You Work Too Hard to Stay This Broke
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Brought to you by the EveryDollar app. Start budgeting for free today. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. We help people build wealth, do work,

that you love and create actual amazing relationships. Jade Walsh, our number one best-selling author, Ramsey Personalities, my co-host today. The phone number here if you folks want to talk is 888-825-5225. Maria is in New York City. Hi, Maria. How are you?

Hi, I am so excited to be on with you both, and thank you so much for taking my call, and you two are my favorite combination, so thank you. How are you guys? You say that to everybody. You say that to all the personalities. Never. What's up today? Oh my goodness. So really excited to speak to you. I know I'm walking into the bear cage, very nervous, but my husband and I, we make a combined income of almost $300,000. And

And we're living paycheck to paycheck. We have two kids. We have been Ramsey-ish for about two years, but life keeps getting in the way between funeral expenses for family. Our daughter has severe ADHD, and it just feels like we cannot get ahead, you know,

long enough to be able just to follow the steps and the plans. And it's causing a lot of financial anxiety. And I can go into background and anything that you need to help just me figure out how to move forward with the amount of money that we have and living paycheck to paycheck. It just, it's foolish. Yeah. Yeah.

Well, it's distressing for you, I can tell. And so you live in an expensive city, obviously. Yeah. And obviously you've got an expensive medical condition that you're dealing with. Yeah. And those two things go in the budget, and they show up in the budget. Some ways they show up in the budget. So where do you think the problem is? I assume you've attempted some kind of written budget.

Yes, I have every dollar premium version. I have notes in front of me. So our budget. So here's what seems to be happening. We do have a budget. Could we be better at it? Absolutely. But what keeps happening is are these large purchase, large bills, if you will. So about a year and a half ago, our mother passed and we covered the funeral expenses and

Why? Why did they not have arrangements to cover her funeral expenses? Unfortunately, and this may be where my financial anxiety comes from, my parents raised a very large family on a single income from my father and did not have financial responsibility, basically. So there was absolutely no assets in the estate?

Correct. Exactly. None whatsoever. What'd you spend on the funeral? About 13 grand. And so you said big things keep coming up. So the funeral was one. What's another example of something that's coming out of the blue? Yes. So my brother just passed away, sadly, a couple of weeks ago. I know it's been a rough two years. So that's another expense. But in between then, what has come up... You're paying for that funeral too?

Correct. How are you? Are you cash flowing it? What's that look like? So that was, you know, this is where my problem is because all I want to do is cash flow it and it feels that I'm not able to. Your brother's different than your mother. Why is no one? Is he single?

He is single. Yeah, he was. Sorry. He was single. And, you know, really right now out of a few of us kids, it's my sister and I are really the only ones that are the most financially stable. So how much did you pay for your brother's funeral? Eight thousand. And you did not pay cash?

Correct. We put that on a credit card. So that didn't bust your budget. It broke your bubble, but not your budget. So why can't you live on $300,000?

I'm calling. No, I'm serious. When you write down your budget, what's the problem? Because you're looking at it in front of you on every dollar. Right. Where's the freaking money going? These are two isolated incidents. What's been happening over the years? Where do you see the problem? When you look at month to month, you've got $25,000 minus taxes coming in. And so you're dealing with $20,000.

or so to live on. Yeah, our take home is $13,600 a month. There's something wrong with that. That doesn't feel right. Is that minus investing? That's half of what it ought to be. So I bring home $8,000. My husband brings home $56,000. He pays for insurance out of his check, and we both do contribute to retirement right now. Okay, that's the problem. Oh, well, stop.

Yeah, 15%. You have no money. You don't put money in retirement. You're stop. Yeah. Stop and get it budget. And what else have you got? Have you got big tax refunds coming? No, we owe every year the last couple of years. So now we've asked our employers. How much is your rent or your house payment? Our mortgage is $2,700. That's not out of line. Okay. Yeah. And how much are your car debts?

We paid off my husband's car and mine. I have $8,000 that we're looking to pay off as well. What other debts do you have?

We have two credit cards. Our total debt, including this funeral now, is $17,800. You don't have much debt, so that's not where it's going. It's not your house payment. That's not where it's going. Do you have kids in daycare? Lots of kids? Well, we have two children, and that's what I was going to get to. It's like, how do we handle it? So our daughter's ballet, it's ridiculous. I'm afraid of what your response is going to be. It's $10,000 a year, our service.

That's not the problem. That's not the problem either. I'm trying to figure out what's eating up $20,000 a month and I haven't seen it because you have $8,000 on the car, these credit cards. I mean, what's the payment on the credit cards? What do you pay every month? Nothing.

Nothing? So here's what we end up, no, what we seem to be in the cycle of is banking money and then paying off the debt, right, trying to do the snowball. Because you're trying to make up your own freaking plan. So let me ask, what do you do for a living? What's your husband do for a living?

He is a teacher, and I'm a school psychologist that moved into administration, so I'm a principal. Okay. All right. Both of you are in administrative-type roles, okay? And so if I hired you and said, balance these people's budget that make $300K, you could do it. It's not an intellectual circus. It's not that hard, right?

Right. So you could do it. But there's something you aren't working together. You're not willing to say no to eating out. You're not willing to stop your retirement savings. You're not willing to get, you know, to sit down and let's get this. This thing has to balance. You're not in Congress. Right.

I know. And you guys have to look at this with a more serious eye. It sounds like you keep circling around the airport and have refused to land. Yeah, because if she's really saying that the only debt they have is $17,000 in credit cards and $8,000 in cars, that money is...

Something is she's not telling us. They're spending money on $10,000 here on ballet. And then, you know, ADHD was probably 10 or 15 grand on something they did overdid. And so you overdo everything and you're living drama to drama, crisis to crisis. And you're letting that stuff dictate your life rather than you dictating to that stuff. And so let's pretend you didn't have any money and your brother died. Well, who's going to pay for the funeral? I guess it wouldn't be you.

So we have to start thinking about these things. And or, you know, we're going to do the twelve hundred dollar cremation. You know, this is what happens if you die and there's no one to take care of you. The state will cremate you. That's what happens. OK. And so I'm not suggesting being that cold, but you guys got to start looking at some of these things and quit calling them all. These crises are taking precedent.

And you've got to take precedent over the crises because the budget becomes king and the two of you have to be working on it together. I don't think he's real involved here.

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Talk it out with BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp, H-E-L-P dot com slash Deloney. Amanda's in Greenville, South Carolina. Hey, Amanda, what's up? Hey, Dave, how are you? Better than I deserve. How can I help?

Thank you so much. Well, I have a question about some family finances. My husband and I started Financial Peace University about a month ago. And in doing so, we kind of uncovered, well, I uncovered some things about some family traditions with money that his family has that is making me a little bit uncomfortable. And I think that's a good question.

Like yesterday morning, he got a text from his mom saying, hey, you owe us $100. And that happens quite frequently throughout the year, probably maybe five or six times a year. For what? For what?

So there's a family lake house and taxes on the lake house. I think the most recent one was for the tailgate parking spot. Sometimes it's for if we spent the weekend with them, it's for food from the weekend, which we don't mind paying for those things, but it's an after-the-fact type of thing. Is he one of the owners of the lake house? No, he is not. And the tailgate spot, that sounds like a football thing.

Correct. So somebody purchased the spot, and if you use it, you have to pay back that person? Is that what it is? Well, we have a different spot. We buy our own spot for the year. Why would you pay for theirs? Well, that's my question. And why is it you're just now discovering this? How long have you been married? We celebrated our third anniversary on Tuesday. Okay. So how much does this amount to? Is this like $100 a month? Has this happened like twice in the year? What does it amount to?

So for the tailgate spot, it's $100, and that would be for the year. But it just always is never something I expect, and it's always been something that he paid until we combined our finances a month ago. It was something that he just paid for out of his money. And thank you to John Deloney, Building a Not Anxious Life, because it really helped us to get on the same page. Yeah, that's good. Okay. So when you say to your husband, this makes me uncomfortable, what does he say?

So he actually had a conversation with his mom last night saying, you know, no more of this retroactive stuff of you guys spending money and then us paying you back. You know, you need to have a conversation with us up front. And her response was, are you sure you want to do this budget thing? That was not the statement. The statement was not about our budget. The statement was you have to tell us in advance or we're not going to pay you.

Right. That's it. She doesn't get a vote on your budget or your marriage or anything that happens inside your house. She's the mother-in-law. By definition, that means she does not get a vote. If anybody doesn't get a vote, it's her. Yeah, how does she even know about it? Of all the people on the planet, she's the one that has the least chance of getting a vote. Well, right. I'm serious. I mean, the worst position you can possibly be in is to be the mother-in-law for the son. It is the weakest position on the planet and the most power-hungry.

Okay. And I do realize it's a difference in culture from my family. I was raised by a CPA. You know, but that's not the point. The point is your husband said to someone outside your home, we will not accept surprise billings anymore. And that's the end of the story, period. Okay. And by the way, you did do this right. He talked to her. You don't need to be brought up in this because you'll become the evil girl that took her baby boy away. Mm-hmm.

Well, I learned that from listening to your show for about two weeks now. Okay. Thank you. So that was very good. Good. I'm glad you caught on to that. You're doing it right. And here's the thing. It's okay. I mean, you guys can be gentle about this. You don't need to be harsh about it because it's not a lot of money. It's just an emotional boundary violation. Right. And it's just, you know, Mom, we don't want to be in a parking spot for tailgating. We have our own.

Right.

because I'll help you, but I'm not going to do it all. And you guys got, we're going to figure this out a little bit. And so you're all like grown women and stuff. And so this is, and the girls go, okay, yeah, we'll chip in. And they don't mind doing that. And we talk about it up front and, but we don't send them a bill two weeks later for catering. Right. Right. Right. Okay. Okay. That makes sense. What do you think about the taxes on the lake house? I mean, why would you be obligated to pay taxes on someone else's lake house?

Well, that was my question because it's not, my husband's name is not on the house. That's why I asked. That was kind of my question, yeah. You can pay the taxes on my lake house if you want. Since you're paying for other people's lake houses, I mean, why not? Right. That's about as dumb. I agree. When you asked your husband, what did he say? What was the reason? Did he make a promise that he would do that?

I don't think so. I think it was just an implication when they built the house. He was in college, and I think that's just kind of how it ended up. When you're in college and your parents build a lake house, they don't call up and go, you've got to pay taxes. You're in college. Yeah.

Yeah. These people are weird. Okay. And not the good kind of weird. I know. It's not a good Ramsey weird thing. So, I mean, yeah, no, we did not. We don't pay taxes on somebody else's lake house. And I don't know how this tradition started, but it's a weird tradition and it really needs to stop. Yeah, that's not a tradition. No, it's a tradition for these people. And so they have some weird things they do. And, you know, we've just got to. But you can be gentle about it. Okay. Okay.

You know, I'm being a little bit bombastic because it's a little bit absurd, and I want you to hear it's absurd. But you guys can be gentle about moving away from it. Mom and Dad, look, we're working hard on this stuff. We're trying to get ourselves out of debt. And it's your lake house, and I'm no longer comfortable paying the taxes on your lake house. Okay.

And, you know, I'm going to let you know that way in advance. So this fall, when the taxes come due, you're not caught off guard. You know, is it part of you being able to go in and hang out there several times a year? Is that what it is? Is it just the. No, well, it shouldn't be. Well, I didn't think so until I found out that that was the expectation. OK, so that's the expectation. You come and use the lake house a month ago. You get to use the lake house twice a year. And in return, you pay how much? How much are the taxes?

I think my husband, when I looked it up on my county records, it said something like $4,000 for the year. And I think he paid like $300 or $400 last year. Okay. Yeah, I...

Do these people, they're not able to afford the lake house? Is that the problem? Well, that's my, I told my husband, I was like, you know, if it's a lifestyle that they can't afford, then they shouldn't be doing it. Yeah, yeah. And I try not to be critical, but when you dip your hands into our finances, then... Well, how often do you go to the lake house? Just you guys. Maybe five weekends a year.

Yeah, if the deal is you don't get to go to the lake house because you're unwilling to pay $300 a year rent,

to use the family in air quotes, lake house, then that's a decision you all can make. But basically you're being asked to pay some of the expenses because you're using it as a rental. And if you don't want to use it, then that's their decision might be that they don't want someone who's not willing to pay to come. And that would be okay.

Okay. If that's how they want to do it. They're running an Airbnb for the family, I guess. I don't know. But a cheap one, but it's still there. But again, I've got a lake house and I pay the taxes. Nobody else pays the taxes. Yeah. Regardless of who visits. Okay. Okay. John Deloney was down there one time and I didn't ask him for any rent. You know, so, you know, I mean, it's just, that's just...

You have guests at your lake house. If you do a deal up front and the family is a family partnership to buy something, but you don't do that with a college student.

No, it doesn't sound like that. It sounds like they said, if you're going to use our house, you're going to give me some money. These people are very intertwined, and they don't have good clear boundaries. And so it's time to untangle some of this. But now, you need to be fair that if you're not willing to chip in on the expenses, they may not want you to use it.

Five weekends is a lot to give up for $300. And that's a fair expectation on their part. They may say, look, only those that chip in can use it. Yeah, because that's them saying, hey, while you're there, you're paying basically the utilities while you're there. Yeah.

I don't think I could go there, but I mean, I do tell, you know, like whoever's down there next weekend when I'm not, fill the dadgum boat up with gas when you leave. Hello? Yeah. You know, I do tell them to do stuff like that. But my kids, I mean. Yeah. My grown kids. That's such an oxymoron. Adult children. The adult remsies. Yes. The Gen 2. Gen 2 can fill up the boat. You should leave the place better than you left it. By the way, I don't also say you can't come back if you don't do that. That's true. Either. So, you know.

You know, storming and we forgot to do it. Whatever. Whatever. Wow. Some people's children. This is The Ramsey Show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet.

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And our team is hosting free budgeting trainings this month. Did I mention they're free? You learn step-by-step how to make and stick to a budget using EveryDollar. And you get your biggest budgeting questions answered in a live Q&A. Sign up for free. Did I mention it's free? At EveryDollar.com slash webinar. Jessica in San Antonio. Hi, Jessica. How are you? I'm doing well, thank you. How are you? Better than I deserve. What's up?

Well, I am currently I'm a single mom and I've been trying to tackle my debt for the last couple of years.

And this summer I had thought, hey, I'm going to try to really do it aggressively, get a second part-time job while the kids are out of school and work on that. Right before summer happened or summer came, child support stopped coming in. So my second job pretty much brings in the same amount as child support. I'm kind of right back where I was. What are you doing to get him activated again?

At the moment, there's really nothing I can do because it just happened. So it's like a wait and see. If months go on that he doesn't pay, then I can start. I mean, it's like an on-again, off-again thing with him. So not the first time I've been here. How much is the child support? It's about $900 a month. How many kids you got, kid? I have two. What age?

13 and 11. Okay. How long have you been a single mom? Probably going on 10 years now. Wow. You've been fighting this a long time. Yeah. What do you make? I make about $54,000 a year. Good. Are you plugged into a good church? I am. Good. Yeah. Good. Okay. And who's watching the kids while you're working so much?

They sometimes will stay home if it's a short shift or they'll be with friends or my sister. Good. That's good that you have that help. And what do you do for a living? I am an office manager for a physical therapy clinic. Okay, good for you. Well done. All right. And so your core question is what again?

How to avoid burnout while trying to do all this. Well, here's the thing. You've made it 10 years with avoiding burnout, and it's really an incredible thing that you've done because that's been a tough slog. The math that you're giving me is no easy walk, okay? So you truly are a warrior princess. I mean, you've been doing it.

And the burnout comes when you don't think there's any light ever at the end of the tunnel. It doesn't come from it being hard. You can do hard. We know that by just hearing your story.

But the heart, the heart becomes burnout when you don't think it's ever going to stop. Well, we know it is going to stop because you got a 13 year old five years from now. That one's done. Yeah. Yeah. Okay. So, I mean, we know that's going to stop and the other one's 11. So, you know, seven years from now. So we know, you know, that, that there is an end to this in terms of the weight of raising children by yourself financially. And, um,

So and so what I would do is two things. And, Jade, you jump in here. But one is I'm always looking at both sides of the equation, the income side and the outgo side. You have a good income, but it's not great. So I want to start thinking about over the next three to 10 years or five years or whatever it is, what I'm going to be doing that makes me 100K. I don't want a 38-year career as the office manager making 50K. Okay.

Right. I don't mind. I don't mind. It's a good job. It's stable. And you're probably a great team member. But I want to know, okay, what is it I'm going to do to own one of these? Or what is it I want to be in the next phase? And I'm going to start studying and taking the classes, get the certifications to do that thing myself.

and have a long plan and that helps with burnout because you can see out there into the future that there's something to do and in the short term do what you're doing and that is add income by um you know by a great side hustle and the side hustle has one definition which one makes the most money if it's moral and legal yeah because there's no the side hustle is not for purpose of your career it's how can i make the most possible money in an hour that's moral and legal

Yeah. And so and then that helps. And then lastly, I would just say the secret to happiness is low expectations on child support. Yeah. Because this guy, this guy's not a good dad. He's not a good provider. He never has been. It's been a pattern to expect this money to come every month.

is not reality. Setting yourself up for disappointment. And so when it does come, I'm going to go, wow, that's awesome. I'm going to act surprised every time it comes. You there? Yeah. Yes, sir. Yeah, I think that Dave is right. I think when you're in survival mode, you...

you don't feel like you have the luxury to really think career wise, what is it that I would really love to do? What would it, what would it look like? You know, there's really no time for that. Just when you're struggling in life and financially. But if you can carve out that time and do that, because we say all the time, you know, there's two components to this puzzle. And one is, you know, to cut your expenses massively, which you've done that that's been your whole life for 10 years. And then the other piece of that is you do have to get your income up and you

Not just side hustling, but yeah, really looking at that core income. And that is a journey over time. Have you got debt you need to clear? Yes, I do. What is it? Right now, it is with my car, right around $20,000. Yeah, that's a lot. That's an expensive car for your situation. You may want to look at moving down to a $10,000 car. Currently, I owe... Go ahead. Currently, you owe what? $10,000.

I owe $9,000 on my car. Oh, I thought you said you owe $20,000. Oh, no, no, no. Total, including my car. Oh, okay. That's good. Okay. The car's a keeper then. That's okay. And what's the other $11,000? That would be credit card debt. That's caught your slack when you were surprised that the child support didn't come.

Yeah. Yeah. So we're not going to be surprised anymore. And I didn't always have this job. Yeah, that's true. I mean, you've been pushing through. I know who you are. I've worked with you for years. And I think you're very impressive. I think you're a lot more impressive than you feel. Thank you. I'm proud of you. I mean, you raised two kids in San Antonio, Texas by yourself with not much help from Goober and not regular help anyway, right? And he's still playing games a decade later.

with his own children, which makes him a shameful individual, right? And so, you know, and in spite of all of that, you've continued to get better, get better jobs, move along. And this job's an upgrade from the last one, isn't it? Yeah. Yeah. So we're going to keep doing that. We're going to keep doing that. And that's, and you're going to get there. And when you get there, you're going to be so strong that nothing will knock you down because you're building strength with every step of this journey.

That's what I meant. I wasn't joking around when I said you're a warrior princess. You're in a position. Jessica, I remember many years ago we had Financial Peace University. We used to do – the way we would do it is after I would teach live in those days, we would have a small group discussion and we'd get in a circle. And I remember a single mom in there, younger than you actually, who was cutting hair. And she said, I don't think I can make it. I'm burning out. I'm not making enough cutting hair.

And I'm sitting there trying to figure out what to tell her. And a lady across the circle says, you're going to be okay. She says, what do you mean? She goes, I was you 20 years ago. I used to cut hair. Now I own the shop. Now I got a half million dollars in the bank. Yeah. And mutual funds. And I'm here to just figure out how to become a millionaire. And you're going to be okay, hon. And she walked her right through it. And I was like, dadgum, there's your future sitting across the room from you. Yeah. You just need to see that it's possible. Exactly. Exactly.

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Sarah is in Seattle. Hi, Sarah. Welcome to The Ramsey Show. Sure. How can I help? Well, what's your question, hon?

Okay, so I had a condo in Seattle that I live in. Mm-hmm.

I paid $2,300 a month for mortgage plus HOA. And then last year, I freaked out because I'm from Florida initially or originally, and my parents are older, and I have a plan of moving back to Florida. And so I freaked out because of the housing situation kept going up, and I felt like if I waited, I would get priced out of market. So I went ahead and

and bought a second home in Florida at the top of my budget. Oh, gosh. Yeah, the mortgage for that is $4,000 a month. Well, sell it. Well, now I'm in negative equity. My take-home pay is $8,600 a month. Yeah, but, I mean, why can't you sell it?

Well, because now the price has gone down and I already spent $50,000 in the past year because I couldn't rent it for whatever reason. Who said the price went down? Yeah, so now it's like maybe. No, who said that? Because the prices in Florida have not gone down. What are you talking about? No, but it is according to Zillow and I talked to a real estate agent. Zillow is not a reliable source on anything. Okay. Okay. When did you buy it? How long has it been since you bought it?

Do you have any money?

I have $50,000 in savings and then some in 401k. Okay. Go to RamseySolutions.com and click on Real Estate ELP. Look for a Ramsey-trusted real estate agent. Have them come out and look at it, get it on the market, and get it sold. If you have to write a $10,000 check to get rid of your mistake, do it. You have a problem here that is not going to get better.

Okay, even now that I finally, after 13 months, I was able to rent it, I mean, I'm still in the hole, but better than what I was before. This is a ticking time bomb. It's going to blow up on you. Okay, so... You cannot afford this house. You cannot afford for it to be empty. You cannot afford for the heating and air to go out. You cannot afford for the roof to leak. You cannot afford to evict the tenant when they don't pay. This thing is going to choke you out, girl.

Hmm. It's just a matter of when. Having a renter doesn't solve the problem because at any point that could leave and then you'd be right back to where you are right here today. Do you see what I understand? But that's the only thing my fear is that I understand I made a huge mistake, but because, okay, so I spent $23,000 in closing costs. Now I have to spend another. I don't care what you spent. That's stupid tax. I don't care what you spent. You lost that money because you did something stupid.

This thing's going to, you're going to lose more money if you stay in it. So you think even if I'm a hundred thousand under, you're not a hundred thousand under. Okay. Even though I've been spending 4,000 a month for the past year. No, no, no, no, no, no. I'm talking about what you can sell it for versus what you owe on it. What do you owe on it? Uh, 428,000. Good God. And what do you think you can sell it for?

If I'm lucky, I think maybe $530. Okay, sell it. You put money in your pocket. I think you have to just realize, Sarah, that this is a mistake and mistakes cost you. And in this case, there may not be a way to get back the money that's lost. You're doing well if you can break even. You're doing well if you can sell it and get a little bit of money. We're trying to stop the bleeding, not reverse the fact that we had a car wreck. We're just trying to stop the bleeding because you're going to bleed out.

This is not a good thing. Now, I've done a lot of stupid stuff in my life, hon. And when I do something stupid and it costs me money, I write on the check in the four column, as I write the check for my stupidity, I write four stupid tax. Dave did something stupid and he has to pay a tax called stupid tax. You're going to pay some stupid tax here. You're going to get some of your money back, but you're not going to get all your money back.

And you're going to get out of this trap you have set for yourself. Nothing in the decision-making process that you used was wise. You panicked over a real estate market. You ran to the other end of the United States and bought a rental property. And then you're shocked that it sat vacant. Yeah. And you overpaid for it, probably. So, hon, you do what you want to do. But you called us, and we're telling you very clearly what to do. If you don't go do it, it's going to be your next bad decision. So you just decide what you're going to do.

It's up to you. I've done plenty of stupid stuff, and I can recognize stupid a mile away, and this was a dumb decision.

Okay, you're not dumb, but this decision was desperate, unwise, and you got yourself into a bear trap, kiddo. And you best get away before the bear comes. This is not good. Well, it was all fear-based. She did the first one out of fear-based, and now she might not get out of it for fear. You know, fear that, you know, you're going to... No, let me tell you, when you look down and you walk away and you go, okay, I put $100,000 in my pocket, but I spent $160,000 for that opportunity. Mm-hmm.

And so I got 100 of my 160 back or whatever the number is. And you look down at that $60,000 worth of stupid. That's what you don't want to do. Yeah. Nobody wants to face that. That's

That's called facing the music, right? Yeah. And nobody wants to do that. I don't want to look down and go, this is what my stupidity cost me. I don't like looking at that. I want to avoid that if I can. That's human nature. That's not unusual for you, Sarah. I'm not picking on you. But honey, all you're doing is arguing with me. You call me up and said, I'm in a mess. And I said, yeah, you're in a mess. Why don't you get out of the mess? You said, no, I want to stay in the mess. I don't want to argue with you about it. I want you to get out of the mess. That's what we're here for is to help you. Harrison is in Indianapolis. Hey, Harrison, how can we help?

Hey, big sigma call, Dave. Sure. What's up? My question for you is I've listened to your show for a long time, and you talk about doing a 15-year fixed rate mortgage. Exactly.

My question is, if it's okay to deviate from your plan, go for a 30-year mortgage and do extra payments on the principal with the understanding that you always do an extra payment a month to basically level out so you're paying the same that you would on the 15th, if that makes sense to be tracking. Well, it's certainly not illegal, right?

But would we suggest it? No, we would not suggest it. And here's why. We've done research, and 100% of the 15-year mortgages pay off in 15 years or less. Almost none of the people that do your plan pay off in 15 years or less. As a matter of fact, the FDIC says from the Federal Reserve statistics that 97.5% of mortgages are not systematically prepaid.

Meaning doing what you're doing systematically would be monthly adding the amount to make it the equivalent of the 15. When you add the amount of a 15-year payment to the 30-year payment, it will pay off in 15 years mathematically. But no one does it because prom dresses and transmissions. Right. Which is why you want to do that, right? Because you want the flexibility of not paying it.

Fair. I mean, my, you know, I would argue my situation is a little different than a lot. Yeah, you're going to beat a 97% odd. That's not a wise argument. I'm not going to set myself up to do that. I set myself up to where I have automatic discipline. Yeah, I like that. And by the way, everybody thinks their situation is different. I just want you to know that, Harrison. I know you're not there anymore, but everybody thinks their situation is different. No, it's not, you know.

You don't have a situation that today that's going to exist 30 years from today or 15 years from today. Now, if you are the rate of change in this culture that we live in, do you understand what happened in the last 15 years? I mean, there was no iPhones. True that. You know, come on. I mean, you understand what has happened. The rate of change. Cars used to drive themselves 15 years ago. You know, I mean, this is this is crazy. All the world we live in. I mean, there was no such thing as a podcast.

YouTube was only cats chasing lasers. That was it. Oh, gosh. And now it's the primary broadcast medium in the world. I mean, come on. Netflix was sent DVDs to your mailbox 15 years ago. Blockbusters was still open 15 years ago. You cannot anticipate 15 years from now, much less 30 years from now.

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that they love and create actual amazing relationships. I'm Dave Ramsey, your host, Jade Walsh. Our Ramsey personality, number one best-selling author, is my co-host today. Anna is in San Francisco. Hi, Anna. How are you? I'm good, Dave. Happy to talk to you. No, I'm not happy, but glad to talk to you. Well, you too. How can we help today? So I have a question. I am in a very complicated position right now. I'm

Thinking about filing Chapter 13 bankruptcy or take a second loan towards my house. It's a long story, but I'm going to try to make it short. And I apologize if I say anything in English incorrect. It's my second language. Okay.

So I'm married, have kids. We had the whole debt situation. I found you in 2022. We got into doing the plan together. By May of 2024, we debt-free paid off like $80,000.

just owned the house. Um, it was wonderful. So my husband started talking to friends about, um, cryptocurrency and, um, he started invested, start small, start make money. He, um, he, you know, made a big move behind my back. You know, he took a big loan of $200,000. Oh my gosh.

And he invested that money in crypto XRP, Trump coins and other stuff. I, he told me after he did it, I panic. I was, I was in totally panic when he told me that, and that was March of this year. And, um, I thought things couldn't get worse. Um,

And he did. He got a phone call. He was expecting a phone call from the company. He was making the whole Bitcoin thing. The name of the company was Pionex, P-I-O-N-E-X, Pionex.

He was doing crypto with this company and he had over $200,000. He also had $50,000 from his mom that he was investing. So it was like $250,000 total. How did he find Pionex? How did he find them online? His friends.

He talked to his friend. I don't know for sure if it was online. So he got scammed? Is that what you're getting ready to tell me? He got scammed, yeah. He lost his mother's $50,000. He lost everything, and we don't even own the $200 that he lost. Wow.

Yeah. And we can't pay those $200,000. So where did you bury him? Still digging my backyard. In his mother's backyard, probably. Yes. That would be a better call. Oh, my God. So what is your household income? About $10,000 a month. Okay. And what do you owe on your personal residence? $400,000. And what is it worth?

It's like 700. Yeah, okay. And what does your husband make a year? He brings home about $10,000 a month. And has he owned this, that he was unbelievably deceitful, lying behind your back? Yeah, that was a big lie. And never going to do it again because he's stupid? No.

Yeah, we thought about that. He called me stupid and said that he didn't understand. The only thing stupid you did was marry him. Wow. He told me he was going to be a millionaire and he was going to make our family a millionaire and that I didn't have to worry about it. Instead, you're calling somebody about filing bankruptcy. So has he owned this so that it doesn't happen again? No.

He did this. The only reason why I didn't walk away yet is because he told me crying. He begged me to stay, and he told me that God took this money away. No, God did not do this.

You don't blame God. Don't blame God when you're stupid. I know. I know. But just the way he's thinking, like, God take the money away. No, that's not a good way of thinking. He needs to own it. I'll tell you what took the money away. He took the money away because he was stupid. He needs to own that or he's going to do it again. If you blame it on God, then what are you going to blame it on next time? The devil? It's manipulative. Yeah. He said that and he told me he was like a punishment for going behind my back. So I was like...

If you really think that's a punishment for going behind my back. How about just being an adult from this point forward? Yeah. That'd be just fine. We don't need a punishment. We need a grown-up husband. He made two mistakes. He took out the loan and then he did it behind your back. Those are two mistakes. You've already paid off $80,000 when both of your brains were working at the same time.

You know how to do this. And so now you pay off $200,000. How did he borrow $200,000? What did he put up as collateral? We had, well, we did the plan. We were doing good. He had good credit, I guess. You know, the house, he has equity in the house. Did he borrow against the house?

No, he didn't. He just loaned it like 23 here, 23 there, 147 there, different location, and he ended up with like 193. It wasn't, you know, close to 200. So these are like credit cards and personal loans? Yes.

Yes. The entrance is super high, like 23%. Interest is not your problem. Stupidity is your problem. I know, but the payment is like five grand a month. You've already paid off $80,000, and you did that in 18 months. So you know how to do this. I hate to ask you to do this, but are you working at all?

I'm not right now. I'm waiting for my kids. I'm already making applications. My kid's going to go back to school. I will as soon as they get back to school. I was working and helping. That's how we get out of debt. Yeah, we're going to do it again. But then right now with the 5,000 payments of... You're not bankrupt. I'm not bankrupt. No, you're not bankrupt. You make enough money to clean this up. And you can either pay it off. You can put a second mortgage on your house. I really don't want you to. And then pay it off there.

But you're keying off on how big the payments are. You need to be paying $5,000 a month. It's going to be painful. You need to be paying $6,000 a month. That's how you're going to get out of this. $6,000 a month, $72,000 a year.

The hardest part of this entire journey, it's going to be hard to pay off the debt, but every payment, you're going to have to work on how you feel towards your husband and what that means for you guys. Because with every payment, the resentment has the ability to grow more and more. And each time you go to your job that you feel you shouldn't be working right now, that resentment has an opportunity to grow. So you guys have to get into some sort of therapy, something to work through this because...

Things still aren't right. I can tell. Oh, yeah. Well, they shouldn't be. Yeah. Shouldn't be. Oh, my gosh. We got massive stupidity and we blamed it on God. And it's unbelievable. I mean, God's looking at you going, not my deal. Yeah. I didn't do this. The only thing I did is make you. That's the only thing I did.

How come every time you're on the air, I get these crypto cards? I don't know. I was thinking the same thing. This is a problem. It's a pattern here. It's a problem. Like George and Horses and Crypto and Jane. I guess so. I don't know, man. This is the Ramsey Show.

What's up guys, it's Jade. And let me tell you, when my husband and I had $280,000 of student loan debt, we were not sitting around waiting on the government to bail us out. We did the hard work to pay it off ourselves. So if you're still holding out hope that forgiveness is coming, that's like you waiting for your landlord to start paying your rent. It ain't gonna happen.

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Buying or selling your home is a big deal, and between clickbait headlines and confusing data, it's tough to know what's actually going on in the housing market. Right now, the average house price, the median house price in America is $431,000. That means half of them are more expensive in America and half are less expensive. That's what median means as a statistical measure.

Nearly a million homes on the market right now. That's the largest inventory of for sale homes we've had since 2019. Six years.

A lot of houses on the market. And house prices are not going down. They've been continuing to go up. Interest rates have gone down. They're a little under 6. 5.9% for a 15-year fixed right now. So if you want to know about housing trends and you're trying to get yourself situated to get your home bought, that's a good idea. Go to RamseySolutions.com slash market or click the link in the show notes and we'll help you. The whole thing is free. Claudia is in Chicago. Hey, Claudia, how are you? Hi, how are you? I'm good. Good. How can I help?

I was just calling in to see if it would be more reasonable for me to get eloped with my fiance in the coming year or to have a wedding. I'd love to have a wedding. No one in my family has had one. And between my sister-in-law and my sister, they regret it. They all eloped. It was more reasonable to get eloped.

It was more feasible and financially the savvy thing to do. But I loved to have a wedding and a very small one, intimate, about 50 to 100 people on my parents' property. What would it cost? I'm estimating less than $15,000 for me and my fiancé. Okay.

Our costs, I know that both of our parents would definitely want to pitch in and help. Do you have the money? See, yes. I'm so terrified of going into debt. So I am 23 years old. I paid for my college myself.

After graduating, I started making about $70,000 a year. Now I'm at $75,000. But I am applying to medical school this cycle. So that income is going to go away. And that's what scares me because I know I'll be taking on loans in the future. And my fiance, he makes about the same as me. He's about $72,000 right now. So do you have any money saved? I have $30,000 right now of my own at a high-field. Yes, I would spend $15,000 on a wedding.

Yes, I would. Yes, absolutely. Okay. Yay. Okay, cool. Thank you. Absolutely. We'll do that. And here's why it's a small percentage of your world. And it is in terms of your mathematically, it's a small percentage of what you make, what you have, what you've done, what you've already accomplished at 23.

It's a very reasonable and the average wedding in America is approaching 30,000 right now. Yeah. Okay. Just to tell you the averages. Doesn't mean you have to spend that, but that's the averages. So you're half of average. So you're being reasonable. You're being very calm. And oh, by the way, you're paying cash. Yes. Yes. Yeah. Okay. So I 100% would do that. Now, can I give you a recommendation? Sure.

Absolutely. The project that has the most scope creep other than building a home is a wedding. Yes. You start out with 15 and you look up and it's 45. That is true. Because you get nickel and dimed and you get with the people on the reception and we get the nicer mushroom caps and whatever, right? And, you know, the old wedding...

with Steve Martin, the cheaper chicken, the cheaper chicken, right? And so that whole thing. So what you need to do is if $15,000 is your budget, you need to write that at the top of the page and you need to say, okay, how do we build a wedding for $15,000? That means the videographer can get no more than X money

The dress will cost Y. The reception food is going to be Z. And you get a total number of dollars down the page by category that totals up to no more than 15. And then when you meet with the caterer and they say, oh, well, we could do it. No, I'm sorry. This is what I can do. Yeah. Yeah. And you go look at the dress. There's always a dress that's more expensive. There's always a videographer that wants to shoot a Hollywood movie.

Yeah. Okay. There's always, and instead I got my friend with a still camera walking around and you're going to be okay. And, you know, we're going to pick flowers in mama's front yard on the farm and whatever. I don't know, but you just decide where you're going to spend this money ahead of time. Otherwise you'll look up and it'll be 20 at least.

Yeah. I've already started like a little spreadsheet. I bought my dress. I love it. I'm not picky. As long as I'm in white, I could walk down in like a trash bag and he'd say I do. We knew he was going to say I do because this is a smart guy. Okay. That's not the question. We don't need trash bags. The point is, the point is your spreadsheet is the exact thing you need to do. And this is how you got through school without debt. You had a plan.

Correct. And this is how you do a $15,000 wedding, not an $18,000 or $28,000 or $48,000 wedding. You do it with a plan.

It's a project, and it has line items down the spreadsheet, and then you stick to that budget. Or if you spend less on one item, it gives you more to spend on some of the other items. But either way, we've got a budget, a project budget here that we're running. And when you run a wedding that way, it doesn't take the romance out of it. It does take all of the opinions of friends, relatives, and mothers out of it. That's the good part. When you pay for it on your own, nobody else gets a vote.

Well, she said maybe mom and dad were going to chip in some, but that doesn't mean they get a vote. They just get to chip in. And so, um, you know, all three of the weddings there, the Ramsey's did, that's exactly how we did them. Um, they all three spent, um,

I think, well, yeah, I think they all three spent it all. Oh, wow. That's good. I gave them an amount. I said, you do it, and we're going to put it in a separate account, the wedding account, and you guys stick to that. And I want to see the spreadsheet, and I want to see you sticking to it. But other than that, I'm not going to tell you what to spend it on. But don't come in here afterwards and go, we're $5,000 over. I don't want to hear this crap. So, you know, you guys just be like grownups and stuff. You're not in Congress. And so you can't just make this crap up as you go.

And that lady right there, she's going to be incredible. I mean, 23, got through school debt-free. Yeah, but she said she plans on taking debt to go into college, to go to medical school. To go to medical school, yeah. That's true. That's a mistake. That is a mistake. Yeah, I would work around that. But the rest of this call was excellent. It was excellent. Very, very well done. All right. Christian is in Raleigh, North Carolina. Hey, Christian, how are you? I'm good, Dave. Thanks for taking my call. Sure. What's up?

So I have a question for, I guess, you and other maybe people listening about, you know, they started their own business. They're, you know, doing well. But how do you manage debt and to get out of debt when, you know, you're running your own business and maybe the paychecks aren't as consistent and sporadic? It's not the lack of consistency that matters. It's the size of the check that matters. Right. Yeah.

If they're inconsistent and small, you've got two problems. But if you get $300,000 every four or five months, you'll probably make it out okay. Right. And I started my business two years ago. I build furniture and custom cabinets, and I've been maintaining. What's your net profit last year? About $60,000. No, what'd you pay taxes on? It shouldn't be an about. You should have filed your taxes. What'd you pay taxes on last year?

About, I think it was like 62,000. Okay. All right. And what do you think you're going to do this year? That's profit? Yes. Okay. That's what you paid taxes on, your income. All right. Yep. And this year, I'm aiming to shoot for 100. Right now, I'm about 40. What causes it to be sporadic? Is it a seasonal thing?

Well, you know, obviously doing cabinets is a very streamlined production, but sometimes I do custom furniture and it can, it's like reinventing the wheel for every project. So sometimes I say, oh, it's going to take, you know, a month and it takes two months. Is there a way that you can kind of set your pay on the lower end of the spectrum and learn to live off of that? And then the times where you're able to take more, it's just kind of a gravy?

That's what I would do. Yeah. Yeah. I've, I've tried, I've done that. And, um, if your, if your production line is running twice as long as you thought it was going to run, you don't have a money problem. You've got a business model problem. You're not estimating your jobs correctly. So you'll get better at that. You'll get, you'll get better at that as you go along. But, um, you know, it's, it's easy to live on $60,000 a year, whether it's irregular or not in Raleigh, North Carolina, it can be done. Um,

And so that's what you've got to lay out is just lay out a game plan to do that. And then watch your cash flows and what you're estimating in your production times. There's a time in your life and the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus rent means instability in your budget because it always goes up, never down.

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In the lobby of Ramsey Solutions on the debt-free stage, Dustin and Tara are with us. Hey, guys, how are you? Great. How are you? Welcome. Where do you guys live? Palm Bay, Florida. Just south of Cocoa Beach. Okay, very cool. Welcome to Nashville. And how much debt have you paid off? $287,766. Wow. And how long did that take? Seven years. Oh.

Good for you. And your range of income during that time? It started at $100,000. I changed roles at work, went down to $70,000. And last year, had an amazing year at $500,000. Wow! That's significant. Sweet! Sweet income. So what do you guys do?

I'm a stay-at-home mom. And I'm in Power Generation sales. Oh, okay. All right. So it just took off, huh? Yes. Last year was a good year. Yeah, phenomenal. So was this your house? It was. Yay! Yay! Look at the weird people. House and everything, baby. Woo-hoo! What's this house worth?

$250,000. Well, that's what we started out in 2019. It's around $450,000 worth now. Oh, okay. Yeah. Wow. Very good. And how much in your nest egg these days in your retirement? Probably around $350,000. Okay. So you're bumping up close to a million dollar net worth? Getting close. Yeah. Way to go, man. Baby steps, millionaires, paid off house. And you're young. How old are you?

I'm going to be 44. And I'm 39. Excellent. Congratulations. Wow. So what happened seven years ago? Tell us about this Ramsey journey thing you've been on. Well, I took a different job and I was running a truck up and down the road a lot with the company. And I was on, I mean, as much work as they could give me, I was taking it.

And I listened to a lot of talk radio and heard this crazy guy on the radio. And the more and more I listened, the more and more I heard other people do debt-free screams and talk about this weird thing of not having debt. And I really piqued my interest. Yeah. So 288, was that all the house or was some of it other stuff? Some of it was little consumer debt.

She brought on when we got married. It was a lovely marriage gift. And then two small car loans. Okay. So you knocked those out pretty quick and then tore into the house. Tore into the house. I love it. Very cool. So what'd you say to get Tara on board with this guy that you heard on the radio? You know, we actually used FPU at our local church as almost like a pre-marriage thing, but she was on board. And I think that was really...

our path to success was, you know, she was gun ho, she was willing to do every dollar and do everything else and just stay on a budget and work through to seeing that, you know, what our goal in the end was, was to be debt-free. Okay. So you'd already heard of FPU through the church. Yeah. I heard it on the radio show and then we weren't attending that church at that time, but that was the closest facility to it. So we started, you know, I kind of brought up Dave Ramsey and, um,

You know, we wanted to see what it was about and took FP&U. And I mean, that was a great course to have. So Tara, you went into financial peace because this truck driver talked you into it. Yeah, basically. When you were in there, what did you see that made you decide where this is okay? I mean, there were other couples in there that shared their story and they seemed happy. Sorry. It's okay. I'm a tissue. It's okay.

They seemed happy and successful, and it seemed manageable. The whole death snowball thing, starting off small, building momentum. Yeah, yeah. How's it feel to have no house payment, guys? Crazy. Yeah. It's great. I have anxiety, and...

you know, always kind of felt like I had to stick with a certain job or do a certain thing because there's this big house payment looming and we never want to move or be out on the streets or just have to deal with that. So not having the house payment is just such a relief knowing if we want to stay, we can stay. Yeah. You own it. That's great. God is great. It is. That's amazing. What was the hardest part? He worked a ton. I mean, day, night, just constantly working.

Really, you know, pushing. There was a lot of hours put into it. You know, like I said earlier, if it wasn't for her being on board with it, it would have been a lot harder than it was. But, you know, with me working, sometimes if I had to work third shift or 16 hours or whatever it was, she kind of, again, saw the goal and just, you know, it wasn't, there was no complaining. She knew what we were doing or why I was doing it and what we were trying to achieve. Was it worth it?

Oh, yes. Yes. Yes. And I mean, the EveryDollar app helps me constantly to this day. I love it. Good. Yeah. I tell everybody about it. Well, you know, thank you. I appreciate that. But you know where you are.

And, you know, you're in control and it's a sustainable situation. And stinking house is paid for. Y'all are heroes, man. Way to go. And you've changed these little kids' family tree. Well done. So how old are the kiddos? Bring them up and let's introduce them. What are their names and ages? We have Ellie, who's nine, and Daniel is seven. All right. Very good. Good looking guys. Very cool stuff. So what's the first big thing you're going to do now that you're almost millionaires and you've got a paid for house?

We used this trip to come up here. We drove up and we stopped. She was always wanting to see the Biltmore. So we stopped at the Biltmore and then spent the last couple days in the Smokies.

The kids got to go to Dollywood. So this was kind of our little family celebration, making our way over here. Yeah. Dollywood's a hidden gem. It is. It's excellent. We're right outside of Orlando, and that is the most amazing theme park we've been to. Yeah. Very cool. Good for you guys. Very well done. Proud of you. Who was cheering you along along the way?

You know, I had some coworkers that, you know, that were inspirational to me or actually owned a company I used to work for. And it was great, you know, being able to talk to them as being successful people. They were definitely Ramsey fans. They were pushing. They understood. It was great, you know. So they definitely were inspirational for me. Yeah, wow. That's good.

Very cool stuff, guys. We're proud of you. Very well done. All right. It's Dustin and Tara and Daniel and Ellie. Cocoa Beach, California area, $288,000 paid off. House and everything. We're looking at some 40-year-old-esque almost millionaires. We'll be very, very soon. And look at these beautiful children. Their whole lives are changed. Their family tree has been changed.

because dad paid a price and mom made it work where dad could pay a price. This is a team effort right here. Very well done. Proud of you guys. You're heroes, man. Excellent. Count it down, guys. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Wow. Wow.

What a bump. 100,000 to 500,000 in seven years. He kicked it. Sheesh. So here's the thing. What's interesting in God's economy, it's just I'm positive that right now on Sirius XM or on podcast or maybe even YouTube, there's a truck driver out there. Yes. Yes.

that's not married, doesn't have two beautiful children, and is listening to this former truck driver, now in sales, with two beautiful children and a beautiful wife and a paid-for house and almost a millionaire seven years later. Mm-hmm.

That's called hope. Yes, it is. These people standing here, they personify hope. And that just got transferred to you out there. And I don't know who you are that you're driving right now, but I'm positive out of 40 million people that listening to this particular broadcast that at least one of you is driving a truck right this second. It might have less than $287,000 in debt. Yeah, it might have. It might, you know, yeah. So the thing is, and here's the trick.

Daniel and Ellie can look back at this video several years from now and go, well, that's when it happened. That's when the old man and the old lady did it. That's when everything turned the corner because they just left Biltmore. Right. Which is the Vanderbilts. Yeah. Okay. So somebody's got to be old man Vanderbilt. Somebody's got to start it, right? And you're looking at them. They just started it. That's how it starts right there. It's exactly how it starts. Somebody's got to be old man Rockefeller.

Somebody's got to start it. Those things, they weren't born. Now, there's a couple of generations after we're born with the money, but the original Commodore, he had no money. That's, you know, that's, and that's where Biltmore comes from. And where Vanderbilt University comes from. It's where the Rockefellers, you know, I mean, somebody's got to start it. Why not you? This is the best place in the history of humanity. It's called the United States of America for the little man to get ahead.

and become the next guy who's not, the next gal who's not the little man. But it's your decision. Hey, we put some stuff together to help you, because if you're trying to explain this Ramsey thing to a family member who doesn't understand, or a friend that doesn't understand, it's hard to get it all out. They can't get it all in their brain. So what we did is we put together the Ramsey 101 playlist.

It's free and it's easy to share and it covers the basics for somebody who's just trying to figure this Ramsey thing out. Stuff like the baby steps, the debt snowball, the emergency fund, working together with your spouse, all that kind of stuff. All these clips are on there and here's how you can share it. Click the link at the top of the show notes to open the Ramsey 101 playlist on YouTube. Text it, DM it, send it in a group chat. Just say, hey, this is something that's helping me. I thought you might enjoy it.

If you're listening on the radio, we've got the playlist featured at the top of our YouTube channel.

So jump in on the YouTube channel and you can see the Ramsey 101 playlist. Think of at least one person in your life and share it with them. It's all completely free. It's just kind of a, I don't know, a compilation of best ofs almost. Not best of, not most entertaining or weirdest calls, but the ones that actually give you the information to show you what to do. Okay. And I think it'll be helpful to you. That's what our hope is. That's why we put it together. Robert's with us in Virginia. Hi, Robert. How are you?

Uh, okay, Dave. Uh, thanks for asking. Sure. How can we help? Well, uh, I've got a question about, uh, chapter 13. I know that, uh, I've, I've been listening to the show for a few months now, and I know that, uh, you say that, uh, bankruptcy is, is like a divorce, um, uh, kind of a last ditch option and,

That's kind of where I'm at right now. I don't know anything about divorce because I've never been married. But my home is, my second mortgage is currently in foreclosure. The sale date has been set. I got about five and a half, six weeks left before the sale date. I've been here once before, about seven years back when I had a business go under. Why are you behind on your second mortgage?

Well, I got hit by a tree last year. I climb and cut trees for a living. Oh, gosh. I'm about to turn 65 here in about two months. And last year in March, I got hit by about a 3,000-pound trunk. It's not the first time I've been injured on the job. But this one took me out for about two months. And I got hit by a tree last year.

And I fell behind on the primary and I kind of let the secondary go trying to catch up the primary. Just as soon as I got back to work, my I drive like a 30, 31 year old Ford pickup. And and that broke down and it took about five weeks to get it back on the road. So I fell further behind. I won't go into all the, you know, the sad songs, but basically, are you OK now?

I got permanent nerve damage up and down the right side of my body, but you know everything else healed So are you back to work? Yeah, I am back to work. Although my truck much You know, my truck just broke down again last week. I was trying to you don't have an option I'm missing any more work. How much do you owe on the first mortgage about 180? What do you owe on the second mortgage?

uh well they say 55 which is weird because i only borrowed 52 and i've been paying on this house for almost 20 years um and i added up what i paid to them it's close to 90k that i've given them but what's your interest rate on the second well now it's low um it's like uh 375 and my primary is 30 um but uh

Originally, when I bought this house... When you were working before the accident, did you make enough to pay both these mortgages? Yeah, usually. But since I got over 60, I started slowing down. And during the winters, I've been having a hard time keeping it up. What's the house worth? That's the thing. It's really worth about what I owe on it. About $235,000?

Yeah, $240,000 maybe, but they've got it hyperinflated on Zillow and stuff. They got it at like $370,000. It's got some land and stuff, but the house hasn't had any updates in almost 20 years. Zillow is not relevant, but I also think it might be worth more than you think it is. The reason I think that is I don't think the second mortgage would have bothered to foreclose if it was only worth $235,000. They believe it's worth more.

That's because the county had some new tax assesmenters out. No, second mortgages don't go off of county assessments. They go off actual value. Because when they take the thing back, county assessment doesn't matter. They've got to turn around and sell it and get their $55,000 out of it. How far behind are you? Well, in the second one, I only owe them like $2,000, but they've added about $2,000 in lawyer's fees. That's typical. That's a normal. That's standard. That's not...

And I'm two months behind on the primary right now. My thing was I was going to try to make enough money. Like I said, I was here once before in 2018. And that's when I stopped doing what I was doing that was losing me money. And I borrowed a chainsaw from a buddy and I got out my old climbing harness and ropes was about 30 years old because I hadn't climbed and cut and

30 years, and I started doing trees again, and I made about $11,000 in five weeks, and I was able to reinstate the mortgage. Now, that's about what you're going to have to do this time, but the problem is after you do that, I'm not sure you're making enough to keep it. Well, the thing is I don't think I can make enough this time because the problem is, Dave, since the accident, I haven't been able to work as much. Now, can you do something else?

Well, that's what I was planning. I took some courses last year, and I got a certification in another field that should be able to get me a job. It's not going to be super high paying at first, so it takes time to build up an income in that field. What field is it? I don't really want to exactly say. It's kind of not exactly healthcare related, but it's kind of along that line. I think you need to get into something that's steady and predictable.

I agree with that. And I was planning on, like I said, I was actually going to go and interview last week and then my truck broke down. So now I'm when you, you know, I actually was outside earlier trying to get the truck running again. The reason I'm asking you all these questions is that chapter 13 is probably not going to work for you. It will stop the foreclosure temporarily. But as soon as it does, you will have to start making payments on the first day.

on the second, and on the arrearage on both. And all is built into the system. They get 100% of their money. The $2,000 lawyer fees, all the back payments, all the late fees, they get 100% of their money, including current payments. And you're having trouble even paying current payments. And so if you go into a Chapter 13 and you don't make the monthly payments...

that include the current payments plus payments on the back stuff, that's a lot for you. If you don't make those, they're going to kick you out of bankruptcy and you're going to be in foreclosure again.

I understand that, Dave, but it's like if I lose the house, I've been fighting to keep this house for almost 20 years. If I lose it, I'll be 65 and homeless and penniless. I don't want you to be that, but my point is Chapter 13 doesn't solve your problem. It doesn't keep you from losing it. What keeps you from losing it is an income. Well, that's why I'm trying to get into this new line of work. It didn't sound too promising to me. It's underpaid is what it sounded like.

It starts off slow, and I was also thinking maybe I would apply for Social Security early and add that to it. Yeah, I think that's a good idea. And I think you go down to Target and you start working 40 hours down there, $20 an hour. Yeah, I mean, they don't pay that. Yeah, they do. They pay $20 an hour all over the nation. So does Walmart.

Okay. Well, I've been down to Walmart, and I've been looking at all the jobs. Everything here is $15 an hour. You can get $17 at some places. Yeah, there you go. All right. I mean, what you got right now is almost nothing. You need $2,000 right now, or $4,000 to get this thing stopped, and then you need to get the first mortgage current.

And you need to run around like your hair is on fire and get those two things done, and then you need to keep the house current. That's going to be a less strenuous plan to keep this house than the Chapter 13 will be. And I'm telling you, the Chapter 13 sounds like it's magical. It's not. It's going to put more strain on you the way it's structured because you have to pay 100% of the payments plus payments on all his back payments.

And you can't do that with a situation you just described to me. And you're going to get booted back out, and then they're going to be coming down your throat in foreclosure again. So you have got to solve the income problem, and the best way to do it is now. It's your only option. That or sell the house. And I like the other option better. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work,

that they love and create actual amazing relationships. I'm Dave Ramsey, your host, Jade Walsh, our number one bestselling author. Ramsey Personality is my co-host today. Lucy is with us in San Antonio. Hi, Lucy. How are you? Hi, I'm good. Thank you for taking my call. Sure. What's up?

Well, my question is, how do I move forward from the shame and regret from losing my $136,000 Roth IRA? How did you lose it? I met a Christian woman at a Christian women's conference, and she...

started talking to me. She was on stage. She was one of the speakers. And so she started talking to me and she just followed up with me. And, you know, people were asking her why she does what she does. She started crying and saying that she just wants to help people. And so she set up an appointment, followed up with me. And

told me about her real estate investment opportunity, which basically, to my understanding, they buy apartment complexes, flip them, and she promised, basically guaranteed, double my money in five years, and if you do exactly what I tell you, you'll be a millionaire in, you know, maybe 10 years, which I was already on track to be a millionaire in 10 years. I don't know why I didn't think about that, but...

So I fully trusted her. Lucy, how old are you? Now I'm 47, and at the time when I met her, I was 44. And how much money do you—you lost $130,000. How much money do you have left?

So my husband and I, we got married two years ago. And with our combined finances now, I had two rental properties. He had his house. I had mine. So we sold all the houses. And with my teacher retirement and everything, we now have $640,000 in rent.

invested with a Dave Ramsey approved financial planner. And we have $50,000 in an emergency fund. So how can we help today? She said, how do I get over the shame? I don't trust my judgment anymore. I don't know how to move forward from this. I don't know how to stop looking back with the shame and regret. I just don't know what to do. When someone burglarizes your home,

And they come in, you come home and the drawers are all open and they've been through everything and they stole your jewelry. It's trauma. Yes. And this is trauma. Yes. You're still describing this woman as Christian and obviously she's not. No, not at all. She's obviously a con artist.

And even the place where she was speaking is questionable because they let her on stage. Exactly, yeah. So there's nothing Christian about this. You thought it was at the time, but it wasn't. Yes. And so when I went bankrupt and we lost everything because I was stupid, we lost 100% of everything. You lost 130%. You still got 600%.

Yeah. But when I lost 100 percent of everything, I had to decide, OK, what is the definition of Dave? What's Dave's identity? Am I a bankrupt idiot or my guy who chose to believe some some lies called borrow all you want on real estate? Nothing down real estate. Let's buy all the real estate we can buy. And it bit me in the butt because the whole concept I believed was a lie.

So I'm not stupid, but I did some stupid things. I've also done a bunch of smart things. Okay. And so I have to decide the windshield is larger than the rear view mirror. And that's called grace. Okay. So 32, 34 years ago, whatever it is. No, God, it's 36 years ago now. 1988, I filed bankruptcy. But that's not my defining moment. It's just the bottom of that valley that we went through.

Because of my stupid choices. Wasn't Sharon's fault. Wasn't the bank's fault. I signed up for it. The banks did some things wrong. Sharon did some things wrong. But 99% of the reason we lost all that money was me. So then I just got to decide, okay, am I going to walk in grace towards myself and other people who have made mistakes? And I can still call stupid stupid, but I don't have to call me stupid. Mm-hmm.

Okay. You did a, you got conned. Okay. For various reasons. I would want to look into my soul and ask what I felt. Why would I fall for this? Was it, was I scared? Was I greedy? Why did I fall for a con? Cause you got conned and you've in this story, you told me you've done 26 things that were smart. And one thing that was dumb. Do you hear me? Yeah. Yeah. Yeah. Pretty good ratio.

Yeah, when you put it like that, yeah. You know, I mean, you're going to be a millionaire. You're only in your 40s. I mean, you've done one really stupid thing, 26 really smart things. Yeah. And I bet you you won't fall for anything like that ever again. Never again. And now I can smell it a mile away. I look at people online now, and I don't wonder what the secret sauce is anymore. I know it's all a facade. I know it's a lie.

There you go. There you go. Yeah. But now we're trying to decide whether to buy a house or not or wait. And I'm scared to make another decision. And I'm just kind of frozen. I think it'd be normal. If you had a car wreck, you're scared to drive. Yeah. But it doesn't mean we don't drive. Yeah. Walking's hard. So, yeah, get back on the horse, kiddo. Okay. You're smarter than this one decision.

I'm smarter than the 26 decisions that caused me to go bankrupt. I'm smarter than that. And I learned from it. I've never done it again. Quite the opposite. And I've become a multi-bazillionaire since then and helped a whole lot of people become millionaires, tens of millions of them since then.

Teaching the lessons I learned from that. And you just help some people telling this story so they don't get conned. Yeah. Quit looking for something for nothing. There's no shortcut to any place that's worth going. The best way to get rich quick is don't. Yeah, exactly. These are the lessons you've learned.

Yeah, definitely. I, um, so now, um, we've been looking at all of our housing options and we've moved into this tiny RV and we're just saving money and I'm planning to start a business. I have 6,000 set aside to start a business cause I really was ready to change careers. And, um,

And so now, you know, there's the rough houses around here that are about $170,000. They probably need a good $50,000, $60,000 of work. And then there's everything in between all the way to the new houses that are $320,000. And we're going to be here for the next 20 years. No, you're not. You might be. You don't know that. You don't know what that, you didn't know 20 years ago you was going to be sitting here.

So we don't know that for sure. But get your house. I don't care. I trust your judgment more than you do. I think you and your husband need to get out of an RV. I can tell you that. That's not going to last. I'll be there about 20 minutes. Get something else. Some people are RV people. I am not. I'm not. Not a cat person. Not an RV person. Just saying.

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help you go to Y refi slash Ramsey. That's the letter Y R E F Y.com slash Ramsey might not be in all states. All right. Today's question comes from Jared in Nevada. He says, my wife and I have been married 50 years. We've both worked over the years, but I always did a little side work to make a little extra cash that I gambled with. We both retired last year. We have a $900,000 house that's paid for. We make about $10,500 a month in retirement and social security. And

and have about $450,000 in IRAs, no credit card or car payments. We are both doing okay, but I really miss the gambling. But at 70, I don't want to have to work to gamble and I don't want to touch any of our savings that we live on. Should I just give up gambling or do you have any ideas that will work?

Well, I wish I knew how much you were spending on gambling. That would give a little bit more insight to this question. I always view gambling in the context of I'm going to Las Vegas and I'm going to gamble X amount of dollars that I budget for ahead of time. And so for that purpose, I view it as a line item for entertainment. That's kind of how I view it. But at the same time, Dave, I put a very small percentage of money towards that. If you're talking about

high thousands, I don't think that you have obviously the margin to do something like that. If you're talking about, you know, just going and spending 100 bucks on something I you know, I wish I knew exactly because a lot of people have gambling problems. So I don't know how much you're saying. If you can't handle it in your $10,000 500 a month budget, then it's too much and you can't do it. That's what I would say.

Well, he didn't want to put it in there. That's what I'm saying. He couldn't handle it. He said he doesn't want to. Yeah, but I think that if he's thinking it's enough that he would have to dip into savings, that's too much. Yeah, I agree with that. I agree with that. So if it can't fit into your monthly budget as a line item of fun or entertainment, then it's too much. So let that be your guide is what I'd say. Yeah, I have trouble commenting intelligently on it because I get zero pleasure from that. So I don't do it.

It's just not fun to me. I work so hard, and it's not fun to me to give my money to somebody else. And that's not entertaining to me. It's quite the opposite. It's stress-inducing. So I just don't do it. I've never been a gambler. My wife put a quarter in a slot machine one time on a cruise when we were in our 20s, and she hit. We got $250 worth of quarters, and that's probably cost me $10,000 over the years.

Because she's still looking for that hit again. That one time. Yeah, that one time. She put that 250 back and then, you know, she's always going to put some more back. She's not a gambler, but she's a little bit like Rachel in that regard. But no, you don't want to have a gambling problem for sure. And I kind of question, you know, I get it. But I don't understand, you know, I don't even understand when you and Rachel call it entertainment. It's not to me because I just don't understand it.

So anyway, having said that, it should be a small line item in your monthly budget maximum. And if you can't get over it with that, you got other issues. Yeah, that's what I'd say. I mean, how much can you, I mean, don't get me wrong. Some people can really go in, but. You know, you're making $10,000 a month. They put a couple hundred bucks a month in there for gambling. And instead of.

you know, whatever else it is people do for entertainment for a couple hundred bucks a month that make $10,000 a month. Um, and are 70 years old, more than a million and a half dollars. Um,

Um, you know, so you can afford to spend $200 a month on some kind of entertainment. If this is what your choice is, that's fine. But no, you don't need to be dropping five grand a month in this. I do feel like, I mean, this is being judgmental. Cause again, everybody's there. I just feel like gambling that often probably isn't good for you. Like once a month. I'm curious why it's entertaining. Yeah.

I mean, you know, why is it I enjoy this? What is it? What is it you get? But people do. They enjoy it. It's a rush. The risk. I like sitting at the table. You have a drink. You're talking to the guy next to you like you're playing blackjack. It's just a vibe, Dave. I can sit at a table and have a drink and talk to the guy next to me and not lose money. Yeah.

Sometimes you win. It's a different table, but I don't have to lose money to do that. Because you never get up from those tables wealthier than you sat down. Listen, you've got to know when to hold them and when to fold them. That is for sure. I folded them like 38 years ago. Alexis is with us in Las Vegas. Speaking of Vegas, hey, Alexis, how are you? I'm doing good. Thanks for taking my call. Sure, what's up?

So I'm pretty new to all of Cure Wisdom. I started seeing some videos pop up on my Facebook, kind of dove right in, finished reading Total Money Makeover, borrowed it from the library, finished it in a few days. My husband's reading it currently, and he's getting excited about it too. Good. We would be on baby step number two because we have a little bit of a

Good.

But my dilemma is that next year is my 10-year high school reunion. I know that might not matter to some people, but I have been looking forward to it. And my home state is kind of expensive to get back to. What is it? And so, what is the state? Yeah. Hawaii. Okay. Yeah. Yeah.

And so I guess my question is, is this like, is this something that is just off the table? I just need to sacrifice it? Or is it something that if we, since it's a year away, if it's something that we were to include in our budget is still reasonable? So are you going to be out of debt by then? No. Okay. How much debt do you have? I don't think so.

So I've got, or we, not I, but me and my husband combined have about $11,000 in like two credit cards on the line of credit. And then the bulk of my debt is student loans, which is $96,000 for a useless degree. What is the degree? Just curious. Theater. What's your household income?

So right now my husband works hourly, and he's getting $22 an hour plus overtime. And then I'm a stay-at-home mom, but I do have kind of a creative side hustle that I've been bringing some money in that previously was fun money, but now I'm like, no, I can just hustle and make it. If you took Dave Ramsey and the Total Money Makeover and all the stuff you've been learning out of the picture, you can't afford to go to Hawaii.

It makes $22. Yeah. Y'all got no money. Yeah. I'm not sure how you can budget Hawaiian plane tickets from Vegas, much less staying over there for two people out of a $22 an hour budget. Right.

Yeah, we would stay with family there, so we wouldn't have to pay for a hotel or anything. So what's airline ticket rent? Probably about 600 tickets. Another thing that I was considering is, is it something that if I went just by myself...

and I didn't stay long, like would that be something budgetable or would that still be off the table? A lot of costs while there would be cut down due to staying with family, but the plane tickets is the biggest. Yeah. You're going to have to drop $1,200, and $1,200 in your old world is a lot of money. Yeah. So some things are going to have to change during this calendar year for this to be logical for you all to do.

Regardless of how plugged in or fired up you are about the Ramsey stuff, okay? Right. Like, what's his career path? Is he working on getting a better job?

Yeah, he needs to work on doing something to double his income. He's making what a 17-year-old can make at Target.

And this is not how you set up Hawaiian vacations. You can't go. Regardless of Ramsey. That's just the math doesn't work.

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Investing can seem complicated or confusing, but it doesn't have to be. Whether you're a complete beginner or looking for next-level strategies, the Ramsey Investing Hub has tools and information that can help you invest with confidence. Go to ramseysolutions.com slash investing or click the link in the description if you're listening on YouTube or podcast. Mark's in Canada. Hey, Mark, how are you? Good. How are you guys? Better than I deserve. What's up? Just want to say it's been a pleasure talking with you guys.

I'm very new to this Ramsey solution. And I have got a question about, I work on a family farm.

It's a tender fruit farm, and I've been working here for quite a while. I'm 33 years old. I came right out of college. And there has been zero talk of transitioning ownership. I don't know if it's maybe wrong of me to push this conversation, but I've brought it up a couple times, and it's just kind of been not necessarily a shutdown, but I guess just pushback.

I'm wondering if you have any recommendations for me on how to proceed. Well, we've studied family business and succession planning for about 20 years, and we've seen a lot of families do it poorly, and we've seen a few families do it well, and we've started trying to establish the principles of that because I'm a family business, and I

Four years ago, after 14 years, my son Daniel moved into the president's office, and for the first time since he's worked here, he reports to me. I'm the CEO, and at that time, we took 50-50 leadership of Ramsey. Today, it's down to 80-20.

with the gradually moving me out of the operational leadership of this company and staying in this seat because I want to keep doing this. I like doing this. So this is my retirement. I'm going to do this until I don't make sense. And they have permission to take me off only when I don't make sense. So we know what happens when people don't make sense and don't get away from the microphone. It's not good. So anyway, we're not going to do that. But, yeah, so we've studied this, and –

A couple of things I can tell you. Is your dad the first generation? No, my dad is the third generation. Wow. Okay. And so it's kind of assumed and in the air that it's going to be handed off in the family, right? Yeah.

Yeah, I, yes. You have siblings? I do. I have five siblings. And who else is, how many people in your dad's generation are the owners? My dad and my uncle. Okay. And how many cousins have you got with the uncle? I have one cousin who's involved. So right now it's just my dad, my uncle, myself, and my cousin. So your other siblings are not involved in the business?

Not at all. But your assumption is that the non-involved ones won't have any ownership? That would be my assumption. Was that the model that they used with your dad and his brother? Correct. Okay. So that's a fair assumption then. That's not unusual, particularly in farming. It's not unusual. All right. So I don't think it is unreasonable for you. As a matter of fact, I think it's very reasonable of you to want to know what the flip's going on here.

And it needs to be said out loud. So here's what happens when the managing generation does not build out a long-term gradual succession plan and announce it to the world. Your other team members don't know what's going to happen when the old man dies. They think the thing's going to fold up like a Walmart tent or Junior's going to get it. And we don't know if Junior's competent or not.

So the other team members are worried about that. Your vendors that you sell to or your customers that you sell to are worried what's going to happen when the old man dies because they don't know if Junior is competent or not. They're going to be able to get a supply off your farm. The vendors that you buy from, they don't know what they're signing up for dealing with you guys because your dad has got to be, what is he, 65? Yeah.

It is 62. Yeah, okay. So you guys are 10 years late talking about this. Yeah, and that's my fear. And then the other thing is I don't know how I can ever afford to –

I don't know what that looks like. Did your dad buy it? The company is large. So my dad grew it from a very small business to a very large business. So I think you need to talk about it. You know, you got me over here working on a tractor, and I can't tell how I'm going to be able to buy this thing, or if you're going to give it to me, because we haven't talked about it. And I can't sit here in the dirt and not know anymore.

Well, I need to know something because I may need to go. Maybe I need to go get a job. And what about the uncle? Does he talk about it? Yes, the uncle's more willing. And he's trying to bring up profit sharing. But it just doesn't ever seem to go anywhere. So you're okay. So your uncle is also trying to push the conversation. I think you sit down with the two of them and you have a frank conversation that says this.

You men are incredible. You have built an incredible business. Not having a plan to systematically communicate to me and the rest of the team and our customers what's going to happen here is going to be the doom of this business. And I'm not okay with that. I want to honor all of the hard work you've done. I want to honor you great men by being able to continue your life's work here.

And I want to pay you honor. But the way I'm going to pay you honor is that we need a game plan, boys. And I don't have to have it tomorrow. And I don't have to have control tomorrow. I'm not trying to take over. This is not a coup. But I am not going to sit here and as you fall back in the grave, toss the keys out. Because that will doom the business. One thing we discovered, Mark, as we studied all these companies is that, and farms included...

that if they literally grab their chest and toss the keys out as they fall back in the grave, the percentage of those businesses that are open four years later is almost none. The more gradual the succession plan, the higher the probability of the continued operation of the business, the sustainability of it. Because you doom the place by an 80-year-old still sitting there and grasping control because their identity is so tied into the fact that they're the boss.

And now they got a 60 year old son who's neutered. This is what we've discovered. And it's why I've been so systematic. I'm only 64, dude. And I'm almost out of Ramsey other than the on air parts. Okay. I mean, I'm still around. I'm still a CEO. I still, I'm still in control, but the day to day operational things, Daniel and our leadership team are handling about 80% of it these days.

And I could I could easily still be doing it. I love doing it. I love running it. But it's not good for my son. It's not good for my customers. And it's not good for my business, for Dave's little boy identity issues to get in the way of all that crap. And so, you know, it's time to be a man.

You know, and that's what this comes down to. So I don't know if this will help you or not. Play it back for your dad. I understand how he's holding on. But his lack of communication and lack of laying out a game plan is bad leadership. It's bad leadership. And it's not fun to turn loose the stuff that you love for the good of the thing. But, you know, it's kind of like, you know, when your kid goes off to college, the last one went off to college. It's like, oh, we're done. It's kind of sad.

And but here's the trick. You hope we're done. We don't want them to come back. You know, we don't want failure to launch. Right. Failure to launch is not success. That's right. That's right. So, you know, you know, I'm sad that you're leaving, but be gone with you. Hey, guys, you know what I love about summer? All the fun yeses. Yes to pool parties. Yes to snow cones.

And yes, for all the fun in the sun moments that you can have with your family. But summer goes fast and so does summer spending. And if you're not paying attention, you're going to look up from your slushy and wonder, where is all my money going? That's why I love the EveryDollar app. It's so simple. It helps you create a custom budget and give every dollar a job to do.

And let me tell you, you'll know exactly what is happening with your money, and that gives you such freedom and guilt-free spending. So do yourself and your summer a favor. Go download EveryDollar for free in the App Store or Google Play today. Our scripture of the day, 2 Corinthians 4.16, Therefore we do not lose heart, though outwardly we are wasting away, yet inwardly we are being renewed day by day.

Thomas Edison said, if we did all the things we are capable of, we would literally astound ourselves. I love that. That's pretty cool. Rachel is with us in New York City. Hi, Rachel. How are you? Hi, Dave. Hi, Jay. Thank you for taking my call today. Big fan of the show. Sure. Thank you. How can we help?

So my husband and I, we make a decent income. Our take-home is just a little over $9,000 a month, and we're currently on Baby Steps 3B while simultaneously doing Baby Steps 4 and 5. We currently have $34,000 saved towards our down payment, but the homes around us are around $900,000 to $1 million. Even if we look further out 30 minutes or an hour, the homes are still in the $700,000 to $800,000 price range.

There's the option to purchase a co-op, which is much more affordable, but our friends and family advise against it due to strict HOA board rules and us not technically owning the property, but the shares of it.

Ideally, we would like to spend no more than $3,000 on the mortgage, property taxes and insurance included. But according to the mortgage calculator on the Ramsey website, we would need to save $500,000 towards a down payment in order to make this happen. My question is, should we go the co-op route and then upgrade to a home later down the line? Or should we just continue to save money in a high-yield savings account for the next 15, 20 years or so to pay for a home full in cash?

Well, to start with, 15 or 20 years, you're extrapolating your existing income with no raises, and that's not realistic. Right. So that's a wrong set of assumptions to do the formula. So you're exaggerating that. The co-op in Manhattan is not an unusual way to buy a property at all.

Anywhere else in America, it would be highly unusual. But there, it's normal. The thing that you have to be aware of and that your friends and family or whoever's bringing up is what the HOA bylaws are and what's governing this thing. Because where you can get sideways on a co-op is if it's misgoverned. And then you've got a real mess on your hands. And you don't get the appreciation then.

because your HOA fees and stuff go through the roof because of mismanagement, no pun intended. And if the HOA fees get out of control, the value goes away because nobody wants to buy it. And so what you've got to do is get something in a very predictable environment where, okay, I can look at the HOA fees and I can look at the operations statements for the last five years and I see a very steady environment. Right.

And you look and say, OK, the use and the resale and so forth in these bylaws is not so restrictive that I hate living there. OK, because some of these places get very militaristic, don't they?

Right. That's what you don't, I mean, you don't want to lose the joy of being there just because everybody's, you know, it's HOA completely on steroids and out of control. So if you can get something where the HOA is reasonably operated in terms of the environment and the lifestyle around it, the human beings dealing with it and that they've been very steady, they, it's okay if it increases because costs have increased, but, um, but that the, um,

you know, the, the increases are reasonable and over the last five years and the, in other words, you get all these indications in your due diligence that the operations of the HOA are done properly and, and, uh, and efficiently. Then if you do all that, then a co-op is as good as, as, as good as a condo is as good as a fee simple. It's technically in a condominium. You're in a very similar situation somewhere else in America. If you bought a condominium, uh,

You know, you're buying into a similar thing to a co-op. It's a little different, but you've still got the same issues there. And if you buy into it, I'm in a single family in a golfing community that's got all these other expenses associated with the community. So if they mismanage that thing, they can destroy the value of my freestanding single family because they run the dadgum costs up and it makes it unappealing to live there.

for the, for resale. And so that you can run into that with anytime you've got an HOA of any kind involved, but just study that and watch that. And I think you're okay to move into the co-op cops again for, if you've never done deals in New York city or don't know about deals in New York city, the cops are very weird transaction. Yeah. I'm not, I've never heard of it. Well, it's as prevalent as condominiums in other places. Okay. In other words, it's, it's, it's not

It's not unusual at all there. It's very normal. And I personally don't have a problem with the way they're structured. Again, I'm going to look at it, though. If I buy a condominium, I've got a bunch of condos. We own probably 15 condos that are rentals. And one of the things before we bought into those, not only were we looking for a deal because they were investment properties, but we're also looking at how the dadgum thing's managed. Are these HOA fees going to make me wish I didn't own it?

You know, because they take all my rental profits by the time they're screwed up sideways management stuff. Kathy is with us in Albany, New York. Hey, Kathy, how are you? Hi, I'm fine. And I hope you are the same. We are. Good afternoon. Afternoon. Yeah.

Doing okay, but in the middle of a decision-making process and really having a hard time with it. I'm 74 and my husband is 82. We've been, over the years, not very good about saving. We've been giving. We've been doing a lot of giving.

And that has brought us to a place where we really don't have anything except our monthly and yearly income, our pension, Social Security. And I'm living in what was a childhood home that I did inherit, but we put money into it. We took out a mortgage. The mortgage is roughly a remaining of $260,000.

And the house right now is probably worth somewhere around $740,000 to $795,000. But it's a difficult place for us to be in because my husband's had a lot of health issues. And, again, it's a family home. And I really kind of don't know where to go for what we're paying here now. And, like I said, we have debt.

And so that's why I'm... How much debt have you got? Just the house? No, approximately $60,000. On what? Lines of credit and credit card debt. Why? Not currently. What did you buy?

That's a good question. Well, basically, you know, because we have no savings or anything, the bills that we have coming in here and what goes out... So you can't live on your income? How much is the pension and the Social Security together each month? Roughly, each month it's around $6,000. And how much is the mortgage? How much is your mortgage payment?

About $1,200. Okay. So where's the rest of the money going to the debt? Taxes. Taxes are high up here. Okay.

Land taxes, school taxes are high. House insurance is high. We have our car insurance. Then you have your oil and propane bill. Lots of, you know, the Internet. Kathy, I don't want to run out of time, and the clock's bearing down on me. I'm so sorry. I wish I could take two hours with you because this is an important decision. So ultimately, you guys have got to get your...

budget to balance what you're describing is you can't sustain with what you're doing. Something has to change for you to sustain. And that's either an income increase or an outgo decrease. And so you're probably looking at selling the house if you don't increase your income somehow. And and you can just smile and say, you know, when we gave all that money away, we gave away the house.

because it's one of the things we gave away. And you didn't technically give it away, but you left yourself in a position where you couldn't keep it. And that's where you set yourself up to be, and I'm so sorry. ♪

I hope you can figure out some way to get this budget to balance and make it sustainable and you can keep it. But it doesn't sound like it's fun for you anymore. I'm sorry. That puts this hour of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. ♪

Hey, you guys. I was shocked to learn that 88% of you out there are sharing the Ramsey Show. I mean, that is so incredible. Thank you so much. And I want to tell you that we're making it even easier to share. So this June, we have pulled together the brand new Ramsey 101 YouTube playlist, a

a quick start collection of how to get started walking the Ramsey Plan. Now, this playlist is perfect for that one person in your life who needs help winning with money and just doesn't know where to start. So here's what's inside. What the baby steps are and why they actually work, how the debt snowball helps you pay off debt fast, and how to build wealth and invest for the future, and so much more.

So here's what you need to do. Click the link at the top of the show notes. It'll take you straight to the YouTube playlist. Copy it. Text it. Send it in a group chat. Just say, hey, I thought this might help. Because one playlist shared at the right time could be the turning point. One share. One playlist.

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