One Decision Can Change Everything

Summary

The Ramsey Show — "One Decision Can Change Everything"

Date: July 30, 2026
Hosts: Rachel Cruze, George Campbell, and Dave Ramsey
Podcast Theme:
The episode centers on the transformative power of making intentional financial decisions, how a single choice can lead to dramatic changes in personal and financial freedom, and why true wealth-building is rooted in both math and behavior. The hosts tackle a range of listener questions about debt, homeownership, investments, and navigating major life transitions, always emphasizing the value of taking control, being intentional, and aligning decisions with personal values and goals.

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Key Discussion Points and Insights

1. Should You Pay Off Your Mortgage Early or Max Out Retirement?

Caller: May from Oklahoma City
Timestamp: 00:50–07:59

• Situation: May and her husband have focused on paying off their mortgage fast at 2.9% interest but were advised by a financial planner to invest extra money for higher potential returns.
• Discussion:
  • Math vs. Peace: Dave and Rachel acknowledge that mathematically, investing in retirement may yield higher returns, but stress that money is "way more than math. It's about your peace, your options, your margin." (Dave Ramsey, 02:17)
  • Behavior & Freedom: Rachel says, "Personal finance is 80% behavior, it's only 20% head knowledge." (Rachel Cruze, 02:55)
  • The Ramsey Way: Pay off your house while simultaneously investing at least 15% in retirement and saving for college—do it all, but never just keep a mortgage for 30 years.
  • Highlight Quote: “If you tell them, hey, a value of mine is being completely debt free...they should be developing a plan that gets you to that goal.” (Dave Ramsey, 06:59)
• Memorable Moment: Dave humorously declares, “I'll tell you what my mortgage rate is. It's 0% for the rest of my life with no payments.” (Dave Ramsey, 04:07)

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2. Including Side Hustle Income in Retirement Calculations

Caller: Sarah from San Diego
Timestamp: 10:21–12:56

• Situation: Sarah, a speech pathologist, asks if her side hustle income should be included toward retirement savings goals.
• Advice: Both Rachel and Dave recommend including consistent side hustle income toward the 15% retirement savings figure.
• Key Point: If the extra income is consistent and part of your financial rhythm, treat it as regular income.
• Quote: “If you're too rich later on, you can call me and yell at me.” (Dave Ramsey, 11:54)

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3. Prioritizing Career Advancement vs. Paying Off Credit Card Debt

Caller: Elle from Cleveland
Timestamp: 13:03–20:11

• Situation: Elle, a single mother, is balancing costly required career licensing, $18k in credit card debt, and a mortgage.
• Discussion:
  • Required courses are seen as “non-negotiable” for career.
  • Strong encouragement to attack high-interest debt before it balloons when the 0% promo ends; suggested “beans and rice, rice and beans” (frugal living) for a set period.
  • Practical Tip: Temporarily pause retirement contributions to free up margin for debt payoff.
  • Rachel stresses the need for “scorched earth” sacrifice in the short term for long-term progress.

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4. Legal Crisis: Hidden Home Defects & Suing Sellers

Caller: Caitlin from Indianapolis
Timestamp: 22:33–30:40

• Situation: Caitlin discovers $100k structural damage not disclosed by the seller and faces a $30k legal bill to sue, but is cash-strapped.
• Advice:
  • Seek lawyers willing to work on contingency or partial retainer.
  • Check for alternative assistance (title insurance, home warranty).
  • Consider very gradual repairs as another (albeit tough) path.
• Memorable Quote: “Just find an attorney with a heart. There’s got to be at least one out there in Indianapolis.” (Dave Ramsey, 30:36)
• Highlight: Rachel passionately warns: “...I can’t advise you in good faith to [take on more debt]. I’d rather you be putting your money towards something you know is healing the situation rather than a guess.” (Rachel Cruze, 30:13)

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5. Breaking the Paycheck-to-Paycheck Cycle and Starting Over

Caller: Derek from Los Angeles
Timestamp: 32:44–42:30

• Situation: Derek, single dad of three, makes ~$40–48k but works only 28 hours/week and has $15k in debt (mostly past-due rent/eviction and credit cards).
• Advice:
  • Increase income by filling available hours up to 40/week and summer hustles.
  • Eliminate debt ASAP—“...if you could get this debt paid off in one calendar year…” (Rachel Cruze, 35:54)
  • Map out a vision for future Derek: finish college for career bump (teaching/PE coach), set long-term savings, and build toward homeownership.
  • Rachel uses investment calculator: even starting at late 30s, “you could retire with $2.3 million.” (Rachel Cruze, 40:25)
• Inspiring Quote: “...Derek in 20 years is gonna love Derek today.” (Rachel Cruze, 41:04)

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6. Handling a Financial Avalanche: Business Debt & Lifestyle Creep

Caller: Sarah (second time), San Diego
Timestamp: 60:42–74:16

• Situation: Sarah and her husband earn $250k but owe over $327k in consumer debt, largely from a “vending machine” business bought on speculation.
• Action Plan:
  • Sell non-retirement investments to clear a chunk of debt.
  • Consider selling the “side business” and a high-value car.
  • Pause retirement contributions for maximum payoff speed.
  • Adopt an “extreme” strategy—“...that extremeness has to be swung the other way...You’re selling stuff. You're selling investments. You’re throwing so much at this.” (Rachel Cruze, 72:41)
  • Aim for debt freedom in 18 months with intense sacrifice.
• Quote: “I mean, if you told 18-year-old Sarah, ‘hey, one day you’re gonna be making a quarter million,’ you’d be like, what? And you’re like, and we are broke.” (Dave Ramsey, 74:10)

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7. Divorce, Custody, and Starting Financially Over

Caller: Jamie from Portland
Timestamp: 85:19–93:46

• Situation: Jamie is leaving a long, emotionally abusive marriage, raising an autistic son, and is saddled with debts (student loans, consolidation, credit cards) after selling her house.
• Advice:
  • “Stop the whole debt free journey, which I know sounds crazy coming from us. We got to pay lawyer fees.” (Dave Ramsey, 90:46)
  • Stack up as much cash as possible while the divorce is ongoing—don’t pay more debt until legal dust settles.
  • Document all payments made toward marital/both parties’ debts for fair division.
  • Rachel: “Your number one priority is to take care of you and your son and get through this divorce, okay? The debt free journey will happen for you.” (Rachel Cruze, 91:46)
• Empathy: Rachel and Dave are deeply compassionate throughout, acknowledging the weight Jamie carries.

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8. Dangerous Co-Signing: When Family Debt Becomes Yours

Caller: Veronica from Detroit
Timestamp: 95:21–103:43

• Situation: Veronica and her husband co-signed a condo for a brother-in-law. He’s paying the mortgage, but stopped paying $10k in HOA fees, leading to imminent foreclosure threats.
• Advice:
  • Sell enough of their own investments to immediately pay the HOA and stop foreclosure.
  • Afterward, document an agreement with the brother-in-law to recoup any money paid once the condo sells.
  • Hire their own real estate agent and take over the sale.
• Lesson: Do not co-sign—“This is not help. This is enabling.” (Dave Ramsey, 100:34)
• Memorable Moment: “If he makes zero profit, fine. But you guys need to get your 10k back at least.” (Dave Ramsey, 101:09)

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9. Breaking and Recognizing Bad Money Habits

Timestamp: 76:01–82:00+

• The hosts overview “broke,” “average,” and “wealthy” money habits:
  • Broke Habits: Payday/title loans, rent-to-own, lottery tickets: “It is this false hope... statistically impossible odds.” (Rachel Cruze/Dave Ramsey, 77:57)
  • Average Habits: Chasing credit card rewards, new car payments, consumer debt, buy-now-pay-later, whole life insurance.
  • Wealthy Habits: “Earning interest, not paying it.” Asset building (investments, debt-free home), buying used cars, intentional budgeting.

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10. Emotional Toll of Legal Battles

Caller: Lance from Louisville
Timestamp: 53:46–60:37

• Situation: Lance is fighting a lawsuit against a contractor who absconded with $10k. Legal fees are stacking up, causing loss of savings momentum and peace.
• Advice:
  • There’s “no peace in the middle of a battle.” (Dave Ramsey, 57:07)
  • Set a timeline and financial ceiling for the lawsuit.
  • If the defendant is truly broke, still might not recover funds despite winning.
  • Accept that this is a temporary dip, not permanent failure.

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11. Financial Stress and Loss of Hope — Serious Compassion

Caller: Patrick from Dayton, OH
Timestamp: 116:10–125:17

• Situation: Blue-collar worker, three medically fragile children, wife at home, living on $25–39k with no savings, often missing work for hospitalizations.
• Advice:
  • Give yourself grace; journey goes at your speed.
  • Lean on community, family, town resources.
  • “If you and your wife… agree on a sprint—six months to focus on income and building a savings buffer…that changes your world financially at this stage.” (Rachel Cruze, 123:22)
  • Consider whether a different role or industry is needed for long-term financial progress.
  • “Quick wins” and stabilizing cash buffer is the first priority.

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Notable Quotes & Memorable Moments

• "Personal finance is 80% behavior, it's only 20% head knowledge." (Rachel Cruze, 02:55)
• "Just find an attorney with a heart. There’s got to be at least one out there in Indianapolis." (Dave Ramsey, 30:36)
• "Derek in 20 years is gonna love Derek today." (Rachel Cruze, 41:04)
• "We’re not co-signing. I'm sorry." (Rachel Cruze, 103:30)
• "All you need is the idea. Shopify handles the rest." (Sponsor, 52:24)
• "If you co signed on anything, you better keep up with what's going on with that thing." (Dave Ramsey, 103:30)
• "There is no peace in the middle of a battle.” (Dave Ramsey, 57:07)
• "If you want to build wealth, you gotta start living below your means and investing intentionally." (Paraphrased/team theme)

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The Ramsey Approach: Consistent Takeaways

• Behavioral change is the real engine of financial progress.
• Peace and autonomy often matter more than maximum mathematical ROI.
• Beware of enabling behavior—no co-signing; seek counsel that aligns with your values.
• Sacrifice—even temporarily—is often vital for permanent change.
• One intentional decision, even made today, can reset your financial trajectory.

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Timestamps for Key Segments

• Mortgage vs. Retirement Investing: 00:50–07:59
• Side Hustles & Retirement: 10:21–12:56
• Advancing Career vs. Paying Debt: 13:03–20:11
• Hidden Home Defects & Lawsuits: 22:33–30:40
• Paycheck-to-Paycheck/Starting Over: 32:44–42:30
• Massive Business Debt Rescue: 60:42–74:16
• Divorce, Debt, and Recovery: 85:19–93:46
• Family Co-Signing Fallout: 95:21–103:43
• Money Habits Discussion: 76:01–82:00+
• Lawsuit Stress & Recovery: 53:46–60:37
• Serious Hardship/No Hope: 116:10–125:17

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Overall Tone & Energy

The show maintains an empathetic, pragmatic, and direct tone—balancing numbers-driven advice with understanding of personal turmoil. There are moments of humor, tough love, and uplifting vision casting, always keeping the message practical: you are one decision away from changing everything.

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For resources and calculators discussed, see: www.ramseysolutions.com

Transcript

[George Campbell]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Rachel Cruze]

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fair Winds Credit Union studio. This is the Ramsey show and I am Rachel Cruze hosting this hour with my good friend and co host of Smart Money Happy Hour, George Camel. And so we're here to answer your questions about life and money. So give us a call at 888-255-225. Up first we have May in Oklahoma City. Hi, May. Welcome to the show.

[Caller (various)]

Hello. Thanks.

[Rachel Cruze]

Yes, absolutely. How can we help today?

[Caller (various)]

So I'm getting a little bit of conflicting advice. A couple years ago, me and my husband set up like a set kind of budget plan and our goal was to pay down our mortgage as quick as we can. As part of that, we don't have any and we've been paying basically double payments on our mortgage instead of $1,500 a month, $3,000 a month for the last two years. I have 195,000 left on my mortgage with no other debt. But last year when I went back to work full time, we met with a financial advisor because with both of our combined incomes, we didn't qualify for a Roth. And I finally had a 401k to contribute to. And he was looking at my savings and the amount of retirement we had already saved up at age 45, where we are now. And he was like, your interest rate is 2.9%. You shouldn't be making payments on your mortgage extra. You should be putting that towards your retirement because in the long term you're going to make like 8% or more off of that by the time you retire. And that's more important at this time in life. So I was just wondering which is correct, like should I be putting money towards my mortgage extra or should I be focusing on retirement and like more savings for my kids like their529 and stuff like that.

[Rachel Cruze]

Says every financial, most financial advisors out there.

[Dave Ramsey]

That's the hard part is there's.

[Rachel Cruze]

And math.

[Dave Ramsey]

Yeah, they're not terrible people. This person sounds like a level headed person who's just doing math. And as you know, money is way more than math. It's about your piece, your options, your margin. And paying off your house leads you towards freedom. Now investing can lead you toward a different kind of freedom. That's also true. But they have a vested interest in you giving them more money because that's how they make money. Do you understand?

[Caller (various)]

Right yeah, they are the investment, their judgment is cloudy. Might be a little sudden.

[Rachel Cruze]

Yeah, I know. I mean, and I'll say this too. From a mathematical perspective. Yes, you're going to make more in the market if the returns are 11 12%.

[Caller (various)]

Right.

[Rachel Cruze]

Than paying off a 2% debt. Like it. The math of it makes sense. Just like when you have debt, a lot of people want to pay off the highest interest rate first because mathematically that's all correct. But what George was saying is so true. I'm like, well, we have found is that money is so much more than math. I mean, we say personal finance is 80% behavior. It's only 20% head knowledge. So your behavior is not factored into his, his financial calculator, if you will. Your peace of mind, your sleep at night, your autonomy when you own everything, including your home, which is unheard of these days. Like when these things start to play in and you have no debt, you have complete say over everything in your life. There's just something we have found from a psychological, emotional, spiritual perspective. It just changes. And what I tell people all the time, May, is listen, because I get the math argument, I understand it. So I would tell you pay off your house and if you hate it, go get a second mortgage and you can invest the.

[Dave Ramsey]

It'll be at a higher rate, unfortunately. And that's what like hanging onto this mortgage 2.9%.

[Sponsor/Ad Voice]

Sure.

[Dave Ramsey]

But to me it's golden handcuffs. I'll tell you what my mortgage rate is. It's 0% for the rest of my life with no payments. And so I'm optimizing for something different. I'm going to be okay in retirement. And the truth is, May, you guys are going to be just fine in retirement. You'll be multimillionaires. Am I wrong?

[Caller (various)]

I have no idea. Because I mean, my husband's military. We were not very good at doing. We did the bare minimum for retirement a long time. And I just started working a few years ago.

[Dave Ramsey]

Well, how old are you guys?

[Caller (various)]

45.

[Dave Ramsey]

Okay. How much do you currently have in investments?

[Caller (various)]

70,000 contributed.

[Dave Ramsey]

Okay, great. And how much are you contributing per month right now across everything, retirement. Anything else?

[Caller (various)]

Just this year was the first time I maxed out my 401k. I tried to do that like up front at the beginning of the year. Before that, we were like only doing 3%, 6% of our income at the most.

[Dave Ramsey]

So you guys are easily investing 2, 3, 4 grand a month at this point.

[Caller (various)]

Yeah.

[Dave Ramsey]

Okay.

[Caller (various)]

We tried to basically play a little catch up because we just, I don't know, for some reason we must have missed the memo on like retirement.

[Dave Ramsey]

Welcome to the club. Everybody feels like, man, I wish I knew this sooner.

[Sponsor/Ad Voice]

So here's the Math.

[Dave Ramsey]

You got 70 grand. If you contribute 3 grand for the next 20 years, 45 to 65, at an average 10% rate of return, you'd have $2.8 million.

[Caller (various)]

Oh, okay.

[Dave Ramsey]

So I'm just saying if you did nothing else, you just kept doing that. And by the way, once you pay off the mortgage, you can invest 4,000 bucks a month. 5,000 bucks.

[Rachel Cruze]

And don't get us wrong, we still want.

[Caller (various)]

I was telling the advisor, I was like, I could play catch up after my mortgage is caught up, you know, because I feel like I've been hitting a really good pace with paying.

[Rachel Cruze]

Yes. But I will tell you may, when you're looking at the overall baby steps, baby steps four or five and six, which is funding 15% of your income into retirement, saving for kids college, and paying the home off early. Those are all done at the same time. So we're not saying stop everything and just pay off the house. Like you need to be contributing 15% of your income, right? Yes. Into retirement.

[Caller (various)]

Yeah.

[Rachel Cruze]

You need to be putting some away for your kids college and then anything extra goes on the house. Right. So you don't have to be intense and all this crazy. But the idea of putting nothing extra towards your home and just keeping a 30 year mortgage for 30 years is wild. And so people that do the baby steps, we find they pay off their homes. It's an average of what, nine years?

[Dave Ramsey]

It was actually seven.

[Rachel Cruze]

Oh, seven years. Yeah, seven. I'll say seven to nine.

[Caller (various)]

Pretty crazy.

I think I'm on track at my rate right now to be done at nine years.

[Rachel Cruze]

Yes. And that's great. So for a financial advisor to be like, oh my. He's just looking at math at that point. Completely just focused in those numbers.

[Dave Ramsey]

They're not listening to your values and

[Rachel Cruze]

your goals and what you're wanting to. That's a good point.

[Dave Ramsey]

Financial advisors work for you.

[Caller (various)]

That makes sense.

[Dave Ramsey]

So a lot of people get it twisted and go, well, I just need

[Sponsor/Ad Voice]

to do what they say because they're smarter than me. No, they work for you.

[Dave Ramsey]

If you tell them, hey, a value of mine is being completely debt free. This is a goal of ours to get the house paid off. We also want to make sure that we're okay for retirement. They should be developing a plan that gets you to that goal.

[Rachel Cruze]

Yeah. And I would, I would encourage you may to go to ramseysolutions.com and check out SmartVestor Pros because I know there's some there in Oklahoma City that follow. You know, they're, they're amazing. These people have the heart of a teacher, not the heart of a salesman trying to get more money. So if you wanted just to spread your wings and have some options, Smartvestor Pros. And they're all over the country. They're amazing. Amazing when it comes to financial planning.

[Dave Ramsey]

Yeah. But it is hard cause you can crunch numbers all day long. But unfortunately numbers, and I'm a numbers guy, I love crunching the numbers, but it doesn't reflect the reality. So when a job loss happens, a

[Sponsor/Ad Voice]

health, health scare, somebody wants to stay home, you want to move.

[Dave Ramsey]

Well, now you've got these golden handcuffs because you have to make these payments and you don't want to lose this 2.9% rate. So you stay there regardless of what you want to do with your life. That's the part that makes me sad.

[Rachel Cruze]

Yeah. What your gut's telling you is something else. Right. And then you're having someone, especially when it comes to financial planning, you know, pushing you another direction, which yeah, I want them to, I want them to listen to you may, but this is a question we get all the time, all the time. But the truth is freedom is freedom. And building wealth and having autonomy over your money. There's nothing like it.

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[Rachel Cruze]

Up next, we have Sarah in San Diego. Hi, Sarah, welcome to the show.

[Caller (various)]

Hi.

Thank you for having me.

[Rachel Cruze]

Yes, absolutely. How can we help?

[Caller (various)]

I'm calling because my side hustle has turned into kind of a long term situation, and I'm now wondering if I need to include it into my retirement investments.

[Rachel Cruze]

Oh, very cool. What is it? What kind of side hustle?

[Caller (various)]

So I'm a speech pathologist and my full time is speech therapy.

[Rachel Cruze]

And then I picked up a side

[Caller (various)]

gig as speech therapy for a different company.

[Rachel Cruze]

Okay, nice. How many hours a week are you working?

[Caller (various)]

It varies because I can choose. I'm in home health, so I can choose my own schedule.

[Rachel Cruze]

Anywhere between 30 to 40. Okay, that's great. So how much income are you bringing in a year if you include the side hustle?

[Caller (various)]

Including the site for me and my wife or just me?

[Rachel Cruze]

Both. Household income?

[Caller (various)]

Household income is around 350,000.

[Rachel Cruze]

Oh, my gosh. Well done, y'.

[Caller (various)]

All.

[Rachel Cruze]

Well done. I mean, at this point, yeah, I probably would. I mean, we kind of say any income coming in, but with your main sources of income, you guys are going to be fine. If you just invest 15% of just

[Dave Ramsey]

that, that's 52 grand right there.

[Rachel Cruze]

Yeah. So you guys will. You'll be fine either way. But because this has become more significant and you're like, it's going to be probably long term, I would count that as my income for towards that 15%. Would you, George?

[George Campbell]

Yeah.

[Dave Ramsey]

I mean, it sounds like it's consistent. You're going to continue doing this and you're debt free with an emergency fund. There's no other sort of goals right in front of you.

[Caller (various)]

Yeah, that's correct.

[Dave Ramsey]

Okay. If you were like trying to save up for a house or something, I'd say, hey, it's okay to allocate that. If the side hustle exists for this purpose, to save up for this goal, it's okay to allocate it there. But if this is just a part of your regular rhythm, you guys are in baby steps for 4, 5, 6. Then I would just invest 15% of whatever else comes into your world. I don't think you're gonna regret it later. If you're too rich later on, you can call me and yell at me. I'm okay with that. No one's taking me up on it.

[Rachel Cruze]

You can blame us.

[Dave Ramsey]

People yell at me for worse things. So way to go.

[Caller (various)]

I know I have someone to Blame.

[Rachel Cruze]

So great. Well, well done, Sarah. That's. That's awesome. That's. That works.

[Dave Ramsey]

The work ethic is there.

[Rachel Cruze]

These are the questions we want. Well, and the fact she's. She's working 30 to 40 hours. Usually the side hustle comes into play for a lot of people on that baby steps. One, they're building up that first emergency fund. They're trying to get out of consumer debt or build up a fully funded emergency fund. So we usually see that, but it sounds like the way her life is structured, it's sustainable. It's sustainable.

[Dave Ramsey]

Burn her out.

[Rachel Cruze]

Yeah. I was going to ask if she's working, like, 60 hours a week, so I'd be like.

[Dave Ramsey]

And if it went away, you're still okay?

[Rachel Cruze]

Yeah, it's not a big deal.

[Dave Ramsey]

So that's a great place to be.

[Rachel Cruze]

Well done, Sarah. All right, let's go to Elle in Cleveland, Ohio. Hi, Elle. Welcome to the show.

[Caller (various)]

Hi.

Thanks for having me.

[Rachel Cruze]

Absolutely. How can we help?

[Caller (various)]

Well, I wanted to get your advice on where to allocate my funds. I am taking a new licensing or taking on a new licensing in my career. It doesn't necessarily guarantee an increase in my salary, however, career growth. There are six more modules I need to take, and they're about 850 each. And it's monthly. And then there's a review after that. That's 1,500. I currently have 18,000 to pay off in credit card debt and a mortgage. About 180,000 due on the house.

Okay.

So as a single mother, few kids, you know, just wanted to know, what do I do? Do I slow it down? Do I hold off on this until I'm in a better position?

[Rachel Cruze]

How soon will this advance your career? Like, how. When do you have to. Because you said it's not an immediate raise financially.

[Caller (various)]

Financially, no. But at the same time, it is. It is part of a. Part of the deal of this position that I took about a, you know, couple years ago. So it's required goals for me to obtain this? Yes.

[Rachel Cruze]

Okay.

[Dave Ramsey]

And they're not going to pay for it?

[Caller (various)]

Well, I get reimbursed after I pass the final exam up to 5,000, which doesn't. I will still be short a couple thousand dollars.

[Dave Ramsey]

Yeah. I mean, you said it's 850. You got six more, plus 1500 for the exam, right?

[Caller (various)]

Yep.

[Dave Ramsey]

Okay, so that's 5100 bucks for the classes and an extra 1500. So basically, you're just paying for the exam. When you think about it that way. So in that Regard. It's not necessarily, it's slowing down your debt free journey, but then you get that five grand reimbursed. You can slap that on the debt, right?

[Caller (various)]

Yeah, yeah, yeah.

[Rachel Cruze]

And, and it's somewhat required for your position too. Right. So I see this as like a,

[Dave Ramsey]

it's a non negotiable.

[Rachel Cruze]

I have to do this for your career. So I would, I would go ahead and make sure, number one, can you cash flow it. How much, how much do you make a year?

[Caller (various)]

About 115.

[Rachel Cruze]

Oh, good. Oh, well, you could probably do, you could do both of this. Yeah.

[Dave Ramsey]

Do you have enough margin to cover the school plus throw money at the debt?

[Caller (various)]

Yeah, I think in some months it might be short, but most months I might be okay. I guess I just am. Like, am I, you know, should I get this debt paid off fast, like faster so that I'm free of it, you know, and just slow down? How? Because I can push back the exam. It's offered a couple times a year.

[Dave Ramsey]

So the exam portion could be. Because once you, once you go through the classes you can get reimbursed. Or is it only once you pass the exam?

[Caller (various)]

Once I pass the exam.

[Dave Ramsey]

Got it. So that money sort of locked up. You sort of already paid that. How long would it take? Let's say you didn't do the courses and you just went full throttle on the credit card debt. How quickly could you pay that off? Making115?

[Caller (various)]

I think I could, I think I could pay it off rather quick. And I'm fortunate. Well, kind of. I had rolled it into 0% about a year ago. So they, they, and I know I had that transaction fee, but I think long term, I knew it was going to save me money based on what I could do, so, so I think at this point I could, I could knock it out within, I don't know, maybe 15 months.

[Dave Ramsey]

When is the zero percent period over?

[Caller (various)]

One of them. There's 7,000 that I have seven more months on and then. Oh, I'm sorry. 7,000 that I have 13 more months on and 10,800 that I have seven months on.

[Dave Ramsey]

So we need to get this done real fast.

[Rachel Cruze]

Yeah, I was gonna say 15 months.

[Dave Ramsey]

I would paid 5% for the balance transfer. Now you're gonna pay the 25% interest once it pops back out.

[Caller (various)]

They were 3%, but yes, there was a fee.

[Dave Ramsey]

3% for the transfer out of your 18 grand. Then in that case I would. If you're saying, hey, I can push this off, it sounds like you're not Dying to get these courses done. But I would use this as fuel to get out of this so much faster and make it. Can you do this in seven months or eight months?

[Rachel Cruze]

Yeah, that.

[Caller (various)]

Well, I. I don't know. With what I currently have, are you

[Dave Ramsey]

bringing home nine grand a month? No, eight grand. Seven grand. What is it about?

[Caller (various)]

I think it's about a little under seven.

[Dave Ramsey]

Okay.

[Caller (various)]

Yeah.

[Dave Ramsey]

So 2500 bucks will get you done in seven months on the credit cards. So out of your seven, can you find 25? That's your goal when you make your every dollar budget tonight is go. What can I shave? Do I need to sell stuff? Make more. Liquidate some savings over here. Do you have anything like that? Any liquid cash you could use?

[Caller (various)]

I have my emergency of about 1600 right now.

[Dave Ramsey]

Okay, we'll leave that there and just use your future income then if there's nothing to sell. But that would be my goal now. You kind of have it set for you by the credit card companies. Seven months, 2,500 bucks a month.

[Rachel Cruze]

It feel good, you know, spring of 27.

[Caller (various)]

Yeah.

[Rachel Cruze]

That you're completely debt free. You save throughout the summer and you can retake, you know, or take this

[Dave Ramsey]

test and then time courses kick back up, right?

[Rachel Cruze]

Yeah, absolutely.

[Caller (various)]

Yeah.

And I think where I can cut

would be some food. I mean, I try to keep it minimal, but then crazy with family coming in and out. But also do I. I mean, Kaith would be the other area going by my budget. So I am trying to do 10%.

[Rachel Cruze]

Sure.

[Caller (various)]

For tight.

[Rachel Cruze]

Yeah. I would keep generosity in there. I think there's something.

[Caller (various)]

Yeah. I didn't want to give that.

[Rachel Cruze]

Yeah, No, I wouldn't invest in it all. I wouldn't.

[Caller (various)]

No. Well, other than what goes out of my paycheck into my 401k, I would

[Dave Ramsey]

pause that for those seven months and even until you have an emergency fund, because that's going to give you even more margin. How much are you investing right now? What percentage? 5, 5%. Okay, so here's the math on that. Out of your 115 income, you're talking about freeing up 5,700 bucks.

[Caller (various)]

Okay.

[Dave Ramsey]

So that's almost 500 bucks a month that you could be putting towards this credit card.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

Now you need to find 2000 because you just freed up 500 bucks.

[Rachel Cruze]

But if you can find the 25, add this, that's 3000, you're out of debt even faster. So it's a. Yeah, it's kind of just that math game. And I'll remember during this Period. It is beans and rice, rice and beans we talk about. But it is that scorched earth mentality where even like all these, a great grocery store, super inexpensive food. Right. So you can do that. I mean, like, you find your ways just to push through. Yes. To get creative. And it's just for a couple of months. It's not forever. And Christmas may look a little different this year for you, and that's okay. Everyone's going to survive. But being debt free, that's going to be your key.

[George Campbell]

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[Rachel Cruze]

When it comes to buying or selling your home. It is high stakes because a bad deal could cost you tens of thousands of dollars. And listen, you do not want to overpay for your next house or you don't want to sell your current house for less than what it's worth. And that's why Ramsey Trusted connects you with vetted real estate agents who have experience to guide you step by step to make smart decisions when it comes to buying or selling your home so you don't make expensive mistakes. Now listen, connecting with an agent is very easy. And what's great is every agent has a profile. So you can compare profiles, you can interview your top choice and pick the one that's right for you. So to find a local Ramsey trusted agent who's has your best interest at heart, for free, go to ramseysolutions.com agent or click the link in the description if you're listening on podcast or watching on YouTube. All right, up next, we have Caitlin in Indianapolis. Hi, Caitlin. Welcome to the show.

[Caller (various)]

Hi, my name's.

Oh, you already said my name. I'm so sorry.

[Rachel Cruze]

No, you're great.

[Caller (various)]

You're great.

[Rachel Cruze]

Yes, absolutely. Thanks for calling in.

[Caller (various)]

Yeah, we purchased our home in May of 2025. We are up to date on all payments. We don't do badly at all. However, we discovered there are about $100,000 in structural damages to our house, foundation wise. And it's also resulting in our electric bills being around 1006. It's not really feasible for us anymore to keep living here with how it is. However, we did find out that through my hairdresser, she was actually apparently under contract to buy our house before us. And her inspector found all the structural damages and reported it to the seller. So the seller never disclosed it to us on the seller's disclosure, which is fraud. So we have a attorney set up and everything. We already paid the retainer and sent demand letters. However, our attorney is wanting about 30,000 doll to proceed with this case. So our options kind of right now as it stands are spend the $30,000 to sue the people who sold us the house. And if we win, then we would profit about 250 to $300,000. If we lose though, then we're $30,000 in debt and we still have the $100,000 in structural damages that would be unfixed completely. And we can't sell our house because of how much is wrong with it. We would end up losing about $30,000 on it right now as it stands as well. So we don't really know what to do. Like, is this an okay situation to put ourselves into debt?

[Dave Ramsey]

What's your financial situation? How much debt do you guys have outside of the mortgage?

[Caller (various)]

About $3,000. I mean, nothing. I know it's not. It is debt, but it's nothing absolutely astronomical.

[Dave Ramsey]

How much do you have in savings?

[Caller (various)]

About a thousand. Not much.

[Dave Ramsey]

Have you contacted other lawyers?

[Caller (various)]

We have looked around everywhere in our area and everybody's running about the same exact price. It's about the 400, 450 an hour. They all want a $7,000 retainer and they're saying that it's going to cost anywhere from 20,000 to 30,000 to get it done.

[Rachel Cruze]

Start to finish, man.

[Dave Ramsey]

Yeah, I'm trying to think if there's any lawyers that would do it.

[Caller (various)]

Sort of you knowing that, hey, they'll

[Dave Ramsey]

collect on the back end.

[Rachel Cruze]

Yeah, My uncle's a lawyer in the area.

[Caller (various)]

He doesn't practice this type of law, but he said that it's not really a common thing in this area because

[Dave Ramsey]

it sounds like if you guys pursued this, you would win. I'm confused how, how it happens. You can, you can Prove the seller's new because you have the previous inspection report. And so at that point, I don't know how they go. Yeah, we're not going to pay this.

[Caller (various)]

Right, Exactly. I, what worries me is that they're saying that they're not going to pay

[Rachel Cruze]

it and they may not have it either.

[Caller (various)]

Right. That's my guess is they don't have the money to pay it either.

[Rachel Cruze]

Yeah. So my fear would be they aren't poor either.

[Caller (various)]

These are people who are flipping houses for a living. I mean, they, they live in a massive home. I don't think that they're poor. I just don't think they have the hundred thousand dollars straight up front to pay it.

[Rachel Cruze]

Yeah, probably not. They're probably leveraged in all areas. So that would be the thing. They would be forced, I guess from a lawsuit perspective either to come up with the money in amount of time or they would sell an asset, you know, their primary home to pay. I don't know. It's, it does feel like, it still feels like a gamble to me that you're going to get that much money out of the situation. So I would hate for you to go $30,000 risk that. So the op. So the next option is if you were to sell it, you said you would lose probably $30,000 on the home sale. Is that with the structural damages, like being upfront with those?

[Caller (various)]

Yes. Since we would have to legally disclose all of the structural issues to the house that we know about, our house, that we bought it for the 200,000, our home wouldn't be worth anything more than 120,000. We'd maybe get 150 out of it. Is what a couple of realtors have

[Rachel Cruze]

spoke to us about. And have you had contractors out to look to see if you were to rehab it? What, what that would be, what that would cost $100,000. 100,000. How many bids did you get? How many people did you talk to?

[Caller (various)]

We have spoke to probably 10 to

[Rachel Cruze]

15 different companies and they're all around there.

[Caller (various)]

Yes, $100,000 was actually the cheapest we could find.

Wow.

[Dave Ramsey]

Well, I wouldn't, I wouldn't give up on the, on the search because right now your best case is still finding a lawyer who can do it on contingency. And so I would ask around, call more attorneys and say, hey, do you take concealment non disclosure cases on contingency? The other thing I would do is check if your title insurance or a home warranty would cover a portion of that and dig into the fine print.

[Caller (various)]

They said that they wouldn't.

[Dave Ramsey]

Nothing would cover it.

[Rachel Cruze]

And your inspector, Caitlin, didn't find all this. Sorry, what was that?

[Caller (various)]

I'm so sorry.

[Rachel Cruze]

No, you're fine. Did you have an inspection?

[Caller (various)]

Yes, we did. And our inspector missed it and missed

[Dave Ramsey]

it, but the previous one caught it somehow.

[Rachel Cruze]

Yeah. So it's documented somewhere.

[Dave Ramsey]

Yeah. Can you get a copy of that inspection report?

[Caller (various)]

Yeah, we have it. My attorney already has it.

[Dave Ramsey]

Okay, so they've seen this all. They know there's a case here, but they're going, hey, based on my hourly rate, this is going to cost you this much?

[Caller (various)]

Yes.

[Rachel Cruze]

Man, I'm so sorry.

[Dave Ramsey]

Brutal place to be.

[Caller (various)]

It's not your fault.

It's just a bad situation.

[Rachel Cruze]

It is a bad situation all around a year.

[Caller (various)]

So. Yeah, my husband makes about 100,000 a year. So I mean, I. I don't even think that we could financially budget for 30,000 dol.

Dollars.

Right.

Over the course of a year with three kids as well. I just don't think that it's feasible for us. Yeah, we would 100 have to take out a loan.

[Rachel Cruze]

Right. And I. And I can't. I wouldn't advise you in good faith to do that. So I would either continue calling attorneys and maybe some that aren't even local. Right. I mean, like maybe you hop over to another. Another city or something, you know, still in the Indiana, somewhere in the area state. But what I. I mean, I think I would slowly start trying to probably fix it because selling it then puts you in negative 30,000 with nothing starting over versus like what stages over the next three years. Are we going to fix this house? Right. And it's a slow process and you fix it little by little and then you might get in there and do maybe half of what you feel like you need to do and it actually ends up fixing a lot of the problem. And you know what I mean? Like you could. You could get in there, but I would. That's where I tend to lean.

[Dave Ramsey]

And on the other side, if you want to save up and pay the retainer and go, hey, we're going to pay you the rest once the case is closed. They might be willing to do sort of a partial contingency there if you cover the retainer. So that might mean we are selling stuff. Hey, once the kids are down, you're going to get a side job. He's working an extra 20 hours a week so they can come up with that money. Because that's still your best case scenario as far as the financial damage.

[Rachel Cruze]

Absolutely.

[George Campbell]

Yeah.

[Dave Ramsey]

Joys. Of home ownership. As all the parents go, kids, you're throwing away money on rent, go buy a house. And then you see situations like this.

[Rachel Cruze]

Yeah, but how that's the other frustrating thing. Just immoral people that they know.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

That there's, that there's an issue the homeowners and they don't disclose it. I mean, complete fraud, completely illegal. You cannot do that. And every part of me wants that justice. But also I can't tell. I mean, I couldn't advise you to go $30,000 in debt for still a little bit of a gamble of if you win or not or what that

[Dave Ramsey]

looks like because then it's just insult to injury. Now you're just in a way worse place. So there's not a lot of good

[Rachel Cruze]

where I would rather you be putting your money towards something you know is healing the situation rather than a guess. Right.

[Dave Ramsey]

Unless they more in your control.

[Rachel Cruze]

Yeah. Unless they can take the retainer, ask for the 7,000 up front and say, hey, would you pay this?

[Dave Ramsey]

Yeah, that feels like enough to where I would go. All right, I'm willing to at least lose the seven grand and maybe a

[Rachel Cruze]

thousand bucks a month, you know, over time to get the rest. I don't know what kind of deal. You could work with an attorney to figure that out.

[Dave Ramsey]

Just find an attorney with a heart. There's got to be at least one

[Rachel Cruze]

out there in Indianapolis.

[Dave Ramsey]

Help Caitlyn, help good people of the Midwest. Where are they?

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[Rachel Cruze]

Up next, we have Derek in Los Angeles. Hi, Derek, welcome to the show.

[Caller (various)]

Hey, how's it going?

[Rachel Cruze]

Hi. We're doing great. How can we you help?

[Caller (various)]

Yeah, so just a quick question. Just learned about you guys, I'll say, like last year and been doing some studying and now I'm at a, at a conundrum in life. I'm about $15,000 in debt, zero savings, and I'm just living paycheck to paycheck and just trying to wrap my head around how I can get out of the rat race, you know, purchase some property and, you know, just set things up for my children.

[Rachel Cruze]

Yeah, absolutely.

[Dave Ramsey]

Do you have kids?

[Caller (various)]

I do. I have three sons.

[Dave Ramsey]

Okay, Are you married?

[Caller (various)]

I'm not.

[Dave Ramsey]

Okay, so you got three kids. Are you single dad, or is it shared custody?

[Caller (various)]

Shared custody.

[Dave Ramsey]

Okay. And what are you doing for work?

[Caller (various)]

I work at an after school program at a local school district.

[Dave Ramsey]

All right, what do you make doing that?

[Caller (various)]

Well, during the summer months and, you know, vacation time, I don't make anything, but on average, I'll say about 40 to 48 a year.

[Dave Ramsey]

Okay, and what kind of debt is the 15?

[Caller (various)]

The 15,000 is mostly consumer debt. A few credit cards and stuff. And I also have a housing eviction for 12,000.

[Dave Ramsey]

Oh, boy. Yeah, that's from a past house you didn't make payments on.

[Caller (various)]

Yeah, I took over a lease when my mother passed away. Didn't realize, like, what I was getting myself into. And by the time I did realize, it was kind of too far gone.

[Dave Ramsey]

Are you current on your rent payments now at your current place?

[Caller (various)]

Yeah, yeah.

[Dave Ramsey]

Okay, but you still owe the 12 on top of the 15?

[Caller (various)]

No, no, that's part of the 15.

[Dave Ramsey]

Okay, cool. So 15 total.

[Rachel Cruze]

We're making 3,000 in credit card debt then?

[Caller (various)]

Yeah.

[Rachel Cruze]

Okay, gotcha. That's a better picture. I was about to add that.

[Dave Ramsey]

Is it like a payment plan on the, on the past due rent for the eviction? How does that work?

[Caller (various)]

I, I have not started that payment plan. It just recently popped up on my credit report. And so that's what kind of got me like a little worried here.

[Rachel Cruze]

Derek, what have you been doing this summer for work? Since you said vacations and summer, you don't get paid.

[Caller (various)]

I haven't. I've just kind of honestly blew through my savings and just, you know, just spending time with my children, vacations, and I kind of looking now like, you know, I could have, could have used that couple grand for some Other things.

[Rachel Cruze]

Yep, yep. Yeah. Well, the biggest glaring piece of the situation that I see is income. How many hours of a week do you work when there is. Like during the school year, when you're actually doing the after school program? Is it, is it a 40 hour week job?

[Caller (various)]

28.

[Rachel Cruze]

Okay. So, yeah, I mean, I see there's a, there's a lot of time available and opportunity available for you to fill out at least till 40 hours. Getting a side hustle. Because if you can make Derek another 1200 bucks a month like that, that's a game changer for getting this debt paid off. Like if you could get this debt paid off in one calendar year and I'm. And think about working 40 hours a week during next summer too.

[Caller (various)]

Right.

[Rachel Cruze]

If you're thinking about the full calendar year through June And July of 27, when you map it out, there's a great chance that you could be debt

[Dave Ramsey]

free in a year because 1500 bucks a month, you're done in 10 months. So now the goal is, okay, where do we come up with this? And it's going to be partially spending less, partially making more, probably mostly making more. Because if you're in the LA area proper making $40,000, that's a tough way to live.

[Caller (various)]

Yeah.

[Dave Ramsey]

Are you in the city?

[Caller (various)]

Just outside the city.

[Rachel Cruze]

How old are you, Derek?

[Caller (various)]

I'm 36.

[Rachel Cruze]

36. Okay. What's your, what's your dream like? If you could look forward five years, what would you be doing? And let's say you're making 70 grand and you are loving life. What, what would that job be that you would be excited to get up and go to work in the morning?

[Caller (various)]

Well, right now, working in education, I love working with the kids. So I'm in school for kinesiology.

Okay.

Trying to become a teacher. A PE teacher, in essence, football coach.

Yeah.

[Rachel Cruze]

Oh, that's awesome.

[Dave Ramsey]

And you're in school right now, you said?

[Caller (various)]

Yeah.

[Dave Ramsey]

How much is that costing you?

[Caller (various)]

It's community college and it's basically free.

[Dave Ramsey]

Okay.

[Caller (various)]

Yeah.

[Rachel Cruze]

Good for you.

[Dave Ramsey]

That's good.

[Rachel Cruze]

What would you be making when you're done with that degree? And if you got a full time job doing that, what would that bring in a year?

[Caller (various)]

I have seen some postings at different high schools in the region around 80 grand.

[George Campbell]

Yeah.

[Dave Ramsey]

Fantastic.

[Rachel Cruze]

Okay, so Derek, that's great.

[Dave Ramsey]

There's hope. When are you done with this program?

[Caller (various)]

I have another year and a half.

[Rachel Cruze]

Okay.

[Dave Ramsey]

Okay. So in the meantime, we got to clean up this debt before then. So how cool would it be? A year and a Half from now, you're done with the program, you have no debt, and you have fully funded emergency fund. That's what you need to put on the bathroom mirror. Like that is the goal. Nothing's going to stop me from being there 18 months from now, which means 10 months from now, I'm debt free. Another eight months from then, I've got 25, 30 grand in the bank. That's the goal. And however much work it takes to get there, we're gonna get there. So what is your schedule with the kids right now

[Caller (various)]

at the school or my children?

[Dave Ramsey]

Your. Your kids?

[Caller (various)]

Oh, it's kind of fluid. I'll have them a week, week on, week off.

[Dave Ramsey]

Okay. That's what I was wondering. Because if you're. The week that you don't have them, I would be working like a madman. So that's gonna mean I'm selling stuff, I'm flipping stuff, I am, you know, doing the delivery apps. I'm going to be walking dogs. I mean, there's a lot of people go find some nice neighborhoods and go, what do they want done that they don't want to do themselves? Pretty much everything.

[Rachel Cruze]

And sometimes, you know, these side hustles, you want to, you know, be the next kind of step into the next career in your situation, but you already have that. I mean, you'll have that in a year and a half, regardless of what your side hustle is. So I would find the thing that pays you the most for your time? Yes, absolutely. Yeah. And I'm doing some calculations here, Derek, because I want you to think long term, because you said, I want to have a house for my kid. Like, I hear this in you, that you're like, I want my life to look different. I want my kids, our family tree to be changed. I want my kids to see something different. And here's what's wild, is if you, if you. Because investing for me is such a. It's such a game changer for future Derek. So if you graduate this program, you become debt free. Exactly what George is saying. You get an emergency fund, you got a, you know, a down payment on a home, at least 5% to save up, which will be a little bit in that area because I know, you know, Southern California is expensive. And then you do the baby steps, which you start investing 15% of your income into retirement. And as. And your income will continue to grow throughout your. Throughout your life. But let's just say, Derek, for 25 years, you work and then you invest $1,500 a month. You could retire with $2.3 million.

[Caller (various)]

Wow.

[Rachel Cruze]

So there's something powerful about. I want you to map out what future Derek is going to look like. Right. And you may have to work past 59 and a half. Right. I mean, I put in 25 years. If you go to ramseysolutions.com, you can pull up the investment calculator. These were just numbers I was just putting in saying that you have nothing in retirement and you invest 1500 bucks

[Dave Ramsey]

a month even in your late 30s, which people feel like, wow, I don't have time now. I should have started at 20.

[Rachel Cruze]

That's right.

[Dave Ramsey]

You still have time.

[Rachel Cruze]

Yes. And it would be you working a little bit longer. But man, I mean, that's what's wild about all of this is starting today something you know, things are going to change, but that means your life day to day is going to have to change. It's going to have to look different. Meaning you're going to be working more to get yourself out of this consumer debt so that you can save for a house, you can start saving for retirement and so forth.

[Caller (various)]

Forth.

Understood? Understood.

[Rachel Cruze]

Yeah.

[Caller (various)]

The marching orders as far as like, right. As far as like saving for a home, like how, how does that look?

[Dave Ramsey]

The same way you would save for your emergency fund. Once you free up that debt, you've got free some freed up payments. Now we're just trying to live on less than we make. So if you make 40, we got to try to live on 30. If you make 80, we got to live on 60. And bucket that other 20 grand into high yield savings. For example, you put that in a high yield savings account year after year, five years at 20 grand is 100 grand. So now by 41, 42, you have six figures for a down payment. So there's no magic wand for this.

[Rachel Cruze]

No, but, but when, if you go to ramseysolutions.com realestates there's kind of our perimeters around when buying a home, how to do it wisely. But yeah, you got some big goals ahead of you, Derek. If you actually stay on the line, Christian will pick up. And we're going to give you a copy of, of Dave's book Total Money Makeover because it walks you through the baby steps and this is exactly where you're at. Like you are starting off. And if you start today, man, Derek in 20 years is gonna love Derek today.

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[Dave Ramsey]

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[Rachel Cruze]

Welcome back to the Ramsey show in the Fairwinds Credit Union studio. I'm Rachel Cruze here with George Campbell taking your calls at 888-882-55225. Up next we have Amanda in Dallas, Texas. Hi, Amanda, welcome to the show.

[Caller (various)]

Hi.

[Rachel Cruze]

Hello. How are you?

[Caller (various)]

I'm good, thank you.

[Rachel Cruze]

Great. How can we help today?

[Caller (various)]

Okay, so a couple of months ago, my last parent passed away and I have received a substantial amount of money, my fiance. So I immediately did the recommended steps. Well, my fiance is wanting me to help him pay off his debt. He has about 18, almost $19,000 worth of credit card debt. And of course I'm willing to help him. I don't expect the money back because

I know in the long run it's

going to help us like our family. But my stipulation was, per the rules, you know, close your credit card account. Once I pay these credit card accounts,

you have to close the account.

And he is saying that I'm financially abusing him because I'm requiring him to do that. So I just, wow, I don't know.

[Rachel Cruze]

Oh my gosh.

[Dave Ramsey]

That's like saying, well, hey, I'll pay for your rehab if you stop using drugs right now. And he's like, hey, come on, that's abusive. Let me enjoy my life. So why is he and Ty closing the cards? Is he still using them?

[Caller (various)]

He still is using them.

Okay.

He pays, he pays about. He gets a payment from his disability, his VA disability. He pays nineteen hundred dollars off each month. So I know that, you know, he would pay it off soon, he. He started at a crazy amount of debt, like $60,000, and he's got it down to like 18, 19. But we also. He's looking to get a new vehicle, and he wants to. For that. And so he's like this fast tracks everything.

[Dave Ramsey]

So when are you guys getting married?

[Caller (various)]

October of next year.

[Rachel Cruze]

Okay. So a little over a year. Well, it sounds like you guys are not really aligned with financial goals or values.

[Caller (various)]

It has been a process. We've been together for nine years.

And how old are y' all got?

I. I am 31, and he is 34.

Okay.

[Dave Ramsey]

How long have you been living together?

[Caller (various)]

Five years.

[Dave Ramsey]

Okay. So he sees you guys as a married couple, where it's like, hey, we're already doing life together. Just go ahead and pay off my debts. What are you doing?

[Caller (various)]

Right.

[Dave Ramsey]

Okay.

[Caller (various)]

Y.

[Dave Ramsey]

Well, the fact is, you're not to

[Rachel Cruze]

tell someone to change because they haven't had change.

[Dave Ramsey]

Yeah, I mean, he. It's been a lot of comfort here of just you guys kind of doing life together without the actual commitment and financial legal protection here. So that's my. My biggest thing is, if you're going to ever pay off his credit card debt, please don't do it until you guys are legally married.

[Caller (various)]

Okay.

[Dave Ramsey]

That's number one.

[Rachel Cruze]

Number two, he's really not gonna like that.

[Dave Ramsey]

I would not pay his credit card debt if he's going to go back into credit card debt. And it's not a. You're financially abusive. It's.

[Sponsor/Ad Voice]

We are.

[Dave Ramsey]

Are misaligned financially. And so I can't in good faith from my values do this knowing that you're going to go back into debt with a car payment the next day.

[Caller (various)]

Right.

Yeah.

[Dave Ramsey]

So.

[Caller (various)]

Okay.

[Dave Ramsey]

I don't. I think he's. He's a little bit beyond a skis here saying that it's abuse. I can't.

[Rachel Cruze]

No, no, no, no, no. That's, like, so offensive to people that actually.

[Sponsor/Ad Voice]

But I think he sees.

[Dave Ramsey]

He feels a little bit emasculated that you're stepping in to sort of save his butt with stipulations like, you know, it's mom with rules.

[Rachel Cruze]

Well, and the problem is. It is. It does sound like. Because it is. Hey, there's a condition to what I'm going to do. And I believe. I mean, I don't think you're wrong in that, Amanda, but I think the biggest red flag if you dig a little deeper is that this is gonna. If you guys don't get aligned on this, this will be a tension point in your marriage. Going forward. And it's gonna be really hard to build wealth. It will. And we see it all the time that, you know, the wife. You know, husband or wife, you could put either one in the scenario. But you're wanting to get out of debt. You're wanting to save for retirement and do all of this. And he's like, well, I'm just gonna go out and get a truck payment for 1200 bucks and not tell you because you would just shame me and make me feel bad. I'm gonna go do. Right. Like, there's a. It's this. It's a level of immaturity on his part personally, is what I think. So I would get. I would be aligned. And again, you don't have to be the same person. I'm not saying that you don't have to be the same person. When it comes to money, Winston is very different than I am with money. But our overall household values are aligned. And so when we have to make big decisions, you know, for the most part, we kind of have these. These guardrails that we make the decision within, which is so helpful. And I'm scared there's no guardrail for you all. It's just. It is what it is. And it's been like that for five years in your relationship because, you know, you guys have been acting like you're married. And so that's when these habits and these patterns really start to play in. And then the moment it changes and you start to feel like, oh, my gosh, we are going to be a married couple. And, oh, my gosh, this windfall of money happened, or, oh, my gosh, he lost his job. Oh, my gosh, I lost whatever it is.

[Dave Ramsey]

Right.

[Rachel Cruze]

Life starts happening. It starts to magnify the situation. And so I would get with. With a marriage counselor or something.

[Dave Ramsey]

I would go through Financial Peace University as well.

[Rachel Cruze]

Yeah. And I would do work just on your relationship as a whole. Amanda, too, because I do wonder what patterns have creeped in for you, all that you want to look different in marriage. And one of those is probably going to be money.

[Caller (various)]

Yeah.

I definitely feel like at the beginning of our relationship versus, you know, now nine years into it, that there's been a lot of mental change about the way that he views money. My parents were very frugal, and they taught me what to do, and his parents did not.

And so it's been a big more

of a learning curve for him. I have faith that, you know, he's going to get where he needs to

[Rachel Cruze]

be, but also like you said, it

[Caller (various)]

raises all my red flags whenever he's.

[Dave Ramsey]

It should. I mean, you're nine years into this.

[Rachel Cruze]

How much did you get with your inheritance tense?

[Caller (various)]

Just shot of a million dollars.

[Rachel Cruze]

Okay, have y' all talked about what you want to do with that? Have you even had the discussion with him?

[Caller (various)]

Yes and no. I got it. Everything wasn't liquid, so I got my parent, like my parents, ira, and then they also had a brokerage account and then they had CDs, and then they also had checking and savings accounts. So they had a little bit of everything. And I'm keeping the brokerage account as is.

I'm not going to touch it.

I'm just going to let it keep

[Rachel Cruze]

growing and I'll put, you know, invest into that.

[Caller (various)]

As far as any of the liquid cash, I don't know. We do have a house together, so I was thinking about maybe paying the mortgage off.

[Dave Ramsey]

Is that in both of your names? The mortgage?

[Caller (various)]

Yes.

[Dave Ramsey]

And the deed is what?

[Caller (various)]

The house deed?

[Dave Ramsey]

Yes. Like this is legally the ownership?

[Rachel Cruze]

I'm sure it is usually if the mortgage is.

[Caller (various)]

Yeah.

[Rachel Cruze]

So I wouldn't do. I wouldn't touch that asset. I would not pay that off now. I would wait till you guys are legally married.

[Dave Ramsey]

And I don't know why you're waiting till October of next year now. Are we waiting till the 10 year mark? What's the goal with the October 2027 wedding?

[Caller (various)]

Wedding?

We had a specific venue that we wanted to use and that was when they were first available.

[George Campbell]

Yeah.

[Caller (various)]

Wow.

[Rachel Cruze]

Just not urgent. Well, Amanda, I would not combine it. I would not touch his finances and I would not pay off this house. I would not do anything until you are married. And I'm telling you, if you guys don't get to the root of some of the stuff, it's going to be constant conflict. And you may look up after you get married. And this 900 grand of inheritance may be spent very quickly.

[George Campbell]

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[Rachel Cruze]

Up next, we have Lance in Louisville, Kentucky. Hi, Lance. Welcome to the show.

[Caller (various)]

Hi.

How are you all?

[Rachel Cruze]

Hi. We're doing great. How are you?

[Caller (various)]

I'm doing well. So essentially a year ago, I bought my first house. And shortly a couple months after I bought my first house, I wanted to get some work done on the backyard

in the parking area.

So I hired a contractor to do that. And then they worked on it for a little bit and then eventually just stopped coming out and then left my yard a mess. And then I had put $10,000 down on that and it had really actually detracted some value from the house. And so it's been a little over a year that I've been dealing with that now, and I'm about six months into a lawsuit. And for the last six months, I have been sort of funding the legal fees month to month on this lawsuit just out of cash flow of margin that I have in my budget. But I've essentially stopped a lot of my extra savings. I'm still contributing to my 401k, but I have a lot less peace with having to contribute to this ongoing legal expenses without a clear idea of when

it might wrap up.

I'm wondering how can I get some peace in just waiting for this to wrap up, knowing that I've kind of had to pause my savings while I'm.

[Rachel Cruze]

How old are you?

[Caller (various)]

I'm 29.

[Rachel Cruze]

29. Okay. Has. Has your attorney told you somewhat of a timeline of hey, this is going to be another 18 months or hey, because I mean, it's hard to have hope when there's no end in sight.

[Caller (various)]

Right?

[Rachel Cruze]

Have they given you any level of timeline?

[Caller (various)]

I should know whether it's going to potentially settle or go to trial within the next two months, but there's not a clear idea because even if I get judgment at trial, you know, there can take some time to collect on

[Rachel Cruze]

that from then for sure. Yeah. And do they know where. Do you know where the guy is? Have they been able to contact him?

[Caller (various)]

Yeah, so there's an ongoing lawsuit against them.

[Rachel Cruze]

So, yeah, you're not the only one.

[Dave Ramsey]

Just slowly, man, just go full class action, man. This really sucks. Well, how much have you spent so far fighting this thing?

[Caller (various)]

It's about $8,000 in legal fees to

[Dave Ramsey]

recover the 10 grand.

[Caller (various)]

But so the good part about this is it's anything that I put in in legal fees, if I win the lawsuit, I can get it out because it's one of those special circumstances to where I can recover legal fees.

[Dave Ramsey]

So you'll get your 10k plus whatever you spend. Legal fees I'll get.

[Caller (various)]

Yeah, I'll get anything that I spend legal fees out of it.

[Rachel Cruze]

Are they going for 10k? Is that it?

[Caller (various)]

I mean, so theoretically when we consider, you know, how much extra it took to get the project finished and then it detracted value, I mean I could be looking at getting like a 40.

[Rachel Cruze]

Okay.

[Caller (various)]

I pay off from this because between legal fees and how much extra it costs to have the project done. So I mean there. It's a high risk, high reward type of thing, you know, if. Right if I win. But you know, so it kind of

feels like anything that I put in

legal fees is a little bit of a savings account that I should eventually get out, but there's always a small chance that I can't recover it. I'm just looking to get some peace, you know, and paying these legal fees

month to month and feeling like I've

had to pause my savings and I can't really like get back onto the path in life that I want to be on in terms of aggressively saving.

[Dave Ramsey]

Sure. Well, you know, it's hard to find peace when you're in the middle of a battle. But I'll give you hope that this is not going to be forever. You are still going to be okay financially later on in life and you'll look back and go, man, don't miss that era.

[Rachel Cruze]

That sucked. Yeah.

[Dave Ramsey]

Remember when I had to spend 20 grand to fight this guy and maybe I got it, maybe I didn't. But. How old are you right now?

[Caller (various)]

Now I'm 29.

[Dave Ramsey]

Okay. And how much do you make?

[Caller (various)]

I make about 150 a year. 120 base. And then I'm a part time professor, so.

[Dave Ramsey]

Incredible.

[Caller (various)]

Take classes and you have no debt

[Dave Ramsey]

and you have an emergency fund.

[Caller (various)]

Correct.

[Dave Ramsey]

Awesome. So there's the good news is that there is an end in sight and you'll be a 30 year old making 150 grand with no debt and an emergency fund with plenty of time to invest and retire with dignity.

[Rachel Cruze]

Yeah. Is it, is it the short term savings you're. You're discouraged about Lance, or is it it long? Is it retirement and investing?

[Caller (various)]

So I would say that you know, for the past six to seven months, I haven't really been able to save.

Like I had.

I haven't paused any kind of 401k contribution.

[Rachel Cruze]

Okay. So it's just short term savings and you're like, man, I make so much and I haven't been able to.

[Caller (various)]

Yeah, it just, it bothers me not

seeing, you know, the money go up

on a monthly basis or by the time I cover the legal fees, that it's like, okay, there's no money left to save here.

[Dave Ramsey]

What happens if this contractor's broke? Even if they do, you know, have the judgment against him?

[Caller (various)]

So they, they do own some property. So we know that there's property to, to go after ultimately at the end of the day. And so that. That's not going anywhere. So we're feeling fairly confident about that.

[Dave Ramsey]

Okay.

[Rachel Cruze]

And its value is obviously more than 40.

[Caller (various)]

Yes.

[Dave Ramsey]

Well, I would just keep on fighting the good fight. There is a level of sunk cost. If you wanted to set a ceiling for like, hey, here's my timeline. Here's the financial ceiling. I'm willing to pay in before I move on with my life. But it sounds like you're so deep into this thing, you're just going to see it through to the end out of sheer anger.

[Rachel Cruze]

Yeah, but I would not let this drag on. We see this a lot with people going through a divorce or, you know what I mean, there's just. In that grind of the legal world and dealing with attorneys and being in and out of cases, I mean, it's just, it's so. It just wears on you so much. So, Lance, I probably would have a timeline and say, I just, I can't take this any further than, I don't know, you. You make it up 18 months, two years, and I would just prepare myself. Okay, so what would. Look what would happen in 18 months if nothing came about this and I've paid this much, like, emotionally.

[Dave Ramsey]

Take yourself there.

[Rachel Cruze]

Yes, I would.

[Dave Ramsey]

So that you're prepared.

[Rachel Cruze]

Yeah. And just to be like, okay, so then what would my life look like financially at that point? And you know, run some numbers and say, okay, if I start saving, then I can get. I can save this much a month and that's going to go towards this next goal. Like paint your life of what that would look like and then paint your life 18 months from now or whatever. I'm just making up a timeline that you got 40 grand. What's going to be happening? What are you going to do with that? Right. And so I would probably paint both scenarios because as much as you want the law on your side, but as sneaky as people are like that, I'm like, they're not.

[George Campbell]

Yeah.

[Rachel Cruze]

Doesn't always follow through the way you want it to.

[Dave Ramsey]

Not always a happy ending there, but I would let it live rent free in your head. I think at this point it might be consuming more of you than it. Than it should, which I understand. I'd have a hard time not thinking about this every waking second, but it's for the best.

[Rachel Cruze]

All right, let's go to Sarah in San Diego. Hi, Sarah. Welcome to the show.

[Caller (various)]

Hi.

Hi.

Thanks for having me.

[Dave Ramsey]

Don't be too excited to talk to us.

[Rachel Cruze]

How are you?

[Caller (various)]

Listen, that's just my normal tone.

[Rachel Cruze]

I love it.

[Caller (various)]

I'm fine. I'm just overwhelmed and, you know, very anxious about my financial picture.

[Rachel Cruze]

Okay, what's going on?

[Caller (various)]

So essentially I was doing fine, you know, had a really good job, and then this bug bit me. They said you need to. You need to start a business. So I started a business about two years ago. In the midst of starting that business, I started taking on, taking up loans for it. And so, like right now, so my husband and I combined, I would say we make roughly around 250, right?

[Rachel Cruze]

Yep.

[Caller (various)]

But we have. Oh, man. Let's start from the beginning. I have a personal loan, 35,000. The interest rate's 9.9%.

[Rachel Cruze]

Is that for the business?

[Caller (various)]

Started at 50K. Yeah, I took that for the business. Okay, another one that's 95k. Interest rate's about 7%. 7.7% for the business? For the business, yes.

[Dave Ramsey]

Is that like an SBA loan?

[Caller (various)]

No, they were just personal loans.

And I started doing the SBA route, but the rates were better on a personal side. And so my goal was just to pay them off early.

Right.

But then I think I just got in way over my head.

[Rachel Cruze]

Okay, what else?

[Dave Ramsey]

Give us the total amount. Since we're up against the clock. What's the total amount of consumer debt

[Caller (various)]

you have right now? Okay, so I have, let me see, 85, 85, 95. So that's 180K. And then that 35K. So what's that? 115K. Excuse me, personal loans.

[Rachel Cruze]

Okay.

[Caller (various)]

And then I have 401K loan, which I recently did, which is 23, 000. And then I have student loans, 60,000, because we had 220,000 forgiven. Thank God. A mortgage, which is 290K, and then a car loan for 29, 500. As far as income, like I said, we make about 250. But all our money is wrapped up in debt.

[Rachel Cruze]

Yes, we have about 10k.

[Caller (various)]

10k.

[Dave Ramsey]

We got a lot to unravel here, Sarah.

[Rachel Cruze]

So, Sarah, if you'll stay on the line, we have to go into a break right now, but we'll come back to you in the next segment and try to look at this. I don't want to say dumpster fire, Sarah, but.

[Dave Ramsey]

Well, I just wanted to say I got a complicated order. That's how it feels like that.

[Rachel Cruze]

No, we're gonna help you, Sarah. We're gonna make a plan. And you're gonna go from overwhelmed to feeling in charge and really tired because there's probably gonna be a lot of work that's about to happen. But it's gonna be great. Hey, guys, it's Rachel Cruz. When it comes to life insurance, most people fall into one of two camps. The ones who make a plan to protect their family and the ones who hope everything will just work out. But hope isn't a financial plan. When you get married or have kids, your money decisions aren't just about you anymore. Your income helps keep the lights on, pay the mortgage and put food on the table. And if something happens to you, will your family have protection or uncertainty? Well, at Ramsey, we recommend term life insurance that 10 to 12 times your income with a 15 to 20 year term for the years that your kids are at home and your mortgage is still being paid off. That's why Winston and I have our term life coverage through Zander Insurance. They're an independent broker who works for you, shopping all the top companies to find the most competitive prices on coverage you need. Get instant quotes online in just [e-mail] or call 800-356-4282 to get your family protected with term Life Insurance. That's Zander.com or 800-356-4282.

[Caller (various)]

Foreign.

[Rachel Cruze]

We're going to go back to Sarah in San Diego. So just to kind of recap, I think, Sarah, if all of our math was correct, you have $327,000 in consumer debt. You and your husband together make 250 a year. And most of this debt, a bulk of it, was because of this business that you started two years ago ago. Is that correct? Okay. What kind of business is it?

[Caller (various)]

A vending machine business.

A what?

[Dave Ramsey]

A vending machine business.

[Caller (various)]

Vending machine business.

[Dave Ramsey]

Where did you get this idea?

[Rachel Cruze]

Social media? The Internet?

[Dave Ramsey]

Tik tok.

[Rachel Cruze]

I knew it.

[Caller (various)]

I've.

[Rachel Cruze]

I've seen this.

[Dave Ramsey]

I've reacted to many of these Videos. And they were like, oh, you. If you just get 28 vending machines. Sarah, how many vending machines do you have currently?

[Caller (various)]

15. 15.

[Dave Ramsey]

And they're all leveraged, doing well.

[Caller (various)]

Yeah.

[Dave Ramsey]

Okay. Yeah, it's hard to make a profit, you know, 75 cents at a time on a, on a Reese's Bar. So.

[Rachel Cruze]

Okay, so let's walk through this. Are we. And you're keeping it running? It's still happening. How much does it make a year?

[Caller (various)]

You know, after the expenses?

Yeah.

Maybe 45,000.

[Dave Ramsey]

Okay, so it does, it does spit out a profit even after all of your payments. Yeah, let's factor it in. Okay.

[Caller (various)]

Wow.

[Dave Ramsey]

What other assets do you guys have? Like, if we said, hey, let's pull everything we can to pay this off quickly.

[Caller (various)]

So we have 111,000 in an investment account.

[Rachel Cruze]

Retirement or non retirement?

[Caller (various)]

Non retirement.

[Rachel Cruze]

Okay, that's good.

[Caller (various)]

Then we have about. I said 10, but I guess it's close to about 15,000 just in personal checking state. In retirement, we have about 400,000.

[Rachel Cruze]

Okay.

[Sponsor/Ad Voice]

All right.

[Dave Ramsey]

So how badly do you guys want to get out of this debt?

[Caller (various)]

Badly.

[Dave Ramsey]

Okay. You're willing to do anything? Is your husband on board?

[Caller (various)]

He is. He is. Yeah.

[Dave Ramsey]

That didn't convince me.

[Caller (various)]

You know, I mean, there may be a little more conversation around it.

[Rachel Cruze]

Sarah's like, give me some time.

[Dave Ramsey]

Okay. What would it, what would it take for you to get out of this business? Could you sell all the vending machines or sell the business as a whole?

[Caller (various)]

Talked about that. We talked about that. I'm open to it. But the thing is, I didn't want to do anything until I got out of debt, you know?

[Dave Ramsey]

Well, this might be your key to getting out of debt.

[Rachel Cruze]

Have you, have you priced it out? What, what you could get out of this business if you sold it.

[Caller (various)]

No, I haven't. And, you know, we kind of bought it from a company where you bomb in bulk and then you pay that company a big dollar amount.

Right.

And it was terrible. Terrible.

[Rachel Cruze]

What do you do for work outside of this?

[Caller (various)]

I'm a pa.

Okay.

[Rachel Cruze]

And how much do you make for. With that?

[Caller (various)]

I mean, base pay? About 165.

[Rachel Cruze]

165. And what does your husband make?

[Caller (various)]

I would say about 50. He's a supervisor.

Hospital.

[Dave Ramsey]

So the, the 250 includes the 45k in profit from the vending machine business.

[George Campbell]

Business.

[Caller (various)]

Right, right.

Because it varies.

I mean, I, I, I said on average, 45. 45 may be on the lower end.

[Dave Ramsey]

Okay.

[Rachel Cruze]

Because a part of me is like, this is spitting out 50 grand. If you did keep it going, you know, in four years, you know, that's helping take a chunk of this 200 off of your 3, 25, plus your investments.

[Dave Ramsey]

Yeah, I definitely would be selling those investments to knock out a huge chunk of this. And I would just list all of these debts out, smallest to largest balance. Have you done that yet?

[Caller (various)]

Yet I have. I guess I was just kind of thrown off with the one that's like the 9.9% interest rate.

[Dave Ramsey]

Sarah, we need to just ignore the interest rates. Right now that is the least of our problems. Because if we were doing the math, we wouldn't be continually going into all this debt. Well, it was 7%. It was a good deal.

[Sponsor/Ad Voice]

We need to start looking at all

[Dave Ramsey]

debt as the enemy, regardless of the interest rate. So what is the car worth? That has 29,000 left on it.

[Caller (various)]

I want to say maybe 35.

[Dave Ramsey]

Okay. Is that you have two cars in the house right now?

[Caller (various)]

We do. One's paid off, so.

[Dave Ramsey]

Okay. Because I'm wondering if you got rid of that car payment. That leaves a little bit of room. You got six grand from the profit, take a little bit from your savings, go get you, you know, 10, $12,000 car, get you from A to B. Yeah. Knock out 10% of your debt.

[Caller (various)]

We, we actually did talk about that. That makes sense. The thing is, I drive a lot though, so I just have to make

[Rachel Cruze]

sure I get a car before you worth it.

[Dave Ramsey]

I promise you there's twelve thousand dollar cars that run that are fuel efficient. Probably more fuel efficient than what you drive right now.

[Caller (various)]

Yeah.

[Dave Ramsey]

Because if you take your 327 minus 111 now, you're gonna have to pay taxes on some capital gains on that investment. Right, right.

[Caller (various)]

And that was the part.

[Dave Ramsey]

Yeah, that's okay. That's still worth, it's still worth liquidating. And then we take out that, that car loan. We're going to sell that, make a little profit and buy something in cash. Now we're down to 187,000 while we're still making 250 and we freed up a whole bunch of payments.

[Rachel Cruze]

And what if you learn to live on a hundred thousand? God forbid. God forbid.

[Caller (various)]

Yeah, we, we have a very low key lifestyle. There you go, like eighteen hundred dollars.

Okay.

[Rachel Cruze]

So if you can. Yeah. And I know after taxes and stuff, 250 goes down, but I mean if you could throw an extra, gosh, 75 or so plus, you know, a year at this, you guys are, you guys are looking real Good in about three to four years, do you guys take

[Dave Ramsey]

home about 15 grand a month?

[Caller (various)]

Maybe a little less? Maybe about 13. Because I also do have another side

[Rachel Cruze]

job, too, I forgot about.

[Dave Ramsey]

Goodness, you're busy.

[Caller (various)]

Which I. Yeah.

[Dave Ramsey]

What is that?

[Caller (various)]

Yeah, I make about 25. I teach on the side.

[Dave Ramsey]

Oh, great. That sounds stable. Because I'm wondering, like, what is the maximum amount you think you could actually throw at these debts? If you did what we said, you freed up a bunch of payments. Now you're down to 187. By knocking out some of those smaller debts. How much could you throw a month at this thing? Could you throw eight grand at it? Nine grand?

[Caller (various)]

I think so.

And the big thing, too, is I need to. So we've been.

[Rachel Cruze]

We've been maxing our retirement, which we

[Caller (various)]

probably should not be doing.

[Dave Ramsey]

So guess what? If you pause that, you know what happens? You just gave yourself a raise to get out of this debt faster, right? And guess what? You guys are going to be okay. If you make this kind of money and you're debt free, imagine how much more you could be involved investing.

[Rachel Cruze]

But, Sarah, you. You guys, you and your husband, number one, y' all have to be on the same page. This is not going to work. If you go and do all of this and you cash out 110, $111,000 out of a brokerage account and you guys get right back into it, like, you both have to really, really be on a team and say, this is what we're doing. It's going to be really hard to do it without him. And if you feel more stress because of all of this debt than he does, you have to. To. You have to explain that to him, and you have to tell him how important this is. He needs to tell you what he's feeling at the. I mean, this is like a therapy session, right? We're getting it all out because I want you guys so united. And this is a. This is an extreme situation, Sarah. I mean, $327,000 in just consumer debt. Like, that's. That's a lot. That's a lot. And I know you feel that, but that means that that extreme extremeness has to be swung the pendulum the other way. And how you handle it has to be extreme. And that's why you're selling stuff. You're selling investments, you're selling cars. You're lowering your lifestyle completely. You're throwing so much at this. He's working extra at nights. You guys can still be doing, I guess, the vending machine stuff. If you want to keep It, I would use maybe that 45 again to throw at this debt. I mean, whatever you are doing, but you guys are working like crazy. You're living on nothing. And it's got to be extreme because the numbers are extreme, right?

[Dave Ramsey]

So how quickly do you want to get out of debt? If I, if you said, here's my timeline, how many months until you guys want to be debt free?

[Caller (various)]

I would say max of 36 months.

[Dave Ramsey]

How about we do 18, split the difference.

[Caller (various)]

I love it. I love it.

[Sponsor/Ad Voice]

Well, here's, here's how that works.

[Dave Ramsey]

You do what we said. You cash out the investments, sell the car, buy something cheap. You're at 1877 and you put 10k a month toward it because remember, you paused investing too. So now you're bringing home 15K. You live off five. Throw 10 at the debt, you're done in 18 months.

[Rachel Cruze]

That's a, that's a dream.

[Dave Ramsey]

18 months. So now you both know we said 18 months. We said 10K a month. No matter what that means we're going to live on way less than we make. We're going to make sacrifices, work extra. But if you both do that hand in hand, rowing in the same direction, you will be shocked at how far you will go. You're going to land on that shore in no time.

[Rachel Cruze]

And to have just the, no stress, Sarah, you guys are, you have 400,000 still in retirement right now. You'll press play on that after this is all done. You, you guys keep funding retirement. You're gonna be fine at that point. But for you, it's the emotional stress. If you had no payments in the world, girl, you're paying out your, out your ears every month. I mean, I don't even know how you keep up with it from a detailed perspective.

[Dave Ramsey]

I mean, if you told H18 year old Sarah, hey, one day you're gonna be making a quarter million dollars, you'd be like, what? And you're like, and we are broke.

[Caller (various)]

Yes.

[Dave Ramsey]

She'd be like, what? Come again?

[Rachel Cruze]

I know you worked too hard, Sarah. You worked too hard. So you called in feeling stressed and just. I don't know what to do. We gave you a plan and if you do it, 18 months, the peace that comes with that, and you guys make an incredible income. You guys are gonna do fantastic. But you have 18 months ahead of you. That's the sacrifice, Sam. So you know what's so interesting about that last call, George, is you know, you hear the income like 250. Amazing. But your habits, what you do with that money says everything. And it either says you can make a great income, but you're still broke. Yep, you can make a great income. You could still be middle class, you can make a great income and use that income and build wealth. Or you can make an okay income and build wealth or be broke. Right. So much about it is our behavior, it's habits, it's our habits around it. And so we talked about this on Smart Money Happy Hour. But your habits can really put you kind of in three categories. Broke, average and wealthy. And there's some, some clues, if you will, about what category you might, you might be in. So be thinking to yourself, does it, do I qualify for these things? Or maybe you're like, oh, that used to be me and now it's not.

[Dave Ramsey]

It's kind of like the old Jeff Foxworthy. You might be a redneck. If this is. You might be broke.

[George Campbell]

If.

[Dave Ramsey]

So you tell us, think about your own financial situation. Take a look at your own spending habits. And if you do these things, this is not a judgment call. We're not mad at you, we want the best for you. But it might be a good reality check as to how you're doing financially and if you're on the right track.

[Rachel Cruze]

That's right. Okay, let's just start with, with, with the broke, broke people habits. Okay.

[Dave Ramsey]

This one is the probably the saddest one on the list, which is payday loans and title loans. You see these in low income areas, they look like abandoned Pizza huts. They're open like 24, 7. And these are high interest short term loans that spiral into a debt cycle or cost you like your, your car

[Rachel Cruze]

and high interest 100. I mean like it's insane because they don't disclose it.

[Dave Ramsey]

It's just, well, it's a $20 fee to go get 500 bucks. You don't realize.

[Rachel Cruze]

That's right.

[Dave Ramsey]

That's 4,000% interest.

[Rachel Cruze]

I mean all of those. And they prey on the middle or on the, on the lower class. Like they, they do, they go into these low income areas and it, they're, it's evil, it's, it's horrible. It takes advantage of people that do not need to be taken advantage of. And it's just awful. But when you get stuck in that cycle, you're paying high interest debt and, and you just feel like you can't

[Dave Ramsey]

get out of it.

[Rachel Cruze]

And that will keep you broke if you stay in that life. So next is rent to own loan and cash advances. I just mentioned kind of that.

[Caller (various)]

Yeah.

[Dave Ramsey]

And it seems like A smart thing. Well, one day I'll own it or you know, I'll get the cash advance now I'll pay it back when that paycheck comes in. But these deals are loaded with hidden fees, exorbitant interest, and it keeps people stuck in this really. A cycle of poverty.

[Rachel Cruze]

That's right.

[Dave Ramsey]

For a lot of people.

[Rachel Cruze]

Yep. And last but not least in the broke category, lottery tickets.

[Caller (various)]

Yeah.

[Rachel Cruze]

So per zip code, if your state has a lottery, you can see it's usually the low income zip codes is where the highest amount of money is paid to lottery tickets.

[Dave Ramsey]

And it's out of desperation.

[Rachel Cruze]

That's right. It's like this. It's this false hope that okay, this is my ticket out, this I'm gonna win and everything's gonna be okay. And people end up spending so much of their paycheck on this. And it is sad because it is

[Dave Ramsey]

stealing from people and it's statistically impossible odds. But you tell yourself someone's gotta win. And when you're that hopeless, you turn to these, these terrible habits. So those are broke people habits. If you can break out of that, you probably then turn to the average person habits which are not much better. This is sort of middle class America.

[Rachel Cruze]

Yep. This is what we see all the time. We'll start with chasing credit card rewards. So you, you live on the idea that I'm going to be able to travel, I'm going to be able to do these things because of what I spend on my credit card. And when that is your mindset, you get stuck in a cycle of credit card debt. And we see it probably because we host this show and people call in with their problems. But the one credit card that was supposed to be I paid off every month turns out to be the thing that catches when the, when the job is lost and there's no paycheck because there's no savings. And then they look up and they're $18,000 in credit card debt. And so what ends up happening with this so often is that broke people who have to pay interest and cannot pay the full balance end, end up subsidizing the rewards. Yes, credit card companies can do it because of it.

[Dave Ramsey]

So no, I mean half of the people don't pay off their balances and America is now 1.2 plus trillion dollars in credit card debt.

[Caller (various)]

Yes.

[Dave Ramsey]

So sure, I would love a perfect world before the fall of man where we could all just swipe our cards and no one goes into debt.

[Rachel Cruze]

We all get there like there's a

[Dave Ramsey]

50, 50 chance you fall off the cliff. I'm not going to go near the edge. No.

[Rachel Cruze]

Save up pay for things. So, yeah, the game keeps you there. New car payments and leases.

[Dave Ramsey]

Ouch.

[Caller (various)]

Yeah.

[Dave Ramsey]

This is where someone goes, well, I want the newer car and the dealer said he can get the payment down to where I can afford it. And then you get into this cycle where you never get out of these. You're paying top dollar for a depreciating asset. So you paid 50 grand for a car with interest, you end up paying 60, and that car is only worth 20 by the time it's paid off. That's bad.

[Rachel Cruze]

That's a classic example of making someone else rich.

[Caller (various)]

Right.

[Rachel Cruze]

You're making the credit card companies rich, the car dealers, the banks, and you're paying interest on something that's going down in value versus actually making interest for yourself, which will be later in the category. That's what lots of people do. But yeah, the idea of staying in the cycle of debt and car payments keeps you. Keeps you average.

[Caller (various)]

Brutal.

[Dave Ramsey]

And then you have the bigger category of just consumer debt. So things think HELOCs, student loans, buy now, pay later plans. These are all really used to fund a lifestyle that people can't afford. Or the home renovation that you really want but you can't cash flow the student loan for the degree that you may or may not use, that may or may not roi. And then the buy now, pay later, which is a lot of the younger generations are falling for this one because it seems better than credit card debt.

[Rachel Cruze]

Right.

[Dave Ramsey]

It's a couple of payments and I'm done. There's no interest until there is, until there's fees, until you miss the payment,

[Rachel Cruze]

and until you just buy more crap than what you need. I mean, that's the craziest thing about that.

[Dave Ramsey]

Is it psychological mind.

[Rachel Cruze]

It is where you're like, oh, I only have to pay that. Well, I'll buy a couple extra more things. No, that's. You're spending more money doing that. So cutting that all off. And yes, living within your means is so crucial. One of your favorites, George. Last but not least, whole life. Whole life insurance.

[Dave Ramsey]

I just got a DM today. And they were like, hey, my financial

[Sponsor/Ad Voice]

advisor is really pushing this index universal

[Dave Ramsey]

life insurance thing for an investment.

[Rachel Cruze]

What did you say, George?

[Sponsor/Ad Voice]

I went ple.

[Dave Ramsey]

I'm like, I don't want to be hard.

[Rachel Cruze]

Harsh.

[Dave Ramsey]

Fire him immediately and run far, far away. That is not a financial advisor. That's an insurance salesperson. That's all it is. So whole life insurance Permanent life insurance, variable, universal life, anything that has those words in it. It's a costly hybrid that tries to do both things, insurance and investments or cash value. And it is a terrible return and costs so much more than term life. So keep it separate. Get term life insurance to cover, you know, your income in case something happened to you and invest separately on your own. You'll be better off.

[Rachel Cruze]

Yes, the underinsurance insurance is a great place to check out for your term life. Everyone and everyone needs term life insurance. Hear me? Everybody needs term life.

[Dave Ramsey]

All right, finally, let's get to some good news.

[Rachel Cruze]

Sorry. Unless you're self insured. I guess the asterisk is if you become in the next category, the wealthy category.

[Caller (various)]

That's right.

[Rachel Cruze]

And you're self insured.

[Dave Ramsey]

You've got a couple million bucks.

[Rachel Cruze]

Yeah, you're good to go.

[Dave Ramsey]

You may not need it at that point.

[Rachel Cruze]

For a lot of people, you guys, that's key. Okay, wealthy category, I said it earlier and I'll say it again. You're earning interest, not paying it. So you're looking at you have more things invested, you have things that are actually paying you or making you more money versus debt companies. Right. Banks and car and car dealerships, all of it.

[Dave Ramsey]

You're not going backwards here.

[George Campbell]

We're moving forward.

[Dave Ramsey]

So next up, investing in assets. So you have assets and liabilities. Liabilities are the debts. Assets are things that actually hold their value and make you money. So think stocks, mutual funds, funds, real estate. These are not going to depreciate and lose value. And that's how you actually build wealth. You can't save your way to wealth. You need to invest in assets. And really all you need is something like a 401k, an IRA, mutual funds, and your primary home. That's what we found in our millionaire study. Most people just had those things.

[Rachel Cruze]

Yep. And that's again, that's what wealthy people do. That's what they end up buying into. And they're not worried about status symbols, including their car. Cars. So one of them is that they buy used cars. You know, they're probably nice, like a nice, you know, truck or something.

[Dave Ramsey]

It doesn't have to be a beater.

[Rachel Cruze]

It doesn't be crappy. But they're like, listen, someone let someone else take the, you know, depreciation when they drive it off the lot. I'll buy a two year old car and we'll be good to go. I'll pay significantly less because of it. And they're just smart when it comes to their purchasing and they're not worried about what everyone else. There's no, for a lot of, a lot of wealthy people, they're not very insecure. You know, there are some that are but in general with their money they're thinking more in a sense of what's going to make me more money. And they look at a car and they're like oh no, not that. So I'm not going to put my money into it.

[Caller (various)]

Amen.

[Dave Ramsey]

And then next up, debt free housing. They actually pay off their home early which frees up cash for more investing and giving.

[Rachel Cruze]

And last but not least, living below their means. So budgeting what they've earned. They have a plan for their money. They know what their retirement self is going to do. They know know what their next goals are. They really live intentionally including a monthly budget. You know, they say hey, here's here. Some people, you know, depending on I think your net worth, there may be more broad categories if you will. But the idea that you just have a plan, you're intentional with where your money is going is so key. So if you want to know how your habits stack up, check out our net worth calculator. And if you have a negative net worth, hey listen, you may want to look at some of these habits again and say is this me and what can I do to get out of debt? So we'll drop that calculator in the show notes a link to it. So make sure to check it out. Welcome back to the Ramsey show in the Fairwinds Credit Union studio radio. I'm Rachel Cruz hosting this hour with George Camel and we're answering your questions. So give us a call at 888-825-5225. All right, kicking us off we have Jamie in Portland, Oregon. Hi Jamie, welcome to the show.

[Caller (various)]

Hi, thanks for taking my call.

[Rachel Cruze]

Absolutely. How can we help?

[Caller (various)]

Need I need some guidance as to what to do. And from here, last this January I filed for divorce after 19 years of marriage from an emotionally abusive spouse. And also come to find out how he's been neglecting our 8 year old autistic child.

[Rachel Cruze]

Oh my gosh, Jamie, I'm so I've

[Caller (various)]

basically just had my wits end and called it quits. He, he refused to to help. Not to mention we had a whole bunch of marital debt that when I asked him can you please step up, can you work extra shifts, can you get a side job, can you help in this manner so we can pay off credit cards, medical bills, cars, trucks, all the stuff that people get, he refused to do it and basically said that I've worked hard my whole life. I'm not going to step up anymore. You're the breadwinner, you make the money, you work. So I'm a PA, so I make 170.

[Rachel Cruze]

What did your attorney say? How did you guys battle it out and court?

[Caller (various)]

Yeah, it's. So we haven't gone to court. We had a date originally, but that was cancelled by his counsel because they wanted to, quote, settle. But his idea of a settlement is my paying him an exorbitant amount of money plus a month.

[Rachel Cruze]

Yeah, no, we are going to continue on to make sure that you're protected

[Caller (various)]

and not to mention pay him $2,000 a month.

[Rachel Cruze]

And, well, he lives in a. He lives in an alternate universe. So what did you. What did you.

[Dave Ramsey]

He doesn't get to decide.

[Rachel Cruze]

Yeah, that's the good news. Yeah.

[Caller (various)]

So my attorney said basically that's not going to work because I have sole custody of our child and we have split 70, 30. So I have him 70% of the time.

Okay.

I've been paying the child on my health insurance. I pay for everything. I arrange all his childcare, his appointments, everything. He, the, his father has not helped with any of that.

[Rachel Cruze]

Sure.

[Dave Ramsey]

What does he make?

[Caller (various)]

He makes 80,000 year.

[Dave Ramsey]

Okay.

[Rachel Cruze]

Okay.

[Dave Ramsey]

And what do the debts look like?

[Caller (various)]

So we've owned a house that I financed solely under my name last year and decided to sell it because I wanted to get out from underneath the debt and moved into a rental.

[Rachel Cruze]

Has it sold, Jamie?

[Caller (various)]

It has, yeah. So it sold. And I paid off quite a bit. I paid off like $90,000 in debt.

[Rachel Cruze]

Okay. I just don't want you paying off this debt if it's going to be split eventually because you're throwing a lot of money at it.

[Dave Ramsey]

Have you figured out what the split is and what's his debt versus yours and how that's going to shake down?

[Caller (various)]

That's what we're waiting on. My attorney said we're going to go before a judge and let them figure that out. But so far it's like what?

His Debt is

a 401k loan that he took out to pay for his attorney and then his student loan, which is like 19,000.

[Rachel Cruze]

Okay. What else is left?

[Caller (various)]

What's left is my debt, which my student loans, 115,000. And then there's credit cards and consumer loan debts that I had to take out in my name because he refused to help. And I was trying to consolidate everything. I fell for the consolidation thing. So I'm going to be Stuck with those. And that's.

[Rachel Cruze]

Say those totals again for us. You had 115 in student loans.

[Caller (various)]

115 in student loans. There's two consolidation debts. One's at 40,000, another one's at 35,000.

[Rachel Cruze]

Okay.

[Caller (various)]

And there's about 15,000 on credit cards.

[Rachel Cruze]

Okay. And remind me or say, clarify this. You said I had to take this out to pay for every. Or what. What. What was the cause for these?

[Caller (various)]

So we were trying to. Well, I was trying to get one lump payment by consolidating everything. So we tried to. I. I took out the loan up by myself because he refused to step up and help.

[Rachel Cruze]

And this was just living above your means like that. This was all in the marriage. And it was. There was nothing specific. It's not like there was a small business that one of these loans went to.

[Caller (various)]

Okay. No, no businesses. But it's. Yeah, I would say that we were living well above our means. Okay. And he got grossly comfortable living that way.

[Rachel Cruze]

Sure.

[Caller (various)]

And now that I filed for divorce, he thinks that he deserves to continue to live that way. Sorry, there's a helicopter outside my house.

[Rachel Cruze]

No, you're fine. How much do you. How much do you make, Jamie, in your job?

[Caller (various)]

170.

[Rachel Cruze]

170. Okay.

[Dave Ramsey]

And what's your rent right now? You said you're renting after you sold the house?

[Caller (various)]

Yeah, my rent is 1,400.

Great.

Okay.

[Dave Ramsey]

So you have plenty of margin. Once the dust settles and we know exactly how much debt's going to be yours now, we can formulate a plan as to how we're going to pay it off.

[Caller (various)]

Okay.

Is that what you're wondering, doing this?

Yeah.

Like I started doing this on my own without his help or input. I have 3,000 saved in a high yield savings account, but he can't tell for the emergency fund.

Okay.

And I've been. I've been doing the every dollar to put everything towards paying my debts. And I had three credit cards originally down to zero, but now that I'm having to pay frequently for the attorney.

[Dave Ramsey]

Yeah, I would just stop the whole debt free journey, which I know sounds

[Sponsor/Ad Voice]

crazy coming from us.

[Rachel Cruze]

I would, too, but you're in the

[Dave Ramsey]

middle of a storm. We got to pay lawyer fees.

[Rachel Cruze]

Yes.

[Dave Ramsey]

And anything beyond that, I would just stack up in a high yield savings account. And once the dust settles, we're done. There's a divorce decree, there's a judgment. We know exactly what's next. Then we can start pushing play on Jamie's new plan for her new chapter.

[Caller (various)]

Yeah.

[Rachel Cruze]

Jamie, the 90,000 that you got out of your. The sale of your home, where did was that all go? To pay off debt.

[Caller (various)]

Yeah. So it paid off the truck.

He.

His truck.

[Dave Ramsey]

That was nice of you.

[Caller (various)]

Yeah, I know it was. It paid off money that his mother gave him.

[Rachel Cruze]

So you paid. Okay, you need, you need to document all of this, Jamie, because this, these are his assets.

[Dave Ramsey]

I would use that to negotiate 90 grand less that you're going to pay him.

[Rachel Cruze]

Yes, yes. All of that needs to be used.

[Caller (various)]

Yeah, my. My attorney has everything and it's all in the bank records as to everything that was his.

[Rachel Cruze]

Listen, you need. Your number one priority is to take care of you and your son and get through this divorce, okay? The debt free journey can. It will happen for you. But you, you. You have had your heart broken. You've been in a horrible marriage. Gosh, the amount of energy, even with your son having autism. I mean, all of it, you have a lot that you're carrying, okay? So you need to just don't make any more big moves financially. Okay? Stay current where you can stay current. And then. And that's it. You need to be stacking up cash on the side. That $3,000, you need to keep adding to that so when these attorney fees hit, you have the ability to pay them in that you have money saved. Right now cash is going to be your friend more than anything because everything is just so chaotic. Does that make sense?

[Caller (various)]

Yeah.

[Rachel Cruze]

That's going to give you stability for now. And then what George said is exactly right. Then once everything is set, settled, then you can say, okay, now I'm going to take that amount of cash after attorneys are paid and everything, I'm going to apply it to my debt for what's left, because that judge may give him some of that debt, Jamie. So don't be paying on stuff because it may be going to him. And then you'll have a ton of cash sitting in the bank, hopefully that you can actually throw at this debt and get some big progress starting it. And then you're going to just chip it away little by little. But. But yeah, there's a lot swirling for you. So I think simplifying and just stacking up cash is going to be huge for you right now. And I'm so, so sorry you're going through this. It's horrible.

[George Campbell]

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates, but when you have the right real estate agent to help you buy and sell the right way you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near [e-mail] agent. That's ramseysolutions.com.

[Rachel Cruze]

We wish that we could get to every call and question question here on the show. But if you have a money question, make sure to head over to our website and use Ask Ramsey. Our Ask Ramsey is our free AI tool and it is built and trained on proven Ramsey principles. And you'll get the answer that you want. The Ramsey way. Just like if you called it on the show. You don't have to worry about Dave yelling at you. You just get your. Get your question.

[Dave Ramsey]

You'll be disappointed. It's going to be a little bit nicer.

[Rachel Cruze]

A little nicer?

[Caller (various)]

No.

[Rachel Cruze]

But yeah, make sure to check it out. It's awesome. People have been talking so much about Ask Ramsey.

[Dave Ramsey]

Yeah, they'll DM me and then by time I get to it, they went, oh, never mind. I went to Ask Ramsey and it was great.

[Rachel Cruze]

Yes.

[Dave Ramsey]

Oh, okay. I'm useless.

[Rachel Cruze]

It's great. Go to ramseysolutions.com and check it out. We'll leave a link in the show notes if you're listening on podcast or watching on YouTube. All right, let's go to Veronica in Detroit. Hi Veronica, welcome to the show.

[Caller (various)]

Hi Rachel. Hi George. Thank you for having me on.

[Rachel Cruze]

Absolutely. Thanks for calling. How can we help?

[Caller (various)]

So in back in 2021, my, my husband's brother asked me and my husband to co sign. Actually my husb. He asked him to co sign on the, on a loan for a condo.

[Rachel Cruze]

Oh no.

[Caller (various)]

And since then he has been paying on the condo but he stopped paying his HOA over a year ago and now we just got a letter saying that there's going to be a foreclosure on the condo because we owe ten grand on fees for the HOA currently.

[Rachel Cruze]

Oh no.

[Dave Ramsey]

What time period was this over that

[Caller (various)]

he didn't pay since April of 2025.

[Dave Ramsey]

Okay, so over a year.

[Caller (various)]

Yeah, he had, he had made some payments last year. Like few times he paid here and there, but it's almost $500 a month every month, you know, plus $25 late fee and quarterly they have like an additional thousand dollar fee.

[Dave Ramsey]

Have you talked to him?

[Caller (various)]

Yes, we did three months ago. He said that he will make. It was at that time it was 6300 almost $400 that he owed and he said that he will make a lump sum payment of almost $3,000 like next month. And at that time we were like okay, yeah, he didn't, he didn't do anything since then.

[Rachel Cruze]

So what's he saying now?

[Dave Ramsey]

I'd be calling him every day. Well, he said three months ago we haven't been touch.

[Caller (various)]

Yeah, we just got the letter last night. And in the letter it says that we have to come up with a payments before July 31, which is tomorrow.

[Dave Ramsey]

Yeah, I was going to say we got a couple of hours before that happens.

[Rachel Cruze]

Do you guys have any money? Veronica?

[Caller (various)]

So the situation is that he's been trying to sell this condo and it's been on the market for 81 days and it's just been had five showings which is ridiculous. I don't know how to communicate.

[Dave Ramsey]

Is it overpriced? Why is it not selling?

[Caller (various)]

It's underpriced for what he paid for it. I think he paid for it 220,000 and right now it's listed for 215k.

Oh.

But I honestly am willing to just part with it for whatever you got

[Dave Ramsey]

to come up with the mag underwater on to get out of way the loan.

[Caller (various)]

Yeah. So currently left to pay is $172,000.

[Dave Ramsey]

Okay.

[Rachel Cruze]

Well I would do anything to stall this foreclosure. Right. I would much rather.

[Caller (various)]

My question, I would like to know how to SOL it because this is the first time we're facing somebody that we always pay everything on time. With my husband we don't really have that much. You know.

[Dave Ramsey]

How much do you have in cash like liquid savings you could come up with by the tomorrow.

[Caller (various)]

Well, if I was like, like in our savings, like in our checking account.

[Dave Ramsey]

Anything under the mattress and checking an investment you could sell.

[Caller (various)]

Yeah.

[Dave Ramsey]

How much?

[Caller (various)]

Yeah, we're basically check the check right now, but I think we could save $1,000.

[Dave Ramsey]

I'm saying could you hand them, could you write them a check for five grand to buy yourself some time and have the other five grand by the end of next month and negotiate with them.

[Caller (various)]

Okay, I see what you're saying.

[Dave Ramsey]

If you go through foreclosure, it's going to be much more financial damage than

[Rachel Cruze]

this 10k and you're on the hook for it because he co signed them.

[Caller (various)]

Yeah, that's. That's what we were, we were thinking. We were like let's sell this condo. Like I want to sell it.

I want, I want it out of it.

I don't want anything to do with it. But it's just, you know.

[Rachel Cruze]

Yeah, you do have something to do with it. And I would, I would take it over and I would look to see if there's a Ramsey trusted agent in your area. I'd get this thing sold. Like I would take it on as if it's mine and be like, okay, step aside brother. Because you're obviously you and your agent doing nothing.

[Dave Ramsey]

Incapable.

[Rachel Cruze]

No, I'm gonna like get in there and do it. Because you would much rather on the front end go through the hard work and the misery of getting this sold quickly than I do have.

[Caller (various)]

I do have some like investment in stocks. Do you think it would be worth just selling my.

[Rachel Cruze]

Yes. To avoid a foreclosure.

[Caller (various)]

Well, I have a. I have a.50

[Dave Ramsey]

grand in stocks in just a brokerage account.

[Caller (various)]

In like individual stocks.

[Dave Ramsey]

Perfect.

[Rachel Cruze]

Yes.

[Sponsor/Ad Voice]

Okay.

[Rachel Cruze]

It's gonna hurt, Veronica. You're gonna be pissed. And you're like, I cannot believe I'm taking this money out of investments made for my brother in law.

[Caller (various)]

Believe me, it's horrible.

[Rachel Cruze]

I know. But that is why, and I pray your husband will never ever, ever, ever, ever even entertain the idea of co star signing.

[Caller (various)]

Yeah.

I mean burned.

Burned.

We actually helped him a few years ago with his. He had a credit and he had a. You know, he. He took some credit cards out and he owns. Owed some money. And we just took a. You know, the second mortgage while we were buying a car and we covered that up and.

[Dave Ramsey]

Veronica, this is not help. This is enabling.

[Rachel Cruze]

Good pattern.

[Dave Ramsey]

This is enabling. So here's your homework. Let's make it very clear. You're going to sell off enough stocks to pay what's due so that you don't get foreclosed on. Then you're going to write up a contract with a real estate attorney to recoup that amount when this condo sells. So he will not see a dime until you guys are paid back for what you've put in.

[Rachel Cruze]

And then he's got to figure out how to get the difference after this condo is sold.

[Dave Ramsey]

Hopefully if he has, you know, he owes 170k, you sell it for 215. You guys can still walk home away unscathed, even after fees. That's the goal. And if he makes zero profit, fine. But you guys need to get your 10k back at least.

[Caller (various)]

Yes.

[Dave Ramsey]

Out of this deal.

[Caller (various)]

Yeah.

[Dave Ramsey]

And you need to hire your own real estate agent to do this. You can go to ramseysolutions.com agent and you can find one that can actually sell this thing.

[Rachel Cruze]

And Tell them you're in a pinch. Well, thankfully, you do have the money to at least push off the foreclosure. So it doesn't have to be very urgent, but we want this thing sold. For your own peace of mind, less about the foreclosure at that point because that'll be all be paid the HOA fee.

[Caller (various)]

But.

[Rachel Cruze]

Oh, man.

[Dave Ramsey]

Veronica, as soon as you're off this call, go sell enough stocks to cover this. Because by the time you can get it into your checking account to then wire the HOA company the money, hopefully we can avoid this, but be proactive. Call them right now and explain what's going on, that you're trying to get this money by the 31st. And hopefully you can walk out of this thing with just a slight burn.

[Rachel Cruze]

Well, what's wild is, you know, as we're recording this show, it's Wednesday. You know what I mean? And it's hard sometimes, sometimes with depending on the banks and everything transfers. So like. Like business day. So business day.

[Dave Ramsey]

This is urgent.

[Rachel Cruze]

Yes, absolutely. Oh, my gosh, man. You know, guys, this is another.

[Dave Ramsey]

Got secondhand stress from that reason.

[Rachel Cruze]

This is another call. We can have a whole show about co signers. This is why you do not co sign. And it's. It is because the person who is taking out the loan, the bank does not transfer.

[Dave Ramsey]

I don't care how much you love them.

[Rachel Cruze]

No.

[Dave Ramsey]

Because here's what happens. Best friends, the relationship is destroyed forever. So how is that for loving them?

[Rachel Cruze]

Yep. You know, we love the camels. And if you and Whitney ever came and said, would you co sign for us? I would say I love you. I love you, George and Whitney. And then. No. That's all you gotta say is no, no, no.

[Dave Ramsey]

And I'm a people pleaser. I want to be helpful. And I still wouldn't co sign.

[Rachel Cruze]

Yes. And because it's not helpful. It's not helpful to the person. They're not not at a good standing place to even be going into tax.

[Dave Ramsey]

What that says the lender said I can't afford a house. But he said if you can promise that you'll pay it, they'll let me have it.

[Rachel Cruze]

Yes. Oh, man, this happened. And I mean, it sounds like Veronica's pretty much done with the brother in law. But what's sad is that just that that it ruins it puts a bad taste in your mouth about the person

[Dave Ramsey]

he's not showing up to Thanksgiving.

[Rachel Cruze]

And then if.

[Dave Ramsey]

Even if you invited him.

[Rachel Cruze]

Yes. And then if he didn't pay some of his stuff Back to them. I mean like all of it, it's just. It's not good. It takes a strain on a relationship. It is not helpful to people. Okay, so you are not mean if you say no, no, I will not cosign. We're not co signing. I'm sorry.

[Dave Ramsey]

And if you co signed on anything, you better keep up with what's going on with that thing. I would have known the HOA fee wasn't paid month one.

[Rachel Cruze]

Oh man.

[Dave Ramsey]

I'd be getting notifications and email can

[Rachel Cruze]

get out of it in any way. If they can refinance, I'd get out.

[Caller (various)]

Right.

[Rachel Cruze]

If you are in one, if there's a way to get out. So make that all be a a warning call out there. So Veronica, I'm so sorry you're going through that but I think there's hope on the other end. Thank God you have that stock because that is going to help you guys in the meantime. But man, that's tough.

[Sponsor/Ad Voice]

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[Dave Ramsey]

and Somehow walk out $87 later with

[Sponsor/Ad Voice]

toothpaste and emotional support candles.

[Dave Ramsey]

Just me. Okay.

[Sponsor/Ad Voice]

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[Caller (various)]

Foreign.

[Rachel Cruze]

The Ramsey show question of the day is brought to you by Y Refi. If you keep putting off dealing with your private student loans, now is the time. Why Refi helps borrowers explore low fixed rate refinancing options and affordable payment plans. Go to yrefi.com Ramsey that's y r e f y.com Ramsey Ramsey may not be available in all states.

[Dave Ramsey]

Today's question comes from Carson in Ohio. The only debt I have is $15,000 on a credit card. My card and student loans are paid off and I earn $65,000 a year. I'd love to know how to attack this while still being able to maintain my lifestyle. Which includes playing golf weekly, seeing my favorite sports teams play, and going on dates. My friends and I are all in the same situation, and we need some help.

[Caller (various)]

Help.

[Rachel Cruze]

Oh, Carson.

[Sponsor/Ad Voice]

Sweet, sweet, sweet Carson.

[Rachel Cruze]

I still want to grow out and still get ahead financially and not have to make any sacrifices.

[Dave Ramsey]

Got to have my golf.

[Rachel Cruze]

Can't make any sacrifices.

[Dave Ramsey]

Well, here's the hard truth. Do you want financial freedom? Do you want to build wealth? Or do you want to keep your hobby temporarily? Which is going to slow down those other plans. So you got to figure out what the priority is for you. And it's fine if you want to say, hey, I don't want to lose my lifestyle. It just might. Might mean you take 24 months to get out of debt and pay an extra five grand in interest.

[Rachel Cruze]

That's right.

[Dave Ramsey]

That's your prerogative. But if I were you, I'm gonna go. You know what? As much as I love these hobbies, I'm gonna have to say no to my friends and put paws on my favorite sports team.

[Rachel Cruze]

It's gonna take four months. Like, if he really buckles down, yeah, I bet he can pay off 15

[Dave Ramsey]

grand, 65 grand a year. He probably takes home 8. 4. 4 grand a month is my guess.

[Rachel Cruze]

Yeah, yeah, that's what I meant.

[George Campbell]

Yes.

[Caller (various)]

Yes.

[Dave Ramsey]

And I don't know what his lifestyle is, how much margin he has, but if he can afford golf and seeing his favorite sports teams regularly and going on dates. Okay, maybe just pause the dates. Let's stay single for a little while longer.

[Rachel Cruze]

Everything else okay? I was a little aggressive. I was a little aggressive on my.

[Dave Ramsey]

I'm just. I talk to you like, if you were my friend, Carson, I hit you straight. So that's the honest truth. 15,000 on a credit card is an emergency. That's like 27 APR. You're paying for the privilege of carrying that balance. So I don't care if it's. If it's the only debt you have. I want you to treat this like a crisis. Which means we are only covering the four walls. Food, utilities, housing, transportation, insurance. Every other dime that comes in, including you working extra, is going to go towards knocking out the debt, getting an emergency fund. Then we can bring back in some of our hobbies.

[Rachel Cruze]

Yes. It's not a no forever, but instead of paying extra on all the money you're working for on interest, get out of debt. And if you want to check out everydollar, that's a great place to look, is to see where the most of your money's been going. Going and then you can like delete categories and say, okay, I used to spend it on this, but if I take that out, that's more margin. And so that is one thing I love about every dollar. There was actually a fan quote that said, I love this app so much. Makes it super easy to budget. With my husband, we have implemented this practice since our wedding day, and we have zero money fights and full transparency. We are on the same page. So that's what's great about it, is

[Dave Ramsey]

take notes from this married couple. Carson.

[Rachel Cruze]

I know, but you just have not in transparency with another person but yourself. You know where your money's going to. And then you could say, carson, what if I add some extra income at the top of every dollar? And I went and got a side hustle. Right.

[Dave Ramsey]

When you're young and single is the time to do it.

[Rachel Cruze]

Yes. Bring in an extra two grand. You add that on the income line item there on your every dollar budget, and you get to see it all trickle down. So, Carson, come on, dude. You got this way more of attractive on the dating circuit.

[Dave Ramsey]

That's right.

[Rachel Cruze]

When you say you're financially responsible, women love it. We love secure security. So that's what you're proven out there. So hope that helps. Carson. And you guys, if you want to check out every dollar, you can go download it for free in the App Store or Google Play. All right, let's head to Miami. Welcome to Miami. We got Brian on the line. Hi, Brian.

[Caller (various)]

Hey, how are you guys?

Hi.

[Rachel Cruze]

We're doing great. How can we help?

[Caller (various)]

Hey, so I'm relatively new to you, and I think you answered this question in a segment about 30 minutes ago. But I'm going to ask you to any anyways after. When I get paid each month after expenses, I put money in my tax account and giving. I've got about $3,000 that I've been investing every month.

[Rachel Cruze]

Nice.

[Caller (various)]

My question is, I just talked to somebody about permanent life insurance as kind of diversifying some of my portfolio. So in Instead of giving $3,000 a month into my mutual funds and IRA and all that, they talked about possibly doing 750 in a permanent life insurance and then 2250 in investments.

[Dave Ramsey]

So by diversify, they meant, can you give me a bunch of that money in commissions?

[Caller (various)]

I brought that to my financial advisor. He said, please, God, don't do that.

[Rachel Cruze]

Oh, what a great financial advisor you have.

[Dave Ramsey]

Well, here's your second financial advisor, me saying, please, God, don't do. Rather get cyclospora than get a permanent life Insurance policy.

[Caller (various)]

Okay, I'm curious. I haven't been listening to you guys. I am curious to why your thought is that way.

[Rachel Cruze]

George was made for this moment.

[Caller (various)]

This is what I do.

[Sponsor/Ad Voice]

My blood pressure.

[Dave Ramsey]

Well, here's the thing.

[Rachel Cruze]

This is where George is about to

[Dave Ramsey]

show the reason why these guys sell. I'm guessing. Is it an old college buddy?

[Caller (various)]

It is not.

No.

This is actually. This is a family member.

[Dave Ramsey]

Oh, good. Even worse blood relative who's. Yeah, they've done well because they've sold scams to people like you, Brian. So here's the thing. These policies try to mix two things at once. Life insurance and this cash value portion, which grows at a snail's pace, way slower than your investments will grow. And they often make 50 to 100% of your first year's premium in commissions goes to them. So they make all their money on the front end. And then when you try to get out of it, you'll lose most of what you put in. So now there's a sunk cost fallacy where you go, I might as well stay in. They told me I'll ROI if I stay in this thing for 15 years. And so you do not need life insurance if you're a single guy. Are you married?

[Caller (various)]

I'm married.

[Dave Ramsey]

Good. Do you have term life insurance?

[Caller (various)]

I just got term life insurance.

[Dave Ramsey]

Hallelujah. Does your wife have term life insurance insurance?

[Caller (various)]

I just put her on term life insurance as well. We both have 2 million each.

[Dave Ramsey]

Fantastic. Okay, so we have life insurance covered. Check. Now let's do investments separately. And you're already doing that through what, index funds? In a brokerage account. Through retirement accounts.

[Caller (various)]

Yeah. The majority is in. I keep 30% in CDs, 60% in high yield, like brokerage account. And then I invest in an IRA

just for tax purposes.

[Dave Ramsey]

Okay, Well, I would keep your investing and insurance separate for the rest of your life. And there's zero upside to this, to you giving this guy 750 to then lose money on it. You will make so much more just putting it in a high yield savings account.

[Rachel Cruze]

And no upside of having these CDs. Brian. Like you need, you need to invest, have index funds you can diversify within your investments. Right. Get a good growth stock mutual fund that's 90 to 200 stock. I mean, it's a. What it, what it can do from a return standpoint is going to be way more on your side by putting this stuff in again, something like a, like an index fund. And is your ira, Is it a Roth ira?

[Caller (various)]

It's a Traditional ira.

[Rachel Cruze]

Okay. So I would look into the numbers on that and maybe converting it, you'll pay some taxes on it, but converting it to a Roth because you guys are so young. The growth that's going to be happening in that account account is going to be astronomical. By the time you're 59 and a half, most of what is going to be in that, in that Roth IRA is going to be growth. And you don't want to pay taxes on that. You can pay it now. So I would look into a couple of things. Is, is your financial advisor, the one that we love who said stay away from permanent life insurance, is he looking at all of this with you?

[Caller (various)]

Yes.

[Rachel Cruze]

And he's okay with all of it?

[Caller (various)]

Yeah, he's, he's good with it. My CDs get capped, so right now I don't add any more into CDs. It's. I capped out at like 40 grand

[Dave Ramsey]

and now what's the purpose? What are you doing with that money?

[Caller (various)]

Say that again.

[Dave Ramsey]

What's the purpose of that money in the CDs? What are you doing with that?

[Caller (various)]

I'm going to buy a house in the next probably two years. Okay. So it's just money that I can take whenever.

[Dave Ramsey]

Got it.

[Rachel Cruze]

Has it filled?

[Dave Ramsey]

Fully matured?

[Rachel Cruze]

Matured,

[Caller (various)]

yes.

[Dave Ramsey]

Okay. I would personally move it to everything to high yield savings for short term goals and anything long term, which is four or five plus years I would do in retirement accounts and index funds. So. Hang on the line, Brian. I'm going to give you a free ticket to our Investing Essentials virtual event where Dave Ramsey and I will unpack his personal playbook for building wealth. We're going to walk through all of the stuff you're talking about out and probably steer some people away from ever getting a permanent life insurance policy.

[Rachel Cruze]

Yeah, it's a, I'm glad you called in though. It's a, it's a great question. And you, you're on the right path. You're doing so many great things, Brian. I think if you tweak a couple of these things from a mathematical perspective, it's going to be more on your side.

[Caller (various)]

Foreign.

[Sponsor/Ad Voice]

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[Rachel Cruze]

Our scripture of the day comes from Proverbs 11:25. A generous man will prosper. Whoever refreshes, others will be refreshed. Richard Branson said, train people well enough so they can leave. Treat them well enough so they don't want to. Oh, like that. It's a good quote.

[Dave Ramsey]

All right.

[Rachel Cruze]

All right, let's head to Dayton, Ohio. We have Patrick on the line. Hi, Patrick. Welcome to the show.

[Caller (various)]

Hi. I appreciate you taking my call.

[Rachel Cruze]

Absolutely. How can we help?

[Caller (various)]

I just. I've had. I got a lot going on right now, and I feel really stuck. Like I'm just spinning my tires and I can really use some wisdom.

[Rachel Cruze]

I'm sorry.

[Caller (various)]

Yeah.

[Rachel Cruze]

What's going on?

[Caller (various)]

So. Well, my daughter's currently in the hospital. She. I've got two kids with kidney problems. The third kid has seizures. And. And I mean, I've been doing the baby steps. Felt like I've been doing everything right. And I'm just. I'm not seeing any hope. We're not getting anywhere. I feel like I'm starting over every other week.

[Dave Ramsey]

Are you talking about financially or no hope as far as the medical sort of getting that under control?

[Caller (various)]

No, that kind of stuff. I sort of made my peace with it and always been very positive outlook, but I guess it's more the financial.

[George Campbell]

Yeah.

[Dave Ramsey]

Well, give yourself some grace, Patrick. The journey looks different for you and it's okay if that goes slower.

[Caller (various)]

Yeah.

[Dave Ramsey]

And, you know, you don't see the progress that other people see around you. You've got a storm, and it might be a longer term storm where you just have to batten down the hatches and have the bigger emergency fund and not be able to invest as much in a season. And that's okay.

[Caller (various)]

Yeah.

[Dave Ramsey]

So what does the expenses look like right now? What's sort of stressing you out financially?

[Caller (various)]

So, you know, when she's in the

hospital for a week at a time or two weeks at a time, is it dial.

[Rachel Cruze]

What's.

[Caller (various)]

What's going on?

[Rachel Cruze]

What's her treatment?

[Caller (various)]

Well, she already had the transplant, but now she's on immunosuppressants. So she's always getting sick, Every little thing. Well, right now she's got salmonella real bad and septic shock and everything.

[Rachel Cruze]

Oh, gosh.

[Caller (various)]

And we just got over that. And then I guess it just came back. But that's just one. One instance where with all three kids, we're just always in the hospital.

Okay.

And obviously while I'm here, I'm not making any money. I got. My wife's at home and it's more than an hour drive from here. She's got the other two kids and, and. Yeah.

[Rachel Cruze]

Okay, so what, what is little things

[Caller (various)]

just always popping up for sure.

[Rachel Cruze]

What does your work life look like right now? What are you, how much are you making? And is it sustainable from like a remote perspective, if you're able to help with the kids or what is, what is that going to look like?

[Caller (various)]

Well, I, I do construction, so I got to be there. There's nothing remote.

[Dave Ramsey]

What do you guys make in a given year?

[Caller (various)]

I mean, if I never missed a day, I guess I'd be getting like 39K.

[Dave Ramsey]

39,000 a year.

[Caller (various)]

Yes.

[Dave Ramsey]

Okay. And your wife stays at home.

[Caller (various)]

Correct.

[Dave Ramsey]

Okay, so 39k is a best case scenario for workers with.

[Sponsor/Ad Voice]

Here.

[Caller (various)]

Right. But with the doctor's appointments, the sicknesses, the.

[Dave Ramsey]

Yeah, because you're getting paid per day on the construction site.

[Caller (various)]

Correct.

[Rachel Cruze]

So what do you think you'll bring in this year? If it, if the top's 39, what is.

[Caller (various)]

God, 25. If I, if I can get back to work.

[Dave Ramsey]

And really, what are your expenses every month? Because that's 2k a month you have coming in.

[Caller (various)]

Yeah, that's. I mean, I would say we probably could get by with like 2,400 bringing in. So there's definitely a deficit.

[Dave Ramsey]

So Your expenses are 2,400 bucks a month, so we need at least that coming in. Do you guys have any debt?

[Caller (various)]

Yeah, I still own the house.

[Dave Ramsey]

Just the mortgage. No consumer debt.

[Caller (various)]

Correct.

[Rachel Cruze]

Okay, that's positive.

[Dave Ramsey]

That's good. And any second savings, anything in cash?

[Caller (various)]

I mean. No, I'm wiped out. I'm telling you, I'm starting over from zero. I put our last money in the gas tank to get her down to the emergency room. Yeah.

[Dave Ramsey]

What do you do you guys have health insurance?

[Caller (various)]

Yeah, it's like through the state, you know, Medicaid. So I don't have medical bills. That's not never been an issue. That's never been an issue.

[Dave Ramsey]

So that's one thing we don't have to worry about is how are we going to pay for this medical.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

Now the goal is to make enough money that you may not even be eligible for that, but you have good health insurance, a better job, you have margin left over to invest and save. Because while this is a blessing right now, the long term of you never having any Money left over is a major problem.

[Caller (various)]

That's what the issue I'm running into is because I took a $5 an hour pay cut in the year 2022, I left a good job that wouldn't want me to miss a day, and I took this job for much less money so I could have the flexibility of always being here with my daughter for sure. And then I have no problems at that job with missing work. You know, we're like a family there. They don't. They don't. They understand my situation.

[Rachel Cruze]

That's amazing.

[Caller (various)]

I'm not getting paid while I'm up there.

[Rachel Cruze]

That's right. Yeah. It says she's there a week at a time is what you said. I'm just wondering if there's a predictable. If there's any predictability to her condition of when you're gonna be at the hospital versus not. And the days you're home wondering if you can pick up something extra just to bring in some side income for a bit.

[Caller (various)]

Right. I work when I can and everything will be fine for a couple weeks. Then all of a sudden then her sister will be having seizures and I got be done in the hospital. The predictability part is out of the question.

[Rachel Cruze]

No, I.

[Caller (various)]

Okay.

[Dave Ramsey]

You guys have any family nearby?

[Caller (various)]

Yeah, I mean, our parents live around. You know, we got a pretty small little town and. And good church.

[Rachel Cruze]

Are you guys involved in a good church?

[Caller (various)]

Not really, but the town itself has helped us out before. You know, Christmas time, they'll give us something and. And our parents help when they can. But the. Yeah, I think my goal is so demanding. It takes all my time.

[Rachel Cruze]

I'm just wondering if there's. And it would be hard as a parent. I'm like, this is. It's heartbreaking, but if there's a stint that you and your wife agree and maybe with grandparents help and you guys just say, hey, we need. I am just making this up. It's six months where you, Patrick, are consistent on the job just for the goal of getting back an emergency fund, just to have some buffer. And it may take 5, 6 months to get that. And maybe it's. It's a grandparents going to the hospital or watching the kids while your wife goes to the hospital, or if there's some length of time for you just to focus on work and even work nights, work weekends. Patrick, I'm like, just so much of that you can at least build up some cash flow because I think the stress is now that there's no margin, there's nothing. And that let Alone, all the health issues with your kids, I mean, that keeps you up at night. And so I'm wondering if having ten grand in the bank sitting there, that changes your world financially at this stage of the game.

[Caller (various)]

It does. It would. It definitely would.

[Rachel Cruze]

So I just wonder if you and your wife. And again, that's going to be so hard because I know you guys are in a rhythm and you're taking such good care of your. Your kids, but where you both kind of look at each other and say, okay, for between now and Christmas or I don't know what it looks like, but it's during a significant period of time enough to get some cash in. That's margin. And we're just saving that. That's our goal because we just need that buffer. That's. I think that would, would cause some level of peace. That could be your first step. Right. And then over time, like what George is saying, looking at your, your career, career and getting to a point where, I mean, God willing, you're making 70, 80 in construction and a great job and you have great health insurance for the kid. I mean, you know what I mean? That's the ideal dream long term. But for now, man, just having some peace of buffer to fill up your tank and not have to think twice about it. Right. To help your kids.

[Caller (various)]

Yeah.

[Dave Ramsey]

What does the latter look like for you if you were to step up into a different role in construction? Construction. Making 30, 40 bucks an hour, Is it management?

[Caller (various)]

Could be.

[Dave Ramsey]

Because if there's no long term trajectory here, then I think we need to find a totally different field where your skills could transfer. Because if you're stuck making 20 bucks an hour and your hourly worker, that's going to be really hard to climb out of this and get that margin long term.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

So that's another piece to look at. And I'll send you a copy of Find the Work you're Wired to Do. It has a get clear career assessment in there and that will start to show you, hey, you know what? I do have all these skills. This is what I'm wired to do. And maybe it's not construction for the rest of your life. So we'll send you that copy of Find the Work youk're Wired to Do to help. But man, there is no easy answers here.

[Caller (various)]

Yeah.

[Rachel Cruze]

We're so sorry, Patrick. Any quick wins you guys can get, I think is your number one goal today just for you to kind of get through day to day and lean

[Dave Ramsey]

on that community as much as you can.

[Rachel Cruze]

Absolutely. Oh, thanks for the call George. Great show today. Thanks to everyone in the booth. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.