Credit Is a Crutch—It’s Time to Walk Without It

Summary

Podcast Summary: The Ramsey Show – "Credit Is a Crutch—It’s Time to Walk Without It"

Release Date: May 14, 2025

Introduction

In this compelling episode of The Ramsey Show titled "Credit Is a Crutch—It’s Time to Walk Without It," host Ken Coleman and co-host Rachel Cruz delve into the complexities of managing personal finances without over-reliance on credit. The episode features insightful discussions with callers facing diverse financial challenges, offering practical advice grounded in Dave Ramsey’s proven principles for building wealth and achieving financial freedom.

---

1. Breaking Free from Dependence on Adult Children: Darlene’s Story

Darlene from Chicago calls in seeking guidance on how to curb her adult children's relentless demands for financial assistance. As a retiree approaching the end of her professional career with a clear plan for retirement, Darlene feels overwhelmed by her children’s expectations, which she likens to "Brain and Butt Syndrome."

• Situation Overview:

  • Debt Reduction: Darlene and her husband are diligently paying down debt and preparing for retirement.
  • Children’s Dependency: With children aged 25, 28, 31, and 36, Darlene grapples with their perception of her as "the bank," seeking funds for everyday expenses like "a hamburger today."

• Advice from Hosts:

  • Ken Coleman (00:03:33): "You have been giving them money for far too long for things that you shouldn't give them money for."
  • Rachel Cruz (00:08:22): Encourages Darlene to establish firm boundaries and maintain her decision not to support her children financially.

• Key Takeaway: The hosts emphasize the importance of setting clear financial boundaries to prevent enabling dependency, urging Darlene to stand firm in her decision to stop providing financial support to her adult children.

---

2. Overcoming Identity Theft and Rebuilding Credit: Jessica’s Challenge

Jessica from Columbia, South Carolina, shares her ordeal of discovering that her mother had been using her Social Security number since she was two, leading to significant credit damage by the time she turned 18.

• Situation Overview:

  • Credit Damage: $186,000 in unauthorized credit card debt accumulated by her mother.
  • Current Struggles: Zero credit history, making it difficult to obtain even secured credit cards or car loans.

• Advice from Hosts:

  • Ken Coleman (00:13:05): "Could you buy a car with $10,000 cash? Yes or no."
  • Rachel Cruz (00:14:54): Suggests focusing on saving money, creating a detailed budget, and paying cash for necessary purchases to avoid further debt.

• Key Takeaway: The hosts encourage Jessica to view her lack of credit as an opportunity to live debt-free, advising her to save diligently and make cash-based purchases to rebuild her financial standing without relying on credit.

---

3. Reevaluating Whole Life Insurance Policies: Mike’s Decision

Mike from Philadelphia, Pennsylvania, seeks advice on whether to cash in his four whole life insurance policies, considering his stable financial situation.

• Situation Overview:

  • Policies Overview: Three policies with a surrender value totaling $70,520 and one policy intended for funeral expenses.
  • Financial Standing: No debts, paid-off cars and houses, and substantial retirement savings ($700,000).

• Advice from Hosts:

  • Rachel Cruz (00:23:11): "I would cancel all three of these and pay for your funeral with the $70,000."
  • Ken Coleman (00:27:14): Demonstrates the opportunity cost of holding onto whole life policies versus investing the cash payout into higher-yielding accounts.

• Notable Discussion:

  • Rachel Cruz (00:28:02): "That’s how crappy whole life is."
  • Ken Coleman (00:28:06): Highlights the missed potential earnings by keeping the policies.

• Key Takeaway: The hosts advise Mike to surrender his whole life insurance policies, citing their poor investment performance compared to potential returns from more flexible and higher-yielding investments.

---

4. Rediscovering Fulfillment in Giving: Sam’s Reflection

Sam from New York City discusses his feelings of emptiness despite having paid off debt and contributing financially to various causes.

• Situation Overview:

  • Philanthropic Efforts: Donated significant sums to cancer research and mental health charities.
  • Emotional Disconnect: Despite charitable actions, Sam feels unfulfilled and questions his motivation.

• Advice from Hosts:

  • Ken Coleman (00:36:49): Suggests that Sam may have overestimated the emotional rewards of his donations, hinting at underlying personal issues.
  • Rachel Cruz (00:39:20): Encourages giving more personal and direct support, such as helping specific individuals or families, to create meaningful connections.

• Notable Discussion:

  • Rachel Cruz (00:38:56): "Try not to make it more of a byproduct that you're gonna feel good, but do something that's selfless."

• Key Takeaway: Engaging in more personal and direct acts of giving can enhance the sense of fulfillment, moving beyond abstract donations to create tangible, meaningful connections.

---

5. Evaluating the Decision to Sell a Home to Pay Off Debt: Joanne’s Dilemma

Joanne from Baltimore seeks advice on whether selling her primary residence to pay off $85,000 in student loans is the best financial move.

• Situation Overview:

  • Home Equity: Potential to sell her home with equity ranging between $124,000 and $157,000.
  • Financial Metrics: Combined annual income of $167,000 to $175,000 from her and her husband’s earnings.

• Advice from Hosts:

  • Rachel Cruz (00:45:24): Advises against selling the home, recommending instead a disciplined approach to paying off student loans while retaining home equity.
  • Ken Coleman (00:46:00): Emphasizes the value of keeping primary assets and focusing on increasing income to accelerate debt repayment.

• Notable Discussion:

  • Rachel Cruz (00:45:29): "No, do not sell your home."

• Key Takeaway: The hosts recommend maintaining home ownership and prioritizing the repayment of student loans without liquidating primary assets, advocating for a strategic financial plan that preserves long-term investments.

---

6. Managing Debt Before Marriage and Parenthood: Taylor’s Scenario

Taylor from Milwaukee, Wisconsin, is grappling with $113,000 in debt while preparing for marriage and the arrival of a baby daughter. His debts include federal and private student loans as well as credit card balances.

• Situation Overview:

  • Debt Breakdown: $18,000 in federal student loans, $57,000 in private loans, and $38,000 across three credit cards.
  • Income: $82,000 from an engineering job and additional variable income from an online business.
  • Partner’s Resources: His fiancée has $40,000 in cash and is supporting the household.

• Advice from Hosts:

  • Ken Coleman (00:68:10): Encourages viewing financial challenges as a team effort, emphasizing the integration of finances to accelerate debt repayment.
  • Rachel Cruz (00:69:35): Suggests creating joint financial goals and utilizing her fiancée’s savings strategically to eliminate debts quickly.

• Notable Discussion:

  • Rachel Cruz (00:74:58): "Let's make some financial goals between now and the end of the year."

• Key Takeaway: Effective communication and combined financial efforts are crucial for managing and eliminating debt before embarking on significant life changes like marriage and parenthood.

---

7. Balancing Support for Troubled In-Laws with Personal Financial Goals: Nikki’s Concern

Nikki from Salt Lake City faces the challenge of wanting to help her parents-in-law who are on the brink of foreclosure due to financial irresponsibility, while she and her husband are still working through their own baby steps towards financial stability.

• Situation Overview:

  • In-Laws’ Financial Trouble: Parents-in-law have stopped paying their mortgage, with potential foreclosure looming and significant credit card debt suspected.
  • Nikki’s Conflict: Balancing the desire to support the in-laws with the necessity to protect her own retirement and financial goals.

• Advice from Hosts:

  • Rachel Cruz (00:82:47): Emphasizes the importance of setting firm boundaries and prioritizing personal financial health over entangling in the in-laws’ financial issues.
  • Ken Coleman (00:83:01): Encourages proactive communication and preemptive boundary-setting to prevent future financial strain.

• Notable Discussion:

  • Rachel Cruz (00:82:53): "You have to treat it like a roommate."

• Key Takeaway: Nikki and her husband should prioritize their financial goals and establish clear boundaries with the in-laws to ensure their own financial stability remains intact, even amidst familial obligations.

---

Conclusion

Throughout this episode, Ken Coleman and Rachel Cruz provide invaluable insights into managing finances without over-relying on credit. Whether it's setting boundaries with adult children, rebuilding credit after identity theft, reevaluating life insurance policies, finding fulfillment in giving, or balancing support for troubled family members, the hosts offer practical, actionable advice tailored to each caller's unique situation. Emphasizing the importance of disciplined financial planning, clear communication, and personal responsibility, this episode underscores the theme that true financial freedom comes from intentional and informed money management.

---

Notable Quotes:

• Ken Coleman (00:03:33): "You have been giving them money for far too long for things that you shouldn't give them money for."

• Rachel Cruz (00:28:02): "That’s how crappy whole life is."

• Rachel Cruz (00:38:56): "Try not to make it more of a byproduct that you're gonna feel good, but do something that's selfless."

• Rachel Cruz (00:82:53): "You have to treat it like a roommate."

These quotes encapsulate the hosts' straightforward and empathetic approach to addressing complex financial issues, reinforcing the episode's central message of achieving financial independence by walking without credit.

Transcript

[Ken Coleman]

Brought to you by the EveryDollar app. Start budgeting for free today. This is the Ramsey show where America hangs out to have a conversation about their money, their profession and their relationships. 888-255-225 is the phone number 888-255-225. I'm Ken Coleman and super excited to be next. Rachel Cruz, ladies and gentlemen.

[Rachel Cruz]

You ready to go, partner? I'm ready. This will be a good show.

[Ken Coleman]

All right. I think so, too. And I think we might be starting out hot. If the board is correct. Darlene is on the line with a question in Chicago. Darlene, how can we help?

[Caller]

I'm wondering if you can help me figure out how to get rid of a disease that my children have that's called brain and butt syndrome. My husband and I are retiring and we are paying down debt and we're within 180 days of retiring and walking away from 50 years in education. And our 25 year old, 28 year old, 31 year old and 36 year old think that we are called the bank. And I am tired of them wanting to know if they could gladly pay me Tuesday for a hamburger today. I'm done. And I want to divorce them. How do I divorce them?

[Ken Coleman]

Wow.

[Rachel Cruz]

Well, are you the bank? Darlene, have you been saying yes when they've been asking for this stuff?

[Ken Coleman]

No.

[Caller]

I am a poor little person with a bachelor's degree who worked my Hiney off for 45 years with my husband to acquire a property. And we have our goals in place. We have a retirement date. We have an IMRF pension date. We have a Social Security date. And a few of the children who seem to have the problem called weed man and gambling synonymous think that they can just keep taking money from us when I'm trying to stock it away and pay down things.

[Ken Coleman]

And so, Darlene, I love you, by the way. You are, you are a gift to a talk show host. And I want to point that out. But Rachel asked you a very important question that plays into our advice. You listed the 25, 28, 31 and 36 year old. Then there was Mr. Weed Man. And we've got a lot of things going on here. Are all four kids who are adults, by the way, are they routinely asking you for money and are you giving them money? Yes or no?

[Caller]

They ask for money so regular that I have the ringtone that comes through is basically, okay. That's the sound of money.

[Rachel Cruz]

Okay.

[Ken Coleman]

Do you give them money?

[Rachel Cruz]

Are you giving it to them?

[Ken Coleman]

Thank you.

[Caller]

The last few weeks I'VE told them, no, I'm broke. I'm so flat broke, I can't even pay attention.

[Ken Coleman]

What about the weeks before that? How long is this pattern been going on? Let me. Let me put it to a different way, Darlene, because. Darlene, listen to me. We're trying to help you, and you're great at the description, and you're very frustrated, and you should be frustrated, but what we're trying to get to is. I'm going to now say something, and you can disagree with me. You have been giving them money for far too long for. For things that you shouldn't give them money for. And now you've had it, and you're at the end of your financial rope and your emotional rope. That is a true statement, correct?

[Caller]

It is very true.

[Ken Coleman]

So I'll be cranky guy and tell you that you can't divorce your children, although I appreciate what you're saying. But you can tell them as you have the last two weeks, the gravy train is officially over. It's my fault. But you're gonna have to stand strong on this because that you've prob. Tried to do this over the years, and they kept asking and you eventually gave in. And you may not have. But the point is, is that Rachel, she's got to say what she said, and now she puts stick to it. Stick to it.

[Rachel Cruz]

Yeah, but so, Darlene, I mean, a little bit of me is like, well, of course they keep asking you for money because you keep giving it to them. Right. So there's a point that they probably shouldn't. I wish they were adults on their own two feet. But you have been enabling the situation for years. You know, would you agree?

[Caller]

And I'm over being an enabler and you're done.

[Rachel Cruz]

I hear it. So how was saying no the last, like, two weeks or so, how's that been for you?

[Caller]

For two of them, three of them, it's been great for one. Of course, she had a problem with a car, which we loaned her money for so that she could. And we're still waiting three weeks later for that money. Just like the daycare is waiting for money.

[Ken Coleman]

You ain't gonna get that money for their daughter. You're not gonna get that money back.

[Caller]

My husband says we're burned. And, you know, we're not getting. We're not getting any Kentucky jelly when we loan out this money and we're over it.

[Ken Coleman]

What's Kentucky jelly?

[Caller]

Ky Jelly.

[Ken Coleman]

It's what, dear?

[Caller]

Yeah, if you're going in for a Gynecological chicken.

[Rachel Cruz]

Oh, my gosh.

[Ken Coleman]

All right, all right, I got it. I was trying to move on, but I was honestly in a state of being stunned. Darlene, you are a gift again to Live Radio. Wow. Now, let me ask you this. As I try to move on, I've tried so hard. James, I think you're the husband.

[Rachel Cruz]

I think he's just saying no.

[Ken Coleman]

Is the husband. Is your husband in agreement with you? Like he's not going to have a problem taking a stand?

[Caller]

He is. He feels so burned and so disappointed in the path that we've led our children on with make do, do without, wear it out or go without, because that's how they were raised.

[Ken Coleman]

Well, good for you. So you've answered your own question, Rachel, and I can't give you any tips other than you've got to make it very clear to the kids and come up with a phrase that you say. And let me tell you where I go on this kind of stuff, because if one of them keeps coming back to you, I would have the same phrase and I would repeat it over and over again until they realize, oh, mom is actually done.

[Rachel Cruz]

It's actually done.

[Ken Coleman]

So you come up with the phrasing, and Darlene, you're a treat. You need no help coming up with any phrasing, but I come up with one of your classic Darleneisms that you've dropped on us. And it's every time they ask for money, you say it that way.

[Rachel Cruz]

Same thing. Yeah. Even your answers consistent, not in principle, but in actual verbiage.

[Ken Coleman]

Literally. That's what I'm saying, Darlene, every time you go and they say it again and you. You just keep going. And I think that they'll get the picture.

[Rachel Cruz]

The gravy chain has left the gravy train.

[Caller]

I'm thinking I need to probably get one of Dave Ramsey's shirts that says, we got food at home, because that's a lot of them. They think my husband and I live on, what, 400amonth for groceries?

[Ken Coleman]

Do they live with you? Do any of these kids live with you?

[Caller]

No, but we have a granddaughter who lives with us most of the time that we take care of.

[Ken Coleman]

Which child's kid is that?

[Caller]

That's the 25 year old. She's married to kind of the weed man, like I said.

[Ken Coleman]

Oh, so the 25 year old daughter is married to weed man and their daughter is living with you because they can't or won't take care of her.

[Rachel Cruz]

Because he's high all the time?

[Caller]

Yep. The one quit her job, working, and.

[Rachel Cruz]

The dad's no better because you know what? I feel genuinely bad.

[Ken Coleman]

But, Darlene, I don't know what Rachel's gonna say about this, so I'm gonna. I'm gonna step out there, Darlene, but I think you got to send the grandchild back. You are actually repeating this process with the next generation.

[Caller]

Our grandchild is in the situation where if DCFS walked in and saw the slum filth that she lives in because she actually went to court before with her mom and her aunt and told her mom at three and a half.

[Ken Coleman]

That, all right, I changed my. I changed my opinion. Because if that's what you have to do to protect the child from going into government, I get that. So you know what? That's an extreme situation. But this is it. This is it. You're going to take care of this grandchild because you have to. No one else can or will. And then it cut everybody else off.

[Rachel Cruz]

Yeah. And Darlene. And you know what? And give yourself grace, because I'm sure there's a level of a self critic in there of like, what did we do as parents that, you know, ended up in this? But. So give yourself grace in it. But you guys, from a financial standpoint, like you said, you have to draw that strong boundary. And I can't wait to hear Darlene's.

[Ken Coleman]

I can't either. And, darling, keep your sense of humor. I think you've got a great sense of humor. It sounds like you and your hubs are going to be okay in retirement, but now it's about you two and whatever responsibilities towards that little one. And keep your chin up, hold the line, don't give in, keep those quips coming, and just press through this thing. I'm so sorry for you. But you've got this. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something. Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. And. Oh, you're telling me. And for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them. Me, too. They don't know what to do next. Me too. I mean, you're going to have a crisis here, and you got two options. While you're sitting and talking to a young widow, she's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly. These are the two options. And take care of your dadgum family. Term life insurance can replace income, pay off debts, cover funeral expenses. So your family can actually have the opportunity to just be sad. Yeah, to just miss you. That's exactly what it's supposed to be. It's saying I love you to your family. Term life insurance, Jeff, Zander and the team at Xander Insurance makes it easy and affordable. I've used them personally for 25 years. Five years. They're the only people I trust. Go to Xander.com or call 800-356-4282. All right, let's go to Jessica now, who joins us in Columbia, South Carolina. Jessica, how can we help?

[Caller]

Yes, so my quick question is, I was a victim of identity theft. I found out at 18 my mom had been using my Social Security number since I was 2 years old. Found out at 18 when I went to go get a car and they wouldn't even touch me with a co signer with an 800 credit score, no money down. Found out I had 800, $186,000 in credit card debt just alone.

[Rachel Cruz]

Wait, say that again, Jessica. One hundred and what?

[Caller]

$186,000 in credit card debt that your mom racked up? Yes.

[Rachel Cruz]

Oh, Jessica, how long ago was this?

[Ken Coleman]

Oh, my.

[Caller]

I mean, all the way back to 2005. The most recent one was in 2021, which was right before I was 18. And I got it with an alloy attorney, and we got my credit wiped, but what. What it left me with was zero credit history and horrible credit score. Not even. Not even a secure credit card will touch me.

[Ken Coleman]

Now.

[Caller]

I have a significant other. We're not married, but we have gone to plenty of financial advisors and we have been told both their best option is to get married because again, I can't get even a credit card in my name. I'm an authorized user on only one card, and I can't be an authorized user on a lot of other credit cards.

[Ken Coleman]

Jessica, I'm just stuck. No, you're not. Actually, this is going to be a great call for you because you're not stuck. But quick question here, and Rachel's gonna give you some amazing guidance here, I promise you. But why Are financial advisors telling you that the best thing to do is to get married? Because that feels like a financial reason, not a good reason to get married. So I want to dig into that first. What are we trying to accomplish?

[Caller]

Yes, they always say sign if I can. And I don't have a car in my name. I can't get a car of my own. We share my partner's car. We moved up here to South Carolina from southwest Florida, away from my grandm and to live up here near my father. And I work from home, which isn't a big deal, but our biggest issue right now is we have one car.

[Ken Coleman]

All right, slow down, slow down.

[Caller]

I'm stuck.

[Ken Coleman]

So you're not. You're not stuck.

[Caller]

This is the theme of this car.

[Ken Coleman]

All right, I'm just gonna ask a quick question here, Rachel. I'll get out of your way, but I want to ask a question here.

[Caller]

Yes.

[Ken Coleman]

What do you do for a living and how much do you make? And I have a quick follow up, so give me the real quick stats. What do you do and how much do you make?

[Caller]

I'm currently a debt collector for Advance America, and I'm currently making about, after commission, 18 to 19 an hour, 40 hours a week.

[Ken Coleman]

All right, so if, if you could save up money for. Let's say you could save up $10,000. I don't care how long it takes you. Could you buy a car without a credit card? Could you buy a car with $10,000 cash? Yes or no?

[Caller]

Yeah, most definitely. I mean, there's plenty of good vehicles for that price.

[Ken Coleman]

So I'm challenging some of your thinking here. I. Rachel's going to guide you here, but I want to challenge this idea that you're stuck because you have no credit score and that you have to get married in order to have a car. You have a job, and you can go buy a $5,000 car, a $7,500 car. I just want to make sure you catch that.

[Caller]

Definitely. Most definitely.

[Ken Coleman]

All right, I want to get out of the way, Rachel, because I know you got some questions, but my goodness.

[Rachel Cruz]

I mean, the paradigm shift that you have to have, Jessica, is a pretty big one, because everything you've been talking about so far on to do with how do I live my life around having a great credit score. And actually, you called the Ramsey show, and we're the opposite. We actually don't care about the credit score because primarily you use a credit score to go into more debt is what. And you're finding that out when you're Trying to go get a car loan, they won't give it to you because you have a bad credit score. You try to go deeper into debt with a credit card, they won't give you a credit card because of that. So living debt free, this is actually a gift, Jessica. You don't even have the option. Most people listening right now could go apply for a credit card. You don't have the option. So see that as a blessing because I don't want it an option for you, even if you had a great credit score. So how do we live life debt free? Well, number one, starting out, your biggest need is what you're saying is a car. I almost think your biggest need is maybe a new job as a debt collector. That can't be a very fun job. So I want Ken to even talk about that.

[Ken Coleman]

So, yeah, you're limited there.

[Rachel Cruz]

I think you can do some really great work, Jessica, and I think you can work overtime. Do you have kids?

[Caller]

Yes, I do not.

[Rachel Cruz]

I so just got married. I would make a priority right now to say here, making a very detailed budget, knowing exactly what you're. What you need in life for food, shelter, utilities, transportation, and that's about it. Like, I mean, we're just going on the basics here. Everything else is going to go to save up for a car. And maybe $5,000 is your goal, whatever it may be, because you don't. Do you have. Do you have any consumer debt in your name?

[Caller]

No, no.

[Rachel Cruz]

It's all. Okay. And you're fighting this whole $186,000, right?

[Caller]

Well, we, we successfully sued the credit bureau and it got wip.

[Ken Coleman]

How much do you have in savings?

[Rachel Cruz]

Okay, yes.

[Ken Coleman]

Do you have any savings currently?

[Caller]

No. We just use our savings to move and, you know, get out of southwest Florida because the jobs there weren't any good. And we're currently trying. I'm trying to get back into college. I have one semester left to get my associates, but again, my mother messing with my identity has affected my tax forms to getting grants and loans.

[Rachel Cruz]

You don't need a loan.

[Caller]

We're working.

[Ken Coleman]

Listen, listen, Jessica, you don't need a loan to get one more semester paid for. And I think your remaining semester of your associate's degree is secondary to what Rachel's saying, which is, let's get some money saved, let's get on a budget and let's buy a car.

[Rachel Cruz]

Because, Jessica, we, we have people call the show all the time and they're trying to get out of debt. And so when we talk about getting out of Debt. For instance, we say you cut everything and you work extra. And we have people very nor. I mean, in a very normal rhythm on this show that are making an extra thousand twelve hundred dollars above their income on side hustles. So let's just make it a goal for you since you don't have kids, be like, hey, evenings I'm working, like, whether you're waiting tables. I mean, you are doing something, and let's just go crazy. And let's say you earn an extra. Let's go two grand a month. I know that sounds crazy, Jessica, but seriously, like, what if you worked your butt off, earned an extra 2,000? That means sitting right now where we are in the calendar, by July, August, you could have a car. By depending on how much that one semester costs you between now and December, after you have a car, another couple of months of working extra, you could have saved, you know, six, eight thousand dollars for your tuition. So that's like. That's literally between now and the end of the calendar year, Jessica. So, like, it is possible you just have to make some really big goals and you have to. Not that you're playing victim to this by any means, but don't be. But don't be leaning on the. On the credit industry to get you out. Yeah, Jessica. Yeah, you can get you out.

[Caller]

What we're fed. We're fed our whole lives that credit is what matters. I mean, again, we moved up here with. To buy a home, and we found out quickly that I couldn't be on it. And I guess that's really what.

[Rachel Cruz]

Well, and you don't need to buy a home with someone you're not married to either, Jessica.

[Ken Coleman]

Or get married or get married at the advice of a financial advisor so you can get a car. All right, now listen. Listen to this. I just found. This is in the Columbia, South Carolina area, okay? I just found a 2009 Toyota Camry, 182,000 miles, which on a Camry, might as well be a new car. Okay? That car can go for 482.

[Caller]

I know.

[Ken Coleman]

All right, listen to this. $3,700 they want for this car. You walk up there with $3,200 in $100 bills and say, guys, this is what I'm going to pay you for this car. They'll give it to you so fast your head will spin. No credit. Do you hear me?

[Caller]

Yes, I do. I've had plenty of. I mean, my first car was in 057.

[Rachel Cruz]

Okay? So I want to know for you, because we've Thrown out a couple of things, whether it's cars or college or not buying a house with someone you're not married to, and you're a rebuttal to us. This whole call has been. Oh, I know. Oh, I know, I know. But why. Why are you then still dabbling in this idea? Like, I can't get a credit card. I can't get a car loan. I can't get a student loan because you're saying, you know, but you're still giving it an option. Why?

[Caller]

No, I. I think it's just more so again. I mean, we. I mean, my whole family is. I. I mean, obviously they're not, you know, they got their own troubles. But the whole thing is to, you know, to have great credit and to not have this negative stuff dragging behind you. And even though I got my credit history, WIP know everything nowadays. They want to pull some type of credit, even buy your page.

[Ken Coleman]

No, they don't.

[Rachel Cruz]

If you pay cash, buy now, pay later is horrible. Just. That's what I'm saying. You don't need to worry about those stuff.

[Ken Coleman]

You don't know.

[Caller]

I know.

[Ken Coleman]

No, you stop saying you know.

[Caller]

It's more so the. The knowing the availability and, you know.

[Rachel Cruz]

But you only need it, Jessica. You really only need it to go into debt. And that's what we're telling you is pay cash. Just pay cash for everything, and you don't have to worry about it. And if some cell phone company pulls up your credit report, you can just show them the police report and be fine. Like. Like you can get away with other things, but you have to be convicted about this, Jessica, or you're gonna keep getting pulled. I feel like you're getting pulled into it, even though you're saying, I know. So you need to stand firm, pay cash for anything. It is possible, Jessica. You can do this and keep things separate from the boyfriend right now and live your life, get yourself a car, save up for the semester, get your college degree, and ride off into the sunset. And then maybe get married because you'll love him, not because of his credit score.

[Ken Coleman]

She's been hypnotized. Stop staring at the. Hey. When you're Gazelle Intense, you sell so much stuff, the kids think they're next. But when you've gotten rid of all, you can save money by switching your cell phone plan to Boost mobile. It's just $25 a month for unlimited talk, text, and data. Forever Boost is a major nationwide network that offers reliable 5G service. And here's my favorite part Transparent pricing. There's no hidden fees, no contracts, and there's a 30 day money back guarantee, which means no risk. Go to boostmobile.com Ramsey to switch today. That's boostmobile.com Ramsey all right, let's go to Mike in Philadelphia, Pennsylvania. Mike, how can we help today? Hi.

[Caller]

Yes, I had a question about my life insurance policies.

[Ken Coleman]

I'm 70 years old. I have four whole life insurance policies, which three of them I would like to cash in.

[Caller]

One I wanted to leave for when I do die.

[Ken Coleman]

It'll pay for my funeral. And the I have no debt. Cars paid for, houses paid for, all that stuff. And I just.

[Caller]

It accumulates up.

[Ken Coleman]

The surrender value on those three policies would be $70,520. And I'd like to know. My insurance agent is trying to tell.

[Caller]

Me not to cash it in. He says, you know, what about your daughter? When you die, you know, you want.

[Ken Coleman]

To leave us some money, but she's going to be sitting pretty anyway because.

[Caller]

She'S going to get the money for.

[Ken Coleman]

My house and all that stuff, you know, so.

[Rachel Cruz]

Yeah. Yeah. And you have no one dependent upon your income right now? M. Do you.

[Caller]

Have. What?

[Rachel Cruz]

Do you have anyone dependent upon your income?

[Ken Coleman]

Just me and my wife.

[Rachel Cruz]

Okay. What would your wife do if something happened to you?

[Caller]

I don't know. Good question. But like I said, the house is paid for. She still get part of my pension. I signed for that money and Social Security.

[Rachel Cruz]

How much will all that equal a month for her?

[Caller]

Probably around 2,220, $300.

[Rachel Cruz]

Okay. And then you'll have 70,000 if you cash all this in. What. What else do you have saved?

[Caller]

I have a. I have a variable.

[Ken Coleman]

I have three IRA accounts, two traditional IRAs, and one is a Roth.

[Caller]

And then I.

[Ken Coleman]

And then I have a couple of.

[Caller]

Other Roth accounts with a different company.

[Rachel Cruz]

Okay. How much are in all those accounts total? Would you say every.

[Ken Coleman]

About 700,000.

[Rachel Cruz]

Oh, amazing. Yeah. I would cancel all three of these, Mike. And pay for your funeral with the 70,000. I would. I mean, because how much are you going to be paying for this whole life policy that you're keeping? And your agent wants you to keep it because he's making a great commission off of it.

[Caller]

Right.

[Ken Coleman]

And I'm still paying on three of the policies. Oh, that's why the insurance agent wants you.

[Rachel Cruz]

Exactly. Yep. So I would. I would drop them all, Mike.

[Ken Coleman]

Okay. And what, what should I do with that money though?

[Caller]

I mean, should I.

[Ken Coleman]

Can I put it into like a savings account?

[Rachel Cruz]

Sure.

[Ken Coleman]

I'm going to have to pay tax on it.

[Caller]

Right, right.

[Rachel Cruz]

Do I? Yeah, you'll have to probably pay for the grow with life insurance, whatever the capital rate. I'm not sure. Yep. I would talk to them to know the tax implications of that because the growth is different than just a standard investment, but depending on what they invested it in. Because that's what usually happens with whole life is they have invested that money in a really crappy investment. And, and so yeah, depending upon that. But I would, I would ask them that to make sure. But I would, I would just put that 70,000 in a high yield savings. And you can keep it there because do you have any liquid cash? I mean everything else you were saying was tied up into investments. Do you have any just like cash in a savings account?

[Caller]

Well, yeah, about 10,000.

[Rachel Cruz]

About 10,000. Okay. So yeah, so I would take some of the 70 and put it there. If you want to invest some of it, you can. But you guys can just have a good buffer of high. Of. Yeah, just in a high yield savings. How old are you guys?

[Ken Coleman]

I'm 70.

[Caller]

My wife is 68.

[Rachel Cruz]

Okay.

[Ken Coleman]

How long have you been paying on. On the policies? And do you have an idea how much you've paid over the, the life? The three.

[Caller]

The three that I, that I want.

[Ken Coleman]

To sell, I've been paying into probably.

[Caller]

For about 40 years.

[Ken Coleman]

Oh gosh. About how much a year?

[Caller]

About a thousand, I guess. Something like that.

[Ken Coleman]

All right. On the tax question again, talk with your tax pro. But the payout or the surrender amount is more than what you've paid.

[Rachel Cruz]

Put in, the growth on it you've.

[Ken Coleman]

Put in, then you will pay taxes. So, but, but you know, just figure out what that is. But here's the thing that doesn't change our opinion, okay? You still want to get that money out because it's not doing you any favors. You don't, you don't need to keep those policies. They're not helping you at all. And Rachel explained that, right? Get the cash, do what she said to do with the cash. And cash is king on this and get out of this bad product.

[Rachel Cruz]

And you've done such a great job, Mike, and like to be 7 years old, have everything paid for 700,000 DOL retirement. So to your point, your daughter, your wife, everyone's going to be okay.

[Ken Coleman]

Why keep the fourth one? And I know what you said, you said, I'm keeping the fourth one. I've got four, I want to surrender. 3. Why keep the fourth based on what we've told you? Because you're going to have plenty to cover your funeral.

[Caller]

Well, yeah, but I just figured that if I cash it in, the surrender.

[Ken Coleman]

Value that is $7,800, but the death benefit is 11,450.

[Caller]

So I figured that'd be enough for.

[Ken Coleman]

My funeral and maybe a nice dinner afterwards for everybody. A nice dinner. No, that's very nice.

[Rachel Cruz]

It's a three grand difference, though, Mike. I just get rid of a crappy product.

[Ken Coleman]

I would, too. I would get rid of it. You've got plenty of money. Yeah. And you're gonna earn plenty. You're live a long time. I can tell. So, you know, put that money, gain the interest on it, as Rachel told you, you just don't need it. Get rid of them all. Get the cash back. You've paid way too much into these things for way too long. Long.

[Caller]

Yeah. Right.

[Ken Coleman]

Right.

[Caller]

Okay.

[Ken Coleman]

Yeah, man.

[Caller]

Hey, thank you so much.

[Ken Coleman]

Yeah, I appreciate the call. What a nice guy.

[Rachel Cruz]

So great.

[Ken Coleman]

Wants enough to cover his funeral and a nice dinner for everybody.

[Rachel Cruz]

For everybody after. That's what I'm gonna tell people. Go have a great dinner. You know, I'm gonna do the same thing on your laptop. Will you pull up the Ramsey investment calculator?

[Ken Coleman]

Yes.

[Rachel Cruz]

Okay. So Mike said for 40 years he was putting in. Would he say $1,000 a year, I think, for these. For these accounts? I don't know if all. I wonder if it was just one of them or if it was all of them. I'm not sure.

[Ken Coleman]

Okay. What do you want me.

[Rachel Cruz]

So he's 70 years old. So he's. And he's 30 years ago. 30 years ago. So age 30 to age 70.

[Ken Coleman]

Oh, I see what you're doing. And a thousand dollars, if.

[Rachel Cruz]

Is it per month on the calculator?

[Ken Coleman]

What did he say? A thousand dollars a year.

[Rachel Cruz]

A year. So do like, just do a hundred bucks a month.

[Ken Coleman]

Yeah. There you go.

[Rachel Cruz]

Rate of return. We'll go 10 just to make everyone not freak out on us. God forbid we do 12%, but that is 10%.

[Ken Coleman]

All right. Calculate. This is very exciting.

[Rachel Cruz]

I'm just curious. What. Oh, no.

[Ken Coleman]

It would have been $632,400.

[Rachel Cruz]

You would have had an additional over $600,000. And now you. He has 70,000 y. That's how crappy whole life is.

[Ken Coleman]

That shot to the shins right there.

[Rachel Cruz]

That hurts.

[Ken Coleman]

That hurts.

[Rachel Cruz]

He would have had. He would have had 1.4 million.

[Ken Coleman]

Yeah.

[Rachel Cruz]

In investments.

[Ken Coleman]

Yeah. I mean, great point here.

[Rachel Cruz]

So just. That's. Yeah, that hurts. So everyone out there. That's how crappy whole life is. And for the actual insurance part of it, Life insurance part. It's so expensive live.

[Ken Coleman]

Yeah.

[Rachel Cruz]

So go get term life at Xander and just. Yes at Xander Insurance, y' all, and call it a day.

[Ken Coleman]

I've got so much insurance on me because I had three kids, right? And I mean, I'm. I always looked at my wife sideways when I get in bed every night. You know what I mean? Because if I've been. If I've been a little cranky or not such a good hubs, you know, I might wake up.

[Rachel Cruz]

We up ours the other, like, literally this past year. And I told myself, I was like, are you gonna try to kill me? Is this gonna be like a 2020 Dateline? I'm telling you, man, situation.

[Ken Coleman]

I'm more valuable dead than I am. I promise you that. The kids are teenagers. She doesn't need me around the house anymore. I don't have to do baths. I don't have to do homework. I mean, what am I doing?

[Rachel Cruz]

Physical labor?

[Ken Coleman]

But the point is, you know why I got so much for peace of mind. And it's so unbelievably inexpensive.

[Rachel Cruz]

So cheap.

[Ken Coleman]

It's so cheap. So cheap. If you're decently healthy, it's going to be really cheap. And that investment calculator. Exercise. What a great exercise that was. Poor guy guy.

[Rachel Cruz]

Oh, man.

[Ken Coleman]

$40,000 he's put in and what that.

[Rachel Cruz]

Could have grown to. And now it's just 70,000 is what it'll be.

[Ken Coleman]

And then the insurance agent is still sticking it to him.

[Rachel Cruz]

Oh, man.

[Ken Coleman]

Come on, Mike.

[Rachel Cruz]

Such a bad product.

[Ken Coleman]

Don't get it.

[Rachel Cruz]

Oh, look, they did it. There you go.

[Ken Coleman]

They did it. Oh, they put it up there. Thank you, James. I know I should have plugged into my fancy little corner.

[Rachel Cruz]

Mike's doing great.

[Ken Coleman]

Mike's doing.

[Rachel Cruz]

He's doing fine. He's doing fine. But, you know, this is a lesson for all of you listening.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Get term life insurance.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Do not fall for universal whole life. All these other policies.

[Ken Coleman]

And if you get a lot of life insurance, get a taster, somebody to taste your food like the kings used to, you know what I mean? Back in the medieval age, they were never sure if their food was poisoned. And so if they gave them a bowl of porridge, they had to have a taster.

[Rachel Cruz]

I believe it.

[Ken Coleman]

And if that poor sucker keeled over, then the king was like, hey, I.

[Rachel Cruz]

Ain'T taking that porridge. I had an espresso martini recently, and the bartender was telling us that they always drop Three coffee beans in the top of an espresso martini, you know?

[Ken Coleman]

Yeah, ambiance.

[Rachel Cruz]

And they said if there's ever four, don't drink it, because it was a sign back in like the 30s or something. If they dropped four coffee beans, it meant that it was poisonous. And so look out, Ken, for your porridge.

[Ken Coleman]

And your last thing that bartender needed to tell you, Rachel, by the way, if you don't know her well, I believe it all. She's never, ever met a conspiracy theory she didn't believe. I mean, ever. So now PSA from Rachel.

[Rachel Cruz]

I don't know.

[Ken Coleman]

Four coffee beans in the espresso martini. Run, run for the door.

[Rachel Cruz]

The earth is not flat. I don't believe that one.

[Ken Coleman]

Oh, that's good to know. Hey, technology has changed a lot in the last 30 years. Now, the hot topic is AI. And I understand that it might seem intimidating, but if you use AI the right way, it's just another tool to help you work smarter and faster, like a calculator or a cordless drill. So if you run a business, you'd better get on board with it before you get left behind. And NetSuite by Oracle offers AI powered tools that help small businesses and improve efficiency and make smarter decisions by bringing all their major business processes into one platform. That way, there's one source of truth for the real time data you need to take advantage of opportunities. Then you can forecast better, scale more efficiently and streamline those manual tasks that take too long. So join the more than 41,000 businesses, including Ramsey Solutions, that rely on NetSuite to help tackle some of their biggest challenges. And right now you can download the CFO's guide to AI and machine learning at netsuite.com Ramsey that's free at netsuite.com Ramsey all right, folks, if you're tired of living paycheck to paycheck, and let's be honest, you are, that's no fun. And you're constantly wondering, where is the money going? The first step is always and always will be getting on a budget. And we've got a great opportunity for you to just jump into this very warm pool. All right? It's called learning how to budget. And you can do this with our every dollar free budgeting training all month. You're going to learn step by step how to actually make a budget. Stick to it, adjust it, all the things. I mean, this is a skill like anything else and it's also a new concept for so many of you. And as a result, it's scary. You Want to take the fear out of this deal. So sign [e-mail] webinar you're going to get all the questions answered, plus live Q and A above and beyond what they're going to teach you. Sign up for free. For those of you who can't afford anything, this is beautiful for you. Sign up [e-mail] webinar everydollar.com webinar Sam is up in the Big Apple, New York City. Sam, how can we help?

[Caller]

Hey, how's it going, guys? So, got out of debt fairly recently a couple years ago and worked through the steps and kind of at the point now where I feel like I could give a little bit more and just feels, I guess, not fulfilling to give for whatever reason. And I'm just kind of curious, like, do you think that makes me a bad person? What do you guys.

[Ken Coleman]

I kid, Sam, I'd be curious about this. Tell Rachel and I what kind of giving you've done and why you think there's no right or wrong answer here. Why you think you don't feel fulfilled or you don't have some good, let's call it butterfly feeling in your body when you do something nice for somebody. Walk us through an example and why you don't think you feel it.

[Caller]

I don't. Yeah. It's such a good question, and I appreciate you asking. You know, like, I. One of my best friends passed from cancer, so I thought, you know, I'll give, you know, five grand to cancer research at the hospital that he was treated, you know, and that made me feel good. But, you know, I just thought that it would, like, really make me feel better. I tried donating to a, like, mental health, you know, charity because my little brother struggled with mental health and honestly, like, it, you know, again, just, like, didn't do much for me.

[Ken Coleman]

Okay. You know, I have a hunch.

[Caller]

I don't know if it's because. Yeah, go ahead.

[Ken Coleman]

I got a hunch. Rachel. Rachel's great at this. I think there's something to be learned. You said something a moment ago. It felt good, but it didn't make me feel better. That's a very interesting statement, and I'm going to assume that you actually said what you felt. And, Rachel, I'll tell you where I don't have the answer here, but you're really perceptive on this. I think that you thought it was going to be a much different feeling than it was because you acknowledge it felt good to give to the cancer thing. There was something there and then you mentioned the mental health. And there was another connection there to your brother. One a friend, one the brother, I believe. And it felt good, which tells me you're a human. But I think that either you overestimated what it might do for you 1.

[Caller]

Or.

[Ken Coleman]

And here's my gut, and I could be wrong, Sam. And Rachel will correct me, she's really good at this. It could be that you're dealing with some stuff maybe you're dealing with. I don't know. I don't know. I'm not gonna hang anything on you, but I don't know if you're dealing with some negativity in your life. Some depression, some anxiety, I don't know. And you thought, maybe if I do this, it's going to really trigger something better in me. And I think you were like, oh, that was good. Like an ice cream cone. And then it wore off after you eat the ice cream about 20 minutes later.

[Rachel Cruz]

Yeah.

[Ken Coleman]

Are you sensing anything?

[Rachel Cruz]

Maybe. I had two thoughts as you were talking, Sam, and one, I'm speaking to myself. Because this is actually a literal conversation I just had with my husband Sam, like last week. Because I read something in this book. Are you a person of faith by chance, Sam?

[Caller]

You know, I'm trying to come around to it more maybe.

[Rachel Cruz]

Okay.

[Caller]

I didn't really grow up super religious, but sure, sure.

[Rachel Cruz]

Okay. Well, so what I'm gonna say is kind of in my. My context of life, which is one of Christianity. And so we are told from a biblical perspective to give. And that is one of the pillars that I stand on when we talk about giving is I really do believe with scripture, like it is the wisest way to live. And when it talks about that and when Jesus talks specifically about giving to the poor, giving to widow. There are orphans, widows. Like there are specific people groups. And that's what he did in his life on earth, was he served and he was giving and that was it. Right. So I was telling my husband all this, Sam, just like last week. Cause it kind of hit me different and I had this perspective. Cause I've been talking to my kids about this and how I want to live out more generous opportunities. Not just giving money, but actually time, like actually serving, doing things with our kids now that they're older and. Sorry, Sam, I'm going a long way around this. But it hit me last week that I thought maybe I was giving for myself and then putting it on my kids of why I wanna give is. Cause I want them to experience. I wanna experience. It was a Lot of me. And I in my giving, just like you, Sam. And last week was one of the first moments where I thought, how self absorbed am I? I'm taking something that's supposed to be beautiful. I'm not saying you're self absorbed, but I'm taking something as a follower.

[Caller]

I hear you.

[Rachel Cruz]

As a follower of Jesus. That's beautiful and what we're just commanded to do. Like, there's a reason to do this and it may not feel good all the time. It may not be great, but it's bigger than me. The benefit is that. I do believe the benefit is that you will end up becoming more fulfilled as you give. Because when Jesus talks about, like, it's the opposite. Right. The eternal life. It's the least. It's the least of these.

[Ken Coleman]

Well, it's also. It's not all financial. You can give of your time and your talent.

[Rachel Cruz]

Yes. And then say my other thought I had. So I would say try not to make it more of a byproduct that you're gonna feel good, but do something that's selfless, even if it doesn't feel great, because I think that starts to change who you are. But I would also say the things you told me that you gave to are wonderful. Obviously cancer research and mental health, but they're a little faceless and big.

[Ken Coleman]

Yeah, I agree.

[Rachel Cruz]

So maybe you find somebody. I don't know how you would. This just came in my head of a single mom and her son is struggling with depression and he's 12, and she wants to get him in therapy, but she can't afford it. And what if you sa able to anonymously or find a situation where you're like, hey, I can actually give to help help that son. Or a medical situation where you can actually help pay the bills of a specific family. Now, you're not going to get the tax write off and all of that because you're giving to an individual. But at least you have this connection point that is actually really beautiful if you're able to. So maybe make it more personal and then don't put the expectation so much on yourself. I don't know. Because that's new for me. That first point I was saying, Ken, is that.

[Ken Coleman]

I told you, Sam, she's great.

[Rachel Cruz]

Great.

[Ken Coleman]

That was unbelievable. Well, now I want to give you a chance to respond here, because we've been trying to help here.

[Caller]

No, this is super helpful. And I think both of you guys hit it home where I think I was trying to one make it about me, which is how self absorbed when you're trying to do something for others. And then two, that connection point I think is huge. Just like, you know, I really want to try that exact strategy, you know, like that, like finding a mother who, you know, has a kid struggling with mental health. Like, that's literally like exactly what I want to do. And like, it's kind of firing me up and making me feel good already.

[Ken Coleman]

So I really appreciate you guys and.

[Caller]

That'S really, really helpful.

[Ken Coleman]

Thank you. And let me just say to you, the fact that you would call about this says what a great heart you have.

[Rachel Cruz]

Yes.

[Ken Coleman]

And I mentioned it very briefly while Rachel was talking. Don't underestimate the gift of your time. Don't underestimate the gift of your talent to build the giving muscle. There is no guilt here. You're a good guy. But, you know, how can you give your talent away? How can you give your time away? And what that does is that begins to build that muscle because you go, man, that was great. I gave some effort. It was something that I cared about. And the last thing I would say is, I love Rachel's advice. Keep that antenna up. Look for the littlest of opportunities to give. Money doesn't have to be huge.

[Rachel Cruz]

No, it could be.

[Ken Coleman]

You're in the grocery store and you see a single mom and you know, and you don't know if she's single mom. But the point is you just, you just feel like, ah, feels right. I'm going to go up there and drop 200 bucks on her. Hey, hope this helps with groceries. Oh, and just walk away.

[Rachel Cruz]

Yeah. Or you're at the gas station and someone's filling up their car. You're like, you know what, let me.

[Ken Coleman]

Just, you know, my favorite is, is the Ola. Hey, I'm going to get the car behind, behind me at the old drive. Oh, yeah, that's always a fun when you drive away because you never actually get the fanfare. And that's the key. Yeah, you got to drive away. You can't pull over to the side and go, huh, how about this guy? You can't do that move. You gotta drive away.

[Rachel Cruz]

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

[Ken Coleman]

This is the Ramsey show, where America hangs out to talk about their money, their profession, and their relationships. Thrilled to have you with us, America. 888-255-225 is the phone number 882-55-2225, alongside the wonderful, the fabulous Rachel Cruz. I'm Ken Coleman, and we're going to start with Joan or Joanne. I apologize, Joanne in Baltimore. Joanne, how can we help?

[Caller]

Hi. So my question is that my husband and I, we just got an assessment of our home equity. And so it's right now at a point where if we were to sell our home right now, our primary residence, we would be able to pay off off completely our student loan, and then that would make us completely out of debt and still give us, like, a little something left over. But we're just, we're just trying to figure out, like, what's the best financial decision because we just don't know. And, you know, it's our home.

[Rachel Cruz]

So, like, yeah, it's a big deal. Yeah, for sure. Yeah. We usually don't recommend selling your home in order to get out of consumer debt, but what are the numbers? What. How much do you guys owe in student loans?

[Caller]

So the student loan is about, like, 85,000. And on the lowest end, the home equity, if sold, would be around, like, 124,000. And on the highest end it would be 157, is what the assessment said.

[Rachel Cruz]

How much money do you guys make a year?

[Caller]

Like, combined growth or.

[Rachel Cruz]

Yes, sorry, combined. Let's go net. How much are you bringing home?

[Caller]

So a year, like 167 to 1 75. My husband's an entrepreneur, so it varies.

[Rachel Cruz]

Yeah, that's great.

[Caller]

Yeah.

[Rachel Cruz]

No, Joanne, I would not sell your home. I would live on nothing and get this paid off in a year and a half and have your home with all this equity in it. No, do not sell your home. No.

[Caller]

Okay.

[Ken Coleman]

Is this your idea?

[Caller]

Your husband, like, his, his thing? Was that, like. Because right now we're just paying, like, the Minimum amount on, on it. Just because we're like, we're putting to savings. And someone was saying like, oh well, maybe if you get your savings to the. Because we're trying to get it to like a three month reserve. So they were like, if you get your savings to a three month reserve by the end of the year like you say you're trying to do, then you can just put more towards it because like the thing basically he was saying like, well, right now we're just maintaining the loan is not going anywhere. Right?

[Rachel Cruz]

Yeah. Because how much margin are you putting towards savings right now?

[Caller]

You said how much am I putting.

[Rachel Cruz]

Towards savings per month?

[Caller]

Yep, it's, it's 200 a paycheck. So.

[Rachel Cruz]

Okay, and how many paychecks are you guys getting?

[Caller]

I'm sorry, so 400amonth.

[Rachel Cruz]

400Amonth that you're putting towards savings. How much is in your savings right now?

[Caller]

In the savings right now is seven. Something like 7,000. Something over 7,000.

[Rachel Cruz]

Okay, my question is, how do you guys only have $400 extra a month? What are all your bills? What's your other consumer debt?

[Caller]

I mean, we don't really have any other consumer debt. It's mainly like our kids schooling because they're in private school. And like I said, he's an entrepreneur. So like my, my job is really the only job that's like more consistent than anything.

[Rachel Cruz]

And how much is he, how much is he contributing to the income? Like how much does he make a year?

[Caller]

Out of the way.

[Rachel Cruz]

Out of the one, out of the 167. How much is his, would you say?

[Ken Coleman]

Say.

[Caller]

So it was 80,000 like altogether, but then things were written off. So I mean, I don't know, like my, my income was about like 154.

[Rachel Cruz]

Oh, so you're making majority of all this.

[Caller]

Correct.

[Ken Coleman]

Okay, if you're making 154 and your income is 170, he's barely making any money.

[Caller]

That's correct, Yeah.

[Rachel Cruz]

I mean he's not making it yet.

[Caller]

Being all written off.

[Ken Coleman]

What do you mean it's all written off? He's paying himself, but he's right of it is like.

[Caller]

So most of it is being written off in terms of like expenses from what he's, he's making, from what he's bringing in, like expenses for his business.

[Ken Coleman]

Okay, so he's not paying himself much at all.

[Caller]

Correct.

[Ken Coleman]

Well, the, the answer to this part of this equation is he needs to make more money. Like would this you.

[Rachel Cruz]

He's not doing a hobby here, Joanne.

[Ken Coleman]

I Love being an entrepreneur. But if I've got a family and a wife and this is a hobby that's paying him a little bit of money.

[Rachel Cruz]

This is a thousand dollars a month. He's making 12,000. He's bringing $12,000 a month to the family. That's a side hustle. That's what people make doing Uber eats.

[Ken Coleman]

Right.

[Caller]

Okay.

[Ken Coleman]

I mean, are you with us here, or does this sound like we're speaking another language?

[Caller]

I mean, I. I get what you're saying. It's not that you're necessarily speaking another language. It's just. I mean, I just feel we're, like, we're of the mindset. Like, we're. We're a team, so.

[Ken Coleman]

I know you're a team when I was. I get it. But we are in debt and you're coming to us. Should we sell our house? And this feels like the nuclear option, right?

[Rachel Cruz]

No, your husband should make more money.

[Ken Coleman]

Yeah. And it's his. Sounds like he's bringing this to you. And you can be team, but we can disagree.

[Rachel Cruz]

And Joanne, I would say the same would be opposite if. If he was calling and if he was making your kind of money, and he's like, yeah, but my wife has her own business and she's making. I'd say. What. What's your wife doing? She does. It's not a husband wife thing. It's just the idea that, yeah, you both have to be pulling your weight in order to do this. And you're about to sell one of the best assets that you have and to get back into the housing market right now is. Market is so difficult. So, no, I would not exit out of the housing market.

[Ken Coleman]

What does he do? What does his business. I'm sorry, what is his business? What is his business?

[Caller]

Oh, he's in it. He's in entertainment. He makes movies.

[Ken Coleman]

He makes movies?

[Caller]

Like. Yeah, he does. He makes movies and he does, like, commercials.

[Ken Coleman]

And so he has a production company.

[Caller]

Yes, sir.

[Ken Coleman]

And he does trade commercials, local stuff for. Through ad agency, stuff like that. Or is he all in on movies?

[Caller]

No, he does both. It doesn't.

[Rachel Cruz]

And how long has he been doing it?

[Caller]

Discriminate completely. I would say probably for the last 10 years. He's, like, been building this business.

[Ken Coleman]

Okay, I'm going to tell you this.

[Caller]

Great success in the last maybe five to seven years, I would say.

[Ken Coleman]

You don't mind if I quote Dave Ramsey, do you? Okay, great. Because literally, I was on the show with him yesterday and we had a very similar call, and he said. And I quote, if he's been in business for 10 years, he ain't building it. It's not built. It only takes a year or two to build 10 years of this and he's barely paying himself anything. He's not building anything. He's got a fun hobby with lots of cameras and mics and lights and he wants to make a movie and hit it big. And you're an amazing woman. But he is not contributing to the level that he needs to contribute to. And 10 years of this, this is not him building a business. He had his to build it and he's not done a good job. That's the reality. And I'm quoting Dave, but I agree with Dave and I Literally we had this conversation yesterday. And so there's a season of life where Rachel, I'm fine with him trying this. If it's a side hustle and we have no debt and the kids are.

[Rachel Cruz]

Out of the house and honestly, if he. Yeah, and even if they had no debt and they were like, you know what? This is what he. Like, this is what he loves to do. But we're able to do it because we have margin, all the things, you know, that's a family decision. But not when you have kids in private school. Not when you have debt. And then you're talking about selling your house.

[Ken Coleman]

Yes.

[Rachel Cruz]

No, Joanne, no. I know you called about selling your house. We're telling you your husband and you can show him this call because we could be the mean, the main people. Yeah, but it's, but that's tough. Like if, I mean, if he made 80 grand a year doing something else, you guys would have this debt paid off in 12 months.

[Ken Coleman]

So you're not much of a team right now. You're the one taking all the shots, bringing the bacon home. And he's, you know, God bless him. And I know it's your husband and I promise you we're not attacking him. But this needs to be a step up moment for him and we could get rid of his debt really, really quick, get stable, and then figure out what the dream looks like.

[Rachel Cruz]

When you go through a job loss or job change and lose your employer sponsored health insurance. There's no better time to try Christian Healthcare Ministries. That's right. There's another option besides COBRA to take care of your family during that time. Because if you didn't know, the cost of COBRA has gone up a lot in the past few years. And CHM is an affordable, biblically based alternative to health insurance insurance. So do your own research. The CHM is a great option that's potentially a third of the price of cobra. It's a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And the support you get from CHM goes beyond helping you pay for medical bills. Members become part of a family that prays for them when they have a medical event. Try getting that with cobra. So if you're going through a job loss, life change, or just want to explore other options to save on health care, CHM might be perfect for you. CHM programs start as low as $98 a month, so find out [e-mail] budget that's chministries.org budget.

[Ken Coleman]

Hey folks, how would winning $5,000 in cash change your life? Life? This month we're giving $5,000 to one grand prize winner and we're giving away a $500 prize every week in May. It takes less than 15 seconds to enter. No purchase is necessary, and you can enter daily. To increase your chances of winning, enter the Ramsey cash giveaway until May 31 at ramseysolutions.com giveaway that's ramseysolutions.com giveaway away. Today's question of the day is brought to you by Y Refi. When life happens and those private student loans go into default, why refi can offer you real possibilities, not judgment. Why refi why will help you explore a low fixed rate loan based on your unique Circumstances. Go to yrefi.com Ramsey that's the letter y refy.com Ramsey it may not be available in all states.

[Rachel Cruz]

Today's question comes from Ariel in Indiana. I'm getting ready to move in with my boyfriend and wonder how to best navigate paying bills. Are there things to look for that may not be in the budget? Do we split everything 5050 or can we make the house payment and the other person pay for the utilities and groceries so it equals two in house payment payment? We have discussed this in detail and plan on staying debt free and working towards the next step in our relationship. What are your thoughts? Well, thanks Ariel for the question. You know, this is always an interesting one to tackle, Ken, because it's so normal like these days always it's so normal. Becoming more and more normal to move in.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Together before you get married. And I think one of the problems problems with that is this right here where you're trying to act like you're a married couple but you're not. So it gets Things really tangled really fast. So, honestly, my recommendation, Ariel, if I were to be honest, would say, don't move in. See if the relationship does go further, and when it does, and you guys are married, then actually be married and play house like you're married. But if you don't take that advice and you guys do move into gas together, I mean, I. I guess my advice would be to. I guess you would split things equally. I wouldn't put your name on a mortgage together, though, until you're married. But, yeah, if you guys want to look and say, okay, in order to run this house, it's going to cost. I'm going to make up a number. $3,000, and you pay 1500, and I pay 1500. You. I guess that's what you do. But, I mean, that's where this gets so sticky, is I'm like, I don't think. Well, I don't know. That's a hard one.

[Ken Coleman]

You have to treat it like a roommate. If you're renting, I guess, and you.

[Rachel Cruz]

Split the rent, you split the rent. You split utilities, maybe split everything down the middle. Yeah, just down the middle.

[Ken Coleman]

If it's a roommate situation. And that's what this should be considered.

[Rachel Cruz]

But from a financial perspective.

[Ken Coleman]

We took a call recently, I think Jade and I took a call recently. And you've had these before. And this was just recent last week, where a lady and her boyfriend bought a house again together. And then it got nasty. They don't talk anymore, and he's not paying. She moved out. She moved out to an apartment. He stayed in the house, and he's.

[Rachel Cruz]

Not paying the money.

[Ken Coleman]

Both of their names are on it, and he's not paying the bills.

[Rachel Cruz]

Shoot.

[Ken Coleman]

And so they were. She was worried about it going to foreclosure. So this is the kind of example of why we say don't buy a home with somebody you're not married to, because when you're married, God forbid, something bad happened, there are legal ramifications, and that is a lot. While a good, ugly.

[Rachel Cruz]

Sure, sure.

[Ken Coleman]

It's easier to figure out.

[Rachel Cruz]

Yeah. Yep.

[Ken Coleman]

So, anyway, good advice. I just. As a girl. Dad, I got one girl. Two boys just get married. Yeah, you know, I know.

[Rachel Cruz]

I'm. I'm.

[Ken Coleman]

Makes me sound like a dinosaur, though.

[Rachel Cruz]

Okay. And I'm about to sound real like a dinosaur. I was talking to some friends about this because we got married young. Okay. So we are on the same boat. Y' all got married young?

[Ken Coleman]

Yeah, I was 23.

[Rachel Cruz]

Yep. And we had kids early. And. Well, we Were married for about five years and then had some kids. But. And I know everyone's story's different, Everything looks different. But I think there's like this notion nowadays, which I get. I don't think it's wrong, but it's like, hey, I'm not going to get married yet. I'm going to wait until I've lived my life. Oh, and then I'm going to settle down and get married.

[Ken Coleman]

You know, I laugh at that and.

[Rachel Cruz]

I don't know, call me old school, but a part of me is like, if it's the person, like, go ahead and do it. Do it. Have it young, you know?

[Ken Coleman]

I agree.

[Rachel Cruz]

Get married young if you can have kids.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Like, have some time together for sure. But have some kids. Be an empty nester early in life. Like, do you know what I mean? Like, it's. Yeah, but there's like this caution around it, which I understand, because I do think not everyone's ready to get married at that age. By. By all means. I get that you need to be ready, but there's like this, this idea in our heads. I think that eventually I'll know when I'm ready or something. Does that make sense? Like, I'm gonna live life first.

[Ken Coleman]

Well, I laugh at that. I hear that. But I think you've not lived life until you've been a parent. To even insinuate that you can go live life and now I'm going to settle down and be a husband, a wife or a mom or a dad is just mind boggling to me because that's a whole nother type of living.

[Rachel Cruz]

Right.

[Ken Coleman]

Life before those two responsibilities is very different.

[Rachel Cruz]

Yes, yes, certainly. Kids, yes.

[Ken Coleman]

Like double, double income. Like Stacy and I were telling a young couple the other night about double income, no kids. And we were talking about it like it was fantasy land. Number one, because it's been a long time. Okay. But number two, because like, oh, wow. Like we just did whatever we wanted whenever we wanted.

[Rachel Cruz]

I know, I know.

[Ken Coleman]

And that changes when you have kids, right? Totally. So anyway, don't tell me about how you're gonna live life. Carla's up in Baltimore, Maryland. Carla, how can we help?

[Caller]

Hi, thank you so much for taking my call. You guys already changed our lives, so thanks for continuing to talk and support to us. But me and my husband are baby step millionaires. And right now we're about to have an excess of 5 to 7k per month. And we're trying to divide that between steps five, six and seven. And I was hoping that you could guide us on, on how much to put into each step or if we should just focus on one of those steps.

[Rachel Cruz]

All right, well, I would probably say Carlin, correct me if I'm wrong, if I'm misunderstanding you, it would be more like 4, 5 and 6. Baby step 7 is once the house is paid off and you're just building wealth at that point so it's not really contributing to step seven. That's more of a milestone you get once you pay off debt or pay off your house, which is baby step six. Does that make sense?

[Caller]

Yes, that does. We still kind of give and have tried to give.

[Rachel Cruz]

Oh, you're thinking of the giving part of step seven. Yes. No, that's great. Okay, so it's more the giving aspect is what you're thinking about when you say step seven.

[Caller]

Yeah.

[Rachel Cruz]

Okay, perfect. So, okay, so what I would do is that 15 of your income will be baby step four. But you guys have that covered because you didn't even mention that. So I'm assuming that's already just you're doing that. And then I would look to see for your kids, how old are they?

[Caller]

So we have twin 7 year olds and then we have a 12 year old.

[Rachel Cruz]

Okay.

[Caller]

And we're currently contributing to their 529 a total of 2k per month.

[Rachel Cruz]

Okay.

[Caller]

And right now we have about 50k spread out amongst the three of them with much more in our 12 year old since he's going to need it sooner than.

[Rachel Cruz]

Okay. Yes. Have you spoken with a financial advisor and run those numbers to see what how much will be in that account at 18 if you continue on this track?

[Caller]

Yes, we have.

[Rachel Cruz]

Okay. So yeah. So do you feel pretty confident with kids college as it is now and what you guys have been doing like that that will be covered do you think?

[Caller]

Yes, I mean we do plan to continue putting in another thousand K per month into their account. But even with that we're going to have an excess of five to seven.

[Rachel Cruz]

Okay, perfect.

[Caller]

Okay, so a little backstory. We've been remodeling our house and now we bought our dream house, we remodeled it, it's now the remodel is almost done and we've been cash flowing to remodel. So now we all of a sudden have 5 to 7k a month.

[Rachel Cruz]

Okay. Of extra. Perfect.

[Ken Coleman]

How much do you owe on the.

[Caller]

House that we hadn't been putting in stuff?

[Rachel Cruz]

Okay.

[Caller]

We owe 600k on the house.

[Rachel Cruz]

Okay. So yeah, I mean. Cause it sounds like baby step four and five you guys have covered that you guys are doing that regardless of this money. So I would take this. Yeah, so I would take the 6 to 7K and you guys take a percentage and I'm gonna let you pick it. I'm not even gonna assign it to you. Of a little bit of lifestyle just to say, hey, we're gonna enjoy some of this and maybe that's 2,000 extra a month, whatever that may be. We're gonna give a little bit more and you guys can decide on that percentage. Let's give a little bit more and then everything else remaining, let's just throw out the, the house. And the more concrete, Carla, you have those numbers. Once you kind of do those percentages, what feels right? And let's just pretend it's an extra. I don't know, I'm just making this up. 4,000, 3,500 extra a month. You're just throwing at the house and, and run out that scenario on our mortgage calculator on Ramsey Solutions.com and just see where that puts you guys. A payoff date. And if that feels like, golly, that's so far. Even though we know our income's going to go up, you know, know, be, you know, our income will continue to go up, but we kind of want to be more aggressive, then maybe you're like, well, you know, maybe we can turn down some of the other percentages and throw more. I don't know, you can kind of play with it. There's really not a right or wrong because you guys are doing baby step four, you're funding baby step five, and what's really left is that pay off the house. So still splitting some percentages between lifestyle, throwing extra at the house and some additional giving I think is great. And you guys can even change those percentages year to year. You guys get to decide that. But I think the more intentional you are on the front end, the better off your results are going to be. Foreign.

[Ken Coleman]

This show is sponsored by Better Help. More and more people are becoming aware of the need for mental and emotional health resources. But over a quarter of those people still say they avoid getting therapy due to the fear of judgment. I know because I've been there. I've sat with hurting people for years and a lot of folks are scared to take that next step step. So listen, when people won't get help, it doesn't just affect them. It impacts everybody around them. Their families, their workplaces, the entire community. The world is better when people are healthy and whole. So if you're thinking about trying therapy, contact my friends at Better Help. BetterHelp is 100% online therapy, so it's affordable and convenient for your schedule. They have a network of more than 30,000 licensed therapists with a wide range of specialists, specialties, and BetterHelp has over 10 years of experience matching people with the therapist that's just right for them. So to get started, just fill out a short online survey to get matched with a licensed therapist. And if it's not the right fit, you can switch therapists at any time. It's easy and it doesn't cost any extra money. Listen good folks, we're all better with help. Visit betterhelp.com jelony to get 10 off your first month. That's better help. H E lp.com Deloney Hey, George Camel here. So you're thinking about buying or selling your home? It's exciting, but there's a lot to think about and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in depth video course course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramseysolutions.com realestate that's ramseysolutions.com realestate Taylor is joining us now in Milwaukee, Wisconsin. Taylor, how can we help?

[Caller]

Hi guys. So I got myself into quite a mess.

[Ken Coleman]

I'm $113,000 in debt and I'm getting.

[Caller]

Married in one month and having a baby daughter in two months. Trying to figure out how to get.

[Rachel Cruz]

Out of this exciting. Hey, wait, when did you say two months. Baby comes one month, wedding one. Oh my goodness. You guys got a big three months ahead of you. Congratulations, Taylor. Taylor.

[Caller]

Thank you.

[Ken Coleman]

You're staring down the barrel of responsibility, aren't you, pal?

[Caller]

Yep, that's for sure.

[Ken Coleman]

Yeah. How old are you?

[Caller]

I'm 25.

[Ken Coleman]

25. Break down the $113,000 in debt for us. What is it?

[Caller]

So 18k in federal student loans, 57k in private loans, and then 38k across three credit cards.

[Ken Coleman]

Okay, give us the three credit card balances just so we kind of know what you're dealing with. Smallest to largest, 10k, 11k and 17k.

[Rachel Cruz]

Okay, perfect. And how much do you make a year?

[Caller]

So I have an Engineering job. And I make 82k a year from the engineering job.

[Rachel Cruz]

Great. And what does your new wife. Will she be working?

[Ken Coleman]

No, she'll be staying home with the baby.

[Rachel Cruz]

She'll be staying home. Okay.

[Ken Coleman]

Does she have any debt?

[Caller]

Oh, no, she's got 40 grand in cash.

[Rachel Cruz]

Looky there, Taylor, you're marrying up, pal.

[Ken Coleman]

Way to go. Well, it's what we all try to do, by the way.

[Rachel Cruz]

Oh, my goodness.

[Ken Coleman]

All right.

[Rachel Cruz]

Okay. Well, that's pretty good news. Are you guys on the same page with working together to clean up this mess? What's her. What's her attitude towards that?

[Caller]

We're working together. She's. She's okay with using her money to pay off some of my debt, but I don't know exactly how to approach.

[Ken Coleman]

That conversation yet because I feel kind of bad because it's her money.

[Rachel Cruz]

Money, sure.

[Caller]

She made before she even met me.

[Ken Coleman]

And there is one more thing to.

[Caller]

Add to the equation. I do have an online business I.

[Ken Coleman]

Started six months ago, and last month I made 40K. So that's very good.

[Rachel Cruz]

But holy crap, is that part of the 82,000 or is that additional?

[Caller]

That's additional, but it's variable.

[Ken Coleman]

What did you do? What. Where is that money right now?

[Caller]

I put everything into debt, so this, like, every single single good profit I'm using to pay off my debt.

[Ken Coleman]

So you just paid off $40,000 in debt? A profited like 30.

[Caller]

So I paid off 30.

[Ken Coleman]

Okay, gotcha.

[Rachel Cruz]

Wow. So that brought it down to 113. You were at 143?

[Caller]

Yeah, that's correct.

[Rachel Cruz]

Okay. Amazing. What's your. What's the expectation that you'll be making 30k a month? Did you see that, like every other month happening? Do you see that happening only twice, twice a year, or what do you think?

[Caller]

Well, this business is six months old.

[Ken Coleman]

And in total, over the past six.

[Caller]

Months, I've made 82K.

[Ken Coleman]

And then obviously half of that was last month, so.

[Caller]

Okay, it's. Yeah, it's uncertain.

[Rachel Cruz]

Any.

[Ken Coleman]

Well. Well, any projection on this month? Because we're. We're essentially halfway through this month. What are you projecting for this month?

[Caller]

At least 20.

[Ken Coleman]

Of profit?

[Caller]

Yes.

[Ken Coleman]

Paying to you?

[Caller]

Yes.

[Rachel Cruz]

Golly.

[Ken Coleman]

Wow, this is great news.

[Rachel Cruz]

Yeah.

[Ken Coleman]

Besides the wife to be 40 grand and in your addition 20, you got another 60 you get to play with here.

[Rachel Cruz]

Yeah. So I'm like, let's just. We'll just pretend, Taylor, just for a second, that her 40 and let's say this 20 are going to go towards that. That means you knock off Basically everything. And you have the $57,000 student loan left is kind of what it is. And then next month, if you make 30 or 20, you know, you're, you're going down to, to 37 or 27,000. I mean, you'll have this paid off. I'm saying all this to say very quickly. I mean, re, I mean, that's, it's pretty remarkable. So I think by the end of the year, you guys will be debt free. But I think the more important question is for you guys as a couple, how you guys are going to do money together. And I totally understand the notion of, golly, this was my mess that I screwed up and the money she's worked so hard to save. But the way to look at it really is that we are one team. And if we are one unit and we're gonna move forward in this life together, we're gonna move faster and win faster financially. If we do this together, if we keep kind of playing this, well, that was yours, this is mine. And that's the way we do. Life and money, it's gonna be separate your entire life and you guys are not really gonna ever be combined and your goals are gonna be. And you're not going to hit them as quickly versus if you guys were like, hey, together we're going to get out of this debt. Hey, together we're going to build up an emergency fund together we're gonna start funding retirement. And our goal is, you know, to, to have X amount in three years so that we can start traveling with the kids. You know, like, like you guys together are creating this life. And money is just a tool to help support that Taylor. So I want that for you guys. I want you guys to get on the same page. So it's. I know it feels like it's her 40 grand, my debt and that and looking at the numbers in the math side. But I want you guys to look at it more as, hey, we're creating this life together and what do we want to do with this? Right? And so that, that's really the main conversation that needs to be had. And then us combining money and going after these money goals together will naturally fall in line with this idea that we are a team. Does that make sense?

[Caller]

Yeah.

[Ken Coleman]

And I guess one last. Yeah, one last bombshell.

[Caller]

I have a leased car, but she has a paid off car. So I'm assuming I should get out of that lease and eat.

[Ken Coleman]

Either stick to one car until we're.

[Caller]

Debt free or just buy something in cash.

[Rachel Cruz]

Correct. You're Correct, Taylor? Yes. Yep.

[Ken Coleman]

I wouldn't stick to one car unless you guys can actually do that. And so you may have to get a cash car, like a $7,000 car or something like that as a part of this process. My question, Rachel, is he's got a month left, so we. We want him to. He needs to be tackling this himself until the day they combine accounts, for sure.

[Rachel Cruz]

Yeah.

[Ken Coleman]

So you got to have the con conversation with her. Taylor, one of the things you said, I thought was interesting, I want Rachel to weigh in on is you're like, she's open to it, but I'm not sure how to have the conversation. And I. I think it would be great for you to weigh in on. This is premarital. But how does he need to have this conversation about what happens with that 40 grand on day one?

[Rachel Cruz]

Yeah. I mean, I would approach it more in the sense of, like, what do we want our marriage to look like when it comes to money? How do we want to approach this together? Let's make that decision first. And then out of that, the numbers kind of start to play. Play out. But, yeah. Have y' all talked about money? Taylor, like, how you guys want to handle it?

[Caller]

Yes, we have.

[Ken Coleman]

We've had that conversation.

[Caller]

I. When I said she's open to it, I just haven't. She knows how much I'm in debt.

[Ken Coleman]

She knows how much I make.

[Caller]

She's going to stay home.

[Ken Coleman]

We have that all laid out.

[Caller]

We just haven't decided for sure.

[Rachel Cruz]

Okay.

[Caller]

That 40 grand is going to all get wiped out and go right to my credit card debt.

[Rachel Cruz]

Sure. Yeah. Yeah. So I think tonight would be a great night. You know, I say open a bottle of wine. She probably can't partake, but. Yeah, but you. You have a glass.

[Ken Coleman]

You're not the surgeon general.

[Rachel Cruz]

Have a glass of something and just say, hey, let's make some financial goals between now and the end of the year. And I actually, because she is expecting Taylor, I wouldn't put her at 40 grand on debt anyways. I would make sure that she and baby are good. So we always actually say go in stork mode when you are expecting and be keeping that savings there. That when they come home from the hospital and everything's good, then you press play. But until then, just hold that 40 anyways, regardless, to make sure everyone's okay from a medical standpoint. And then, yeah, you guys, tonight just say, hey, let's map out what we want the next year or even end of the year, calendar year 20, 25, what are some of our big goals? And start running some numbers. And it could be fun to say, okay, do we want to try to be debt free by the end of the year? What would that look like? That's crazy. But what would that look like? And start very possible mapping out some numbers. Numbers. Looking at projections. And just kind of start dreaming together. And then I think it naturally will flow to here's what you have, here's what I have. And as we combine this all together, like this is how fast we could hit these goals. And it starts to in my opinion, be energizing. I always think that stuff is energizing.

[Ken Coleman]

You know, Taylor, I don't know if Rachel agrees with this, but I think this requires some flowers, maybe even a spa day. You gotta go into this conversation celebrating her. She's got 40 G's in the bag. Yeah, she's willing to take your debt ridden hide on. I mean I, I would when you. Come on. Doesn't he need a sweetie?

[Rachel Cruz]

Nice.

[Ken Coleman]

Nice gesture, my friend. You know she's pregnant.

[Rachel Cruz]

You're wanting to take care of her, right?

[Ken Coleman]

I'm gonna take care of you. I appreciate you. Yes, I would make some gesture and more than flowers.

[Rachel Cruz]

I wouldn't be mad about that.

[Ken Coleman]

See, I think spa day, you know, maybe after a really positive. That a boy. You got to go in with a lot of appreciation, my man.

[Rachel Cruz]

Because a lot of humility.

[Ken Coleman]

This is a big deal. This is a great woman. And, and so you need to, to let her know that cuz you're in good shape, my man. My goodness. Yeah. I've always said you got to out marry yourself. Taylor took this literally.

[Rachel Cruz]

He did it.

[Ken Coleman]

Way to go, Taylor.

[Rachel Cruz]

Congrats, Taylor. It's the next fun couple of months for you guys.

[Ken Coleman]

Yeah. Congrats on the baby, Sam. Buying your home is a huge deal, folks. Don't try to do it on your own or with somebody that has no experience. Don't get scared. Don't buy into all the headlines. Get with somebody who knows what they're doing. Give you an example here. Median home prices went up slightly last month to about $430,000. More homes are on the market, the highest nearly a million right now. The highest since 2019. So it's still not enough to meet buyer Demand. The average 15 year fixed rate rose to 5.9% last month, but it's still under 6. So if you're ready financially, a small rate increase shouldn't hold you back. To learn more about the housing market trends and get free tools to Help you buy or sell with confidence. Go to Ramseysolutions.com Market Ramseysolutions.com Market or we've got the link in the show Notes. If you're listening via podcast and YouTube. Nikki is joining us now in Salt Lake City. Nikki, how can we help?

[Caller]

Hi, thank you so much for having me on. So my question is basically how do my husband and I approach helping my in laws in their retirement when we are working our own baby steps and they are also not making financially responsible decisions themselves, themselves.

[Ken Coleman]

I don't know that you can. And I'm not being cynical, Rachel. I, I just. There's only so much you can do, you know, maybe a suggestion, maybe an offer. But outside of that, if they don't receive it, what, what do you think you can do?

[Caller]

Well, here's I guess let me give some context for what's happening right now. Last fall they stopped paying their mortgage in a home they've been in for over 30 years. Why we still don't wait. Why? Have no idea. They won't tell us. And so we don't know where that money has gone. And they're about to lose their home to foreclosure now. But they're trying to get it sold and if they do get it sold them that about 200,000. But they haven't saved anything towards retirement and we don't know how much credit card that they have. But my guess would be high five figures. Figures.

[Rachel Cruz]

Five figures? Is that what you said, five figures?

[Caller]

Yeah.

[Ken Coleman]

Well your first clue that you can't do much, if anything. And I'm not trying to be negative here, I'm just trying to answer your question. But when, when, when they won't tell you why they stopped paying their mortgage and we're talking about you being your husband, their son, when they just say we're not telling our own son why we're not paying our home, our mortgage. Mortgage, that's a sign they don't want anybody to know there's something they are hiding and have no interest in sharing.

[Rachel Cruz]

And do you guys feel like, Nikki, that you're wanting to help them just because of the obvious? Like it's our in laws and we don't want them to be homeless or are they coming and asking for help?

[Caller]

A bit of both. So they have been kind of cagey about getting help. But my husband and his siblings have been communicating with each other and they recently asked his brother for $10,000. So we know it's only a matter of time before that question is directed at us. And they have a history of borrowing from their children and not paying it back. So it's. I mean, it's pretty ugly. And I'm just really feeling that anxiety because I don't want to do this to my own children someday. And I worry about how much money they'll want from us and will that rob me of my own retirement savings and my children's situation.

[Ken Coleman]

Pause. Do you have a legit fear? No. You're great. You actually said something that I want to lean into. Is that fear because you think if they come to your husband and ask for money that he's going to give them some money and then you're going to be really stuck.

[Caller]

No. My husband and I, we have worked really hard to get on the same page. When we first got together, he said, absolutely, I'm going to deplete our emergency fund to help them if they ever ask. But he's very much the opposite now. But I guess the worry is too, if we say no, that it's going to ruin the relationship he has with his siblings.

[Rachel Cruz]

Okay.

[Ken Coleman]

Is he still going to stand strong on that?

[Rachel Cruz]

Well, that's not his fault.

[Ken Coleman]

Or yours.

[Rachel Cruz]

Yeah, that. That is. Then a boundary is drawn. And whoever gets mad about the boundary, that's their decision to be mad about it. And so there's a lot of. This is so hard. This is so hard because you want to control the whole situation. Situation. You want everyone to be okay, everyone do their part, be an adult. Everyone. You know what I mean? And you're like, we're the ones being adults here making wise decisions, and we're getting screwed because we are making right decisions now. They're coming to us for money. And so the. I think the. The issue here is that when the boundary is drawn, if it's not really a boundary until someone bumps up against it, and the fact that they get mad that they bump up against it, that's their fault. And I, And I. And I say that with such love, because I. You do not want a family to be torn apart, apart by money. But you guys aren't causing that. They're going to choose that. Right? And you can't control what they're choosing, and that's hard.

[Ken Coleman]

Very hard. And Nikki, I understand, you know, your stress over it because it involves your husband, but it also involves your money, too. And as long as your hubs is on the same page and you guys are going to hold the line together, then you shouldn't have that fear. And what I was responding to is what. When you said, I've got this fear that it's going to rob from my retirement. Well, there's. There's no fear of that happening. If there ain't no chance in the world, it's going to happen. Now, the only way that you get to that point is if your husband goes, I'm all in on this one. I'm not going to give them a nickel.

[Rachel Cruz]

And if you guys had, you know, $400,000 sitting in a high yield savings account or something like, I mean, we could give them a few, you know, and you wanted to do that. You could, Right. Like, I mean, people can decide to do what they. They want, but you guys aren't in a position.

[Ken Coleman]

Yeah.

[Rachel Cruz]

To give a ton. Right. Because you guys are still working the baby steps.

[Ken Coleman]

I wouldn't give them a nickel.

[Rachel Cruz]

Well, I know you wouldn't, but some people are like, they're about to be. They're about to be homeless, so.

[Ken Coleman]

No, you're making a great point. I'm just. I wanted to put it out there that I think it's. I think it is so morally wrong for parents to put their kids in this situation. It really bothers me.

[Rachel Cruz]

I agree.

[Ken Coleman]

I know, but Nikki, Rachel's right. Guys can do whatever you want to. You called us.

[Rachel Cruz]

No. Yeah. And I, And I wouldn't. But I'm saying it's not even like I. I don't feel like you guys are even set up in a way that you really could help on a substantial level.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Because you guys are still.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Working to pay stuff off and fund retirement. You know what I mean? For yourself. So that's. How much do you guys make a year?

[Caller]

Well, I just had my first baby and so I'm going back to work just part time.

[Rachel Cruz]

Okay.

[Caller]

So I think this next year will probably met around or not. Net. Excuse me. Will probably gross around 1 10th.

[Rachel Cruz]

Okay. And what baby step are you guys on? 4, 5, and 6.

[Caller]

No, we're still in 2.

[Rachel Cruz]

Oh, you're still paying off consumer debt. Oh, yeah, yeah, yeah, yeah. You don't have.

[Ken Coleman]

Not a nickel.

[Rachel Cruz]

Yeah. You don't have an option to do anything right now. You don't have the money. I mean, you guys are working to pay off debt. So, like, we. You don't. You don't have the extra cash.

[Ken Coleman]

What's the other brother doing on the. I thought you mentioned.

[Rachel Cruz]

And how many siblings?

[Ken Coleman]

Yeah, there's a couple that he got asked for ten grand. What's he going to do?

[Caller]

Well, he's not going to give it to them. Unless the house is supposed to be sold to another family member, and that should be closed on by the end of the month. If it's not, his brother has said he will give them the ten grand in order to give them more time to try to sell so that they don't just.

[Ken Coleman]

Man, that stinks. It'd be great if all the brothers circled the wagons. I. I'm going to. I'm going to go a step further. I think you need to have your husband preemptively tell mom and dad, hey, listen, I'm sorry you're going through all this. I know you asked my brother for Mom.

[Rachel Cruz]

We just had our first baby.

[Ken Coleman]

We just had our first baby. My wife is not working full time. We're trying to get out of debt. I want you to know our financial position and our financial philosophy. And don't ask me for money, because I'm not going to give it to you. I. I would go that far because I think they are being enabled by the one brother. Sounds like a family member is enabling them by buying this house and bailing them out. We don't know what's really going on, why they would stop paying their mortgage. This is a mess. And here's what I know about messes. You get near a mess, you get messy. And you guys need to steer as clear as this thing as you can. Now, that may be aggressive, but I'm just that kind of mentality where if I see a potential confrontation, I try to cut off the real confrontation by going, hey, in case anybody's thinking about confronting, running this, I want to go ahead and put out my preemptive position on this. And let's avoid all the ugliness and the weird tension.

[Rachel Cruz]

Yeah, there you go. Because super proactive in that.

[Ken Coleman]

Yeah, that may be a little too aggressive, but. And I know that, but I just threw it out there.

[Rachel Cruz]

That's so hard, though. Nikki, I'm so sorry.

[Ken Coleman]

So sorry for you.

[Rachel Cruz]

And you just felt bad for the parents. Like, there is a part of you that you're like, man, you don't want to see him in trouble or lose.

[Ken Coleman]

A relationship over what they did.

[Rachel Cruz]

Yes.

[Ken Coleman]

Like, wait a second. You guys acted like morons, and because of that, we can't have Christmas. It's tough stuff. Hey, what are you still doing here? You know the rest of the show's happening on the Ramsey Network app, right? So you got to jump over to there to continue watching. You can download it for free. Just go to your app store, type in Ramsey Network. It's completely free, and I'll drop a link in the show notes to make it easy for you. So if you're watching on the app, you're in luck. But if you're watching anywhere else, this show is over for you. So jump onto the app and let the fun continue. All right, go on now. Don't make it weird. Okay? I got nowhere to go, so you need to go. Okay, bye. Bye, now. All right, this is getting weird over there, guys. What do we do?