Make The Most of Your Financial Choices—They Matter

Hey, before we get rolling, listen up. If you want to win with money in 2026, you can't keep living normal. Normal's broke. You need a plan. Get a personalized plan and start living like no one else by downloading our EveryDollar app today. Normal is broke. Common sense is weird, so we're here to help you transform your life from the Ramsey Network and the Fairwinds Credit Union Studio. This is the Ramsey Show. Jade Washall, number one best-selling author. Ramsey personality is my co-host today. The number here, if you want to talk, is 888-255-225. And we're going to talk about you right in front of you. Nancy's with us in Clarksville. Hey, Nancy, how are you? Good, Dave. Thank you for taking my call. Sure. My question is, I have paid off all my debt in step two, but the problem is I got involved in a lease for an HVAC system. The total cost of the system, when paid off at 10 years, will be over $62,000. So I'm wondering, do I pay it off using the debt snowball method and just get out of it, meaning I'm responsible for that, or just leave it until I do the house stuff? Wow. OK. I didn't know you could do a lease on a heat and air system. That sounds like you got. I went to the Attorney General, and I went to a better business bureau, and the Attorney General Consumer Protection Department said, it is legal. It's being done all across the US. So yeah. But it's so bad that they, yeah, it's horrible. OK. So a lease, typically, I have no idea in this case, but typically would have an early buyout provision, because leasing is simply financing. An early buyout. Leasing is termination. OK. What is it cost to terminate it? The cost of the whole contract. No. What you have remaining, yes. Yes, sir. No. Yes, sir. 47. Right now, my lease buyout would be about $47,000. Oh my gosh. I've paid 15. Now you had an attorney look at that part also, right? I'm getting there. Right after I did the system, I got diagnosed with cancer. So I got kind of sideline for a few years. Now I'm like, wait a minute. I don't want to keep doing this. This is fevery. It's theft. Wow. But OK, because I mean, I know a lot of equipment leasing, certainly car leasing. And I've looked at the contracts on all kinds of leasing deals, even employee leasing they have out there now, which is really strange. And every one of those have a buyout provision that is less than the total of payments, because you're giving them their capital early. You're giving them their money early. And so they're not collecting interest, so to speak, even though there's not technically an interest rate. And so almost everyone I've ever seen, but I've never seen a heat and air one. So I don't know. My god, honey. All right, so let's do two things. Number one, I want you to reinvestigate that part of it. Because as suspect as this whole thing is, that part of it's suspect. So if the total of your remaining payments is 47, a normal buyout provision would put you somewhere in the 30s. And the way you would do that, if that's the case, is instead of paying them in advance, like double payments like you would in a debt snowball, you simply save the money up. You pay yourself into a savings account and then write them one check. If there is a discount for early payout, OK? And there typically is. If there is not, either way, what is your income? I just retired from federal service, so my income is roughly $2,400. OK, this goes in baby step six then, because it is the equivalent of a second mortgage. And it's a lien on your house, because it's a lien on your heating and air system. And you would pay it off in baby step six when you're paying off the house. OK. What is your interest rate on your home? 2.25. Yeah, no bueno there. We leave that alone. OK. Because if you had a higher interest rate, I would suggest refinancing and taking them out. OK, my mortgage balance is $169.578. Yeah, so when you get to baby step six, you knock out the lease first, either way, whether you get a discount or not, because it's more than half your annual income. When a home equity loan or a second mortgage of any kind is more than half your annual income, we move it to baby step six. Yeah, I've never heard of such a thing. I have now. There's a lot of things that I get on this show. This is where I learn about it. And then I have to go look it up later and go, oh, it is a thing. So you know what else? I didn't ask. She said federal employee. Clarksville is a base, military base. That's right. So these may be morons that are preying on our military people. Yeah, that's big. That's problem. Which makes us like double negative for this company that does that. So if your son is out there, mom, and his new job is selling heat and air leases, tell him, don't be a crook. And go do something else with his life. Oh, there we go. There you go. I helped with that. Just throw a dart out there into the universe to see if we can hit a balloon. Why not? Yeah. Man. Oh, man. Because I did have that happen one time. I was ripping on the payday lenders at 800%. Oh, gosh. And a lady called and said, well, my son owns two of those stores. I said, well, time to sell them, quit being scum. He's ripping off poor people. He's oppressing the poor. Read about what happens in the Bible when you do that. It's not good for you. It's not a place you want to be. Mess them with widows, orphans, and oppressing the poor. These are not three things you want to do in the Bible. And really, just as a matter of living your life properly, hello. But yeah, they're scum. They're scum. So yeah, shouldn't be. Don't be scummy. And then you're safe on the show. We'll leave you alone. We won't talk about you. We won't talk about your kid. We won't talk about you. We won't do any of that. So interesting to side note, the lease on a car, and I suspect it's true on a heating and air system, is the most expensive way to operate a vehicle. Several publications, including Rimsie Research, have done detailed research on this. And when you run the math out, so you can take a financial calculator and say, this is what the MSRP is on the car, which is what it's calculated on. Here's what the buyout is at the end of the lease, a closed-in lease always has a number after three years, four years, seven years, whatever it is. You can buy the car for $12,000, but it was a $64,000 car, or whatever it is. So you've got those two numbers, and then you have the number that is the monthly payment. When you put those into a financial calculator, you can figure out what the effective cost of capital is. That's a fancy way of saying the interest rate. However, interest rates are not disclosed on leases, like they are on car lines. The Federal Trade Commission requires they hand you one piece of paper with your APR on it. Even if they're screwing you, they have to hand you that piece of paper, and you'll look down, and you'll see 38% or 28% or 12%. You'll know you got subprime, right? On a lease, you don't have to do that, because lease is not technically borrowing money. But you can run out, but it is borrowing money. So that cost of capital, there's no cap. No cap at all, and no knowledge of what it is, unless you know how to run a financial calculator. And I've done it on probably 40 or 50 leases over the years. Every time I do it, it comes out between 14% and 17%. And so those of you that are, I got my BMW on a lease, because my accountant said that was the smartest way to do it, you're an idiot. You got hammered. You're paying 17%. You should fire your accountant and get rid of your beamer. You're getting hammered. But you never did any math. You just thought you were sophisticated. Jeez, no, you wanted a beamer. That's what it was. And there's a way to get a beamer. Very little down, a lot a month, and very little at the end. Yeah, this is the problem. Day, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential, because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Xander can help you find the right plan. Whether you're single or married, it's not optional. If you're gonna be out of work for a while, then you need to make sure the money's still showing up. And that's why Xander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling. I've trusted Jeff Xander and Xander Insurance for over 25 years, and so has my family. So don't wait, it's fast, it's easy, and it could make all the difference. Go to xander.com or call 800-356-4282. Protect yourself, protect your income, protect your family. ["Personality"] Jade Walsh, all Ramsey personality is my co-host today. Thank you for joining us. Michael is in Toronto. Hey, Michael, welcome to the Ramsey Show. Hey, thank you. What's up? So I'm currently 18, and by the time I graduate, I'm probably looking at $100,000 to $120,000 loan that I'm sitting at. And my current car is under my mom's name with her interest rates on it. And her credit card got ruined by my dad leaving. And I'm looking to switch the car with a way less percentage of interest, but I have to max out my credit cards for the down payment to put on it. And I don't know what to do if it's even worth it or not. What's your car? What do you owe on the car? I'm sitting, so I bought the car at $30,000. I'm looking at $41,000, I know. And you're a college student? First year, yes. With a $40,000 freaking car. What are you doing with a $40,000 car? You're a college student. I had a $70,000 car and another $60,000. I sold it, I made profit, but my mom's credit card got ruined and they gave me a 12% interest on it. And I didn't realize till yesterday when I checked and I only had it for five months. And I think this is your mom's fault. You bought a $30,000 car and you're in college. You get a $4,000 car. Do you make any money? What's your income? So I'm sitting at $1,000 to $1,500 from my work at retail. And I had side businesses before and I had like about $70,000. I blew it all and now I make maybe $500 to $1,000 for my side businesses a month. Okay, do you have any money saved? Nothing, I'm in debt by credit cards. Okay, so the car, you owe $41,000 on it. If you sold it private sale, what's it worth? Or your mom's? Right now, with the trade in, they're giving me 27. Oh my gosh. That's a trade in. $12,000 negative equity on it. Okay, but let's look at, that's your homework, is to look at the Kelly Blue Book value if you did private sale, because you're gonna get more for it. No, I did, it's $30,500. $30,500, okay. If I were in your shoes- I can't, there's a lien on the car, but I can't pay. Yeah, I mean, you make $1,000 a month, and you pay the car payments, more than that, isn't it? My car payments comes exactly to $1,000. Oh my gosh. So how are you paying it? Credit cards? Basically everything I do. No, no, I can't put on credit, it's debit, basically everything I do. I mean, if you make $1,000 a month and you spend $1,000 a month on your car, you don't have money to put gas in it, and you don't have money to eat. So, I use- This math doesn't work out. He did it a lot, I don't know how. And no, I make like $1,500. On a good month, I make $2,000. On small months in retail, I make $1,500. Okay, so you got $500 to spare. You eat a little bit, you pay your insurance, you get gas, you've got nothing left. Okay, let me stop a second, because I did a drive-on something a minute ago, I wanna know more about. You had $70,000 in savings, you said, from a side hustle that you blew. Did I hear you say that? Yes. Tell me about that side hustle. Where did all that wonderful money come from? It came from, I used to self-serve screen protectors in cases during COVID when I was 14. Ah. And Amazon. Yeah, so no COVID, no business, gotcha. Okay. Yeah. All right. And I gave most of it to my mom after the separation. And she's sitting at least at $300 to $400,000 herself. Yeah, okay, you're 18. I'm like that. You're 18, your mother is not your responsibility. Your responsibility is to love her and cheer for her, but she's not your financial responsibility. So this has got to stop. And unless you can create a huge income, you need to get rid of this car and get a $2,000 car. I tried doing that, but I have to sort of, the loan that you get on that car. I would put the $10,000 on a credit card. I'd rather you have $10,000 on a credit card than $41,000 on a car. Amen. I can't put on a credit card. Why? Maybe $3,500 left on a credit card that I can spend. Yeah, okay. Who do you owe the $41,000 to? To a bank. Go down, talk to the bank about signing a note for the difference. Do that, right? And then what about on the new car? So that's the thing that doesn't make sense to me on the new car that I looked at that I'm gonna get. Same monthly payments, instead of 96 month loan, it's a... I didn't say anything about monthly payments. I said get a $2,000 car. Cash. Because we tried when we went to the bank. I didn't want you to go to the bank. I want you to come up with $2,000 and go buy a car. Just buy a car? Yeah, are you in school full time? Yeah. Are you on campus? You're at home or at home? Campus. So... Like, where do I live? At home. Okay, how close are you to campus? What I'm getting at is you might go through two months where you don't have a vehicle and you make it work. And instead of using that $1,000 a month to pay for a car note, you use it to save up and get yourself a little beater car is what we're saying. I want your buddies to get a class. I'm not all the way from campus. Okay, all right. Okay, here's the thing. We keep throwing suggestions out and the only answer you've got is it doesn't work. So let me tell you what doesn't work. Your life, the way you have it set up right now. Your situation sucks beyond belief. The decisions you have made are beyond suicidal financially. So you've got to throw a stick of dynamite in the middle of this freaking mess you've created. And it's gonna be really uncomfortable. But you know what's gonna be more uncomfortable? You sit there in this pile of stuff and you're gonna smell like this stuff as long as you sit there in it, coming up with excuses to sit there in it. So you have got to get rid of this mess. You've got to create a big, you may need to quit school. You need to go get some dad gum money and start cleaning up this mess. So I want you working like 80, 90 hours a week, going to school on caffeine and doing what normal people do when they get in this instead of telling me, oh, my mom got screwed over by my dad when he left. I'm sorry, but that doesn't mean you buy a $70,000 car while you're in college and downgrade it to a $41,000 car and act like that's smart. Nowhere in this conversation is smart. Smart didn't come up today. No, it didn't. It didn't even show up here. So dude, you've got to get rid of the car and you've got to figure this out somewhere or another. Now we're giving you lots of suggestions. Get a buddy that's in the neighborhood to take you to college, quit college for a year and take you a gap year and go clean this mess up while you work like a freaking maniac. But you are, man, you cannot, there's nothing in this that the math works. Sixth graders could tell you this math doesn't work. This is a mess. And so no, you can't keep this car. And no, you can't keep this life the way it is it designed right now. It's why you called. And you can't get another car on payments. And I'm not gonna argue with you about it anymore. I'm through talking to you about it. So you go fix this. We gave you some suggestions, but part of fixing it is you've got to decide that where I live, the land I live in right now is the land of stupid and I want to leave. That's the first decision you got to make. And we hadn't even been able to get that far with you. So that's where you got to go, man. That's where you got to go. Open phones here at triple eight, eight, two, five, five, two, two, five. Now, Jade, let's just review the policies on this show. Reveal it. We love you. All of you. If you've done something stupid, we love you. Anyway, we've done something stupid. I have a PhD in DUMB. Jade and Sam cleaned up $465,000 worth of stupid in their life. So no one's sitting here high and mighty talking down to someone. So we love you. We love you so much. We're gonna tell you the truth. We're gonna start gentle and we're gonna start by trying to help you move along. But if you want to argue with us while we're trying to help you, it's gonna get nasty fast because we love you. I'm gonna smack you upside your stupid head until you listen to the stuff that'll make your life better. Now, I will start with a gentle handshake and say, honey, this is the best way to do it. Well, Dave, I listen to you all the time, but I'm not selling the car. Well, you're an idiot. You gotta sell the car. That's how it's gonna sound around here, honey. Okay, so we're going to serve you when you call here. You're not entertainment value for us. You're a calling for us. You're a crusade for us. We want you to win. And we're going to do everything in our power, starting at first, gently, and turning up the heat by degrees during the time we're on the phone together until we have contact. This is The Ramsey Show. Hey, it's Rachel Cruz. The holidays are here, which means family time, and giving back, and remembering what the season is all about. And let's be real. It also means shopping. Y'all, if you're any such a fan of the show, why don't you come and watch it? I'll be happy to. I'll be happy to. I'll be happy to. Hey, it's Rachel Cruz. The holidays are here, which means family time, and giving back, and remembering what the season is all about. And let's be real. It also means shopping. Y'all, if you're anything like me, December gets really busy and really expensive. It's harder to stay intentional with your spending. And that's why I love shopping on Amazon, especially this time of year. Named the lowest priced US online retailer for nine years running by Profitero, a third party analytics and research firm, Amazon's prices are up to 14% lower across top categories and beat competitors by up to 5% in key gift categories. Between amazing deals, stress-free shopping, and fast shipping, Amazon makes gift giving simpler, the holiday season a little brighter, and helps me keep my budget in check. That allows me to get back to enjoying the season. What more could a busy mom ask for? So for more information about Amazon's low prices and easy affordable holiday shopping, head to Amazon today. Thank you for this great sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc sc What's up? Um, my wife's been pestering me for quite some time now to take her on a vacation. Um, I'm not sure right now is the time to do it. We're both pretty young. I'm 25. She's 21. Um, we got a little one on the way here before too long and we're getting ready to purchase a property we intend to build on. Okay. Do you guys have debt? No debt. No debt. We've been very fortunate in that way. We're very much educated. Okay. What's your household income? Um, I bring about 50,000 home after taxes and she brings about 20,000. And that's part of the issue is that next year her income will be going away. She's a preschool teacher now, um, but with the little one she's going to stay home. Do you have an emergency fund saved? We do. The thing that concerns me is that after the down payment on the property, that's what people will be left with is with our emergency fund and sort of take that vacation. We kind of have to dig into that a little bit. Well, a vacation is not an emergency. So I would not dig into the emergency fund to take an emergency, to take a vacation ever. Um, what does she want to spend? She wants to go somewhere warm, you know, Wyoming. This time of year you want to kind of leave it a little bit. About 2000. 2000? Okay. So have you run, have you run out the numbers on what? Here's the thing. I'm not saying, uh, I'm not saying no and I'm not saying when, but you can decide when. You can look at this and go, okay, my wife wants to take a vacation. We've never taken a vacation. We're debt free. We have an emergency fund. We're also trying to move in this house. What can that look like and when is the time to take it? Because if you just tell her no and you kind of just swatted away like a nap, she's going to get irritated. Um, well, no, that's not your position anyway. It's your position for two. She's not a child. Okay. The two of you ought to sit down as two adults and go, okay, yeah, vacation is a good thing. Uh, a emergency fund is a good thing. Having a baby is a good thing. Buying this piece of ground is a good thing. None of these are bad things. Now where do they fit in our lives with our goals as grownups? You know, you can't just be a kid on the cereal while throwing a fit. You have to be like an adult. Both of you. And so I don't want you being her daddy and have to talk her off the ledge. I want her to grow up and look at it and say as a grown woman who's has a child, what is responsible for me? I want to take a vacation. I'd love to take a vacation. But as a grown woman looking at this, I can't afford to do it right this second because I'm not going to be working next year after the baby comes. Or as a grown woman looking at this, I've got a child on the way. I really want to do this. You know, we do have $86,000 in the emergency fund. We probably can go ahead and take a vacation because you've overfunded the emergency fund, bubba. I don't know what's in this emergency fund. But I mean, she needs to participate in this decision as a grownup, not as someone who has a parent that they're married to. That's right. And if she's laid out how you guys can do this, then. And it's wise. And it's wise. And you've also got to be open to going. You've got to be a grown up, though. It can't be, I want it. I deserve it. You know, bull crap. That's what 14 year olds do. That's not what grown women do. Grown men do. No. So no, you have to be emotionally mature and say, what is good for our family? And if in the midst of that, we can do this reasonably and we don't leave our family vulnerable with no emergency fund because we went on vacation, that would be stupid. Yeah, that's not. Or leave our family vulnerable since you're going to be quitting work and staying home with the child and you can't make your bills because you went on vacation last winter because it's cold in Wyoming, which is not a shock to anyone in Wyoming for sure. And so, you know, that kind of. So I mean, what I want to do is just pull her into the conversation as a grown woman, not as someone who's I can't get my husband to let me do stupid stuff. I mean, this is just that's ridiculous. It's not a conversation you want to have in a marriage. It needs to be the two of you are we have this child, we have his future, what makes sense and yes, vacations are part of the equation. I got no issue with that at all. But where they fit is where your point, Jade. Absolutely. You know, where and when. Yeah, they don't strike me as people who are not smart with their money. They paid off their debt. They've got an emergency fund. They're looks like they're trying to do this house the right way. I have a feeling that he's laser focused and sometimes has to remember like, hey, we can we can do some things sometimes. That's just my my spidey sense. Could be. Could be. Yeah. Loosening the nerd up. Loosening up the nerd. Yeah, but she needs to do that with reason. That's right. Not with emotion. That's right. Yeah. And that that's a fair that's a fair request for a grown up. Stephen is in Little Rock, Arkansas. Hi, Stephen. Welcome to the Ramsey show. Merry Christmas. Merry Christmas. How are y'all better than we deserve, sir? How can we help? Okay, so here's my situation. I'm 20 years old. I'm engaged and I'm planning on getting married in June. And that being said, we're looking to get an apartment together in June because that's what you do. You move in together once you get married. Thanks. I'm completely debt free. She has a little bit of student loan debt. That's kind of a side to point the question for me is my grandma opened up a credit card for me to you strictly as a gas card. And that's my only credit card. And she always pays it on time. But that being said, I have to pay it. Oh, you're 20 years old. Why should grandmother pay your card? That was her way of saying that she wants to support me through college. That was her gift to me. So I can totally afford my own gas, but that's just good if she wanted to give to me. And but I know that I want to get this apartment and I really like the sound of what she'll talk about it, letting your credit score roll over to nothing. But I'm afraid that if I say, Hey, grandma, thank you, but let's close this card. I appreciate the gesture. I can pay for this. My credit score will plummet, but it won't flip and disappear before that time in June when I'm trying to get an apartment. Honey, you don't have to have a credit score to get an apartment. OK, that's that's that's mythology. We've done this about six times in Ramsey in the last six or eight years. One of the personalities will jump on the phone and call 15 apartment complexes and say, Hey, I'm moving to Nashville. Do you guys I don't have a credit score because I'm just out of school and I got zero credit score. Do you guys you guys rent to people without credit score? Nine out of ten, say they do. Some of them, a couple of them want an extra deposit, but most of them are just no, it's no big deal. Come on over. That's just complete mythology that people have spread out there among your age group. It's just not true. Exactly. Nine out of ten or not. Don't care if you have a credit score. Awesome. I did not know that I was under the impression that my credit score would plummet and that might jeopardize whether or not we'd be able to make that. Your your credits when you stop borrowing money, your credit score will go away. It's not going to plummet. It's just going to disappear. But to Dave's point, he's right. There are plenty of places that you don't need a credit score to go. And so you'll just do your due diligence and find one. Yeah, just, you know, can't rent to those. You can't rent from those guys because they require one. I can't rent from these people over here, though. And by the way, that's a great litmus test because when you move into an apartment, you want to have a super or whoever's in charge that uses their brain because things are going to happen. You're going to need to talk to them about things and you want something fixed. Right. You want somebody who uses their brain. So that's a great way to start. Yeah. And if the only way they approve you is by a number, that's not using your brain. No definition. No. Yeah. Very good. Good stuff. Yeah, you can look those calls up. We've had different personalities do this over the years and they're on the YouTube channel. And you can see the making phone calls to the apartments and it's recorded and you can hear the conversation. Yeah. George went on on the fine print, remember? Yeah, that's the one I remember. And he did. He went out and he was able to call him and there were plenty that did. You just have to call around a little bit. It's not going to be the first. It may not be the first door step that you go to. That's all. Yeah. And yes, you need to it'll be good for your marriage to get off the grandmother doll. I know that's right. Well, good for you. Good for you, Stephen. Well done, sir. This is the Ramsey show. Yeah. 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Paid endorsement, attorney advertising, Guardian Litigation Group LLP, not available in Minnesota and Oregon. Results vary and no specific outcome is guaranteed. That settlement may negatively affect credit and not all creditors will negotiate or settle. Savings vary and may be taxable. Please review our website terms for more information. Thank you for joining us, America. Open phones at 888-825-5225. There are a few things in my life that I've run into that other than things from the Bible that I am 1000% sure work. Teaching the seven baby steps that we teach here, the first one's save $1000. The second one is get out of debt, everything but the house using a debt snowball and gazelle intensity as if you're running from a cheetah. The gazelle runs for its life. That's the intensity you use to get out of debt. You sell so much stuff the kids think they're next. You don't see the inside of a restaurant unless you're working there and you're not going on vacation because you're a broke person in debt and you are ears laid back running headlong. Straight into this getting rid of it, baby. And we're going to leave it all on the field. That's baby step number two. And then you go on to building an emergency fund, retirement plan, kids college, pay off the house and become very wealthy. Those are the seven baby steps and in essence and you can find those everywhere. And the total money makeover book is where we outlined them. We've sold 12 million copies of that. 10 million people have been through financial peace university where we teach those baby steps and how to implement them. So tens of millions literally of people and there's tens of millions of you listening at this moment to this podcast on YouTube and on talk radio. So we know that easily a hundred million people have done some stage or some process of the baby steps and with varying degrees of success because of varying degrees of commitment and sacrifice like you do with anything. So it's it's a it's a process of making sure that you're doing it. So it's it's a it's a proven thing. It's not a theory comes out of a test tube. The debt snowball is probably what we've become best known for. Now, this is where you list all of your debts except your home smallest to largest. You pay minimum payments on everything but the little one. You attack the little one with a vengeance. You squeeze every dollar, every drop out of your budget and you throw it at the little one. You work extra, you sell stuff, you clean out a savings account all the way down to a thousand dollars, you stop putting money in your 401k, you get term insurance and cash in your stupid whole life policy, you sell a car if it's too expensive, you do whatever you got to do and you throw every dime at that smallest debt until it's gone. When that one's gone, you take the payment you used to pay there and every dime you can squeeze out of everything else and you put it on number two and when number two is gone, the payment from number one and number two are freed up. The snowball rolls over again. It picks up more snow and it attacks the third one and you're doing this with just increasing levels of hope, increasing levels of sacrifice, increasing levels of passion and every time the snowball rolls over and you get rid of another payment that's that much more money freed up in your monthly budget to attack the next one down and it's been unbelievably successful. But Dave, I got to be, I'm the person because I know what they say in the comments, I see what people are asking and the biggest two questions are this. Dave, I've got my debt listed. What if I have a debt that the interest rate is just killing me? Why would I put the lower one first? Why would I list them small to largest if it means me, you know, having to pay this high interest loan for much longer? What about the math, Dave? It's brain chemistry. A dopamine is released when you complete a task. There's a dopamine release and it's called a feedback loop in psychology. And so when you have success at something, you're more likely to repeat the task. That's right. And the faster you have success and the more often you have success, the more you've got a feedback loop and the more the dopamine release is there. And in a spiritual realm, we would call this hope. You start to believe it's going to work because it's working. And then you lean in that much more and you lean in that much more and you lean in that much more. And that's why this works, because no one set set up, sat down at their kitchen table and said, hey, let's go deeply in debt because that's a good idea. A series of behaviors put you into debt and you don't fix a behavior problem with a math solution. You fix a behavior problem with a behavior solution. And the feedback loop, this positive feedback, I knocked out one. Yeah, I knocked out another one. Yeah, I knocked out another one. Whoa. And then you're down. You're beating on the you're beating on that student loan. You're beating on that big one. You're beating on that car. And you're yeah. And now you're starting to yell at your neighbors think there's problems over there, you know, because you're getting fired up because it's working. And that's the dopamine release. That's hope that you're starting to believe. And when I first started, I paid off the little one. I wasn't so sure. And the next one, maybe this will work. And then the next one, yeah, it's going to work. The third was like, ah, and then your broke friends start making fun of you and you want to punch them, you know. And so this is this is this is why it works. And that's why the debt avalanche does not work. That's right. Or consolidation, you know, when people exactly because you don't change your habits. That's right. The debt avalanche is where you it's a, you know, you list your it's mathematically correct. Well, honey, if we were doing math, we wouldn't have credit card debt. It's not a math problem. It's a stupid problem. That's what we had to fix the stupid, not the math. And so the math is, you know, we're going to list it highest interest rate to smallest interest rate because this interest rate is killing me. And here's the problem. Well, that sounds like it's mathematically correct. It's not because your math that you're using is very naive and you left variables out of the math formula. Here's a variable you left out of your math formula, probability of completion. If your probability of completion is 80 or 90 percent with a snowball, but the math is running against you, when net of probability of completion, it's going to beat the avalanche because the probability of completion is close to zero. Almost no one finishes that because there's no feedback loop, no dopamine release, no hope release, no sacrifice increase, no getting the spouse on board because this crap starting to work for the first time in my life. I'm telling money what to do instead of it telling me what to do. I am not relinquishing this control ever again. You start getting a little swagger, man, you're ready to go. That's true. And that's why this thing works and why so many millions of people have gotten out of debt using the REMSY system, which is just freaking common sense. But, you know, you people there think your debt avalanche is mathematically superior. No, your math is naive and your formula is incomplete because you don't know what the flip you're doing. So Northwestern University did a study of the debt snowball versus the avalanche. And they concluded because of probability of completion that the snowball was far superior. Because if you quit and you don't get out of debt using the mathematically superior, which is not really mathematically superior, it doesn't work. That's right. So you don't get completion, you don't get to the goal. So and then Time Magazine comes out and does a story on the Northwestern studio Northwestern study and they go, turns out do rooms. Right. Like we didn't already know that we've got like millions of proof text here. We've got so much social proof on this, it's unbelievable. Beat your research project into submission. So good God, people. This is not that hard. Get your butt out of debt. Your number one wealth building tool is your income. And when you're giving it to stupid Bank of America, Lexus Motor Credit and Master Card, who's your master of your life, you know, and you wonder why you work so hard. I make a hundred thousand dollars a year and I got nothing. It's because you're giving it all to these stupid banks and you've got to get back control of your life. You just you work too hard to be broke, people. You need to retain control of your life. This is so empowering. It is. So Dave, get a little bit more tactical because we know, OK, we're listening to small to large. OK, Dave, I will do the debt snowball method. But what a word of cars fit into that. You're telling people all the time to sell their car. That's not my smallest debt. Do I do it first? Do I wait until I get to that on the debt snowball? When do I sell my car? Rule is if you can pay the car off and all the other debt within two years, not counting your house and you like the car, keep it in the debt snowball and pay it off. But if the car is keeping you from making it out in two years, if it's one of the reasons, OK, but if you got a five thousand dollar car and a two hundred thousand dollar student loan, the car is not your problem. That's right. That's right. But you got a seventy thousand dollar car and a six thousand dollar student loan and you can't make it out in two years. It's the car stupid. Yeah. You know, so get rid of the dumb car. So can you get rid of the thing and do you like it? Oh, I hate it. Well, get rid of it anyway, then. It's you get rid of it even if you weren't broke, because you don't like the stupid thing. But I love the car and I can pay it off and all of my other debts with the money I have in savings and the money I can earn and using the debt snowball during a two year period of time to keep the car. I'm fine with that. Yeah. And the only exception would be the IRS. That's the only thing that jumps to the top of the list. Fair child support child support. Anything like that goes to the front of the list because they're going to come get it anyway. That's right. And child support. You take care of babies for you doing this. Shut up. But the, you know, the IRS is going to get their pound of flesh. So you need to put them at the front and get rid of them as soon as possible. They have collection abilities. Nobody else has this is the Ramsey show. Hey, guys, it's George Camel and I've got a hot tip to save you some serious cash this holiday season. Shop Aldi first. Aldi has everything you need for holiday get-togethers. I'm talking charcuterie boards, holiday sides, desserts without the large price tags. You'll get fresh, high quality food while keeping your budget off the naughty list, because Aldi has the lowest prices of any national grocery store. It's true. Families are saving up to $4,000 a year just by making Aldi their go to, which means more money for stocking stuffers. So find a store near you at aldi.us. That's a l d i dot us savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability and the market. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. Jade Wachaw, Ramsey personality, number one bestselling author is my co-host, Sarah is in Virginia Beach. Hi, Sarah. How are you? Hi, I'm doing well. How are you? Better than we deserve. What's up? I have a question about debt and merging everything. I'm a new wed. Me and my husband recently got married in December 12, 2024. And I didn't know that he wasn't as financially responsible as I thought. He has, I guess, been more secretive about his debt. I'm a bit more open about it. And he wants to merge accounts, but I'm not comfortable with doing it as a debt because he's kind of been very secretive and has lied to me about certain debts. And I'm working on now using my gear plan to get myself out of debt because I bought a home before we got married back in 2023. I have a car I'm working on paying off, which is supposed to be paid off later, maybe next year. And a couple other few debts, but he has many more that I wasn't aware of and some that I think he's secretive about still. We're going to marriage counseling, but I just don't know how to be more comfortable with merging our accounts together and fear like we'll be deeper in debt versus trying to have more assets. Give me an example. So let's clarify because part of the solution to the problem is you merging accounts. Because when you merge them, then you can see everything that's going on, right? There's transparency there. So give me an example of what that deceit looked like. Was it, I asked him how much the bill was and he said it was 300, but really it was 3,000. Tell me an example of what that is. Yeah. So when we, when he moved into the home out of his rental, it was that he wasn't making enough at the moment because he needed to still finish paying off, like electricity bills, gas bill, things like that. So I told him, okay, how long did you need to do that? And it was about two months. Okay. And so when I was waiting for that timeframe, I had got a bill in the mail and it was from the gas company. And when I had asked him if he paid it, he told me yes. But when I ended up calling them, they told me that there was still a balance of $1,200 for a gas bill. And when you asked him about that, what did he say? He told me that it was paid. I never informed him that I called them until a little later and he told me that he would end up taking care of it. So when you said I called them and you lied, you didn't pay it, what did he say? He just said that I did. It was, it was just from, he was firm about that he did pay it until I showed him like the bill. And then was he like, oh my gosh, I didn't realize there was still an outstanding balance. We're just really trying to get an, here's what I'm trying to get an understanding of. Are you dealing with a liar? Or are you dealing with somebody who's disorganized and chaotic? Right. It's more, he has lied about many, many things. Not just money. It just surprised me. Yeah. It's not. In three months? Yeah, it's been, I guess, 10 months now, but three months into, yes, the marriage, I found out that he was lying. So everything before was being deceived into separate homes while we were recording and things and then got married and now everything in the home and I'm seeing it more vividly. Okay. So here's, here's what I'm trying to be clear about because there is part of this to Dave's point where some people are just extremely unorganized with their money. And as they learn to get more organized, things get better and better. And then there's another part of you guys are married and I'm wondering what the communication sounds like because of the communication is, did you pay the bill? Yeah. And you're keeping it to yourself. No, he didn't. It's this much, right? All of that matters in this, in this situation. Now, what I do think is if he's lying and they weren't past lies, but there are lies that are continuing on now and you know about them. And if he's lying in other areas, not just money, then you do have a big problem on your hands. Yeah. You have a big enough problem. You need to be in the marriage counselor's office early and often right now because your communication style isn't good. Because if at my house, if I said, Hey Sharon, did you pay that? She says yes. And I went, I'm going to check. And I call and they go, No, it's not paid. I would go, Hey, I called them. They didn't pay it. I wouldn't wait three days and stew about it. I'd walk in there right then and go, Hey, what's up? You said you paid this. Right. Like right then. And she would be going, I thought I did. I screwed up or I was I was ashamed or I was scared or whatever. But at least we get to the bottom of it right then. We don't carry it around for four weeks and then label her a liar. Because that's a bad thing to be married to. And what I'm trying to understand from the beginning of your call is you're saying now he wants to combine money, but you're the one who's afraid to. So I'm trying to understand if he's trying to make it right by saying, OK, let's just put everything together. Then I don't have to try to, you know, keep something over here while you have it over here. But you're saying now I don't feel comfortable doing that. So are you too late? You're married. Right. Are you worried? Yeah. What can he do? What do you think he's going to do if you combine finances? Let me ask that question. I think he's going to spend more because I'm like, what is the term people use like the breadwinner? So I make majority of the funds. He helps pay like since we didn't have a merge account, he would just send me like. What does he make? What does he make? That's another thing he's kind of private about that too. So he works for a cable company and it's supposed to be quote unquote, $12 an hour, but they have a point system. So week to week, sometimes he says he makes $500. Sometimes it's only 300. So what he'd be direct deposited into your joint account then, if you combine finances, is it, hey, now we direct deposit all of our paychecks into this account, not you get paid and then put money into a merge account. All direct deposits go into the same account. That's how it works. And that's the only way we're doing it. That's right. Then we know what he's making. And what do you make? In the discussion. So I make 62,000 and some change a year. How long did you update before you got married three months ago? It was two years, about two years. And how many times have you sat with your marriage counselor in the last three months? We've been going consistently. It's like once every three weeks. And now he's going one-on-one with the counselor and I go one-on-one with a woman counselor. Well, that's good that you're doing that. And at some point we have to combine that process. All right. He's a bit of a spender as well. So it kind of makes me, I guess that's where it gets me a little nervous. Here's the thing. Now we're merge everything. Here's the thing. If you put all of your money into one account and you make a list of all the bills that have to be paid on every dollar and you both agree to them and we agree where every dollar of our income is going to go this month before the month begins. He has agreed to his spending level and you have to before it occurs. If he does otherwise, you're dealing with someone who can't keep a contract now with his wife and then then we got a problem there. That's a different kind of problem. Okay. But you're not solving a spender by staying separate from them. Combining is the only way to get transparency and accountability on where every dollar is going. And you need to talk to your counselor about the language you are using towards your husband. You have contempt all in your language. Exactly. You're rolling your eyes like you're so much better than him on every subject. And that is one of the four horsemen of the apocalypse. The primary reason people get divorced when contempt rolls in. So you've got to solve for that or this marriage isn't going to make it. This episode is sponsored by BetterHelp. The holidays are full of traditions. Some of these traditions we love, some we just survive. And in addition to the traditions, let's be honest, this time of year can also be a time of noise and pressure and loneliness. Here's what I want you to do. I want you to ask yourself what really matters to you this year. And therapy can give you a space to do just that. To think, to breathe, to ask yourself what do you want this year and to make room for peace. That's why I recommend BetterHelp. BetterHelp has over 30,000 licensed therapists that have helped over 5 million people worldwide with an average rating of 4.9 out of 5 stars. BetterHelp is online so it fits around your schedule even during the chaotic holiday times. You get online and just answer a few questions and they'll match you with someone who fits your needs. And if your therapist is not the right fit, you can switch anytime for no extra cost. This month, start a new tradition by taking care of you. Visit BetterHelp.com slash Ramsey to get 10% off your first month. That's BetterHelp, H-E-L-P dot com slash Ramsey. Music Jade Walsh, all Ramsey personality is my co-host. Triple 8, 825-5225. Anna is in Austin, Texas. Hi Anna, how are you? Hi Dave, I'm good. How are you? Better than I deserve. What's up? Well, I received this weekend, I received some devastating news that my husband was scammed out of his, almost his entire 401K. And so now it's tax time and we're going to have to pay taxes on it. So we have no more retirement and our savings is going to be wiped out. And I don't know where to begin from here. What did he, how did he get scammed? What did he put it in? It was a crypto. Crypto. It was a, yes. How much? And 270,000. 270,000. Yes sir. Oof. And there's a little bit of a backstory. I'm not making excuses for him, but there's a little bit of a backstory as to why he felt financially strapped, that he felt he needed to do this to secure our financial future. How old are you? I'm 57, he's 58. We had no debt. We paid off our home in February of 2022. What's your household income? Right now he makes approximately 98,000 annually. And I'm currently not working. I had to quit my job in January of 2023 because I was diagnosed with cancer and the medication that I'm on just causes me a lot of side effects that we chose it's better for me to stay home because we could afford it. Obviously we had no debt again. And he was, I think he was looking into securing our future so that he may be able to retire early. He started doing some research after having this money. He knows nothing about it. He's not educated in that. So first thing that came up. Your voice is fairly muffled. Speak directly into your phone please. Okay. Okay. He's not. No, he's obviously, even if he is educated, he's not wise. And he got desperate. It sounded like. He did. And right after I get desperate, I usually get stupid. That's what it was. And so that happened in January 2024. In March or April, he came up to me and told me that he invested a little bit of money. And I was like, okay. And he says, and he showed me that it was, he showed me the app and he showed me that the money was, I mean, we had made it made about 3,400,000. And I said, okay, how much did you invest? And he told me at that time, he said 30,000. I said, what did you get the money from? Because I take care of all the banking. And he said that he pulled it out of the 401k. And I said, okay, that's a mistake. You know, we'll get through this. I found a temporary job. I made enough money to cover the taxes. I made, I calculated, we probably owe about 6,000 taxes. I said, okay, great. Well, I'll take care of it and I'll get a permanent job. So it won't affect our savings. And now that it's tax time, I kept looking for the form that comes in, the 1099 R, I believe. And he gave me an excuse as to why he hadn't gotten, we hadn't received it. So I kind of had a feeling that it was worse than what I knew. And that it was worse than what he had told me. And this weekend, he gave me the paper and it was 270,000. And so now we will have to... And now it's worth the money, of course. Yes. Well, I looked at it last night and there was about 16,000 in it right now. Was it really a scam or did he just lose? Like, did he get scammed by a scammer or he invested the money and he lost the investment? No, it wasn't an actual scammer. I had demanded that I, back when he told me it was 30,000, I demanded to know where he sent it, how he sent it. I wanted to know everything and apparently it was a company in Hong Kong. And I looked up the address and it's in the slums of Hong Kong. I'm like, why didn't you do the research before? Well, the thing is now, he said that it was the 200... I'm like, how can he go from 30,000 to 270,000? And he said it was about the same time. He invested here in a couple of different... Okay, let me ask you this. Let me ask you this. Yes, sir. Does he now own that this is stupid or is he still defending? No, no, he owns it. He's been living with this for the past year and it's... I mean, he has... Well, he was lying about it 20 minutes ago. Yeah, you said he just came clean with it. Yeah, he just came clean with it, but he was living with that lie for the... But I mean, he's now saying out loud, I completely screwed this up. Yes, he has. That's important because otherwise he's going to do it again. Right. And he's like, I'm prepared to work till I'm 70. Yeah, he might as well. I'm gonna do a good job right now. And yeah. That's not a choice at this point. Belly up, buddy. How's your health? Are you improving? It's getting there. I'm on a clinical trial. Okay. And so I'm hoping that this will be something that will give me more time. And I feel pretty good, except just the usual side effects. I mean, not the usual, but the side effects of medication. But thank you. I'm happy to... Every day is a good day. And I'm not going to let this bring me down, but it does scare me for our future. The good news is you have no payments. And so what he needs to do is max out his 401K. And you'll need to max out your Roth IRAs. And you need to tell him that if he makes any transactions without the two of you being in agreement ever again, that that will be the last time he'll do so as your husband. Absolutely. He needs to understand that this has extreme consequences. Because he not only did something stupid, he lied about it. At length, deceived, created a web. A full scenario of lies. That concerns me actually more than his stupidity. Correct. And so, you know, that's a big deal. So yeah, you guys can catch up. I mean, you can make a hundred hundred and twenty and you max out your 401Ks and Roths. Max out your Roths and work another 10 years, 12 years, and you will have enough of a nest egg to retire on if you don't do this again. But as soon as he gets desperate and tries to pull off a fast one, that's when you get messed over and say, ouch, I'm so sorry, honey. With everything you're facing. It's just not fair. Wow. All right, guys, let me give you a couple of principles on that. There's a guy who scammed a bunch of people and wrote a book from jail in the 70s. The book he wrote about himself was con man or saint. Obviously, he thought he was a saint, but he was in jails. He was a con man. Okay. But there was I read that book in the in the early 80s and as a teenager, early 20s. And the only thing I really got out of the book was he said it's very, it's almost impossible to con someone unless they are afraid or greedy. This guy was afraid. His wife had cancer. He's trying to get a bunch of money so that he cannot have to work and take care of her. And he got desperate based on fear. And he said that set him up in the emotional category to be conned. The other crypto people that get conned are the greedy ones. They're trying to make double your money in 20 minutes because I'm the cool kid. And I'm the smart one. And I grew up with a cell phone in my hand, a smartphone in my hand. So I know everything about digital. No, you don't. You're a greedy fool. And you're going to lose your button crypto also. The second thing you can do is who can find a virtuous wife for her worth is far above Ruby's. The heart of her husband safely trusts her and he will have no lack of gain. If you have to hide the investment or the financial move from your spouse, warning, warning, warning, you're screwing up. I have no lack of gain because share not talk about it before we do it. And it keeps me on the rails. This is the Ramsey show. Finally, mortgage rates have dropped. And you know what that means. People who've been sitting on the sidelines are about to jump back in to the housing market. So if you've been waiting to buy, this could be your window, but you've got to be prepared and do it the Ramsey way. You need to contact Churchill mortgage. 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It's way more than just our world-class budgeting app. Ton of advanced features to help you make faster progress with your money and show you hand by hand by hand how to follow the Ramsey way. The average person finds thousands of dollars in margin in the first 15 minutes of using the app. And that gets you started to work your way out of debt into wealth and into generosity. Start every dollar for free today. Get it in the app store or on Google Play. The world's best financial tool every dollar. The all new one. Check it out. South Dakota's calling. Sarah's with us. Hi Sarah. Hey, how are you guys today? Better than we deserve. What's up in your world? Well, say just have a quick question. So my husband and I got a term life insurance policy through Xander when our son was first born. But that was 15 years ago. And since then life has hit a little bit. We are still making progress with our debt snowball. We're actually planning to pay off our last debt by hopefully February. However, we're not there yet. But over the years our income has increased quite a bit. So when we were first married we were making about 70 combined. Now we're making about 180. So my question is... Why is it taking you 15 years to get out of debt? Well, you know, maybe weren't so gazelle intent. Like not at all. Okay. Right, right. But we're getting there now. So we're getting really close. So every that you still have a mortgage and you still have what else? We have 8,000 on my student loan and we've got our mortgage and that is all we have left. Wow. So what's the question today? So the question today, we are curious. Do we need to consider increasing our life insurance through Xander? Given that our income has gone up. I know the recommendation is like 10 to 12 percent. That's right. Your overall income? Or because we're so close to being debt free, do we not need to take that approach? Because ultimately we'll be self-funded through insurance. No, you need to extend. Because being self-insured would denote that you've got a massive nest egg of wealth that can cover you when those situations arise and you don't have that just yet. If you keep going with intensity you will. But if you play the next 15 years, like you've played this last 15 years. You're still going to be in debt. You'll still have a mortgage. Well, we are definitely not looking to do that. We're definitely looking to get to tax that mortgage as soon as the student loan is paid off. So everything that we're looking to do is loan now. When you have enough money and investments that the income off of the investments will support you if he dies, then you're self-insured. You're not there. We want you to be okay if something happens to him. And you're not there. And we want him to be okay if something happens to you. And make sure the kiddos are fed and so forth. And that would be that, you know, and so if you had a million dollars and it was producing 10%, that'd be $100,000. And that's not even, that won't even take care of you now because you're making 180. And so you're not going to be able to do that. And so you'd need about $2 million in investments right now in zero debt in order to be self-insured equal to, you know, having the right amount of life insurance. So no, yeah, you need to increase your life insurance and buy new policies. Yeah, if your 15-year fixed policy is running out by new ones. Yeah. And yeah, and here's the thing. If you do get intense, if that did happen and you get out of debt and you look up in there's a million or $2 million in investments in zero debt, you can cancel the life insurance. You don't have to keep paying it. You can just call them and cancel it. But if you're not, if you don't smoke folks and you're not overweight, life insurance doesn't cost anything. It's very inexpensive. Very. So 15-year level, 15 to 20-year level fixed rate. And the idea is that during that 15 years you pay off your mortgage and you get out of debt. And you build up some investments and the kids grow up and leave. That's right. During that 15 to 20 years. And so we don't have kiddos to take care of. We've got a pile of money and you work your way into a net worth that allows you to be self-insured. Start the policy. And so, but you guys have been slow so you get to re-up your life insurance. And then you can always drop it later, but for right now you're not ready. That's a good question. Yeah. Felix is in Los Angeles. Hi Felix, how are you? Hi Dave. Thank you so much for the opportunity to be on the show. Sure. I'm calling today to get more, to get your advice on my current living situation. I work for a government utilities agency in Los Angeles as an engineer. I currently live in downtown LA. I'm paying about $3,000 in rent per month. And I just turned 30 this year. And I watch your show. I hear your advice about ownership and owning a home someday. And that's a goal for my life as well. And I wanted to give you thoughts on renewing my lease, which expires this month, or going back home to stay with my parents. Well, how much do you bring home every month? So after tax, I bring home about somewhere between $6,000 and $6,500. So what you're telling me is your rent's 50% of your take home? Yes. Yes, it's around that. If you include utilities and you know, I just reliable. So I think you know, there's one of two things that can happen here. You can either figure out a way to bus free, and suddenly make $20,000 a month, or you can look for some place that's far less expensive for rent. What would you do if you moved away and moved towards where your family is? What would you do for a living? Well, I would still be an engineer. My family stays in Fontana, which is about maybe 50 miles away from Los Angeles. You have an engineering degree? Yes, I have a bachelor's in civil engineering, and I have a master's in environments for engineering. And you make $70,000 a year? Well, that's, you know, I make around $105,000 a year. How long have you been out of school? I graduated with my master's in 2023, and shortly after is when I moved to LA, and got my job in Los Angeles. Yeah, I mean, you're living in one of the most expensive places in the country. So that there is always going to be a limit because of that. So if I were in your shoes, yeah, I'd be looking for other places. Now Fontana that you mentioned, I mean, have you priced it out? What's the difference? What could, where could you, could you get a one bedroom and what would it cost? Would it get you to the 25% range? Well, in LA, it's very difficult to find a place to stay. I'm talking about Fontana like you said. I'll be staying with my parents. Okay, so Felix, here's the thing. What you want, staying with your parents is not your, is not your play. Because it doesn't take you to the future you want. You've said no, you've said nothing about where you want to be in 20 years, in 10 years, and how staying with your parents is going to get you there. All we're doing, solving the immediate problem by going backwards. So no, I'm not going to do that. If I'm you, I'm looking for a new job that pays 150,000 in a market where the rent is half of what it is in LA. And you make a move for your career, your single guy, and you go out there and make some money and get your cost of housing down. Because if you're working for utility, your bumps, your increases in pay are going to be moderate to poor. Yeah, it's a government, it's a government job. Yeah, it's going to be moderate to poor. The pay is already low, and it's not going to get better. You're going to get cost of living bumps and nothing else. And so as an engineer, you can go out there and make twice what you're making now, in an area that costs half what it costs to live in LA. And that puts you in a position to build a life, a financial life, including home ownership. But the ratio you're giving me right now, going back to your parents doesn't solve it. That's regressing, instead of saying how can I move forward. So I'm going to be figuring out a way to move forward. Either a different kind of engineer application for my master's in engineering in Los Angeles, where I make a lot more, or a different city, or both. The holidays are supposed to be joyful, but they can also be expensive. Between gifts, travel, and about a thousand limited time offers, your budget can start feeling anything but merry. And that's why I love this. Boost Mobile helps you treat yourself and your wallet. Right now, you'll pay just 10 bucks a month for your first two months. Then, only 25 bucks a month for unlimited talk, text, and data. Forever. No price hikes, no contracts, no nonsense. Just reliable service that keeps your phone bill low, and your holiday spirits high. So stop stressing over your budget, and start saving instead. Go to boostmobile.com slash Ramsey, and unwrap the savings today. That's boostmobile.com slash Ramsey. Restrictions apply? See boostmobile.com slash Ramsey for details. Jadwarshall Ramsey, personality is my co-host today. Thanks for being with us, America. Luke is in Columbus, Ohio. Hi, Luke. Welcome to the show. Hello. Hi. How are you? Better than I deserve. How can we help? So, I kind of use a unique situation here. Twenty-two years old, household income of 90,000. We inherited six acres of land and decided to build a house on it. We don't have any debt. We have not taken any loans on the house. I've built it so far where you've got the roof, walls, and siding, and almost all the utilities. But our goal is that I pay for all the bills, and then my wife she pays for all the materials for the house. My question is, should I take what's left of my income after the bills and throw it towards the house, or put it towards retirement? Okay, you're trying to build a house out of your pocket, and so far you have. But you and your wife have separate finances. Well, we work together for the finances, but... Not really. Not really. You've delegated part of it to her and part of it to you. You don't have one pile. So, you need one pile of money. Her money, your money is our money. One big pile. Out of that pile, what is our first goal? I would assume it's to finish the house, isn't it? Yes, sir. So, what does it take to finish the house money-wise? How much money? We're living at probably about ten grand left. We've got drywall, insulation, paint, and... Okay, how long... If you pile all your money, you and your wife, our money, and one pile, how long does it take you to come up with ten grand? Uh... Well, probably one through two. Yeah. Okay. So, let's finish the house. And then you need to make sure you have an emergency fund of three to six months of expenses, and then take 15% of your household income, our income, and start that towards retirement. That's baby step four. But you're going to be living in a paid-for house. That's nice. That's awesome. You got this acreage, and you built the house, you got a lot of sweat in it, and you're going to have a bunch of equity, right? Oh, yeah, for sure. What's this finished product going to be worth? Acreage and house total. We're hoping for 250. Good. Very cool. And you said you're 26? I'm 22. 22? Wow. Okay, wow. And your household income, if we put both of your money in one pile, is how much a year? 90,000. How much? 90,000? 90,000. That's the two of you combined. Okay, good. I'll make 62,000 next 28. Okay, cool. Perfect, yeah. So, let's take 15% of 90,000 after we get the emergency fund in place, and you're sitting on $250,000 house, you're going to be millionaires before you're 30. Whoa, that's exciting. Not fun. I hope they take your advice and put their money in one pile. Well, that's the thing. Yeah, so, there's, yeah, there's just so much data that says when you do that, that you're higher probability of winning at marriage, winning at relationship, winning at everything. And let's circle back and say this, nothing to do with Luke's call, but just this, because we get so much bull crap on social media about telling people to put their money together. You should be independent. Now, you shouldn't be independent if you're married. That's a dumb butt idea. This is how your marriage doesn't work, because you're so strung out on you that you're worthless as a spouse. So, that's the problem. So, no, you don't need to be independent. You need to be one. The preacher said, and now you are one, one, uno, unity, all in one. And so, if we know, and we do know, that the data tells us in America today, the number one cause of divorce is money fights and money problems. The number one solution to that is learning to dream together and put our money together and handle our problems and our challenges and our opportunities and our dreams together. That is the solution where you don't have money problems cause divorce. If we have the solution to the number one cause of divorce, why are you arguing with us? That's just dumb. Because people out there are dumb and we will always have a show for that reason. So, there it is. Not all people out there are dumb, but enough of them are dumb, but we will always have this show. Are they dumb, Dave, or do they do dumb things? They're ignorant. Ignorance is different than dumb. That's good. Ignorance is, I don't know how. Ignorance, and there's some things I'm ignorant of, by the way. I don't know how. I used to know when I was a young redneck, I used to know how to work on a car, but now a car looks like a spaceship when I open the hood. And so, I can't even, I don't know if I could jump the thing and get a jumper cable on it nowadays without blowing it up. So, you know, so, but- The data is there. I don't know how to work on that car. I, it doesn't mean I'm dumb, it means I'm ignorant. You're ignorant. I don't know how to do that. But then don't argue with experts when you're ignorant, because it makes you look dumb. I'll take that, dude. I'll take that. Get off me. Wow. And Luke was doing none of that. Luke's a sharp young guy, 22, man. He's got it going on, doesn't he? Yeah, oh, most definitely. I don't even, I was nowhere near that, so. Yeah, yeah, I only want to talk about it. Jason was in Raleigh, North Carolina. Hi, Jason. How are you? Hey, guys. How are you all? Can you all hear me okay? What's up? Hey, I just got a quick question for you. I'll give you a quick rundown on my situation. I'm trying to decide if I should sell my house. I live about an hour outside of the Carolina Metro right now. I'm planning to make a move this summer. I'm self-employed at Sells Real Estate. And so on my new market, I'm going to have to kind of start from the ground up. I'm near the end of Baby Step 2. This move wasn't happening. I'll be done probably by June or July, maybe August. The flip side, so the question is basically. Where are you going to live when you move? I'm going to rent. Okay. And so your question is whether to keep your house or not? Yeah, I'll sell it. Oh, so that's unique to this position. No, just sell. Yeah, I bought. You don't need to be a renter and be a landlord. That's bass-aquared. That was risky, Dave. That was risky, Dave. That was very risky. Well, that's what I needed to know. Yeah, I mean, really, think about it. That's backwards. You don't want to do that. So no, you need to get, you know, you're in the real estate business. You're going to get plenty of opportunities to own a property and live in a house that you pay cash for and or buy it and then get it paid off as quick as you can. Hanging onto this boat anchor that represents your former life out in the burbs when you're moving into the metro and having to deal with that while you're trying to learn to sell real estate and trying to get your business moving. Yeah. That's what my mind was and I thought that was right. I just want to make sure. Yeah, you're right on track, man. You're right on track. So there you go. Here's the thing. It's interesting. Real estate is such an emotional topic because it has these two strange elements to it. Strange element number one is it is an excellent way to bill wealth when you do it right as a part of your long term plan. Right. That then gets confused with it's always smart no matter what. That's a good point, Dave. And it's not. Sometimes real estate, doing a real estate deal in the wrong situation in your life could be not, you know, in Jason's it's just, it's just a bad idea. But in other people's it's even way over into the stupid zone. Yeah, for sure. And so real estate is, it's weird. It is because it's a blessing when you do it right. That gives everybody permission to do it even wrong and it becomes a curse. Yeah. And I think also the other thing that I think we're fighting now is so many people had properties that they locked in at a better interest rate. And so then when life moves them, they feel like, yeah, it's a good deal. Maybe I shouldn't get rid of it. Even though I'm moving, I should keep it. It's like this weird attachment to it. It's like because real estate is good. I can't, everything I do with it is going to be smart. Right. It just falls in line. And it's like, no, it's not going to be smart. You know, it's not smart. The only way that, you know, no, there's a good time to cut real estate loose. There's a good time for it to not be there. And buying, buying real estate, you can't afford buying a house you can't afford. We had that earlier in the hour. That's right. So we've got to sell the house as mom wants to come home and not be a teacher and be a full-time mom. That's cool. But we got to sell the house. We bought a house we can't afford. So it's not a blessing anymore. That's right. It's a curse. It's a problem. Yes. So doing it wrong or keeping it wrong or because real estate is good. It's not always good. Yeah. Because and it's not that real estate is actually real estate is always good. It's the life situation you're in doesn't match up with owning real estate right then. And so it's not always good to keep your old house and rent it. As a matter of fact, it's seldom is. Yeah. Very seldom. This is the Ramsey show. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. Jade Washall Ramsey personality. Number one bestselling author is my co-host today. Alyssa is with us in Chicago. Hi Alyssa. How are you? I'm good. How are you? Better than I deserve. What's up? My question is how much is too much to spend on a wedding? Okay. That's cool. So that is cool. How much are you thinking about spending? 60,000. Ooh. Cool. Nice wedding. Good. Okay. And you have 60,000? So we're actively saving to get to, we have about half right now. So by next September, when the wedding would be, we would have that. So mom and dad aren't tripping in that you and him paying for it? We are going with the intention that we're paying for it. They've briefly mentioned that they might contribute but no hard numbers have been given or anything like that. Okay. So you're assuming it's all on you? So what do you make? Yeah. I make 90 before. What's he make? 190. Cool. Do you guys have any debt? No debt. Wow. It's not too much. It's not too much. No. Not if you pay cash. That's exciting. Okay. You want to know how I did that? Yes. Here's fun. Okay. Average household income in America right now is about $75,000. The average wedding in America is about $36,000. It's about half of the average income. So if you spend more than half your annual income on your wedding and if you're paying for all of it, which just sounds like you are, okay, then you're spending too much on a wedding because you're more than half the average. Now, here's the thing, keep in mind, average kind of sucks in America. We don't necessarily want to be average but you're below 50% of your way below 50% of your $270,000 income. And so you're on a ratio basis, you are half of the national average, which is half. Weird way to say that. But yeah. So I mean, the national average would put, if you spent 50% of your year old's income, maybe $135. So you're well below what the average person is doing. And you're about half of that at $60,000. And so you're very conservative as a ratio. But now for somebody that makes $100,000, it sounds like that, you know, Alyssa's lost her mind. You know, but that's what people say that don't have any money and you've got some money. So yeah. When you have more money, you can spend more of it. Without it being a problem. Yeah. So. And if that doesn't include the honeymoon and we added, I don't know, 10 or 15 on top of that. I'm just talking about the wedding. Honeymoon's a different story. I think that'd be fine. And the engagement rings another story. Okay. But. Yeah. That's a good differential though. When we're talking about the wedding, there are those three components. There's the rings, then there's the actual party, and then there's your honeymoon. What do y'all do for a living? Three separate things. I do medical sales and he does product management. Cool. Okay. Well, he's going to really like this last suggestion. We've done three weddings at the Ramseys. I've got three kids that are all married and been married many, many years. Okay. And Ramseys, we like a big party. We like to celebrate stuff like that. And so we threw major parties on each of these weddings. It was a lot of fun. But we learned and we did it from the first one. We introduced this idea that for your fiance will love me. Your wedding is a project. So let's lay out a budget. Yeah. In detail. If we're going to spend 60, how much of that's the dress? How much of that's the reception? How much of that's the videographer? How much of that's the preacher? How much is the venue? And you lay out a budget. And then guess what? You stick to the budget. And that would be my word of wise for you, Alyssa, because when you hear what Dave said, You'll get scope creeps. Yeah, which is technically you could be spending more if you were being quote average. So for you, the hard part is going to say, even though we could spend more, we're going to stick to what we said in the beginning of 60,000. I would pretend like that you work for someone and your job was to manage a 60,000 dollar budget and bring the event in on budget, on schedule. Because you're managing a project. It's an event project. I mean, we manage events here. It's what it is. And so this is what you get fired if you went over someone else's budget. Yeah. If you work for somebody, you get fired if you screwed it up, right? So just treat it like it's serious business. And I know that doesn't sound very romantic, but people use romance as a way to do a lot of stupid butt stuff. So no, we're not doing that. So no, just lay it out exactly. And you say this is and you can pull up some percentages. There's some good guidelines online for how much to spend on the dress. I will go and tell you if you're going to have a nice reception to have the big party, it's going to be your biggest line item by far. Like how many people you think I mean, 60,000, you're thinking about inviting a decent number of people, aren't you? It's not huge. So we've already booked the venue and we're going through that process, but I'm more of the favor and he's more of the spender. And so thinking of kind of the rough estimate that we put together with all the videographer, photographer and all that, it just sounds like a lot of money. So I go back before 15 hesitant and not. You know what I mean when I say scope creep? Yes. Yeah, this project, this thing will creep up and then the 60 will turn into 80. If you do not line item this and no rough estimates, it's freaking what we're going to do. And then when you're meeting with the caterer and they go, well, we can add devil like, no, no, that's all we got. That's what we're doing. And well, you know, we could spend freaking $85,000 on flowers. Who's getting married here? Princess die? I mean, seriously. So, you know, we're going to go in the field, pick some wild flowers so that we stay on budget. Rachel actually did that one. Well, if nothing else. She's over budget on other stuff. And the only way she could get it back in budget was to get the flowers down. If nothing else planned for 54, so at least you've got 10% set aside just as contingency. That's what I do. A little slush fund in the line item. Just in case. Yeah, just in case fund. I'd have something in there for that. I don't know if I get away with that, but wow. Wow. Yeah, that's exactly how I would do it. And, Lucy, I think you're approaching it very wisely. You're not counting on the people who have been vague about their possible input. That way you're not under their control. Matter of fact, whatever they come forth with, I'd probably just use that for the honeymoon. And I just lock this baby down on 60 and just go, we're doing it. And you and the fiance sit down and agree to that. Go, this is a project like you manage at work. We're going to manage this. We're going to come in on budget. We're going to get the details out because there's always something that you can go higher. You can always go one bigger, one better on everything. You get the extra large shrimp instead of the large shrimp. What was the thing on Father of the Bride? Cheaper chicken. Oh, yeah. Oh, the cheaper chicken. Yeah. You get ice sculptures. Yeah, that's it. And so, yeah, you can do that on a $10,000 budget. You can do it on a $60,000 budget. You can do it on whatever. You just manage the budget. That's right. This is what we're doing. And so, we're going to get super creative. We're going to do this for $7,800. We have a lady here on the team that got married and had a really nice little wedding for $7,000. And she just, you know, they were trying to get out of debt. And that's the most they were going to spend. And it was really very nice. Can I tell you the, okay, Sam and I paid for our wedding. What did you pay? I had a pocket. Oh, it was like $10,000. Okay. It was a little bit more. But I, my biggest regret to this day, and it was in the name of doing it debt-free. We didn't have an open bar. No open bar. That's your, that's your regret that you didn't booze up everybody else for three? I mean, we were on a yacht. We were, it just made sense. You should have had, there should have been some drinks on board. And there wasn't. Oh, you didn't have, you didn't have a, oh. There was no open bar. There was no bar. No. No, what, not, they couldn't even pay. No. Open bar would be like you paid. No. Well, I thought it was tacky to have people pay. So there just was no bar. Just no. Oh, well, okay. I'll go with that. Okay. But yeah. Listen, it was a mistake. That's okay. You know what? They don't remember it. You're the only one that does. I guess so. I don't know about that. Sam doesn't even remember it. When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan. And that begins with our get started assessment. Go to ramseysolutions.com slash start. Answer some questions and we'll show you what steps to take next. Don't stay stuck. Take control of your money starting today. Go with ramseysolutions.com slash start. Jay Dwashaw, Ramsey personality, number one bestselling author is my co-host today. Thank you for joining us, America. I am Dave Ramsey, your host. Katrina is with us in Salt Lake City. Hi, Katrina. How are you? Hi, I'm fantastic. Thank you so much for asking. How are you? Better than I deserve. What's up? All right. So I am going through a divorce and it's really hurting me financially. So I'm wondering if I should take money out of my business account that I'm actually trying to sell because of the divorce and use some of that money to buy things for my primary job. So what is your primary job? I am a school teacher and tomorrow I go back to school and the kids come back next Tuesday. But I need to buy some supplies for the students to come back to school. I'm sorry, they don't furnish you supplies for the classroom like they should? Well, they give me five dollars. Which would make you every school teacher in America? Well, yeah, thank you. They give me five dollars as a student, but I've already spent that. I bought glue sticks and colored pencils and pencil pouches for the students and their kind of work. So what are you talking about spending? I need paper, hand sanitizers, folders, and journals. What are you talking about spending? I'm thinking I need about two hundred dollars. What type of business do you have? What's the nature of it? So in the evenings I run an escape room, but I have to sell it according to the divorce decree. I have to sell it so I could pay back some of the equity that I owe to my student to be ex-husband. Do you take a payroll from the business? I don't. It doesn't make enough money. So I just run it and then it pays for it. Okay, if two hundred dollars changes your life, you have other problems. Well, right now I'm barely finished, baby step number one. I've been using your every dollar app. If you have to choose between you eating and buying your children hand sanitizer, you eat. Okay, I get that. Okay, and so if you're down to nothing, if you have no money and two hundred dollars is a huge amount to you, where you get it from doesn't matter. It's where you spend it that matters. You don't have the option to be this generous to these students. Contact a local church and ask them to help you if they've got some journals laying around and maybe they've got some hand sanitizer they can give you from the children's ministry and help you fund this, help you get the thing set up without you spending the two hundred dollars at Tarjay and you know, let's go that route because it sounds like this two hundred dollars is a lot of money to you. Yeah. And you've got you need to work on the other side of that and that's the overall income. I think I'm tutoring instead of running a game room. Yeah, escape room. Yeah. Today's question of the day is brought to you by Y-Refy. If private student loan debt is taking away your peace of mind and you don't see any way out, you need Y-Refy. That's Y the letter R-E-F-Y. They refinanced defaulted private student loans. If you have one, they'll refinance it for you. Nobody else will touch it and they give you a low fixed rate that is built for you on a term that makes it work for you so you can get your loan paid off and get it current. So it's not trashing you every month. Go to YRefy.Refy.com slash Ramsey today. 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 Nora in Pennsylvania. She says, I've been married for almost 30 years and my husband and I have adult children. My husband runs his mother's family business. He will inherit the business when she passes, but he says that the business is not going to be mine if anything happens to him. He says his will is going to state that our children will get the business and that he will not be providing for me. I've explained to him how upsetting this is and that I shouldn't have to go to my children for help when it is his responsibility to care for me. I live on a fixed income. My adult life as a stay at home mom, what can I do to protect myself legally? Wow. You can't. So you have a marriage problem. My goodness. You don't have a legal problem. You're married to a jerk. That's a problem. Yeah. I thought this question was going in one direction. And then it turned left and went off into the ditch. It sure did. You know. So honey, you need to go see a marriage counselor and he's not going to go with you because he's right about everything. He doesn't need any help if you ask him. And of course everybody else listening to this knows he's not going to go with you. This knows he's the one needs the help. But you need to go to the marriage counselor and the marriage counselor is going to explain to you that your marriage is over if you don't get some serious work done on it. Who that rattling you're hearing under the hood means the engine's about to blow, kiddo. And this does not describe a loving home where the husband is gentle kind and serves his wife. I didn't hear anything like that in here. Oh no. So sad. Nora, I'm sorry. But yeah, you need to go see a marriage counselor today. Tell him that he ought to go with you, but he won't. And then the marriage counselor will give you words to speak to him that lead to either him coming to the table or the end of your marriage. You can't go forward with this. And after 30 years, he still chooses his mommy. Wow. After 30 years, he's still a mama's boy. Old men that are mama's boy are kind of pitiful. That's the worst. Mama's boys are pitiful period after four years old, but old men mama's boys seriously pitiful. And he's going to be one even after she's gone. That means this guy is in his 50s. He's an old man mama's boy. You can title the thumbnail on YouTube. Old man mama's boy. I thought she was going to say something. I, you know, as I was reading it, I thought, okay, this is his mom's family business. It's going to pass to the children. Maybe she didn't want to run the business. You know what I mean? Cause there's part of that where it's like, I don't want this responsibility, but that took a hard left turn. Ooh, gracious. Yeah. Yeah. Mama's don't let your boys become. Leave and cleave. Oh, shoes carefully, my darling shoes carefully. Choose a man who loves his mother from a distance. I know that's right. Mom, I love you over there. Listen, I say that, but when the day comes, when my son gets old enough, where he has to go over there, I'm going to be sad. I think it's one of the hardest child developmental things I've ever witnessed. As we raised kids, girls separate from their mom, but boys when boys stay right there until they separate, when they separate, it's brutal. And it usually comes somewhere around 16 or 17 years old for people that become men. Oh man. But boys who are, mama's boy at 50, they never did cut the cord. And so they're still tugging on her apron strings. Mommy, mommy, mommy, I want the business. Mommy, mommy, mommy, mommy, would you take care of mommy? Mommy, I want to make sure you love me, mommy. Oh brother, I think I'm going to puke. Oh gosh. No, I want my son. We do have a manhood crisis in this country for sure. Wow. I mean, this is not masculinity. It's not toxic masculinity. This is just a child. Yeah. In a controlling child. A very controlling jerk of a child. Goodness gracious. After 30 years. And here's the thing. Nora's husband, if you happen to end up listening to this, if you're not who she says you are, you need to understand how screwed up your marriage is that your wife wrote this letter to a nationally syndicated show that has hundreds of millions of people downloaded every month. So if you're not this and she sent this in, you got stuff going on, dude. So you still deserve bus tracks over your butt. So we threw you right in front of the bus still. That's what happened. Maybe he'll write in a letter next. I hope so. I wish he would just come on the air and let us talk to him. How fun would that be? That would be compelling podcast material. Oh man. Wow. Ouch. Yeah, that's, this is a. Here's what's interesting. The number one thing that will keep you from building wealth is screwed up relationships. Ingo, that's so true. When you can't handle screwed up relationships and put reasonable, gentle, kind, strong boundaries in place and keep the screwed up people at a distance and the right people up close and you can't function with other humans. You're going to struggle building wealth. Period. This is the Ramsey show. It's one of the best times of the year, but it's also the time of year when people let their money get totally out of control. Everywhere you look, it's just bye, bye, bye. So you start swiping the credit card and suddenly it's January and you got a mess on your hands. Don't let that happen. 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We hope you do good in the real estate business, but we don't want you to sell a half a million dollar house for somebody we love. And you've never sold a house. You need to be doing 30 to 50 to 100 transactions, 200 transactions a year. And then you can become the possible, possibly become Ramsey trusted. So if you want to know who's Ramsey trusted and is a high octane, high protein producer in your area, you can do that for free at ramseysolutions.com slash agent. Teddy is in Traverse City, Michigan. Hi Teddy, how are you? I'm doing great Dave. What a pleasure to speak to you today. You too man, what's up? Well, I've been in most of my whole life between cars and my wife and I bought a house. I am self employed. My wife is retired after 32 years. I make about $70,000 a year in salary. I have $1400 a month in rental income from a home that we have purchased and paid off. My wife makes about $400 a week in a side hustle and she draws $1500 a month from her for a 1k. Last year we got a Heal Aqual Home for a home addition. So I still owe about $100,000 on that. I owe $20,000 on the mortgage on the house we're living in now that we put the addition on, as well as $20,000 on a car. We've got about $1.1 million in retirement and of that $210,000 is liquid investments. So my question is we've been working the debt snowball, but do I sell some of my investments and pay off the debt and just get it over with? Yep. How old are you? I'm 62 and my wife is 65. Yes. If you take, you said 1.2 and we turned it into 1 and you're 100% debt free. I'll take it. I mean you said you had $210,000 that was liquid. I do. You could do it with- It's not tied up in retirement. That's liquid. Oh, it's not retirement at all. So you're not even going to have taxes on it. Yeah, I know. Well, maybe a little gain on it. It may have been sitting there gaining, but it might have a little capital gain. So it's not even going to be a 200 hit. It's a 150 hit, whatever. But either way, you're 100% debt free. Now that only works, Teddy. If you stop borrowing money. Oh, yeah. I'm sorry, America. I've been in, you know, borrowed cars, bought to buy cars. I know. I'm real frugal. I'm real frugal. You know, you're not. You're 66 with a stupid car payment. Isn't that the truth? You're a millionaire with a car payment. Don't do that. No, sir. All right, brother. Hey, seriously, if you're going to pay all this off and then run up another debt, you're just going to eat your nest egg up. I can't wait to come and stand on the stage. You've inspired me. I love it, brother. I love it. You're a good man. Congratulations on being a millionaire. Very cool. Very cool. Isn't it funny how hard it is to get the culture out of our veins? It's very, I mean, it's yapping at us around every corner, you know? Every, every corner. That's why when someone's debt freehouse and everything, we say you're weird. Yeah. Because you're, you are, you're weird just means unusual. It doesn't mean bad. Well, the weird, what makes you weird is you've decided to become independent and a culture that teaches you to constantly be dependent. That's what the weird is. Wow. Let it roll around in the brain for a while. That's strong. That's strong. Well done. All right, let's do it. Charlotte's in Cincinnati. Hey, Charlotte. How are you? Hey, good afternoon, Dave and crew. Thank you so much for taking my call. I, I really enjoyed listening to your program. My question is, um, my, just a tiny bit of my back for it. My husband passed away in 2012 and, um, as a result of insurance money coming in, we were able to get debt free. My daughter and I, and we have stayed debt free. Thank God. And, uh, she just finished her freshman year in college. We have a Cactiary 529 plan, um, projected. You have a what 529? It's what's called a cafeteria 529. Oh, cafeteria. I didn't hear, I didn't hear the word. Okay. Cafeteria. Okay. I got you. Yeah. All right. Good. That's a good plan. So, um, so yeah. So we've got our college paid for as far as that's concerned. Um, but, um, unfortunately the way that it's grown, there's a projectory of being like an $80,000 surplus at the, at the end. Um, it's, and I found out that I could only put $35,000. $5,000 in a Roth IRA in her name. That's true. After she's 30. Okay. Yeah. So I'm a little bit concerned about like, um, can I take any of that overage? I mean, so how much is in the, uh, 529 total? There's probably right now $189. Okay. And how much did you put in and how much is growth? It, well, that's just it. Like I only, I think at the time I only put in like, I don't know, $85,000. Okay. She got a hundred growth. You got a hundred growth. Yeah. And of that, 80 is going to be, if he keeps growing, there's even going to be more. And so you'll have an 80 overage. Is that what we're saying? Yes. Is she getting any scholarships? She is. Okay. You know, you can pull that much out. Of? The equivalent of the scholarship can be pulled out each year. No tax. The equivalent to the scholarship. Okay. So she gets a $10,000 scholarship, pull $10,000 out. That's actually an incentive to get more scholarships. Yeah. Okay. Cause I guess my tax preparer, he doesn't know about that. Is there any place that you could direct me as to where I could find good solid information about this kind of stuff? A different tax preparer, cause that's pretty standard information. I'm not even good at taxes and I know it. So yeah. You know, if that's, if that's one of our ELPs, I'm sorry, but if it's not, check one of our endorsed local providers for taxes in your area and get a second opinion on it. But you're allowed to pull the equivalent of scholarships out, athletic, academic, whatever the basis for the scholarship is every year and there's zero tax on it. So she gets a scholarship, pull that much out. Do you know how much she got in scholarships? Like last year, I mean it was, I don't know, it was around $10,000 I think. Yeah. Okay. All right. That's not going to alleviate the problem completely because if it's times four, it's only $40,000, right? And she's 80 over, so you're going to have another 40. And I really wouldn't screw around with the Roth IRA at age 30. I just go ahead and cash it out. You don't get, it's not a hundred percent tax. You're just taxed and penalized on that amount of growth only. That's why I was asking you what you had in it. And so the calculation is not as severe as it sounds. So let's say you end up pulling $40,000 out because we just got rid of $40,000 with the scholarship idea. You know, you might have $5,000 in taxes. It's 10% yeah? Is that the rate? Yeah, on the growth. Yeah. Yeah. So I could in essence take that money out and use it for home improvement. Use it for anything if you pay the taxes on it. And there'll be the taxes and the penalty. There's a tax and a penalty both. But it's maybe a 10 or a 15,000 out of that 40 you're going to lose, but it's not 100%. So they don't take the whole thing. And rather than try to screw around with something for a 22-year-old wait until they're 30, and these idiots in Washington change the law six times between now and then. No, I just cash it out, take my hit and go on. Hey, we paid for college and we had a little leftover. Good life's good. Yeah, I agree. Yeah, there you go. Hey, good question. Thanks for calling. So, you know, that's a very unusual problem. Yeah, it's a good, I think it's a good problem to have. It's a problem of abundance. Yeah. I mean, the only other thing is if they left it, I mean, it can pass like, her as a beneficiary, she can pass it to her kids when the time comes. That's way out there. But yeah, now we got 800 grand. That's true. Yeah. At that point, if you take the penalty, it might hurt a little bit more. Yeah, I think I think I'm going to go ahead and just be done with it and just say, hey, we did a great job. We might have even done too good a job, but just so slightly, just so slightly. You know, when I hit a golf ball a little bit too long, I just say I hit it too well. That's all it is. This is the Ramsey Show. Yeah. Do you want to keep more money in your pocket and not Uncle Sam's? Then listen up, there are tax deductions and credits you could maximize before the end of the year by connecting with an experienced tax professional like a Ramsey Trusted Tax Pro. They know the tax code inside and out, so you don't have to. And they can help you file when tax season rolls around. Get a Trusted Tax Pro by going to ramseysolutions.com slash tax pro RamseySolutions.com slash tax pro. Our scripture of the day, Luke 638, give and it will be given to you a good measure. Press down, shaken together and running over will be poured into your lap. Jay Paul Getty says, money is like manure. You have to spread it around or it smells. All right. I'll go with a little generosity. There we go. Left in one pile. It stinks. Yes, I like that. That's good. Dylan is in Houston, Texas. Hi Dylan, welcome to the Ramsey Show. Hey Dave and Jay, how are you? Better than we deserve. What's up in your world? Hey, I've got a question for y'all. I've kind of got two options. I'm working Baby Step number two currently with my wife. We are about 71,000 in debt. 67 of that is student loans and 4,000 on a credit card. Right now we're bringing about 6,200 and I think it'll take us, you know, roughly five years to get out of that debt. So that's kind of what I'm going to label as option one. Option two is my wife can have the opportunity to travel with her job and we would be able to kind of sell our house, pay all that debt off instantly, and then travel around for a couple more years while we save up for another down payment and find the place that we want to stay for a while. And that option, I wouldn't work. I would raise my five-year-old and my two-year-old, maybe finding a job on the road if I got time. But I want to get y'all's opinion. What kind of work is it? Nursing? Yeah, well, kind of it's an echo cardiac stenography, so ultrasound is at the heart, but very similar to like a travel nurse. Okay, so give me a better picture of that. So is that you just, you live somewhere for six months and then you move on? What does that look like? Three month contracts, roughly about 2,500 a week. But they range depending, but the average would be about 2,500 a week. And how old are the kids? Three and five. Five-year-old and yeah, five and two, but yeah. Five and two. Okay, interesting. What do you do? I work for the state. Doing what? Fisheries biology. What do you make? I make 69,000 a year. What does she make now? She's part-time. I'm just staying at home with the kids two times, so it ranges, but I think about 30,000 a year. Okay. Okay, so she could work full-time and make 70. She could. But your all's concern is that one parent is with the kids, it sounds like. Yeah, we like that. And I'm okay staying in bed a little longer. I know that's not the Ramsey way, but I'm okay with it. So she can spend some time with the kids. It's really important to her. If you were leaning towards one, what would you lean towards? Because when I look at it, when I look at what you're showing me, it really feels more like a values conversation between you guys. Some couples are, they want the adventure and they would say, oh, this is a great opportunity. Let's go out, go travel. The kids will learn on the road, that kind of thing. Whereas other families like the feeling of stability and being in one place. So do you see what I'm saying? Where do you fall on that line? Yeah, for me, option two. And I think that's both of us. So what our concern is, y'all just went through the housing market. Hey, I mean, we're in a really good spot. We bought in 2019, so we have a low interest rate. Okay. We're just not a huge fan of our area. We both love our jobs. We just want a different area. So then you've whittled this down to it all being about interest rate. And that shows me. Our house price. Yeah. House prices are going to escalate during the three or four years he does this. That's true, but they will also have paid off debt. So you'll be saving more. So I think you can pace with that. Yes. And putting into retirement, because right now, baby seven, number two, we're not into retirement. So this would essentially jump us into three. Yeah. I feel like what you're leaning towards is option two. And I don't have a problem with that as long as you guys don't have a problem with it. Okay. And then I'd set clear limits. How long do we think we want to do this? And then play out the whole thing until the end. What is the whole thing look like? We do this for three years at the end of it. We've had X amount of dollars saved, and then we can go and we think we can buy this amount of house and cash. Play the whole plan out and then ask yourself, what happens if this goes well? What happens if this goes bad? And really try to fill in all those variables as best as possible on paper, not just mentally, not talking about it over dinner, but write it down so you can see, do we like this? Yeah. And give yourself permission to pull the plug in the middle of it. Yeah. There's nothing holding you to this. Okay. Three years, we're going to do five cities. Okay. That's the plan. But after three cities, you go, this isn't fun. Yeah. We're out. You can stop. You can stop. Yeah. You don't have to play all the way out. It's not a long-term play. I would not call it a decade. No. Yeah, a decade of this feels. You know, I think I would put a limit on, personally, I'd put a limit on it from an economic standpoint of five years. Yeah, because what's the goal behind it? There's only so much adventure you can stand too. So, but, you know, I personally wouldn't do that. But I mean, I wouldn't do anything longer than five years. I think you're going to end up in other kinds of issues. At that point, you've got a 10-year-old and an 8-year-old too. So. Yeah. But the point of playing that out is to say, what is it that you're trying to accomplish? Exactly. With this money and with this lifestyle. What's in game and is it worth it? And is the process we're going through going to be worth, is the juice going to be worth a squeeze? There you go. Ramon is in San Diego. Hi, Ramon. How are you? Hey, hello, Dave. Thank you for having me. Sure. How can we help? I mean, I don't really know where to start, so I'm just going to put it this way. I'm like $73,000 in debt and I don't really know where to start. Okay. I mean, I got myself into this procession. I'm down-bitting myself down to it. And I mean, here we are now. What kind of debt is it? I mean, it's a combination of a lot of things. It's credit cards, a personal loan. Give us a break there. How much on credit cards? Okay, and credit cards is about $33,000. Okay. How much on the car? On the car, it's $16,000. Okay. What else? Personal loan? Okay. Personal loan is $6,000 and student debt is about $12,000. Okay. The car, what's it worth if you sold it? Just curious? Last time I checked, it would take $24,000. What do you make? I'm currently making $3,000 a month. Okay. Okay. So I just want to clarify the car. You said you owe $16,000 and I said if you sold it, you said you'd get $24,000. Is that right? Yeah. Okay. Last time I checked, like a couple months ago. Okay. Well, that's good for you. Yeah. Okay. So what if step one was we sold this car to get out of the note? Or you want to get out of the note and then you bought something in cash to free up some money? What about that? Yeah. Yeah. That's something that's cousin of my wife here and we're kind of onboard to the next one. What's your wife make? My wife stay at home. And you make $3,000 a month in San Diego? Oh, yeah. Yes. That don't work. What's keeping you in San Diego? What do you do? Okay. So just a little background in the, in the way the situation ended up like this. So I lost my full-time job like six months ago. I ended up being unemployed for like four or five months. And I finally landed this part-time job in consultation cards. Got it. In the meantime. And now I have a job, professional job again. Thank God, lined up in Houston, Texas. It's going to start next month. Oh, that's a big part of this. Oh, that kind of matters in the discussion. So how much are you going to make there? Yeah. So the first few months is going to be like $67,000 a year. Plus a $500 difference for rent. Okay. A month. And after that, I think it's going to be, they're going to want me to look $62,000 or $63,000. Good. A salary plus commissions is a sales position. Awesome. Excellent. So the biggest thing to worry about now is saving up for this move. Because this move is coming, it's going to be expensive. I still think you need to get rid of this car because it's going to free up extra money. Are they giving you a moving stipend? Yeah. Yeah. I believe they're going to send like 1500 before taxes. 1500. Okay. That's not a whole lot. So I want, your homework here is to not make this worse by going into debt on a move. So you need to save up for the move and you need to do detailed research on what this is going to cost you because a cross-country move is expensive. When do you move? They want me to be there by January 2nd. Yeah. So yeah, you need to be delivering pizzas and Ubers and whatever else you can, going crazy between now and Christmas, throwing boxes for FedEx or UPS, whatever you got to do. I want you to work in 60, 80 hours a week to pay for the move between now and Christmas. Okay. Yeah. No, yeah. I'm actually looking for a second and a third job at the moment. Yeah. I wouldn't look for one. I'd go get one today. They're everywhere. It's Christmas, dude. I mean, targets paying 20 bucks an hour. Get your butt over there. So load up on that and then list your debts smallest to largest. And we're going to pay for you to go through financial peace university, our class to show you how to do all this stuff because we're running out of time and we didn't get to give you a great answer. So you hang on, Christian will pick up and take care of your brother. You're going to be great. You're going to do good. I can tell. This is the Ramsey show. 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.