Debt Is Always the Symptom of a Bigger Problem

Summary

The Ramsey Show — Debt Is Always the Symptom of a Bigger Problem

Date: June 11, 2026
Host: Dave Ramsey
Co-Host: Rachel Cruze
Theme: Taking control of your money through behavioral change, transparency, and practical action — because debt is a symptom, not the disease.

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Episode Overview

In this episode, Dave Ramsey and Rachel Cruze take live calls from listeners facing a variety of money challenges, revealing that debt is rarely the core issue—it's the end result of deeper behavioral, emotional, or relational problems. The episode covers topics including massive debt due to gambling, managing family and aging parents, budgeting around life’s curveballs, investing for the future, and the emotional side of financial decisions. As always, the tone is straight-talking, practical, and empathetic, underscored by moments of tough love and humor.

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Key Discussion Points & Insights

1. Debt as a Symptom, Not a Problem (00:45–09:00)

• Phil from Orlando (28, single, high-income data analyst) calls in overwhelmed by $200k in gambling and personal debt (plus a $600k mortgage).
• Dave's message: Debt consolidation isn't necessary for someone with high income—focus on behavior change.
  • Quote: “Debt is never the problem. It's always the symptom.” – Dave Ramsey (04:16)
  • If the problem behavior (gambling, poor decisions) isn’t addressed, “the $200k will come back quickly.”
• Suggests living extremely frugal, using his skills to aggressively pay off debt in a year.
  • Quote: “Put Phil Incorporated on beans and rice, rice and beans, no life. $20,000 a month on these bills for ten months—and we're done.” – Dave Ramsey (07:00)
• Both hosts stress the importance of humility and the ego challenge as part of recovery.
  • Quote: “To go backwards in lifestyle—that’s not easy.” – Rachel Cruze (08:08)

2. Overcoming Disorganization and Tight Budgets (10:21–19:41)

• David in Memphis: Budget tanked after adding daycare costs; $40k in non-mortgage debt.
• Action plan:
  • Use the EveryDollar app (gifted free to caller).
  • Budget to every last dollar; cut up credit cards; sell unused assets (e.g., lawnmower).
  • Prioritize monthly expenses, learn to say “no,” and use smallest-to-largest debt snowball method.
  • Quote: “Any crisis that comes up, it cannot result in debt ever again because it has made your life tight and miserable—get rid of it and keep it gone.” – Dave Ramsey (13:13)
• Rachel emphasizes the psychological peace a strict budget brings.

3. Navigating Family, Generosity, and Aging Parents (21:43–31:03 and 43:48–51:39)

• Kate from South Dakota: How to support generous, elderly parents who are secretive about finances, focused on giving, and anticipating the Rapture.
  • Dave advises gentle, supportive oversight—ensuring basics (taxes, food) are met without fighting their worldview.
  • Stresses dignity and gentle provision: “Just check in on the refrigerator...buy a beef and the three of us are going to share it.”
  • Acknowledge their humility versus entitlement ("they're not brats").
• Cheryl from Boise: Parents want to secretly compensate her for caregiving with a $50k CD. Should she keep this from siblings?
  • Dave: Never participate in secretive deals—they lead to resentment and accusations. Be open, matter-of-fact, and clear.
  • Quote: “You do what you want to do, but I do not participate in deals that involve deception.” – Dave Ramsey (45:26)
  • Rachel: “If you are the one on the front lines, you get whatever you want.”
  • Discussion of family dynamics: older daughters often end up as caregivers.

4. Should I Sell My Home to Pay Off Student Loans? (32:39–42:16)

• Anna in Arkansas: Debating if she should sell her jointly owned home to pay off $33k in student loans.
  • Dave and Rachel run the numbers and recommend side hustling and extreme frugality to kill the debt in roughly 14 months instead.
  • Quote: “The only reason you’re selling is you didn’t have hope you were ever going to get rid of it otherwise. And I just gave you a 14-month detailed plan.” – Dave Ramsey (39:16)
• Urges her to investigate paycheck deductions and avoid selling a house with favorable terms unless absolutely necessary.

5. Investments and Market Timing (54:09–62:44)

• Gabriel’s question: Should a $350k windfall be invested all at once in the S&P 500, or dollar-cost averaged?
  • Dave: Lump sum has better historical returns if you’re emotionally prepared for volatility.
  • Quote: “No one gets hurt on a roller coaster except those that get off in the middle…If you think you’re going to jump, dollar cost average.” – Dave Ramsey (56:55)
  • Recaps quick market recoveries post-crisis (COVID crash, Iran news).

6. Family Budgeting, Saving for College, and Blessing Your Kids (67:19–74:10)

• Michelle (military family): Are they saving enough for their kids’ college?
  • Factor in GI Bill, state tuition, growth, possible scholarships, and alternative paths to college.
  • Encourages funding retirement and flexible savings outside 529s.
  • Quote: “Parent them—brainwash them that college is coming, but where you go to school does not matter.” – Dave Ramsey (73:15)

7. Practical Calls: Home Ownership, Inheritance, and Major Purchases

• April in Lynchburg (117:21–123:32): Preparing for a baby with only one income; housing costs are unsustainable.
  • Must consider returning to work or selling the house; “Babies are the best thing ever…but they don’t get a pass on math.”
• Melanie in Phoenix (107:20–114:48): Wants to buy a $350k condo in Mexico with inheritance.
  • Dave explains Mexican real estate law (ownership via trust) and the importance of evaluating worst-case scenarios.
  • “If you just lost the condo after you bought it, is your life still okay?”
• Marcus in Clarksville (124:14–126:00): Military family’s debate over big vs. small house when relocating and income drops.
  • Dave: Don’t rush. Rent for a year, get on the same page about debt load before buying.

8. Emotional, Behavioral, and Spousal Trust Issues (95:47–103:42)

• Garrett in Washington DC: Spent $35k in secret credit card debt trying to cover bills and shield wife from stress; family has adult child with major medical needs.
  • Dave prescribes total financial transparency, joint EveryDollar budgeting, giving every dollar a job, and stopping all new debt or retirement contributions until debts are cleared.
  • Quote: “You cannot get out of a hole while digging out the bottom.” – Dave Ramsey (103:38)

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Notable Quotes & Memorable Moments

• “Debt is never the problem—it’s always the symptom.” (04:16, Dave Ramsey)
• “Put [yourself] on beans and rice, rice and beans, no life.” (07:00, Dave Ramsey)
• “To go backward in lifestyle—that’s not easy.” (08:08, Rachel Cruze)
• “Any crisis or a desire...cannot result in debt ever again.” (13:13, Dave Ramsey)
• “You do what you want to do, but I do not participate in deals that involve deception.” (45:26, Dave Ramsey)
• “No one gets hurt on a roller coaster except those that get off in the middle of the ride.” (56:55, Dave Ramsey)
• “Babies are the best thing ever…but they don’t get a pass on math.” (122:30, Dave Ramsey)
• “You cannot get out of a hole while digging out the bottom.” (103:38, Dave Ramsey)

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Key Timestamps for Important Segments

• 00:45 Caller Phil: High income, high debt, gambling, behavior focus
• 09:59 Caller David: Budget, daycare challenges
• 21:43 Caller Kate: Aging parents, financial provision, faith
• 32:39 Caller Anna: Student loans, home sale decision
• 43:48 Caller Cheryl: Caregiving payments, sibling dynamics
• 54:09 Market investing vs. dollar cost averaging
• 67:19 Caller Michelle: Saving for kids’ college, GI Bill
• 95:47 Caller Garrett: Financial infidelity, medical issues
• 107:20 Caller Melanie: Buying a Mexican beach condo with inheritance
• 117:21 Caller April: New baby, unsustainable mortgage
• 124:14 Caller Marcus: Moving, marriage disagreement on house size

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Takeaways

• Behavior change is critical; debt is the outcome of other unresolved issues.
• Complete financial transparency between spouses is a must.
• Live with humility and intensity when getting out of debt—no lifestyle inflation.
• Family dynamics in old age require clarity, honesty, and gentle involvement.
• Major financial moves (selling homes, investing windfalls, buying property abroad) demand careful, unemotional planning.
• No decision overrides the basic math—numbers never lie, even when life changes (babies, injury, job loss).

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Tone: Blunt but caring, focused on personal responsibility, peppered with humor and practical wisdom.

Listeners come away reminded: You can’t fix money problems until you fix the behaviors and relationships underneath. Start with honesty, live frugally, make a plan, and stay in the fight together.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union Studios, this is the Ramsey Show. I'm Dave Ramsey. Rachel Cruz Ramsey, personality number one best selling author, co host of the Smart Money Happy Hour. My daughter is my co host today. Open phones at Triple 882-55-5225. Thanks for hanging out with us. Phil is in Orlando. Hi, Phil, how are you?

[Caller]

I'm doing well, Dave, how are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Yeah, so I'll keep this as short as possible. I'm 28 years old. I've put myself into kind of a corner of the past couple of months after some bad decision making, somewhere around 2. And debt, which is a mix of credit cards and personal loans that I took out, which I shouldn't have. I also have a mortgage which is relatively new. I make good money. But ultimately things are tight right now and I'm curious to get your thoughts on whether or not debt consolidation is a wise choice or if I am better off just essentially figuring it out and, you know, climbing back into a better place.

[Dave Ramsey]

What do you make?

[Caller]

Salary is about 140, but I make probably. Well, this year I'll probably net 400 after stock units.

[Dave Ramsey]

And that includes cashing those in or are those restricted?

[Caller]

They are restricted, yeah.

[Dave Ramsey]

So what is your income that you can use this year?

[Caller]

Yeah, well, this year, like I said, I'm in like 400 total.

[Dave Ramsey]

But you can't use the restricted stock units. You can't sell them. They're restricted. That's the nature of the beast.

[Caller]

Right? Right. Yeah. Like 100, 150. Vestable share of sellable throughout the remainder of the year, plus. Yeah, I mean 140 divided by two. Call it, call it halfway through the year. So I mean, I would call it 200 coming in through the remainder of

[Rachel Cruze]

the year for the rest of the year.

[Caller]

Correct.

[Dave Ramsey]

Okay. What do you do?

[Caller]

I'm a data analyst.

[Dave Ramsey]

Okay. And how much do you owe on your cars?

[Caller]

Zero.

[Dave Ramsey]

Okay. And you ran up $200,000 in credit card debt and personal loans. That's it.

[Rachel Cruze]

That doesn't include the mortgage or does that include the mortgage?

[Caller]

Does not include the mortgage.

[Dave Ramsey]

How much is the mortgage balance?

[Caller]

Mortgage balance is just under 600.

[Dave Ramsey]

Okay. Are you married?

[Caller]

Not married.

[Dave Ramsey]

Okay. What did you do for 200 grand worth of mess?

[Caller]

It was a bad sprint of gambling, plus poor decision making.

[Dave Ramsey]

Oh, yeah. That fairly easy to come up with. The last part of that.

[Rachel Cruze]

Is there anything you can, like anything you bought that is sellable in this or is it all, it's all gone in things like gambling or other things?

[Caller]

No, I mean home improvements have definitely been a thing. I mean, I just bought the house maybe a little less than a year a half ago and definitely put money into the home because we had some issues. But otherwise. Yeah, sort of just bill. Bill payments. Slash. Yeah. Through money away, which is.

[Dave Ramsey]

Okay, so here's the thing. Personal finance is 80% behavior. It's 20% head knowledge. So debt is never including. When I went into debt and lost my butt because I was stupid. Debt is never the problem. It's always the symptom.

[Caller]

Yeah.

[Dave Ramsey]

Okay, so this is the symptom of gambling and in air quotes, poor decisions, whatever the flip that means. Okay. And so it doesn't matter if we waved a magic WAND and the 200 went away. It's coming back quickly if the gambling and the poor decisions haven't come to a screeching halt. Agreed.

[Caller]

Agreed. 100%.

[Dave Ramsey]

So has it?

[Caller]

Yes, it has.

[Dave Ramsey]

No. No more gambling. No more bad decisions.

[Caller]

Longer. Yeah, it took longer than it should, but yeah, it's clicked.

[Dave Ramsey]

Okay. All right. So you're a single guy, you have no bills except a house and you have 400, well, 200 to $400,000 to get a hold of. And you owe 200. You don't need debt consolidation. You just need to reach over there and take a bunch of that money you've been wasting and pay off your debt. You'd be debt free in a year and you lived on 200 grand.

[Caller]

Right? Right. Yeah. I guess the issue is more so just the short term liquidity and you know, been getting bombarded with calls from some of these, you know, consolidation.

[Dave Ramsey]

You have enough coming in to pay minimums. Oh, debt consolidation people are, are advertising to you. Well, so what? I mean, that's not a big deal. You could do this, but you could, you could use like guardian litigation and they can put you on a four year plan and walk you out. But I wouldn't. Yeah, not when you have the income to pay it off in a year.

[Rachel Cruze]

Yeah, it's your income. And the debt consolidation may get you, quote unquote a better interest rate, but it's not really going to matter in 12 months because you'll be debt free anyways. So going through a company and paying for that is something that you can do yourself.

[Dave Ramsey]

Yeah. Honestly, if I were you, I'm going To sit down and go, I'm going to look at the stock options and what the release, the vesting and the release on the restrictions are. And have you got a pile of that stock laying there somewhere?

[Caller]

I don't right now. Everything that has vested throughout this year already has already been liquidated.

[Dave Ramsey]

And so.

[Caller]

Right, right, right now. Right now. Yeah, like I'm pretty much.

[Dave Ramsey]

Translation, you lost more than 200 grand with this behavior.

[Caller]

Agreed.

[Dave Ramsey]

So if I woke up in your shoes. I'm sorry, I'm sorry to interrupt. If I woke up in your shoes, what would I do? Knowing what I know, having taught this stuff and walked with people in these situations. You have this wonderful brain that allows you to be a data analyst. And I want you to apply it to a new company called Phil Incorporated that needs to be turned around.

[Caller]

Yeah, right.

[Dave Ramsey]

And Phil Incorporated has revenues of 400 grand and liabilities of 200 grand. And so we're going to put Phil Incorporated on beans and rice. Rice and beans, no life. $20,000 a month on these bills for 10 months and we're done. That's what I would do if I was in charge of Phil Incorporated.

[Caller]

Yeah, that's kind, that's kind of what I have. Yeah, that's, that's sort of my approach as well. I just really uncertain. I don't know anybody that's done like, you know, work with debt consolidation companies.

[Dave Ramsey]

Well, I mean, again, you could call. We have one, the Guardian litigation guys are sponsors. We can send you to them. They can put you on a three year plan or whatever. But I wouldn't do that.

[Rachel Cruze]

Yeah, and that's usually when you're in lawsuits and stuff too, you know what I mean? So, like, yeah, I think you're fine. Yeah, you don't need that.

[Caller]

Phil.

[Rachel Cruze]

Honestly, what's probably going to affect you the most is, is the ego side of you killing it. Making a crap ton of money, living like you're making that much money and more and ratcheting down everything like that's going to be, that's a, that that makes you really put, put yourself in a completely different mindset, Phil. I mean, it does.

[Dave Ramsey]

Exactly.

[Rachel Cruze]

So that humility, which I think you already have because you've realized, crap, I'm not good at this and I've messed this up. So you have a level of that now, but it'll, it'll, it'll do inner work in you for sure. To, to go backwards in lifestyle. That's not easy.

[Dave Ramsey]

Well, and, and what I'm doing with this prescription is more than just mathematical. It's also behavior because if you go this intense, it's going to be. It's going to burn all that other crap that you were doing completely out. You're going to go, I never want that again. Because you're going to submit yourself to a sacrifice to clean up the manure. And you never want to see manure again after this.

[Rachel Cruze]

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[Caller]

Christmas.

[Rachel Cruze]

Go to chministries.orgbudget and use promo code RAMSEY. That's chministries.org budget and use promo code Ramsey.

[Dave Ramsey]

David is in Memphis. Hi, David. How are you?

[Caller]

Good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Yeah, I was just wanting to, I guess, figure out how to get more organized with my budget. We've. We felt like we were doing pretty good and then we ended up having to start putting two kids through daycare and it's eating up a lot of our flexible spending room. I guess. That'll do it.

[Dave Ramsey]

That'll do it for sure. So what's your income, sir?

[Caller]

Mine is about 75 and a half or 75, 500 a year.

[Dave Ramsey]

And does your wife work outside the home? If you got daycare, I assume.

[Caller]

Yes.

[Dave Ramsey]

What's she make?

[Caller]

She just started a new job. So at the Moment she's at 27,000 right now, but expecting a raise in the next few weeks.

[Rachel Cruze]

By how much? What would that be?

[Caller]

Probably close to between three and five dollars increase an hour.

[Rachel Cruze]

Okay.

[Dave Ramsey]

All right. And how much debt do you guys have?

[Caller]

So mine total is right at 212,000 with a mortgage.

[Dave Ramsey]

How much of that's mortgage?

[Caller]

184.

[Dave Ramsey]

Okay.

[Caller]

All right.

[Dave Ramsey]

Okay, so. So you got about what, $60,000 in debt? No. 40,000. 40, yeah, 40 in debt. Yeah. Okay, on. What's the 40 in debt? On?

[Caller]

All right, I got 2200 in credit cards. I got 9100 on a bad H Vac loan that I had to take when I bought the house. Then, oh, 1900 on a zero turn lawnmower. And then I have 14,000 in 401k loans.

[Dave Ramsey]

No. Car loan?

[Caller]

No, sir.

[Dave Ramsey]

Okay. All right. And what are you paying for daycare?

[Caller]

270 a week.

[Dave Ramsey]

Thousand dollars a month. Okay.

[Rachel Cruze]

For both kids. Yeah.

[Dave Ramsey]

Okay. Yeah, you're right. It's a matter of getting organized. And, you know, we've got to stop some of these decisions that have put you into this debt and reverse that, get the debts cleared. Because if you were on a game, if you're on a written budget, you and your wife were in agreement and you had no debt except your house, you'd be in really, really good shape.

[Caller]

Yeah.

[Dave Ramsey]

No, and so stuff like the next time a zero turn lawnmower speaks to you, you have to look at it and say, no, thank you, I'll use the one I have. We're not financing it. No, we're not using a credit card to do anything. We're cutting them up tonight. No, we're not borrowing money. No, we're not borrowing money. No, we're not borrowing money. And that's a new thing you have to learn to say, like, over and over and over again. Any kind of a crisis or a desire or an impulse or a wish or a dream that comes up, it cannot result in debt ever again because it has made your life tight and miserable and we have to get rid of it and keep it gone. Does that sound familiar?

[Caller]

Oh, yeah.

[Dave Ramsey]

Okay, cool.

[Rachel Cruze]

Yeah. So what's the part of the organization that's been hard for you guys, David? Is it. Is it doing a budget and sticking to it? Is it trying to figure out what debts to pay first? When you ask about organization, what specifically are y' all struggling with?

[Caller]

I guess how to prioritize, maybe because it just, if something comes up, you know, it starts stretching really thin and we can get behind sometimes.

[Rachel Cruze]

Yeah, just like, like monthly expenses that come up that you didn't plan. Yep, for sure. Yeah. So I think that's one reason the budget is so helpful. We'll give you a year of every dollar because it is knowing that you have a plan and anything outside the plan, there's kind of, you know, the simple word of no of, like we just, we can't do that. We didn't plan for baseball signups. That's an extra 300 bucks or whatever. And you're like, nope, can't do that. Like, I mean, it just, it really kind of forces you, especially where you guys are, how, how, how tight everything is. Like, it really does kind of create a black and white scenario for a lot of these situations where before you could kind of finagle it and like, I'll just charge on the credit card and figure it out later. When you live on a zero based budget, it really is directing you to your decision making, which is fabulous. So you guys sitting down and doing that and then starting to pay off this debt, smallest to largest. And so I don't even know, can you sell the lawnmower and get some cash back?

[Caller]

I think it'd be a wash on that.

[Dave Ramsey]

Good. That's $2,000 of debt gone.

[Caller]

All right, all right.

[Dave Ramsey]

This weekend, gone. Now here's what Rachel's talking about. We're going to give you this every dollar budgeting app and we're going to give you the premium version. We're going to pay for it free. Okay? And then you and your wife are going to sit down tonight and you're going to look at, okay, here's what our take home pay is for me and my take home pay for you for this month. And then we're going to take this month's income and we're going to give every one of those dollars an assignment in the budgeting app. This much for food. This much for house payment. This much for electricity. This much for water insurance. Yeah, this much for whatever. You go right down your life and you say, this is where the money is going to go. And every dollar has an assignment before it comes to you. And then when it comes to you, you simply do exactly what you had already planned to do on paper. And if something pops up and it will, then you look at the paper, you look, you look at the digital app together and you say, if we're going to do this popped up, what are we not going to do? That we take off of here so that we can do the pop up, or we look at the pop up and say, no, we're not doing it. I don't care if you popped up or not. We don't have the money because every dollar has been assigned. But I mean, if a tire goes out and you have to buy a $200 tire, then you look over there and you go, okay, I got to increase car repairs. By $200. And I got to decrease something else in the budget by $200 so that this continues to match and we don't get behind. And so you work on that together. And you need to have a budget committee meeting and go over this and stick to it once a week minimum, right now, until you get the feeling of organized. So you're telling your money what to do on that digital app, and then that app is gonna tell you what to do so that you do what you said you wanted to do. That's how this works.

[Rachel Cruze]

And it's easy to David that with the premium version, you connect your bank account. So anytime you guys swipe your. Your debit card, because no more credit cards. When you swipe in your debit card out of the checking account, a transaction pops into that app, and you drag and drop it. So you can see literally how much you have left in each category. Like, it is right there with you. And it really does it force. If you follow it, it forces you to stay within the bounds. But the great thing is, is there, it creates a level of peace, too. And then you're going to expose and see, okay, how much have we been spending out to eat? How much have we been spending, you know, here or there? And you start to actually see your spending habits. And because you guys are in debt, you cut all those categories because you're doing nothing. I mean, but just survival at this point.

[Dave Ramsey]

There's no food, shelter, clothing, transportation, utilities, and get out of debt. That's all. You're not going to see the inside of a restaurant unless you're working there as your extra job. You're not going on vacation, you're broke. You got to get this brick mess cleaned up. Not until you get it done. And you can get it done really quick once you start doing that, because you sell the mower, you cut up the credit cards, you look around the house, see what else we can sell. We look around, I can pick up a side job this weekend and make 2,000 bucks, throw it at this credit card, and it'll be gone. I mean, you start getting creative on knocking these things out, and then you get your life back at the end of the story. And the end of the story is only about 12 or 18 months away at the end of the first chapter of the story, I guess, because then when you're out of debt, you can build an emergency fund. And when you build an emergency fund, then you can start investing. And, dude, you literally could retire a millionaire if not a multimillionaire. If you follow this stuff through exactly like we teach you, and you go from disorganized at $27,000 a year looking for a $3 an hour raise and two kids in daycare, and I can't breathe all the way to millionaire. And it takes you 10, 12 years to do all that. We can show you how. That's what this app. And the app will guide you. It'll tell you what Ramsey says next. You got ask Ramsey on the website for free. You can go in there and ask and you call us back and we'll help you even, even more if we need to.

[Caller]

Sam,

[Dave Ramsey]

Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance now. And most people are surprised by how affordable term life really is, even if you're not perfect health. Look, I understand the hesitation since most insurance companies make it more of a hassle than it needs to be. Not at Zander Insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Zander for straight answers, competitive rates and coverage that actually protects your family. Call 800-356-4282 or go to zander.com for a quick and easy quote. That's zander.com. Kate is in Sioux Fall, South Dakota. Hi, Kate, how are you?

[Caller]

Hi, I'm great. I can't believe I'm talking to you.

[Dave Ramsey]

You too. What's up?

[Caller]

So I'm calling to get your advice on how we can help my parents. So my parents are in their late 70s. They're faithful Christians. They have been their whole life. As they've gotten older, me and my siblings have been considering how we can help them to age well and, you know, whether we'll need to take care of them. My dad has worked a ministry job his who life, and they've never had much money, but they're very private about money. So recently they've expressed several times that they don't have enough money to retire. I don't think they understand money at all. And we're also concerned that they're giving a lot of money to Various ministries, because they're really looking forward to being in heaven and they want to spread the gospel far and wide before they get there. They've also told us, and I do think they firmly believe that they're going to be raptured before they die. So we all love them very much, but we're also concerned that they may not have enough to take care of them. And we want to be prepared to take care of them if we need to do that, that they aren't willing to talk to us about it. Is this something we just let go or. Or how can we respectfully love them for the rest of their years without any information?

[Dave Ramsey]

Well, first, as a fellow Christian, I hope they're right. Come quickly, Lord Jesus. Right? But I don't think we lay out our plans. The Bible that I have read doesn't teach me to lay out our plans as if I'm not going to retire because the rapture is going to be my bailout. Instead, the Bible says, in the house of the wise are stores of choice, food and oil. The Bible does talk a lot about God as our provider and that he cares about us and he has a plan for us and not to worry and all those kinds of things. And that's all very true as well. But the Bible then, on the other hand, it says if you don't work, you don't eat. That's in the Bible. And it says, if you don't plant corn, don't expect corn. You're going to reap what you sow. And if you sow sparingly, meaning very few kernels of corn, please expect very few corn stalks to come up out of the ground. That's a cause and effect thing in Scripture. Okay? God is talking about, this is the land in which we live, the world in which we live. And as Rachel said the other day on the show, God gave us a brain and we're supposed to use it to reason as well. And so spiritually planning for the rapture, I agree with, and I'm on board for. Let's all. Where's the line? I'll get in the line, okay? But also while I'm here and we don't know the date or the time, very clear in Scripture that we're not gonna know the date or the time of his return. Then out of Jesus own mouth, those words were spoken. And so given that, then we have to plan as if we're going to be here. And then that plan works if we're not here or if we're here Their plan only works if we're not here. So anyway, end of sermon, end of doctrinal lesson. Okay?

[Rachel Cruze]

Thank you for your TED Talk. No, but it's true.

[Dave Ramsey]

Now how do we love these sweet, precious people who care about other people wanting to meet God, meet Jesus, and they're willing to live on almost nothing and barely get by so that they can accomplish that. What impact they can have on the world for the Lord they are having. And their thumbprints are going to be all over people's names in heaven. And they're just wonderful people. So how do we love them? Well, and they are secretive partly because

[Caller]

how do we take care of them?

[Dave Ramsey]

Yeah, they are partly. They are partly secretive. They're partly secretive because they're ashamed. They're not ashamed of the gospel, they're not ashamed of their ministry mindset, but they know that they haven't done a good job with money and it bothers them. And so we gotta.

[Rachel Cruze]

It's almost easier in a weird way to have an excuse for the fear that, oh gosh, we're not well, it's okay, we're gonna. You cling on to something.

[Dave Ramsey]

Yeah. We didn't do it because you have plans. I'm blame it on the Rapture. Yeah. You know, and so now how do you help them? Gently and lovingly. Because 100% chance a 78 year old with this mindset is not going to change.

[Caller]

Right?

[Rachel Cruze]

98. We'll say 98%, Kate, we'll give you 2% hope.

[Dave Ramsey]

Yeah, but I mean,

[Caller]

they're going to change.

[Dave Ramsey]

I don't want to enter the conversation thinking they're going to be transformed financially. I don't think they are. I think they're pretty well set on giving everything away in Jesus name. And I gotta say, that's a wonderful person. My goodness, what wonderful people. So I think you siblings band together and you just check in on them every so often, make sure that the property taxes are paid, that there's groceries in the cabinet, don't open the cabinet, and the only thing in there is dog food and they haven't got a dog. Right. I mean, so that kind of thing happens in these situations. So just check in on the refrigerator and how it's stocked and hey, we just bought a beef and the three of us are going to share it and we're going to bring a bunch of it over and put it in your refrigerator. And hey, I just got a friend that's got some chickens and we all bought a bunch of eggs here. I'm going to bring you some stuff. And I just went by a Kroger and they were having a sale and Publix was having a sale. And mom, I brought you a bag of stuff to put in there. And so just make sure the electric bill is paid and you guys can just kind of subtly poke around without getting them on a full plan like they actually should be well.

[Rachel Cruze]

And thankfully in. I guess the positive side of some of this too, Kate, is they're so low maintenance, they're used to living on basically nothing versus some people call in and their parents are living the high life and have nothing in retirement and they're going to expect the same and they expect their kids to take. You know what I mean? There's like a whole entitlement side where this story could have been. But for them, their. Their motivation and attitude in a weird way is, is, you know, I don't say endearing because I don't think it's wise, but it's easier to help someone that has a level of humility and sacrificial heart. Do you know what I mean? It's not entitled to do all that. Yes.

[Dave Ramsey]

Yeah, they're not. They're not brats.

[Rachel Cruze]

Are you guys. Kate, are you and your siblings in a good place financially just to do a bare minimum like what he was just explaining.

[Caller]

We are. There's certain of our families that are going to be more able to do it than others. I think specifically our family would be able to contribute more. And so those of us who may be able to contribute are just wanting to understand what they mean by the fact that they don't have enough money. So we can prepare for how we need to help them, but we really haven't been able to prepare at all.

[Dave Ramsey]

You could just do it in an honoring way, say mom and dad. You all have done such work for the kingdom. And you know, scripture says that your children will rise up and call you blessed. And we're standing here calling you blessed. Blessed, Blessed. And one way you're blessed is your children are standing here and we want to love you. If you'll tell us some of the basic things, we want to help, but you're going to have to kind of tell us what we need to help with.

[Rachel Cruze]

Yeah. Do you even know, Kate, if the house is paid off or anything? Like, do you have any range?

[Caller]

It is, Yep. They have a small home, but it's paid off. And they have two paid off cars. So that's a good consolation is that they have a place to live. They're not worried about that.

[Rachel Cruze]

Yeah, yeah.

[Dave Ramsey]

Food, lights, water, property tax.

[Caller]

Yep, yep. Check in on the food, check in on the property taxes. And then what about, like, again, we have a little bit of concern that they're still giving a lot of money away. I just don't think there's much we can do about that. I mean, it's their money and probably

[Dave Ramsey]

some of the ministries that they're giving. Yeah, probably some of the stuff they're giving to they shouldn't be is probably irresponsible. But so what? There's nothing you can talk about unless they ask. If they ask, you can say, but if you can start a conversation. And then they say, well, honey, you think we ought to do this one? And you say, well, mom, let's look at how they spend their money. Let's look at how they're, you know. Oh, wait a minute, mom. They spend 90 cents of every dollar on the guy that runs his salary. And the hungry kids only get 10 cents of every dollar. Well, I don't think we need to be. Mom, that's not a very good deal for the hungry kids.

[Rachel Cruze]

And mom, let's make sure you're not hungry first.

[Dave Ramsey]

Yeah, yeah. Take care of your own household first or you're worse than an unbeliever. These are all script.

[Caller]

Foreign.

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[Dave Ramsey]

Anna in Jonesboro, Arkansas. How are you?

[Caller]

I'm good. How are you guys?

[Dave Ramsey]

Better than we deserve. What's up

[Caller]

so I'm having a disagreement with my dad, and I want to know if I should sell my house to pay off my student loans. Oh, yes. We bought it together. So that's why I was talking to him about it. In 2020. Yes.

[Dave Ramsey]

So you don't own it by yourself?

[Caller]

Not by myself, but he will let me make the decision. He thinks that you're going to tell me something different. I think you're going to tell me to sell it.

[Dave Ramsey]

Interesting. Okay.

[Caller]

Yeah.

[Rachel Cruze]

Two minutes.

[Dave Ramsey]

Yeah. This is great. So it's a lot. It's a lot of power. I'm kind of sc.

[Caller]

Yeah.

[Dave Ramsey]

So how much student loan have you got?

[Caller]

I've got about $33,000.

[Dave Ramsey]

And what is your income?

[Caller]

I make 54 and some change as an accountant.

Mm.

[Dave Ramsey]

Okay. Working 40 hours?

[Caller]

Yes.

[Dave Ramsey]

And you're single?

[Caller]

Yep. Single, no kids.

[Dave Ramsey]

Okay.

[Caller]

All right.

[Dave Ramsey]

And what other debts do you have other than the house?

[Caller]

I paid off my car in December early. So all I have left is 1700 on a credit card. But I have 32,000 in savings, and I could pay that off today and still have some left.

[Rachel Cruze]

Oh, well, bury the lead there. So you'd sell your house instead of cleaning out your. Instead of dumping your savings and building it back up in 24 months.

[Caller]

So the reason that my dad is hesitant is because my mortgage is like 800.

[Dave Ramsey]

No, no, no. We're asking you why would you sell your house when you have the money in the bank to pay off the debt?

[Caller]

I don't have the money in the bank. I have 32. I said it wrong. 3200, not 30.

[Rachel Cruze]

Okay, okay.

[Dave Ramsey]

Well, that's a little different.

[Caller]

All right, sorry.

[Dave Ramsey]

You may have said 32 when we put a zero on it. I don't know. Okay, okay. All right, 32. Credit card.

[Rachel Cruze]

Okay, gotcha.

[Caller]

Yeah, yeah.

[Dave Ramsey]

And then. So you pay off the credit card debt. You got a little. You got your thousand dollar left. Then we're working on the student loan, and you make 54. And what is your house payment?

[Caller]

885.

[Dave Ramsey]

Okay. How long have you owned it?

[Caller]

Six years.

Hmm.

[Dave Ramsey]

How much car debt did you pay off and how long did it take you?

[Caller]

I think I paid it a year and a half off early.

[Dave Ramsey]

What was the total debt and how long did it take you to pay? That total debt once you attacked

[Caller]

was 13,000 and it took five years.

[Dave Ramsey]

That's not attacking it.

[Rachel Cruze]

Were you ever. Were you ever.

[Caller]

My job when Covid hit.

[Dave Ramsey]

Okay, I'm talking about. What I was trying to get at was, did you pay off $13,000 in five months or something. And no, you didn't. You just piddled away at the thing. Okay.

[Rachel Cruze]

All right, Anna, if you looked at what you bring in each month, and if you lived on nothing, you paid rent, some groceries, kept the lights on, and that's about it. Like, I mean, you really had no life. No life. Yeah. What. How much extra would you have per month? Just with your salary?

[Caller]

I take about 33amonth, so I would probably need, like, depending on gas and groceries, like 1600 ish.

[Rachel Cruze]

Okay, what if. What if we just said 2000 just to play it a little safe, 1300 bucks extra. And if you got, you know, a part time job at night and weekends, which I know is not bookkeeping, not fun. Oh, yeah, yeah, yeah, yeah, yeah.

[Dave Ramsey]

Big mom.

[Caller]

I've been looking into that.

[Rachel Cruze]

Yeah. And you brought in an extra 2000. You know what I mean? That's. That's $3000 in 10 months you'll be done a month and. Yeah, and you just look at that in the calendar.

[Dave Ramsey]

Stop your 401k temporarily. And did you get a tax refund last year?

[Caller]

It was like $200.

[Dave Ramsey]

Okay, so you got that dialed in. Good. Okay. Anything else? Any other crap coming out of your check, like crappy insurance that you don't need and stuff?

[Caller]

No, just health and dental and that's it.

[Dave Ramsey]

Health, dental. Do you have 401k coming out now?

[Caller]

I do not.

[Rachel Cruze]

Okay.

[Dave Ramsey]

I don't know why you're only getting home with 35,000 or $38,000.

[Rachel Cruze]

33 is what you said 3.

[Dave Ramsey]

300amonth, which is 38,000 a year. And so why are you only getting home with 38 out of 54? How much is your stinking health insurance?

[Caller]

All of my insurance together is 53 per paycheck, so one of six.

[Dave Ramsey]

Okay. All right.

[Rachel Cruze]

This feels a little low.

[Dave Ramsey]

Yeah, that's still a low. I mean, because you're gross. You're grossing almost five grand a month, and you shouldn't be having 1700 come out of this check.

[Caller]

No, I gross 3300amonth. No, I get 1600 per paycheck.

[Dave Ramsey]

No, you take home 3300amonth. 54,000 is your income, correct?

[Caller]

Yeah.

[Dave Ramsey]

60,000 a year is $5,000 a month. Okay, I can't get down to 33. There's something wrong with your check to me. But aside from that, I'm going to investigate your check and see what's coming out. Make sure nothing is coming out except health insurance. That's it. And taxes and the appropriate amount of taxes, not too much. Then I'm going to pick up an extra job side hustling, bookkeeping and bring in another $1,500 to $2,000 a month. Then I'm gonna take the every dollar budget and get on beans and rice, rice and beans. And I'm gonna be clear of this $33,000 in debt in less than 14 months. And your dad wins the argument because I wouldn't sell my house. I would not sell a house where you've got a great payment like this and a great interest rate and you like the house. I would not sell mortgage payment.

[Rachel Cruze]

I mean, yeah, your payment is I

[Dave Ramsey]

would not sell it. I would not sell it for 14 months worth of hustle. And I'd go, I'd lean in with 14 months worth of hustle and clean the student loan out and get rid of it. The only reason you're selling it is you didn't have hope that you were ever going to get rid of it otherwise. And I just gave you a 14 month detailed plan and Rachel did on getting rid of it. And if you get rid of it in 14 months, it'd be silly to sell your house

[Rachel Cruze]

because how much equity's

[Caller]

in it and it have so much. Well, that's that, that's the thing, is that the houses that are stuff that sold for what mine did around the time and are selling now are selling for between 200k to 220.

[Rachel Cruze]

And what'd you buy it for?

[Caller]

My loan. I bought it for 149, put seven down. So my loan was for 142.

[Dave Ramsey]

You sit in a sweet spot. Don't walk away from that.

[Rachel Cruze]

Yeah, I wouldn't.

[Dave Ramsey]

This is perfect. There's people all over America going, I could have a $200,000 house. Oh, my God, I didn't even know they existed.

[Rachel Cruze]

$800 mortgage payment.

[Dave Ramsey]

They do in Jonesboro, Arkansas, and a single lady making 54,000 owns it. Yeah, that's. I'm gonna. The house is the last thing I sell if it's the only way I have hope to get you out. And I got a lot of hope, a lot of hope mathematically that you're going to be out of this without it. So you can do this. Oh, and by the way, let's just fast forward what happens to your life when you don't have a student loan hanging over your head and a credit card hanging over your head and a car debt hanging over your head and you've learned to live on this budget. Oh, we can start putting money in that Roth 401K. Oh, then we start to talk about how fast does your income at 15% of your income turn you into a millionaire? Pretty stinking fast, kiddo. It's about 18 years is my estimate sitting here today. So you're going to retire with a million dollars in your 401k 18 years from now and maybe in that same house paid for house that by then will be worth 600,000.

[Rachel Cruze]

That's right, 600.

[Dave Ramsey]

Yeah. I just tripled it.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

18 years from now. Sure, why not?

[Rachel Cruze]

Yeah, why not?

[Dave Ramsey]

It's a $200,000 house. It's already doubled once.

[Rachel Cruze]

Yeah, just like that, right, Dave?

[Dave Ramsey]

Yeah, just like that. That's how you do it.

[Caller]

Just like that.

[Dave Ramsey]

Just. You just. You just move your nose from one side to the other, like make it happen. Yeah. So no, but that.

[Rachel Cruze]

But honestly. Yeah, the. That people selling their house as if their house is the problem. And for some people, their mortgage payment is huge. They have no margin, they're not able to get out of that. They have some equity. Yeah. And you're wanting to move anyways? Sure. Like there's a. Yeah, there's some reasons, but the amount of effort and time it takes for moving, selling, and then you're gonna have to go buy something else and it's gonna be double what. You know what I mean, you're gonna. That increase that you are on. The better half on is gonna be there waiting for you for the new house. So it's not worth leaving. So sorry.

[Dave Ramsey]

Anna, I want you. I want you to get a little dirt under your fingernails and get this done, baby, you can do this. I'm sorry. For your sake, your dad wins the argument.

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[Dave Ramsey]

to remain active on Boost Mobile Unlimited plan. Welcome back to the Ramsey show and the Fair Wins Credit Union Studio. Cheryl is in Boise, Idaho. Hi, Cheryl. How are you?

[Caller]

I'm good. How are you, Dave?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Thanks for taking my call. My parents are to the point in their life where they need extra help. They are 87, 88. And instead of putting them in an assisted living, I would like to take care of them. And that's what they would like. I am not old enough to retire yet. I have about five more years, but they're willing. If I retire, they're willing to pay me the same monthly wage that I make right now. And then they want to give me a $50,000 CD, which would make up. That's the difference of whether I retire right now or in five years. My question is they do not want my siblings to know. They're okay with them knowing about the monthly wage, but they do not want them to know about the cd.

[Dave Ramsey]

Why?

[Caller]

Because I have some siblings who I think, they think would be unhappy about it, and they don't want to stress. They don't like confrontation. They don't want anybody to be unhappy. I personally think that my siblings should be happy because the monthly wage is way less than if we put them in assisted living. So my husband is a little. We're a little concerned about causing trouble in the future. But my mom and dad said nobody knows about our CDs. It's under the table. Nobody will ever know about it because they don't. They don't know about that. So we're wondering what to do. Should we.

[Dave Ramsey]

You do what you want to do, but I do not. You do what you want to do, but I do not participate in deals that involve deception.

[Caller]

That. And that's what we feel like, too. We're like, I don't like the secretiveness of it.

[Dave Ramsey]

It's going to come back and bite all of you. And it's going to come out. It's going to come out in the settling of the estate, and they're going to accuse you of having stolen from your parents.

[Caller]

That's. That's what we're worried about.

[Dave Ramsey]

It's what's going to happen. I mean, yeah, absolutely. I mean, we've played this record on this show before.

[Caller]

Okay.

[Dave Ramsey]

I Mean, for sure. For sure. That's what's going. And so listen, if everybody can't get along, here's the other thing. If they want you to handle the confrontation, I would be willing to do that. Hey, brothers and sisters, here's what mom and dad want to do. Here's what's going on. I'm taking a pay cut, and I'm losing part of my retirement. To cover the retirement, they're giving me a $50,000 CD, and I'm taking a pay cut because I really want to go over there. It's a better quality of care for them. It's cheaper for the whole family, me doing it, than us putting them in a thing. So you get a deal. But I want to make sure you guys all know about it. You don't really get a vote. I'm just telling you we're doing it.

[Caller]

Okay.

That's there.

[Dave Ramsey]

And if you don't like it, pound sand. But this is what we're doing. Right?

[Caller]

Okay. So it's not. Don't put it out there and say, are you guys okay with.

[Dave Ramsey]

I'm not taking a vote. It's not their money.

[Caller]

I like that.

[Dave Ramsey]

It's not their money. It's. This is what mom and dad have decided to do, and I wanted to just make sure you guys knew it,

[Rachel Cruze]

that you're in the loop. That you're in the loop.

[Dave Ramsey]

So that you're in the loop and not a thing.

[Caller]

Okay. I like that way of approaching it that way. Yeah. There's no argument. It's just what it is so that it doesn't come out in the end. Okay.

[Dave Ramsey]

I like that. We have a family member that had a small business. One of the brothers was involved in the small business. The rest of the family was not. And when the dad sold the small business, he gave half of it to the brother, and he told everybody, but he didn't ask everybody's permission. He said, this is my freaking money and this is what I'm doing. He didn't say it that way. He just did it.

[Caller]

Okay.

[Dave Ramsey]

And then just said, this is what happened. And then you get to choose if you're the brother or the sister, then whether you're going to have a hissy fit about somebody else doing what they want to do with their money.

[Caller]

Okay. You know, that makes perfect sense. Thank you so much.

[Dave Ramsey]

Yeah. Just lots of clarity and kindness and legacy. What you described had no malice, no theft, no. No weirdness. It was a. You're probably coming out on the short end of the stick, except you really want to love your mom and dad well through this legacy stage of their life. And good on you.

[Caller]

That's perfect. That's exactly. I just have always promised them, nope, I will take care of you. And I'm the one that's willing to do it.

[Dave Ramsey]

Yeah.

[Caller]

And. And I get along well with them, so.

[Rachel Cruze]

Yeah.

[Caller]

Yeah.

[Rachel Cruze]

And almost as factual as it can be, too, Cheryl. It doesn't have to be all emotional. Right. It's like, here's the facts, here's the numbers, here's what's happening, and that's about it.

[Dave Ramsey]

Low.

[Rachel Cruze]

Drama low.

[Dave Ramsey]

You know, and let me go ahead and just. This is happening all over America at this moment, this scenario, and for you brothers and sisters out there, that the other sibling is the one stepping up and gonna do the doctor's visits and gonna be in the house making sure stuff gets cleaned up. Up and going to make sure the bills get paid and they end up with more than you, and you're not there. Shut up. Rise up and call your brother or your sister. Blessed. And say, thank you for taking care of my life. Thank you. Thank you for doing this. And you get whatever you want. You're the one on the front line. The rest of you out there, I mean, because this is like a normal. I hear this almost every week among my friends.

[Rachel Cruze]

You know, it's crazy. I saw a study, I just saw this actually yesterday, that the role within siblings, if there's an older sister, she usually is the one that ends up taking the responsibility.

[Dave Ramsey]

Yep.

[Rachel Cruze]

That's like the number one, like, predictability. If you are the older sister, the oldest child, period. Sometimes it's usually the daughter. The daughters are usually the ones that kind of gather, that end up kind of doing that and then talking about retirement, all of it was fascinating, but there's data coming out all around it, and there was a whole article on it, and it was. Yeah, that'll be Denise for you. For you and Mom.

[Dave Ramsey]

I'm on notice. It's not gonna be you.

[Rachel Cruze]

I know I will.

[Dave Ramsey]

I'm so shocked.

[Rachel Cruze]

Stop by.

[Dave Ramsey]

I'm appalled. I had no idea. Stop by. You'll do a drive by and what, give us a parade? Wave from the car?

[Rachel Cruze]

No, no. But that is, you know, and even, you know, when we look at friends and even, you know, even Winston's parents, like his, like our papa, my papa, my mom's mom, my mom's dad is still living. My husband's mom's mom is still living. Right. And it is. It's like a full force.

[Dave Ramsey]

Who Is taking care of them.

[Rachel Cruze]

Yes.

[Dave Ramsey]

And it's whoever's taking care of them. The rest of them need to support the one that's on the front lines and say thank you.

[Rachel Cruze]

Yep.

[Dave Ramsey]

And not be going, well, you're getting too much money. You got a cd. Oh my God, you petty people. Yeah. And it's not even your money. It's their money.

[Rachel Cruze]

And if you split it between all these siblings that Cheryl has, everyone probably gets 10 grand. And for 10 grand, take care of your. Have your parents being taken care of. You know what I mean? Like, it's not like it's a million dollars sitting in there and they're fighting over. Yeah, over that. So anyways, Cheryl, well done. I hope the. I hope the conversation goes well. And I have John Deloney in my head too. But there is a point when you do put a scenario out there of what's gonna happen. They are adults, your siblings, and they get to make a choice of how they respond. That's not up to you. That's not your responsibility to caretake their emotions either. It's what's happening. And they're gonna have to be adults and decide.

[Dave Ramsey]

And if they decide they're gonna come at my 87 year old parent after I make the announcement to them, then I'm gonna deal with them. That's the other thing. So you have to step in between and go. Cause your mom and dad don't do confrontation, remember? They'd rather do deception. No, that's not a good idea. Not a good idea at all. Because that confrontation is gonna come back and it always grows. Was it less? Parity says it has a high rate of resurrection.

[Rachel Cruze]

It will come.

[Dave Ramsey]

It will rise up. You have zombie confrontations wandering through your backyard, all from former dead things. Oh, wow, that's. Yeah, because you tried to bury it and it came alive.

[Caller]

Sam,

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[Dave Ramsey]

no specific outcome is guaranteed. Today's Ramsey Show Question of the Day is brought to you by why Refi defaulted student loans can derail your money plans, but why Refi helps borrowers explore refinancing options designed to get you back on track. Learn [e-mail] Ramsey that's the letter y r e f y.com Ramsey might not be in all states.

[Rachel Cruze]

Today's question comes from Gabriel in Delaware. We recently sold our house and did not anticipate buying another one for at least four to five years. We have $350,000 that we want to into the S&P 500 and index funds until we are ready to buy again. Several friends who invest regularly have suggested that because it is such a large sum and we should do a dollar cost average by investing 1/12 of the amount each month instead of investing it all at once. Do you agree with that suggestion or would you recommend investing the full amount immediately?

[Dave Ramsey]

If you understand what you're putting money into and you've looked at the track record of it, the s and P500, the math would tell you to put it all in at once. The only reason the dollar cost average is if you're emotionally not committed to this process. And the first time Trump decides to bomb Iran and the market goes down, you freak out, okay, because he's going to do a Trump thing. You can count on it. I don't know what the next one's going to be, but there's going to be a Trump thing. Sometimes it causes the market to go up, sometimes it causes the market to go down. And there's going to be other things that happen in the world other than Trump that are going to cause the market to go up and the market to go down. But here's an example. Let's say that you had $100,000 for round numbers and you put the money in at the beginning of 2024. All of it. At the end of 2024, the market, unusually high, went up 24%, 25%. So you'd have 125,000 if you put 100,000 in in January 1st and at the end of the year, you'd have 125 because it went up 25%. If you put it in a 12th at a time, you'd have about 111,000. But if the market went up or went down, you wouldn't be as scared. But you did not have it invested the entire year, the entire amount. And so you did not get what the market made the entire year. Now, if the market goes down 10 minutes after you put it in, which is kind of like Murphy's Law. Yeah, it's gonna. It's like God saying, this is a test of the emergency roller coaster riding society and see if you can ride the roller coaster or not. Right. Like you're gonna have a test, right? Ten minutes after you put the money in, the market's gonna go down. And so you just gotta say, I'm not gonna look at it. I'm just gonna put it in. And It's S&P 500. And so, you know, we'll see what it does right this year. Year to date, as of this broadcast, the market is up 7% and it's June. If it continues on that track, that's going to be about 14, which would be fairly normal. It's averaged about 11.8. Okay. And that includes the big dip after the Iran bombing.

[Rachel Cruze]

And I was back up, and we've had a couple of those. When you look at the chart, I mean, you can just Google S&P 500, right? You'll see. But. But the amount of recovery time, which I don't know the exact date, but It's. It's maybe 30 days, right? I mean, like, it's pretty quick on certain things.

[Dave Ramsey]

Depends on what the event is. But most of the time, this stuff comes back very, very quickly. Even the big newsworthy drops. Okay. One of the ones I always remember is when Covid hit in 20. Go back and look at the 20 charts. All right? From February and down into March, in less than 30 days, the market dropped dramatically. I mean, it didn't go in half, but it went way down. It lost, like, a lot. And everybody's freaking out because they're freaking out about COVID and they're freaking about everything, and they're freaking out about masks. We hadn't gotten around to vaccines yet, but at that moment. But they came later.

[Rachel Cruze]

Job markets were closing.

[Dave Ramsey]

I mean, people were worried about the businesses, worried about what's going to happen with the economy. And the market dove. Okay, it hit bottom in April, we didn't know that at the time. How long did it take it to recover what it lost from the COVID scare in the 30 days prior? 57 days it came back. So Covid wasn't even over. But we're up in September and the market has returned because the market figured out that there wasn't going to be 2 million deaths. And the market figured out that a whole bunch of this was a bunch of hooey. Well, and no, they did. I mean the market looked around and said we're not all going to die. And this is, you know, and the economy is not going to turn into a dust bowl. And, and, and, and, and so the market recovered. The market recovers common sense over time.

[Rachel Cruze]

Well, and you think back to 0708, which was a, obviously the massive, huge drop. And was that, how long did that,

[Dave Ramsey]

I mean that was, it took a, a bit. It went in half. The Dow Jones went from $13,000 to $6,500. Now how quick did it get back to $13,000? I'd have to go back and look, but I think it was almost a year.

[Caller]

Yeah.

[Rachel Cruze]

So that was probably the long, you

[Dave Ramsey]

know, that was a long one, but it also went in half.

[Rachel Cruze]

But even the Iran thing recently, right, that it dropped. It came back within like two weeks. It was not long.

[Dave Ramsey]

It was less than a month.

[Rachel Cruze]

Yeah, it was not long because we had just put money in there and

[Dave Ramsey]

then every time there's a news cycle on it, you'll see like this week if you go back and depending on when you're listening to this, but I'm doing this real time, you'll see a little blip right now and you know, latest news cycle on the same thing and you know, because they're bombing each other again for a minute. Right. So all this stuff, so all that stuff comes into it, all that to say the answer to your question is invest immediately if you have a four to a five year window because these wrinkles iron out if you give them time. No one gets hurt on a roller coaster. Except those that get off in the middle of the ride don't jump. Don't jump. So if you think you're going to jump dollar cost average because it keeps you from freaking out quite so much because you're like, oh, it went down, but I don't have all my money in. But if you're going to be one of those people that says I lost all my money in the stock market, which by the way is a lie, if you put money in An S and P. You have never in the history, in the last 150 years lost all your money. Money zero times that. The market went to zero. So you didn't lose all your money. If you put it in at the top in 2008, you're talking about, and it goes in half. Put 100,000 in, it's worth 50,000. You could say I lost half my money because I bought at the top and sold at the bottom. I'm the worst possible timer in on the planet, you know. And so. But even then you didn't lose all your money, you lost half of it because you're the worst possible timer on the planet. So. Yeah, so if you just ride it, you're gonna be okay. So if you're willing to do that and you're willing to understand that, then you're gonna make really, really, really good money as a long term investment in good mutual funds. And an S&P 500 is a great place to park stuff when you've got a four to a five year window. Though longer term, I'll go with different mutual funds, but I use the S and P for short term parks like that myself. And just while we're on it, this is a fun stat. I pulled this up the other day because I got curious about it. 23, the market went up 26%, 24% it went up 25%. 25, it went up 18%. Three very unusual years this year, as I said, it's up 7%. So if you compound those numbers in. So in four years, three and a half years to date, because we're all the way through those three calendar years and halfway through 26, when I'm saying this, that's 100% return on your money. So if you put in 100,000, you put in a million dollars in 23, it's now $2 million. If you didn't add anything to it and just sat there. Now that is a very unusual three and a half year period of time unusually good. I don't recall one. And I'm old and I've been doing this a long time. I can't, I can probably go back and look if there is another one, but I don't remember. Emotionally it doesn't come to mind anything that sweet in my memory. The three years in a row. 20 plus percent.

[Rachel Cruze]

That's crazy.

[Dave Ramsey]

Yeah, that's crazy. But I mean, I've got money sitting in the S and P and I got twice as much right now just because of that three and a half Year period of time, it doubled. Meanwhile, I've got my money in checking because I'm scared of the stock market. You'd probably need to do some learning because that's the kind of crap you're missing out on right there.

[Rachel Cruze]

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[Dave Ramsey]

Well, we wish we could get to every single call and question here on the show, but we can. There's only so many lines and so many minutes to be on the air with you. So if you do have a money question, we have an answer for you and it's head on over to the website and use ask [e-mail] Ask Ramsey. Ask Ramsey is our free AI tool. The only data in Ask Ramsey is Ramsey data. We took three, four years of this show and put every call and dump the answers in. We took all the books we've written, dumped them in. We took all the articles and there's thousands of them on our website and dumped them in. There's no Reddit in Ask Ramsey. If you don't know what Reddit is, it's a sewer. Okay? And so if you, you know, and so the way AI works is it can only spit out what you put into it. So if the data set is clean, the answer is clean. And the data set and ask Ramsey is 100% Ramsey clean. That's all it is. So you're going to get an answer almost as smart alec as you would here on the air and exactly the same stuff. And it's quick and it's easy and it's completely free. So ask your question [e-mail] click the link in the description. If you're listening on a podcast or YouTube, check out Ask Ramsey Jersey and tell your friends about it. It's completely free. It's just like calling into the show.

[Rachel Cruze]

They should. We should make a version someday where you can click. What type of, like, do you want a Dave answer? Do you want Rachel tell? Like, in the tone at which you get your answer, right? And it'd be like. I'd be like, hey, guys, it's all. It's gonna be fine. Here. Here's what you do. And Dave's like, you're stupid. Deloney's gonna be like, rachel, how's your dad?

[Dave Ramsey]

I lied to you, and I just don't think that that's smart. And Dave's like, stop it.

[Rachel Cruze]

You're dumb.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

And Deloney's like, how's your dad? How's the relationship with your dad? You know, Jade will be like, girl, let me tell you, I don't know. That could be good. I'll tell. I'll send an email after the show. Give him my idea.

[Dave Ramsey]

George will pull.

[Rachel Cruze]

Oh, George. Let me get the calculator out and

[Dave Ramsey]

we will figure this out together. He's going to nerd out.

[Rachel Cruze]

Love that investment calculator.

[Dave Ramsey]

All right, there we go. Michelle is in Raleigh, North Carolina. Hey, Michelle. What's up?

[Caller]

Up.

Hi, Dave. Hi, Rachel. I've been playing with Ask Ramsey, and I always imagine George Campbell is the one.

[Dave Ramsey]

That's all we needed.

[Rachel Cruze]

Michelle. Thank you. Thank you.

[Dave Ramsey]

Well, it's a very. It's a very precise answer.

[Rachel Cruze]

You will get a good answer, especially if it has to do with investing. So that's great.

[Caller]

But I wanted to ask you all this one. A quick background. I'm 32. My husband is 34. We make about 100k a year. We have 230,000 in retirement.

[Dave Ramsey]

Way to go.

[Caller]

Thank you. My husband and I are both military. He just gave money or GI bill to our two children, which are 5 and 2. And we have 10K and they're 529. And we're investing 200amonth into their 529. But I just wanted to see, like, is that enough? Should it be more Again, they would get 12 months of his GI Bill, which I think actually equates to more than just one school year.

[Dave Ramsey]

So his GI benefits for children's college education is one year of his income?

[Caller]

No. So the GI bill would cover 12 months of school for each child.

[Dave Ramsey]

Oh, I thought it covered all of it. Oh, cool. Interesting. All Right. So you got 12 months. All right, so you know what I would do is just say, all right, where are we going to be living, do we think when we retire from the military, in other words, where we'll be the state school, that we are the resident. You want to guess what state?

[Caller]

In North Carolina.

[Dave Ramsey]

North Carolina. You'll still be there. Okay. All right, so you know, University of North Carolina or whatever, that's a state school. All right, and what is the tuition? $14,000 a year. What's room and board? Probably about double that. Probably about that much again. So probably 25, 30,000 bucks times four. So 120,000 bucks. Oh, minus one year because military's picking that up.

[Rachel Cruze]

Times three. Yeah.

[Dave Ramsey]

So times three instead. So now we got 90 or 100,000 bucks. So our 10,000 at 2 years old, what's it going to turn into by the time we get there? Plus our 200 bucks, is that going to turn into, you know, 100,000 bucks? You're going to be pretty close.

[Rachel Cruze]

Yeah. But also looking at the rate of tuition increases, what the average has been year to year, because it's, it's, it's one of the wildest.

[Dave Ramsey]

And I would underfund the 529 and overfund some of your other investing that you could use at that point. Because what happens a lot of times is by the time you get there, two or three things can occur. One is they get scholarships for whatever reason. A, they applied for them. B, they're academically or athletically gifted. And if they get a scholarship, the amount of their scholarship can be removed from the 529 with no penalties or taxes. Okay, so, but that money now is set free instead of being trapped in the 529, growing tax free. So that's one thing that can occur. Another thing that can occur is you guys are sitting on a pile of money by then because you're doing a great job. We're talking 15 years from now, you know, what's that going to look like? You're going to be millionaires easy. And you're going to have other money laying around. And you might decide all kinds of different things. Oh, see, they decide not to go to college. They want to go and be in the trades and get a certification in whatever it's called 15 years from now. We might call it AI today. And they want to be a tech person and they don't need a four year degree to do that. They want to be in cybersecurity and you don't need A four year degree to do that. You don't need a four year degree to be a programmer, for God's sakes. Right now for sure. And so on.

[Caller]

Right.

[Dave Ramsey]

And so that's, you know, maybe they want to, maybe they want to be a diesel mechanic. And it's a two year certification, by the way, diesel mechanics right now making 120 a year, which is more than a lot of lawyers make. So, you know, let's just think through what is it they're going to do. They may or may not be four year University of North Carolina. I recommend college if they study something that's actually usable. You don't want a degree in left handed puppetry, you'll end up being a barista. But you do need to get. But if you get a good solid degree and something that's usable in the marketplace, I still recommend college. So that's how you plan it out. You just look out there and go, what's it cost? And then you back out what you've already got covered and then go, I want to come up a little short because I'm going to have other money.

[Rachel Cruze]

Yeah. Because the hard thing, especially Michelle, which is such a great position to be in, that you guys are looking at baby steps four, five and six. Like you're looking at college and you're able to fund it. And because of how young your kids are and how fast that money can grow, is that. Yeah, that, that's a scenario where it can be overfunded. So you do want to just be watching the numbers and make sure for majority of people out there, that's not a, that's not an issue for them. Right. They're trying to save for retirement and their kids are 16, 17, and they don't have money for college. So you're on a good scenario, but you are one that you do want to be looking at. Like Winston and I, I mean, we funded a ton, Amelia's 11, and we slowed down hers just because of all this. Just to say again, I don't know what she's gonna do. And financially, whatever's in there, that will grow for the next, you know, six years. And then if it's not enough, can we cash flow behind it? But that's because we've been doing the baby steps for 15 years too. So it's, it's all. But it's something to think about, especially. Cause your kids are so young.

[Dave Ramsey]

Michelle, I love this question, by the way. Thank you for your service to the country. I'll give you one other thing. Go ahead and start brainwashing them on two things. I mean, parent them. Okay, Thing number one is that you want to brainwash. I mean parent them on. Is that they are going to engage in some kind of continuous learning after high school. They need to learn something beyond high school if it's a trade or if it's college, whatever. So this is your college fund. This is your college fund. This is your college fund. Show them when they're 12. This is your college fund. Which presupposes in their little mind that they're going to college. That's brainwash number one. Brainwash number two is where you go to school. Does not matter. So you're not going to school at a super expensive school.

[Rachel Cruze]

School.

[Dave Ramsey]

We're not paying for it. So we went to the University of Tennessee. We're in Tennessee. Sharon and I did. We taught our kids to say go Vols. Early Go Vols. Presupposes you're gonna be a Vol. All three of them were.

[Rachel Cruze]

The brainwashing worked. Okay, guys, let me ask you something. What would it take for you to switch your bank? Because if you're still earning next to nothing on your savings, you need to check out Fairwinds Credit Union. And I know what you're thinking. It might sound like a hassle. Moving your direct deposit, updating bills, getting a new debit card feels like a lot. But here's what most people don't realize. Staying where you are could be costing you hundreds of dollars every year. Y'. All. The average savings account pays less than half a percent. So let's say, for example, you got $20,000 saved. You might earn around $70 a year. But with a fair winds high yield Savings account earning 3% APY or more, that same money could earn you over $600. And that's real money that you can use towards the baby's steps. So don't let temporary comfort keep you stuck. Check out the smart bundle from Fairwinds Credit Union. You get a high yield savings account, a no fee checking account, and the Ramsey Beweird debit card. Go to Fairwinds.org Ramsey to learn more and make the switch today. That's Fairwinds.org Ramsey insured by the NCUA.

[Dave Ramsey]

Elizabeth is in Pennsylvania. Hi, Elizabeth. How are you?

[Caller]

Good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So my husband recently lost his job and he was working in the trades, but now he's considering reopening a landscaping and home services business that he ran a couple years ago when we first got married. But he's started to pick up some side work and it's showing some strong promise. He's making about double of what he would normally make in his weekly. For his weekly paycheck for his normal job. So our situation is a little bit different now than when we first got married. I'm a stay at home mom and I'm nervous about him taking this business on full time, which is what he wants to do. So he's pretty much stopped applying for jobs. And I want to support his. His goals and what he wants to do, but I'm just concerned about putting all of our financial security on a very seasonal business since it, you know, didn't produce a lot of income in the winter last time. And I'm just curious what your thoughts are.

[Rachel Cruze]

Well, he's making. How long has he been making double? How long has he been doing it?

[Caller]

So he just lost his job a couple weeks ago. So this is just like very recently.

[Rachel Cruze]

Dang.

[Dave Ramsey]

So if he can, good for him. Double his income for six months, that's the same amount he would make in one year.

[Caller]

Right.

[Dave Ramsey]

Why would I be nervous?

[Caller]

I'm just, I'm. Because last time when. And like I was his accountant, I did all those numbers for taxes and everything. So I just am getting like the accounting flashbacks to when he had his business. When we first got married, we pretty much relied only on my income because he didn't. We didn't save for the winter and everything. I will. He didn't like know to do that, I guess, the first time around. And he does have that mentality.

[Dave Ramsey]

Why did the business fail last time?

[Caller]

So it didn't fail. We actually moved across the country. So he closed it down because we. We just recently moved back to Pennsylvania in the area. So that's why he was, you know, now with this job loss, he's thinking about reopening it.

[Dave Ramsey]

Okay, well, a paycheck coming from someone else who's out hustling and trying to keep a business open is no more stable than you out hustling and trying to create some business. They're both unstable. They're only as stable as your ability to leave the cave, kill something and drag it home. You just have the illusion that someone else does it. Oh, until they fire you or lay you off because they can't figure out what to do at their place, which is what just happened. So the security is an illusion. What? I don't want to engage in on your. I want to come alongside you. What? I don't want the two of you to allow to happen is that you ignore trends that are negative. Okay. But also don't want you to say, well, last time we didn't save up anything for the winter. And so it was tight. It was tight during the winter. Well then don't do that again. You know, I mean, but if you're making double, why would you not figure out a way to handle that and handle winter?

[Caller]

Right? I guess I'm just nervous. That trend.

[Dave Ramsey]

You're nervous about something that hasn't happened.

[Caller]

Yeah, because we have a daughter and I have to think about her.

[Dave Ramsey]

You're nervous about something that hasn't happened. I'm thinking about her too.

[Rachel Cruze]

It happens the first time around what you're saying, Elizabeth. But now can you not shift mentality and say, okay, going forward, as long

[Dave Ramsey]

as we're making double, I'm happy. Is that not correct?

[Caller]

Yeah, I'm. Yeah, I guess I'm just a worry word.

[Dave Ramsey]

As long as we're making double. Yes, you're a worry word.

[Rachel Cruze]

And then, Elizabeth, I would say though, in the winter months, November, December, January, February, there's something else you could be doing for four months.

[Dave Ramsey]

Two things have a plan to create income during winter and B, save up. Act like the squirrel, Put some money in the nest, get ready for winter. If you're making double, set half your money aside. And then winter is. You're a fat squirrel.

[Caller]

Okay, so you would not recommend him

[Dave Ramsey]

applying and no, not if he's making double. In two weeks the guy's already doubled his piss poor job. I don't want another one of those jobs. I love this one. But get ready for winter. He has a baby to feed and a worried wife. So let's get ready for winter. Let's double down and get bank half our check. Let's live on what we were living on when I had the horrible job

[Rachel Cruze]

from doing this last time. Elizabeth, can you guys calendar out? And when did business start slowing for you guys in Pennsylvania? Is that October? Is that September? When does it start going into winter months for you guys?

[Caller]

I would say like end of October, early November.

[Dave Ramsey]

What kind of work is he doing?

[Rachel Cruze]

Landscaping?

[Caller]

Yeah, he's doing like landscaping and home, like home services, which is what he did before.

[Dave Ramsey]

Define home services.

[Caller]

It's pretty much mostly landscaping, but like in the. We'll do some snow removal and stuff in the wintertime. But that's very dependent on whether or not we get snow.

[Rachel Cruze]

Okay, but he has that.

[Dave Ramsey]

But what else can we do around landscaping? Tree removal in the winter?

[Caller]

Yeah, he does tree removal.

[Dave Ramsey]

You can do that all winter. It's better to do it in the winter.

[Rachel Cruze]

And maybe, Elizabeth, for a period of time, maybe for this first year, just to settle some of this, that he's like, hey, I'll go, you know, drive ups for three months during the holiday season.

[Dave Ramsey]

No, what, just listen, make double between now and September and set half of it aside.

[Rachel Cruze]

But he can be doing something in

[Dave Ramsey]

the winter, just snow removal and stump removal and tree removal and yeah, holiday

[Rachel Cruze]

driving if he needs to, whatever it

[Dave Ramsey]

is, but figure it out. But I mean, here's the thing. If you can make double, it's real simple math. Six months gives you all 12.

[Rachel Cruze]

But that doesn't. But Elizabeth, you're not. That doesn't, that's not. It's computing mathematically to you, but you're feeling something different. And why is what I'm wondering, is it because he didn't do a good job? You guys didn't do a good job saving last year. Do you think you have the ability to save this time around?

[Caller]

Yes. And I mean, we've been, I want to say we've been doing like your baby steps and stuff and we've been in a much better place financially. And I'm just nervous that to see that progress potentially stop if things don't work out perfectly.

[Dave Ramsey]

How old is your baby?

[Caller]

She's a year old.

[Dave Ramsey]

Okay. And so, you know, you got to look at him and he has to hear loud and clear that we have to do this in a way that makes sure that the family is okay. Meaning we're going to make double and bank half of it. We're going to pay our taxes on time. We're going to have some alternative things that we do during the winter to make sure that we don't even need that savings, you know, and honey, if you're not doing that, I'm going to go from worried to a problem. I'm going to be a problem for you if we are doing that. I'm going to be your cheerleader and support you. But if you're going to engage in a pattern that puts. It looks like this family is going to be in jeopardy, me and you are going to have a problem. So let's keep me cheerleading. Let's work together and let me do my accounting stuff and we're going to work real closely together. We're not going to go along four months and not talk about this. We're going to talk about it every month. We're going to look at the trend lines on the revenue on the business like we're running a business and we're going to say, okay, this type of business is making us more profit. This type is not. Let's engage in that and let's start thinking about do we need to buy a piece of equipment for winter, Winter snow removal, snow blower, what do we got attachment for one of the mowers? I don't know what this. But let's just start running a business and anticipating what is coming and let's do it together and talk about it. We're not going to just go along and like, I'm living my dream and my family gets hungry. We're not doing that. And I don't endorse that. But I also don't want you to have the illusion that self employed is less stable than employed. Especially when you're making twice as much. It's more stable. So I like his, I like him. He's a hard worker.

[Rachel Cruze]

I mean, that's impressive though.

[Dave Ramsey]

He turned that around real fast. Really fast.

[Rachel Cruze]

And he knows what he's doing. He's done it before.

[Dave Ramsey]

The actual doing the thing he's good at. But she's got the accounting skills.

[Rachel Cruze]

That's right.

[Dave Ramsey]

So she can come alongside and they can have adult discussions about, about how the business is creating profit and what we're doing with the profit. We're doing our quarterly estimates. We're not going to get behind on taxes. We're making sure all bills are paid. We're keeping the profits, you know, set aside, getting ready for winter. We're going to squirrel. Squirrel money. That's what we call it. The South. Welcome back to the Ramsey show in the Fair Winds Credit Union Studios. I'm Dave Ramsey, your host. Thank you for joining us. Rachel Cruz is my co host today. Jim is in San Jose, California. Hi, Jim, how are you?

[Caller]

You good? Hi, Dave. Hey, I had a question. I had a question. I'm getting married and my fiance is 50. I'm 60. We're both retired and based on our wealth differences, we should probably have a prenup.

[Dave Ramsey]

What is the wealth differences?

[Caller]

So she's got 3 million, no debt, and I've got 45 million, no debt.

[Dave Ramsey]

Okay. Yes, you should have a premium prenup.

[Caller]

Yeah. So in the, the question revolves around what's in the prenup, what should go in it. So, you know, she, she wants to feel like we're building something together in our marriage going forward. And she talked about slowly maybe moving some of my separate property into community over time, you know, like 5% a year, you know, over 20 years. You know, at first I thought that was fine, but then I started looking at the numbers.

[Dave Ramsey]

How much of your. How much of your 45 million is real estate date?

[Caller]

Just a couple million.

[Dave Ramsey]

Okay, so what is the rest of it?

[Caller]

So the rest of it is stocks, mainly.

[Dave Ramsey]

Okay.

[Caller]

Yeah.

And.

[Dave Ramsey]

And the way some people do it, and you can do whatever you want. It's kind of like a. Will you make it up? And what if you both like it? You've got your deal. Right. But what some people do is we a. We exit with what we entered, 3 million 45. And any growth from then on is ours. Some people do that or a percentage. You know, a ratio of some kind. Any growth from this point forward is 70% gems and 30% hers or whatever. I just made that up. Okay. And so. But if. If yours is only growing for you and hers is only growing for her, that does kind of leave a negative light on what she's concerned about. And she's concerned fairly, then we need to grow a life together from this point forward. The main purpose of this is that she should not come out of this with 20 million bucks two years from now. You know, that's what I was afraid of.

[Caller]

Like.

[Dave Ramsey]

Yeah, that's the main purpose. So we. We exit with what we entered with and then have a formula for how the growth. Growth would be dispersed.

[Caller]

Okay.

[Dave Ramsey]

And I don't think 50, 50 growth is fair because she would. If she made. If you made 10% on your investments, you'd make four and a half million a year and she'd make 300,000.

[Caller]

Right.

[Dave Ramsey]

So, but I mean, if you want to be generous on it and say, you know, 70% of the growth from this point forward on our whole thing is mine and 30% on the whole thing is yours or whatever, make up a number. I don't care. But I mean, so the two things you have to address is leaving with what we entered, and then how do we build a life together and address the growth?

[Caller]

Right. Okay, that sounds. That sounds pretty reasonable.

[Dave Ramsey]

Yeah. But I would not. I would not set up a roommate situation where what yours is, yours is mine is mine. And we have to decide who pays for the mustard in the refrigerator. Oh, that'll drive you nuts.

[Caller]

Yeah.

[Rachel Cruze]

Do you guys have choices?

[Caller]

Yeah, we both have kids. We have teen kids, and I have a couple older kids.

Okay.

So I set aside some of the money in trust for my kids, you know, so that's. That's already, you know, separate.

Okay.

You know that we're not talking about splitting that up.

Okay.

It's just I saw the 5% a year and that seemed reasonable, you know, a little bit each year.

[Dave Ramsey]

But the problem is there's no reason to.

[Caller]

Not the problem, probably. Yeah. There's no reason to. It only benefits her if we get divorced and it ends up being a lot of money in 10 years.

[Dave Ramsey]

But if you took a percentage of growth, it's going to have the same effect. If she gets a percentage of growth without changing the name on the asset. If she gets a percentage of growth from this point forward and you get a percentage of growth from this point forward, unless it's exactly in ratio of 3 to 45. And I wouldn't do that.

[Rachel Cruze]

You'd give her more? Just.

[Dave Ramsey]

No, I mean, if you gave. Yeah, I would give more than that. So, you know, so if you said, you know, we got 48 million to deal with, you get 3. 48, I get 45. 48.

[Caller]

Yeah.

[Dave Ramsey]

Of the growth. That's a little heavy. I probably would lighten up on that personally, but. So that's like she would be getting about 6% under that scenario of the growth, but not of the asset.

[Caller]

Right. Not the principal or the principle.

[Dave Ramsey]

That is your starting point as of today. That's how most people address it. Now, you can sit down with an attorney. They may have some other ideas if they're used to doing these things. We don't generally recommend prenups except in extreme situations. And yours, my man, is an extreme situation. Okay. And it's really good to talk about it and. And think it through. And here's the other thing. I would be sure I get under the numbers and address the concern. Meaning that's a form of pre marriage counseling, in other words, where you say, okay, what is it you're trying to address when you say you want 5% moved?

[Rachel Cruze]

What does that do for her?

[Dave Ramsey]

What is it that you're wanting there? What are you trying to do? And if we did it this other way, does that address it as well? And you know, that kind of thing. So the thing I do, the thing I really. Whatever structure you use, make it from this point forward that you're building a life together in some manner.

[Caller]

Yep. Yeah, I agree with that. Yeah.

[Dave Ramsey]

That's the danger of a prenup where you just turn your marriage into a roommate.

[Rachel Cruze]

Yeah. Because I mean, you know, you could have another 25 great years of marriage

[Dave Ramsey]

with her, you know, and 14 grandkids.

[Rachel Cruze]

Yeah. Yeah.

[Dave Ramsey]

Each, you know, and that aren't related to the other one at all.

[Rachel Cruze]

Yes.

[Dave Ramsey]

Except by this Marriage. And so, yeah, yeah. I've got a friend that has four kids, and he's on a second marriage, third marriage, and she has five kids, and they've all got kids. There's a bazillion people in these two combined families now. And you've got to address that because there's a lot. You know, just Thanksgiving becomes a thing. You know, you gotta. You gotta think through yours, mine and ours, and there's not.

[Rachel Cruze]

That probably is the wisest way with the kids. Like in his scenario, drop something to trust.

[Dave Ramsey]

But if the prenup says the first 45 is mine anyway, and we're only dealing with the growth, then it can go to wherever he wants it.

[Rachel Cruze]

That's right. Yep.

[Dave Ramsey]

Yeah. And that can be in the. That can also be in the will, you know, so. And trust does that, but it's not 100% wise. That's very interesting, Jim. Good discussion. Prenups have become a hot topic around here. Off the air.

[Rachel Cruze]

I was just telling you, I was doing an interview. They brought it up in the interview.

[Dave Ramsey]

And the guy doing it on another guy's podcast.

[Caller]

Yeah.

[Rachel Cruze]

And he was like an anti prenup. And he said now, over the years, he has shifted to more of a pro because.

[Dave Ramsey]

Yeah, prenup.

[Rachel Cruze]

Yeah, pro prenup. And I do wonder if people. If there's, like, a discouragement of just marriage in general. Like, seeing the stats that you. You know, half the time it's not going to work. You know what I mean? And, like, do you prep for that? Where's the wisdom in that versus the attitude going in? Preparing for the end of the marriage is not great. You know what I mean? Like, it just. Well, the way you slice it is tough.

[Dave Ramsey]

Yeah. The other thing is the marriage statistic that half don't work is incorrect. If you start adjusting for a few variations, variables. If you have four years of education, if you have $50,000 a year or more in income, if you are shared in your religious beliefs, if you fill in about five more things and it goes to about 90% probability of success in marriage. So it's. If you get married after you're 22 months old. No, I'm kidding.

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[Dave Ramsey]

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[Dave Ramsey]

Garrett is in Washington DC. Hey Garrett. What's up?

[Caller]

Hey, I'm Dave. How about you?

[Dave Ramsey]

Better than I deserve. How can we help?

[Caller]

Well, I just have. It's kind of a vague question, but I'm just kind of looking for some advice on which way to go. I've got myself in some financial waters, I guess you could say. And I guess one of the things too is, you know, during that way I wasn't, I guess, open all the way with my wife about it. I mean, actually, I guess I just read Rachel's article about financial infidelity. Just the other day she sent me. Wife had been done. So I'm just kind of, you know, looking for advice on which way to go. I don't know if we should try to do bankruptcy or risk other ways out living way. So just looking for a little advice in which way to turn.

[Dave Ramsey]

Okay, so you ran up credit card debt that she didn't know about, Is that what you're saying?

[Caller]

Yes. You're pretty much, yeah.

[Dave Ramsey]

How much?

[Caller]

You know, there's probably 35. The hard part is, honestly I never really kept track. I've been very bad at budgeting until about a couple of weeks ago.

[Dave Ramsey]

Okay, why were you not telling her? Were you running all the bills and you just couldn't pay them all and you didn't tell her that you're putting on cards or what was the deal?

[Caller]

Yes, pretty much. And then we've got assignments, very. And his health insurance every month's 1400. And then wife had an injury, a medical injury two years ago. And so it's been hard for her. And so I just. I guess my thought was, you know, I was doing good, you know, trying to, to keep some stress, but I think it made it a lot worse.

[Dave Ramsey]

Yeah. Yeah. Okay. That's. That's one way this happens. Yeah. And it's just like I'm trying to do it this, doing the best I could and I was trying to keep it off of you. So I Didn't tell you, but that's a mistake. Okay. Gotcha. And what's your household income, Garrett?

[Caller]

It's right around 7,400amonth.

[Dave Ramsey]

Take home pay?

[Caller]

Yes, sir. Yeah.

[Dave Ramsey]

Okay. And does your wife work outside the home or is this just she.

[Caller]

You. Just me.

[Dave Ramsey]

You said you had a special needs child.

[Caller]

No, he's just. He's just having a lot of health problems. He needs. Have some surgery coming up. And how old is. He's 28 years old. Yes, sir. Yeah. Yeah. Your.

[Dave Ramsey]

Your child is 28 years old and has health problems?

[Caller]

Yes, They've been going on for many years. We've been many places trying to figure out what the answers are and. And he knows. Haven't really got the answers to, you know, is he.

[Dave Ramsey]

Is he a functioning adult? Does he support himself?

[Caller]

He does as much as he can. Yeah, he's having some issues right now with arms and things like that, which. He's in a lot of pain all the time.

[Dave Ramsey]

I'm asking, does he live in an apartment and support himself?

[Caller]

Oh, no, she lives with us.

[Dave Ramsey]

Okay, so you take care of him. Is he. So he's disabled to the point. Is he able to work?

[Caller]

Work? He's not. No, he's not. He's not even able to drive or do some of the basic things right now because of the pain he's in.

[Rachel Cruze]

Okay. And this has been going on for years?

[Dave Ramsey]

28?

[Caller]

Yes, ma', am, it has. It's been going on for a while, and it shouldn't to the point where it keeps getting worse. And, you know, we're trying to find the. We've been all over the country trying to find some of the answers. I think we found he's got some issues with his ribs, and we're hopefully going to get those fixed and maybe that'll get things on the right track. Okay. He doesn't want to. It's just that. Yeah, I got the pain that he's been in.

[Dave Ramsey]

Okay. I'm sorry. What a deal. Okay. Somehow I had in my head, this was a baby. Okay. And it threw me off. Okay. All right, now, so the 35,000 in debt on the credit cards that she didn't know about. What other debts do you guys have?

[Caller]

We have a mortgage. That's pretty much the only other one.

[Dave Ramsey]

You don't have a car payment or a student loan loan?

[Caller]

I do have a student loan, but other than that, that's it.

[Dave Ramsey]

How much do you owe on the student loan?

[Caller]

I think it is roughly 14. I think there's two of them. There's one from, like, 10, 15 years ago.

[Dave Ramsey]

$14,000?

[Caller]

Yes, sir. On altogether.

[Dave Ramsey]

Okay. And any other debts? No. Car debt?

[Caller]

No, sir. No.

[Dave Ramsey]

Okay. And what's your mortgage payment?

[Caller]

Which? 2580.

[Dave Ramsey]

Okay. All right. Okay. Well, there's several parts of this, and they're all interconnected, so we can't leave one out. Part number one is you and your wife are carrying a burden with your son's health. You're emotionally carrying the burden. You're logistically trying to help him find solutions and get him to those solutions. You're not doing it by yourself. She's not doing it by yourself. The two of you are carrying that together. That way, the only way we can carry the emotional weight of something like that is together. The money is the same thing. She needs to carry the emotional weight of the money also with you. Okay?

[Caller]

Yes, sir. Yes.

[Dave Ramsey]

And so the way that's gonna work is. And it's also gonna give her actually more peace because she's going to know what's going on, and she's not going to suspect or wonder if there's a hidden credit card debt anymore, because she's going to be involved from this point forward.

[Rachel Cruze]

All accounts, everything?

[Dave Ramsey]

Yeah, everything. So we're going to put you on the EveryDollar budgeting app. We're going to give it to you guys, and both of you are going to sit down and spend $7,400 on that app and say, this is what this month looks like. Like what we're going to do with this money. We're going to put this much on groceries, this much on the house payment, this much on the utilities, lights, and water, this much on medical bills for our son, this much on whatever it is we're going to just label out. Every one of those dollars is going to have an assignment before the month begins. We're both going to look at it. We're both going to give it a vote. And when both of us vote on the budget, now we have a budget, and then we agree to live on that budget. If anything comes up that's not on that budget, we have to sit down together and change it. That's both of you carrying the money emotionally, and that's not that stressful. It's less stressful than what you've been doing. Unknown. Unknown and hidden is more stressful than known. Then you just look at this and say, I'm cutting up the credit cards. We're never borrowing money again. And we have $50,000 in student loan and credit card debt that we need to clean up and we make 140 or $150,000 a year and we're gonna go do that. Stop your 401k temporarily. Stop saving temporarily. Do you have any money in savings?

[Caller]

I don't know, sir.

[Dave Ramsey]

None at all?

[Caller]

No.

[Dave Ramsey]

Okay. Do you have any in 401ks in retirement?

[Caller]

I do have a retirement plan, but I actually would. The app, it actually recommended stopping putting anything in that a couple weeks ago and I stopped that thing.

[Dave Ramsey]

Okay, good, good. So you're already focused on that.

[Rachel Cruze]

When you look at the math of all of this, if you guys can find an extra 2,000amonth, which sounds like a lot, but if you limit your lifestyle, right. And maybe even work a little extra or your wife maybe gets a part time job or something, just two grand a month, you guys are out in two years. So.

[Caller]

Yeah, I can work overtime all the time.

[Rachel Cruze]

Yeah, it is, yeah. This, it is possible for you all, but also with the asterisk of knowing that medical bills is part of the equation too. And so it might slow down the process a little bit, making sure that your son is being cared for for sure. But if you guys really just say, hey, hey, no matter what, we're finding $2,000 a month and no matter what,

[Dave Ramsey]

we're gonna live on what comes in. We are not borrowing money.

[Rachel Cruze]

Yep. Yep. And you stay out of that ever again.

[Dave Ramsey]

You cannot get out of a hole while digging out the bottom.

[Caller]

Yep.

[Dave Ramsey]

So cut up the credit cards tonight in front of her, sit down and do the everydollar budget together and lay this out and you can walk straight through this. You'll be able to do it. And that gives her the benefit of rebuilding trust because she knows that we've got 100% transparency here. And the longer that we work together and have 100% transparency, the longer, the more the trust will be rebuilt. And because you know this was not in malice or you were buying yourself something, this was, you were simply trying to keep stress off of her. And it had the unintended consequence of adding stress instead of did. Wasn't your intent, but that's where it ends up. So you learned your lesson on that one. So now we just ever. All cards are face up. You know, there's no, no, no cards under the table. Everything's on top and everything's face up. And. And we're going to deal with it together. And it's less, it feels like it's more weight, but it's less stressful than the unknown for her. So you help her by carrying the weight of the medical issues with your son. She helps you by carrying part of the weight of this. And we've, we're a team and we're gonna work on both of these things together and be successful. If you're a business owner who's serious about growth, you've got to be at entree Leadership Summit 2027. Summit is our world class leadership conference where you will learn from the people who have influenced the way we lead at Ramsey. You'll also connect with like minded business owners who are facing the same challenges as you. To get your tickets for May 2027, go to entreeleadership.com summit. Buying or selling real estate's a big deal for most people. It's the largest transaction they ever do. And so you need a pro in your corner, not someone who got their license three weeks ago. I don't care if your mother plays bridge with them. You don't buy real estate with them unless they sell a bunch of houses. That's the deal. Period. So get a high quality, high octane, high protein real estate agent if you're going to buy a property or sell a property and then you'll have a good experience because you have somebody knows what the flip they're doing because it's not their first ride on the cabbage truck too. If you're. If it's your first ride you want someone's driven it before. Hello. Not road in the back. So here we go. Yeah. Go to ramseysolutions.com and you can find a Ramsey trusted agent that we recommend real estate pros that we have vetted that are high octane, high protein that get her done. Melanie is in Phoenix, Arizona. Hi Melanie, how are you?

[Caller]

Hi. Doing well.

[Dave Ramsey]

Good. What's up?

[Caller]

Okay. I really want to buy a beach condo and it's in Mexico. That's the thing. That's why I'm asking. I just want to know if I can justify paying cash for it.

[Dave Ramsey]

Do you have the cash?

[Caller]

I have the cash.

[Dave Ramsey]

How much is it?

[Caller]

350.

[Dave Ramsey]

That's cheap. Good.

[Caller]

Well, no kidding. Okay, good.

[Dave Ramsey]

Okay. And what's your total net worth?

[Caller]

Okay. Oh, I didn't expect that question. I thought you were going to ask my income.

[Dave Ramsey]

That's okay.

[Caller]

My house is paid for. My house is paid 4, 6 or 700. My little condos, couple hundred thousand and then those, that's it for property. And then you know, I have maybe, maybe, you know, that's the thing. My income is a little bit that. But you know, a few hundred thousand.

[Dave Ramsey]

Okay. And how much is your nest egg?

[Caller]

Pardon? Pardon? The income is not a few hundred thousand. I know you're used to big rollers. My income's little. 60,000.

[Dave Ramsey]

Okay, but your. Your nest egg is how big? Where are you getting the 350 from?

[Caller]

Well, so that's interesting. It's actually from my father. It's. It's from my inheritance. And I thought it would be a beautiful thing to do with the money for the. All the kids and, you know.

[Dave Ramsey]

Okay, so that's. The total inheritance is 350, and you're going to put it all in a beach condo.

[Caller]

Well, I know that sounds terrible. That was the house that, you know. But I do have a few. Few hundred thousand that, you know, just make making a little income.

[Dave Ramsey]

How old are you?

[Caller]

64.

[Dave Ramsey]

Okay. All right. We're in Mexico. Just out of curiosity. Not that it really matters.

[Caller]

Well, it does, but Puerto Pinasco. So really it's only an hour into Mexico. So you're driving the three hours in the U. S. And then you're crossing the border. It's one hour, one drive, kind of loaded with Americans. So.

[Dave Ramsey]

Yeah. Yeah. Okay. Now if. If you just lost the condo after you bought it, is your life still okay?

[Caller]

Yeah, yeah.

[Dave Ramsey]

Everything doesn't burn down around you because you've got. You're pretty much in the same situation. Yeah. Okay. I don't think you're gonna. I don't think you're gonna lose it. That's not what I'm suggesting. Now, in Mexico, so American citizens are not allowed to own real estate. It goes into a Mexican trust. Okay. And the state runs the trust. They use a notary. And the notaries in Mexico are way different than a notary in the states. The notary in Mexico is like a big deal government job, and they build the trust out, and it's very complicated. It's like 73 pages, and it's crazy. And you don't technically own the house. The Mexican government technically owns the house, and you're the beneficiary of the Mexican trust. Okay, Right. So it's a little weird, but there's billions and billions and billions of dollars of American money in these trusts in Mexico. The likelihood they're going to go through and take all these American monies away and not have an invasion from the north is very low. So there'll be a problem. Okay. So I'm not worried about it, you know, at all in terms of the. You being scammed or something like that. As long as you've checked out the particular Condo you're going into making sure stuff like the HOA fees aren't going to go through the roof and that kind of junk. So, you know, make sure you got all that nailed down and that the condo.

[Rachel Cruze]

The ongoing cost, too.

[Dave Ramsey]

The ongoing cost to manage it may make the purchase price look small by the time you're through.

[Caller]

Well, I've kind of looked at it, and it looks like. And I'm very conservative and usually push things up just because I don't like surprises. 12. I'm saying 12,000 a year for all the expenses and things like that.

[Dave Ramsey]

And who's covering that? How are you covering that? You make 60.

[Caller]

Correct. But so I was planning on renting it. So most people that rented, they were used to in the past years renting it, like, you know, 50, 50,000. Now it's way, way down. People are freaking out. They say now half of that, 25,000. But let's just say I really just want to use this for family.

[Dave Ramsey]

Okay, you want to cover the expenses with the rental and the rest of its family?

[Caller]

There you go. Yes. Just, you know, just make what I can make and pay that.

[Dave Ramsey]

Yeah, that's probably harder than the salesperson is making it sound.

[Caller]

Okay.

[Dave Ramsey]

But it can be done. It can be done.

[Caller]

Okay.

[Dave Ramsey]

I mean, I have friends with stuff in several different neighborhoods around Cabo and Puerto Vallarta and maybe even a few in Tulum and some of those spots. And they all get the pitch that the rentals are not easy. It's a process, and it's basically a VRBO situation, and it's kind of a pain in the butt. But you can make your expenses back if you lean into it a little bit and you'll probably be okay. I think I would do it if I were you.

[Caller]

Oh, my God. I told my whole family he's gonna eat my lunch. Oh, my God. I can't believe this. Holy Toledo. Okay.

Oh, my God.

Okay. Okay. But wow. Okay. There is one little thing I will

[Dave Ramsey]

say is that just learn to save. Margarita and fiesta. Okay.

[Caller]

Oh, my gosh. Okay. Well, I don't really want to say anymore, actually, because I don't want to argue with you.

[Dave Ramsey]

I don't want to take a chance to change your mind. I'm getting off the line. I'm going to get off the line while I can. Goodbye.

[Rachel Cruze]

Yeah, I mean, adios, Dave.

[Dave Ramsey]

Adios, amigo. Hasta.

[Rachel Cruze]

I'm heading to Mexico. Oh, my gosh. That's so funny. But, yeah, the emotional exercise of if you had the money there and then it's gone tomorrow. Are you still okay? And that's such a key point.

[Dave Ramsey]

It's just an emotional exercise. It's also an actual. Because if you know what people don't think about when you're buying something in a foreign country is it's not in the United States people, the laws aren't the same and people don't view the law as the same and they don't view private property rights as the same. And.

[Rachel Cruze]

Oh, you were okay.

[Dave Ramsey]

So I'm not suggesting that the Mexican government is gonna jerk the rug off of from under all of these tens of billions of dollars of American money.

[Rachel Cruze]

I thought it was the exercise of put the money in the middle of the table and burn it. Can you. Are you still okay?

[Dave Ramsey]

If the thing goes down, I mean, if it goes down in value, it could go. That community could become cartel crime ridden and the condo be not inhabitable.

[Rachel Cruze]

Right.

[Dave Ramsey]

That could happen. That could happen. That's more likely to happen than the Mexican government scarfing this under the name of socialism. But I just got back from Argentina and two generations ago, the state came in and took private property away from everybody left and right. And in the name of, you know, the little people needed the money and so they took it away from the big people. Hello, socialism. And so we forget in America that because we've never experienced that, that that's pretty much commonplace in a banana republic. And so Mexico, I honestly believe, is very stable. I really don't think it's a bad investment. I think you'll make some money.

[Caller]

Money.

[Dave Ramsey]

But you need to stop and think that this is a different culture. It is not Anglo, it's Latino. And there is a difference in the way people think. And there's a difference in the way the laws are written, the way the government functions, everything. And so the police force, everything's different. So you just need to be aware of that and embrace those differences. Enjoy the differences, but don't go in there naively. Like, I bought a condo in Mexico and it's the same thing as buying 1 on 30A in Florida. It ain't. Yeah, it's different. And so's the rentals. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through reading money problems and figure out what to do next. Now you can get that same kind of help anytime with ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com. Our scripture of the day is psalm or Psalm 113:3. From the rising of the sun to the place where it sets, the name of the Lord is to be praised. William Arthur Ward said, opportunities are like sunrises. If you wait too long, you miss them. April is with us in Lynchburg. Hi, April. How are you?

[Caller]

Hi. I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Well, I was curious about how to prepare financially for our child. That's on the way. So basically I was working, and then in November, we had a miscarriage, and so I decided to take some time to heal. And so I wasn't working when we were expecting this child that's due in two months now. And so we're just relying on one income right now, and we have our monthly mortgage as 1,000, and the monthly income is about 3,000 to 4,000, depending on if my husband's able to work extra hours. So we're just trying to be in a better position. We have used some of the tools that you have, like the EveryDollar app to get out of debt. We just have $7,000 in debt right now for an H vac system on the size of the mortgage.

[Dave Ramsey]

Congratulations on the baby, April. And you're due in two months?

[Caller]

Yeah.

[Dave Ramsey]

Okay. And how old are you guys?

[Caller]

I'm 31 and he's gonna be 36.

[Dave Ramsey]

Okay.

[Caller]

All right.

[Rachel Cruze]

What does he do for a living?

[Caller]

He works for prepress, so it's like a printing company, but he makes about 24 an hour.

[Dave Ramsey]

And what were you doing before you took time off for the child?

[Caller]

I. I was a career navigator, so I would help people figure out what type of positions would be a good fit and help them get into training.

[Dave Ramsey]

Okay, and what were you making doing that?

[Caller]

It was similar. I think it was about 21 or 22 an hour.

[Dave Ramsey]

Okay. All right. Are you planning to go back to work after the child comes?

[Caller]

Not immediately after. Just because we don't have child care.

[Dave Ramsey]

Well, you don't have enough money coming into the house to pay this house payment. Yeah, your house payment is on his income alone is not something you're going to be able to do. You could pull it off for a few months, but it's not going to work over the next three years, you're going to get yourself in a pickle. And so either your all's income, his, yours, ours is going to go up within the next 10, 12 months or so, or you guys need to start talking about selling this house.

[Caller]

Gotcha. So that's the other part. So basically my mom. Mom gave us $6,000 to buy down the interest rate when we bought the house two years ago. And then with this all happening, she contributed some more money for us to be able to finish the basement. And that's what we were going to use to help us with like extra income. But it was supposed to be finished in March and it's still not done.

[Rachel Cruze]

Yeah. I would be pausing any type of renovation and I just would make sure the mortgage is paid and there's food on the table. I think that's your priority versus finishing the basement.

[Caller]

Yeah. Okay.

[Dave Ramsey]

You can't afford $1,800 a month with $3,000 coming in. That doesn't work. It can work for a little while, but it will not work long term. And so if you're making the decision to stay at home, you're simultaneously making the decision to sell the house. Unless his income is going to go up dramatically in the next few months. Months. And I don't think it is.

[Caller]

What would you say? How much income should we.

[Dave Ramsey]

Your house payment ought to be a fourth of your take home pay. Not more than half. And this is way more than half.

[Caller]

Yeah. Okay. I go back to work once the baby's born or he a different type of position or additional income.

[Dave Ramsey]

Yeah. And. And you know he's gonna have a lot of extra hours somewhere or you all sell the house. I mean, it might be more important for you all to be. For you to be at home with a baby than to live in that house. I don't care which one you do. I just am not going to participate in you being in denial about this math. I want you.

[Rachel Cruze]

Yeah. He needs to be making.

[Dave Ramsey]

I want you to face it head on.

[Rachel Cruze]

Yeah. I mean, around six grand would get y' all to that good place from an income perspective with that type of mortgage. So if that's through you doing some work right after maternity leave and all of that or his income going up, but yeah, it's going to be. Yeah. I mean, he brings in 3,000 April. Right. And it's a $1,700 mortgage payment.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

It's not a lot of money.

[Dave Ramsey]

Babies are the best thing ever to happen. But they don't get a pass on math.

[Caller]

Okay.

[Dave Ramsey]

You still have to do math. Even with us. The awesomeness of babies.

[Caller]

Right. I'm sure the diapers are going to be expensive. And other Things that's probably not going

[Dave Ramsey]

to kill you, but it's going to put a pinch on everything.

[Rachel Cruze]

Yeah. You'll feel it for sure.

[Caller]

Yeah, yeah, yeah.

[Dave Ramsey]

But I'm. Congratulations. I'm still happy for you. I still think this is awesome. I just want you guys to address this so that the house doesn't turn this financial situation into a nightmare.

[Rachel Cruze]

Yeah. And your housing situation, April, I mean, even if you guys sold and rented somewhere for three years, that's okay.

[Dave Ramsey]

It's not the end of the world.

[Rachel Cruze]

Yeah. And then you go buy something later. Like, it doesn't have to be a home ownership conversation either. Right. So you guys want to look at the totality of your life and say, hey, what are our priorities? What income will be coming in that meets those priorities? And then how do we live a life out of that? That's kind of the backwards way of thinking about it.

[Dave Ramsey]

And it's sweet that his mother gave you some money, but she gave you money, given this change of a baby coming, to put you into a trap. She didn't mean to trap you, but

[Rachel Cruze]

you're trapped in the house, you mean?

[Dave Ramsey]

Yeah, I mean, if you don't. If you can't sell it because Mommy helped buy the house. Mommy gave us the money for the down payment. So Mommy or.

[Rachel Cruze]

No, toward the interest. She said $6,000 toward the interest.

[Dave Ramsey]

So we can't get rid of it because Mommy is, you know, we're locked in here of relationally. But then Mommy. Mommy isn't a blessing then. If Mommy's trapping you into a nightmare.

[Rachel Cruze]

No.

[Dave Ramsey]

So sorry. Mommy. Marcus is in Clarksville. Hey, Marcus, what's up?

[Caller]

Hey, Dave, thanks for taking my call. Longtime listener for Some Color.

[Dave Ramsey]

Great.

[Caller]

I just.

I want to hear from you. How you doing, Dave?

[Dave Ramsey]

Better than I deserve. What's up, man?

[Caller]

I love it. I love it. Hey, so I'm active duty, military. I am retiring medically after 12 years, 4 months and 14 days of active duty service. We are moving from Clarksville, Fort Campbell to Florida to be an assistant pastor. Our monthly take home pays and go from $12,000 to just over $7,000. We are wanting to buy a house, but my wife and I are at an impasse. She wants a big house with a large mortgage and a low interest rate. I want a small house with a low mortgage with an average interest rate.

Rate.

What should we do?

[Dave Ramsey]

Well, you don't have a choice on the interest rate. Both are going to have an interest rate. That's. I mean, big houses don't have lower interest rates. Than small houses.

[Rachel Cruze]

So are you thinking like a 15 versus 30?

[Caller]

Well, no, I'm meaning the lower interest rate would come from a brand new build that the builder would pay the incentive at a 3.99% rate, whereas the national average I think is mid 6%. So 3. And basically 4% versus 6%.

[Dave Ramsey]

6% buying down the thing 4% on the whole package for the entire mortgage?

[Caller]

Yes, sir. Yes, Sir.

[Dave Ramsey]

On an arm.

[Caller]

350,000. Is that an arm versus what's that?

[Dave Ramsey]

Is that an adjustable.

[Caller]

No, it is not an arm. It is not. No, sir. That is for the length of the loan.

[Rachel Cruze]

Wonder if they're getting desperate.

[Caller]

I want a smaller house.

[Dave Ramsey]

That's some. There's some serious margin in this house.

[Caller]

Average rate.

[Dave Ramsey]

Yeah, this guy's riding a large check

[Caller]

with a average rate.

[Dave Ramsey]

Yeah, he's right. The builder's writing a large check. So this thing's got a lot of margin in it. Profit in it. Okay, 350,000. And then you're talking about buying something. Now, do you own a home there in Clarksville?

[Caller]

We do, yes, sir. You know, and so we have.

[Dave Ramsey]

I would recommend doing neither one. I'd recommend moving there and renting for a year and continuing the discussion until you get on the same page. The page you're trying to get on is not the size of the house. The page you're trying to get on is how much debt we're gonna be in and how long it's gonna take us to pay it off. That puts the Sarah the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.