothing too complicated, I think. So you think you'd still hang out around 98,000? Yeah, for sure. No matter what, that would be where we would be today.

to make ends meet. And then if real estate took over, we, you know, we'd revisit it at that point, but we would definitely want to stay around the 98 just to suffice. Yep. That's great, Jenny. Well, you guys are in a, you're in a great position. I mean, I think after, yeah, after baby comes knocking out the IRS, the other two debts and then tackle the car, which you guys can do. So well done, Jenny.

I'm excited for you guys I think you're gonna get Some really great Traction quickly That's always encouraging When you have You know even that Eight thousand dollar You know fund That you guys have Even to be able to Throw some of the money At that and just Get these out of the way It gets you moving Which is so great All right up next We have Luis In Cedar Rapids Hey Luis Welcome to the show Thank you Absolutely How can we help

Well, I want your advice on whether or not I should finance a house for my son. Alright, tell us the situation. Well, yeah, he has always followed Dave's advice so he has never in his life borrowed money or had a credit card. So when he went to the bank to get a mortgage, he had no credit history and no one would loan him the money.

It's not like he has to buy a house, but we would like him to own his own home. He has a plan where he would rent out rooms to some friends to make additional income with that house. How old is he? He's 36. He's 36. We were originally going to go partners on the house where he has saved up a significant amount

It's a sizable down payment. But with the cost of, you know how the cost of housing just shot up in the last few years. For sure. Yep. And so we said we would go partners originally. Is he married? Both of our names. No, he's single. He's single. Okay. Yes. So he's been living with you?

No. Oh, no. He hasn't lived with us since he was 21. So he's just been renting? He's been renting with me. He should be able to do manual underwriting, Louise. If you have a rental history with payments and you can prove employment for two years, did he try manual underwriting?

I'm sure he's never heard of that. I have never heard of that. That's what you got to do. So if you don't have a credit score, you have to do a process called manual underwriting where the bank or the mortgage company actually looks at you, the person, and again, you have to be current on all of your bills for two years, show renter's history that you pay on time and employment for almost two years. There's a little bit of work in it, but they can actually underwrite you the mortgage. So no, Louise, I think it's a kind mother's heart in it, but I would let your 36-year-old son...

Do it on his own. And every mortgage company doesn't do that. You have to do your due diligence. Yes. Go shop options. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Rachel Cruz hosting with Jade Warshaw. We are answering your questions today. And if you are new to the show, love the show, listen to the show, an old listener of the show,

Any of you, it would be wonderful for you to share it with your friends and your family. This is one of the ways that we can spread the word. And honestly, word of mouth, it's one of the best marketing tools that we have. It's you guys listening and watching, sharing it with the people that you know and that you love. Because our goal for people is to get control of their money. We want everyone to have control.

A plan from point A to point B that is effective and helps them when it comes to their money to get control and to build wealth, to change their family tree and have peace ultimately is what we're shooting for when it comes to the subject that is not peaceful for a lot of people. So yeah, leave us a review, share the show. We so, so appreciate you guys listening and watching. All right, up next we have Jared in Cleveland. Hey Jared, welcome to the show.

Hey, Rachel. Hi, Jade. Thank you so much for having me. Absolutely. How can we help? Well, I am in... Well, JM doesn't begin to explain it, I guess. I'm a bivocational pastor. I work 60 hours a week for my secular job and about 30 hours a week in the ministry. I'm married. I have two wonderful boys.

I love my church because I love my God. You know, God's been good to me. But I've got back against the wall, my back's into the wall, if that's a possible thing. I've got a mortgage that's out of hand. I've got two car payments that are out of hand. Kind of got dealt a bad hand when it came to those particular debts. Got lied to in both of them.

And it cost me a lot more and stuck me where I kind of didn't have a choice. But I'm looking at a mortgage where I'm paying $1,700 a month. I'm $18,000 in negative equity in my car. And I've maxed out my credit. I've gotten

know where to go. And I could really use some sound godly advice from you ladies. Oh, Jared, I'm so sorry. I know it's, it's really, it's stressful. And especially when you feel like you're trying to do the right thing and it's not getting traction, then that is difficult. But yep, hopefully, hopefully we can help here. Okay. So what do you do for your, your vocational job that you said?

So I'm an on-call supervisor and what I do is I take care of people with developmental disabilities. Okay, and how much do you make in that job? My take home is $1,900 and it's bi-weekly. Okay, so $1,900 every two weeks? Correct. Okay, so how much do you make as a pastor? What does that bring in?

My salary is $1,500 a month, and then I have a housing allowance and stuff like that, too. I don't know if that figures into this or not, though. Yeah, it does. So what's your housing allowance? Because is that going towards your mortgage? It is, yes, and it's $1,900. Okay, good. So is your housing allowance covering your mortgage, then, if your mortgage is $1,700? Yeah.

Yes, it does cover that. And it usually covers most of the electric bill as well. Okay. Okay. Yep, that's big. Okay. And then how much do you owe on the cars? For mine, I owe just under $25,000, like 24-7. Okay. And then for the other one, I owe $8,900. Okay. And how much in credit card debt?

Uh, 12,500 for the one. And then the other one is a total of 13,000. Okay. And does your wife work outside the home at all? She does. She works from home. Yeah. Okay. What does she earn each month? Bring home. She's about, it depends on the hour she's able to get, but I'd say she's about 800 a month or so, somewhere in there. What does she do?

uh she does uh medical billing okay okay so i've got you at eight thousand dollars a month between the two of you obviously um 1700 of that is going to the mortgage um okay so help me when i look at this i'm like okay mortgage is covered there's some debt here it's like 6500 left after mortgage so where's it going yeah are you guys on a budget

Yes, we are on a budget where we're at now, too. So the credit card debt that I gave you, one of them was the twelve five. The other two are through. I'm doing a debt consolidation because they were maxed out and I couldn't afford the minimum payments. So I moved that into one payment. And then also, you know, I'm trying to I'm nervous. I'm nervous. That's OK. You're fine. You're fine. We have time. We have time. You're good.

And then in addition to that, I pay for my son. He goes to a private Christian school. That might be an area. How old are the boys? My oldest is seven. My youngest is four. So seven and four. How much is tuition for the private school? It is thirty seven hundred. I want to say for the year. OK, what else?

So you're paying $308 a month for... Yeah, I'm curious, Jared, where the $6,500 is going, though. Because how much are payments for your car? How much are they for your car? My car is $480 a month. Okay. And then I pay for my wife's car as well. Which is how much? $240. Okay, so I've still got you at $5,280. Okay.

Keep going. OK, then there was student loans involved in that. And what's that? No more because the president, he just took those. Well, let's pretend. Let's just pretend. What would the minimum payment? What was it? Two hundred. OK, minus two hundred. So now we're at five thousand eighty. Keep going. I'm just helping you work through this. It's not to try to call you out.

No, not at all. I appreciate it. Let me think. Then cell phone bills, $190 a month. And then I've got car insurance, which is up at $180 a month. Okay. Okay. Then, of course, we're talking about tithes, so 10% of the amount that I gave you there. So $800? Yeah. Okay. Okay.

$3,900. What's been on these credit cards, Jared? What are you putting on for $13,000 and $12,000?

Uh, well, a lot of that was, uh, just trying to make the ends meet, uh, not having enough to make the bills. Uh, I just recently, my income is higher the last couple months because I started asking for more hours at work. Okay. So that's new. It was, it was below that. Okay. Okay. Okay. So Jared, I mean, just looking at these numbers, there's not like a, Oh, I forgot the $3,000 bill here, whatever that is. Right. Like there's,

A month there's not a big Gaping hole I'm just I may just Call it out Jared I just feel like you guys have been sloppy Would you agree well I wouldn't Disagree yeah I think that's it And Jared and I'm going to say this because you You mentioned this and as Believers in this room I think we're Spiritually somewhat consistent scripture Has nothing good to say about debt

Nothing. Every time debt is mentioned, it is in a negative fashion. Now it's not a sin. We're still go to heaven. It's fine. If you still got your credit card debt, like, okay, everything's fine. And that's in that regard. But the wisdom that comes from every time it is spoken is,

It is in a negative fashion. And so in that sense, I would say let's lean on the spiritual conviction that we all believe here from something that is consistent, and that is eliminating debt. So you've been running to something that is getting you deeper and deeper in a hole, right? And so I think for you guys, if you tighten the subject, I'm encouraged by it because I think your numbers are there. I really do. And so I want you to hang on the line because Christian's going to pick up and we're going to give you every dollar premium.

And I want you to cut up these credit cards. And I want this to be a moment where a line is drawn for you all.

And you're going to say no more. We are not running to these credit cards to make minimum payments and make ends meet because you don't need to. You have thousands of dollars and you have a really blessed situation of even in this pastoral role to have the mortgage paid for with the housing allowance. I'm like, you guys are in a really great position. You're going to be working a crap ton. You're probably exhausted, Jared, working 90 hours a week. But for a period of time, I mean, truly, if you guys through...

I mean, five grand at some of this. I'm like, you could be knocking this stuff out. I mean, month after month. And so I would, I would get on a really tight budget that there is nothing, no expenses going out that are not necessities, Jared. And you guys can do this. I really believe in you. I think you can. This just has to be a turning point from here on out. This is the Ramsey show.

Welcome back to The Ramsey Show. We are taking your calls at 888-825-5225. Up next is Lauren in Raleigh. Hey, Lauren. Welcome to the show. Hi, Jade. Hi, Rachel. I absolutely adore you guys. I'm very thankful that I could ask you guys my question. Oh, I'm so glad you called. How can we help?

So me and my husband, we purchased our house. It's 1,100 square feet. We purchased it five years ago. We figured, okay, in five years, we'll be able to buy our next home, you know? But then it turns out that market, everything, our house, that was our dream, is now what our current house is worth. Best laid plans, I tell you. Yeah. So...

I'm self-employed. My husband works for a company. I pay currently $550 in rent every month for the space I have. We currently owe $136.075 on our house. Our joint net income is $132.

And my question is if it's a good idea to expand on our house, adding a workspace for me so I can consolidate clients in and out of the home. I have a set amount of clients. I don't take new clients, so I feel comfortable there and adding on a master bedroom so we can have more space to create a family eventually. One thing is that when I spoke with my town, because we're town limits, when I spoke with them two years ago,

I asked them in regards to this and they said, well, you can't have a separate structure outside the house. It has to be attached to the house and we cannot approve it until after you build. So you have to build and then you go through the permitting. That makes no sense. What happens if they disapprove it after it's built?

I can't use it for work, but I can. It can be a part of our house. And that's the thing is what they say is it's kind of risky. But basically what happens is they'll have a town council. They'll open it up to the public. And if one person says, hey, we're not comfortable with her having a business out of her house, it could be like JK. So is this just an effort like you just don't want to pay rent for office space anymore? That's the whole point. Yeah.

No, it's not that. It's every single place I've rented at, I feel like I just keep getting issues of either last minute changes on management. So I left my last place because I knew the girl was about to sell and I was like, let me find another place soon. I found a place. The guy was great. Easy peasy. I rent above a place. So they have event spaces downstairs. Everything was fine. Within a year, they changed management and now the events have over

overcome so much to the point that my clients can't even find spacing and I feel like I'm just never guaranteed as long as I'm renting and even when I look at it say I'm spending $550 every month for the next 15 years that's like a hundred thousand so that could be going into my home what would cause and what would cause your city limits not to approve let me I mean we haven't talked money yet but what would cause them not to approve it

It would just be the matter of, of course, they would send out letters saying, hey, here's the town council. I would be a little snippet, but I'm just like praying that that little snippet

No one would pay attention to you. But if anyone says, hey, I'm not comfortable. But once that town meeting's closed, it's approved if no one said anything. And do you live in a neighborhood where there's like a lot of people that could get upset because of parking or like is help me understand it a little bit better? Because if I had a business out of my house, I live in a cul-de-sac and I was running, you know, eight or 10 people throughout the day. Yeah.

People would be annoyed. Yeah, if I'm having people park on the street and they're having to go around, there could be a nuisance there. Are you in that sort of situation? Or are you out in the field? So, I am in a neighborhood. I am blessed with the fact that we live on almost an acre, so I could expand our driveway to create parking so no one would have to be on the street. It feels so risky, Lauren. It feels so risky. No, I don't think I would put that much. I know. Because it's going to be a lot of money to do this addition. Right. And so, what kind of line of work are you in again, did you say? I'm an esthetician. Okay. Okay.

Yeah, I mean, I think it's I think a little bit of me is like this is the tax to do business like you have to have space. And if you're in a situation that you would build something out and then they can come back and say you can't use it unless you guys as a family said we would we would use this as a play. Like we sure we could, you know, multipurpose space for our family. So either way, we're OK. That's one thing. What would it cost?

Have you priced it out? When we priced it out about two years ago, the lumber and everything was up. They quoted us around 120. Okay. And so I don't know if it's going to be 120 or 150. Who knows now? It went down a little bit. But we have to go through that whole process again. We basically, once we got a quote, we were like, okay, this is scary. We were too scared to make the leap. But the thing is, is like,

Anything that we look around our area, nothing for what we're looking for. I mean, our house even is worth what we're looking for. Everything we see is like $399 and up. Everything. And so, well, we could add on to our house and we would have a mortgage of less than $300. I don't think that I would... I think that we're solving the... I think that we're using the wrong tool to solve the problem. I don't think going up to a $300,000 mortgage is the solution to a...

$550 rent. I agree with Rachel. I think it's just part of doing business. Right. You know what I mean? Maybe it's starting to keep your eye on commercial areas that might be a place that one day you can sink some money in and purchase yourself. I don't know. That is what I was going to ask you. If you would recommend me purchasing... I don't

I don't recommend you doing anything on debt. Let me make that super duper clear. Whether it's this addition or you've got your eye on a commercial space, you know, that's, you know, whatever that is. But based on what you're saying, I would not do this addition. I wouldn't because I don't think that there's no guarantee. You put $120,000 in which...

Again, yeah, which is exactly the amount of rent you would pay more than the rent you would pay over the lifetime of you working for 20 years at 100,000. You know what I mean? Like it's it doesn't. And once you start, you know what I mean? And you guys said you want to start a family and all of that. And Lauren, I'll throw that out there like.

Things change so quickly. You could look up in seven years, Lauren, and have maybe not be doing this anymore. Right. So again, if it made sense financially and it was like, yep, we could throw 10 grand here. We have it saved. I can renovate this one area. Everything's fine. Then yeah, run. But you're having to depend and risk on other people deciding if it's okay after the project's done. That's a, that's a done deal for me. I'm not putting money in for something that I can't use anymore.

Because one person, Mary Ann from down the street, you know, said no. And then I get screwed. Like, I'm not depending my all of, you know, my eggs in that basket. True that. And then number two. Yeah, I just don't think that y'all are in a position right now to do it. So I would I would just pay for it. Which, again, there's things all the time, Lauren. And it's not outrageous, but there are things that.

as adults that you have to do that you're like man that sucks I kind of hate that but it's the price to be able to do what I do and and the thing that's glaringly obvious to me is it's going to cost somewhere between 120 to 150 to do this build in your mortgage you only owe 136 I know we can do it off within like six years I'm like that's what I'd be focused on I'd be focused on paying off this mortgage

Okay. Yep. I would do that. And then suddenly the $5.50 you're paying in rent for your workspace, it don't matter. Do you guys have other debt, Lauren? Very, very true.

We don't know. It's just the house. All of our cars are paid off. And another thing is like our cars are 10 years old. Who knows if we need a new car? But yeah, that's right. Things scare me. But, but yeah. So now the one question though, just to tack on it really quick is, okay, say we didn't do that. Would you rather us pay off the house within like six years and then do an addition, not for the work stuff, but just say, Hey, we want it. Yes, I would. I would. And with what you're making, okay.

I think Lauren, you guys have paid off in five, four. I mean, I think you could really get aggressive with it and just say, let's like really make this our big goal. And we're going to throw everything at this. And then when you look up and say, okay, do we want to save now for the addition? So it may take some time and some patience to do all of this. Or again, I will reiterate because it is just so true in my life. Four years from now, who knows where the world is and you guys could have a paid for house and

And then realize, okay, we actually like this one over here. That's much better. And we'll take out $100,000 mortgage now, move there, get a step up or like, you know, do what you got to do in that regard too. But I think having no debt, especially a mortgage, it gives you so many options and it frees up so much income. It's amazing. So true. Rachel, you make such a good point with that.

the timeline. You don't know what's going to happen. Four years ago, I had one kid instead of two. I know. Four years ago, I lived in South Florida. Now I live in Nashville. Four years ago, I had a totally different job. Like you don't know what's going to happen. I know. I know. Oh, so great. Lauren, we're excited for you. Thank you. Thank you for the call. And thank you, America, for listening. Thanks to all the gentlemen in the booth who make this happen. Jade Warshaw, always a pleasure hosting with you. And thank you, America. 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 amazing relationships. I am Rachel Cruz, hosting today with my good friend and best-selling author, Jade Warshaw. And we are answering your questions on life, on money, career, relationships. So give us a call and we can help you out at 888-825-5225.

Alright, up first we have Alex in Philadelphia. Hey Alex, welcome to the show. Thank you very much. How are you? We are doing well. How can we help?

I'm just calling to see, I'm on baby step number two and I'm checking about, um, causing all investing. So I have the opportunity to invest after tax in my 401k and get a company match. And what I was planning to do, I just started the program in January was to put my after tax contribution into my 401k on a Friday and

and get the company match, and then on a Monday, pull out my contribution to put towards my debt, and I would still gain the company match, and even at the end of the year, if I paid the 10% penalty, because I'm only 37, I'd still profit about $2,700. So I'm just trying to see...

if that works or not. You know, I appreciate the game. Yeah. I mean, he's a smarty pants. You're a smarty pants, Alex. You're trying to, you're trying to fornagle the system. This is, this is good. So you've got a Roth 401k. That's a really cool benefit. Plus you've got the match on it, which is another great benefit. Yep. And it sounds like you're just trying to take advantage of it and say, well, at least I can have some money instead of no money. How much debt do you have? Let's see if it's all what's making it all worth it. Right. Yeah.

I started the program in January. I was a little over $100,000. I paid off $16,101.78 so far this year. Good. I'm going to have about $87,300 left. Okay. Good for you. How much did you make a year? Yeah.

So it's about 140. Oh, good. So this is great. You're making headway. You've got a really good shovel. I personally would not do this for many reasons. A, you are. You're having to come back and you're having to pay the 10% penalty. And...

At the end of the day, you're not accomplishing fully what you think you're accomplishing because you're having to go back and pay the penalty in 10%. So you're like, I'm putting this money here. I'm going to come back in and grab it back out. But I'm still having to pay a fee on that money. And for us, the whole purpose is so that you have as much of your income at your disposal to put towards your debt. That's the whole purpose of this. And it's temporary. Like it's not going to happen forever. And I get it.

Like a match is free money that's on the table and no one wants to give that up, Rachel. But it's part of the stupid tax that you pay for getting into debt. Like part of the stupid tax is I have to forego this really cool opportunity in order to clean up my mess. And the silver lining of that is it's temporary. It's not forever. And it should motivate you to move faster to get this debt paid off, which it sounds like you are going really quickly. Yeah.

And what you've said to Jade before, that makes sense is that on both ends, you're, you're, you can't double dip in the sense that like, yeah, you may be losing out on that match, but you're also losing out, keeping debt around longer and paying interest and all of that. Right. So there's, you're kind of, it's, it's both ends of it, if you will. So, but yeah, by pausing it, I know I, I would, because I think the, yeah,

Yeah, I would just posit Alex. And again, twenty seven hundred bucks. I mean, that's a yeah, that's a good amount of money, but it's not going to change your world. I think Alex is going to change this world. Not this twenty seven hundred. But I appreciate kind of gaming the system. And if you want to do it, that's your call. You're you're a grown man. You can. But I think I think I think just focus intensity, just doing it all and saying, hey, there's no shortcuts like I'm going to figure this out. We're going to do this.

and pay off this debt and you've already gained so much traction i mean like you've done a really great job so so i probably i i wouldn't i wouldn't do i wouldn't do the gaming the system plan no i i would not although i think that's the first call like that i've i don't think i've ever heard of anyone doing that so i'm just opting in to pay the penalty and just to keep going listen desperate desperate times call for desperate measures it makes you think in a

completely different way. Yes, for sure. All right, up next we have Tiffany in Atlanta. Hey, Tiffany, welcome to the show. Oh my gosh, hi Rachel, hi Jade. Hello, listen, y'all. Oh, thank you. Thanks for calling. How can we help? So I have a question about the every dollar budget. I just wanted to know how is it too soon, how soon is it to start the budget for the next month?

To plan it out Just to have it down visually Yeah I mean I do it Whenever yeah I mean I think you may end up changing it The closer you get to that month Because other things may pop up That you didn't realize Or something cancels And you take it out of the budget So there may be Some changing But I think you could go ahead And plan out I mean I think as early as you want Okay I just didn't know If it would You know Mess up the next month I just didn't want anything To mess up I just didn't

Yeah, no. Yeah, it won't. Because with every dollar, too, it duplicates the previous month. So just copies and pastes basically into the next month and then you go in and change. So for a lot of it, Tiffany, you'll see so many categories are very consistent. You know, we keep pretty much food pretty consistent. You know, gas for your car is pretty consistent. Bills, cable. So a lot of them you probably won't change.

But when you get, or at least for us, how we do it at the bottom of our budget is our line items that are the random ones throughout the month. And so, yeah, I mean, I think if you want to plan, and every dollar you can plan out far in advance. So if you said, yeah, we have a big thing coming up in May and I want to go ahead and make the budget. So I need to know how much I need to be making for May because this big expense is hitting. Then yeah, go ahead and go ahead and do it. I would just caution you that you may want to update it to the closer you get to that month or double check and make sure that you're going into the month

with numbers that are more realistic than if you had planned it earlier, if that makes sense. Oh, okay. Yes. Yes. Thank you so much. Yeah, absolutely. I'm so glad you're budgeting, Tiffany. I think that's, uh, that's awesome because budgeting you guys, it is, uh, we don't go into major detail. I feel like a lot on the show about budgeting, but it is one of the foundational principles that comes with, with getting out of debt, getting your emergency fund started. I mean, all of it, it really comes down to this and it's such a, it's such a peace of mind, uh,

uh, when you have it, I'm like, I, we love it. I really do as a spender. I would go off the rails without a budget. Yes. Easily. It just helps me. Like, I don't know. We're planning for spring break coming up. Our kids will be out of school. Yeah. And I was like, all right, I'm going to get an Amazon swimsuit. And I went to the clothing category. I'm like, I'm going to go spend and, and buy something new. And it's there. It's allocated. I have my limits.

which I don't always like, but there is a limit. But other than that, it's just, I don't know, it really does. It keeps you with peace of mind and control. So every year, Sam and I will sit down in January and we'll plan every budget for the year just to see,

- Okay. - Like, well, it's like a planning thing and it's like a two, three hour event. And we go through the whole year just to get a picture, like a snapshot. And we dream a little bit, we talk about what we wanna do, we talk about. And then for me, it's great because there's kind of just a template there, you know it's gonna change. But then like going into what next, what month is next? We just got to March. So when I set up March's budget, it was basically already there and I got to kind of see, okay, what's changed since we last talked. - Yep, yep.

We both can look at it and see, and it's just, I don't know. It's a great planning. Yes. You know, we do something similar. We, it's not every, it's not a monthly thing we do at the beginning of the year, but we do look out and forecast. Okay. We're doing this. The kids will probably be in like four different camps in the summer. So we're going to put some chunk of money to the side for camps. We're going to do this for vacations.

for Christmas. We kind of plan out in categories what we think we're going to spend throughout the year. And it is, it's so helpful when you're down to those decision-making. So Tiffany, we're proud of you for budgeting. Good for you, girl. This is The Ramsey Show.

All right, you guys, a lot of you have questions when it comes to taxes and we get it. I mean, it's confusing. There's so many terms, so many ways to do it. It feels like and and it's a lot. But we want to help you guys get a better handle on them. So let's unpack a question from one of our listeners.

I'm a new business owner. What are the most important things that I needed to do to make bookkeeping for my business easier? That's good. Great question. Well, first and foremost, congratulations. Start a new business. We always we love some entrepreneurs and small businesses and starting one. So number one, if you're if you're not already keep a personal and business expenses, keep them separate. And we actually took a call earlier in the show where someone had them combined and

and it gets really hard from an accounting purpose. So keep those two things separate. Also create a regular bookkeeping routine so that you're on top of tracking your expenses, your receipts, your invoices, all of that. And then lastly, try to automate any processes with accounting software or by working with a tax professional. So it can really pay to have a CPA in your corner because they will review all of your books to help reduce risk, eliminate errors, and maximize your tax deductions, which is really big for small businesses.

So again, you want to focus on growing your business and then let the people who know what they're doing in these areas, let them do their work. So a Ramsey trusted tax pro really can help. And our team has vetted this group of people. So they really are top notch. So head to Ramsey solutions.com slash tax pro to get started. That's Ramsey solutions.com slash tax pro. All right. Up next, we have Christine in Salt Lake City. Hey, Christine, welcome to the show.

Oh, thank you. I'm so excited to be talking to you. We're so glad you called. How can we help? We have a 21-year-old son and we've encouraged him to live with us so that he could save money. But recently, my son has been watching lots and lots of these Ramsey videos where it says that's really going to stunt his growth emotionally. And so

So I'm wondering what's the best course to take? Um, where we should encourage him to buy a house because I've also been hearing that there's never been a worse time to buy a house or if we should just help him like find a place to rent. Yeah. So he's 21. So yeah. Tell me, did he, um, did he go to school? Is he still in college? Like what, where is he at on just

Just kind of his life process. He didn't go to college. He just went out and he went to a technical college to reside in IT. And he has a great job. He's making about $64,000. Good for him. I know. So he's really responsible. I mean, we've never had a problem having him here because he's working hard. He has about $46,000 saved. Nice. My gosh. Yeah.

Yeah. And he, so I told him, this is kind of a funny part of his story, but I told him, Josh, I'm so proud of you because you did this great job. He didn't run out and buy a fancy car. He was driving the car that he had just, you know, driven through high school. And then just that very week, someone plowed into it and totaled it and drove off. Oh, man.

But he ended up, he just, you know, paid $6,000, got himself a new car. So he's really responsible. Sure. It hasn't been a problem and he's great and nice. Yep. So my take on this...

always is it's not a black or white issue. Okay. It's definitely not one of these things. It's like, oh my gosh, he has to be out next week or you've damaged him for life or something. Right. It is not, it's not urgent. You're okay. You're, you're a great mom. He's obviously a really smart guy. I mean, like two years in technical school and then you're making 64 grand coming. I mean, like he's just 21. Wow. Right. I mean, like you,

Really? I mean, you guys have done a fantastic job. So I think where our caution always is, and not just us, but I think, you know, other people in the space too would say that there's just this element of growing up that happens when you are out on your own and you're forced to make decisions and keep a level of responsibility that you just don't have to have when you're living with mom and dad. And so we don't want him to,

in this situation forever, ever. Amen. But, you know, they're like my sister. She had a transitional period after college for about six months. She moved back home and then moved into an apartment. You know, like, I mean, like there's there's a time and a place, right? This ebbs and flows. It's not a it's not a black or white issue. But the thing is, is that I would want there to be a plan at least. I think the indefinite idea is really tough where it's just like, oh, yeah, this is just what we're doing. But I think for him to say, yeah, OK, I think by

October, right? Let me get through the summer. And by October, my plan is to be able to rent somewhere, rent for a bit. He doesn't need to run in and buy a house right now. I don't think that's wise right now. I think he needs to be out on his own for a little bit. But I think having a date, Christine, for both of you guys...

would be wise because I don't think staying there forever and ever is a smart plan. And so it can end up being that. You could look up and it's been two years and it's been the same. So I think just having a date is,

out there that you both agree on. And again, nothing's on fire, but I would have a date out there to say we're shooting for this and this is where I'm going to move out because he can. I mean, he has $46,000 in the bank. He doesn't have any... He could move out next month. That's... Okay, Jane's more on that side. I'm like, oh, you can keep him until October. I mean,

My thought is like however long it takes him to find the right place. Like if it, you know, he doesn't have to move out of the first place he sees. But if it takes him a couple months, I think that's good. Maybe roommates, if not, you know, or maybe he's like, forget roommates. I got money. I'm going to get my own spot. That's good. Yep. Yep. I just, yeah, that's way to go, mom and dad. That's great. Yes. Well done. Well done. Oh, thanks. Yeah, but you would tell him to rent at this point rather than trying to jump in when things are so crazy?

Yes, I would. And again, he can look at some of his goals. And I think a goal of owning a home eventually is great. And really our perspective for the most part with the housing market is that when you're buying a home, making sure that you're in the right position, not that the market is in the right position, right? So I really think if he has a great down payment for a house that he can afford within 25% of his income, he has at least 5% down, he's going to be in the area for the foreseeable future.

and he wants to get in, then yes, he can. But being 21, his first step really out on his own, I would rent for a year or two. You know, even stuff with, I don't know, the election's coming up this year. I don't know. There is a part of me that I'm like, there's no rush in this. But he has a great cash position to put a down payment on a great condo or a townhome. You know, he's a single guy. Like,

He could get into something sooner than later, which is great. But for the first year or two, I think renting an apartment, I mean, he didn't need a lot of space. Yeah, because when you live by yourself for the first time, there is that feeling of, man, okay, like you're getting used to that. And I do think that rushing into home ownership, I mean, there's a layer of stress and responsibility that...

It's like, oh, this is doubling down on that. Yeah, like this is real. And so it'd be nice to, like you said, have a year or two to kind of get your footing under you and then enter into that. Yep. Even right up next, we got Michelle in Atlanta. Hey, Michelle, welcome to the show. Hey, how are you guys doing? Well, how can we help?

I'm 59 years old, $335,000 in debt. Half of that is my home and the other half is mostly student loans and a couple of consumer debts. I am in a situation where I'm wondering, I think my house has like $230,000 in equity and I'm wondering if I should...

Sell my home, which, by the way, my monthly mortgage is only $1,069. Should I sell, try to get out of these student loans that seem to never disappear? What were they from, Michelle? Are they from your education or a kid's? A little bit of both. I have four sons that I helped through college as well as my college education. How much are the student loans?

The student loans in total are $100,028. Okay, $128,000. And then you've got other consumer debt?

Yes, I unfortunately two months ago had to buy a pre-owned used car, but it wasn't $5,000. It was $37,000 before that. I know. You know what, Michelle? We're up against a hard break. I'm going to keep you on the line, though, and we'll come back to you if that's okay after this break. So hold on. Don't hang up, Michelle, because there's some numbers here we want to unpack and kind of figure out this situation.

This is The Ramsey Show.

Alright, we have Michelle on the line from the segment before. We held her over because she's in a situation that we kind of wanted to walk through more with her numbers. So what we learned from her is she's about $330,000 in debt, about $128,000 of that in

is student loans. $37,000 of that is credit cards or a car loan. And then the rest, a little bit more consumer debt, and then the rest is her mortgage. So Michelle, was that a fair recap, would you say?

That is right on point. Okay, perfect. So what's the other consumer debt you mentioned? So I had a medical scare last year, and so I have like $23,000 in medical expenses. Wow, okay. And a $10,000 personal loan that I had before everything happened. Okay. What do you bring in every month in income?

Um, every month I bring in $5,960. Okay. And that's after 401k and medical and everything that comes out of my check. How much are you putting into 401k every month? 5% or every check 5%, which is the max, um, match amount, um, for, for my company. What's the dollar amount? Just so I don't have to do that math.

so so it's like yeah it's like 270 every paycheck oh every paycheck okay great um yeah okay i i think that your initial question is should you sell your house to access the equity which is around you think you'd pocket 230 in equity is that what you think if you were to sell this house

I think I would pocket anywhere between $200,000 and $230,000 after all of the fees. Michelle, what do you have in retirement? Less than a couple of hundred thousand dollars.

Okay. And tell us more about this house. Like, is it the right size for you? Is it where you ultimately want to end up? Tell us more. Well, it's the house my children grew up in. It's about 23 years old. I've kept it in really, really good shape. And my mortgage payments are like $1,069. You can't find one.

Sure. Yeah. Yeah. Yeah. We hear you totally. So I'm just kind of between a rock and a hard place and also thinking about retirement, which hopefully will be soon. I think you have to look at this. I think you have to look at this on a 10 year play. So you're 59. There is a world that if you get crazy about this with your income, 6,500, because I'm going to pause here.

And I know that feels so counterintuitive for you right now. But if you were to pause investing, that'd give you another $540. That gives you $6,500 a month. It's just you, right? Okay. So you want an extremely tight budget. You're only paying $1,000 a month in mortgage payments. Like I, you know, I'm looking for extra work that you can pick up for yourself. And I'm going to try to knock this out. The average person is out of debt in two years or less.

And that's what I want to leave you with. And with the amount of debt you have, it's a lot, you know, you're a 50, 60, 70, you're, you're, you're knocking on the door of $200,000 of debt, consumer debt. But I think that there is a possibility here. Cause I agree with you to sell this house. Yes, you'd be out of debt, but my guess is you'd want to go right back into debt by getting another property. Exactly. And then you're starting from scratch. And so for me, I,

I'd probably walk this out and see if I can get this debt cleaned up and see if I can keep going and get this house paid off on down the line. Even the car, Michelle, it's $37,000. How much could you sell it for today?

Well, I'm glad you asked that question. Last Friday, I went and a dealer offered me $30,000, so I would be upside down still $7,000. Have you Kelly Blue Booked it? Because sometimes dealerships will lowball you because they want to make a margin of spread on it when they resell it. Actually, one dealership,

offered me $22,000. Then I went to another recommended dealership that makes good offers and they were right at $30,000, which is...

a lot more than the previous one. I haven't looked at the Blue Book. I thought about doing it, you know, a private sale, but I know there's a lot of work around test driving. And again, me being alone, I don't know if I would want to do that. Yeah, I would just run some numbers. I would just look it up on Kelley Blue Book because if it comes out to even $33,000, right, that's a...

I mean, that's $3,000 that you don't have to pay, which is awesome. So I would look at that, but I probably would sell this car. Just overall the situation you're in and your income, it's bumping up to that half of your annual income is in this car, and I don't like that. So you may have to take out if you can get it. Do you have any money saved that's liquid cash, not retirement? No.

I have, well, of course, I have my starter emergency fund and I do have vested stock that'll be maturing like between the next month and this December. Oh, wow. What's it worth? What's it worth?

Well, today's market is said it's worth about $63,000. Hey! Michelle! We got the golden tickets! The answer is... Oh my gosh, Michelle! Look at that. Okay. Wow. Okay. I'm like...

Absolutely. I mean, if you were to sell this car, Michelle, and get a crappy $5,000 car, that'll be $7,000 because you're underwater a little bit. You'll need some cash to buy something. But seriously, Michelle, get a car that you get a deal on and it's great. Because if you knock that out and then this stock...

I'm like, oh my gosh, that knocks out medical, that knocks out the personal. Yes. Oh my gosh. And then you have, how much is that left? About 20K left, I think in that, which can go. Now you've got 108 on the student loans and that's it. Yes, that's right. That's right. Okay. So when I sell the stock, cause like I said, between, you know, the end of this month and the end of the year,

total would be $68,000. Should I initially knock out some of the consumer debt and then target the student loans? Yes, exactly. So you'll want to pay off the smallest debt first. So knock out that personal loan of $10,000.

And then knock out your medical debt. And even that, Michelle, is going to feel so great. I'm like, just even getting that out is going to be awesome. And then, yeah, and then throw the rest at your student loans. And by the time you do all that, you've gotten your consumer debt from over $200,000 to right around $100,000. Yeah. And if you can find $4,500 a month to put towards that, you're out of debt in two years.

Oh, wow. And I know you can find that. Yeah. I'm sure I can. Yes, Michelle. I was driving my 2007 Camry forever and someone hit me and totaled it. So that's why I'm in this predicament of this car. I'm so sorry. But I think I want to sell and try to find something else. Yep. I mean, I really would because your peace of mind and getting this traction, Michelle, is

is so key. And I hate to like put ages on it, but especially at your age, you're 59, you're 59 and you want to feel some really fast traction and a car is not worth the

this level of stress. The freedom is going to feel so much better. I mean, a great Honda Civic that's 20 years old, give it to me all day, right? I'm like, you will feel better in that. So let's keep playing it out too. So you pay off the $108,000 in two years. And then by then you've got your mortgage, which you owe what right now you owe $167,000 on. But after two years, it'll be, you know, a good amount less. And

And then, you know, you will have felt, hey, I paid off $108,000 in two years. I can pay off $157,000 in two and a half or three years. Right? Do you see what I'm saying? In five years, Michelle, you could be completely... Now, it's going to be a lot of hard work.

It's going to take a lot of discipline. And with that stock, I want you to talk to a SmartVestor Pro because there's going to be some tax implications. We want to make sure that you do everything correctly in that regard. So Christian's going to pick up. He's going to help you get connected to a SmartVestor Pro. And then we're also going to give you EveryDollar Premium and Financial Peace University, which is our crash course when it comes to money. It's nine lessons that teaches you everything. And Michelle, you are at such a great point right now. Thank you.

Golly, there's so much hope. I'm so thankful you have this company stock. It's really going to be a gift to you. Really going to be a gift to you. So thanks for calling. This is The Ramsey Show. Our scripture of the day comes from Lamentations 3, 22, 23. The steadfast love of the Lord never ceases. His mercies never come to an end. They are new every morning. Great is your faithfulness. Serena Williams says...

I really think a champion is defined not by their wins, but how they can recover when they fall. Ooh, good one. I always love when there's quotes like that from people that win all the time. I know, right? Thanks, Serena. You're a really great tennis player, though. Can we just throw it out there? But it is true. It is true. How you recover when you fall. Love it. All right, up next, we have Joseph in Atlanta. Hey, Joseph. Welcome to the show.

hey thank you for taking my call absolutely how can we help so i i have a question about um i guess the order of debt or how i should go about paying off some of this debt my wife um has a house with a car it's not much but on my side i have about 14 000 of credit card debt that's in the red like they're

you know, uh, and collections. And then I have like another 24,000 from chase. That's a charge off. And I was just told it's a charge off, but I don't exactly know what that means. So I was just kind of wondering, should I, should we focus on paying off my wife's debt and the vehicle and all of that? Or like, how should I go about it? So you said the house is in your wife's name or does she have a separate property that she brought into the marriage? No, it's, it's in her name. Okay. Uh,

Yeah. And then she's got a car. What's what's the debt on the car? It's like thirty four thousand. OK. And so that's it. It's just the car, the credit card and the chase charge off. Right. Yeah. I definitely would start with whatever is late or in collections just to get it current. The youngest. The youngest. Which happens to be the smallest debts, too, which is which is great. How much do you guys make a year together?

um without my side business it's around like right under 90k 90k and how much do you bring in with the side business uh after like expenses and everything like on a on a good year it could be 50 on a bad like bad year like this year like 30 okay that's pretty good yeah excellent okay so y'all are it's it's 120 on the low ends but could go up to 150 or more yep okay great that's awesome what about your wife does she work

Yes, she works from home. She does health care. And do you guys have any savings? Yeah, we have a thousand on the side and then she has another 10 on just for herself because she likes to keep it, I guess, just in case. Listen, I peeped it out earlier. It sounded like there was a lot of separation there, but now here it is again. Yeah, I don't like some of the vocabulary I'm hearing, Joseph.

Well, I mean, I don't mind. It's not like, you know, I have access to it, but I like to have her safe, keep in mind or whatever. She likes to keep it. Well, I mean, I'll just be honest with you. You know, here, the way we view money is when it's a married couple, we view it as one. And if it's truly, if there's $10,000, it should be our money, not yours or mine. Because when it comes down to it, you together have a life and you together have debt and

And man, oh man, that $10,000 sure would come in handy right now to pay off a credit card debt that is both of your debt. And so there's a piece to this that, you know,

It's a different mind. Yeah, it is. It's a total different mindset shift with this, because if you guys have functioned so long, she does probably feel protective and have this ownership over this 10 grand. But what if you guys sat down together and didn't have names on anything and all that, and you just put everything in a pile, if you will. And one night you just went down the list and said, OK, here's what all we have. Here's our savings, all of it. And you kind of just you changed your mindset just for a night and just said, OK, what if

All of this was ours. Our income is all together. Everything is together. How fast could we get this paid off? How fast could we build back the emergency fund? How fast could we be investing? How fast could we get to a million dollar net worth? How fast can start just dreaming big, Joseph, like with you guys,

together as one with one unit in one mindset doing it. And it's a, again, it's a different exercise with a mindset shift because you have been, well, this is mine over here. I don't want her money to have to pay off my debt. You know, it's this, it's this tip or tat kind of situation. And in a marriage, y'all are one, you are all one. And the more you can be unified, Joseph, I'm telling you, we talked to so many couples that,

If you're in a somewhat of a healthy relationship, we've taken some calls here that we're not good. But if you guys have that mutual respect, you love each other, you're in this together.

There is something that deepens in the intimacy of your marriage when you truly go all in, when you truly say we are one, we're going to do this life together. And so that would be my encouragement for you, Joseph, is for you guys to have that conversation. And I would start with keeping your $1,000 emergency fund. You got 10 grand. I would throw it at the credit card debt. That gets it down to four grand that's in collections. And if it's in collections, you may even be able to negotiate, Joseph, and

I would call the collections company and ask them, tell them, I got 10 grand. Yes. My wife's money. No, I'm just kidding. I have 10 grand. Will you settle? Will you settle this? Will you settle this debt? Right? I mean, in collections, they may be able to do that. And if they do,

Number one, do not give them access to your checking account for them to get it themselves. You send them a cashier's check, number one. Number two, get it in writing, have them email you. But I would try to negotiate the ones in collections because those are more easier to negotiate. And then you guys start working this plan and start working to pay this off. And I mean, yeah, you got 58 grand left after that $14,000 credit card.

And you guys could have this knocked out in 18 months. I do got a quick question. What do I do about the charge-off thing? Because it's like one of them six years. I'm sorry. I'm a ghost. They can't find me. I'm the gingerbread man. What does that mean? You off the grid? Yeah.

Yeah, a little bit. I mean, they, you know, they'll send sheriffs to the house looking for me for the wealthy or whatever. Listen, listen. Pay it. Joseph, you got to pay your bills. You got to pay it. You can't, like, escape the law. He said you can't catch me because I'm the gingerbread man.

Well, it's destroying your credit. I'll tell you that. Not that you care much about the credit, but at the end of the day, if it's money that you owe, you need to pay them. It's like beyond collections. They will find you, Joseph. Yeah. I mean, you're on the map. You freaking got MasterCard. You got Capital One or whoever you're with. I mean, like, yeah. You can't... Yeah. We're not going to sidestep...

uh the situation we are gonna tackle it head on joseph uh but my man said he's the gingerbread man i've not heard that that's hilarious pay your debts but you can negotiate you can negotiate oh man jay that is uh yeah look rachel i gotta go back we gotta go briefly back to this my money his money thing because it's just

For me, it's a level of trust. Like there's something there at the, when you whittle it down to all of its, you know, to its lowest common denominator, it's, it's a trust thing. It's I, I trust you with these areas, but I don't trust you with that. And it's kind of, it's a weird way of thinking because it's, um,

it's not balanced, right? Like if you want a commitment, I want a 100% commitment from my husband. I can't say I'm committed to you in every way, but leave this 10% there that I'm not committed. And that's my finances. Cause here's the thing. Listen, you put that in any other context. If my husband says, Jade, I'm committed to you Monday through Saturday, but you know, Sunday, that's

my day like that's for me I'm like what like yeah I will come for you you'll be on the moon but and it's the same thing with your money you can't say I'm committed to you in all these other areas but my money like that's my thing right commitment is what's hard is money has become such a security place for people it feels like oh my gosh it's if something happens this is my escape out right yeah and again if you the asterisk always is you guys if you are in a situation we give Jade I feel like we've taken a few of these together hosting like it's

Yeah, there are times to protect yourself. If there is abuse, if there is addiction, you have the what is it? The keep your money safe. The safe. Yeah. So it's you seek counsel. That's the S. Seek counsel. If there's any type of addiction, abuse, that's the A. Financial infidelity, financial abuse. That's the F. And then with the counselor, you evaluate your options. That's the E. And for a lot of people, it is you need to remove yourself from it.

Yes. It's not to say that you're getting divorced. It's not to say that it's over, but you're removing yourself and getting yourself and your family in a safe position. That's it. But then for all of you other, all of you other couples out there,

I'm telling you, when you see yourself as one, there is a stamp of approval or something that happens when you say, we're combining it. We're combining our lives. And we see people win faster. Your net worth goes up when you say, this is all of us, all of our income. Well, thanks to all the guys in the booth for a great show, Jade. Thank you as always. And thank you, America. And remember to take control of your money and create a life you love.

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.