A Life Built on Debt Is a Life Built on Risk

Summary

The Ramsey Show – Episode Summary (April 29, 2026)
Episode Title: "A Life Built on Debt Is a Life Built on Risk"
Hosts: George Campbell and Rachel Cruze
Theme: Breaking risky debt habits, building real wealth, making wise financial decisions, and overcoming money mistakes with practical advice and caller stories.

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Main Theme and Purpose

This episode centers on one core message: living with debt, even when it's "normal," is deeply risky and destabilizing. George and Rachel field a variety of real-life questions from callers, emphasizing that lasting financial peace comes from wise stewardship, not status symbols or shortcuts. Throughout, they challenge listeners to detach their self-worth from material displays, cut through self-deception, and follow proven principles for building wealth and stability.

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Key Discussion Points & Insights

1. Impressing Others vs. Financial Wisdom

[00:44–09:01]

• Caller: Muhammad, age 22, Halifax, Nova Scotia
  • Situation: Considering selling his paid-off 2022 Pathfinder to buy a $90k Yukon, mainly to impress his visiting grandmother.
  • Self-justification: "I can easily pay full cash for that car."
  • Hosts' Response:
    • George: Exposes the motivation: "So you want to make a six-figure impulsive decision to impress somebody who's there temporarily so that they think you're doing better than you are?" [01:41]
    • Rachel: Urges him to examine his identity: "You got to detach your identity from all this stuff. This is not who you are." [04:13]
    • Both warn that buying things for external validation creates a pattern of emptiness.
    • Alternate suggestion: Rent a fancy car for Nana's visit, but don't upend financial plans or chase status.
  • Takeaway Quote: “If nobody sees this purchase, would I still want it?” – Rachel Cruze [05:06]
  • Rundown: Choose purchases for your fulfillment, not social approval. Don’t build a lifestyle (or identity) based on fleeting attention.

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2. Family Complexities & Lack of Boundaries

[10:20–19:24]

• Caller: Patty, Salt Lake City
  • Situation: Husband has worked for his parents’ farm for 31 years. Parents control salary, time, and home (which Patty and her husband half own but don't have legal claim to).
  • Emotional toll: No succession plan; housing insecurity; feeling of being undervalued.
  • Hosts' Response:
    • Rachel: “You're in a bad business deal… this is a marriage problem between you and your husband deciding what you want your life to look like.” [13:00]
    • George: Advises counseling, setting boundaries, and insists “Nothing about this is normal.” [11:24]
    • Patty acknowledges repeated attempts at raising issues over 30 years, facing denial and avoidance from her husband.
    • Rachel underscores need for Patty to set up her own financial “island” for security, regardless of family drama.
  • Notable Moment: Rachel addresses the emotional reality: “For him to continue to choose them over you... that's where the resentment is coming from.” [15:09]
  • Advice: Construct your own retirement plan, clearly document all agreements, and recognize when continued self-sacrifice is unsustainable.

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3. Breaking the Cycle of Paycheck-to-Paycheck Living

[22:24–30:55]

• Caller: Joseph, Columbia, SC, age 24
  • Situation: Stuck living paycheck to paycheck, carries $26k in debt (truck, boat, BNPL). Feels like life is always “happening to him.”
  • Hosts' Response:
    • Both challenge Joseph’s language of “I have to” about big purchases and urgent replacements.
    • Rachel: Clarifies needs vs. wants, challenges victim mentality: “No one had a gun to your head that you had to… You wanted to. That was a want.” [25:30]
    • George: Shows the opportunity cost: $700+/month in payments is the difference between treading water and progress.
  • Plan: Sell the liabilities, get multiple jobs, attack debt with the debt snowball, use budgeting (EveryDollar app provided).
  • Encouragement: “You’re gonna be a success story.” – George [30:55]

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4. The Dangers of Commingling Finances Outside Marriage

[32:46–42:24]

• Caller: Marie, Columbus, OH
  • Situation: Boyfriend (living together) abuses her financial trust, racks up ~$13k in credit card debt using her cards, refuses to move out.
  • Hosts' Response:
    • Rachel: Empathizes, calls it “stupid tax”: “You have no legal protection… it may be a really not fun lesson to learn.” [40:31]
    • George: Urges to freeze credit, close accounts, get legal action for eviction.
    • Both warn against combining finances prior to marriage; cite frequent calls with similar disasters.
  • Overarching Lesson: Protect yourself with boundaries. Emotional ties don’t substitute for legal protections.

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5. Reasonable Car Upgrades vs. Real Financial Security

[48:10–52:15]

• Caller: Karen, Toledo
  • Situation: Couple wants to buy a “new to us” ~$30–40k vehicle, worried about impending home repairs (~100-year-old house).
  • Hosts' Response:
    • Walk through safety margin calculations; advise earmarking emergency funds for expected repairs; caution not to stop all savings post-car-purchase.
    • Rachel: “Buying a new car is totally acceptable in baby steps 4, 5, and 6.”

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6. Sudden Increase in Income / Windfalls: How to Avoid Lifestyle Inflation

[53:58–62:37]

• Caller: John, Richmond, VA
  • Situation: Household income jumps from ~$120k to $330k; worried about “sudden wealth,” wants to avoid mistakes, small retirement nest egg.
  • Hosts' Advice:
    • Kill all remaining debt (car loans, mortgage) ASAP with incoming windfall.
    • Use 15% of income for retirement, catch up via Roth IRAs and index funds until 401k eligibility.
    • Rachel: “You’ll probably have two, three million in net worth at retirement if you avoid the traps.”
  • Quote: “Have some fun in there, too… but have an aggressive goal to pay off this house." [57:29]

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7. Should You Borrow from Your Boss to Pay Off Debt? (Short Answer: No)

[66:22–72:19]

• Caller: Iris, Bismarck, ND
  • Situation: Boss offers to pay off her $41k in debts—interest free—as a personal loan.
  • Hosts' Response:
    • “Keeping things clean… keeps healthy boundaries.” – Rachel [67:00]
    • George: Owing your boss is a risky, awkward, and relationship-threatening move; better to follow the debt snowball method.
    • Celebrate her progress and strong budget discipline already underway.

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8. Young Listeners: Money vs. Experiences for Happiness?

[75:00–80:56]

• Caller: Cesar, Colorado Springs, 21
  • Struggling with: Should he focus on working hard for money now, or fill life with experiences?
  • Hosts’ Advice: It’s a both/and—money gives options and peace but doesn’t guarantee happiness. Experiences, relationships, generosity, and health matter more in the long run.
  • Rachel: “Nobody lays on their deathbed and says, I wish I had a little bit more in my 401k.”
  • George: Recommends Arthur Brooks’ and Sahil Bloom’s frameworks for happiness/wealth; suggests reading Ecclesiastes for deeper perspective [81:48].
  • Memorable Sermon-Like Segment: “Money is the tool that lets you focus on love, relationships, generosity, and the fruit of the spirit.” [84:20]

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9. Massive Debt and College Costs: “Normal” But Not Sustainable

[85:16–93:45]

• Caller: Joseph, NY
  • Situation: $200k in consumer debt (not including $4,400/month mortgage), college-bound daughter, no eligibility for financial aid due to high household income ($340k/yr).
  • Hosts’ Advice:
    • No more PLUS loans; cash flow college—even if it slows down debt payoff.
    • Dial lifestyle down; systematically list all expenses and use EveryDollar; sell cars if necessary.
    • “You make too much to be this broke.” [93:17]
    • Urge cold-turkey credit card usage—“Cut up the cards, be done with them.” [93:26]

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10. Business Growth vs. Debt Priorities / Gold Hoarding

[97:05–104:39]

• Caller: Azalea, Raleigh
  • Situation: Husband wants to take on $70k in business debt for a new truck/trailer, but family has existing $15k 401k loan, $25k credit card debt, $50k in gold, $40k in land assets, $0 cash.
  • Hosts’ Advice:
    • “No, you should not invest… if you did that, you’d only make $2k/mo extra (on a $70k loan) and the payment may eat half of it. People dog-sit for that.” – Rachel [103:00]
    • Sell the gold, pay off all debt, then use cash to fund business needs in increments.
    • Memorable critique of emotional gold hoarding: "Gold’s the fear commodity… as soon as the crisis calms, it drops. Get rid of the gold and get off the internet." [104:05]

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11. Inheritance Complications/Estate Planning

[106:06–113:54]

• Caller: Diane, Philadelphia
  • Situation: Caregiver for two parents with dementia, one condo with mortgage, wants to clarify with her sister (who’s not contributing) if it’s fair to take the condo as inheritance in exchange for years of care.
  • Hosts’ Advice:
    • Get the agreement formalized (in writing); document hours/care value vs. inheritance.
    • “Formalizing should be a requirement.” – Rachel [113:30]
    • Broader advice: Estate planning, power of attorney, family communication are essential well before crisis hits.

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12. Handling Windfalls & Changing Lifelong Patterns

[116:31–125:42]

• Caller: Michael, Louisville
  • Situation: Sold a rare baseball card for over $300k. Previously $40k in credit card debt, several investment/mortgage properties.
  • Hosts’ Wisdom:
    • Celebrate debt freedom, but caution Michael: “The guy that got $40,000 in credit card debt, he's still there. He’s still in you.” – Rachel [118:45]
    • Use the windfall to pay off all personal debt, set an emergency fund, and seriously consider selling the investment properties to start fresh if stewardship is the goal.
    • Biblical tie-in: “Every time debt is mentioned in scripture, it's in a negative fashion… nowhere in debt in scripture is debt good.” – Rachel [124:19]

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Notable Quotes & Moments (with Timestamps)

• "If nobody sees this purchase, would I still want it?" – Rachel Cruze [05:06]
• “Nothing about this is normal.” – George Campbell [11:24] (to caller about family-controlled finances)
• “No one had a gun to your head… You wanted to. That was a want.” – Rachel Cruze [25:30]
• “You’re gonna be a success story." – George Campbell [30:55]
• “You have no legal protection… it may be a really not fun lesson to learn.” – Rachel Cruze [40:31]
• “Keeping things clean… keeps healthy boundaries.” – Rachel Cruze [67:00]
• “Money is the tool that lets you focus on love, relationships, generosity, and the fruit of the spirit.” – George Campbell [84:20]
• “You make too much to be this broke.” – George Campbell [93:17]
• “Gold’s the fear commodity… as soon as the crisis calms, it drops." – George Campbell [104:05]
• “The guy that got $40,000 in credit card debt, he's still there. He’s still in you.” – Rachel Cruze [118:45]
• “Every time debt is mentioned in scripture, it's in a negative fashion… nowhere in debt in scripture is debt good.” – Rachel Cruze [124:19]

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Timestamps for Important Segments

• [00:44] – Car upgrade for family image vs. financial wisdom
• [10:20] – Family farm succession & boundaries
• [22:24] – Breaking the paycheck-to-paycheck cycle
• [32:46] – Dangers of mixing finances before marriage
• [48:10] – Buying a car with savings: how much is too much?
• [53:58] – Sudden income increase: avoid lifestyle creep
• [66:22] – Should you take a loan from your boss to pay debt?
• [75:00] – Money vs. Experiences: young adults & happiness
• [85:16] – School debt debate (Parent PLUS loans vs. cash flow)
• [97:05] – Should you go into debt to expand a business?
• [106:06] – Estate planning, sibling agreements, and elderly care
• [116:31] – Handling a windfall (baseball card sale) wisely

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Tone and Language

• Supportive, direct, and sometimes gently confrontational (“tough love”)
• Combines practical financial advice with deeper questions of motivation, self-worth, and values
• Occasionally playful or humorous, but always anchored in real-life consequences and clear moral principles

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Takeaways for Listeners

• Debt is always risk, rarely a shortcut.
• Motivation matters: Buy for contentment, not to impress.
• Boundaries are essential, in families and business.
• Learn to separate needs and wants—most “emergencies” are really bad planning.
• Don’t mix finances before marriage—ever.
• If you get a windfall, fight your old habits; reset, don’t repeat.
• Generosity, relationships, and purpose matter as much as numbers.
• Turn to budgeting and the debt snowball—not to new loans or asset shuffling.
• Formal agreements (in families/business) prevent heartbreak.
• Scripture and wisdom both warn: debt is not your friend.

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For more, check out ramseysolutions.com or call the show live weekdays 2–5 p.m. ET at 888-825-5225.

Transcript

[Sponsor/Announcer]

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

[George Campbell]

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is the Ramsey Show. I'm George Campbell, joined by my good pal and co host of Smart Money Happy Hour, Rachel Cruz. We're taking Your calls at 888 5225. Muhammad kicks us off in Halifax, Nova Scotia. It's a fun place to go. What's going on, Muhammad?

[Caller]

Hi, how are you?

[George Campbell]

Good. How can we help today?

[Caller]

I have a question. So my grandmother is going to visit me on in July. Now I love her very much. This is more of a love question. I know it's not one of the most smart decision to make. I drive a really nice car right now. I drive a 2022 Nissan Pathfinder. I paid all cash for it.

[George Campbell]

Good.

[Caller]

And now when she's coming, I want to get an even better car. Just because I would love to spoiler with an even better car. Is it wise for me to sell this for. I'm going to probably be able to sell this for 35 and buy around a $90,000 car for your grandmother.

[Rachel Cruz]

I'm so confused. For her to keep.

[Caller]

Yeah, well, yeah. No, no, no. Not for her to keep, for me to keep, but just. It's just I'm making an impulsive decision because she's coming and I really want her to see how well I'm doing for myself.

[George Campbell]

So you want to make a six figure impulsive decision to impress somebody who's there temporarily so that they think you're doing better than you are?

[Caller]

No, I am doing. I can easily. I could pay full cash for that car.

[George Campbell]

That wasn't the question.

[Rachel Cruz]

The motivation is what we're asking about.

[Caller]

Oh, and it's your grandmother.

[George Campbell]

Does she actually care?

[Rachel Cruz]

I don't know. All people in the world, nanas love their grandchildren.

[Caller]

I was like, I, I have a feeling she would appreciate having like massage seats and you know, and just like,

[George Campbell]

are you, how often are we, are we living in this car for five months?

[Rachel Cruz]

Is this, are you even for.

[Caller]

No, no, no, no. I am, I am. I'm being very for real. Went and checked out the car yesterday. I told the guy I'd come around like five or six o' clock today and tell him if I want it or not.

[George Campbell]

What car is this?

[Caller]

This? It's a Yukon.

[George Campbell]

What does grandma need a Yukon for? Is she sleeping in the back? Is there a Mattress.

[Caller]

Oh, no. It's also because.

[George Campbell]

Are you single?

[Rachel Cruz]

How old are you, Muhammad?

[Caller]

I am single. I'm. I am 22.

[Rachel Cruz]

Okay.

[George Campbell]

I kind of wish you were married, because your wife would slap you right now if she heard this call. This is insane.

[Caller]

No, Yeah, I know.

It's like. It's insane.

But my parents, like, when my grandmother comes, she. She's like a magnet. So when she comes to, like, North America, she's.

[George Campbell]

Where she coming from.

[Caller]

All of her relatives, she's coming.

She.

She's coming from India, my home country.

[George Campbell]

Okay. And in their culture, is it big to, like, hey, look at how impressive my life is?

[Caller]

It's not. It's not so much like that, but

[George Campbell]

how much do you make a year?

[Caller]

So I currently own two companies. I started one when I was 16, and one I started six months ago. The one I started when I was 16 was a clothing company, which does really well for itself. It has nine employees full time. I maybe go there twice a week to just look. Look at stuff.

[George Campbell]

Way to go.

[Caller]

And. But nothing just to, like, the warehouse we have.

[George Campbell]

So what did your taxes show last year? What'd you bring in? What was your taxable income last year?

[Caller]

I pulled in around 250.

[George Campbell]

Amazing. Dude, you're crushing. If I'm grandma, that's what I'm proud of. Not the car upgrade or just you. You're a successful, bright young man. She loves you for you. And if a car is gonna be the ticket for her to love you even more, this relationship is built on a farce.

[Caller]

And, oh, no, it's not like she's going to love me more because you

[Rachel Cruz]

just want to impress your grandmother.

[George Campbell]

They just rent a car for five months. You want to impress her.

[Rachel Cruz]

No, Mohammed, you got to, like, you got to detach your identity from all this stuff. This is not who you are. Like, if you're. If you woke up tomorrow and you're driving a Honda Civic, would that absolutely trip you out? And if it would, then I would. I would ask some deeper questions of what's going on, how much your identity is wrapped up.

[Caller]

I have a Honda Civic right now. My second car is a Honda Civic. It's good gray oil fuel. I use it for short trips.

[Rachel Cruz]

Oh, my gosh.

[Caller]

Yeah.

[Rachel Cruz]

You got two cars.

[Caller]

I use it for short trips.

[George Campbell]

I think you need some problems, Mohammed. Right now. You don't have enough.

[Rachel Cruz]

Oh, my gosh.

[Caller]

I do. I do.

[George Campbell]

My. You need some reality. And you've done so well, and I think that's caused you to go. Well, I Have to live a certain way because I've done so well. And the more you can realize that your identity is not wrapped up in stuff and how much money you make, the better relationships you're going to have and the better life you're going to have.

[Rachel Cruz]

Listen, we're not mad at $90,000 cars. And if you can pay cash for a $90,000 car. And that's what you want, Muhammad, because you want to upgrade your car. You enjoy cars, and whatever the motivation is. But asking yourself, if nobody sees this purchase, would I still want it? And if the answer is, yeah, I still would, I would still want this. Like, if that was your. If that was the beginning of this call, it'd be a green light for me, because I think you could afford it and you would be fine. But what I'm scared of is that if you make this purchase because of the motivation that you just explained to us, you have set up a pattern in your life and a lane at which is unrealistic and unfulfilled. It's an unfulfilling lane that you're setting up. That if I just get this purchase, I'm going to feel good. From the ego stroke of my grandmother, who says, like, oh, my gosh, you're just amazing, and look how successful you are. Whatever. Whatever you need from her, whatever that need is, that need is still gonna be there, and it's gonna. And you're gonna look to other people to fulfill it. And so I want Muhammad to be content and happy with what Muhammad has, regardless of what anyone thinks. And especially Grandma. I mean, my gosh, grannies and nanas, they're like the number one fan of grandkids. I know she will be happy to be in a Honda Civic, you know,

[George Campbell]

what is she driving? That's the question. What's she used to. Is she rolling around in Rolls Royces?

[Caller]

No. What she. Well, my parents are doing very well for themselves, too, and they have obviously spoiled my grandmother a lot. And her husband did very, very well. So my grandfather, who just passed away this January. So she drives. She does not drive, but she gets driven around in a Toyota Land Cruiser, which.

[Rachel Cruz]

Yeah, that's right. I think you come from a successful family. You do. You come from a successful family, and you want to graft into that message that's been told to you. And what we're giving you is a different perspective on life. And again, it's not that the stuff is bad, but when the stuff has you at that point, to the point that you're gonna Go and make a purchase again solely out of wanting someone to feel good about it and feel good about you because of this purchase, all of it. I just don't like the motivation. And I think it's gonna end up. You're gonna end up in a. In a. Like a rat in a wheel, running and running and running the whole. Your whole life. Because it's not gonna be grandma next. It's gonna be the girl next. It's gon to be a parent. It's going to. You know what I mean? Plug in anybody.

[George Campbell]

And then the goal post moves too. Because now it's like, well, you don't have a sports car. It'd be nice to add a Lamborghini to the mix if you really want to keep up. And then it becomes a lifestyle you can't keep up with even if you can afford it. You admitted this is impulsive and there's better ways to spend this money, right? Do you have a mortgage?

[Caller]

No, I currently rent. That was my second question. I have two options right now. I rent a two bedroom apartment. I live alone. Don't need two bedrooms. I know, I know that's. But I like an open space. Now that grandma's coming and she's a magnet, she's going to pull maybe my parents or my brothers and everyone here, hence I'm going to need a little bigger of a space. I was talking to a realtor yesterday and she. She showed me this house that's up for sale for 395. Now, I could scramble and gouge and get that 395 to get that house. And she gave me a second option. Near where I live, they built new townhouses that are up for rent. I currently pay 2,500. Those townhouses are up for rent for 3,500.

[Rachel Cruz]

It's all the same philosophy. No, I would not be making an impulse. I would not make an impulse decision on buying a house. Mohamed.

[George Campbell]

They can afford to go stay somewhere

[Rachel Cruz]

six months and wait till they leave. And then you make a decision for your future, for you. No, we do not need to be impulsing.

[George Campbell]

But if I was going to drop money, I'd rather be on a house than a car. But do it for you and for nobody else.

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[George Campbell]

Patty is up next in Salt Lake City. Patti, welcome to the Ramsey Show.

[Caller]

Hi, how are you?

[George Campbell]

We're doing great. What's your question today?

[Caller]

Good. My husband has worked for his parents, his family's farm for the last 31 years. They're super controlling. Is it crazy for me to expect a plan for succession? They control his salary, his time. They even control the house we live in. Like, we paid for half of the house and they refused to put any of it in our names. Like, we can't even remodel it. I went to them and because it's built in the 70s, I have like electric blue bathrooms. I asked them to remodel it and. Or he wouldn't ask them. I asked them by a letter. They wouldn't even respond. But they told him that I wasn't grateful enough for the house that they provided for us. But we paid half of it, so

[George Campbell]

it's 0 reserve cash. But they paid half. You paid off.

[Caller]

Yes.

[George Campbell]

This is insane. Patty, you know that nothing about this is normal.

[Rachel Cruz]

Okay. So for on one end of the spectrum that they control his income and time, yada, that would be like having a boss, Right? You're the company.

[George Campbell]

Say Dave Ramsey controls my income and time.

[Rachel Cruz]

Yeah. So there's a level of like, I'm working for a person and they have set up a company in a certain way. But the housing situation for sure is not. Yeah, you guys are not in a good spot because if the house is not in your name and you've put half of your money into it, you legally have no assets. Right. From a, from a home perspective.

[Caller]

Correct.

[Rachel Cruz]

So what is your husband saying? These are his parents. Does he see that as not good for your future?

[Caller]

He doesn't really mind. He thinks that they will just be fair when it, when the time comes. But my thing is, I will ask him like, we have no retirement plan with him. Because of course you expect your ground on a farm to be your retirement plan. And that is fine. When we started this 30 years ago, we used to have family meetings and it would be like, oh, we're going to let you start signing checks, we're going to let you do this. We might have you buy some more ground and put it in your name. None of that ever came to fruition. And so now here we are 30

[Rachel Cruz]

years later, and yeah, you're in a bad business deal.

[George Campbell]

If they were going to be fair, they would have done it by them.

[Rachel Cruz]

And that's. So that's a, that's a marriage problem, Patty, between you and your husband deciding what you want your life to look like, and it's as much his fault and your fault as the parents fault. They've just set up the life they want and you guys have chosen to go along with it until you're fed up and you've called this show. So at that point it's going to be, yeah, you and your husband have to figure out what you want your future to look like in a pretty big way, because it'll probably, if you do it the right way. I think the healthiest plan is going to include a lot of boundaries that have not existed for 30 years. And I don't know if his parents will be up for the task. But your husband kind of has to decide, do I want my, my future and my marriage and my family to be taken care of, or am I going to just still be a child and still do what mom and dad say, Right? I mean, to a degree.

[Caller]

Oh, absolutely, absolutely.

[George Campbell]

I don't think they're going to take kindly to him all of a sudden having a backbone, do you?

[Caller]

No, no, they won't. And, and he knows, like he tells me he's stuck between a rock and a hard place. And when I ask him, I'm like, so basically we can't make a plan for our family.

[George Campbell]

I mean, you can't even get the money out of this house because you have, you can't even sell it.

[Caller]

No, we can't.

[Rachel Cruz]

My question, Patty, why did you write them a letter? Why did you not just call and talk to them? Is the relationship strained right now that you can't just call and have a discussion about it?

[Caller]

I can talk to my mother in law, but the father in law doesn't talk him home or, you know, or he doesn't talk or, you know, he doesn't want to. So I just thought it would Be easier than I could just express myself a little better with that. And I thought my mother in law would call me back, but she didn't. And then she just went to my husband and she wouldn't even show it to my father in law because she said I wasn't grateful enough because he.

[George Campbell]

There's some narcissistic behavior that I'm capturing here and I think this is going to have to come between your husband and his parents.

[Rachel Cruz]

It's your. Yeah, I mean, at this point, Patty, it's you and your husband, that it's the issue.

[George Campbell]

There's a marriage issue between you and your husband and there's a business family issue between your husband and his parents. And it's gonna get awkward.

[Rachel Cruz]

And for him to continue to choose them over you, Patty, that's what hurts. That's where the resentment is coming. I mean, I hear it all in your voice, which I get. I would be pissed too, probably. But also, have you said anything for 30 years?

[Caller]

Oh, yes, lots of times. Lots of times.

[Rachel Cruz]

And so what does he say? What does your husband say?

[Caller]

He just shut down. He shut down.

[Rachel Cruz]

You guys need to go to marriage. You guys need to go to marriage counseling. You'll have a breakdown in your marriage.

[Caller]

Well, we tried that. He showed up for two times and then he wouldn't do it again because they told him that it was crazy too.

[Rachel Cruz]

Okay, so. Well, Patty, you have some decisions to make about your life. So I don't know if we can fix that on a seven minute call.

[George Campbell]

I'm so sorry, but fixing 31 years of toxic relationships?

[Rachel Cruz]

Yeah, so, I mean, it would, I mean, there'd be some ultimatums for me. Not for like, not in a threatening way, but just in a. Hey, I'm sick and tired of this and I don't feel safe. I don't feel like we have a future. I don't feel secure. I have a lot of fear. I don't like how I've been treated in this part. And Patty, if you've had stuff in the past that you've done wrong, admit that too, right? I mean, like, it's not like it's all their fault. I'm sure there's been tiffs and tabs throughout the years, but yeah, if I'm married to a guy and as a wife that you're saying all these things and he doesn't at least listen, take into consideration, have conversations about it. Figure out a way to make this life work for you. I don't, I don't know what else I don't know what else to tell you.

[Caller]

Yeah, that's kind of what I thought. And he. He makes it like, when I say, so, basically, we are not going to know what we're going to get until your parents are no longer with us. And he'll go, so now you want my parents dead? And I'm like, that's not the case. This is just common sense and planning and so.

[Rachel Cruz]

Well, then, yeah. And you guys need it. Yeah, I think. I think a ask would be that we need to create our own retirement plan. How old are you? Gu.

[Caller]

55 and 52.

[Rachel Cruz]

Okay. Well, I would say for me to feel secure, I need a path of retirement that has nothing to do with your family and the farm because nothing is documented. And so there's not security there. We don't have security in it because we don't know what's going on. And so I need to start. I want to start putting money away for our family in retirement. Right. And you guys put that in the butt, you know, and he. I don't know if he'll go for it, but that's what. That would be a plan.

[George Campbell]

Are you working outside the home, Patty, or have you?

[Caller]

I have. I have. So about 10 years ago, I started my own business and I was super blessed. And so I have been putting away for me, you know, we're putting into retirements and stuff, set plans, Roth plans.

[George Campbell]

That's what I would be doing is creating your own little island to be insulated from the chaos that couldn't be.

[Caller]

But, like, I was just told, like, that he's like, well, now you're becoming financially independent from me and you don't need me. And I was like, yeah, that's been part of my plan because you just didn't care for our family and you just do everything with your family. So I had to take care of myself. So. So I have been blessed to be able to do that.

[Rachel Cruz]

Yeah.

[George Campbell]

I would continue that.

[Rachel Cruz]

Yeah. And conversations moving forward, something John Deloney always talks about is the more you point the finger, your family, you. You know, all of that, immediately defenses go up. Like, that's just human nature. You're immediately he's going to want to defend himself. And, you know, I mean, that's. That's natural. So as much as you can talk about you, Patty, and what you can control is you and what it's doing to you. And that's how I would. That's how I would approach the conversations with your husband. But, yeah, you guys need some deep untamed light. And there are a lot of generational farmers that we've talked to on this show. That's very difficult from a financial perspective, a passing down generationally between siblings. I mean, there's, there's just a, there's a lot there and people have done it really well and communicated very clear expectations. Everyone is in the know. It's, you know, very, very,

[Caller]

I don't

[Rachel Cruz]

know, it's been very clear. This sounds like the opposite, Patty, that it's very, very muddled and a lot of questions.

[George Campbell]

So all you can do is continue to ask for clarity and set up your own boundaries and set up your own financial world. Not because you don't trust your husband, but because you need security in your own life, whether that's with him or without him. You deserve that. So I appreciate the call. This is going to take a lot of untangling and I don't know that you can do it in their lifetime. But I hope there's a lot of redemption and healing on the other side.

[Rachel Cruz]

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[George Campbell]

Buying or selling your home is a big deal and there's a lot of clickbait headlines out there and conflicting data. So it's hard to know what's really happening in the housing market. So we're here to make the latest trends easy to understand. Last month, the average 15 year fixed rate mortgage ticked up a bit to 5.56% but still below 6. So if you're financially ready, a small Rate increase shouldn't hold you back. That should not be the make or break, especially since waiting could mean facing higher home prices as the busy season ramps up. Median home prices went up to $415,000 last month, typical for the spring market. It's a hot time, and with more homes available and more buyers entering the market, this could be a great time to buy or sell. So if you want to learn more about the housing market trends and get some free tools to help you buy or sell with confidence, go to ramseysolutions.com market or click the link in the show notes. If you're listening on podcast or YouTube, Joseph is in Columbia, South Carolina. Up next, what's going on, Joseph?

[Caller]

Hey, what's going on, man?

[George Campbell]

Not much.

[Caller]

I am 24 years old, living paycheck to paycheck. Have been since I was 18. Can't never seem to get ahead. I'm just trying to figure out some way to get ahead. Hmm.

[George Campbell]

What do you think is the cause of that? If you look back over those six

[Caller]

years, I've just been one thing after another. Every. Every time I get ahead, get money saved up, whatever else, something happens, something breaks, something, and I just. I can't never seem to get ahead.

[George Campbell]

So you got a lot of emergencies. Murphy's moved in with you, Is it. What's your income right now? Has it been going up over those six years?

[Caller]

No, not really. I'm making 22 an hour right now, which would be what, like 45 a year?

[Rachel Cruz]

Yeah. What are you doing in that career or that job?

[Caller]

Right now, I am a service technician.

[Rachel Cruz]

Okay.

[George Campbell]

What does the ladder look like in that world? If you were to move up and

[Caller]

up and up, I can. I can move up pretty well within. Within probably the next. I've only been doing this for six months now, but majority of the time, within about eight years, I can move up to a position where I'm making 100 grand if I work really hard at it. But right now, it's just trying to make it to that point.

[George Campbell]

Yeah. How much debt do you have?

[Caller]

I'm sitting at $26,000 in debt.

[George Campbell]

Break that down for us. What's what types of debt with the balances.

[Caller]

I have 15,000 in debt on a truck. Truck loan. I have 6,000 in debt on a boat loan. And then the rest of it is stuff I did when I was younger, dumb and stupid. And it's like Amazon Affirm stuff.

[George Campbell]

Buy now, pay later. Okay, so what I'm hearing is you said, man, life's just been coming at me. I've never heard of a boat coming at you. You know what I mean? Like that.

[Rachel Cruz]

That could be kind of scary, but

[George Campbell]

you know what I mean. Yeah, that's true. But you see what I'm saying here? If I looked in the mirror, I go, man, like, yes, life has happened. There have been some emergencies, but that's not the problem. The problem is I want some stuff and I can't wait till I have the money to buy the stuff. So I'm going to borrow money from other people. And so if we can get out of that mentality, then we can get you out of this cycle. But it's going to have to start with you saying, I'm done with debt. I'm never touching this stuff again. Tried it, got burnt. I'm gonna sell the boat. I'm gonna work those three jobs. I'm gonna live on nothing in the meantime so that I can get an emergency fund so that it's a never get into debt again insurance plan.

[Caller]

Well, the thing about that is. So when I turned 18, my grandma had had some money she left to me. It paid for my truck and my boat. I didn't owe anything on them. I bought them right out in cash. My truck broke down five years later. I had to. It was that big of a money pit. Had to buy another one. My boat motor that I had, it blew up. Had to buy another one. I'm in my boat any and every chance I can get.

[Rachel Cruz]

Okay, Joseph, Joseph, Joseph, we got it. We got to change our language. Okay? You did not have to. No one had a gun to your head that you had to. Okay? You wanted to. That was a want.

[Caller]

Well, so.

[Rachel Cruz]

Okay, so just. I'm being for real though, because when there's a mentality of this thing breaks. So that means I immediately. And you're normal. We get calls like this all the time. People. This is people's mentality. Well, there's no other option. I have to go. I have to go and get a car and I have to go and buy a new boat. I have to. No, you don't. You really don't.

[George Campbell]

I mean, you'd like to.

[Rachel Cruz]

Yeah, I mean, you. Like, you could. You could get a ride from a friend. You could bike. Like you know what I'm saying?

[George Campbell]

Like, I know those are get a canoe.

[Rachel Cruz]

Those are not realistic. You can get a good canoe. Those are not realistic. I get that. But the point is, when you start separating needs and wants from like a very extreme degree, it causes you then to say, okay, this is Not a. This is not a need. I now have to make other decisions if debt is not on the table. So that means I have to go buy a $2,000 truck that barely putts, putts, putts down the road. But it's gonna. But that's what I can afford. I don't have money for a boat. So I'm gonna have to say no. I'm gonna say no to myself. I can't get a boat. So there are this. You do have to filter through some of these decisions. Because that is what's caused you to be here. And when you go that extreme, Joseph. Which it sounds extreme, but when you do, I'm telling you, every purchase you make, you're gonna be thinking, do I need this? And in this point of you getting out of debt and all of it, a lot of it's gonna be like, nope, I don't need it. Nope, I don't need it. And Saturdays I'm gonna be working. Sundays I'm gonna be working. Cause I need to be making some extra money to pay all this stuff off. And then once we have money, then we can start saving towards goals of things that we want. Because boats are not bad and trucks are not bad. But the way we've gone about them has caused a lot of stress in a paycheck to paycheck living. Because you have payments. Like, if all those payments were freed up every month, you wouldn't be paycheck to paycheck.

[George Campbell]

Yeah. What's your truck payment?

[Caller]

My truck payments? Actually, it's only $426.

[George Campbell]

Okay. Do me a favor. Never say only in front of a payment again. Joseph. You hear that? Because that was you justifying the payment.

[Caller]

Yeah.

[Rachel Cruz]

You don't have. You don't have that money. You're living paycheck to paycheck. $425, that changed your life. That was just sitting in your account month to month.

[George Campbell]

So we got 425 on that. What's the boat payment?

[Caller]

The boat payment is 160.

[George Campbell]

Okay. What are the rest of those payments for all the other stuff you mentioned?

[Caller]

One of them's $60, the other one's $80. And I think the other ones. There's one more that's like 60 bucks.

[George Campbell]

Okay. Okay. So we're over 700.

[Rachel Cruz]

Yeah, 750 is what I have.

[George Campbell]

So if I gave you a $700 raise, would that help you get out of this paycheck to paycheck cycle?

[Caller]

It definitely would.

[George Campbell]

You see where we're going with this? It's time to aggressively attack the debt with no other folk. You don't need to be on a boat. You don't have time. You're going to be working too much. That's the great news. So what could you sell the boat for today?

[Caller]

Not much. It's a. It's a piece of junk. Honestly, the motor's the only thing that's worth anything. And that's because it's brand new.

[George Campbell]

I'm so confused. Did you buy it as a piece of junk?

[Caller]

So, no. I bought it in 2018 as a decent boat. And over the years, it has proven to be a piece of junk.

[George Campbell]

It sounds like you destroy everything you touch.

[Rachel Cruz]

Put a $6,000 motor on a piece of junk.

[Caller]

$10,000 motor.

Oh, no, Joseph.

[Rachel Cruz]

See? Bad, right? Not good. Would you agree?

[Caller]

I do not.

[Rachel Cruz]

Okay, great. I'm glad.

[Caller]

I'm glad.

[Rachel Cruz]

We're like tracking some people, you know, you don't really track. We're tracking with Joseph.

[George Campbell]

We love Joseph.

[Rachel Cruz]

I'm not trying to justify.

[Caller]

But at the time. At the time.

[George Campbell]

Continue. This is going to be good.

[Caller]

60 to 80 hours a week. I was making the money. It wasn't a problem. But.

[Rachel Cruz]

But life happens and you have risk in your life, and suddenly it does become a problem when things change. That's what. That's what happens with debt. That's what happens with debt. Every. Everyone's fine. Everyone can afford the house payment, they can afford the car loans. Everything's fine until there's a job, until it's not, until a kid gets sick, until whatever. Life happens. And you've built your life on risk and it all comes tumbling down. So, Joseph, I'm excited for you. I feel a lot of work in Joseph's future, and I really think, Joseph, you can get out of this.

[George Campbell]

Yeah, Joseph, here's the truth. When I was your age, I was $40,000 in consumer debt, and I wasn't even making 45 grand like you are. And I got out. And the way I did it was by cutting my expenses down to nothing and working two, three extra jobs. And then all that margin I created by doing that, I threw only at my smallest debt. The rest you're gonna make minimum payments. That's called the debt snowball method. Then once you get rid of all the debt, now we can focus on savings and our emergency fund. So hang on the line. I'm gonna give you every dollar. It's our budgeting app. That's the one thing it does, is it helps you create margin to throw at Your debt. But you've gotta actually do it. You gotta look at that budget every day. Because that's gonna be your ticket to saying no to the next thing that's gonna be happening to you that you had to do.

[Rachel Cruz]

Hey Joseph, call us back though. We're cheering you on. If you need help through this process, we are here. Cause I really do believe in two years and your life could look so different.

[George Campbell]

You're gonna be a success story. Hang on the line. We're gonna get you every dollar and a copy of my book, Breaking Free from Broke. That'll give you the road map to getting out of this thing.

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[George Campbell]

Marie is in Columbus, Ohio. Up next, Marie, how can we help today?

[Caller]

Hi and thank you for taking my call. I started listening to you guys in 2020 and by that time I think I was in a bad situation right there. My current live in boyfriend who I plan to serve a 30 day notice to very soon, he ran up to my credit card and I've been following the baby steps and I've paid everything off except for those two credit cards. And it was actually the baby steps that helped me realize that those two cards had been run up. I didn't realize it at the time and I guess I'm just looking for, I guess a way through to figure out if there's a possibility for me to recoup my money back.

[Rachel Cruz]

Yeah,

[Caller]

paying for it because it's on my credit.

[George Campbell]

Yeah. Well, was he an authorized user on your card? How did he get access?

[Caller]

He was not an Authorized user on my card. So at the time, still, we're living together, and we had a mosquito tick, flea service that we were supposed to be paying for. They said they wanted to do, like, the automatic. They wanted to charge us automatically. And I was at home at the time, and so I used my credit card and gave it to them. And he said, you know, don't worry about it. I'll pay for the service. And so that's how it started.

[George Campbell]

So he grabbed your credit card while he was at home? Saw it on a table. What happened?

[Caller]

No, I gave it to them.

[Rachel Cruz]

You did it. Okay. With the promise that he was gonna pay it back?

[Caller]

Yeah. And they would be charging the card every month. It's a monthly recurring charge. And then he would, you know, pay for it. That was part of one of his bills. He was part of the household.

[George Campbell]

But then what happened? You said he ran it up.

[Caller]

Well, yeah, I didn't realize yet. Ran it up because I. He was just supposed to be paying the recurring charge. And then it was in 2023 that I realized that this card had, like, a really big balance on. And I was like, hey, what are you doing? And I said, and I noticed, like, your payments aren't covering the charges. And he told me, don't worry about it. I got it. I've been paying it. I'm going to keep paying it. And he said, you know, like, we

haven't done this before, but that was three years ago.

[George Campbell]

So what happened since then with the balance?

[Caller]

It continued to continue to balloon.

[George Campbell]

And what does the credit card statement say?

[Rachel Cruz]

Is it all this one company on this credit card?

[Caller]

This particular one? Yes. He actually ended up doing it to two. But what was on my radar was this one. Credit cards, one company.

[George Campbell]

Okay, well, if it truly was without your knowledge, it was unauthorized use. That's fraud. And you can call your credit card company.

[Rachel Cruz]

She gave the card to the company. Well, do you know what I mean? From a legal perspective, yes.

[George Campbell]

But was there other things on this outside of that flea and tick service? What I'm wondering is he buying other stuff?

[Caller]

That's what. And that's what I didn't realize. So he was supposed to be paying the recurring charges for the flea and tick company, but then I started looking in there when I noticed that the credit card balance had gone up. And then he started using. I saw he was using the card to pay for our car insurance. You know, like 7, $800 to pay for the car insurance for your own

[Rachel Cruz]

car insurance for yours or his or both ours.

[Caller]

Because we were in the house together. And he had two cars on the insurance. I had one car on the insurance. The insurance was another bill he was supposed to pay. I did not know he used my card to pay the insurance. And then I started seeing other transactions for, like, advanced auto parts and car parts this and car parts that.

[Rachel Cruz]

Okay, Maria, I have a question. Random other stuff for the credit card statement every month. Where was that being mailed to or sent to you?

[Caller]

It was being mailed to our address, our home.

[Rachel Cruz]

And you just didn't see it? Or he would take the bill and you never saw the bill?

[Caller]

He. I never saw the bill. He would take the bill because he was supposed to be paying it for the green. That's okay.

[Rachel Cruz]

Okay.

[Caller]

And so I just did it. I didn't think anything of it, that he was taking the bill because he was.

[Rachel Cruz]

So some of this, Marie. So some of this, from a legal perspective, George, correct me, but some of this, if it really was without your knowledge, I think you can flag that as fraud. But, Marie, if you willingly gave your credit card over and you just have a crappy boyfriend who's not paying it, that's more on you guys. That's not a legal standing.

[George Campbell]

Especially after three years and all of a sudden you're calling the credit card companies and, hey, there's some fraudulent charges here from three years ago.

[Caller]

Yeah, I didn't call the credit card company and say there were fraudulent charges. I noticed that. I didn't say that. I went to him and said, hey, what are you doing? Like, you're supposed to be paying these bills.

[Rachel Cruz]

Have you called him?

[Caller]

I just met this. I'm sorry.

[Rachel Cruz]

Have you called and put a freeze on anything on your credit or this account or for more money not to be taken out?

[Caller]

Well, by that time, I had. So what ended up happening is. I told it. What ended up happening is he just stopped paying the bill. Just period.

[Rachel Cruz]

Okay.

[Caller]

And I said, why aren't you making the payments? He said, I'm sorry, I missed the payment. And he was going off of the fact that we had done this before. I haven't just met the man. I've known him for a very long time, and he's used my credit card to do other things like buy tires. And he paid the bill, and we just kept moving. It had never been an issue.

[Rachel Cruz]

Okay, so from this. From today, where we stand, Marie, how much is on the card balance?

[Caller]

As of right now, the card balance is $8,100. But that's because I paid it down.

[Rachel Cruz]

Yes.

[Caller]

At the time it was $10,900.

[Rachel Cruz]

And are you guys broken up? What's the. What's the status of the relationship?

[Caller]

I don't consider myself to be in a relationship with him anymore, and I plan to send him with an addiction notice really soon.

[George Campbell]

You don't consider it? Are you guys broken up or not? It's not like a feeling. Well, I don't consider. You know, I don't identify as a single person. It's just. Did you guys break up or did you not?

[Caller]

I have broken up. He keeps saying he's in a relationship, and I can't change his thoughts.

[George Campbell]

Who is he saying it to?

[Rachel Cruz]

Yeah. Yeah. So. Okay. So, yeah. So you're. You're.

[George Campbell]

He's in denial. He's his name on the lease.

[Caller]

I own the home.

[George Campbell]

Okay. So there's no lease on the home.

[Caller]

And he won't leave.

[Rachel Cruz]

Yeah. So that needs to be. A sheriff will need to show up and evict him. Correct. Because this has gotten so entangled proceedings. Yes. From a. From a financial perspective. So entangled. And this is what happens when people commingle finances. When you're not married, you have no legal protection. Really? On your end.

[Caller]

I learned that in 2020, once I start listening to you guys.

[Rachel Cruz]

Yes. So I'm so sorry. So already. Okay, so you got $8,000 left. So, Marie, we gotta figure out, is that the only debt you have is this card?

[Caller]

He did the same similar thing to the Lowe's card. I didn't. Not that card. I didn't know he was using that at all.

[Rachel Cruz]

Okay, how much is on that?

[Caller]

And the current balance is now $4,900, but he ran it up to like $5,600. And outside of those two bills, I have no other balances because I started with your debt snowball.

[Rachel Cruz]

Oh, yes, you said that.

[Caller]

Okay, perfect. Okay.

[Rachel Cruz]

So what I would do is I would become. I would investigate as much as I can, calling these two credit card companies. And in good standing of faith of what you can say, honestly. Yes. These were charges I did not know about. You probably can't say about. About the Flea Tick company because you willingly gave over your credit card and he just never paid you back. And that's between you guys. But from a legal standpoint, here are charges that I did not know about. And I would try. I would see what.

[George Campbell]

You know, see if they'll reverse it.

[Caller]

Yeah.

[Rachel Cruz]

If they can reverse any of it. I don't know if they will because it's been so many years, but it would be Amazing. If not. And then if it doesn't, Marie, it's. I mean, yeah, this gets chalked up to $12,000 of stupid tax is what we call it of just like a really hard lesson. Which is so frustrating for you. It's so frustrating for you because you've been working this plan and you've been doing it and it's just, it may be a really not fun lesson to learn, if you know what I mean. If this is the bills that you have to end up paying because it's all in your name. But I would cut off any, any access of any accounts from him and making sure he has no access to you financially and.

[George Campbell]

Yeah, and I would go on to every credit Bureau's website, TransUnion, Equifax, all of them and freeze your credit completely so that nobody can open up any accounts in your name.

[Caller]

He didn't do it to any other card, just those two. And he hasn't done it. And just.

[Rachel Cruz]

I don't care.

[George Campbell]

As far as you know, I don't trust him.

[Caller]

I've already checked. No, he hasn't done that.

[George Campbell]

I would still freeze your credit.

[Rachel Cruz]

Freeze your credit. Donut? No, I don't trust him. Who knows what he would do when he gets pissed that you evict him. I mean.

[George Campbell]

Nope, I'm closing down every credit card account. You can still pay it off after that, but close them down, freeze your credit and get this guy out of your life and then clean up the debt yourself. This is not going to be fun, but it'll be a, a lesson well learned. You'll never do this one again.

[Caller]

No, I won't.

[George Campbell]

Hey guys, George Camel here. Listen, we need to talk about your phone plan because for a lot of you it's like a bad roommate. You know the one. Unpredictable moods, always asking for money, hard to get rid of and they never do the dishes. And that's what the so called big wireless carriers are like. They're counting on you overpaying forever. But Boost Mobile flipped the script. You can unlock up to $600 in savings per year over the big guys when you switch to Boost Mobile on their unlimited plan, there's no contracts, no hidden fees and no surprise email saying, hey, your bill went up. Because reasons you see with Boost Mobile you bring your phone, keep your number and pay just 25 bucks a month. 25 bucks and that price is locked in forever. So if you're thinking, okay, George, that all sounds great. What's the catch? There isn't one. Boost Mobile backs it up with a 30 day money back guarantee, which means you can try it without feeling trapped. People kick the bad roommate out. Head to boostmobile.comramsey to make the switch today. That's boostmobile.comramsey based on average annual payment of AT&T, Verizon and T mobile customers compared to 12 months on the Boost Mobile Unlimited plan as of January 2026. See website for full details. Welcome back to the Ramsey show in the Fairwinds Credit Union studio, I'm George Camel, joined by Rachel Cruz. Open phones at 888-825-5225. So Rachel, we recently just took a call from a lady who was going through a hard time because she's had this sort of toxic relationship. The ex is living in her house who she now has to evict. He's been using her credit cards with and without her knowledge, running up 13 grand in credit card debt. And it just was a great reminder of why we tell people to not combine your life and your money before marriage.

[Rachel Cruz]

Because some of it, it wasn't outrageous stuff. Right. It was like our car insurances, we're just going to pay them together. Right. It's like it's very normal things but when you combine your life with someone, even from a financial perspective. Yeah. You just, you set yourself up for a lot of chaos and untangling that is exhausting and it ends up costing you a lot of money. That's what we end up finding over and over again. Because usually the person that is the financial responsible one ends up getting the bad end of the deal. Right. It's usually the one that's not great with money ends up kind of mooching or figuring out how to like. Not necessarily. I don't think they're always malicious by doing that. It's just the way it happens. And when you're not married. Yeah. There's no protection for you.

[George Campbell]

And what's funny is we get a lot of flack for our advice that you should combine finances once you're married.

[Rachel Cruz]

Yes.

[George Campbell]

And they all get so angry at that. They want to combine when they're not. But once they're married, they want to stay independent.

[Rachel Cruz]

Yes.

[George Campbell]

I'm like, okay, so let's stay codependent while we're not married. And once we're married we want to be independent.

[Rachel Cruz]

Right.

[George Campbell]

That is insanity.

[Rachel Cruz]

Yep. Crazy.

[George Campbell]

So aside from any of like your, your faith background and some moral judgment on living together, it is just a really bad idea to combine your financial life to co sign to add someone as an Authorized user. Or to buy a house with someone.

[Rachel Cruz]

Yeah. A big purchase together where both your names are on it when you're not married. Not good. Not good.

[George Campbell]

So much risk, so much drama. And you're assuming everything works out perfectly. And this show would not exist if everything always worked out perfectly.

[Rachel Cruz]

We wouldn't have jobs at that point.

[George Campbell]

We're on the other side of it when they go, well, I could handle the payment until I couldn't. Well, everything was great until I found out he was.

[Rachel Cruz]

Yeah. And honestly, it just adds to, I think, more of the heartbreak because not only when. When you break up and you gotta untangle everything, not only is it just your heart's broken. Right. Or the situation is really sad because you've been. You were obviously very close to that significant other to share finances. And when. When you break up, if you break up, not only are you dealing with, like, the heartache of just the breakup, but then you're sitting there trying to pull your credit for report. Right. And figure out who's, you know, who's on it, what debts and what do you owe me? And then it's just. It just gets so messy.

[George Campbell]

Anger and guilt and resentment and why did I waste so many years with that person? All to leave with this mess that I have to clean up. It just sort of makes you look in hindsight to realize how messy it was and how you didn't see it. So you're too close to it.

[Rachel Cruz]

That's right. So clearly you guys do not combine your finances until you are married and when you are married. Yes, we are a proponent of combining your finances. Sharing a checking account. When both incomes or one income hits the household, that is the household budget. We both have a say in it when we're married. We both have opinions. We both are able to agree on. This is what we're doing with our money. Because when you do that, you agree on your life at that point and where you're going now, there's always the asterisk. If there is. If the. If there is a divorce coming, if there is abuse, addiction, like there are situations that you have to protect yourself a hundred percent.

[George Campbell]

Untether, have your own account.

[Rachel Cruz]

Yes. Yes, that's right.

[George Campbell]

Protect yourself from this person.

[Rachel Cruz]

Yep, that's right. But for all the other marriages in the world that are just going along, I'm telling you, combine your. Combine your finances. Be one in that. And it creates so much unity.

[Caller]

Yeah.

[George Campbell]

And the other thing is, you noticed she wasn't paying attention. She wasn't checking the credit card. Statement. She was just assuming that he was telling the truth. And so you've got to stay on top of this. Your money is your responsibility and nobody else's. So don't ever assume that they've got it under control. That's usually a sign that things are going south and you don't even know about it. So there's our soapbox. We are now stepping off, although I like the height boost it gave me.

[Rachel Cruz]

But you know, thanks for listening to our TED Talk back down to earth.

[George Campbell]

All right, Karen is in Toledo. Up next. Karen, welcome to the Ramsey Show.

[Caller]

Hi. Thank you.

[George Campbell]

What's going on?

[Caller]

So my husband and I can't decide if we can afford a new vehicle or new to us. Vehicle for 30 to $40,000 just with our other expenses, our mortgage and potential other expenses with our 100-year-old home as well.

[George Campbell]

All right, walk us through this. How much money do you guys have right now saved up?

[Caller]

So we have about 120 in our savings.

[George Campbell]

Awesome. And do you guys have any debt?

[Caller]

We have our mortgage, but no other debt.

[George Campbell]

Okay. And what's your household income?

[Caller]

So I just went part time, so it was 180. Now it's going to be about 160.

[George Campbell]

That's still a great income. Okay, so what's the argument about this? Sounds all reasonable. You're going to pay cash. It's not a huge part of your world. Are you going to buy it used or brand new?

[Caller]

Well, I previously would have bought it new, but since being married, we're probably going to get new to us, but maybe a year or two, maybe three years old.

[George Campbell]

Okay. And is your husband not wanting to do this or you.

[Caller]

So my husband does not want to buy a vehicle. I do want to buy a vehicle just because I think we need the space. We have two small old cars. We have a 2017 and a 2014 car

[George Campbell]

space for kids or what?

[Caller]

We do have a new baby and then we also have a large dog. So yes.

[George Campbell]

Okay. So new baby, large dog, you want more space. And he thinks it's a waste of money. Is it the financial part of spending that much money or is the idea that you guys don't need a car at all?

[Caller]

So he agrees we do need a car, but it's the financial aspect of it. Just because we live in a 100-year-old house, we were living on borrowed time with our AC furnace, UN. Potentially a new roof, potentially a new sewer pipe. I mean, all this is all functioning now, but it's just kind of. We're on borrowed time for all these very expensive items.

[Rachel Cruz]

If you add it up, if everything hit the fan and everything went out at the exact same time, what would that cost you guys?

[Caller]

So the sewer is probably about 15. The AC furnace, I would have to say probably about 6 to 8,000. And for a roof, we don't know the roof. We haven't looked into quotes because it's working well now that's probably in the next couple, couple years or so.

[Rachel Cruz]

Okay, because I'm just doing some quick math that if you guys have 120 saved, if you had an emergency fund of 40 000, if that was a fully funded emergency fund for you guys, I'm not sure what your household expenses are per month, but that'd be a hefty good emergency fund. You'd have 80000 left. Let's say you spent half of that on a car, you'd have 40000 left. And if everything hit the fan, I think you'd still have enough to cover all of that, right?

[Caller]

Yes, but that's very scary to think about. And then plus we just didn't know with having a mortgage, we still have about 130,000 to owe on that. If that's something we should be prioritizing over purchasing a car.

[Rachel Cruz]

Not necessarily. Yeah, I mean buying a new car is totally acceptable in baby steps four, five and six, which is where you

[George Campbell]

guys are, your life is a priority. And so if you need the car for your life because your lifestyle, you guys are doing it right. And I think having $60,000 still left over after covering the car and the emergencies, you're going to knock out the house fast. Knowing you guys, you're going to just start throwing chunking money away at that thing. After the renovations are done, repairs, the car's here now you've sort of freed up all that savings and money. Right? Your future income.

[Caller]

Right. That is very true. It just, it makes us, you know, it's unnerving to think about all this potential very expensive things that are saving, dwindling.

[Rachel Cruz]

Yes, I hear you. But you would have enough still in savings to cover those things. And they have not happened yet. And more than likely they'll be stagger staggered while you can be saving money on top of that. So it's not like your savings completely stops after you buy this car, pick it back up and save some more if you guys want. And then if you have too much in savings, you throw some at the house. Right.

[George Campbell]

I would earmark each savings account. One is for the car one is for the house stuff. That way you're not confused as to where this money's going to be.

[Rachel Cruz]

Buying a home is one of the biggest financial decisions you'll ever make. But too many people base the decision on opinions or what the market is doing that week.

[Sponsor/Announcer]

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[Rachel Cruz]

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[Sponsor/Announcer]

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[George Campbell]

That's Churchill Mortgage.com this is a paid advertisement in MLS. Id 1591nmlsconsumeraccess.org Equal housing lender. John is in Richmond, Virginia, up next. John, welcome to the show.

[Caller]

Thanks for having me, guys.

[George Campbell]

Absolutely. What's your question today?

[Caller]

Got a. I've got. I feel like I've hit the job lottery. I'm kind of a specialist in my field and. And I recently just got a humongous increase in income. My wife is also getting a raise starting in July. So we're suddenly, we feel like we're kind of suddenly wealthy, but I'm kind of panicking because I don't know what to do. And I'm really behind on my retirement and I'm 48 years old almost, so kind of lost as to what to do. I'm happy, but I'm nervous.

[George Campbell]

Yeah, no, that's actually a good feeling, John. That tells me you're going to be very wise with this and cautious and actually use it to build wealth. If you were just like, yeah, I could double my income. We're going to go buy some stuff, I'd be like, all right, we got to slow down. So walk us through this. What is your household income now? What will it be?

[Caller]

Okay, so it's going to be 330.

[George Campbell]

Fantastic, right?

[Caller]

Yeah, it's. I think, I think we're getting about 120,000 between the both of us increase all of a sudden.

[Rachel Cruz]

So are you both getting increases or just one of you?

[Caller]

Both of us.

[Rachel Cruz]

You both are. And it just happens to fall at the same time.

[Caller]

Yeah, yeah. My new position just started. My wife starts in July, so, you know, right. Right there, around the same time.

[Rachel Cruz]

Great. Congrat, John. Good for you guys.

[George Campbell]

Where are you guys at? Financial. Do you have any debt?

[Caller]

What's up? Well, we have our mortgage. We owe 214 on our house. I. We do have to use car loans that are fairly recent. And that's it? That's it for debt? No credit card debt.

[George Campbell]

What's the balances on the cars combined at?

[Caller]

24,000.

[George Campbell]

Okay. How much do you guys have in savings right now?

[Caller]

Now

22,000.

[George Campbell]

Okay.

[Rachel Cruz]

Is that just liquid or is that retirement?

[Caller]

It's liquid.

[Rachel Cruz]

Okay, and then how.

[Caller]

My retirement. My retirement is very low. My retirement's like $45,000. 45.

[Rachel Cruz]

Okay. What's your wife's.

[Caller]

Yeah, she's. Her retirement's at like 340,000 or so.

[Rachel Cruz]

Okay, so hers is okay. Hers is more.

[Caller]

Yeah.

[Rachel Cruz]

Okay, great. So, yeah, so I would make a plan to probably feel like you didn't get a raise for a hot second once it starts to get these cars paid off. So pay off the 24,000 and honestly,

[George Campbell]

you could do it with the next paycheck. If you take your next paycheck plus most of the savings, these car loans are knocked out, and now you free up those payments for the rest of your life.

[Caller]

Yeah, that's right. And. And the cars are fairly new, even though they're used, so I think they'll be fine. But.

[Rachel Cruz]

Yep.

[Caller]

But. Yeah, so we have like. Like, basically that leaves us with the little bit we have in our checking account, and that drains our savings. Emergency fund, so.

[George Campbell]

Yep, temporarily.

[Rachel Cruz]

Yeah. Then you'll bring it back up with the new income and have a good fully funded emergency fund. And all this hits in July. We're what? It's almost May, so that's two months. Yeah. So I would. I would throw all. I would throw your savings at this car. You'll have a little bit left on it on one of them, and keep a thousand dollars in there and go ahead and pay everything off. And then once July hits, you guys start really stocking away some money for a fully funded emergency fund. And then beyond that, John, you just go down the baby steps. You guys need to invest 15% of your income into retirement. Throw all the extra you can at the house.

[Caller]

Sure.

[Rachel Cruz]

Okay. And have some fun in there, too. Right. If you guys want to take a trip or something. That's okay. But have an aggressive goal to pay off this house. I mean, if you guys said, hey, what if we did this in two years? Right. Like a pretty aggressive way. Because once the house is paid off and everything, then to your point about retirement, all you do, all that's left is to stack money. Stack money. And in those retirement accounts and then even beyond that, because you guys will probably max out a lot of your for or your roths and your 401k even.

[George Campbell]

Because you guys, 15% of 330 is almost 50 grand. So that's over 4 grand a month you guys are going to be putting away. And that's without any employer match. So I did the math for you, John.

[Caller]

My, my company won't start letting me have a retirement for a year and my job just now started. So I'm kind of like, well, well, do I start, like, talk to a financial advisor, get it?

[George Campbell]

Well, you can still do, you can still do a backdoor Roth ira.

[Rachel Cruz]

Yeah, I would do the Roth and then I would just put some money. Yeah, I would sit down with a financial advisor. I'd probably open up like an index fund or something and just throw some money in investing. It may not be retirement specific, but I would get in that, that habit of 15% of my income being invested. And then, and Then once the 401k is available next year, then maybe, you know, turn down the, the index fund and put, put it the rest in the 401k because you'll have great tax benefits with that.

[George Campbell]

But even in the meantime, 15 grand would fully fund two backdoor Roth IRAs for you and your spouse. So you still have options even before you can contribute to the employer plan.

[Rachel Cruz]

Yeah.

[George Campbell]

So let's walk through this real quick for you, John. How much money would you free up? How much throw. If you didn't have those car payments? How much could you set aside every month in savings

[Rachel Cruz]

with the new income?

[George Campbell]

Well, with the new income, I have

[Caller]

a daughter that's, I have a daughter that's starting college. My new income is 330,000. The college expects us to pay about 30,000 a year for my daughter. And we're not, we don't want to take out loans for it. We want to pay it.

[George Campbell]

Okay.

[Caller]

So my bills are, my bills are going to be like 12,000amonth on average with all that going on.

[George Campbell]

That's without the car payments or with,

[Caller]

that's, that's without car payments.

[George Campbell]

Okay, great. But you're still going to be taking home like 20k a month?

[Caller]

Yes.

[George Campbell]

Okay, so you still have eight grand to put away. Well, when all said and done, if

[Caller]

you do it right, are we taking home eight grand? How much are we taking on a month?

[George Campbell]

Because I have like my 20k a month is 2:40. So if you're making 330 after your after tax income.

[Caller]

My after tax income is going to be about 16, eight per month, I think.

[George Campbell]

And that's without your wife?

[Caller]

It's with my wife.

[George Campbell]

Okay. That feels low.

[Caller]

I'm a W2 employee in my, I mean federal taxes, state, Social Security, all that stuff is like 75 a year off my 2, 225 that I'm making to will be making. So.

[George Campbell]

Yeah, but you're not paying 130 grand a year in that. Out of your 3:30. That's what it amounts to is you taking home 200. So I would look into that. This is about 60%. It might be a little bit more after all of your deductions. 401k, all of that stuff is hitting. But either way, you're going to have some margin of four to five grand a month to sock away, which means your emergency fund is going to get built up quick. Then we'll be investing 15%. So let's even say you're 49 and you start investing that a little over four grand a month between you and your wife's retirement as sort of the base nest egg. If you just do that from 49 to 62, you guys would have about $2.7 million. At 62.

[Caller]

All right.

[George Campbell]

When you're 62, I don't know how old she is. I assume younger. Is that a fair sign you're older than me?

[Rachel Cruz]

Ooh, what for the older lady, John.

[George Campbell]

So she's 63, you're 62, you get 2.7 million and then you guys can decide do we want to keep working or not. You probably will have the option by

[Rachel Cruz]

then and with a paid off house

[George Campbell]

at that point, and that's without you increasing, investing or making more money, which at this point, you guys are only going to make more money in your careers if you keep this up.

[Caller]

Yeah. Okay.

[George Campbell]

So I hope that's encouraging to you. If you do this right and you just stay out of debt, pay off the mortgage, follow these baby steps, and

[Rachel Cruz]

when the daughter's out of college, that frees up money in four years, you know what I mean?

[Caller]

That'll free up a lot of money.

[George Campbell]

That's like 2,500amonth. You can go on a vacation every month. John.

[Caller]

Sounds Good, George, you're doing great.

[George Campbell]

Don't beat yourself up, John, for the past. You guys are crushing it.

[Rachel Cruz]

Yeah. And the caution is, is very fair because as you run the numbers, you know, you look and it's like, yeah, it's not a million bucks. You know what I mean? Like, it goes fast if you're not careful. That's why we get people that make 300,000 and they're still living paycheck to paycheck. Right. It's like that's what ends up happening. So the intentionality is key. I think writing out the numbers, you and your wife seeing it, I think having a great financial planner on board, especially with some of this retirement stuff that's going to be picking up, is really wise. And yeah, I think if you guys just plan it out month to month, you're just, just, you know, you have that level of intentionality, have a goal for paying off the house, all of that lined up, you're going to do great. You really will.

[Caller]

Great. Thanks.

[George Campbell]

You got this, man.

[Rachel Cruz]

Thanks, John, for the call.

[George Campbell]

Love a call like that. That's a fun problem to have our income doubled. And I want to be wise with it.

[Rachel Cruz]

Yes.

[George Campbell]

And the truth is, I mean, 214,000 left in the mortgage. If they just take the daughter's college money when she's done, they just throw that at the mortgage.

[Rachel Cruz]

Right, right, right.

[George Campbell]

Plus some of the extra margin they have, they're done in a couple years. So before they're 60, they're going to have a paid for house. Maxing out retirement accounts, millionaires.

[Rachel Cruz]

How went aggressive? I said two years. That was too aggressive.

[George Campbell]

I like, you know, I love that spirit.

[Rachel Cruz]

Why, why, why not go big, right?

[George Campbell]

Rachel goes big and she goes home. She does it all. Most people don't struggle with money because they can't do math. They struggle because they don't stick to a plan. And when your bank makes your money feel confusing or hard to track, plans fall apart fast. And that's why I love Fairwinds Credit Union and their mobile app. Because let's face it, most banks build systems that make it easy to swipe and hard to stay organized. But with the Fairwinds app, you open it and you know exactly what to do. No clicking through 11 menus just to move your own money. Just tap transfer and done. You can deposit a check from your couch by taking a picture. You can get real time alerts so you're not guessing what's in your account. And you can add your Ramsey beware debit card to Apple Pay and tap to check out out. See, a lot of banks leverage convenience to make it easier to go into debt. But Fairwinds offers convenience to help you stay in control. It's a huge difference. That's banking that actually supports the baby steps instead of working against them. So if you want to bank someplace that's both faster and wiser, check out Fairwinds. Go to Fairwinds.org Ramsey that's Fairwinds.org Ramsey, insured by the NCUA. Ramsay, is taking over an entire cruise ship. Not like pirates. We're just, we, we booked it legally, don't worry. But this is 2500 people coming together for the ultimate debt free celebration. This is so much more than buffets and deck parties, which I am personally excited about those things. But you get to hang out with Dave and all of us Ramsey personalities for seven days. Hear new teachings on wealth building. Join the world's largest at free Scream. Watch live episodes of your favorite shows on stage. And so many more surprises. Who knows?

[Rachel Cruz]

It's so fun. It's a fun week.

[George Campbell]

Yeah. I mean, ever since the last one, I was like, I was kind of riding a camp high after, like, that was something special.

[Rachel Cruz]

I know, it was, it was such a great.

[George Campbell]

And the people working on the cruise were like, who are these people? They're all so kind.

[Rachel Cruz]

They kept saying that they're like, this is the nicest like week of people we've ever had.

[Caller]

Yeah.

[George Campbell]

And there's no strangers because they all have. You have like minded people all in one place.

[Rachel Cruz]

Well, not to make anyone uncomfortable, but everyone's like, yeah. They would stand in line for the buffet and be like, how much debt have you paid off? You know, and they just talk, talk about things that you would never ever probably share. But a place to celebrate and get to go to the Caribbean. It's be fun.

[George Campbell]

Not mad about it.

[Rachel Cruz]

It's gonna be fun.

[George Campbell]

All right. Click the link in the show notes or go to ramseysolutions.comevents to book your cabin. Hopefully we'll see you in 2027. Iris is in Bismarck, North Dakota. What's going on, Iris?

[Caller]

Hi, George and Rachel. How are you guys doing?

[George Campbell]

Well, how can we help today?

[Caller]

Okay, so I'm in quite a bit of debt and I actually started going through the baby steps at the beginning of the year. Started like going full, like full intensity about two months ago. Already paid off about $5,000. And my boss, my boss offered to lend me the money that I need to pay off the rest of my debt. And just pay him without interest.

[George Campbell]

Lend you the money. How much is this?

[Caller]

So I have $41,805 left to pay off Wolf. And this is so credit card 9373. I have 6573 I owe to the IRS and a nasty personal loan with one main financial for $25,859.

[Rachel Cruz]

Okay. No, I would not do that, Iris. I know it sounds. Sounds good because you don't have to pay interest and all of that, but suddenly now you are tied to your boss as. As a bank, basically. And any missed payments, anything that happens in your life, any. I mean, anything that is going to be happening, he's going to be just there. Right. From, like, an emotional financial perspective. And so keeping things clean and just saying, hey, keeping the creditors. The creditors and keeping your boss. The boss keeps very healthy boundaries and keeps everyone in the lane they should be in. And when you start muddling those, it can get messy really quick.

[George Campbell]

And the truth is, interest. The way you're attacking this thing isn't going to be the issue.

[Rachel Cruz]

That's a good point.

[George Campbell]

So the issue is the behavior that got us here, and you are actively transforming that. And I think there's something really powerful about using that snowball method to knock out the next set. The next set. Freeing up the payment. And if you just owe your boss one weird, giant payment, it's just going to hit different, and it's probably going to take longer. You're probably going to get a little comfortable because, like, well, I'm saving on interest. I don't need to be that aggressive. He only said I needed to pay 500amonth. And again, to Rachel's point, it just adds risk. It changes the relationship. I would much rather owe all these other people money than my own boss.

[Rachel Cruz]

Yep. Iris, how much do you make a year?

[Caller]

Yeah, well, it varies. I work in a restaurant, so this year I made 54 before taxes.

[Rachel Cruz]

Okay.

[Caller]

And I started doing some side hustles so I can pay off this debt.

[Rachel Cruz]

Good, good.

[Caller]

Hopefully by. My goal is February of 20. 20. 27.

[George Campbell]

Awesome. I love how specific you've been. You knew your exact numbers on your debt. You have an exact debt payoff date. They. That gives me a lot of encouragement.

[Caller]

I have a concert to go to, so I need to.

[George Campbell]

That's hilarious. What concert is it?

[Caller]

It's not backstreet Boys. It's Carol G. She was in Coachella this year, and she's gonna perform in Puerto Rico February 26th.

[Rachel Cruz]

A destination. How fun. Iris Is the boss at the restaurant that you work at?

[Caller]

Yes.

[Rachel Cruz]

Okay, so I'll be on honest. Even more so. Why I wouldn't. Because that has. That industry turns over so much. You could look up in six months and get a great paying job somewhere else. But then you weirdly have this, like, loyalty to him because he, like, did this big favor for you. And. And so I.

[George Campbell]

Or he leaves and goes to a different restaurant and now he's like, hey, I need all that money up front.

[Rachel Cruz]

Yeah, yeah.

[Caller]

Well, he's. He's the owner of the restaurant. The thing is, I've been working with him forever. I've known this guy for 11 years and he's. He's seen me for 11 years. And the thing is that he asked me, he's like, hey, Iris, like, I've seen you be stuck. Why haven't you bought a home? Just life things. And so that's why he asked why I haven't progressed, in a way.

[Rachel Cruz]

Yeah. And his heart's probably in the exact right spot. Right. I don't think there's any malice or anything. We just see these situations go sideways, like we do when you start mingling relationships and money, especially when it comes to borrowing money, it just, it changes the relationship. And even though I think the heart of him is probably gold and it's probably great, I just, I would have the more conservative approach of keeping him my boss and not my banker. Like, that's just basically, you know, at the end of the day. So that's. That's what we would do. That's what I would do. George, I guess you could speak for yourself, but.

[George Campbell]

Well, 100%, the more I'm thinking through this, I'm just going. This just feels like I can count on zero fingers how many times someone's called into the show and said, hey, I borrowed 40 grand from my boss and it worked out perfectly. Paid him back and everyone was happy and the relationship was great. It just doesn't happen. It's sort of a pie in the sky thought. And anytime you lend money to anybody that you know, it usually ends up changing the relationship for the worse.

[Rachel Cruz]

And to your point earlier, George is so true. Iris, like you are the secret sauce of getting yourself out of debt. It's not rearranging debt. It's not consolidating here, getting this lender there. And all of this people, people shuffle their debt, even if it's not their boss saying they'll pay it off, but like, to get a better deal here with the interest, all of it. But listen, at the end of the day, it's really not going to matter. It may save you a month or two. Right. But at the end of the day, it is you that's going to be paying this off. And you're the secret to it all. It's you not trying to finagle the interest. And so because of the risk of the relationship and your employment. All of it. Yep. Keep it at.

[George Campbell]

And you're less than a year away according to your goal, Right?

[Rachel Cruz]

Yes. So great.

[Caller]

Yes.

[George Campbell]

So less than 12 months.

[Caller]

I'll call you guys back for the. For the debt free screen.

[Rachel Cruz]

Yeah.

[George Campbell]

And I hope you get to go to that concert. I'm not hip enough to know. I mean, I know Coachella. That's about. And I've heard of Carol G. Because I know that it's a really hip.

[Rachel Cruz]

I need to look.

[George Campbell]

I'm so out of touch. Rachel and I only know music from, like the early 2000s. We never learned anything new and exciting.

[Rachel Cruz]

Let me see. Oh, she's pretty.

[George Campbell]

It's about the music. Okay.

[Rachel Cruz]

I know. I'm. I think it's great, but thank you for that. Give me a. Give me a millennial boy band and I'm there and.

[George Campbell]

And dangle a carrot. I love that she has a thing that she wants to do that gives her a.

[Rachel Cruz]

Why, yes, sure. I'm gonna work an extra concert.

[George Campbell]

It doesn't have to be this really deep. Why of like, you know, childhood trauma that I'm running from. It could just be a fun concert. And you go, I want to feel like I earned it.

[Rachel Cruz]

That's my finish line out there.

[George Campbell]

And not put it on a payment plan.

[Rachel Cruz]

Yep, that's my finish line.

[George Campbell]

I was just at Disney, Rachel, and we did these street interviews. Can't wait for you to see the Disneyland version.

[Rachel Cruz]

You did the Disneyland in California?

[George Campbell]

Yes.

[Rachel Cruz]

And how was it?

[George Campbell]

Everyone I talked to, it was like an 18 year old on a payment plan for the annual pass. It's only 130 bucks a month. That's what they tell me. And her mom's on the payment plan, too, so they're doing this together. Not paying it off, just paying the monthly payment.

[Rachel Cruz]

Some generational debt to the old.

[George Campbell]

It's like a family tradition now. But it's funny how we. We teach our kids that payments are okay as long as you can afford them.

[Rachel Cruz]

100. 100. And just stupid financial decisions. We get ourselves in from time shares to car payments, all of that. And it's like when it's so normalized, that's what your kids pick up. Yeah, that, that is how you do life. And that's what ends up, I think the, the of being average, right. Of just being paycheck to paycheck, barely have enough for retirement, if that. But we're like having to depend on Social Security. And you work your whole life for that, for that ending. And it's like, no, you can get rid of all of that. Pay yourself instead of paying other people

[George Campbell]

on the other side when you're in control. Humans are really good at one thing and that is justifying the things that they want even when they don't have the money. That is the American way. And the sooner we can go the other way, the better off we're going to be.

[Caller]

Sam.

[George Campbell]

Cesar is in Colorado Springs. Up next. Cesar, welcome to the Ramsey Show.

[Caller]

Hey, George, how are you guys?

[George Campbell]

We're doing great, man. What's going on with you?

[Caller]

Well, I'm in a little dilemma. I feel like have been for like about a year now. My question is like, what will get me closer to happiness, money or experiences?

[George Campbell]

You called the right show. What do you think? CESAR I think you know the answer.

[Caller]

I think so. But I like, I know experiences Will, but I know like at my age, I'm 21, so I feel like right now everybody says there it's split. It's like everyone, some people say, oh, you're, you should go have fun. And some people like, oh, you should go work and make your money now and later have fun. And I'm like stuck in between those two.

[Rachel Cruz]

Yeah, I don't think it has to be an either or at this point for you. I think there can be financial goals that can set you up to have a peaceful life because money does bring options and choices. And instead of being stressed and living paycheck to paycheck, which will rob your happiness, you know, you can set yourself up well. And especially at a young age. Yes. Investing in all that. Well, will will do that for you. CESAR so on one end of the spectrum, absolutely. But the other end, the lie that money at the end of the day is going to be the thing that fulfills you, that's a lie. I mean, it doesn't even people that have a goal of like, oh, I want to get a million dollars, once they get it, it's like, okay, it's still me, so I gotta do something else. Right? That's, it's not the, there's like we always say the finish line always moves. So, so yeah, I think it could be a both and I Think you can enjoy your life and save some money and be wise with it.

[George Campbell]

And also no amount of experiences will cure you if there's something going on inside. And so I want to tell you that as a 21 year old, I think that will free you to go. There's not a single trip that's gonna be like, well, that did it. Yeah, I'm happy now. It's all ephemeral, it's all temporary. And so the key is what's going on in you in Caesar that's even stirring this up.

[Caller]

Yeah, well, like, I feel like it's more like on the lookout for the future because like, right. Every, every now and then I'm like, wow, like I'm happy right now in life, you know, just. I guess what, like, like a lot of young people, it's like, I want an exotic car or like I want a mansion one day. You know, it's like, I see like entrepreneurs go, like, don't. Like they work seven days a week, 15 hour days for 10 years and they finally have it, but then they're like empty inside. And at the. I got. I know people that just like have like the normal life and they go on vacations and, and they invest a little bit and later on they're like, oh, I wish, you know, I guess what my fear is that I don't want to be limited by money in my life. To be able to like to live, you know, if that makes sense.

[Rachel Cruz]

Yeah, I think so. And I think it's just a mindset of what money is, where money's placed in your value system and how you see it. So if you worship money and you think it's the thing that is going to cure all, I think you're gonna get to the ends of your life and like you said, you're gonna be. You're not gonna have anything to show for it from a relationship standpoint.

[George Campbell]

Right?

[Rachel Cruz]

Like, nobody lays on their deathbed and they're like, man, I wish I had a little bit more of my 401k. Right? They're asking for their family and their friends. Like the things that money can't buy in life, I really do believe are the things that give us the most joy and where we can actually find of contentment. We put our time and energy into our families and into our marriages and our friendships and our spiritual life and our health. Like these things are really, those are the important things in life. Our friend Arthur Brooks talks about this though, about how there's five things you can do with money. Four will actually bring happiness and one will not. Yes. And the one that will not, Caesar, is everything you listed out, which is stuff.

[Caller]

Stuff.

[Rachel Cruz]

That's the one thing that, like from a chemical reaction in your brain, like, genuinely, scientifically, the stuff does not. It will give you a momentary hit, dopamine hit, but it wears off, it doesn't last. Yep.

[George Campbell]

So the things that will give you happiness that he talks about is spending money on experiences, especially with people you love, people you love. Buying your time back, that can bring happiness because you're not doing something you don't want to do. And you get to refocus that time, saving money and investing, that actually brings happiness. Happiness to set up your future self for success. And then generosity, making, giving a habit in your life also brings you happiness. In fact, it's the most fun you can have with money. So the sooner you not only learn that, but you believe it and you act it out and it becomes the habit in your life, the better your life is going to be. And my friend Sahil Bloom wrote a book called the Five Types of Wealth. And he goes through relationships, family, social, your physical health, money and work. Like all of those things combined. If you're healthy in all of those areas, you're going to be a happy person.

[Rachel Cruz]

Let's those out again, George, what are they?

[George Campbell]

So family, social life, relationships, your physical health, your finances and money. And lastly, your work.

[Rachel Cruz]

My gosh. I just. I basically did the book. I just rambled off some stuff. But that's the stuff money can't buy right there.

[George Campbell]

Like, if you have a miserable job, you're going to be a miserable person. If you are broke, your whole life stressed, you're not going to be happy if your health is in poor shape. All you care about is your health at that point. Point. And if you don't have good social relationships, you become the loneliest person on earth, even with a pile of money. And in your big mansion. And you find that people who have the big mansions, who don't have a lot of people in their life and family, they want to go get a small apartment somewhere that feels cozy because it's just so lonely. It just amplifies the loneliness. So all that to say, Cesar, you're on the right path that you're even asking this question.

[Rachel Cruz]

It's a good philosophy.

[George Campbell]

You're not calling saying, hey, I want to buy a Lamborghini. You're calling saying, hey, I know the Lamborghini is not going to bring me that joy. And the last thing I'm Going to throw in there is faith. Cesar, I don't know your faith background, but I would say faith brings a deep level of grounding and a deep level of joy that the worldly treasures can never give you. That sermon hit you?

[Caller]

Yeah. I'm like a little speechless right now because I thought you guys were going to tell me something else, but yeah, I guess. Yeah, that makes a lot of sense. Yeah, because like, I just don't want to be like at the top of the hill and be like, oh, this is not what I wanted, you know, and 100%.

[George Campbell]

Can you do me a favor?

[Caller]

Go ahead.

[George Campbell]

Can I recommend a book to you? If you promise me you'll read it. And I'm not going to give it to you because you can access it for free right now, like on your phone.

[Caller]

Perfect.

[George Campbell]

Read the book of Ecclesiastes in the Bible, because this is a tale as old as time. And Solomon did it bigger and better than anyone else. And he has the best message for you at the end of it.

[Caller]

Okay.

[George Campbell]

Have you heard of that book?

[Caller]

Yes.

[George Campbell]

Okay, great story. Richest man on earth had it all. And at the end he goes, everything is meaningless.

[Rachel Cruz]

George loves.

[George Campbell]

Spoiler alert.

[Rachel Cruz]

George is such an ecclesiastical.

[George Campbell]

I love an emo book of the Bible. That's just like, yes, dude. Like, it's like a goth kid. You know what I mean?

[Rachel Cruz]

What are we doing? What are we doing with our lives?

[George Campbell]

But this is like I have this existential crisis, you know, once a week where I go, what are we doing? I know when you just pan back, you go, okay, what really is meaningful in this?

[Rachel Cruz]

That's why I liked the book Die with Zero. Not that I agreed with everything in it, but you're like, okay, what do we do? Like, you know what I mean? You get to a point financially, which I get all of you listening. Everyone is at a different place financially. But you know, if or when you get to that place of like, okay, you know, we've done it all, what am I doing? Am I just like stockpiling money? And then when I die in my 80s or 90s, my 60 year old kids just get everything? Is that it? And it's like, no, live the live life now.

[George Campbell]

Like, yes.

[Rachel Cruz]

And again, you have to set yourself up well to do that. So I'm not saying go into debt or spend everything every single month, because no, that is from a biblical perspective, that's going to cause stress. Like that will. But. But getting to a point of like, okay, if you work hard and you're smart with money, and yes. And you're in your. You know, mom and Dad, I think they're a great example of this. They're in Argentina right now. They were Texas, texting me pictures. Waterfalls. And I'm like, there's Dave in front of another waterfall.

[George Campbell]

Uh, but.

[Rachel Cruz]

You know what I mean? But it's like, enjoy it. And then they, like, love our family so well, and they, you know, they take. Take us all on a trip every year, and it's like some of the best times. So it's like, spend some of your money. Like, yes. When you have it, spend some of it and enjoy it. And then the other part is the generosity part, George. Which is exactly. You're exactly right. When you actually have the means and the ability to reach into someone's situation and completely change their life. Like, that is wild. And you know What? Like, a $8,000 car for a single mom sometimes will do that. Or a $10,000 car, and you can just pay for it and you just give it to her and that's it. Right? I mean, like, that kind of stuff, when you can use your money while you're alive to do those kind of things, like that is, like, there's a level of satisfaction that you're actually using your money as a tool to create a life that you love.

[George Campbell]

That's it. In my book, I say I talk about money so we can stop talking about money to become the tool. Tool that funds the rest of the things.

[Rachel Cruz]

That's right. That's right.

[George Campbell]

And then ask yourself this question. Well, I brought up this one from Galatians because this is. This is really it for me. But the fruit of the spirit is love, joy, peace, forbearance, kindness, goodness, faithfulness, gentleness, and self control. That, to me, is the goal. That's why we get our money right? So that we can focus on have peace. Joy and peace and love and all the things that are on T.J. maxx. Stitch pillows. That's what's. That's what it's about, Caesar. So I appreciate the call. It launched a good sermon for Rachel and I. Welcome back to the Ramsey show and the Fair Winds Credit Union Studio. I'm George Camel, joined by Rachel Cruz. The number to call is 888-255-225 if you want to join the conversation. If not, just keep listening, listening. You'll have a good time. Joseph is in New York City up next. Welcome to the show, Joseph.

[Caller]

Thanks for taking my call.

[George Campbell]

Absolutely.

[Caller]

Yeah. So the issue that I'm trying to sort through right now is My daughter is heading off to college this year. I do have two other kids to follow behind her about four years apart, which is a good thing. Have a lot of debt, about $200,000 worth of credit card debt and loans with personal loans in heloc. That does not include the mortgage of about you know, I pay about $4,400 a month there. So, you know, the issue that I'm having is that I make too much money that we don't get any financial aid. We were fortunate enough that we got some merit aid. My daughter's going to be going to an SEC school and they're giving us like in state tuition. So that helps a lot. But we're still going to be left with about, about 30 some thousand dollars after the fact. So I'm stuck with the question, do I try to pay that in cash because I can work extra that I could probably do that. Do I take the $20,000 parent plus loan out and make that put that extra money towards the debt that I have. I just don't know which way I go. My wife and I are, you know, we, not that we fight about it, but we argue about, you know, what the heck we're going to do because we totally miscalculated and we were just, just didn't know, we didn't know anything about column paying for college. I was still living in the 80s and 90s and things have changed since then.

[Rachel Cruz]

Yeah, for sure.

[Caller]

Yeah.

[Rachel Cruz]

The affordability of college is, is tough. So we, you know, we find that, you know, we, we are not a proponent of any kind of debt. Joseph. So no, we will say no to the Parent plus loan and we're about going to a school that, that everyone can afford and it sounds like you guys can't afford this college.

[Caller]

Right.

[Rachel Cruz]

So that puts a awkward conversation in the air with the 18 year old because it's May and I'm sure the acceptance has already happened and the plans have already started rolling. But the truth is if you guys don't have the money to pay for this, you don't have the money to pay for it. So either your son or daughter who's going off to college, works and finds a job and has a different looking college life than just sorority houses and frat parties and football games and you know, he or she will be working and, or they can't go to that

[George Campbell]

school, at least not right, right now. Have they already like, have they have it in their heads they're going to this school?

[Rachel Cruz]

Yeah, it's.

[Caller]

How far are we yeah, we, we, we already, we already committed.

[George Campbell]

Got the T shirt and everything. Okay, so let's talk through this. How much money do you guys make a year?

[Caller]

Combined income? About 340,000.

[George Campbell]

Okay, so help me understand how a family making $340,000 is $200,000 in consumer debt. What happened?

[Caller]

So we have a lot of credit cards. You know, we have. I took a HELOC loan out probably about five or six years ago. There's about $50,000 on that. We had a roof leak. That was about $20,000 on that.

[George Campbell]

But what was, what was happening to the actual income you had coming in? Because this is all outside of your, you know, 15 or 20 grand take home every month.

[Caller]

Sure.

[George Campbell]

Where was that going?

[Caller]

A lot of credit card misspending. Bad, bad, bad decisions. Bad decisions over a long period of time. Yeah, that. When we bought our first home, we were. Which again, I'm financially illiterate and I will take the full blame on that. When we, when we bought our first. When we bought our first home, our agent set us up with this financial person and then we were making the minimum payment at the time. But I didn't realize that despite me making the minimum payment, which I thought was satisfying everything, it was borrowing against the principal of the mortgage. And my principal was actually going up. So that put us in a hole there. We have since sold that house and have moved on. I knew we couldn't afford the house. House that we lived in. We had a couple friends, family, actually, family to front us some money so we could get the house. Right now our mortgage is about 4,400.

[George Campbell]

And what's your take home pay every month? What's coming into the bank between the two of you?

[Caller]

So my wife is about 6,000. This is take home after taxes. My wife is about 6,000. I'm about eight, nine. Roughly about 10,000. That's before. Before overtime and extra shifts.

[George Campbell]

Okay.

[Caller]

I can pretty much as many extra shifts as I can. And after taxes, I get about $1,000 per shift. Okay, after taxes.

[George Campbell]

Cool. Well, the math should be pretty clear here on how we're going to cash flow this. And if that means it slows down your debt payoff a little bit to get her through this first year and buy you guys some time, that's what I would do because I do think it's a great goal for her to go to school debt free. But I think she needs to have some skin in the game versus dad just working his tail off so she can go, go enjoy the frat. Parties and sorority parties. So that would be the game plan. And then the long term, we need to clean up the $200,000 of debt using the debt snowball. So attacking the smallest one first we need to rent. You know, really dial down our lifestyle because my guess is your total expenses are close to 16k a month, if not more.

[Caller]

Yes, definitely.

[George Campbell]

What's coming out of the bank account every month?

[Caller]

Mortgage.

[George Campbell]

I mean, is it more than 16k or is there any money left over?

[Caller]

No, no, there's, I would say, you know, I was doing rough estimates over the last week or two. I would say it's roughly about the like 14, 15,000 that's coming out.

[George Campbell]

Okay.

[Rachel Cruz]

Because you said 4,000 is the mortgage.

[Caller]

Right?

[Rachel Cruz]

Right. So you got 12,000 left. How much are all the payments on all the debt, the credit cards and everything?

[Caller]

Let me see. We have, I just paid a car off. We have two cars that are about $700 total between the two. The HELOC is about 5, $500 a month. The credit cards are. That's several thousand. It's a couple thousand a month. You know, it's like 30 interest, which is.

[Rachel Cruz]

Yeah.

[Caller]

I'm trying to think of what.

[Rachel Cruz]

Yeah, well, I mean, I'm at 7,000 right now. I mean it's just to the point. Yes. That these are, and these things I don't, we don't want you to get behind on. So. Yeah. So Joseph, I mean I would sit down tonight and we'll give you every dollar dollar, our budgeting app will give you a year subscription to it. Because I would, I, I would want, if I were you, you and your wife to sit down and list out everything that we spend money on in the month. And, and my, my hope is, and my sense is that you guys are gonna look up and be like, oh crap, three to $4,000 is just getting blown on subscriptions and how to eat and just whatever, whatever the flip we want to do and all of that has to be tightened up to not only pay off this debt, but if you guys are serious about this college of starting to save to cash flow and have to make payments for this college, forward payments, not back payments of debt. And so getting on a really strict budget, Joseph, I mean even looking at selling some of these cars if you want, like whatever you can do to get out of this as fast as possible is what you need to do.

[George Campbell]

Yeah. I would not turn to any more debt. That's what got us here. It's not going to get us out. So no more parent plus loans. No more. Just kind of phoning it in. You guys make too much to be this pro.

[Rachel Cruz]

Fuck up the credit cards. Be done with them.

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[Caller]

Foreign.

[George Campbell]

Today's Ramsey Show Question of the day is brought to you by why Refi if you've lost control of your private student payments, your financial progress has stalled out. But why Refi helps borrowers explore refinancing options with payments built around their real life situations. Learn [e-mail] Ramsey that's the letter y r e f y.com Ramsey may not be available in all states.

[Rachel Cruz]

Today's question comes from Susie in Washington. I recently paid off my Tesla. Love that. As two Tesla drivers we appreciate that and have $20,000 in credit card debt. Should I take a loan against my 401k to knock out that debt?

[George Campbell]

Not in a thousand years. No, no, no. You paid off the Tesla, use the same intensity and get rid of the credit card debt. The problem with this loan against the 401 is there's multiple reasons. Number one, one, you are unplugging all of that compound growth that was happening.

[Rachel Cruz]

Yes.

[George Campbell]

So that ten thousand dollar loan you took out against your 401k is now not growing for you. On top of that, you're basically double taxed on it because you likely pay taxes to put the money in and now you're going to pay taxes as you pay it back in while paying interest on it. So no, I would not do this 401k loan and it also puts you at risk with your employer. And we've gotten this call recently, recently of I got laid off, I got fired and now the entire loan is due within 30 days.

[Rachel Cruz]

Yes.

[George Campbell]

Or else it gets counted as an early withdrawal which then gets IRS penalties.

[Rachel Cruz]

That's Right. And if you know the money, it's just gone, then. Yep.

[George Campbell]

And doesn't change the behavior that got you here. It feels like a little shortcut.

[Rachel Cruz]

Yes.

[George Campbell]

Robbing your future self.

[Rachel Cruz]

That's right. We say to never cash out retirement. That's 401ks Roth IRAs, traditional IRAs, unless you are facing a bankruptcy or foreclosure closure. So we are not pulling it out to pay the house off early. We are not pulling it out to pay off consumer debts. So none of that.

[George Campbell]

So no withdrawals, no loans.

[Rachel Cruz]

That's right.

[George Campbell]

None of it. Just pay it off with your future income, with your savings, with your gazelle intensity with girl.

[Rachel Cruz]

She's doing it. Susie's on it.

[George Campbell]

Yeah. I don't know how much that Tesla was and what the loan was, but if you can knock that out.

[Rachel Cruz]

Yeah. Hopefully it freed up a couple hundred bucks in the payment and throw that at the credit card cards.

[George Campbell]

Love it. Thanks for the question, Susie. All right, Azalea is in Raleigh up next. What's going on? Azalea,

[Caller]

Hi. Thank you so much for taking my call.

[George Campbell]

Sure. How can we help?

[Caller]

So I. So I want to know if it's a smart idea for my husband and I to invest in his business or should we pay off all of our debt first? We have about. I forgot about his 401k. I was just listening to whatever was going on on the pH. But we have about $15,000 that he. A loan that he took out of his 401k that we need to pay back and about 25,000 ish dollars in credit card debt. We don't have any car payments, and our household income is around 200,000 a year. And he. His business is growing and he wants to invest a trailer, a dump trailer and a new truck. The van he has is so old, it just can't do the work that he needs reliably. So with the truck and the dump trailer would be a total of about $70,000. But that would immediately. He would be making around $2,000 a month extra immediately with the work that he would be doing.

[Rachel Cruz]

Okay. So he wouldn't recoup that.

[George Campbell]

That's like five years to break even.

[Rachel Cruz]

Three to. Yeah.

[George Campbell]

And you guys would have to go into debt for this.

[Caller]

This. Yes. We have zero. We don't have any savings at all. Like cash.

What.

We do have assets, but we don't want to like, touch that.

[George Campbell]

What do you mean assets?

[Caller]

So we.

So we have land. We own land. We bought that cash. And we have gold.

We Have a total of that.

Those assets is around $90,000.

[Rachel Cruz]

How much is the gold?

[Caller]

About 50.

[George Campbell]

What are you hanging on to that for? Is this like apocalypse?

[Caller]

Yes, like rainy day. You never know what's going to happen. We just want to be able to

[Rachel Cruz]

more than a rainy day. Like, like the world ends kind of thing.

[George Campbell]

Yeah, that's a little bit more than rain.

[Rachel Cruz]

A rainy day is like well H

[George Campbell]

Vac goes out but you're not going to pay.

[Caller]

Yeah.

[George Campbell]

Your H Vac guy in gold, I'm

[Caller]

sure he takes right well. So it's just for us it's just a question that we feel comfortable with. God forbid something really bad were to happen. We feel like we have that to like, you know, it'd be easier to grab a piece of gold and trade versus like selling land, food.

[George Campbell]

What about money? Did we forget money's an option?

[Caller]

Yeah. So. Well, with all of that being said, we don't know what to do if we should just pay off our debts completely or if we should invest. Invest?

[Rachel Cruz]

No, you should not invest. No. Because the return is opposite. If you said I need to get a 2000 which we had this call I think earlier this week or last week I needed $2,000 to get a new license for my career and I'm going to make 5,000 more a month because of it. And it's like done.

[George Campbell]

That's different. And you're paying cash.

[Rachel Cruz]

This is flip flopped. This is $70,000 of debt to. To make 2,000 more.

[George Campbell]

Even if you had the cash, I

[Rachel Cruz]

would say drivers at night and make $2,000 more.

[Caller]

Okay.

[Rachel Cruz]

So no, no, no.

[George Campbell]

So pay off the debt. Pay off the largest balances.

[Rachel Cruz]

So I'm telling you I would. And you're not going to do it. I take that gold and I'd pay off your. Pay off your debt. You guys will be debt free. You'll have some cash from that and then use that to slowly save up to invest in his business for his. For. For like the truck. Like one, one thing or the other. Right. Because I do want him to be able to grow his business but we got to do it at the speed of cash and not at the detriment of slowing down, getting out of consumer debt. So how much does he make a year off this business?

[Caller]

So his, his main job, thankfully he works from home and he has a lot of flexibility which is why he's able to run his business. His main job pays him about 110.

[Rachel Cruz]

Okay.

[Caller]

And then he makes around 40 to 50,000 with his business. So Gotcha.

[Rachel Cruz]

Okay.

[George Campbell]

And then you make another 40 or

[Caller]

50 and the rest. Yeah, I'm a home baker, so I make money from home. I'm home with my kids.

I homeschool men.

[George Campbell]

Okay. Okay.

[Caller]

So yeah, 50 to 60.

[Rachel Cruz]

So from a. From a business perspective, I would have. Which I'm sure you guys do. You know, his own business account with that. And then I would break out. Yes. How. What's the cheapest truck I can get get? Not a new nice truck. Like what's the cheapest truck I can get to do what I need to do? Make that. You know that goal number one, after you guys have paid off debt.

[Caller]

Okay.

[George Campbell]

And have an emergency y.

[Rachel Cruz]

And then the. And then the. You know what. What was it? It was the truck and a what?

[George Campbell]

Credit cards?

[Caller]

Trailer.

[George Campbell]

It's dump trailer.

[Rachel Cruz]

Dump trailer. Yeah.

[Caller]

Or.

[Rachel Cruz]

Or one or the other. You're right. So like. Yeah, but we're going to be cash flowing those purchases.

[George Campbell]

It's easy to try to justify it with the money on the other side. The problem is that's not a guarantee and we're not doing the math on what it's really going to cost us. The break even, all of that. So I would pay off all of your debt. Now. I personally would sell the gold. Otherwise you're just going to be. I would love for you guys to sacrifice and get rid of this debt over a fast period of time. But the scary part is to me is that you guys are bringing home $12,000 a month and yet you still turn to debt. So what's causing that behavior underneath it?

[Caller]

Well, the debt. Majority of our debt was from when we moved from. We moved from New Jersey. And honestly, it was completely my fault. I accumulated a lot of debt buying things that were unnecessary. And that really has. And also. Yes, it has. And the other debt that we have a credit card was from investing in my business. I've invested a total of $50,000 in my business business, which means basically I only made $10,000 last year. Investments, however, have stopped. I have everything I need to continue making money. So at this point, it's just making money.

[Rachel Cruz]

Yeah. And I do want you to. I want you guys to critically think though of the situation. I keep going back to, let's go $70,000 in debt. We'll make two grand more a month. But the debt payment on that may be $1,000 between the truck and the. And the trailer, you know, so that you're really only making a thousand dollars a month.

[George Campbell]

And again, plus there's interest.

[Rachel Cruz]

Yeah. People are doing that dog sitting. Do you know what I'm saying? Like, like I'm just like, like just keeping perspective of reality of these numbers. Because it's not, to me, it's like a, it's like a non, a non starter.

[Caller]

So I'm just so afraid to sell the gold because we bought like $20,000 worth and now it's at 50. So like I'm afraid to.

[George Campbell]

Hold on, hold on. Are we doing this to get rich or are we doing, doing this to, you know, secure ourselves in case of an apocalypse? Because right now you're mixing a lot. You told me it's just in case and now you're keeping it because now it's like, well, we could make more.

[Rachel Cruz]

Gold's the fear commodity. When fear happens, which is happening right now, the market's kind of up and down. The war, everything.

[George Campbell]

As soon as that calms down.

[Rachel Cruz]

Yes.

[George Campbell]

If that gold's gonna go down, the market's already come back up. I would get rid of the gold and get off the Internet. Cause that's what's caused you to buy this. If the Internet didn't exist, you'd own

[Rachel Cruz]

zero mobile cable news. It's all gold and reverse mortgages and walk in bathtubs. Let's don't, let's don't go down that path.

[Sponsor/Announcer]

Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real, real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com.

[George Campbell]

Welcome back to the Ramsey Show. I'm George Camel here with Rachel Cruz. You've heard us mention every dollar. And if you're working the baby steps, the best and fastest way to do it it is by using the everydollar app. And it's more than just our budgeting app now. The plan is built right in. And the singular focus of everydollar is to create margin to throw at your focused financial goal. You can track your progress, get personalized recommendations and coaching, and that will free up more money to work the plan even faster. So start everydollar for free by downloading it in the app store or Google Play. Diane is in Philadelphia up next. Diane, welcome to the show.

[Caller]

Hello, and thank you for this opportunity to get your advice.

[George Campbell]

We're honored to give it. Hopefully it's good.

[Caller]

I hope it is too. But anyway, let me give you some facts. I'm a caregiver for both my parents. They live with me in my home. They were divorced when I was like 12 years old. And they each remarried and each of their spouses have passed. So I've had my dad. And they each have dementia too, by the way. But I've had my dad for eight years and I've had my mom for five. My mom had a condo, which we kept. I didn't sell it. I rented it out. I was a landlord too, with all of us.

[Rachel Cruz]

That's a part time job too, girl.

[George Campbell]

No, tell me about it.

[Caller]

So anyway, I rented it out for about four years. Really quaint little town, really nice town that I'd like to move to when all this is, you know, done. But my question is, okay, the renter moved out. I've had it for about a year, where I use it to go to just relax and get some respite. I have a sister. I'm the power of a church attorney. We're both on the will for both of them to receive one half each. I want to know the condo still has a mortgage on it, and most of the mortgage payment, not most of it, about half, is still going to interest. So what I like to do is pay off the mortgage, the remaining mortgage on the condo. My sister has said she hasn't been helping. I've been doing most of it by myself. She just started helping maybe about eight months ago. She said that she would forfeit her inheritance for the condo just because it would have been gone anyway. Had they been in a nursing home or anything like that. They would have taken any assets they had or that my mom has. So I want to know. One, is it okay? Would it be good to pay off the mortgage? It's about 33,000 left. And second, if I should get what my sister said in writing so that there no, you know, problem, you know, in inheriting that proper property and having it for myself to move into.

[Rachel Cruz]

Okay, so you're saying you're gonna. You want to take the condo and she'll take the rest of the inheritance.

[Caller]

No, I mean, what do you mean? Any other. There, There are no other assets? Is that what you're asking?

[Rachel Cruz]

Oh, it's just the condo right now.

[Caller]

Yeah. For my mom. Yeah. In fact, yes.

[George Campbell]

So what is your sister getting in this?

[Caller]

She wouldn't be getting anything, not for my mom, my dad. My father has money. I've been, you know, a good steward of his money. So he has. She has money left. And they each have, they each have insurance, but like an insurance policy, that's. That's all we could have.

[Rachel Cruz]

Life insurance.

[Caller]

Yeah, but my mom's is a small policy. It's only about 15,000.

[Rachel Cruz]

Okay.

[Caller]

So. But on my dad's side, she would get money she hasn't really done anything for.

[Rachel Cruz]

Yeah. I was gonna say the compensation of you being the caregiver is something usually most siblings, you know, talk about, because to your point, you would be paying for someone to be doing this, and you've been doing that. And so.

[George Campbell]

And some states you can get paid to be the caregiver of your parents, but they don't.

[Caller]

Yeah, you'd have to be on Medicaid and, And you know, they'd have to spend down all their assets at work. You know, they didn't have a lien or my condo would be gone.

[Rachel Cruz]

So how much is the condo worth if you were to sell it?

[Caller]

Yeah, the market value right now is, I should say only, but it's about 130.

[Rachel Cruz]

130. Okay. Okay.

[Caller]

So one bedroom, one bedroom condo.

[Rachel Cruz]

Yes. So. So technically, if it was paid off and that was the asset that you girls had to, that you, you and your sister had to split, then to buy her out, you would have to pay $65,000.

[Caller]

Yes, definitely.

[Rachel Cruz]

To pay her out. Yep. But you're saying you have 33,000 that you could do just to pay it off right now I could pay the

[Caller]

mortgage so she, my mom wouldn't be paying interest, you know, on that because I am using. She gets a monthly pension, so a small pinch, about 2,500amonth. And I use part of that to pay the mortgage.

[Rachel Cruz]

Yeah, because at the end when the, like, if you didn't pay it off and she passed, the estate has to settle up.

[George Campbell]

You'd have to continue the payments on your own.

[Caller]

I'd be paying it anyway. I'd have to sell it. That's the same.

[Rachel Cruz]

Yeah.

[George Campbell]

If you get it in writing that you're going to get your money you put into it, plus your share, then I think that's fair.

[Caller]

Yeah.

[Rachel Cruz]

You just may have to still continue to buy her. There may still be a difference. But I wonder if you can add up, up from an hours perspective of the caregiving and just see if your sister would negotiate with you, like some of it off just for what you.

[Caller]

Well, even, even at that, like if they were. If she Was in a nursing home. That's why I. I figured if she was in a nursing home, the local. Just a mediocre nursing home nowadays is like $9,000 a month, and it's 350 a day. So

[George Campbell]

that's what you're saving by you being the caregiver?

[Caller]

Caregiver, yeah.

That's what is six figures a year, easily. And I've had a five years, so I figured I've earned. I've earned the kind of. That. That's my point of view. But I just wanted to.

[Rachel Cruz]

Have you mentioned that. Have you said that to your sister at all? Have y' all had that conversation?

[Caller]

She did, yeah. She. She said, yes, you can have it, but saying it. And that's what I'm saying.

[George Campbell]

So she's good with it. But you seem to get it in writing. You're like, it's a handshake agreement. Right. Right now we need this in. Right, right.

[Caller]

Exactly.

[George Campbell]

So just say, hey, I'm working with my estate planner. We just want to formalize some of these things and get it in writing. So that we're clear. There's no confusion. And you guys have a good relationship.

[Caller]

Right now, it's better. When she wasn't helping out, it wasn't so good.

[George Campbell]

Okay. There was enough pause there that I went, okay, just a slight pause. But, yeah, you want to salvage what's left of the relationship, at least. And it can go south when, you know, family passes. You're grieving. And now you're like, well, you said. And now she's looking at the numbers going, well, I could. I'd love to have 60 grand in my pocket.

[Caller]

Yeah, I never said that. Yeah, exactly. She doesn't. She never listened to me. I've been telling her about your program. I'm debt free. But they're. They're. And, you know, in dire. Not dire strains, but, you know, they're struggling. That's how I got her to help me. I offered her money. That's how she's helping.

[George Campbell]

Well, I think what you're doing is very fair. You sound like a real noble, sweet person. I mean, the fact that you've, you know, given your life to care for your family at this point is.

[Rachel Cruz]

You're amazing.

[George Campbell]

Incredible. They're. They're so lucky to have you in their life, and that's a much better life than being in a nursing home, by the way. The quality of care that you're giving them is priceless. So I appreciate the call, and I wish you the best for, you know, formalizing all of this for sure.

[Rachel Cruz]

Yeah. I was going to say if you called to get permission to. If is formalizing okay? Yes, it should be a requirement. And so I would.

[Caller]

And should I pay off. Should I pay off the mortgage now?

[George Campbell]

Once it's formalized, I think it's wise to go. If you got the money sitting around burning a hole in your pocket, you don't want to deal with the mortgage and the interest, It'll definitely give you some peace of mind.

[Rachel Cruz]

But make sure it's formalized first and

[George Campbell]

then you can decide if you keep

[Caller]

the condo and then think. Okay. All right. Thank you so much.

[George Campbell]

Absolutely. Thank you for the call, Diane. I love that we're talking about this now.

[Rachel Cruz]

What a jewel of a human.

[George Campbell]

Yeah. And two parents with dementia, I cannot imagine.

[Rachel Cruz]

So hard. So hard. That's a lot of work.

[George Campbell]

And the other thing to think about here is power of attorney, which it can be very difficult once they have lost the cognitive ability to make decisions. So depending on the diagnosis, you know, I would be talking to the doctor and the estate planning attorney to figure

[Rachel Cruz]

out, make sure everything.

[George Campbell]

Can we get a financial power of attorney to move the money around, make financial decisions on their behalf? That's an important piece of the puzzle too. But I appreciate the call. This is the. The hard stuff you deal with and the baby steps don't make any of this easier. It just takes away the stress of money problems on top of. Top of all of this. So I'm so glad that you followed the plan, Diane. You're debt free. You have options because you set yourself up for that kind of life, for that kind of flexibility, for that kind of generosity. Cuz if you were broke, you wouldn't have many options. You wouldn't be able to take care of your family the way you are. You wouldn't be able to pay off the condo. So I appreciate you being a living example of what life looks like when you follow this plan.

[Sponsor/Announcer]

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[George Campbell]

Our scripture of the day. 2nd Corinthians 4:16 Therefore, we do not lose heart. Though outwardly we are wasting away, yet inwardly we are being renewed day by day. Thomas Edison said, many of life's failures are people who did not realize how close they were to success when they gave up. There we go. Thanks for the light bulb, my guy. We got a lot of lights in here, thanks to you. Never give up. All right, Michael's in Louisville up next. What's going on, Michael?

[Caller]

Hey, how are you doing, sir?

[George Campbell]

We're doing great. Just having a good time.

[Caller]

So my question is, I just recently came across a financial reset myself and came across a decent sum of money. And I'm looking to see, moving forward, what is the best way to be a good godly steward of what I got?

[Rachel Cruz]

Oh, it's a great question. How much money has come upon you, Michael?

[Caller]

Well, believe it or not, I just sold a baseball card for over $300,000.

[George Campbell]

Come again? Now, what card was this?

[Rachel Cruz]

Tell us the deets. How do we get into the business?

[Caller]

Literally, I'm telling you, went into the card shop, finances have been tight and had spent a lot of money or been selling a lot of baseball cards to help pay pay bill this winter. And so I thought I owed it to myself to go buy some more. And so I bought a box that had two cards in it and pulled a one of one. Oh. Tani Refractor, which just sold an auction for 324,000.

[Rachel Cruz]

Oh, my God.

[George Campbell]

That is why.

[Rachel Cruz]

That is crazy.

[George Campbell]

So is this like. Like an auction that will handle this all for you and they take a fee?

[Caller]

Yes. So they've already taken it. It's already sold. I've already gotten a large cash advance and the rest of it can comes within the next week through a wire transfer. Wow.

[George Campbell]

All right. What's your net worth currently without this card?

[Caller]

Without this card, I mean, I've. So I've never been Dave Ramsey financially free. I struggle with credit cards early on and kind of never was able to get out of that hole. I've got investment properties, just a few. The wife and I. And so we have. We're in really good shape on those. And thanks to this baseball card, completely debt free with the exception of mortgages.

[George Campbell]

Oh, great.

[Caller]

Okay.

[George Campbell]

So you don't have credit card debt anymore?

[Caller]

I just paid it off.

[George Campbell]

Yeah, but you have your primary home as a mortgage.

[Rachel Cruz]

Well, he had it before the baseball card. How much did you have before the baseball card? I'm just curious.

[Caller]

That's embarrassing. Probably like 40 some thousand.

[Rachel Cruz]

Okay. Because that part of you has not changed. Okay. The guy that got $40,000 in credit card debt, he's still there. He's still in you. Okay. And you just were able to wipe it off with a lucky.

[George Campbell]

The same part of your brain that impulsiv. That caused you to go into credit card debt is the same one that got you that card. It just happened to work out this time.

[Caller]

Right.

[Rachel Cruz]

So I'm just saying we got to be cautious. Okay. Because. Okay, meaning I'm glad you paid it off, but do you know what I'm saying? You had no emotional sweat equity, if you will, by paying off $40,000 of credit card debt. It didn't take you a year with extra jobs, and you had to really sacrifice. It was just. In one fell swoop, it was gone. So nothing in you has really changed. So it's just a red flag. It's a marker.

[George Campbell]

Just easy to go back in.

[Rachel Cruz]

Yep. Just a marker of, hey, I gotta be aware that that is my. That's my propensity is to go into debt. So we gotta remember that.

[Caller]

But just say this. I have definitely changed. This has given me a new perspective on life. I knew it's giving my wife and I financial breath. The stress is completely gone. I understand those impulses may be there, but I'm very much aware of the blessing this is and that things need to change moving forward.

[Rachel Cruz]

Good. Okay. I'm so glad. So glad you said that. Yes.

[George Campbell]

So what's left on the mortgages?

[Caller]

So with investment properties, we have about230 that's owed and then, I'm sorry,3.320 that's owed on investment properties and 100 and some on personal mortgage.

[George Campbell]

Okay, and you guys have savings already?

[Caller]

We've got a little bit. It. Not much.

[George Campbell]

Okay, and what's the amount that's sitting there from the card right now?

[Caller]

We still have over 200,000 coming.

[George Campbell]

Okay, great. So you can fully fund an emergency fund of three to six months of expenses and still have what, 160 grand? 175 grand?

[Caller]

Yes.

[George Campbell]

And that would pay off your primary mortgage. Correct.

[Caller]

Okay, well, first of all, I got to give. I mean, I know that I need to give something back to the Lord here. Sure.

[George Campbell]

Done with the list. I'm just walking through the things you could be doing. We're going to give someone enjoy for sure. I just want to see what was left over after you pay down the mortgage and set aside the emergency fund I got you.

[Caller]

I understand.

[George Campbell]

Would there be a good chunk left over after that?

[Caller]

No, there was another secondary, like a home equity line. Of credit that I paid off as well. So I'm looking at, as it says, with mortgages and about a little over 200,000.

[George Campbell]

Okay. That's just your primary plus the HELOC, not the investment properties.

[Caller]

The primary is about 180. The HELOC is paid off, and then I have investment properties.

[George Campbell]

Okay. The HELOC paid off. So we don't even. It's out of the picture now. Great.

[Caller]

Yes.

[George Campbell]

Okay, so what I'm thinking is we set aside an emergency fund. If we have enough to pay off the mortgage completely, let's do that. And then the. Of the rest. Rest. Let's give some and enjoy some.

[Caller]

That sounds good.

[George Campbell]

Any different thoughts on that, Rachel? No, I frees up a mortgage payment, so I love that idea.

[Rachel Cruz]

Yes, for sure.

[Caller]

Yes. One of my. One of my mortgages has like 8 and a half percent, which is higher than everything else. It's 55,000 for one of the properties. I thought about getting rid of that one just because I was going to say.

[Rachel Cruz]

Yeah. How many investment properties do you have?

[Caller]

I have four.

[Rachel Cruz]

Okay. And they all have mortgages on them?

[Caller]

Yes, but they're all. I mean, there's all. There's plenty of equity in all of them, but the highest interest rate is 1. That's 50 if you.

[Rachel Cruz]

So I'm just curious, if you sold all. All four investment properties. I'm just curious. And paid off all the mortgages. How much equity. How much cash would y' all be

[Caller]

sitting on if we sold everything. Sold all the investment properties. And paid off my mortgage? Mortgage?

[Rachel Cruz]

No, no, no. Didn't pay off yours. Paid off the mortgages on those properties. So what would you net out?

[Caller]

Oh, with the money from the card, there's not enough money.

[Rachel Cruz]

No, no, no, no. Michael, you have four properties here. We have time. We got. We got. We got three minutes.

[George Campbell]

Okay, do the math.

[Rachel Cruz]

How much. How much is one of the properties? How much do you. How much is it worth and how much do you owe property number one

[Caller]

94 is what's owed and 120 is what it's worth.

[Rachel Cruz]

120. Okay.

[Caller]

Property two 55 is owed. 120 is what it's worth.

[Rachel Cruz]

One hundred and 20. Okay. Property three.

[Caller]

80 is what's owed. 160 is what it's worth.

[Rachel Cruz]

150.

[Caller]

160. 60.

[Rachel Cruz]

All right, so we got the last one. Yep. Property.

[Caller]

Property is owed. 180 is. It's worth.

[George Campbell]

Okay, got it.

[Rachel Cruz]

Okay, so we got. I got like 280. George was my math Check your math on. I'm, I'm. I'm chicken scratching on this.

[George Campbell]

271. Final answer, Bob.

[Rachel Cruz]

271. Oh, it was pretty quick. I rounded. I was a rounder.

[George Campbell]

So that's, you know, that's before any kind of closing costs and realtor fees, but let's call it 250.

[Rachel Cruz]

Is 250 just for the heck of it. Of equity that's in some of these. Okay. I'm just trying to paint. I'm just, I'm trying to get different scenarios because when you come into a pile of money, there's a lot of. And, and because you guys have so many things happening in your life and you're asking us. The word steward is on the screen, which I'm.

[George Campbell]

You brought God into it.

[Rachel Cruz]

You brought God in. So we're, we're going to talk about that. We'll go there.

[Caller]

My pastor and I talked about, like a possible foundation with a little bit of money or, you know, help paying for some mission.

[George Campbell]

Here's the thing. Generosity comes from overflow. And right now, you know, if you look at Proverbs, the borrower slave to the lender.

[Rachel Cruz]

Yes. So going a biblical worldview with our money. Every time debt is mentioned in scripture, Michael, it's in a negative fashion. It is not a sin. So you're not going to like, go to hell because you have a heloc. Like, none of that. Okay. It's not a sin.

[George Campbell]

Oh, the word hell is in heloc. I just want to put that out.

[Rachel Cruz]

That's true. The letters are there. You know, you don't have to confess anything. Like, it's not a sin. Sin. But every time it is mentioned, it is negative. It's a curse on your family. You are a slave to the lender. It is not good. Like, nowhere in debt in scripture is debt good. Okay, so, Michael, I'm going to be a little hard on you, but you've been playing around the edges and the fringes of this debt world. Helocs and credit cards and four mortgages. I mean, it is like you have become. You have loved debt like you do. You use debt as a tool, and it's gotten you in a really bad spot. And now get out of jail free card. I was going to say, like, get

[George Campbell]

out of hell free card.

[Rachel Cruz]

Get out of hell free card came upon you. So if we're going to go all in with the biblical perspective, let's go all in and let's just pay everything off. Let's sell everything. Let's start with no debt. And if you did that, you would have probably almost 300 back in your pocket after you sell everything and pay off the primary home with the proceeds of the car. $300,000 in the black. Michael, you got this.

[Caller]

That's what I would do.

Hey.

[George Campbell]

That puts this hour in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.