Big Life Changes Demand Bold Money Decisions

Summary

Podcast Summary: The Ramsey Show – "Big Life Changes Demand Bold Money Decisions"

Release Date: February 5, 2025
Hosts: Rachel Cruze & John Deloney
Episode Focus: Navigating significant life transitions through strategic financial decisions.

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Introduction

In this episode of The Ramsey Show, hosts Rachel Cruze and John Deloney tackle a series of calls from listeners facing substantial life changes that necessitate bold financial decisions. From marital struggles and inheritance management to divorce-induced financial stress and responsible spending, the hosts provide actionable advice to help individuals regain control over their financial destinies.

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1. Holly from Portland, Oregon: Addressing Underemployment in Marriage

Timestamp: [00:50] – [08:53]

Issue:
Holly seeks guidance on how to communicate to her husband the necessity for him to secure a better-paying job. After 17 years of marriage and five children, Holly feels the financial strain as her husband remains underemployed despite holding two degrees.

Discussion & Insights:
Holly explains that her husband transitioned from active duty in the military to a part-time bus driving job, which, while fulfilling personally, doesn't adequately support their growing family. With their income nearing $10,000 monthly through various side hustles, Holly anticipates a significant income drop due to her impending maternity leave.

Advice Provided:
John Deloney advises Holly to have an honest conversation focusing on their immediate financial reality rather than expressing frustration over her husband's career choices. He emphasizes the importance of mapping out their finances for the next six months to create a clear plan. Deloney suggests that Holly express her fears about losing half their income and discuss practical steps to stabilize their financial situation, potentially requiring sacrifices in the short term for long-term security.

Notable Quotes:

• John Deloney [01:21]: “This is a wife at the end of her rope.”
• Holly [06:27]: “Half our income?”

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2. Dan from Houston, Texas: Managing Inheritance and Setting Boundaries with Siblings

Timestamp: [20:01] – [31:45]

Issue:
Dan is preparing to inherit between $500,000 and $750,000 from his grandmother. However, his younger siblings have a history of financial mismanagement, prompting concerns about future requests for money.

Discussion & Insights:
Dan shares his frustration with siblings who have previously sought financial help despite their limited financial discipline. He is anxious about maintaining boundaries to prevent becoming a perpetual source of financial support.

Advice Provided:
John Deloney emphasizes that the responsibility for his siblings' financial behaviors rests solely with them, not Dan. He advises setting clear boundaries and communicating directly with his siblings about the terms of the inheritance. Deloney suggests exploring solutions like creating a small fund or imposing a structured payment schedule, ensuring that Dan's peace and financial stability are prioritized over familial obligations.

Notable Quotes:

• John Deloney [24:44]: “The answer to this question has nothing to do with them.”
• Dan [25:20]: “I'm frightened about the future guilt that may come my way.”

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3. Andrew from Dayton, Ohio: Deciding Between Selling an Investment Property or Saving for a Primary Residence

Timestamp: [12:03] – [19:53]

Issue:
Andrew faces a dilemma on whether to pay off the mortgage on his investment property or save for a primary residence. Living with his parents until marriage, he wants to ensure financial stability without overextending.

Discussion & Insights:
With a $173,000 mortgage on an investment property and a combined household income projected between $120,000 to $140,000 post-marriage, Andrew contemplates the viability of maintaining rental income versus investing in a home they will live in.

Advice Provided:
John Deloney recommends selling the investment property to eliminate mortgage stress and redirect the savings toward a primary residence. He underscores the importance of securing a stable home to mitigate unforeseen expenses and long-term financial burdens. Rachel Cruze echoes this sentiment, suggesting a strategic approach to financial planning to ensure Andrew and his future spouse can afford a comfortable home without reliance on variable side incomes.

Notable Quotes:

• John Deloney [17:57]: “Spend one year at this gift that my mom and dad are giving me and save every possible penny.”
• Andrew [15:10]: “It's just a math problem.”

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4. Julia from Seattle: Navigating Divorce and Sole Mortgage Responsibility

Timestamp: [43:22] – [51:23]

Issue:
Julia recently finalized her divorce, leaving her solely responsible for a $6,000 monthly mortgage payment on a house acquired during the marriage. Despite having $500,000 in investments and $125,000 in savings, the financial strain is significant.

Discussion & Insights:
Julia expresses her reluctance to sell the house due to the emotional toll on her children and the desire to provide stability. She faces high mortgage payments that consume the majority of her income, exacerbating her financial stress.

Advice Provided:
John Deloney advises Julia to explore options like recasting her mortgage to reduce monthly payments or selling the house to alleviate financial pressure. He emphasizes prioritizing her and her children's well-being over maintaining the property at the cost of their financial health. Rachel Cruze concurs, recommending a detailed financial review to determine the feasibility of keeping the house or opting for a more manageable living arrangement.

Notable Quotes:

• Julia [43:24]: “I have to stay in it for like five more years until my kids graduate high school.”
• John Deloney [44:14]: “I hate this for you. I'm heartbroken for you.”

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5. Christian from Boston: Responsible Spending on Luxury Items

Timestamp: [53:20] – [62:53]

Issue:
Christian, a 25-year-old with no debt and a net worth of approximately $133,000, contemplates purchasing a luxury Tudor watch costing $5,000 to $6,000. He seeks advice on whether this expenditure aligns with his financial goals.

Discussion & Insights:
Christian is confident in his financial standing but is wary of the motivations behind his desire to buy an expensive watch. He acknowledges that the purchase is a want rather than a need and is seeking validation on whether it’s a prudent decision.

Advice Provided:
Rachel Cruze and John Deloney explore the deeper motivations behind Christian’s desire, encouraging him to reflect on whether the purchase fulfills a genuine need or serves as a status symbol. They recommend assessing the emotional impact and long-term satisfaction derived from such purchases. The hosts advise maintaining financial discipline while allowing room for discretionary spending, ensuring that luxury purchases do not compromise overall financial health.

Notable Quotes:

• John Deloney [59:16]: “If you can light it on fire, if you could take that pile of cash and set it on fire, and you’re okay, then you’re okay.”
• Christian [54:35]: “It doesn't do anything different than my phone, you know, flipping it over.”

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6. Sharon from Cleveland: Considering Bankruptcy Amid Debt

Timestamp: [75:09] – [84:47]

Issue:
Sharon is burdened with $100,000 in student loans, $20,000 in credit card debt, and a $26,000 car loan. Her income is $30,000 annually, and she is contemplating bankruptcy to manage her debts.

Discussion & Insights:
Sharon reveals the financial turmoil exacerbated by recent life changes, including sobriety and struggling to maintain her household. She is overwhelmed by her debt and considering bankruptcy as a solution.

Advice Provided:
John Deloney counsels against filing for bankruptcy, urging Sharon to take proactive steps to increase her income and reduce expenses. He suggests selling her current car to alleviate the loan burden and securing additional employment to stabilize her financial situation. Rachel Cruze reinforces the importance of creating a structured payment plan and prioritizing debt repayment without resorting to bankruptcy.

Notable Quotes:

• John Deloney [82:08]: “Do not file bankruptcy, you're not there yet.”
• Sharon [75:25]: “We've just been sober for 40 days, trying to get our house back into a livable condition.”

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Conclusion

In this episode, Rachel Cruze and John Deloney adeptly address diverse financial challenges tied to significant life changes. Their guidance underscores the importance of honest communication, strategic planning, and prioritizing long-term financial stability over immediate desires or emotional responses. Listeners are encouraged to assess their financial situations critically, set clear boundaries, and make informed decisions to navigate life's inevitable transitions successfully.

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Notable Quotes from the Episode:

• John Deloney [06:27]: “Half our income?”
• John Deloney [24:44]: “The answer to this question has nothing to do with them.”
• John Deloney [44:14]: “I hate this for you. I'm heartbroken for you.”
• John Deloney [59:16]: “If you can light it on fire, if you could take that pile of cash and set it on fire, and you’re okay, then you’re okay.”
• John Deloney [82:08]: “Do not file bankruptcy, you're not there yet.”

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This summary provides an overview of the key discussions and advice offered during the episode, capturing the essence of the interactions and the financial wisdom imparted by the hosts.

Transcript

[Rachel Cruze]

Foreignsey Solutions. It's the Ramsey show where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruze, hosting this hour with best selling author and host of the Dr. John DeLoney Show.

[John Deloney]

John Deloney and your best friend, but.

[Rachel Cruze]

And my bff.

[John Deloney]

You don't have to say that.

[Rachel Cruze]

Good friends, John Deloney. So we are answering your questions about your life, your relationships, your money. So give us a call at 888-255-2225 and we are here for you. All right, starting us off this hour is Holly in Portland, Oregon. Hey, Holly. Welcome to the show.

[Caller]

Hi.

[Rachel Cruze]

Hello. Hello.

[John Deloney]

What's up?

[Caller]

Hey. I have a difficult question and I'm really glad that get to talk to both of you about it.

[Rachel Cruze]

Absolutely.

[John Deloney]

Let it rip.

[Caller]

Okay. I have to have a really hard conversation with my husband. I have to basically tell him in a loving way that I really don't care what his dreams and aspirations are, that I really just need him to get a better job.

[John Deloney]

Fantastic. This is incredible. Okay, dig in. I don't care. Like, this is a wife that's at the end of her rope.

[Rachel Cruze]

She's really resolved. That's what I was gonna say. Holly knows I love it.

[John Deloney]

This is a wife at the end of her rope. I don't care what your stupid dreams are. I don't care when this, when you think the Avon sales are gonna finally come through.

[Rachel Cruze]

You just need to make money.

[John Deloney]

We're hungry, so. Yeah, tell us where you're at.

[Caller]

Okay. So we've been married for 17 years and we have five kids and another on the way.

[Rachel Cruze]

Oh, wow.

[Caller]

First 10 years he was active duty in the military. That was really, really hard on our relationship. And we made choices. He chose to get out because our family is more important and that stability is more important. And we made choices. Like, I gave up my career. I'm a preschool teacher by trade, and gave that up to be with our kids. And we, I just. He's underemployed. He's working like.

[Rachel Cruze]

Yeah. What's his situation now, job wise?

[Caller]

He took a job that guarantees him 30 hours a week as a school bus driver. He has two degrees that we already did the hard work of getting. Like, he got those since we've been married.

[John Deloney]

How is he supporting five kids, one on the way with being a bus driver?

[Caller]

It's really hard. He does get some disability, but it's not like complete or anything.

[Rachel Cruze]

And Holly is his mindset. Like, he's happy because he has time with the family. It's not that much. I am not stressed and all of that. Or is he. Does he feel undervalued at all? Like, is he looking or talking about other things?

[Caller]

He's such a sweetheart. I think he really likes what he does, and he loves working with the people he works with. He's job hopped. He's experienced a lot of job loss since he left the military, and he finally has found a job that he really likes. Or the people really seem to appreciate him, but it doesn't make up for the fact that he's underpaid. And we're hustling. We're on baby step two. We're like really working the debt snowball to the best of our ability. I have been working like 50 hours a week trying to open my own daycare, which didn't go well because of other things. But I've been working and bringing in as much as I can. And the problem is that all these side hustles brought our income up to the point where we're bringing in almost $10,000 a month. But I'm due soon, and most of my students have left because of my pregnancy, which is understandable.

[Rachel Cruze]

Yeah. And you're. And you're working so much to make that versus, like having a 40 hour a week job where you're making 80 or whatever it is.

[John Deloney]

Yeah, but how much? So, but, Holly, what I'm hearing underneath everything is how much of this is. And all of these things are real and they're not. They're not inherently bad. I just want to get to the honest pain point here. Number one, when I was. I'm trying to think of my last title when I was the chief student affairs officer, Dean of students, slash Associate Provost. I remember what my title was. It was long. I remember my wife, and this is her laughing and joking, but also, like when she was at a dinner party, she sure liked saying, my husband is a dean of students and a college executive, then a YouTuber. Does it matter that financially we're better off? Doesn't matter that I'm helping way more people. It was a funny thing, but she's like, yeah, it was cool. And I got to say that. So is this. You don't like going to. Talking to other moms and saying, well, my husband's a bus driver. Is that number one? Number two, I hear you. You. You've entered into comparison world or scorekeeping world, and that's a dangerous place for relationships. I gave up my career. I'm doing this. I'm working so hard, and I'm about to not be able to work hard because I'm giving. I'm creating another human. I'm about to give bir. And so is this about you keeping score and saying, hey, you're not as tired at the end of the day as I am, or is this. I'm looking at a man I love who can give value to the world and we don't have enough for groceries. Where's the pain point here? Or maybe it's a cocktail of all of that.

[Caller]

I didn't grow up with money or anything. It doesn't matter to me what he does. I don't care about his title.

[John Deloney]

Okay.

[Caller]

And I've been a stay at home mom off and on, and that's what I would prefer to do.

[John Deloney]

Okay.

[Caller]

But I'm fine with making sacrifices for our family. I'm not asking him to do anything that I haven't done. And I think he sees what I do and acknowledges it, and it's very grateful. I don't think it's a comparison thing for me. I think it's just that I'm scared because we're about to lose half your income.

[John Deloney]

That's it.

[Caller]

Half our income?

[Rachel Cruze]

Yeah.

[John Deloney]

That's where you start. Right there is the most honest statement. Because that's different than you called in saying. And again, I'm with you, not at you. Okay, so. But that's you calling in saying, I have to tell my husband I don't care about his dreams and his whatever, he's got to get another job. That's different than you saying, hey, honey, we're about to face a math problem. And me as a stay at home mom of six, I'm terrified.

[Caller]

Well, I tried to have that conversation and he's like, well, maybe I want to be a teacher, which means he has to go back to school. And then if you look at the salary that it starting pay for teachers in our state.

[John Deloney]

Yeah. You know, y'all made. Like this sounds awful, but y'all made choices to have six to create six humans. So that means you can't afford to make $42,000. That's. That's the trade.

[Caller]

Yeah.

[Dave Ramsey]

And.

[John Deloney]

Or live in Portland. Right, Right.

[Caller]

Well, we live outside of Portland in a much cheaper area. But he thinks he can make up the. The gaps with the side hustles, which we've been doing.

[John Deloney]

But y'all, you all aren't going to be able to do side hustles anymore. You're out.

[Rachel Cruze]

Yeah. And the in the side hustle world is for a season. It's not ongoing to support seven, you know, a seven person family.

[Caller]

And, and up against like time. He doesn't have any more hours in the day to do another side hustle. He already has like two part time gigs, plus his bus driving.

[John Deloney]

So I, I, if I, if I'm you, I would sit down and start with. I want to map this out for the next six months. I want us to be honest about the money. Not well, I hope here. And I think I've got a deal here. And I'm trying to build this. We're not at that place right now. I want to be honest about what's coming down the road for six months. We need to sit down and make a plan. I'm scared to death. Will you help me with this? And this is not that. That's how you get underneath the dream part. I need this written down. How much money will you bring in from these side hustles? Not fantasy, not fiction. I needed to know based on the last three months, what are we going to do the next three to six months? And then you look and say, we don't have enough money for you to go be a teacher. I want you to be. We need good teachers. I would love for more men to be teachers. But our family, as for us right now, we can't afford to do that. And so we're gonna have to make some, we're gonna have to make some sacrifices. Whether time, whether it's this quote, unquote passion and purpose. Right now, we just can't do it.

[Rachel Cruze]

Hey, what's up, guys? It's Jade Warshaw. And look, if there's anybody who knows student loan debt is a problem, it's me. My husband and I had $280,000 of it, but we were able to dig ourselves out. And you can too. If your student loan payment and interest rate are burying you, refinancing could be the solution. Now, I recommend contacting my friends at Laurel Road today through their online application. You can get an initial rate quote in less than five minutes. And if you have a more complex situation, you can schedule 30 minutes to talk to an actual human being. Thank goodness Laurel Road makes it simple. There are no fees involved and you could save thousands over the life of your loan. Remember, you should only refinance if it makes sense in your situation. So if you're looking for a low rate or a shorter term so that you can pay off these student loans fast, talk to my friends at Laurel Road about their competitive interest rates and how you could actually get a lower rate. By signing up for autopay. Listen, nobody's coming to save you from student loan debt. If you want them gone, you can't mess around. Go to LaurelRoad.com Ramsey to find out more about student loan refinancing. Again, that's LaurelRoad.com Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. Well, John, you're going to be busy this spring. You and Dave are hitting the road.

[John Deloney]

Yes. It's going to be a wild tour. Me and Dave.

[Rachel Cruze]

Yeah. The money and relationships tour. You guys are going to Louisville, Durham, Atlanta, Phoenix, Fort Worth, Kansas City, all through the end of April. End of April and early May. So if those are any of your cities near you or you want to travel to destination cities, make sure to. Yeah. See if you guys can. Can come because it's gonna. You guys are really, you know, creating this event in a really unique way that the audience gets to decide a lot of the content in each of these cities, which is so fun.

[John Deloney]

Yeah. And it will be wheels off, which I'm looking forward to.

[Rachel Cruze]

He's off the bus. Yeah.

[John Deloney]

You are one of only, like, a few people on the planet who have had the experience of being on stage with Dave when y'all kind of have an outline of what y'all gonna do, and then he just gets in the driver's seat and he hits the gas, and you're like, oh, this is where we're going. Here we go. Right? And so I'm. I am as nervous for this as I've been for anything in a long time. I can't wait.

[Rachel Cruze]

Yeah, it's gonna be. It's gonna be fun. So go to ramseysolutions.com tour and get your tickets for the Money and relationships tour with Dr. John DeLoney and Dave Ra. It's gonna be.

[John Deloney]

Can't wait.

[Rachel Cruze]

Train wrecks on stage. It's gonna be fantastic.

[John Deloney]

Nowadays, people like, in, you know, this, we both do it, but you get on, like, a tour cycle. And so if you hear, like, your favorite person on a podcast, you see them pop up. Sometimes we just have the same points talking about the same thing. What I love about this is if whatever night you show up, it's gonna be a different event, man. And that's. I. I don't get to do that very often. So I'm excited about it.

[Rachel Cruze]

Yeah, that's gonna.

[John Deloney]

We'll have a blast.

[Rachel Cruze]

So great. So great. All right, next we have Andrew in Dayton, Ohio. Hey, Andrew. Welcome to the show.

[Caller]

I appreciate you having me?

[Rachel Cruze]

Absolutely. How can we help?

[Caller]

So I'm in a bit of a particular situation right now. Just to kind of debrief you on my situation. I have no debt other than a mortgage. Me and my father are in a little bit of a dispute whether I should pay off my current mortgage, which is on an investment property that I don't live in first, or save as much money as I can and put it into a primary residence.

[Rachel Cruze]

Where are you living now?

[Caller]

I'm currently living around Beaton and I still live at home with my parents.

[Rachel Cruze]

Oh, your home. Okay.

[John Deloney]

Is this disagreement, your dad wanting you to get out?

[Caller]

It's not a matter of that. In my culture, you don't move out until you're married. And I'm going to be married here in 56 days.

[Rachel Cruze]

Oh, wow.

[John Deloney]

Counting down by the minute, but congratulations, brother. That's awesome.

[Rachel Cruze]

So where are you guys gonna live?

[Caller]

I appreciate it. My parents have a second home that they're allowing me to live in. All I have to do is just pay the expenses so they break even, which is very generous of them for sure.

[Rachel Cruze]

Is this a long term thing or is this just like, hey, the first couple years, you know, don't worry about rent. You guys can live here, but you will eventually get your own place. Or this. Is this property from your parents deemed to you guys, like, long term?

[Caller]

They've said we can stay in it for as long as possible. Personally, I don't want to take advantage of their generosity, so I will get in and out of there within two.

[Rachel Cruze]

Well, yeah, yeah, for sure. And if that wasn't the case, I didn't know, like, what situation you were in if it was going to be deeded to y'all eventually, you know, I mean, or something like that. But if you guys, I would want you guys working towards your primary home for sure, so that you, you know, have the ability to go and buy something when you're ready. How old are you guys?

[Caller]

I'm 21 and my fiance is 18.

[Rachel Cruze]

Okay. Okay, great. So how much is left on the rental property?

[Caller]

$173,000.

[Rachel Cruze]

Okay, and how much will you guys be making combined household income after you get married?

[Caller]

The problem is I open sales. Pretty much all of my income comes from commission, so that's kind of speculative, but I'm going to say somewhere in between 120,000 to 140,000.

[Rachel Cruze]

Okay. And what will she be doing?

[Caller]

Good question.

[John Deloney]

You should find that out. You're getting married in 56 days, dude.

[Rachel Cruze]

I guess she going to school or Will she be working?

[Caller]

She was going to school. She stopped because she realized the degree she was going for was probably not worth it. But she is working right now.

[Rachel Cruze]

Okay. How much think she'll bring home?

[Caller]

Probably around 40,000.

[Rachel Cruze]

Okay. Okay. So you guys are at 180.

[Caller]

Oh, I meant. I meant 140 combined. I'm sorry.

[Rachel Cruze]

Oh, okay. Okay, okay. Together you guys will be okay. I'm sorry. I got you and the rental property. How. Tell me that about that. Was that you and your dad together doing that, or was that. Is that just under your name?

[Caller]

It's just under my name.

[Rachel Cruze]

Okay. And why are. What. I'm just curious. Why aren't you moving into it? What's causing you to have this property?

[Caller]

It generates. It generates too much money for me to justify moving into it, to be honest.

[John Deloney]

Okay, yeah, but if you're. What are you going to pay out in rent if you get and go rent your own place?

[Caller]

I mean, not probably four or five hundred a month.

[Rachel Cruze]

Okay.

[John Deloney]

That would be the difference.

[Caller]

Well, the. Each side of the Property generates about 1200amonth, and my parents only really want me to pay around 4 to 500, which is just the expenses.

[John Deloney]

Yeah, but that's living in mommy and daddy's house. So when you decide you and your wife are going to move into your own place, what will your rent on that place be?

[Caller]

Oh, I'm not looking to rent. I want to buy. Wait, I'm sorry, are you talking about the house I'm moving into or.

[John Deloney]

No, here's what I'm trying to. The picture I'm trying to paint for you as a 21 year old, you're so far ahead of the game. You're thinking about owning your own business. You're thinking about becoming a property owner and a property manager and all that, which is awesome. I'm proud of you. And so at 21, as a salesman making an unstable commission, like, you have great month, you might have a good month, and then you have three or four low months. Just that steady drum beat where it feels like you're getting $2,400 every month, minus your mortgage on that place, minus the expenses, minus the depreciation, minus the upkeep, minus the, oh, hey, we need to do a new roof. Minus the hey, the air conditioner went out. Minus the hey, the they flushed a whole bunch of grease down the toilet. And so now we have to replace the sewer main. Like, minus all of that stuff. What Rachel and I are trying to. I guess trying to gently steer you in what feels like A ton. So much money you can't afford to sell it or move into it yourself. What I'm telling you is in five years, you're going to much rather wish you had a paid for own house than have a paid for rental house. And you and your wife are still trying to figure out how you can pay your mortgage every month. So it feels like a lot right now. But y'all haven't had a big expense. You haven't had the thing almost fall down. You haven't had that kind of stuff that hits every single home manager out there. Do you what I'm saying?

[Caller]

Yeah, yeah, that makes sense. That was kind of a third option that I kind of floated that I never really took seriously. I probably have 150,000 in equity in that house. I can sell it 1031 exchange and into a primary if I need to.

[John Deloney]

If I was you, I would spend one year at this gift that my mom and dad are giving me and we would save every possible penny and I would sell the rental property.

[Rachel Cruze]

Yeah. Live on 40 or something. You know what I mean? Like if you don't have rent, put 75 grand away. Yeah. Do that for one or two years and golly, you could put, yeah, 1,200. Sell your place, that's 350. Go pay cash for a house right up to the sunset. If you guys want to get back into the rental games and do it from. With some cheap, you know, $150,000 property that you guys save up over time because you have a paid for house.

[John Deloney]

Like, just, just know this. If you could figure out a way at 25 or 26, reverse engineer this. Yeah, we have a paid for primary house, me and my new wife, we've been married five years. We're going to start having children. We're driving kids. And we have a paid for house, no mortgage. I'm telling you right now, you have sat yourself on. Have you heard the phrase in the. Because you, I can tell you're, you read all the stuff. Have you heard of take care of your long tails? Have you heard of that, that phrase?

[Caller]

I don't believe so.

[John Deloney]

Okay, so if you think of a distribution on a bell curve, the long tails are the way outside of the bounds. Things that almost never happen, except for every single person, they do happen. And what I mean is, every single day of your life, you don't get a cancer diagnosis. Someday somebody you love will. Okay, that's, it's, that's taking care of your long tails. Long tail is the market will go up, rent will go out. Covid will happen, renters won't pay. Whatever happens, you'll have a legislative change in your state where they say you can't evict people. Who knows what happens down the road. But if you've taken care of this long tail that nobody can take away your primary home, you and your wife have a home that nobody can take. It allows you to anchor off and really go after true wealth creation.

[Rachel Cruze]

Yep. So Andrew, I think what I would do is I would live rent free in your parents home, let your property continue to appreciate, that's fine. But then eventually have the goal to sell it probably in the next year or two. And exactly what you're saying, move all that equity over to a primary home with the money you've saved and there's a good chance you had cash flow primary home. And then if you guys want to get in the rental game, do that later with cash.

[John Deloney]

But that's a lot of races, man.

[Rachel Cruze]

That's a lot of peace. Andrew, congratulations.

[John Deloney]

This show is sponsored by Better Help. You've probably heard people talk about different kinds of flags and friendships and romantic relationships. Red flags, green flags, beige flags. Listen, it can be helpful to look for patterns or unsafe behaviors in potential relationships. But all those labels can distract from what's really important. Your values and whether you and your potential partner are willing to wake up every day and choose to honor each other's values. And look, I know it can be tough sometimes to even know what's important to you in a relationship. Therapy can help you figure out what your values actually are and decide your boundaries and your non negotiables. And if you're thinking about starting therapy, try BetterHelp. BetterHelp is 100% online therapy that works with your schedule. To get started, just fill out a short online survey to get matched with a licensed therapist. If it's not the right fit, you can switch therapists at any time for no extra cost. So whether you're dating, married, building a friendship or working on yourself, do it with help from BetterHelp. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H E-L-P.com DeLoney.

[Rachel Cruze]

Welcome back to the Ramsey Show. We're taking your calls at 808-825-5225. Up next, we have Dan in Houston, Texas. Hey Dan, welcome to the show.

[Caller]

Hi. Thanks for having me.

[Rachel Cruze]

Absolutely. How can we help?

[Caller]

Well, first I want to give a shout out. I started with Dave's program many years ago. I'm 67 now, and by the time I was 55, I could retire. Now I'm doing the things I love and volunteering.

[Rachel Cruze]

So well done, Dan. Congratulations.

[Caller]

Trying to spread the word, you know, but. So I'm, I'm working on brevity here. So. So there's four of us kids. I'm the oldest of 68. The youngest is 60, 61. And number two is my sister and she's the administrator, the trustee of the estate. And so there's 95. And when she passes, we all receive between a half a million and 750,000. Oh, wow. So, yeah, you know, life changing money. You know, my wife and I are both debt free. I mean, literally no debt. Dave would laugh if he heard that my truck has 300,000 miles on it.

[Rachel Cruze]

But he tell you to go get a new truck, Dan.

[John Deloney]

You would get a new truck, Dan. I'm telling you, go get a new truck, Dan.

[Caller]

Thanks, guys. I'm kind of in love with this thing, but. So the problem is the two youngest ones have asked my mother for money before over the years. Both a little bit over a hundred thousand. And one of them, number three, has $900 car payment, $2,400 a month, apartment payment, about 160,000 credit card debt. And even though she makes six figures, cannot, you know, emotionally control her spending. The youngest one, we inherited about 100 grand from my father some 10 years ago. And I said, if you blow this money, I'm going to punch you in the nose. And six months later, he had a quad and a snowmobile and didn't pay off his house. You know, he's been bankrupt and.

[John Deloney]

Did you hit him? Just kidding.

[Caller]

Pardon? No, no. You know the problem? I'm not too worried about it. I've been working since I was 13. My sister's a hard worker too, but the problem is she's worried they're going to come to the door when they're 70 or 80 begging for money. You have money, I have no money. And we're trying to figure out how to handle the coming basically tsunami of what they're going to bring to the table. Now, the trust comes in two parts. The one trust, everybody gets an equal share right away. And then second trust, my sister and I both get our share. But those two there, my mother broke it up so that it's like five years apart, something like that. But if you have any advice for how to handle people who blow through money have no control. I got my brother on the On. On Dave's program. He was good for a year and then fell off the wagon.

[John Deloney]

So. Hey, Dan, here's the hard thing. I'll answer it, but here's the hard thing. Okay?

[Caller]

Yes, sir.

[John Deloney]

The answer to this question has nothing to do with them.

[Caller]

Okay. You know, I told my sister that I said, I have no problem, you know, in my heart knowing that I. Over the years, over 20, 30 years more, going on 40 now, I have. I have ministered, I have given material. I've done everything I can.

[John Deloney]

But here's the thing. It was never about you.

[Caller]

Right.

[John Deloney]

They're struggling. And so it sounds like what? What. Especially your sister. But I'm sure deep down you're dealing with it, too, is you're frustrated at the future guilt that may come your way.

[Caller]

Yep.

[John Deloney]

You're.

[Caller]

You're nailing it on the head.

[John Deloney]

But here's.

[Caller]

Here's what's hard.

[John Deloney]

If you live like that right now, what you're doing is you're not mitigating the guilt in the future. You're just spoiling today.

[Caller]

You have absolutely right.

[John Deloney]

And so I'm going to choose for peace and joy and warmth and laughter in the right now, and I'm going to be very clear about my boundaries moving forward.

[Caller]

Right.

[John Deloney]

And so the. The harder conversation will be sitting down with your brother and sister who are adults, who could have never, like, they could care less what you have to teach them. They think, like, I'm sure they're. When they get coffee together, they're talking about, you got you and your sister. All they do is work. And they never. Whatever is. Is saying, hey, here's the distribution. There. There's don't come for to us.

[Caller]

Right.

[John Deloney]

Or you and your wife.

[Rachel Cruze]

And you're saying. Just saying it out loud when you.

[John Deloney]

Guys all have put, yes, I heard Becky Kennedy say this. The other Dr. Kennedy say this, And I loved it. She said, a boundary is something that requires nothing from anyone else other than you.

[Caller]

Wow. That is awesome.

[John Deloney]

So you're going to set this boundary. We're all going to be clear. There's no more money after this. And if you, as a loving brother, want to say, I'll hook you up with Ramsey Solutions, I'll hook you up with the plan that set me and my wife free. Y'all want that? Great. I'm not gonna preach to you. I need everybody. I need to be on record that y'all are getting a check for $750,000. Y'all are gonna have to learn to manage this, because when you're 80, you can't come knocking on my door. Here's the other side of that. You and your wife might sit down and say, when that day comes, are we really gonna leave our brother on the street? And if not, then say, okay, then we'll start a small fund. Or like you all get to decide what you do with that moving forward. But what, what y'all are doing, you and your sister are doing is you're living every minute frustrated by things that other grown adults are choosing to not do.

[Rachel Cruze]

And that haven't really happened yet either.

[John Deloney]

And they haven't even happened. Exactly. And so you're, you're 100.

[Caller]

Correct.

[John Deloney]

Brene Brown calls it dress rehearsing tragedy. I love that you're prac. You're already having imaginary conversations that you're at that 82 are going to have with an 80 year old little brother. Don't do that. You're just blowing your. Like you should be laughing, especially when you're truck shopping because God, get a new truck, dude. But. And I'm playing with you. My truck has 200,000 miles. I'm with you, but you get what I'm saying.

[Caller]

Oh, yeah. And you know, I've actually had this conversation with my sister and my wife and I are in a new marriage and some people didn't like the idea that we got married and all this kind of stuff. And I'm like, look, this is all about us now.

[John Deloney]

Yeah. They don't get a vote. Who cares? Yeah.

[Rachel Cruze]

Right.

[Caller]

Exactly. And I, it's, it's really tearing my sister up.

[Rachel Cruze]

And I think that we sometimes live under this illusion that we can change people. That if we say the right thing or we give the right book or we do whatever it may be, that that's somehow going to be the magic moment of the light bulb going off in their head of like, oh my gosh. And we put that responsibility on ourselves. And I hear this more from your sister, the way you're talking about your sister. And so yeah, maybe you hang up with us and call her and relieve her. Right? I mean like tell her about this call. But you both don't need to sit there feeling this like hero complex that we, it's, it's our responsibility somehow to change our 62 year old sibling.

[Caller]

Yeah.

[John Deloney]

But also your parent hear you. Your parents put her in a very maternal role.

[Caller]

They did. And my, my, they were really bad with money and came into it late in life. And my sister and I have been working literally since we've been 13, which is fine. We both love working.

[John Deloney]

Sure.

[Caller]

But you know, to think that I'm going to give it away to somebody who's lived this profligate life and, you know, it's just ludicrous.

[John Deloney]

So, so here's the deal.

[Caller]

And I would sit down with crisis.

[John Deloney]

I would sit down with your sister and say, as your, as your little brother or as your older brother, I want to remind you they have a mom and it's not you. All her job is, is to distribute the funds in the way that mom asked. That's it.

[Rachel Cruze]

Not manage everybody, manage you.

[John Deloney]

I'm not gonna, I'm not gonna try to pseudo parent through mom from the grave. I'm gonna do any of that stuff.

[Rachel Cruze]

Put all that weight on her.

[John Deloney]

That's it.

[Rachel Cruze]

I mean, yeah, yeah.

[John Deloney]

She has to decide. I'm not going to be their 78 year old mother, I'm going to be their older sister just doing what mom asked me to do.

[Caller]

Yeah, well, this is pretty much what I've told her. And she's still in fear. You know, she has that guilt like you guys were saying. And you know, I, I learned this volunteering at the hospital. A man once told me, he goes, you know, you see a crisis based on how you're living, but they don't see a crisis.

[John Deloney]

That's right.

[Caller]

And they don't, you know, they don't see a crisis.

[John Deloney]

But that's right.

[Caller]

They're still asking for.

[John Deloney]

They sound like a lot of Americans right now that think that's just going to continually go on forever and ever. Amen. And it's not.

[Rachel Cruze]

Yeah. And Dan too, you can be a great listening ear for your older sister too, but don't carry her weight either.

[John Deloney]

I mean.

[Rachel Cruze]

Yeah, because part of your call has been a lot of her concern too, and don't carry that either. Dan, you know, it's this like kind of individual that I think is really important for you guys because you're taking on a lot your sister's emotion that's doing things well, but she's frustrated and fearful and then the siblings that aren't so.

[John Deloney]

And just because you feel guilty doesn't mean it's not the wrong decision. Just because you feel guilty doesn't mean you're doing the wrong thing. You're a good man, man. Congratulations.

[Rachel Cruze]

Thanks Dan, for the call. There's a time in your life and did the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner. You can rely on Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the American dream of homeownership [e-mail] that's churchillmortgage.com this is.

[John Deloney]

A paid advertisement in MLS ID 1591 in mlsconsumeraccess.org Equal Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, TN 37027. Foreign.

[Rachel Cruze]

Show Question of the day is brought to you by why refi? Why refi? Refinances are defaulted private student loans which are different than federal student loans. Why refi? Get oh gosh, why? If I default students and build you a custom loan based on your ability to pass kiptal on. So kick your private student loan debt out of your life by going to yrefi.com Ramsey that's the letter Y R. Don't say it. R e f y.com c may not be available in all states. I'm terrible sometimes.

[John Deloney]

This this segment is also brought to you by Bob's reading course. Bob's teaching Rachel Cruz how to read.

[Rachel Cruze]

I'm resetting the same line again, not correct.

[John Deloney]

The why refi? People are like man, we got our money out of that ad.

[Rachel Cruze]

Listen, why refi? It's incredible. It is. It takes as your defaulted private student loans creates a new loan with a low interest rate that will fit in your budget. And it's wonderful. We don't talk about refinancing debt. Majority of the time we don't, we don't recommend it. But with private student loans we do. So there you go. Go to yrefi. Y r e f y.com words.

[John Deloney]

Like there's just so many words when you read. There's words everywhere. Today's question comes from Alexandra in Arizona. My 14 year old daughter claims that all the kids in school. Dude, we just. I just had this in my house. My 14 year old daughter claims that all the kids in school are buying lunches from local eateries and spending as much as 20 bucks a day on takeout. Food, rather than bringing their lunch.

[Rachel Cruze]

Not allowed at our school. No outside takeout food. Keep going.

[John Deloney]

My wife and I are on baby step two and have another $65,000 to go. We simply cannot afford this. How do I explain this to my 14 year old without, in her words, making her feel poor? I think underneath all of this, I'm just going to tell you, Rachel, how I experienced this very similar. The school my son goes to has extraordinary cafeteria and I, for me and Sheila, it's less about the finances and it's more about. I want him to participate in food creation and food consumption. I want him to know that food just doesn't materialize out of thinner. Right, sure. And so that may. That's a little, Little House on the Prairie for us. I know, but.

[Rachel Cruze]

So you don't let him buy from the cafeteria, is that what you're saying?

[John Deloney]

That's right. So he has to be a part of making his food. Oh, gotcha, gotcha. Underneath this though, I struggled with my kid's the only one. And so I think, Alexandra, it's less about you worrying about your 14 year old feeling poor and it's more about you feeling guilty that your 14 year old has any sort of uncomfortable feeling. And that's where you need to deal with this. So if you can't afford it, then the way you go straight into that is sitting down with your daughter and letting her walk through your budget with you. She's 14, she's a freshman high school, she can do that. And you look at her and say, we're working really hard to change our family tree. We don't have enough money. And by the way, for a 14 year old, they don't care. They're going to have feelings, they're going to get mad, oh my gosh, we're poor. Let a 14 year old say 14 year old things. There's a reason as a society we have all said 14 year olds can't buy beer and cigarettes and guns.

[Rachel Cruze]

Right.

[John Deloney]

Because they're 14. The other side of that is you need to become more comfortable with your 14 year old being uncomfortable.

[Rachel Cruze]

Yes.

[John Deloney]

Because that's life.

[Rachel Cruze]

Well, that's life. And if it's not the lunches, it's going to be the type of shoes, it's going to be the backpack. It keeps going and then on into college. What college is she going to? I mean, that feeling continues.

[John Deloney]

So the greatest gift you can give 14 year old is not 20 a day for lunch. It is the ability to tolerate discomfort and go forward anyway.

[Rachel Cruze]

Yes.

[John Deloney]

And That's a lesson every human will learn. But you have to learn most today's now adults call into the show saying, I'm $140,000 in student loan debt, I'm trying to live in New York City and I want to be a painter. And it doesn't work. And nobody had reality conversations.

[Rachel Cruze]

Earlier. I read this in a parenting book. I can't remember who Sissy Goff. I can't remember who it was, but they were saying that the generation 10 years ago, 15 years ago was the helicopter parents and now it's the snowplow parents.

[John Deloney]

Yeah.

[Rachel Cruze]

The bulldozers just make a smooth path so there' there's no bumps. We don't feel anything. We are good. No hardship, no bumps in the road. It is just a smooth walk and everything is fine. And that's not, that's not reality.

[John Deloney]

No.

[Rachel Cruze]

It's teaching your kids.

[John Deloney]

This is an amazing moment for your 14 year old.

[Rachel Cruze]

And can I just say this too? Not that this matters, but they're buying lunch from local eateries. This isn't even like a cafeteria buy. This is that they're gay.

[John Deloney]

Yeah. They leave campus.

[Rachel Cruze]

It's a, yeah, like it's a, it's even a step beyond normal reality. Like some kid, you know what I mean? Like, yeah, it's not even like, oh, we're not even gonna pay for school lunches from the cafeteria. This is like another step beyond. So I think even, even for her to have some level of reality. My parents did this of like, there's tears in life. The highest tier is that a 14 year old is getting a 20 lunch from Panera or whatever the local eatery is. The second tier is. Yeah, maybe you get to spend some money and buy lunch at the cafeteria and then you got to bring your, you know, your lunch. I don't know. And like, like, like we don't all get to live at a high level. Like there's going to be ups and downs in life.

[John Deloney]

So a great gift you give your 14 year old is let her experience that now and let her just know that she's not alone experiencing that. Let her know, I wish I could just give you 20 bucks every day. That'd be awesome. And that's not reality. That'd be cool.

[Rachel Cruze]

It's crazy.

[John Deloney]

And just for whatever, whoever's listening, because evidently there's at least two of us in the country dealing with this the two ways we've mitigated this in our house. And you don't mitigate it, you just walk through it. Is a lot of the time our kids participate in cooking the night before. And so the leftovers are not just leftovers that were shoved out in the fridge. It was something that they participated in cooking the night before. And they've got a steak in it.

[Caller]

Right.

[John Deloney]

They got skin in the game. Or just yesterday, my son was cooking chicken nuggets or something before school in the oven, and that's what he's going to put in a container to take to school. So he gets to take as luxurious a lunch as he wants to, but he's going to be. He's going to make it, and it's going to be from our. What we have in the fridge in the house. And so that comes with planning and meal planning, all that kind of stuff. So all I have to say is the goal is not to have 14 year olds that don't feel certain ways they're going to feel. However they feel. 16, 17, 18, whatever the goal is, your feelings are okay. And they're right. And I'm going to sit with you while you feel that way. And then we're going to be tethered to reality. We don't have the money. We just simply don't. And by the way, if you did, I'd recommend you not do that anyway. That's right.

[Rachel Cruze]

That's right. All right, next we have Donna in Sarasota, Florida. Hey, Donna. Welcome to the show.

[Caller]

Hi.

[Rachel Cruze]

Hello. Hello. How can we help?

[Caller]

Hi. So my husband and I have worked really hard to be debt free and to get our daughter through college debt free. And we've achieved that. And we moved to Florida to kind of slow down, enjoy our time a little bit more. We took lower paying jobs and we are finding that we only make just enough to cover the bills now that we're down here. And I'm wondering if we should. I know your answer, but I'm wondering if you should take some equity out of our house somewhere else.

[Rachel Cruze]

Okay.

[Caller]

Questioning whether he should take early. So security.

[Rachel Cruze]

How much are you guys. How much are you guys making a year?

[Caller]

About 60,000.

[Rachel Cruze]

60,000. Okay. And how much does it take to run your household Every month?

[Caller]

About 5,000. A month?

[Rachel Cruze]

About 5,000. Oh, yeah. I mean, yeah. And how much is your mortgage?

[Caller]

Yeah, we're there.

[Rachel Cruze]

How much is your mortgage?

[Caller]

I don't have a mortgage.

[Rachel Cruze]

Oh. Oh, that. Oh, okay. And how old are you guys?

[Caller]

I'm 55 and my husband's 61.

[Rachel Cruze]

Well, how much you guys have in retirement?

[Caller]

225.

[John Deloney]

Can I be the bearer of bad news?

[Caller]

I Know what you're gonna say, like.

[John Deloney]

Y'All wanted to slow down and y'all aren't. It's just. This is just. This isn't a character issue. This isn't a dream issue. This is just a math problem. Y'all just aren't in a place where you can slow down yet.

[Rachel Cruze]

Yeah. To combined, you guys can't be making 60. You guys need to be making double. Each of you need to be making 60.

[John Deloney]

And can I tell you, y'all get to feel real sad about that because y'all worked really hard to get out of debt. You worked really hard to get your daughter through school. And it's just a math problem.

[Caller]

Yeah.

[John Deloney]

And that means I would love to see y'all come up with like a number. Rachel. Like, get to a number and say, this is what we need to work towards so that you don't feel like you're just perpetually working 70 hours a week for the rest of your life.

[Rachel Cruze]

Totally.

[John Deloney]

But at the same time, like, we had this dream of just kind of laying back and working part time jobs and enjoying Florida and the math just doesn't work.

[Rachel Cruze]

Yeah. Where so y'all are in Sarasota, I was gonna say. I mean, I don't know if there's a less expensive, you know, place that you guys want to be long term. You know, you could consider that. But also, I mean, I. Yeah, I mean, I. I would do the math and just say okay for him for the next three to four years. For you, maybe the next five. What does it look like? And how much do we need to make to put a percentage of our income away for retirement? Because you're gonna want more in retirement and that we're not feeling like we are living paycheck to paycheck. So that's going to just really be you guys sitting down and mapping out. But then also, I mean, Sarasota, I mean, you're. You're in an expensive part of Florida.

[John Deloney]

Yeah.

[Rachel Cruze]

So, I mean, you know, whatever you could sell your house for. Do you guys say, yeah, we. We just on a whim, decided Sarasota, or is our family around? Is there a reason you're there? Could there be a less expensive place? Get a condo, bank, half your equity, and, you know, put yourself in a different place to retire earlier.

[John Deloney]

But don't borrow against your mortgage because you're just punting a problem and you've put your house on the block as a solution that don't do that.

[Rachel Cruze]

Thanks to all the guys in the booth and Kelly. Thank You, John, for great hour and thank you, America. This is the Ramsey Show.

[Dave Ramsey]

Hey, listen up. Everyone is at risk of identity theft. I don't care if you're a hermit living off the grid, listening to the show on a battery powered radio. All of your data collected by every company you've ever done business with, lives online. Your bank, your doctor's office, retailers, the apps on your phone, the gas station where you have loyalty rewards, they all store your info online, making them ripe for a cyber attack or data breach. That's why I've been telling people for almost 25 years they need an ID theft protection plan. And the only one I've ever recommended is from Zander Insurance. They monitor your personal and financial info, even your home title, and take over the work if you become a victim. It's the most thorough and affordable plan out there. I even have it for my family and our entire team. Visit Zander.com or call 800-356-4282.

[Rachel Cruze]

Live from Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruze, hosting this hour with my good friend, bestselling author Dr. John DeLoney, and we are answering your questions. So give us a call at 888-25-5225. Your relationships, money, life, all of it.

[John Deloney]

We got an opinion on it, Anything.

[Rachel Cruze]

And everything, give us a call. We're starting off this hour with Julia in Seattle. Hi, Julia. Welcome to the show.

[Caller]

Thank you.

[Rachel Cruze]

You are welcome. How can we help?

[John Deloney]

What's up?

[Caller]

I. I'm wondering if I'm foolish to keep my house. I. My. I move. I bought this house with my husband about 18 months ago, and just a few weeks after moving in, I found out he had been having an affair for the past six months.

[John Deloney]

I'm sorry.

[Caller]

Yeah, it was horrible.

[Rachel Cruze]

Oh, I'm so sorry.

[Caller]

He declined to end that relationship. And our divorce was just final a couple of months ago and he quit, claimed the house to me. But now I'm responsible for the entire payment myself. And it's most of my paycheck.

[John Deloney]

Yeah, you got to sell it.

[Caller]

Okay. Can I tell you a little more?

[Rachel Cruze]

Yeah, please.

[John Deloney]

I hate this for you. I'm heartbroken for you.

[Caller]

I only need to stay in it for like, five more years until my kids graduate high school. And I don't. After all, what they've been through this last year, I just don't want to make a move to.

[John Deloney]

I know.

[Rachel Cruze]

And all of that.

[Caller]

I have about $500,000 in investment accounts and retirement accounts, as well as a pension. And I have $125,000 in a high yield savings account as an emergency fund. And if I'm trying to find a way to make money, I've always been good with. Yeah, I've always been good with money. And I've saved for a rainy day.

[Rachel Cruze]

Yeah.

[Caller]

And I'm wondering, okay, tell me my rainy day.

[Rachel Cruze]

Yeah, no, this is five years.

[John Deloney]

This is. Yeah, no, this is.

[Rachel Cruze]

Okay, so, Julia, tell me, what are you guys. What are you. What are you bringing home a year?

[Caller]

About $150,000.

[Rachel Cruze]

Okay. And per month, what is hitting your account after taxes and everything?

[Caller]

A little over $8,000.

Okay.

And how much is $2,000 of child support?

[Rachel Cruze]

Okay, so $10,000 total coming in.

[Caller]

Yeah.

[Rachel Cruze]

Okay. And how much is the mortgage?

[Caller]

Is $6,000.

[Rachel Cruze]

For your job? Yeah. I mean, do you do.

[John Deloney]

How much equities is in the house?

[Caller]

Almost 50%. We just had it valued for the divorce, and it was a little over 1.6. And I owe 850 on it.

[John Deloney]

So one thing you might try, and this is embarrassing because this is a largely money show, and I can't think of a term, but you can call your mortgage company and, good gosh, I've lost the term. But essentially adjust your payment in light of what you owe now.

[Caller]

Okay.

[John Deloney]

And so, for instance, if you took out a $1.3 million loan and you got it down to that 800,000, they may be able to drop it as though you have what. Whatever it is you have left. Left.

[Caller]

Okay.

[John Deloney]

And I. Off the top of my head, Give me a second. I'll think of the term here in a second. No, it's not refinancing an attribution. Talk for a second. Let me. I'll look it up real quick. So I've got an email in my box for one second.

[Rachel Cruze]

Yeah. So, yeah, Julia, I mean, I haven't.

[Caller]

Had to dip into savings yet, and it's been a year. I'm super good at living frugally.

[John Deloney]

Yeah. But here's. Here's. While I'm looking this up, here's my big concern for you, okay? You're trying to limit the bomb blast that just happened in your home.

[Caller]

Yeah.

[John Deloney]

And I want you to know, like. And hear from it, a neutral third party, like, what you think you're shielding them from. They've already experienced. And the thing if you look five years from now, 10 years from now, the greatest gift you could give them is a mom who found peace inside her own Home. Not a stressed out mom who had to work overtime and skimped and didn't eat sometimes and did this so they could stay in the same school.

[Rachel Cruze]

Yeah.

[John Deloney]

Does that make sense?

[Rachel Cruze]

Are they, Are they in public school?

[John Deloney]

Back casting?

[Caller]

They are, yeah.

[John Deloney]

Recast. That's right. I'm sorry. Recast. Yes, yes, yes. Call your mortgage company. Ask about. If. About a recast. It may drop your, Your, Your payment by half. So call and ask them that.

[Caller]

Okay.

[Rachel Cruze]

And they. Are they in private or public?

[Caller]

They're in public school.

[Rachel Cruze]

They're in public. And I'm just wondering, Julia, you know. Yeah. If the recasting and all of that doesn't happen, is there a way, because I even know within our school, you know, our school district even to say within our elementary school, which is a tiny little circle within a county. But I'm like, there's, you know, certain neighborhoods that are half the price of other neighborhoods. I mean, there's still like a, A, there's still a cost difference even in residential. Right. So is, Is there an area where you guys are. Would you say you're in the higher end of that school district or are there cheaper houses that you may want to move homes? Because I, I get that feeling as a mom, trying to keep them with a level of normalcy like that makes sense to me, but it doesn't make sense to. Yeah, I mean, basically drive yourself down with this payments and having nothing. I mean, you'll have 4,000 to live on. Could you.

[John Deloney]

But that's a lot of kids and kids eat a lot and school and cleats and all kinds of stuff and everything.

[Rachel Cruze]

Is there other options, Julia, within the school district, housing wise, if I wanted.

[Caller]

Like a condo or if I just wanted to rent for the last few years of their schooling.

[Rachel Cruze]

Yep. Yeah.

[John Deloney]

How much of this Julia is. And this is just me asking. Just, Just between me and you and a couple million people listening, like, he took your marriage and he blew your house up. And the, the, the thing that nobody ever talks about in these moments is you lost trust in you. Because you've been asking yourself for the last 18 months, how did I not see this? How did not experience this? What is it about me that he got caught and he was like, no, I'm gonna go with her. How much of this is. You can't have my dream house, too? You. You took everything from me. You're not taking this house that we, you and I saved for, that we put down on. How dare you just walk away from my house?

[Caller]

I haven't Thought about that before. I mean, maybe a bit.

[John Deloney]

Okay. Because if it, if, if that is the what tilts the teeter totter here, then that's me having a hard conversation with my friend Julian saying that's ego. And you, I want you to have peace more than I want you to have this big fancy house.

[Caller]

Yeah.

[John Deloney]

If it's the majority. I just can't in my gut stomach disrupting my kids lives again. Just know their lives have already been so disrupted that. Mom, solving for peace is. Is the primary. I'm going to solve for peace in every way I can. And if that means we got to move again, then God almighty, we got to move again.

[Rachel Cruze]

How old are the kids, Julia?

[Caller]

They're 13 and my son just turned 18.

[Rachel Cruze]

Okay. So. Yeah. So it'd be the 13 year old.

[John Deloney]

Yeah.

[Rachel Cruze]

Yep. Yeah, that would, that would feel so.

[John Deloney]

But. So, but mom and a 13 year old can move to a. A condo.

[Caller]

Yes.

[John Deloney]

And have no upkeep and have no. Whatever you get. You get a lot of equity cash in the bank and you get to breathe.

[Caller]

Yeah.

[John Deloney]

Yeah. I mean I. I'm just being as honest as I can. If there's just me and one kid.

[Rachel Cruze]

Right.

[John Deloney]

I wouldn't have a 1.6 million dollar house.

[Rachel Cruze]

Right.

[John Deloney]

In this much money stress. I just wouldn't. But that's easy for me to say on the side of the fence. Call your mortgage company and check out about a recast and see if they can drop your payment. It's not a refi, but it may help you in this situation.

[Rachel Cruze]

Thanks for the call. Julia. We're so sorry. This is the Ramsey Show.

[Dave Ramsey]

People tell me about their experiences with big banks all the time. Bad service fees that nickel and dime them to death and predatory lending that tries to catch them in never ending cycles of death. So if you're ready for a bank that puts people over profits, check out Fairwinds Credit Union. I recommend Fairwinds because they share our Ramsey values of helping people get out of debt and live generously. If you go to fairwinds.org Ramsey you'll see the combined checking and savings account bundle they created just for Ramsey fans. This account bundle is designed to help you take control of your finances and stay out of debt. And Fairwinds also has a great mobile app that's safe and secure so you can manage your transactions with peace of mind. Fairwinds has been helping people avoid big bank traps for 75 years. So go to Fairwinds.org Ramsey to learn more. It's easy to join no Matter where you live. That's F a I r w I n d s.org Ramsey. You spend hours researching before making a major purchase like a home or car. But it's also a good idea to put in the work searching for the right insurance coverage to protect your biggest assets. I recommend using Ramsey trusted pros. Whether you're looking for car, home or any other type of insurance. Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you [e-mail] insurance.

[Rachel Cruze]

Welcome back to the Ramsey show. Up next, we have a Christian in Boston. Hey Christian, welcome to the show. Oh, did it go?

[John Deloney]

Hey, Christian. Hey, what's up, man? Hey. Rachel just said that. Funny. Like we have a Christian. We have a Catholic in Boston. We have this awesome guy named Christian. What's up, dude?

[Rachel Cruze]

Christian, welcome.

[Caller]

So I've been a long time social media watcher, never called in. So I'm 25 from Boston. I'll give you a little background before I guess I get to my question. 25. I have no debt at all. My net worth, I guess with investments in cash sits around 133, depending on how the market is. And last year I took around 125,000 home. And I want to buy a watch, a luxury watch, a Tudor. It will range probably with tax around 5 to 6k. I already have a Rolex and so I guess my question is with my finances, no debt, nothing. What is an appropriate amount of money to spend on a luxury watch? And if so, does this make sense for me as a want, not necessarily need to spend, you know, this amount of money on a watch?

[Rachel Cruze]

Yeah, I mean, I think just a couple like tactical money questions. Do you. So you got, you have no debt?

[Caller]

None.

[Rachel Cruze]

And you have savings and emergency funds?

[John Deloney]

Yep.

[Rachel Cruze]

Okay.

[Caller]

Yeah.

[Rachel Cruze]

How much liquid cash do you have beyond your emergency fund?

[Caller]

Beyond my emergency fund, probably 35. 35, 000 I have. Yeah. And then I have obviously 401k, my Roth and then all your investment account.

[Rachel Cruze]

Yeah.

[John Deloney]

What will this watch bring you, like in your chest? Like in like if you have your fist on your chest, what will this watch bring you?

[Caller]

I don't know. I kind of appreciate, I guess, the craftsmanship. It's a nice watch. It looks cool. It doesn't do anything different than my phone, you know, flipping it over.

[John Deloney]

Sure.

[Caller]

It's more or less just kind of like a want, you know. It's not like I'm buying it for some sort of, you know, to commemorate something, you know, I turn 26 this month like if you really want to call it I'm buying it or something. I'm getting kicked off my parents life insurance. Like that's what I'm buying.

[John Deloney]

Right, right. Yeah. I would guess this. So Rachel, tell me Rachel is better at this than me. I have bought guitars that are really expensive that I've thought were going to fill a hole in my heart and they didn't. I love them and I told people like no, they, they have a kind of tone or they put. I needed this guitar to make myself feel better. So there was that. I'll also tell you just as a 25 year old and I'm in my 40s, the single greatest flex I've ever seen when it comes to watches was doing an event with Jocko Will I and dude rolls up with a Timex and we were talking about his watch and, and the way he said it and you know Jocko like from, from you know like Internet. But the way he said it tells the same time that everybody else other watch tells. I just remember thinking like you're the baddest dude I've ever met. Not to mention, you know, he's Jaco. But it was a, it's almost a.

[Rachel Cruze]

Flex not to have it kind of thing.

[John Deloney]

Yeah, yeah, I rem just and I guess that would be my warning to you as a 25 year old is if you want nice things and you got cash and, and like whatever.

[Rachel Cruze]

Afford it.

[John Deloney]

Yes, yeah, you can afford it. Fine. The thing is is I think sometimes I remember being 25, I remember being 35 and thinking I needed a pair of jeans, I needed a car that said I needed shoes that said X, Y and Z. And now that I'm older and I've hired a bunch of people in my life and I'm meeting people over the country, I was actually completely opposite. Wrong. The eyebrow gets raised when somebody walks into somewhere nice and they've got jeans on because you think oh, that guy knows something I don't know. Or when they pull out their Timex and you know they're worth millions and millions of dollars you end up going that's kind of awesome actually. Right. And so, but, but you, I think cash to cash, you can afford it. It's a nice thing.

[Rachel Cruze]

Totally. And I think what John's saying, I think the sentiment of stuff is always just like, just I think it's an awareness within you Christian. And I do the same. I mean like, I mean I think there's just something to be said of when I want something. Asking the Questions, you know, if nobody sees this, do I still want it? How much of my motivation is for other people? How much of it is for my own ego to feel something? And even from a joy perspective, Arthur Brooks talks about this, that we can do five things with money. We can give it, save it, buy our time back, buy experiences with people we love and buy stuff. And the one thing that does not bring lasting joy is stuff. So again, this whole kind of concept of I'm buying this watch because I love it because I have. I bought a purse for my birthday last year and it was a nice purse and it was like, okay, think like whatever car.

[John Deloney]

What do I that nice of a person?

[Rachel Cruze]

No, no. Do not know. Not that nice. There are levels of persons. It was not that kind of purse, but. But it wasn't from Target. And so it was just this idea of like, okay, if I have this purse, if I don't have this purse. What does Rachel say about herself? How's she feeling when she walks in a room? Like, there's just a lot of introspect ness I would have for myself. The higher dollar amount you spend on something, I think the more it's just kind of good to explore some of that. And maybe it's more of a, you know, you can buy it and you're totally fine if you buy. We are not against stuff. Go get some nice stuff. Christian, you have set yourself up very well. You make great money, you don't have debt, you've lived below your means. Like, you are doing great. You can buy this watch. I just don't. John. And I think our biggest caution with stuff is don't be under the illusion that it's going to fulfill you long term and that it's going to bring some level of satisfaction. Because the way that things are marketed to us and the belief in that and what we wear, I mean it. It is crazy. The status symbols that are out there and what we believe and the thing is, people get in trouble with that. So again, I'm not worried about you from a money perspective at all. I think you could probably buy two of these and you would be fine. But it's more about you long term and who you are. Christian, you should ask John and Rachel what kind of watches and how much did they pay for theirs that we currently have. Huh?

[Caller]

You guys got on?

[Rachel Cruze]

Oh, okay. Christian. I've got an Amazon watch for $15. John, what kind? This is such a flip of the script, which I love.

[John Deloney]

I've got this dope Garmin watch. I Love Garmin watches. A free ad for Garmin. They're the best. I love them. While we're on this topic, Rachel, tell us about how much your car that you rolled into the parking lot costs, because mine costs $4,000. You. Anyways, we love. We love nice stuff. I'll also say this. If at 25, you can wrap your head around this idea because you have chosen to live the way you live, you have the opportunity. And I didn't find this out until I was old, you can buy it once really nice if you buy with cash. If you buy a super nice pair of Wolverine Thousand mile boots, you can resole them and you can take care of them, and you can give them to your grandkids, but they're really expensive out of the gate. Right. And so if you say, I want to buy a couple of really nice watches, I love them. I'm kind of a watch guy, and that's cool and awesome and. No, this will fill no gap in my soul. I won't feel any better about myself. In fact, I'll feel a little bit weird because I'm gonna see somebody who needs money the following day or whatever. I know some people who have a rule that if they buy something really nice, they give that amount away or a percentage of that amount away just to balance their own soul out. Whatever. But I love the idea of buying once and. And letting that just be that.

[Rachel Cruze]

Right.

[John Deloney]

I'm gonna buy a nice. Go ahead.

[Caller]

I don't mean to extend this conversation. The question ever, but is there, like, a rule or a percentage of a net worth that you'd be, you know, like, a percentage of my net worth that I could spend on a want that wouldn't necessarily obviously break the bank, but it's like you're comfortable with just blowing.

[John Deloney]

I love Dave saying, like, if you can light it on fire, if you could take that pile of cash, if you can take 5,000 bucks, set it on fire on your kitchen table and watch it burn to ash, and you're okay. And you're okay. It won't. It won't affect your world. Yeah, yeah, yeah.

[Rachel Cruze]

That's it. I mean, there's not really this, like, percentage. I mean, we say things, like, with cars, like, we always say, like, things with motors and wheels. Right. Cars can appreciate.

[John Deloney]

Yeah.

[Rachel Cruze]

Depreciating asset. Yeah. No more than 50 of your annual income. Like, there's some things around that. But when you get to the point where you are. Yeah. Of. I mean. Yeah. You're. You're Beyond Baby Step 3 and you just have extra cash that you want to spend. So it just, you emotionally have to detach from that money. And if you can really do that and it doesn't keep you up at night, then you're good to go.

[John Deloney]

Well, and it could be pathological. I, I would love for you to also, like, get a nice watch. Dude, you sound like you got a level head, man. Get a nice watch and also start laying the groundwork to get your money out of crypto, whatever nonsense you have it in and buy yourself a house that nobody can ever take from you. Right. Some of those more stable assets that you can anchor into.

[Rachel Cruze]

Yeah. And into, you know, a well balanced. And you're learning this early, Christian. I mean, honestly. I mean this is stuff that it's like so good to have because where you are financially. But always remember with money that you can spend it, you can save it, you can give it. And we say on the show we are fans of all three. So as, as you continue to become more successful and continue to live below your means, you're going to continue to build wealth, you're going to have more and more savings, you're gonna have the opportunity to spend some more, but also be having that generosity muscle as well, because that is joy within money. And if you can get that early and live with it, there's a, there's a freedom and a joy there that's unbelievable. So giving, saving, spending, doing all three. All right, Christian, have fun with your new watch. This is the Ramsey Show.

[Dave Ramsey]

Listen, people, what you call organized chaos is still chaos this year. Build some room in your budget to get your life really organized. One tool that I recommend is a knockbox. As in next of kin, Knockbox is a complete system that helps you organize important documents, accounts, IDs, tax returns, insurance policies, estate plans, and other personal history in one secure place. The 15 categories in your Knockbox cover everything from health, history and investments to your ancestry and even collectibles. So cut the clutter with a knockbox. Start getting organized today and receive an exclusive [e-mail] Ramsey that's n o k box.com Ramsey I think we'd all agree that it's a lot harder to run a race if you don't know where the finish line is. But nearly half of all Americans have no idea how much money they'll need to retire with dignity. If you're ready to stop hoping for the best and start planning for your future, then check out the SmartVestor program. A SmartVestor Pro can teach you Everything you need to know to get in the driver's seat of your own financial future. Connect with a [e-mail] Smartvestor Ramsey Solutions.

[Rachel Cruze]

Is a paid non client promoter of participating pros.

[John Deloney]

Learn [e-mail] SmartVest Investor.

[Rachel Cruze]

Welcome back to the Ramsey Show. So the best way to take control of your money, make the most of your money is to do a monthly budget to know and have a plan on where your income's going. And every dollar makes this easy. It makes you have this honestly very intuitive way of how you plan your spending, how you track your spending, what you're saving for your giving goals. I mean, everything is in every dollar. It really takes your income and walks you through how to have a plan for it and know where it's going. So you can download everydollar for free in the App store or Google Play or you can click the link in the description if you're listening on YouTube or podcast. Up next, we have Dave in Springfield. Hey, Dave. Welcome to the show.

[Caller]

Thank you guys for taking my call.

[Rachel Cruze]

Absolutely. How can we help?

[Caller]

So I'm 21. I'm about to be out of college this year. I have no debt. I paid it off as I went, but I'm. My girlfriend didn't. And she's gonna have about $70,000. And every time I bring it up, she's just kind of like, dismissive about it. And I don't really, like, want to pay off her debt in a way. You know what I mean? And I'm just not sure how to go about this in the future.

[John Deloney]

You should just break up with her, dude. Dude, John, I'm serious. I mean, it's like, because here's the thing, you're both going to bring crap into this relationship, both of you. And some of it you'll know right away, like, $70,000 in debt. And if you're already thinking that's hers and like, g, she's bringing this into this and I don't want any part of it. Like, that's just a down the road you're going to run into, oh, I want to raise kids like this, but this is how my dad did it. Or I don't want to live in this neighborhood of this house. Like, you're just like, if that's the, the if that's your first impulse is what about me? Then you're not ready to get married yet. If she has 70,000, I understand that. Does that make sense? So if she has $70,000 of debt, and you're like, dude, I don't care what mountain I have to move. You're going to be like, I want you to be my wife and I want to build a life with you like hell or high water. You and I are paying this off together, then. Awesome. You're off to the races. We would never tell you, don't get married because of student loan debt. So when I say. When I say just break up with her, does that give you peace or does that make you mad?

[Caller]

A little bit of both. Like, me and her have been together a while. It's not that I don't want to pay it off together.

[Rachel Cruze]

Is it more because of her attitude?

[Caller]

More than happy? Yes. It's more of like, she has no. Like, she doesn't want to pay it. It seemed like she wants me to pay it. It's kind of like what I'm getting at.

[John Deloney]

Okay, what's beneath that? Where else does that show up in your relationship?

[Caller]

Honestly, nowhere. Like, she. I mean, she's a little unmotivated. Like, she doesn't really. Isn't really that ambitious. Like, post college. She doesn't really want to do. She just kind of wants to do her thing, like, live around the area and whatever. And I kind of been like, I did an internship, like, in another city, and I've been like, you know, exploring career opportunities, but she's kind of seems, like stuck where she is, and I just like. I like, like her a lot and I want to be with her, but it's just like, such a weird thing.

[John Deloney]

I think y'all should explore that conversation.

[Caller]

Yeah, it's just like, I try to go further, but she's just, like, not interested in, like, continuing that conversation. You know what I mean?

[Rachel Cruze]

Beyond the money, though, Dave, like, hey, this is. These are kind of. This is kind of what I value in life. This is what gives me energy. This is how I'm wired and what I'm excited about and trying new things and opportunities. And it feels like, you know, you're more just, you know, I don't know. I don't know if. If that kind of life long term is something that you want to, you know, be a part of. So I think it's. I think it's more of that conversation because what that leads to is her motivation around any. I mean, anything in life. Right? Money, career, kids. Yeah.

[John Deloney]

Cleanliness. How does the house look? Where do we live? And here's what I'm here. Here's the, like, if you ask me what my big fear for you all right, now is. And I'm not judging you for this. I'm just calling it out. There's already a piece of you that feels like, well, I'm doing this and you're not doing that. Or to put it in a nerd terms, you're already in the scorekeeping world.

[Caller]

Yeah, I can understand that. I just, like, when I look at, like, both of our situations, like, I think of everything I've done to get to where I am now. I've worked so hard to be debt free right now, now. And. And she just kind of like took the shortcut and it feels like. And I don't know, it just feels weird for me.

[John Deloney]

But here's the question. You're asking her to go back in time and sign up for values that you had before y'all started dating. That's not fair. I hear that about sex. I hear that about money, I hear that about debt, about, well, I did all of this stuff and we just met and now we're doing this and I don't feel like they, dot, dot, dot, they didn't sign up for that set of values. The question is, will she agree to live a debt free life moving forward with you? Because you say, that's the way I feel like our family will be the most safe moving into the 21st century. And if she says, eh, I don't care. Now y'all have a values issue and you're. It's less about. Do y'all have the same beliefs? Me and my wife have way different beliefs on all kind of stuff. But one of our core values is if one of us raises a flag and says, this is a huge deal to me, the other person says, well, I don't give a crap. I'm in. I'm in. And so if you're honest and say, this really is important to me that we commit before we get married, I never want this family to be owned by a bank, by a car dealership, by whatever. And she's like, oh, I'm gonna have a Tahoe. Then just know that y'all are gonna have a problems, like insurmountable problems, because they're value problems.

[Caller]

Yeah, definitely.

[John Deloney]

Does that make sense? I hate to be the bear of bad news. Yeah. I feel like I just ruined your effort.

[Caller]

I understand. Yeah.

[John Deloney]

But I want you to also be very careful because you're not better than her. You just took it.

[Caller]

Yeah, I'm not saying that.

[John Deloney]

I know, I know, I know. But that frustration builds up and that's how it comes out.

[Caller]

Yeah.

[John Deloney]

Is I've done all this and you haven't done anything. Right. And so it's kind of like, okay, can we agree on values? But almost always those values conversations, brothers, start with you sitting down saying, I'm scared about X, Y and Z. It's important to me that our family never be owned by somebody. Are you in on that? That means we're gonna have to sacrifice here. We're gonna have to work really hard for two years after we get married to pay off your debts. And that means you're gonna have to get a full time job, all those kind of things. But it starts with you saying what you really feel. What do you think, Rachel?

[Rachel Cruze]

Yeah, no, that's what I was gonna say. I mean, this is like kind of a classic example what we say on the show. A lot of people call in about a money issue. You know, she has student loan debt. I don't know if I want to marry her. It's not as much about the student loan debt. It's more about the values around the relationship. And because we have people that call here all the time, like, yeah, my wife has, you know, $80,000 in student loan debt. You know, I brought some credit card debt in and we're working to pay it off together. I mean, like, it's a, it's a team effort there. And as you get into marriage, the less of a team you are and see each other as one and you're on each other's side, both of you. Right. She's jumping into your boat. You're jumping into her. I mean, it's just this idea of like, you guys value the same thing together. It's not that life is necessarily are easier, but there is a level of smoothness with that. I'm like, you're not running up against barriers constantly because of what you're desiring versus what she's desiring.

[John Deloney]

Yeah. The world will give you enough resistance.

[Rachel Cruze]

Yes.

[John Deloney]

You. You can't be fighting your partner while you're also trying to take on the world. It has to be you, y'all. Two versus the world.

[Rachel Cruze]

Yep.

[John Deloney]

Right. Otherwise it just gets sideways really quick.

[Rachel Cruze]

Yep. So. And it sounds like you guys have been dating a while, Dave, is what you said. And you guys are still young. And so maybe you start dating at 16 and you're a different person at 16 than 21. I mean, that's.

[John Deloney]

It's heartbreaking, but it is, Rachel. Like, man, on, on my show, on the other show that I, I'm a part of. I get this all the Time I chose to not drink in high school and college, and this person did. And so now. Right. And I always want people to go back and say, you can't judge somebody on some. On values they didn't have before you met.

[Rachel Cruze]

Right.

[John Deloney]

The question is, can we unite right now?

[Rachel Cruze]

Yes.

[John Deloney]

And if you can't. If you can't get over that, then you can't bring. You're bringing baggage to the relationship.

[Rachel Cruze]

Right, Right. And I think it's always a balance in marriage, too. And in relationships is that, you know, we always say opposites attract. Right. It's like the old saying, and it is true. You're both gonna have different levels of passion about different things. So it's not about becoming this, like, one individual person. When you get married, you still are.

[John Deloney]

Two individual people, but you're in the same boat.

[Rachel Cruze]

But that's it. Like, it's like. But we're still moving in the exact same direction. Right. Winston's still going to have 18 Excel sheets with stuff, you know, out till we're 65, and I'm not gonna know how to work them. Like, that will always be the case, but we are still working towards the same goals. And so the way we go about those things is different, and our interests are different in life, but it. That doesn't. Yeah. It doesn't conflict with the values of our home and how our family unit is being driven. And that's where. That's where it gets sticky. And if that's a red flag early, Dave. I mean, yeah, it's something to at least talk about. And, you know, and I'll give you guys this not to. Like, I don't want to belittle you because you're young, but I'm like, y'all are still figuring this out. She's still figuring this out. You know. Yeah. So have that conversation with her. But I would not break up with her because of the student loan debt. I would very much possibly break up if you guys cannot get to a set of values. And I would not take a step into engagement until those are consistent. This is the Ramsey Show. Hey, guys. Rachel Cruz here. All right. I'm about to say what everyone already knows, but budgeting is a good thing to do now, actually starting, well, that's where people freeze up. And, you guys, it doesn't have to be that way. With the Every Dollar budgeting app, getting started is super easy, and so is sticking to it. You can set up your first budget in less time than it takes to go through the Chick Fil. A Drive thru. It's fast. And the best part, with unlimited budget categories, you can customize it to fit your life. Grocery runs, coffee runs, or planning your next family trip. Whatever you have going on. Everydollar helps you see exactly what's happening with your money. You'll know what's coming in, what's going out and what's left over for some fun. Because let's be real, you need some fun in your budget. Everydollar keeps budgeting simple and stress free just the way you want it. So go download the app for free and get started today. Again, go download EveryDollar today. Welcome back. Up next, we have Jessica in Los Angeles. Hey, Jessica, welcome to the show.

[Caller]

Hi, how are you?

[Rachel Cruze]

We're doing well. How can we help?

[Caller]

So I'm just wondering how to go about applying the baby steps. Where my largest debt is a, is to my grandmother who has helped us. Yeah.

[Rachel Cruze]

All right, tell us. Yeah. How much, how much do you owe her?

[Caller]

$6,000 now.

[Rachel Cruze]

6,000?

[Caller]

Yeah. And that is from a credit card that she co signed with my fiance so he could start his own business.

[Rachel Cruze]

Oh, wow. What a nice grandma. Okay, and so what's your, what's your other debt?

[Caller]

In total, we are $10,344 in debt.

[Rachel Cruze]

Okay.

[Caller]

That's including our property taxes, our utilities, and our $2,200 in other credit card debt.

[John Deloney]

Are you behind on your utilities and property taxes?

[Caller]

Yes. So the thing is my, my grandmother is pretty persistent in reminding us about the credit card debt. So we kind of. For example, his Last check was $4,500. We gave her $2,000 to try to bring that debt down. But the issue with that is that we rely on that credit card because he's on the road for weeks at a time. So.

[Rachel Cruze]

Hey, Jessica, are you able to talk into your phone a little bit more? We're trying to get a clearer.

[Caller]

Oh, sorry. I'm a little nervous too.

[Rachel Cruze]

Oh, no, you're fine, you're fine. Okay. So yeah, so she's persistent. She's wanting her payment. She's, she wants her 6,000. How much do you guys make a year?

[Caller]

So he's been doing this business on his own for six months now. In the six months he's made about $60,000.

[Rachel Cruze]

Okay, and how much, how much do you make?

[Caller]

I don't work at the moment. I am, we're going through a new life transition. We're newly sober and I trying to get our house back into a livable condition. Basically, we've only been sober for 40 days. But, you know, we just kind of. Our whole life is chaos. And so since getting sober, we're trying to figure out how to be like functioning adults, you know, priorities and learning how to be, you know, normal again.

[John Deloney]

Well, let me tell you this, Jessica, number one, I'm super, super proud of you. Congratulations.

[Caller]

Thank you.

[John Deloney]

That's awesome. The second thing is, and I know you've probably heard this over and over and over in your meetings, but you have to, have to, have to, have to, have to go get a job asap. It doesn't have to be a full time job, and it for sure is not going to be your dream job or your passion job or whatever. But think of it this way. If you think of alcohol like yourself chained to a bottle you've been unchained for 40 days, but grandma calling you, the government calling you, your utilities possibly going to get cut off, that's like a squat rack. It's like you're sitting under a squat rack and you got a squat bar on your back. And so now you're unchained, but you still can't run free. And so what I'm telling you is if you go get a job, even working 20 hours, you clock in, you clock out, and you're baby stepping your way into full time employment, getting your feet underneath you. You're 40 days sober. You, you're still, I mean, your legs are still wobbly. And I get it every minute you're making a choice to do the next right thing. If you go get a job working 15 hours a week, 20 hours a week, and you can contribute to this thing, it will be like putting y. It'll be like jet fuel to your life change.

[Rachel Cruze]

I mean, Jessica, if you could make three grand a month, you guys could be completely debt free in three months.

[John Deloney]

In three months.

[Rachel Cruze]

I mean, I mean, with his income, everything. So I would tell Grandma, okay, our goal, Grandma, is it's February, March, April. Our goal is by the end of May, by the end of May, you will be paid. But we first have to take care of these back property taxes.

[John Deloney]

Yes.

[Rachel Cruze]

Because the government's right there. We're gonna, we're gonna pay those off this month, Grandma. And you could even show her your, you know, you guys make a timetable and say how many hours.

[John Deloney]

I would give her a payment schedule because my guess is grandma's calling because y'all have had, y'all have had challenges in the past and she's worried accountable. She wants to make sure she gets her money back. So you and husband Husband, make a map. Here's a 12 month payment schedule. We're going to pay you this much, 250 bucks every month or whatever it is. And then you will be paid off by this date. She's not hassling you. She can check it off every month. But like Rachel said, you can't keep Rob and Peter to pay Paul. They're going to cut your lights off. They're going to take your house away.

[Rachel Cruze]

Yep.

[John Deloney]

So I know grandma's hassling you and as she should be and she's frustrated, but you can't let them take your home. Right. So let's get a payment schedule and give it to her.

[Rachel Cruze]

Yeah. And have a goal of you guys live on his income. And Jessica, you bring home home two to three grand a month. You know, you could do that with some part time jobs.

[John Deloney]

I'm talking fast food. We're talking just clock in and for.

[Rachel Cruze]

Sure we'll go work at Target. Go, go Uber. Like do something that really. Yeah. Allows you to just earn some extra income. I mean, even if it's, you know, 25, 20 an hour. Yes.

[John Deloney]

You need some little wins and I'm telling you, it'll be so transformative. I'm so excited for you.

[Rachel Cruze]

Good job, Jessica. I hope that helps. Up next, we have Sharon in Cleveland. Hi, welcome to the show.

[Caller]

Hi. Thank you for having me, guys.

[Rachel Cruze]

You're so welcome. How can we help?

[Caller]

So I have a kid going off to college next year and I am in a ton of debt. I have not made good financial choices or money choices. I have never learned how to be totally honest. That's not an excuse. I just don't, I just haven't made the good choices. And so it was recommended to me to file bankruptcy. And I just need to know if that's even like a wise thing to do. I have a lot of credit card debt.

[Rachel Cruze]

Okay, walk me through your debts real quick. How much debt?

[Caller]

Okay, so I have student loans. I know that bankruptcy doesn't take care of those. So I have over 100,000 in student loans, I believe.

[Rachel Cruze]

Is that like right at, like right at 100 or like 120? I think it's about 125, 125 in student loans. Okay, keep going.

[Caller]

I have about 20,000 in credit card debt.

[Rachel Cruze]

Okay.

[Caller]

I just had to buy a new car because my old car clunked out on me. That one was paid off. So now I have a car loan.

[Rachel Cruze]

How much is the car?

[Caller]

I'm at 26,000 is what I owe my car.

[Rachel Cruze]

Okay.

[Caller]

And then I have two civil suits from credit card companies.

[Rachel Cruze]

Okay, and how much are Those?

[Caller]

One is 9,000 and the other is 6,000.

[Rachel Cruze]

Okay, and how much do you make a year?

[Caller]

I make $30,000 a year. I work in ministry for my church.

[John Deloney]

Oh, you can't do that anymore, Sharon, I'm so sorry. I know you have to. You have to let them. Let them know that you love them, but. Yeah. You can't breathe, hun.

[Caller]

I can't. You're right.

[Rachel Cruze]

Yeah.

[John Deloney]

Yeah. And I know you. You want to do this ministry, and I know you do good work for people, but you got to take care of your family, and you've dug yourself a pretty big hole, but. And you got to go get it.

[Rachel Cruze]

What's your degree in?

[Caller]

I have a communications degree and a master's in education.

[Rachel Cruze]

Okay. What would you. If you weren't doing what you're doing now? Do you. What's like probably the most realistic next step career wise for you, do you think?

[Caller]

Probably going back into the school system.

[Rachel Cruze]

Okay. And how much. How much would starting out be if you. If you started as a teacher?

[Caller]

Probably about 45. 40. Between 40 and 45.

[Rachel Cruze]

Okay. Okay. So that would be. That would be my next step. I would go talk to them tomorrow. I mean, I. I hate to say it. Math. We.

[John Deloney]

It's a 50% raise, let me put it that way. And 45 is not enough, but that's a 50% raise.

[Rachel Cruze]

Yeah, that, you know, and I think too, you know, nonprofit ministry work, all of that. I mean, we. We are big fans of people in those worlds. And. And maybe eventually that's your goal, to get back there. Right. I mean, if you could imagine having no payments, having an emergency fund, having a great retirement set up, and you're like, you know, I can go back to 35 because I have everything set up. Right. That would be a goal for you, which I think is amazing. But for right now, reality, it would be that. So what I would do is your car. I would sell it.

[John Deloney]

I would sell your car tomorrow.

[Rachel Cruze]

Sell it, because, I mean, it's basically how much you make in a year. And I would go get a $5,000 car. If you can get a difference. I wonder how much. Have you, Kelly Blue booked it at all? I know you just bought it, but have you seen. If you could. Have you looked up if you could sell it?

[Caller]

No, I haven't, but I will.

[Rachel Cruze]

Okay.

[John Deloney]

Even if you have to take $5,000 down to the credit union where. And you're upside down on it. I'D rather you do that because then you only owe 10,000 you're going to take a $5,000 loan out out pay the difference off because you're upside down and take out a $5,000 loan to.

[Rachel Cruze]

Buy a car Was it a brand new car or was it used when you bought it?

[Caller]

No it was brand new it was.

[Rachel Cruze]

Brand new okay so you'll probably take yeah you'll take a hit so hopefully you could still get maybe like you could maybe sell it for 21, 22 you'll take a little bit of a smaller loan for a difference it gets you a four thousand dollar car and that'll at least free up that car.

[John Deloney]

Payment but no do not do nothing not do not file bankruptcy you're not there yet Hang on the line we'll hook you up with financial peace University and the every dollar premium app for free and give you the education that you're missing but do not file bankruptcy.

[Rachel Cruze]

You'Re not there yet this is the Ramsey show.

[John Deloney]

Ra.