Building Wealth Starts With Setting Aggressive Goals

Summary

Podcast Summary: The Ramsey Show – "Building Wealth Starts With Setting Aggressive Goals"

Release Date: December 9, 2024

In this episode of The Ramsey Show, host Dave Ramsey and his co-host Jade Washaw delve into various financial challenges faced by listeners, offering expert advice and strategies to help build wealth and achieve financial freedom. The episode emphasizes the importance of setting aggressive financial goals and making informed decisions to avoid common money pitfalls.

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1. Demystifying Whole Life Insurance

Caller: Andrew from Miami
Timestamp: [00:16] – [08:46]

Andrew initiates the discussion by inquiring about whole life insurance as an investment vehicle, expressing confusion over its supposed tax-free growth benefits.

• Dave Ramsey: “Whole life does not grow tax-free unless you lose money and your basis for tax purposes in a whole life policy is the total of your premiums.” [04:07]

Dave debunks the myth that whole life insurance is a viable investment for growing tax-free savings, highlighting its poor rate of return and high fees. He compares it unfavorably to alternatives like Roth IRAs and investment brokerage accounts.

• Dave Ramsey: “Whole life in and of itself does not grow tax free. That is a falsehood.” [03:18]

Jade Washaw: “He's a sugar daddy. Still, he might be a nice one, but that's what he is.” [16:12]

The conversation underscores the inefficiency of whole life insurance policies for wealth building, advising listeners to prioritize more effective investment strategies.

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2. Navigating Family Financial Decisions

Caller: Hayden from Nashville
Timestamp: [10:25] – [18:04]

Hayden seeks guidance on how to advise her mother, who is contemplating quitting her job to rely on her wealthy new boyfriend without marriage.

• Dave Ramsey: “Put a ring on it or don't do it. It's pretty simple because I gotta tell you, it changes the chemistry.” [17:42]

Jade expresses concern over her mother’s financial naivety and the potential risks of becoming financially dependent without formalizing the relationship through marriage. Dave emphasizes the importance of evaluating the downside risks and maintaining financial independence.

• Dave Ramsey: “When one of the possible outcomes is devastation... you don't make big decisions like this.” [16:12]

The advice centers on promoting financial literacy and ensuring that significant life decisions are made with security and foresight.

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3. Smart Mortgage Strategies

Caller: Michael from Charlotte
Timestamp: [18:29] – [25:32]

Michael questions the wisdom of his loan officer who advises against a 20% down payment on a mortgage, citing North Carolina's appreciation rates.

• Dave Ramsey: “I don't advise you using this loan officer. She's stupid.” [18:53]

Dave criticizes the loan officer’s advice, advocating for significant down payments to minimize mortgage burdens and avoid excessive debt. He recommends utilizing Ramsey Solutions’ real estate resources for more reliable guidance.

• Dave Ramsey: “They get paid on what? What's her percentage on the loan amount? Conflict of interest in this advice.” [19:11]

The segment highlights the importance of making informed mortgage decisions to ensure long-term financial stability.

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4. Real-Life Success: Paying Off $206,000 in Debt

Guests: Casey and Jesse from Ruston, Louisiana
Timestamp: [63:05] – [72:21]

Casey and Jesse share their inspiring journey of eliminating $206,000 in debt within 23 months by adhering to Dave Ramsey’s debt snowball method. They discuss the challenges they faced, including medical bills and property issues, and how their commitment to the plan transformed their lives and marriage.

• Casey: “We listened to your book again, and this time it sank in. It's okay. My Plan obviously isn't working. I had prayed numerous times, God, please increase our income so that we can get out of this.” [66:51]

• Dave Ramsey: “You paid a price to win. Way to go. I'm proud of you.” [71:53]

Their story emphasizes the effectiveness of disciplined budgeting, increased income efforts, and community support in achieving financial freedom.

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5. Evaluating the Necessity of a New Mortgage

Caller: Ashley from Illinois
Timestamp: [21:38] – [32:17]

Ashley, on the verge of becoming debt-free with her husband, contemplates taking on a new mortgage to purchase a home they can call their own, moving away from his previous residence with his ex-wife.

• Dave Ramsey: “If you have the ability to do something in cash, I think that's a great thing. But I definitely wouldn't go crazy on this.” [22:58]

Dave advises against unnecessary debt, suggesting that Ashley and her husband consider renting or purchasing a less expensive home to maintain their debt-free status.

• Andrew: “If your plan was to go into debt for a mortgage anyway, then why are you waiting three years till you pay this thing off? What's the point?” [25:32]

The discussion focuses on weighing the benefits of homeownership against the financial freedom achieved by staying debt-free.

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6. Addressing Emotional Guilt After Paying Off Debt

Caller: Jade Washaw
Timestamp: [25:49] – [30:53]

Jade discusses the emotional aftermath of becoming debt-free, experiencing guilt over occasional purchases despite adhering to a strict budget. Dave and Andrew offer strategies to overcome these feelings, emphasizing the importance of celebrating milestones and maintaining financial discipline.

• Jade Washaw: “I have three boys together, two to five, and our first girl on the way, she's 15 weeks pregnant.” [12:34]

• Andrew: “Just tell them, hey, we're doing this debt snowball and we list them smallest to largest. You're number four and... we're happy. Our plan is to pay you off this year.” [49:32]

They highlight the psychological aspects of financial management, encouraging listeners to embrace their progress and continue their disciplined approach.

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7. Overcoming Financial Missteps with Inherited 401(k)

Caller: Ryan from Hartford, Connecticut
Timestamp: [75:30] – [83:59]

Ryan explains the complications faced after inheriting a 401(k) from his late father, receiving a check that resulted in significant tax withholding due to lack of rollover before the expiration of a five-year window.

• Dave Ramsey: “They have to withhold 20%. That's the rule. If you take a draw, but this is an involuntary withdrawal without note... This is a problem.” [78:44]

Dave advises Ryan to consult with a SmartVestor Pro to explore potential solutions, emphasizing the importance of understanding tax implications and the rules surrounding inherited retirement accounts.

• Dave Ramsey: “Go to Ramsey Solutions.com and click on SmartVestor and find a SmartVestor Pro in your area that you like.” [79:42]

The segment underscores the necessity of proactive financial planning and seeking expert advice when managing inherited assets.

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8. Final Thoughts and Community Success Stories

Timestamp: [53:04] – [73:05]

Dave and Jade wrap up the episode by celebrating listener success stories, reinforcing the effectiveness of the baby steps approach. They highlight the transformation in Casey and Jesse's marriage and financial status, encouraging listeners to stay committed to their financial goals.

• Dave Ramsey: “The best thing we've said... Once you start going and I need some debt free trackers as well, it just kept us motivated of knocking this out and getting ahead.” [70:45]

The episode concludes with motivational insights on goal setting, the power of intentional financial planning, and the impact of community support in achieving financial freedom.

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Key Takeaways:

• Avoid Whole Life Insurance: It's often a costly and inefficient investment compared to alternatives like Roth IRAs.
• Maintain Financial Independence: Be cautious about becoming financially dependent on others without formal commitments.
• Make Informed Mortgage Decisions: Aim for significant down payments to minimize long-term debt burdens.
• Celebrate Debt-Free Success: Achieving financial freedom enhances personal relationships and overall well-being.
• Overcome Emotional Guilt: Embrace financial discipline while recognizing and celebrating progress.
• Manage Inherited Assets Wisely: Understand the tax implications and rollover rules to maximize inherited retirement funds.
• Set Specific, Measurable Goals: Clear financial objectives with defined timelines facilitate effective wealth building.

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Notable Quotes:

• Dave Ramsey: “Whole life in and of itself does not grow tax free. That is a falsehood.” [03:18]
• Dave Ramsey: “Put a ring on it or don't do it. It's pretty simple because I gotta tell you, it changes the chemistry.” [17:42]
• Casey: “We bought a condo and started dealing with all the debt, [...] Marriage is way better.” [71:53]
• Jesse: “It's the most rewarding experience of our lives.” [71:21]
• Dave Ramsey: “You can do it. It's not impossible.” [70:45]

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This episode reinforces the foundational principles of financial discipline, strategic planning, and the transformative power of committing to aggressive financial goals. Listeners are encouraged to utilize the baby steps framework, seek expert advice when needed, and stay resilient in their journey toward wealth building.

Transcript

[Dave Ramsey]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. Jade Washaw, Ramsey personality is my co host today, number one best selling author and we're here to answer your questions about your life and your money. Open phones at 888-825-5225. Andrew starts off this hour in Miami. Hi Andrew. Welcome to the Ramsey Show. What's up? Not too much. Thank you so much for having me, Mr. Ramsey. Sure. So I had two questions regarding whole life insurance. I know you're general principal, but I've never actually heard you discuss these two character of whole life insurance or these two scenarios. So I was kind of curious of.

[Jade Washaw]

Your opinion regarding the subject, if you don't mind.

[Dave Ramsey]

Sure. I'm an expert on my opinion. So the first question is like this. Today in America, if a person is, a single person is earning $150,000 a.

[Jade Washaw]

Year or less, they can put up.

[Dave Ramsey]

To $7,000 into a Roth IRA.

[Jade Washaw]

That grows tax free.

[Dave Ramsey]

But at $150,000 after tax is about 130,000. A single person pretty much anywhere in.

[Jade Washaw]

America still has plenty of money.

[Dave Ramsey]

So let's say you're putting money into an investment brokerage account. My question was on whole life insurance. It also grows tax free. I know it doesn't have the same.

[Jade Washaw]

Rate of return, but if a person wanted to increase their long term tax.

[Dave Ramsey]

Free savings, would that still be, would.

[Jade Washaw]

That be something you would consider as a viable approach? That they've already maxed out their Roth IRA? Or if they have a company, a Roth 401, they still can only max out 7,000.

[Dave Ramsey]

How long ago did you take your job selling whole life? I have actually.

[Jade Washaw]

I've only sold a couple of policies.

[Dave Ramsey]

But no, I don't, I'm not actually involved in the industry specifically. If you don't, how did you sell policies if you're not involved in the industry? Oh, I am a licensed agent, but I haven't done it in a few years because you pretty much spouted their line perfectly. This is the Whole Life sales line. That's how I knew you were selling it. You nailed it. Like you were just trained like three weeks ago. That's what it sounded like, not picking on you. But you are representative of the industry. Okay, so let me help you with this. Let me help you with this. Whole life, Whole life does not grow tax free unless you lose money and your basis for tax purposes in a whole life policy. Is the total of your premiums. So if you pay in $100,000 over a bazillion years into your whole life policy and your cash value is $90,000, you have lost $10,000. And so of course there's no taxation or you can borrow your own money and pay them an interest rate to borrow your own money. And by the way, 100% of the time borrowed money is not taxable. So whole life in and of itself does not grow tax free. That is a falsehood. If it actually made money and you took the money out, it would be taxable, but they never do because they suck so bad. The rate of return is horrendous and the fees are so high. And so no, I would never consider that as an option. Instead I would. Listen, dude, if you put your money in a fruit jar as your side investment after you maxed out a Roth, you're going to end up with more money than you will screwing around with the whole life policy because they lose money.

[Andrew]

I'm impressed that you sniffed that out as quickly as you did too much.

[Dave Ramsey]

Time in 30 years being hated on by whole life people.

[Andrew]

So that was pretty impressive. I'm not going to lie. I'm impressed.

[Dave Ramsey]

Well, I mean it's a scripted thing. Clearly it's tax free growth, which is a complete lie, y'all. It's not tax free growth. If there is growth and you take it out, it's taxed, period. But there never is because the rate of return is so horrible and the fees are so high. So here's the way whole life works for those of you listening. And he's talking about it as an investment only. But let's talk about it as an insurance product, which is what it is purported to be. And that's you only have to have a life insurance license, not a securities license to sell the crap. So the which is easy to pass if you can, if you can roll out of bed, you can probably pass your life insurance exam. It's not that hard. Securities exam, on the other hand, very hard. Now whole life is 20 times more expensive than the same amount of term on the same person. So a 30 year old buying $100,000 policy, if say for instance, they did that for $5, whole life would be $100. Okay, so where does the extra $95 go above the cost of insurance? Because term is only insurance.

[Andrew]

That's right.

[Dave Ramsey]

It goes into an investment called cash value, which is what he was bringing up. Okay, the investment called cash value. The first three years on a Whole life policy, your Investment growth is 0,100% of your $95 a month. In our example, the extra 19 times you're paying for this, you get zero in your investment. So you open a bank account and you put in $95 a month for three years and the balance is zero.

[Andrew]

No one would do that, by the way, if they understood that.

[Dave Ramsey]

They do it all the time, but no one would do it if they understood that. You're right. Which is our goal here, is to make everyone understand it. Then once it does start making money. The average whole life policy in America today averages 1.2% with an inflation rate of 4.7.

[Andrew]

Losing money.

[Dave Ramsey]

And so after you get past those two things, here's the worst part of the whole thing. So this little couple buys $100,000 life insurance policy. They pay into it for 20 years. They have 20,000 bucks in there. Finally, after they got 1.2% and has nothing for the first three years, and then he dies, you know what they pay? They pay the life insurance. Just the premium, the face amount. What happened to the money? I've been paying $95 extra to build up in my savings account? Insurance company keeps it. You do not get the face value plus the cash value.

[Andrew]

Let me ask this because.

[Dave Ramsey]

Let me finish. So you have a savings account that the first three years you put money in, they keep all of it. After that you make 1% on it. And when you die, they keep your money. Who would open the savings account? Nobody. But people do every day. It's the biggest, let me tell you. It's the payday lender of the middle class. It's crap. Sorry, Andrew, but you asked.

[Andrew]

So when do they. A guy like Andrew, if somebody said, I'm interested, let's say they had built up a certain amount of cash value. When would a guy like Andrew say, here's the right time to get at that money? So you. So you know, it's all a risk game, but so that you can get it before you die.

[Dave Ramsey]

Well, you can't get it before you die. The only way you could get it is cash the policy in. Because if you borrow the money out, then you're paying before you die. They repay the debt to yourself to make sure they keep the whole cash value before they pay out the face value. So if you borrowed 20,000 in $100,000 policy and you died with the loan out, you get 80 instead of 100. They pay back the loan. So they get. Make sure they get to keep it.

[Andrew]

Wow, wow, wow, wow, wow. Wow.

[Dave Ramsey]

So the only way to get to keep the money is to cash out the policy.

[Andrew]

And then at that point, what was. Why get it to begin and you.

[Dave Ramsey]

Have lost money on it, so it's not taxable.

[Andrew]

Terrible, terrible, terrible.

[Dave Ramsey]

No, you're better off putting money in a fruit jar, darling. At least when you die, it's there. Assuming the family knows where the fruit jar is buried. But be careful with that one. That did happen to one of my relatives. We got, we got, we got cousins out there with metal detectors in the backyard trying to figure this one out. But don't do that. Don't do that one either. This is the Ramsey Show.

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[Dave Ramsey]

Jade Washaw, Ramsey personality, is my co host today. Thank you for joining us. Open phones at 888-825-5225. Hayden is in Nashville. Hi, Hayden. Welcome to the Ramsey Show.

[Jade Washaw]

Hey, thanks so much for taking my call. Appreciate it. Appreciate everything you do.

[Dave Ramsey]

Thank you.

[Jade Washaw]

So basically I'm calling about my mom. I'm very concerned for her. She has a bad track record for Being financially smart. And recently she just got into a relationship. It's only been about six months, and he has a lot of money. So she thinks that she wants to quit her job and live off of his money and then sell her house, and then that's her retirement. So I don't. I just don't really know, like, how to give her advice. And she has asked me for advice.

[Dave Ramsey]

She did ask.

[Andrew]

Interesting.

[Jade Washaw]

She. She did ask advice.

[Dave Ramsey]

Because the one thing that changes the whole discussion is the marriage date. When are they getting married?

[Jade Washaw]

That's exactly my point as well. Like, I'm telling her, you need to get married before you decide to quit your job or decide to move in with him.

[Andrew]

Like, but is there.

[Dave Ramsey]

Listen, if you quit your job and move in with somebody and sell your house, that's rich. That's called a sugar daddy. We have a name for that guy.

[Jade Washaw]

He's a really.

[Dave Ramsey]

I don't care. He's a sugar daddy. Still, he might be a nice one, but that's what he is. No, you don't do that, Mom. How did you get to be mom and not know that?

[Jade Washaw]

Trust me, I don't know.

[Andrew]

So what. What have you said to her? What have you said to her so far about it? What have you told her so far?

[Jade Washaw]

He wants to take care of her, and she, you know, he supports her in any decision she wants to do. If she doesn't want to work anymore, that's okay. She'll. He'll pay for, you know, all the bills, and she wants to sell her car. She also has a. She owes 20,000 on her car right now, 8,000 in credit cards. You know, she's not good with her money.

[Andrew]

And I'm saying, what have you told her about this? Have you told her anything?

[Jade Washaw]

I told her. I told her that one. She needs to get married if she wants to, you know, rely on his income.

[Andrew]

Did you tell her why?

[Jade Washaw]

Most. Oh, yeah, for sure. And it's hard. It's hard for her to listen to me because, like, I'm not married, so I don't.

[Andrew]

Ah, okay. Another strand. Well, it's. You're her kid. That's strand one.

[Jade Washaw]

And that's another thing, too.

[Andrew]

Yes. And then you've not been in the type of relationship that she's been in. At least that's the way she's going to view it, which is true. So you're fighting again. Like, you're fighting a current 100%.

[Dave Ramsey]

Let me tell you what. If you ask your mom's dad, he's probably Gone, Right.

[Jade Washaw]

Yeah.

[Dave Ramsey]

Yeah. But if we were to ask a good relationship, they didn't know, that's probably not a good example. If we were to ask her uncle, he would have said, no, I'll bonk him on the head. No.

[Jade Washaw]

Right?

[Andrew]

Or I mean, even if you flip the script and put yourself in that situation. Although I, I would love to think that she would tell you to do the, the opposite, but she might tell you to do the same thing that.

[Dave Ramsey]

She'S doing so she would smell that one out. I don't. You know, your question is how to convince her of what all three of us know that this is a bad idea. Okay.

[Jade Washaw]

Yeah.

[Dave Ramsey]

So I guess the thing is this. Okay, here's the thing. Anytime, mom, you're making a great huge decision and there's a series of great, huge decisions you're making here. You have to play out the decision. Is it a happy, happy decision? Now the way that works is this. You're happy if this works and you're still happy if this doesn't work. If it all works and you just play house and the sugar daddy takes care of you, it worked. You're happy. That's your plan. But what happens if he dumps you in the street for a 10 year younger version, Trades you in on a new model? Mom. Because he can do that pretty easily here by waiving the exact same carrot he waved in front of you and be sugar daddy to somebody else. So when he puts you in the street with no house, no car and no job, where are you going to be? So you don't make big decisions like this, Mom. When one of the possible outcomes is devastation. Bad risk management, bad lack of wisdom. Lack of wisdom.

[Jade Washaw]

And I'm also just not in a position financially to help her. She's asked me in the past for money.

[Dave Ramsey]

That doesn't enter into how stupid this is. Whether you give her money or not doesn't mean this is smart.

[Andrew]

And you're going to have to accept the fact that she's going to do. You could lay out the best argument in the world, like perfectly, just eloquent, everything makes sense. And she could still go and make this choice and it's going to be bad for her and you're going to have to just learn how to live with that and accept the fact that she's a grown woman and she's making a bad mistake and there's nothing, in many ways, there's nothing you can do about it. And that's, I think that that's the hardest part of being In a relationship with anyone that you really care about is they get to choose.

[Dave Ramsey]

Is there anyone in her life that's wise, that she trusts her brother, have him call her and scream at her. I'm serious.

[Jade Washaw]

She really. He. He really likes the guy. So I haven't seen him.

[Dave Ramsey]

Like I said, I asked if he was wise. Oh, if he's wise. He doesn't think this is a good idea. I'm not saying the guy's a horrible guy. I'm saying this is a horrible deal for your mom without. Put a ring on it, buddy.

[Andrew]

Well, the guy probably thinks if this is a. I'm going to say in air quotes, a good guy. This guy probably thinks he's offering your mom the world. So maybe somebody needs to get in his ear and make him see, hey, we. We like you. We. We think that you're probably trying to take care of our mom. But can you do this the right way? Because this way, the way that you're doing it now makes us nervous. Because if for some reason it doesn't work out, she's on her butt, right? So maybe that's the way to go at this, is if there's somebody that has the right relationship to talk to him. If he is really the good guy that you guys say he is, that should give him a light bulb moment to go, oh, I get it.

[Jade Washaw]

Yeah, right.

[Dave Ramsey]

Put a ring on.

[Jade Washaw]

My mom just needs a reality check, too.

[Dave Ramsey]

The problem is she's not looked at the downside. Anytime you're making a big decision, you have to look at the downside. What's the possible negative outcome from this? And it'll keep you from doing some stupid but stuff if you don't only consider that, you know, sunshine, rainbows, and skittles. You know, it doesn't always turn out sunshine, rainbows, and skittles. Especially when the deal is set up poorly from the start. You're kind of asking for it.

[Andrew]

Yeah, that's true.

[Dave Ramsey]

You're asking to have your butt kicked. Life's gonna come along. Go, you were stupid. Here's your butt kicking. Ready? Here you go. And we all get to pay some stupid tax. We've all done some stupid butt stuff, and she's signing up for one here. This is a trip. It's gonna be harsh. Please don't do this. Lady, please don't do this. Put a ring on it or don't do it. It's pretty simple because I gotta tell you, it changes the chemistry.

[Andrew]

Well, I was gonna say there's no, like, balance of power in this relationship, she sells everything she has. There's no way in the world she could live in a house that he lives in on herself. You know what I'm saying? She has no ability to keep up life.

[Dave Ramsey]

We need to bring back some of the vernacular from bygone eras.

[Andrew]

Let me hear it.

[Dave Ramsey]

A kept woman. Oh, you ever heard that one?

[Andrew]

Yes, that's very. I don't want to say the word old, but that.

[Dave Ramsey]

That's. That's ancient. That's a kept woman. She's being kept?

[Andrew]

Yeah.

[Dave Ramsey]

For her use.

[Andrew]

Yes.

[Dave Ramsey]

Oh, yeah. Give you a little chill. Gives me a little chill.

[Andrew]

I don't like it.

[Dave Ramsey]

My dad's stuff. My grandpa's stuff gets angry right then. So I just can't put a ring on it. Michael is in Charlotte. Hey, Michael. What's up?

[Jade Washaw]

Hey. I'm good. How are you doing?

[Dave Ramsey]

Better than I deserve. How can I help?

[Jade Washaw]

Other question. My wife and I are in the process of buying a house. We were pre approved and our loan officer told us she doesn't advise 20% down payment. We're in North Carolina. She says the appreciation rate in North Carolina.

[Dave Ramsey]

I don't advise you using this loan officer. She's stupid.

[Jade Washaw]

Yeah, I figured you would say something along those lines, but I'm just. I don't. I have a hard time understanding how that works out, how it would be.

[Dave Ramsey]

Well, her thing is the borrowed money has no risk. So borrow all you can.

[Jade Washaw]

Okay.

[Dave Ramsey]

My thing is I've met people who are up to their eyeballs in a mortgage and can't get out. They're stuck because of some idiot loan officer. Like this. By the way, she gets paid on what? What's her percentage on the loan amount? Conflict of interest in this advice. Hello.

[Andrew]

Hey, you need to go more money.

[Dave Ramsey]

If you don't put down so much.

[Andrew]

He needs to go to our real estate hub and find some folks who are going to actually help him.

[Dave Ramsey]

Go to ramseysolutions.com real estate. There it is. That's easy. A whole bunch of stuff there that'll help you, Michael. Yeah, but she's getting paid on that. You do need a loan. Loan officer. This woman's not smart. This is the Ramsey Show. I've been doing this show for over 30 years. And some of the saddest calls I have taken are from situations that are completely preventable.

[Andrew]

Yeah.

[Dave Ramsey]

And what's so hard is I feel like one of those. Especially the ones that I'm like, oh, it's terrible air. People that call in and their spouse has passed away. Suddenly. And they don't have life insurance.

[Andrew]

When you have to think through how am I going to pay my bills.

[Dave Ramsey]

In the middle next week.

[Andrew]

Yeah.

[Dave Ramsey]

In the middle of all that grief. Like it's just, it is, it's terrible.

[Andrew]

And so life insurance is the one.

[Dave Ramsey]

Thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 835. That's 800-356-4282 or go to Xander.com Jade Wash All Ramsey personality is my co host today. Thank you for joining us. Today's Ramsey show question of the day is sponsored by why Refi? When you're trapped in a maze of defaulted private student loan debt, hard to find your way out. But why Refi can offer you a lifeline with custom refinancing based on your ability to pay and a lump sum payoff option you could qualify for after 24 months at a discount. Go to wirefi.com Ramsey that's the letter y r e f y.com Ramsey might not be available in all states.

[Andrew]

Alrighty then. Today's question comes from Ashley in Illinois. She says my husband and I will be debt free in about three years. House and everything. Congratulations. The house we currently live in is the house that he lived in with his ex wife. I would like to get a place that is new to us that we can create our life together. Is it stupid to get a mortgage when we are debt free? That's a very good question. The simple answer is no. It's not bad. It's not the worst thing. You could definitely do worse. And I the reason that you're wanting to do this, I understand it. I just wonder if you go ahead and you are debt free within this three year time frame. I wonder if what the market will be like and if there's something that you can just simply say we're moving from one house to another. You may not have to go into debt or if it's a Small amount. I'm not mad at it. I just think that you're really going to love the feeling of being free. And so when that time comes, you're going to step very lightly. You're probably going to be very lenient on the amount that you would be willing to borrow. And I think that that's a good thing. Yeah, it's not, to answer your question, it's not stupid, it's not bad or evil. We just don't like debt. So if you have the ability to do something in cash, I think that that's a great thing. But I definitely wouldn't go go crazy on this. Dave, what do you think?

[Dave Ramsey]

Here's what's interesting, that it is assumed that I have to move up in house to move out of her house.

[Andrew]

Yeah, they might be able to get.

[Dave Ramsey]

Something move down in house.

[Andrew]

It's a novel concept.

[Dave Ramsey]

So now we're getting to the root of why we really want to move.

[Andrew]

That's good, Dave. That is. Listen, you're not wrong.

[Dave Ramsey]

I saw one with a jacuzzi and a skylight. Mine doesn't have that.

[Andrew]

They might be willing to consider that because she hasn't felt that freedom of no mortgage yet.

[Dave Ramsey]

Well, these are not necessarily the same thing. You could move down in house or you could move to the exact same price of house and be out of the ex's house, which I completely would definitely want to do.

[Andrew]

I would too.

[Dave Ramsey]

But you're right, there's probably that would gross me out.

[Andrew]

I want out of her house and I also want into another nice, nicer better house.

[Dave Ramsey]

Well, I mean, moving up in house is one question. Moving out of the ex's house is another question.

[Andrew]

But even moving.

[Dave Ramsey]

They're two different questions.

[Andrew]

There are two different questions. But even if she just simply said it like that, I, I personally still would be like, listen, if you told me you were taking on at that point, it's like, hey Jade, we're, we're moving up in house. It's going to cause us to take on a hundred thousand dollar mortgage. Then my question would be like, well, how quickly could you save to get that done? You have no house payment. So when you put it like that.

[Dave Ramsey]

And sell it and go rent for two years.

[Andrew]

Exactly. When you put it that way, it's like, well, it's a small mortgage. Then if it's a small mortgage, you could probably pay cash for it just as quickly.

[Dave Ramsey]

So I can tell you, once I got out, a herd of horses couldn't have drugged me back.

[Andrew]

You ain't Going back. I know that's.

[Dave Ramsey]

And that includes a dissatisfied wife. Ain't nothing, nothing, nothing gonna drag me back in.

[Andrew]

He ain't going back. I know.

[Dave Ramsey]

Never going back. So we might. I get you want to move. Let's just go. We'll go rent. I get you want to move. We're going to move down. We're going to get this little condo.

[Andrew]

Oh yeah.

[Dave Ramsey]

Where the X hadn't been. I get the move. But you're. This lady is asking the same question we get when we have someone say, hey, I have a $10,000 paid for car. It just got totaled. I don't really want to go in debt to buy a new car. Well, you don't have to. You get the $10,000 check from the insurance company and you buy a $10,000 car. But instead you're using the car totaling as an excuse to move up to a $20,000 car and somehow that equates to payments and you're going to act like the car being totaled caused this. No, you moved up in car. You just wanted to go. Yeah, ex didn't cause this. It's not that's then caused the move up. They caused the move out.

[Andrew]

That's the other question of this. I'm like, listen, if you're. If your plan was to go into debt for a mortgage anyway, then why are you waiting three years till you pay this thing off? What's the. What's the point?

[Dave Ramsey]

That's a good idea too. That's a really good. That's. I like that. The best thing we've said. Doug is in St. Louis. Hey Doug, what's up?

[Jade Washaw]

Hi, how's it going? Thanks for taking my call.

[Dave Ramsey]

Sure, man. How can we help?

[Jade Washaw]

Hey, so I've got some good news. And I paid off a lot of debt and. But I want to talk to you about the emotional side. The guilt is still there. So. Yeah. So we had some major medical bills and some home repairs, found ourselves over $100,000 in debt. We decided we didn't want to pay the minimums anymore. So we paid off a third, Settled a third. And then when my 99 year old grandma passed away, we got a little money so that with the exception of our mortgage, my wife's two loans and a very small car payment which we're going to pay off early. We are out of debt.

[Andrew]

Okay.

[Dave Ramsey]

What is it you feel guilty about?

[Jade Washaw]

Be just still. If we. Even if we budget for it, a big purchase, it still feels uncomfortable. Or here, you know, go into the kids activities and you Run out of time and you swing by McDonald's and you like, you feel the occasional purchases, it still feels guilty.

[Dave Ramsey]

Are you doing a budget?

[Jade Washaw]

Yes. Yes.

[Dave Ramsey]

Does your budget account for those occasional purchases?

[Jade Washaw]

Yes, we.

[Dave Ramsey]

Are you able to accomplish your other goals with the occasional purchases?

[Jade Washaw]

Yes. Yes. It just still feels weird.

[Andrew]

Do you feel bad that you didn't pay? Is it because you didn't use your earned money per se to pay off all the debt?

[Jade Washaw]

It's more a mixture of I guess I'm afraid to go back and then, you know, I've really drastically increased my income and so I feel a little like, you know, people who are having a harder time.

[Andrew]

Yeah.

[Jade Washaw]

And then the other part of the guilt is so we have a three year old and a five year old and because of the medical stuff and because it just, it was just easier with my wife being home. We, when she's home, we meal plan better. We save more money because we don't eat out. We don't save Money because my 3 year old would have to go to daycare. We save more money that way. But anytime you go visit family, friends, anything, it's the first when she go back and it's like, well, I've increased my income. I think we'll be okay.

[Dave Ramsey]

They don't get a vote. Who gave them a vote?

[Jade Washaw]

I know it's in my head and I guess what I'm trying to say is how do I get, we're doing fine, but how do I get all that voices out of my head? I assume that once you cut off the debt, it still takes a little bit before you feel that release.

[Andrew]

Listen, I'll be honest with you. My husband and I paid off a big amount of debt and immediately you're like, yes, this debt's gone. But you do feel the residual effects of that throughout like your day to day life. For me, it's. I would go to the grocery store, my armpits would still sweat when it was time to swipe my card. Still to this day I have to stop myself from checking my account to make sure the money's there. So there's. There is that part of it that your body is just used to a certain response when it gets in those familiar circumstances. And I do think that that starts to fade over time. I think the best thing for me, one of the best anecdotes for this has been antidotes for this has been the budget and just going over it and saying, okay, I planned for this and, and reminding myself that I'm still doing all of the things that caused me to be a financially responsible adult. I'm still doing my investing. I am still, you know, planning for the future. I'm still being generous. Like when I tell myself, jade, you're checking all the boxes. This is okay, then it kind of causes my heartbeat.

[Dave Ramsey]

All the boxes are checked. Checked. Including taking my wife out to a $300 dinner.

[Jade Washaw]

Okay, well, I'm not talking about. I'm talking like, oh, you know, I am.

[Dave Ramsey]

I'm talking about that maybe I think this woman needs somebody to take her to dinner. Sounds like.

[Andrew]

And sometimes to Dave's point. To Dave's point, I do think you need to bust through those barriers a little bit and remind yourself why you did this. Why did I pay off this debt? There's a so that to it and the so that wasn't so that you could be at home and. And fretting about every small purchase. That wasn't the so that. Right, Exactly.

[Dave Ramsey]

Yeah, that's a good point. And as far as the other people getting a vote, I can tell you there's a high correlation between people that build wealth and those that don't give a crap what other people think, right? So you pretty quickly go, ah, you know, whatever you want to think about, that's fine. I mean, I got people that want to tell us what to do, but they've even voted wrong for the president. So, you know, I don't. Why do I want to listen to them? You know, you gotta be careful who you're listening to, man. You don't get a vote. You don't get a vote. This is the Ramsay Show. Mortgage rates have dropped. So if you're thinking about buying a home in the next year, contact your local Churchill mortgage team right now. If you wait, more people will be in the market, competing for the same homes and potentially driving up prices. Churchill will help you do the math to be sure your budget is correct, making your home a blessing and helping you build lasting wealth. Learn [e-mail] Churchillmortgage.com this is a paid.

[Jade Washaw]

Advertisement in MLS ID 1591 nmlsconsumeraccess.org Equal.

[Commercial Speaker]

Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027.

[Dave Ramsey]

Well, Christmas will be here in 20 seconds. Are you ready? I'm not, man. It comes fast. I gotta figure out what Sharon's buying herself.

[Andrew]

I have a couple of guesses. My guess, it involves diamonds.

[Dave Ramsey]

Anything she wants. Shiny swi. Sharon wants it, whatever it is. Whether you're shopping for yourself or you're looking for the perfect gift. To help someone get their house in order, their money in order, now's the time to check out the 30% off on our best selling products including the total money makeover, the non anxious life book which was number one bestseller. Georgia's number one bestseller, Breaking free from broke. The classic questions for humans decks are just $12. All kinds of Christmas specials, good stocking stuffers and hey guys, I mean you can buy an ugly tire, you can buy a book that will change somebody's life.

[Andrew]

Okay.

[Dave Ramsey]

Hello? Yeah. Yeah, so click the link in the description on YouTube or podcast or Ramsey Solutions.com/store Kyle is in Salt Lake City. Hey Kyle, what's up?

[Jade Washaw]

Hey, Dave. So I. I appreciate taking my call. I messed up big. Went by my wife's back, racked up 26k and credit card, dead in four months. Pregnant wife, I should say. And now she's filing for divorce.

[Dave Ramsey]

What would you drag. What'd you jack up 26k on?

[Jade Washaw]

Pokemon cards. Trying to buy a bunch and then sell them online, which didn't work out.

[Andrew]

Oh, okay. All right.

[Dave Ramsey]

She's filing for divorce.

[Jade Washaw]

Yes.

[Dave Ramsey]

She already filed and sounds like things were pretty rocky before.

[Andrew]

Yeah. It's not because of these Pokemon cards. That was just the final straw.

[Jade Washaw]

Yeah, correct. We have three boys together, two to five, and our first girl on the way, she's 15 weeks pregnant.

[Andrew]

So what went on before this? Why? What were the straws before this? How have you been behaving?

[Jade Washaw]

Angry. Short. Not, not. Not pleasant. All to be around, to be honest.

[Andrew]

I appreciate your honesty.

[Jade Washaw]

Yeah.

[Dave Ramsey]

So let me ask you, if you were to put her shoes on for a minute, what do you think regarding this purchase? That she's angry about the deceit, the betrayal. Good, good. That's good. Self awareness. Yeah. In our world, we call this financial infidelity because it's. You busted the trust. Almost as if you slept with someone. Yeah, that's the way it feels. It's the same part of the brain that you damaged. Yeah, that's what's going on. And so that's why I pushed her over the top. And then. So the net. Net of the thing is, have you been able to sell the Pokemon cards yet?

[Jade Washaw]

No, I'm going here in a few. I'm just getting everything together so I can take it to one of the local shops here in Salt Lake to sell and pay back some part of this debt.

[Dave Ramsey]

What do you think they're going to bring?

[Jade Washaw]

I'll be lucky. Honestly, if I probably get five grand.

[Dave Ramsey]

So how did you mess this up that bad? I'm confused.

[Jade Washaw]

So what had happened was I was trying to build a platform on social media. So I built an Instagram account where you buy followers and I paid a lot of money on giveaways on an app called Whatnot. And that's how I really racked up the debt, was buying these expensive giveaways to try to get people to come.

[Dave Ramsey]

So you didn't really buy $26,000 worth of Pokemon. You really spent some of this money on the website?

[Jade Washaw]

Yes.

[Dave Ramsey]

Yeah. Trying to build a false front. Yeah.

[Jade Washaw]

Yes.

[Dave Ramsey]

Look like you're bigger than you really are. Yeah.

[Jade Washaw]

100.

[Andrew]

Did you tell her any part of this? And she said, don't do it. And you did it anyway, or you just kind of did it all?

[Jade Washaw]

Yes. I started at. We were at four grand, and that's what she knew of 4, 500. And then I went. And continued as things were already going. A rocky path. I felt I just. I self indulged in myself.

[Andrew]

Yeah.

[Jade Washaw]

And one all in and on myself out of selfish greed and lust for fame. That wasn't real.

[Andrew]

Are you in counseling?

[Jade Washaw]

I am, yeah. She went with me in my first today. Went to my appointment. Okay, that's good. Yeah. That's point blank.

[Andrew]

I say that because you sound like you're. You sound like you're working through this mentally, at least it sounds like it. In this very short call, has she said anything to the effect of here's what I need to see in order to stay with you? Or has she just said, that's it?

[Jade Washaw]

She did. I looked up a video from you guys. That's how I came across your number last night. A financial infidelity. She used that word. And I told her, I said, look, I know I'm going to be served papers tomorrow next day, so if there's even a chance you'll stay with me, I would burn all these cards right now, work overtime and do whatever it takes.

[Andrew]

Wow. What did she say to that?

[Jade Washaw]

She said, I want to go with your therapist appointment.

[Andrew]

Good.

[Jade Washaw]

And the therapist said, why should she stay with you? I said, logically, she shouldn't. I said, she has no room to stand on that. She should. And I said, but if there's even a chance, even if in the end it's worth it to give a chance to my family.

[Dave Ramsey]

Let me give you a parallel. And we're not counselors. Dr. John Deloney is our counselor. But we work with people in these situations and have for 30 years. So much that the parallel she's looking for. I'll tell you what. Go pick up this book by Dr. Henry Cloud. It's called Trust, Trust. Trust. That's what this whole call is about. Broken trust. And in his book, he talks about how to build trust and how to rebuild trust when trust has been broken. Also recommend it for your wife because it'll give her some more. It'll give her the correct things, if she's willing to demand of you, that are the right things to demand of you. Okay. And it should sound something like this. What you're trying. The way you rebuild trust is over a period of time, you establish a pattern of never repeating the major offense here. And you already told me what the major offense here was. It wasn't buying on things on the Internet. It wasn't Pokemon cards. It was lying. Yeah, that was the major offense. And so if she enters back into this, if she were my daughter or my little sister, I would tell her to give you a shot. But you get one strike. Never again do you lie. You are so unbelievably honest that it's awkward all the time around your house. Do these jeans make me look fat? Yes. You have to tell the truth all the time. And you have awkwardly.

[Andrew]

And be proactive about making sure there's no place for mistrust to live. So you're sharing all the account passwords. You're putting the pin. You know, you're sharing your location on your phone. I. I always say make it to where there's no foothold for that to even get in.

[Dave Ramsey]

Yeah.

[Andrew]

And that way there's no questions.

[Dave Ramsey]

So let me. Let me kind of give you a correlation a little bit. In my life, there wasn't deception. But my wife did lose faith in me when we went broke because I was stupid. Which was valid. It took years for her to trust 100% in my judgment. We made all decisions together and still make all decisions together. Which gives her comfort that I'm not off chasing the moon somewhere like you were. You went off chasing a get rich quick thing. And that I did, too. And that's how I went broke. Didn't cost me my marriage. Did cost me bankruptcy. Because I was an idiot, okay? I did it with more zeros than you did it, dude. So she. But it took her. I mean, we've been married 43 years. That was 35 years ago. We filed bankruptcy. To this day, if I say a phrase a certain way, I'll see her head tilt because it reminds her body. It reminds her emotions of those old days. And then I have to stop and rephrase and go, okay, here's what I was really trying to say. I could see her body react to this day now. It's not much. It's very seldom today because it's been a lot of years of a good pattern. Trust has been rebuilt. She trusts my wisdom now and, but it's with, you know, I had 30 years to work on that.

[Andrew]

Absolutely.

[Dave Ramsey]

So you got to rebuild trust in your integrity. No strikes, no lying, no purchases that she doesn't know about the rest of your life. Not a freaking pack of gum the rest of your life, period. And it's like if you were. If you were an alcoholic. And she says, I'm done. And. But I'm going to give you one more chance, one more time. You fall off the wagon, you're gone.

[Andrew]

Yeah. Yes.

[Dave Ramsey]

You're on. You're on a one strike deal. And then, then you got to lean into that. And, and it sounds like you're ready to do that.

[Andrew]

It does sound like that. It does sound like that. But I, you know, time will tell.

[Dave Ramsey]

She may not be ready, she may not want to do it, but this is how it works, folks. You've got to tell the truth and you got to work together on money. High correlation between that and winning with money. High correlation and not doing that and losing with money. This is the Ramsey Show. Hey, you guys, I'm not a fan of the big banks and you probably already know which ones I mean, but I do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fairwinds credit union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fair Winds has been in business for over 75 years and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join. And Fairwinds partners with more than 5,000 credit union locations around the country, so you can bank in person wherever you live. But if you prefer the online experience, you can log on to Fairwinds and do anything you could do at a physical location. So go to Fairwinds.org Ramsey to learn more. And while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's Fairwinds F A I R W I n d s.org Ramsey live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host. Jade Washoff, Ramsey personality, is my co host today. She's the number one bestselling author here on the show with me. And we're answering your questions at 888-825-5225. Rex is with us in Columbus, Ohio. Hi, Rex, how are you? Hi, Dave.

[Jade Washaw]

Hi, Jade.

[Dave Ramsey]

I'm doing well.

[Jade Washaw]

It's a pleasure to talk to you two today.

[Dave Ramsey]

You too. What's up in your world?

[Jade Washaw]

So I'm 27. I got married just over a year ago, bought a house shortly after. We're on track. Baby steps four, five and six to pay off our home in about four years from now. Our first child is on the way, due in five months. And my question's one about priorities. I really want to keep paying down this house asap. So my wife may not have a job in the future other than caring family. But I also want to be generous with others. And a buddy of mine went through a separation recently. He's a hard worker, not a bum. But he's starting from scratch, saving up to buy a car. And I'd like to give him a beater for Christmas as a, as a way to bless him and advance his future. But I worry if this is reckless financially while I still have a mortgage.

[Dave Ramsey]

What's your pregnant wife say?

[Jade Washaw]

I just brought this up with her yesterday and she, she's mixed about it. She's more hesitant than I am, but surprisingly, she was not averse.

[Dave Ramsey]

What's your household income?

[Jade Washaw]

Between 225 to 250k a year.

[Dave Ramsey]

How much do you have in your emergency, sir?

[Jade Washaw]

At least six months of expenses. About six months.

[Dave Ramsey]

How much?

[Jade Washaw]

So I want to say it's like 30 to 35.

[Dave Ramsey]

How much you're spending on the beater?

[Jade Washaw]

I'm thinking no more than 1200.

[Andrew]

Oh, I do it. Twelve hundred dollars?

[Jade Washaw]

Yeah. Car's gone down a little bit, so, I mean, they used to be pricier, even the beaters.

[Andrew]

I mean, I'm just telling you, if I woke up in your shoes today, I, I would do that in two seconds. It's a very small part of your world.

[Jade Washaw]

It's a good point. But if I may add one more piece, I am considering career change relatively shortly. Although I'm again, I'm making 100k and the rest about 125 or so is my wife. I worry about my future at this company. I don't feel as though I'm doing a good job as I have in other roles. It doesn't seem like a good, good fit for me. So.

[Andrew]

So you fear.

[Dave Ramsey]

Can you make 100k if you lost your job? 1200 bucks don't help you.

[Jade Washaw]

That's a good point.

[Andrew]

Yeah. I mean, for me, that doesn't change it much. What you're talking about is how far in the future. You know what I'm saying? So for me, I mean, if it really made you feel that weird, you could say, well, I'm gonna. I'm gonna spend twelve hundred dollars on this and then I'm gonna add an extra twelve hundred dollars to my. Like you could balance it in a weird way to make your brain feel better. And I think when you do that, you'll realize, oh, this wasn't that big of a. It wasn't that big of a deal.

[Dave Ramsey]

What's interesting is, is that this tiny little bit of stress really shined a big light on your career thing and means you need to get off your butt and do something about that.

[Andrew]

That's a good point.

[Jade Washaw]

Right.

[Dave Ramsey]

You need to act on it instead of wait and let something to you.

[Andrew]

Yeah. Are you concerned that when you have this baby, your wife's not going to want to go back to work after leave?

[Jade Washaw]

I don't think that's the case. She's working from home now, so it's relatively manageable.

[Andrew]

Okay.

[Jade Washaw]

But I do still want to have. I won't give her the opportunity to not feel trapped in her job.

[Dave Ramsey]

I hear that $1200 does not keep her from coming home. You losing your job might.

[Jade Washaw]

Right.

[Dave Ramsey]

So these are way different decisions. One's 100k, one's 1.2% of 100k.

[Andrew]

But kudos to you for thinking in. In the way of generosity like that. I love things like that. It's the reason that you go through and do the baby steps so that you can do those sorts of things. So. Really good.

[Dave Ramsey]

And you. Yeah. And also what's weird is this 10 years from now, you'll forget you did it.

[Andrew]

Yeah. Yeah. It's such a small.

[Dave Ramsey]

He'll remember it the rest of his life. But you won't. I promise you. I don't remember what I have done.

[Andrew]

Yeah.

[Dave Ramsey]

I don't.

[Andrew]

Good.

[Dave Ramsey]

I have no idea. Bailey is in Fort Worth, Texas. Hi, Bailey. Welcome to the Ramsey Show.

[Jade Washaw]

Hi there. Thank you for taking my call.

[Dave Ramsey]

Sure. What's up?

[Jade Washaw]

Hi there. So my husband and I, we have recently been binging your guys'show and we are preparing now with our baby step one and are about to start our baby step two. Looking at our debt, we've made some real dumb decisions. And my husband's credit cards, there are several we have let all go into default over the last couple of years. Mine, however, are current. I have three. And so when listing them, since we know we've gotten all the information about paying them in full, you know, settlement in full with a prepaid debit card, all that sort of stuff. But I just don't know how to go about listing them smallest to largest, since they will be a sum, you know, lump sum.

[Dave Ramsey]

I would do two separate. I would do two. Two debt snowballs. One for current debt and work it first and then work the old bad debt second.

[Jade Washaw]

Okay. And then our car loan is actually now a personal loan from a friend. Should that be gross?

[Andrew]

Yeah, that might first. I'd want to attack that very quickly.

[Dave Ramsey]

That's on your list. That's on your list of current debts.

[Jade Washaw]

Right, Right. It is just one of the larger ones because my credit cards are all relatively small. However, because it's a debt with a friend, it really is hanging over my head.

[Andrew]

So should it still have it? How long have you had the debt with the friend?

[Jade Washaw]

One year. We've been paying and we're current. You know, we're paying them all monthly, but.

[Andrew]

And how long will it take you to pay off the first few things in your snowball, those few credit cards?

[Jade Washaw]

My first three are only 10,000, so probably about five months.

[Dave Ramsey]

What's your household income?

[Jade Washaw]

Currently it's at 100, but in the next six months we're going to go up to 160.

[Andrew]

Good.

[Dave Ramsey]

Well, it's not going to take you that long then.

[Andrew]

Yeah, I'd probably.

[Dave Ramsey]

You better get more than two grand a month rolling out of 160, kiddo.

[Andrew]

Yeah, it's just not going to go.

[Jade Washaw]

Up until February, so we are impatiently waiting.

[Dave Ramsey]

Okay, well, and you need to jet. You need to go ahead and cut your. Cut your eating out off the budget too.

[Andrew]

Have you been paying the friend or you haven't been paying the friend?

[Jade Washaw]

We have been, yes.

[Andrew]

Okay.

[Dave Ramsey]

What do you owe on the car?

[Jade Washaw]

10,000.

[Dave Ramsey]

Oh, you'll knock it out. Yeah, It'll be gone by summer.

[Andrew]

If it makes you feel better, just tell them, hey, we're doing this debt snowball and we list them smallest to largest. You're number four and. And we're happy. Our Plan is to pay you off this year and so that we're not running this thing out.

[Dave Ramsey]

Yeah, you should be done. You should be done with them by April or May.

[Andrew]

Yeah.

[Jade Washaw]

Okay. That is our hope. And then just go ahead.

[Dave Ramsey]

Oh, it's not a hope. It's a math thing.

[Andrew]

Yeah. Hey, run the math out. Have you done the math on this to see what your projected date is? Because if you haven't, you need to jump in every dollar. You need to do your roadmap so that, you know, we have downloaded.

[Jade Washaw]

Downloaded every dollar and we are using that.

[Andrew]

Okay, then that's. Then that is the accountability there. And just for. From somebody who's been in your shoes, you need to speak that way. Because if you run everything, if you verbalize everything as if it's. It might happen, it might not, then chances are it might not happen. So you need to verbalize it in the way of, well, we'll be done with that in April and then when we're done with this one in January. Do you see what I'm saying? You need to use that and let that be your vocabulary because that's going to inform what you actually do to accomplish this goal.

[Dave Ramsey]

Yeah. How fast do we go through 20 grand? 10. And credit cards. 10 in car.

[Andrew]

Yeah.

[Dave Ramsey]

Making 100 bleeding into 160. Pretty stinking fast. Pretty stinking fast. This is the Ramsey Show.

[Commercial Speaker]

This show is sponsored by BetterHelp.

[Jade Washaw]

All right.

[Commercial Speaker]

Hey, it's that time of year when it's getting a little colder, it's getting dark earlier, and sometimes we just want to stay inside and get cozy. For me, the perfect night at home when I'm trying to be cozy is me and my whole family under a bunch of big blankets watching a TV show or reading a book. Whatever your perfect night in looks like. Therapy can feel a bit like that. A time when you can settle in, get cozy, replenish your energy, and take care of yourself. Therapy is a great way to bring yourself some comfort, especially during the chaos and rush of the holiday season or any other time of year. Taking the time to pause and be mindful is one of the reasons I recommend BetterHelp. BetterHelp is 100% online therapy with licensed therapists. You can talk with your therapist just about anywhere, so it's convenient for your schedule. Just fill out a short online survey to get matched with the therapist, and you can switch therapists at any time for no extra cost. Find comfort this December with BetterHelp. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H E L p.com DeLoney hey, what's going on? Dr. John DeLoney here. I'm excited for our next money and marriage getaway coming up over Valentine's Day Weekend 2025. This is your chance to invest in your marriage, strengthen your communication and get away from all the noise and chaos of everyday life together with your spouse. You're worth an incredible marriage and trust me, it's way better than the chocolates and flowers you had planned. Tickets start at $799 per couple. Go to Ramsaysolutions.com getaway to get your tickets.

[Dave Ramsey]

Jade Wash all Ramsey personality is my co host today. Open phones at 888-825-5525 the old motivator from another generation. Before there was a Zig ziglar, before there was a Tony Robbins, before there was a Dave Ramsey, Earl Nightingale said, what you can conceive and believe you can achieve. Jade, with that last call, you said the same thing to her. You need to be so dialed in on your numbers that you are speaking the Future March of 2025 as if it is fact.

[Andrew]

That's right.

[Dave Ramsey]

Because the math is telling you that it is a fact and you don't use language like I hope, maybe, maybe, hopefully, sorta kinda tells me you haven't dialed in your numbers. Exactly. You need to get a little bit nerdy with your numbers. And because here's what really happens out there in the real world. In the real world is almost always you will get out of debt faster than your first plan you lay out thinks you're going to 100.

[Andrew]

That is so true. You know, I remember because some people know that some people don't. But I used to listen to the show long before I ever got to work on the show. And I remember you used to say, Dave, when you start working the plan intensely, you get on a moving sidewalk. It's like at the airport when you go and you can either walk normal or get on that little sidewalk and it makes you walk a little bit faster. That is so, so true. I think you just open yourself up to opportunities when you say, I'm going to go lightning fast. I'm willing to do whatever work it takes. Then you begin to see the opportunities around you to go faster.

[Dave Ramsey]

Yeah, I think God just looks down and goes, oh yeah, there's a smart one. I think I'll help this wants to.

[Andrew]

Do it my way.

[Dave Ramsey]

Yeah, yeah, I don't want to get out of debt. I think I'll Just lift them right along here. Fly, little bird.

[Andrew]

Yeah, that's right.

[Dave Ramsey]

You just. You look up me. Well, that's supposed to take nine months and it took seven.

[Andrew]

That's right. But what I was saying to you on the break, and this really does segue into every dollar is most people have never said, I am going to do insert specific task, and I'm going to do it in this timeframe. Insert specific timeframe. And this is going to be the exact outcome. And once you do that for the first time, and a lot of people for the first time they do that, it's when they do their every dollar budget and when they pay off their. Once you do that, it creates a confidence on the inside of you that, oh, I can actually say something, do it and hold myself accountable. That is, it breaks open a whole new world of possibility and confidence in yourself.

[Dave Ramsey]

So that alone, you know, like, we're approaching the first of the year, we're going to do the goal setting talk.

[Andrew]

Yeah.

[Dave Ramsey]

And we always do that. And it's something I've taught entree leaders for 25 years, and I learned it when I was 12 years old going to these motivational seminars with my dad and the real estate business. But I want to lose weight is not a goal.

[Andrew]

No.

[Dave Ramsey]

I want to lose 30 pounds. Okay. Over 10 years. And how many times do you want to lose £30? Yeah, it's like. Yeah, well, I mean. Hello. So, okay, so this is not. These are still not a goal. It's a wish. It has to be specific. It has to be measurable and has to have a timeframe. As soon as it has all three of those things, then you will do the long division math immediately that you learned somewhere around the fourth or fifth grade, hopefully. And that is. I want to lose 30 pounds. When? Oh, 90 days. Oh, you mean 10 pounds a month. Oh, you mean two and a half pounds a week. Oh, I'm going to increase my aerobic activity, my water intake and decrease my bread and sugar intake and I will lose two and a half pounds a week. It's magical. You don't even need Oprah. I mean, that's how it works. That is how it works because you dialed it in. But it's specific. It's measurable. You spoke it. Because it's in a certain timeframe. And then you know, if you're not on track or not.

[Andrew]

Yeah.

[Dave Ramsey]

And that's really. That's why. That's why doing your every dollar budget works.

[Andrew]

That's right. Because you can look at and go, am I. Am I accomplishing what I said I was accomplishing? And so, yeah, let's get into it.

[Dave Ramsey]

This is how it works, ladies and gentlemen. So check it out. You can download every dollar for free in the App Store or Google Play. Do not miss this. People who win at anything are doing that intentionally. Winning is a series of intentional acts. David's in Fort Smith, Arkansas. Hi, David. Welcome to the Ramsey Show.

[Jade Washaw]

Hi.

[Dave Ramsey]

Hey, what's up?

[Jade Washaw]

I got a problem. My insurance company is wanting to. They say it's illegal for them to insure my automobiles because I have such a low credit score. I've been very wise with my money.

[Dave Ramsey]

I have no bills. I don't borrow a lot of money.

[Jade Washaw]

I don't need money.

[Dave Ramsey]

Who's your insurance company?

[Jade Washaw]

Huh?

[Dave Ramsey]

Who's your insurance company?

[Jade Washaw]

Shelter. Insurance.

[Dave Ramsey]

Shelter. Okay.

[Jade Washaw]

Yeah.

[Dave Ramsey]

Okay. The agent that you're talking with is either an ignoramus or a liar or both. Hmm.

[Jade Washaw]

They sent me a letter.

[Dave Ramsey]

Oh, okay. They're. They're lying. It is not illegal to issue insurance to someone with a low credit score. It might be unprofitable for them. And here's where this comes from. The University of Florida, in conjunction with the University of Pennsylvania 25 years ago, did a study that shows that people with low to no credit scores file more claims more often. And so the insurance business across the board took the FICO score and used it to raise rates. But it has nothing to do with legal. So my credit score. My credit score is zero and has. Hey, David. My credit score is zero and has been for 30 years. Do you think I have trouble getting insurance? No, but I have old automobiles. I have a 2007, a 2014.

[Jade Washaw]

I have nothing new. I have a 2011 Harley and a 2000. I have nothing old. Everything's got liability insurance on you. See what I'm saying? I have nothing with full coverage insurance. Don't need full coverage.

[Dave Ramsey]

You have debt. No, I'm debt free. You have a zero credit score.

[Jade Washaw]

I have a zero credit score.

[Dave Ramsey]

Okay, well, then what you need to do is fire your stupid insurance company because they're stupid and get you another one. So go to Ramsay Solutions.com and click on ELP for endorsed local provider, and you can find the insurance for home and auto. It's called PNC Property and Casualty Insurance. And those agents don't work for a single company. They work for you. They will shop among many companies and get you the best deal. And you can decide you know how to do that. But it is not illegal to issue insurance on someone that has a zero credit score. They are following a false premise because the research that I just referenced that's 20 years old or 25 years old was incomplete research in that it is valid in the sense that if you have bad credit because you don't pay your bills, you are more likely to file a claim. And a higher claim, that does make sense because you're broke now. But if you have a zero credit score, I'm not more likely to file a claim. I'm a multimillionaire. That's dumb. I'm less likely to file a claim. That's dumb. All right. So obviously the research is incomplete for a guy like David or a guy like me. David's got plenty of money. He just drives beaters because he wants to. That's what he said.

[Andrew]

And that reminds me of that same way of thinking with rental cars. I feel like it's the same thing. You know, I just came, I was leaving. Where was I leaving? Denver. And I wanted to rent the car and then drop it at another airport.

[Dave Ramsey]

Oh, no.

[Andrew]

And they said, you cannot do that if you don't have a credit card. And I said, what's that got to do with it?

[Dave Ramsey]

Because of the theft. There's entire gangs that are running debit card theft. All that they're stealing these credit. The size of the rental car business is unbelievable. And the size of theft that they deal with is unbelievable.

[Andrew]

That's what the guy was telling me.

[Dave Ramsey]

It's exactly what does it. We learned that when we had $rent a car as a sponsor here for a while, we talked them into being the world's best debit card only or they took the debit card for Ramsey listeners. And we did that for a while. And then of course with COVID everybody went bankrupt, including Hertz that owned them. And so then they come back as dollar dollar came back as two dollar rent a car. And they got a new CEO and a new leadership team and decided they weren't going to take debit cards anymore, which means we had to take them off there because we can't endorse them anymore. So we lost a sponsor and they lost a bunch of customers because that was stupid. But anyway that we learned all this, they showed us the data back in the day why it was so risky because it's. They're literally, and I'm not making this up, gangs that steal cars from rental car companies on debit cards and they use a debit card to do it. And so the. And the worst one, the worst location in the world is Las Vegas, by the way.

[Andrew]

Yeah, but yeah, for some reason, if you pick it up and drop it off at the same location, you can use, it's fine.

[Dave Ramsey]

Well, that's because they think they're going to get the car back at least. Yeah, the idea that you're leaving California and never coming back is scary to them. This is the Ramsey Show.

[Andrew]

Remember the good old days of the Internet?

[Dave Ramsey]

Before it was a privacy nightmare filled with spammers, scammers, hackers and fraudsters. Simpler times.

[Jade Washaw]

Now I don't have a time machine.

[Andrew]

But I do have the next best thing. Delete me. Think of Deleteme as your online bodyguard, helping to protect you from the risks of online scams and data breaches. Here's how they do it. They scour the web to find and remove your data from these sketchy data broker websites.

[Dave Ramsey]

And this includes your name, your phone number, your email, your address and more.

[Andrew]

And Deleteme will send you a detailed.

[Dave Ramsey]

Report of what they did and how.

[Andrew]

Much time they've saved you.

[Dave Ramsey]

And They've saved me 66 hours so.

[Andrew]

Far, which is more time I can spend trying to nail the wordle of the day on the first try. Deleteme has been around for over a decade and they now have over 100 million data removals. Which explains why they have a mountain of rave reviews and an A rating.

[Jade Washaw]

From the Better Business Bureau.

[Andrew]

It's been great for my family and I love getting fewer targeted ads, fewer spam texts and fewer creepy robocalls. So this holiday season, share peace of.

[Dave Ramsey]

Mind by gifting a DeleteMe subscription to.

[Andrew]

Someone you love or even just like their individual. Plans start at just nine bucks a month and you can sign up today@joindelete me.com Ramsey for 20% off. That's joindelete me.com Ramsay.

[Dave Ramsey]

Folks, the Ramsey Christmas cash giveaway is here and you could win big. We're giving away $500 prizes each week and one grand prize of $5,000. Enter daily for your chance to win at Ramsaysolutions.com giveaway. It's that easy. Plus our 50 Days of Christmas deals is on right now. Get up to 30% off bestsellers and life changing gifts that won't break the holiday budget. Ramseysolutions.com store jade wash all Ramsey personality is my co host. Today in the lobby of Ramsey Solutions Casey and Jesse are on the debt free stage. Hey guys, what's up? Hey guys, how are you? Welcome. Where do y'all live? Ruston, Louisiana. Oh fun. Welcome to Nashville. How Much debt have you two paid off? We have paid off $205,960.46. I love it. How long did this take? 23 months. Whoa, you're cooking. And what kind of. What kind of income range during that? Two years?

[E]

110 to 140.

[Andrew]

Wow. Oh, nice.

[Dave Ramsey]

What do y'all do for a living? I'm an equipment manager for a golf course. Okay.

[E]

And I'm a payroll administrator.

[Dave Ramsey]

And what did you sell? And all those numbers don't work.

[Andrew]

Exactly.

[E]

We sold some land and a rent house nightmare and a lot of other things. We sold so many things, the kids thought they were next.

[Dave Ramsey]

I love it. So what did the rent house nightmare bring?

[E]

It brought 122,000.

[Dave Ramsey]

Good. And what'd the land bring about 4.

[E]

Not even 40. 25.

[Dave Ramsey]

Okay. Okay, cool. And what kind of debt was the 206?

[E]

A maxed out home line of credit on the nightmare. Rent house camper, car, credit cards, phone loans and medical bills.

[Dave Ramsey]

Y'all were normal.

[E]

Everything but student loans.

[Dave Ramsey]

Yeah, you were normal. You had it all.

[E]

Yeah.

[Dave Ramsey]

Yeah, it sucks. We had to.

[E]

It really did. It was horrible.

[Dave Ramsey]

How old are you two?

[E]

I am 36.

[Dave Ramsey]

38. And how long you've been married?

[E]

17 years.

[Dave Ramsey]

Okay, so two years ago, three years ago, you had a I'm sick of this sick and tired of being sick and tired moment. I've had it. What happened? Tell us the story.

[E]

So I actually listened to your book. A few years before our journey, we were already drowning in debt. And I listened to the total money makeover and was like, he is so right. We have got get out of this debt. We'd have so much margin in our life. But I don't want to listen to your plan. I want to do my plan. So we.

[Dave Ramsey]

You're the first person to ever do that.

[E]

We raised the limit on the maxed out home line of credit and maxed it out again and then found ourselves in even more debt. This was the third time we consolidated our debt. Each time we doubled the debt and didn't change.

[Dave Ramsey]

Habits go back in deep. Habits changed.

[E]

So two years ago, we're drowning again. The renters hadn't paid rent in six months and we had a variable interest rate on the rent house. So the feds were going up. So we went from $300 interest payment to $900 interest payments. Yeah, it was bad.

[Dave Ramsey]

We couldn't do it. We literally couldn't pay.

[E]

So then I listened to your book again, and this time it sank in. It's okay. My Plan obviously isn't working. I had prayed numerous times, God, please increase our income so that we can get out of this. And he said, no, I'm cutting you off. You obviously are bad stewards of my money. You've got to learn this lesson. So then I said, let's do this. And at the time, our marriage honestly was on the rocks. Casey was dealing with some heavy depression. And I was like, I'm not sure how many get my spouse on board. Because he wanted nothing to do with the finance.

[Dave Ramsey]

I was, I'd given up. I was, I was done. Well, did the weight of this add to the issue with depression? Correct? It was. It was a. It was a big portion of it. Okay. A lot of it.

[E]

So I did the only logical thing, which is say, hey, I'm going to sell this gift that you bought me on credit a few years ago. Why don't you ride with me to make sure that I'm safe as I sell this item? And I trapped him in the car listening to Total Money Makeover. It didn't go well. He made fun of the book. You know, it can't be that easy.

[Dave Ramsey]

It's just seven easy baby steps. A baby could do it. That's so easy. I'm not a believer at first.

[E]

You're not listening. He says, it's not easy. So I'm like, okay, I'm on my own. Give it a few days. So when he comes home.

[Dave Ramsey]

And I'd listened to a few of the debt free screams, I started listening to the podcast and heard a few of them. And it was very inspiring, very emotional for me. And I said, you know what? If these folks can do it, who. Some are worse off, some are not as much, but they were able to do it. I thought, why? Why can't I made it real? Yeah, it did. It finally did. I thought, and now you're here doing that for somebody else. That's it.

[Andrew]

Let me, let me ask you a question, because I'm researching this exact thing. There was something that, when you first heard the baby steps, you had an emotion that caused you to say, I'm not going to do it. Exactly like they teach. I'm going to do it my way. Casey, you had an emotion that caused you to say, this guy, this is not a baby step. This is, you know, for adult. Whatever you thought. What was that emotion that caused you to initially kind of back away from it?

[Dave Ramsey]

The.

[Andrew]

Was it fear? Was. It seemed insurmountable.

[Dave Ramsey]

It seemed insurmountable. Like, this is impossible. I thought I was Going to live to my death working and in debt. I grew up knowing it. I was in the mindset of can we afford it? That's. That's the culture I grew up in, is not can we afford it? Can we afford the payments? That's the word. That's how I grew up. Like, this is. This can't be done.

[Andrew]

And what about you, Jesse? What was it that caused you to say, I'm going to do it my way. This sounds good, but I'm still going to do it my way.

[E]

Well, I don't want to take the time to have to go through all of this. If I can just wipe it clean and have a 400 payment in one thing versus working and taking years. I mean, when we initially looked at the snowball calculator, we were at 2031 paying off all this debt, and we did it in 23 months.

[Dave Ramsey]

That's right.

[E]

It was just.

[Dave Ramsey]

But the snowball calculator did not include selling off everything, right? It did not. At first.

[E]

It did not.

[Dave Ramsey]

When you. When you plugged that in, it changed the numbers.

[E]

It did. And we had. I mean, life happened. All the plumbing busted when we had a freeze in that rent house.

[Dave Ramsey]

Oh, my God, this house is cursed.

[E]

It was. The renters had destroyed it. I mean, flooring was gone. There was a lot of fecal matter everywhere.

[Dave Ramsey]

Animals. Animals.

[E]

But we did have a real estate pro, Ramsey Pro. And he helped us through the whole thing. And I mean, I would work at night, get off work, go to the house and clean. And then Casey worked a ton of overtime. We doordashed. You gave plasma.

[Dave Ramsey]

Yeah, yeah, did. Wow.

[E]

But once you start going and I need some debt free trackers as well, it just kept us motivated of knocking this out and getting ahead.

[Dave Ramsey]

How's it feel to be free? Amazing.

[E]

Amazing.

[Dave Ramsey]

It's so. It's so nice. I wish everyone could feel this way.

[E]

Like, it's awesome. Our daughter made homecoming court, and we're like, we have to go buy two dresses now. And we could just afford it. It was.

[Dave Ramsey]

This is within the past.

[E]

We had margin. Yeah. It's been so fantastic.

[Dave Ramsey]

We get to buy. Yeah, exactly. Yeah, yeah, yeah, yeah. That's good. Very cool.

[E]

And then the Facebook group, the baby steps community that y'all have really helped as well. Just looking through and seeing other people's stories, which j became a personality about a few months as we started. And your story really helped motivate me a lot. You and Sam, I was like, okay, they have way more debt than I did. I don't feel nearly as bad. Let's do this.

[Andrew]

Oh, I'm so glad. So what would you say to that person who's listening? And. And they're where you. They're where you were, Casey. They're going, this is not as easy as you think it is, Jesse. They're saying, I'll do it, but I'll do it my way. What would you say to that person?

[Dave Ramsey]

You can do it. It's not impossible.

[E]

Just start.

[Dave Ramsey]

Yeah.

[E]

Budget and start. Because if you just look at it has a hole.

[Andrew]

It is.

[E]

It's overwhelming. You're like, we're never going to get out. But if you just start and really follow the steps and start with baby step one, and then start with baby step two and pay off that little debt. Each credit card down, which is so exciting to us. Like, now we have more money to throw at that debt.

[Andrew]

That's right.

[E]

I mean, we started at only being able to put an extra $200 a month towards this debt. By the end, we were throwing over $3,000 a month at it.

[Dave Ramsey]

Yeah. Ding, ding, ding, ding.

[E]

Yeah.

[Dave Ramsey]

Yeah. And 23 months out of your 17 years was hell. Oh, wait a minute. A lot of the other was hell, too. But this hell got you out. That's it. You paid a price to win. Way to go. I'm proud of you. All right, bring the kiddos up. Let's get their names and ages. Looks like they survived the cutback. They sure did. We got emily here. She's 15. Way to go, homecoming queen. Just turned 13. I love it. I love it, I love it. Well, this is excellent, you guys. Proud of you all. Thank you. Well done. Who was cheering you on? Friends and family.

[E]

Co workers.

[Dave Ramsey]

Yeah, yeah. Co workers. Yep, sure.

[E]

Everybody was pretty much cheering us on, especially when they heard how much we owed.

[Dave Ramsey]

Yeah. I love that you're debt free. My favorite part of your story is that cloud of depression is lifted off your house. Yes. That makes me cry. That's a powerful. Marriage is a lot better now.

[E]

Marriage is way better. The transformation over the past two years is unbelievable. I mean, I had given up on our marriage practically, but after counseling and this, I mean, we're stronger than we've ever been.

[Dave Ramsey]

Y'all are amazing. Well done. All right, count it down. Let's hear a debt free scream. Three, two, one. We're debt free. 206,000 paid off in 23 months. Oh. But everything in the house is transformed. Hello, depression, marriage. Everything's trans. Transformed. See, the debt's all tied into this. It's not A standalone subject that you can compartmentalize. It's woven its way into your life. It's time for you listening to get it out. They were here to tell you that. I hope you heard it. This is the Ramsey Show.

[Commercial Speaker]

Hey, if you're like me, this time of year feels bananas. Thanksgiving just flies by and then you blink and the kids are out of school, families in town, and somehow there's glitter everywhere. Pure chaos. Let's face it, the last thing you need right now is money stress. If you want to lighten your mental load this year, do yourself a favor and go download everydollar. It's my favorite budgeting app and it can help you create a game plan for your spending so you can focus on what really matters this time of year. Listen, the holiday season is going to be busy. There's no getting around that. But let's be busy enjoying our families instead of stressing out about money. Head over to the App store and download EveryDollar right now to get started for free.

[Dave Ramsey]

Jade Washaw, Ramsey personality, is my co host today. Hey guys, if you didn't know, I love talking to you about money. We also help small businesses, about 10,000 of them across America. And we have a podcast called Entree Leadership. It was actually the very first podcast we ever did at Ramsey and it was run by other Ramsey personalities and interview style and stuff over the years. I took it over about two years ago and started taking calls from small business people about leadership and small business questions. It's called Entree Leadership Podcast. It's very popular in that world and if you want to be part of that and you run a small business, you got a question about it, you can call and leave us a voicemail there at 8449-441078-44944, 1070 or you can go to entreleadership.com ask. Leave your question. Our team will get you set up to be a caller on there. Also, a reminder that this is the last portion of the show that is broadcast over YouTube and podcast. There's another portion coming up that is on the Ramsey Network app and on some talk radio stations around America. And so if you want, the Ramsey Network app is completely free. So you can finish this version of the show, video or audio or both, and just jump over the Ramsey Network app. It's completely free. There's all kinds of stuff you can do there, like search calls by subject, find out what we got to say about any certain thing. Type it in. You can type in an email and send it to us. We'll answer it here on the air. We do a lot of stuff that's really fun over on the Ramsey network app. So be sure you check all that out. Ryan is with us in Hartford, Connecticut. Hey, Ryan. Welcome to the Ramsey Show.

[Jade Washaw]

Hey, how are you guys?

[Dave Ramsey]

Sure, what's up?

[Jade Washaw]

Hey. So I have a bit of a problem. I never thought this was going to happen. So in 2018, my father passed away and he left me and my brother a 401k plan. Fast forward 5 years. I got a check in the mail this morning for about 245,000. The original account balance was about 300,000. And what's happening is they gave me the check and I have to pay the IRS that 55,000 difference from the 300,000. 245. I called them and asked them if they could roll it over and they said once they issued the check, there's nothing that can be done.

[Dave Ramsey]

Who told them to issue the check?

[Jade Washaw]

Not me, apparently. The company my father for. I didn't either. Didn't read.

[Dave Ramsey]

I'm sorry, I didn't. I didn't hear you. You cut out. Apparently the company your father worked for. What?

[Jade Washaw]

Yeah, they. They have a five year plan, I guess for the death benefit that if it's not rolled over to something else within five years, they must close the account and just issue a checkout. It's super confusing the way they explained it to me. I was on the phone with them for an hour and a half this morning with my 401k company and they pretty much said once we issue the check, there's nothing that can be done. There was no workaround. Yeah, they had until this. Yeah, that's what I'm saying.

[Dave Ramsey]

Yeah. I'm sure you don't have an extra 55 grand laying around.

[Jade Washaw]

No. So the way it worked is my account bounce is 300,000. It started like 215, and over the years I added up to 300. They issued me a check for 245. They already took the money out and sent it to the IRS and issued me the difference.

[Dave Ramsey]

Yeah, they have to withhold 20%. That's the rule. If you, if you take a draw, but this is an involuntary withdrawal without note, without any contact to you or anything, which is completely, at a minimum, unprofessional.

[Andrew]

What caused you to wait. What caused you to wait the five years as opposed to rolling it over?

[Jade Washaw]

Because the 401k plan my father was invested in had really good options like.

[Dave Ramsey]

I built up all of those same options exist in the open market.

[Jade Washaw]

Yeah. And I have my own personal investment accounts and I do it with that as well. The, you know, if, you know, don't rock the boat if the boat shouldn't be rocked. So the way I figured is the 401k plan was perfectly fine. I kept it in there just because the investment options were fine. It was just. It's a retirement account. I was treating it like a retirement account. I wasn't going to touch it till I was 65. I'm 30 now.

[Andrew]

Yeah.

[Dave Ramsey]

What do you make?

[Jade Washaw]

I make. I'm a truck driver, so I make about 110,000 a year. And I also own a small business that I make about the same.

[Dave Ramsey]

Okay. Under the Secure act that Biden passed, you have 10 to liquidate the 401k completely. You should have been liquidating it at 1 10th a year from the time the SECURE act passed two years ago. And you've not been doing that.

[Jade Washaw]

So I didn't know about that.

[Dave Ramsey]

I know the. So I'm trying to figure out how that plays into this and how hardcore. All right, let's pretend that we figure out a way to lean on them and they cancel the check and put the money back into the 401k so that you can roll it over within 30 days, which is what they should do if they're are people of integrity. This is a problem. It's not technically unethical. It's just so nasty that it ought to be unethical. What they.

[Jade Washaw]

Yeah, and it's a big.

[Andrew]

It's a lot of money.

[Dave Ramsey]

It's gonna cost you. It's gonna cost you, you know, 20, 30,000 bucks and that you don't have.

[Jade Washaw]

It cost me two years. It cost me two whole years of gains because of this. I never thought I would be upset to get a huge check in the mail, but I did. And. Well, I'm upset because I should have had it rolled over.

[Dave Ramsey]

It should have been huger.

[Jade Washaw]

He should have called me.

[Dave Ramsey]

Yeah. All right, so here's what I'm going to suggest you do. And I don't think it'll work, but it's the only thing I can think of. All right.

[Jade Washaw]

Okay.

[Dave Ramsey]

Go to Ramsey Solutions.com and click on SmartVestor and find a SmartVestor Pro in your area that you like. After talking to them on the phone, they may be able to call on your behalf and talk them into undoing this and immediately rolling it, and they'll help you with the rollover.

[Jade Washaw]

Okay.

[Dave Ramsey]

They may be Able to cite something that. A regulation or something that I'm not aware of. Because this is when you started talking. I thought you were going to tell me this was a tiny little 401k, like a $10,000 and they were just cleaning out all the little ones. Sometimes they do that when a company sells or in the event of an inherited 401k like you've got. But this is huge. This is a lot of money. And so this is with no notification at all. This is particularly nasty. And so I. If they had simply notified you, you could have quickly rolled it over and avoided this. Right.

[Jade Washaw]

And they said they notified me, but I.

[Dave Ramsey]

Wait a minute. You didn't once they did notify you, check my accounts.

[Jade Washaw]

They said they did, but I never got a notification.

[Andrew]

So you've never seen evidence?

[Dave Ramsey]

Yeah. Ask them to prove that they did.

[Jade Washaw]

Okay.

[Dave Ramsey]

Okay. So, I mean, I don't, I don't think you've got a basis for suing them, but I'd be tempted to. I really would. I mean, because you're talking about 25 or $30,000 cost here. That is unnecessary.

[Jade Washaw]

5,000. They took out they.

[Dave Ramsey]

The taxes on 55,000. The 55,000 is going to be taxed, not penalized.

[Jade Washaw]

No, no. They. When I got my experiment, like the summary of what my original account balance was 300,000, they got me a check for 245.

[Dave Ramsey]

I understand they took 55,000. They sent it to the federal government as tax withholding. And it's not all taxable. So that. Because the entire. Because you're going to roll the rest of this. If you take the check in your hand and you roll it to a 401k, the only harm that's going to come to you is the taxes on the 55,000, which is going to be 15 grand or 20 grand.

[Jade Washaw]

Oh, so I'm going to have to pay another 15 grand.

[Dave Ramsey]

Honey, you haven't paid anything yet. Okay. They withheld your money, 55,000 and sent it to the federal government. Then what you do is you file a tax return of what is actually due. And what will be actually due is not 55,000. It'll only be the taxes on 55,000 if you take the check in your hand and put it into an IRA traditional within 60 days of rent right now. So you need to get on the phone with a smartvestor pro right now because at least we need to do that.

[Jade Washaw]

Okay, I will, but.

[Dave Ramsey]

So the worst case scenario, if you follow through on what I just told you, is taxes on $55,000 because the government has 55,000 of your money. As if you're going to get taxed on the whole thing. And you're not. Okay, because you're going to roll the portion in your hand, which is 80% of it, into a traditional to keep you from getting tax. You got 60 days to do that from the time withdrawal. So, folks, you can pull your money out of 401k. They have to withhold 20%, but you have to put 100% into an account within 60 days to avoid taxation. That's what. They can't do that because they got 55 of his money over at the IRS now. And so if you just take the. Take the 55, then you're going to pay some taxes, but not 55. So there we go. This is the Ramsey Show.

[Commercial Speaker]

What up? What up? It's Dr. John DeLoney from the Dr. John DeLoney show with some amazing news. The latest episode of United States of Anxiety is available right now exclusively on the Ramsey network app. This docu series follows real people from my show as they embark on a 90 day journey to transform their lives. And I personally walk alongside them every step of the way. Okay, now here's a sneak peek of what the new episode is all about. And don't forget to click the link in the show notes to download the app. What's up, Kelsey?

[Jade Washaw]

So I've lived with crippling anxiety for as long as I can remember.

[Andrew]

How do I stop it from constantly.

[Jade Washaw]

Coming up in different areas of my life?

[Commercial Speaker]

What does crippling anxiety mean? Paint me a picture of that. All right, so you ready to jump in?

[Jade Washaw]

I'm ready to jump in.

[Commercial Speaker]

We're gonna check in with Kelsey. 30 days, 60 days, 90 days.

[Andrew]

I cannot even function because I am just crying. My mom left us when I was 4.

[Jade Washaw]

I truly felt like for a while I had no family.

[Commercial Speaker]

She's experiencing things that really hurt a long time ago. Tell me about this boy.

[Jade Washaw]

He triggers me a lot.

[Andrew]

Scared of losing Paul, Scared of doing the wrong thing. Scared of not being enough.

[Commercial Speaker]

It just feels like it would be exhausting to be Kelsey.

[Jade Washaw]

It is.

[Commercial Speaker]

Whenever somebody's playing whack a mole with their anxiety, when it just keeps moving, that tells me the underlying system's not okay.

[Andrew]

How do I get my inner child out of this relationship? Because I feel like she's running the show.

[Commercial Speaker]

One of two people that's supposed to never leave took off.

[Andrew]

How is this. How is this burden?

[Commercial Speaker]

Your burden? That's right. To the one person who should carry all of it. Did you ever tell that little girl that it wasn't her fault?

[Jade Washaw]

I don't know what to do.

[Commercial Speaker]

You either have to choose to let this guy love you, or you gotta choose to let this guy go.