Don’t Look for a Hack When You Need a Grind

Summary

Episode Summary: The Ramsey Show – "Don’t Look for a Hack When You Need a Grind"

In this insightful episode of The Ramsey Show, host Dave Ramsey, alongside co-host Rachel Cruz and their team, delve into various listener questions surrounding financial challenges and wealth-building strategies. The episode emphasizes the importance of disciplined financial management over seeking quick fixes, aligning perfectly with the episode's title: "Don’t Look for a Hack When You Need a Grind."

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1. Navigating Financial Dependence on Parents

Caller: Lorena from Dallas, Texas
Timestamp: [04:32]

Lorena shares her predicament of feeling trapped in her parents' household due to their financial struggles. Although she contributes by not paying rent, her parents rely on her presence to maintain their current living situation, which is under threat due to impending property demolition.

Notable Quote:

• Dave Ramsey: “But there's no net loss to them when you leave. It's a net gain.” [06:00]

Advice Given: Dave encourages Lorena to reassess her responsibilities and emphasizes the importance of resetting expectations. Rachel highlights the emotional burden Lorena feels, suggesting she recognize that aiding her parents continuously isn't sustainable for either party.

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2. Managing Savings Amid Pregnancy and Medical Challenges

Caller: Jennifer from Phoenix, Arizona
Timestamp: [10:13]

Jennifer discusses her current financial standing: being in Baby Step 3B and 4, dealing with an unexpected pregnancy, and facing a significant medical condition. With a robust emergency fund and substantial savings for a house, she's contemplating whether to keep her funds in high-yield savings or invest them to maximize returns.

Notable Quotes:

• Dave Ramsey: “You are a master saver. Saver. Your amazing saver.” [13:27]
• Rachel Cruz: “You're good. Run some tests. And if you're in the same position in 18 months, you're okay.” [16:23]

Advice Given: Dave reassures Jennifer of her strong financial position, advising her to maintain her savings in high-yield accounts given the current uncertainties. Rachel supports a cautious approach, recommending she hold off on major financial moves until after her medical situation stabilizes and her baby arrives.

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3. Handling Car Loans After an Accident

Caller: Zach from Charleston, South Carolina
Timestamp: [16:38]

Zach recounts a recent car accident that resulted in his vehicle being totaled. With an outstanding loan balance, he's seeking advice on whether to pay off the remaining debt and how to proceed with obtaining a replacement vehicle.

Notable Quotes:

• Dave Ramsey: “You cannot keep yourself from saving money. You're amazing. Well done.” [16:54]
• Rachel Cruz: “The goal would be to get to buy a car in cash.” [18:03]

Advice Given: Dave advises Zach to use the settlement to pay off the remaining loan balance, thereby avoiding additional debt. He suggests purchasing a reliable, albeit inexpensive, replacement vehicle with any remaining funds to ensure financial stability without engaging in prolonged debt cycles.

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4. Balancing Further Education with Financial Stability

Caller: Gus from Boston
Timestamp: [23:35]

Gus describes his situation after a layoff from a well-paying biotech job. Contemplating whether to pursue a master's degree to enhance his qualifications or to rely on his substantial savings and possibly take on debt to cover educational expenses.

Notable Quotes:

• Dave Ramsey: “You're holding a straight flush here. So, yeah, I'm going to work Ken Coleman's system.” [28:09]
• Rachel Cruz: “Run some tests. And if you're in the same position in 18 months, you're okay.” [13:48]

Advice Given: Dave advises Gus to leverage his three years of experience over further education, suggesting that practical experience often outweighs additional degrees in securing employment. He recommends utilizing networking strategies, such as those outlined in Ken Coleman's "Proximity Principle," to enhance job prospects without incurring additional debt.

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5. Parents Considering IRA Withdrawals for Home Improvements

Caller: Matthew from Omaha
Timestamp: [37:14]

Matthew brings up his parents' intention to withdraw $100,000 from their traditional IRAs to fund a deck construction project. Concerns revolve around the tax implications of such withdrawals.

Notable Quotes:

• Dave Ramsey: “You can't get out of them. There’s no hack on that.” [37:30]
• Rachel Cruz: “You can't.” [37:53]

Advice Given: Dave clearly states that withdrawals from traditional IRAs are taxable and emphasizes there are no loopholes to avoid these taxes. He suggests exploring alternative financing methods, such as using rental income from their real estate properties, to fund the deck without incurring additional tax liabilities.

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6. High Housing Costs Leading to Financial Strain

Caller: John from Pittsburgh
Timestamp: [75:42]

John explains that his mortgage payment consumes nearly half of his monthly take-home pay, forcing him to live paycheck to paycheck and rely heavily on credit cards for essential expenses. He's considering selling the house to alleviate this financial burden.

Notable Quotes:

• Dave Ramsey: “You can't do that. That's why you're dying. You're not starving to death.” [76:38]
• Rachel Cruz: “Just breathe for two to three years.” [82:21]

Advice Given: Dave strongly advises John to sell the house, highlighting that a mortgage should not exceed a quarter of one's take-home pay. He underscores the unsustainable nature of John's current financial commitment, urging him to prioritize financial peace and stability over maintaining an unaffordable home.

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7. Success Story: Jennifer’s Journey to Debt Freedom

Caller: Jennifer from Ramsey Solutions Team
Timestamp: [64:11]

Jennifer shares her inspiring journey of paying off $204,000 in student loans over six years. Her strategy involved working multiple jobs and leveraging her role at Ramsey Solutions to stay motivated and disciplined.

Notable Quotes:

• Caller Jennifer: “For me, it was making extra income, definitely.” [71:32]
• Dave Ramsey: “Way to go. I love it. I love it. I love it.” [72:32]

Advice Shared: Jennifer exemplifies the effectiveness of the Debt Snowball method by aggressively paying down debts and increasing income through side hustles. Her story serves as a testament to the show’s philosophy that disciplined effort and multiple income streams are key to achieving financial freedom.

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Closing Thoughts

Throughout the episode, Dave Ramsey and Rachel Cruz reinforce the importance of disciplined financial management, leveraging existing resources, and making informed decisions over seeking quick financial fixes. The discussions underscore the show's core message: building wealth and achieving financial peace requires consistent effort and strategic planning, adhering to proven financial principles rather than temporary hacks.

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Notable Quotes with Timestamps:

• Dave Ramsey: “You can't get out of them. There’s no hack on that.” [37:30]
• Rachel Cruz: “You are good. Run some tests. And if you're in the same position in 18 months, you're okay.” [16:23]
• Dave Ramsey: “You are a master saver. Saver. Your amazing saver.” [13:27]
• Caller Jennifer: “How much did you pay off?” [64:11]

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This episode serves as a comprehensive guide for listeners facing various financial challenges, offering practical advice grounded in proven financial strategies. Whether dealing with familial financial dependencies, unexpected medical expenses, debt management, or investment decisions, The Ramsey Show provides actionable insights to steer towards financial stability and wealth-building.

Transcript

[Dave Ramsey]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. I'm Dave Ramsey, your host, Rachel Cruz, number one best selling author many times over. Ramsey personality and host of the Rachel Cruze show. My daughter is my co host today. Open phones here at 888-825-5225. You call with your questions about your life. That's what we're here for. The call is free and some say the advice is worth exactly what you pay for it. So we're glad you're here, Rachel. Big day today. Another book launch. The third Rachel Cruz kids book is out. Ding, ding, ding, ding, ding, ding, ding.

[Rachel Cruz]

It is. I know, I'm so excited. So I'm glad when I can share. So this is the kids book on generosity. And I went with the sharing element because for our little ones, teaching them to open their hand and share is kind of that first step in generosity. But it concludes my series. I did one on contentment, gratitude and this is the final one for generosity. So this is the three kids book series and the third one is out.

[Dave Ramsey]

Today and they've all been bestsellers. I'm glad for what I have. I'm glad for where I am. That's contentment.

[Rachel Cruz]

I'm glad for where I am is gratitude.

[Dave Ramsey]

Gratitude. And the first one's Contentment. And then this one is generosity. I'm glad for when I can share. And it's a three book series and this is the third one. So it's [e-mail] in the bookstore. And again, Lauren just continued to these world class illustrations make the book.

[Rachel Cruz]

Yes. Lauren Gallegos is the illustrator for all of them and she just, I mean did a fabulous job. So yeah, it's a, it's a really sweet book and it's short. You're welcome, parents.

[Dave Ramsey]

Yeah. For those of you who do bedtime stories that are nine years long.

[Rachel Cruz]

Yes.

[Dave Ramsey]

You don't have that here.

[Rachel Cruz]

And on each of these books I always tried to add an element for the adults at the end. So just a sweet reminder, right when it comes to contentment, there's that and then this one for gratitude. That that joy in life really is the gifts that God has given us from our brothers and our sisters and you know, all of that to understanding that when we give it is a joy unlike anything else that money can buy.

[Dave Ramsey]

It's the most fun you'll ever have with money. We had Jimmy Dartz on yesterday. Who's got the big YouTube channel?

[Rachel Cruz]

Oh, yes.

[Dave Ramsey]

Giving money away. And we were talking about the power of generosity. And we teach you guys, as you know, to live like no one else so that later you can live and give like no one else. And Lauren even snuck that onto the license plate of one of the cars in there. So you'll have to look for the hidden. The hidden meanings.

[Rachel Cruz]

There's a little Easter eggs in there.

[Dave Ramsey]

There's a few, few, little, few. Little Waldo.

[Rachel Cruz]

Call me Taylor Swift, but I have my own Easter eggs.

[Dave Ramsey]

Where's Waldo? Yeah. So there it is. Live like no one else on the license plate. Probably need to get one of those for one of our cars. For real? That'd be pretty cool. I never thought of that because. But nobody knows what it means unless they know what it means.

[Rachel Cruz]

Well, it's just letters on that one. Yeah, totally.

[Dave Ramsey]

It's nuts, but yeah. Anyway, good stuff. So I'm glad when I can share. It's here, it's on sale. Oh, just in time for Christmas. And it's 1999 at Ramsey Solutions. Calm in the store. And of course you can order it anywhere. You can order great books as well. The other two books in the series are only 1799. So you can pick up all three of them for what, 50 bucks roughly, and a little over $50. And you'd have a wonderful little set for the grandbabies or for the babies, whatever it is. Good stuff. And speaking as the grandfather who has a few grandchildren that might be accused of picking out the longest possible book, some of those Dr. Seuss books go on for days and they have a way of finding. This is the one I want to read. Papa David translation. I want to stall bedtime as far as I can. And so, uh. Doesn't work with any of the three of these. These three all get to the point and you go to bed.

[Rachel Cruz]

Yeah, they're pretty fast and they rhyme. They're very sweet. Great message. But yeah, we get to the point. So you're welcome parents for that good stuff.

[Dave Ramsey]

Lorena is with us in Dallas, Texas. Hi, Lorena. Welcome to the Ramsey Show.

[Caller (Lorena)]

Hey guys. How are y'all?

[Dave Ramsey]

Better than we deserve. What's up in your world?

[Caller (Lorena)]

Good, good. I just have a couple of questions, so I'll start off with that. I feel like I cannot move out of my parents house due to financial struggles that they're. That they are having and I'm also having as well.

[Rachel Cruz]

Okay, so what causes you not to be able to move out because of their Financial struggles. Walk me through that.

[Dave Ramsey]

They need your rent, Basically.

[Caller (Lorena)]

Yes, sir. And so since I moved back in, I've been trying to get rid of my debt and start following the baby steps.

[Dave Ramsey]

But you pay them rent.

[Caller (Lorena)]

No, I do not.

[Dave Ramsey]

Oh. How would it affect them negatively if you left?

[Caller (Lorena)]

So there, right now, they're in a rental property, and their city is actually planning on demolishing the area that they are in.

[Dave Ramsey]

Is this the house you live in?

[Caller (Lorena)]

Correct.

[Dave Ramsey]

How would it affect them negatively if you left?

[Caller (Lorena)]

Because I don't think they could. You know, I don't think they could move into a new house without you're.

[Dave Ramsey]

Not paying them any rent.

[Caller (Lorena)]

That's true.

[Dave Ramsey]

But there's no net loss to them when you leave. It's a net gain.

[Caller (Lorena)]

Yes, that is true. Because whenever they do have to move, eventually the rent that they're paying will be up more.

[Dave Ramsey]

Oh, yeah.

[Caller (Lorena)]

Than what they're paying right now.

[Dave Ramsey]

And then you would pay. You would start paying rent.

[Caller (Lorena)]

Correct.

[Dave Ramsey]

To help them do that. Okay.

[Caller (Lorena)]

Correct.

[Dave Ramsey]

Bad solution.

[Caller (Lorena)]

Yeah. So that's why I feel kind of stuck. And I'm not stuck.

[Dave Ramsey]

It's just you got. You need to. Everybody's got to reset their expectations in this.

[Caller (Lorena)]

Right.

[Dave Ramsey]

They're in an unrealistically low rental rate on a house that's being demolished.

[Caller (Lorena)]

Correct.

[Dave Ramsey]

So they cannot rent the same house three streets over. They can't afford it.

[Caller (Lorena)]

Correct.

[Dave Ramsey]

So they need to move to a different area.

[Caller (Lorena)]

Yes, sir. So that's why I just feel stuck. I feel like they're looking at me and it's not him, it's them.

[Dave Ramsey]

They need to move to an area they can afford to live. They're like grownups and stuff, right? Yeah. Maybe they need to act.

[Rachel Cruz]

I mean, it. But. But in a family dynamic, I mean, I think Dave's calling out the dysfunction in that, that they're leaning on you to help them in their situation.

[Dave Ramsey]

Well, or somebody made you feel guilty. I don't know whether you took it on yourself or they did.

[Rachel Cruz]

Yeah. So that. That's what I would say to you is to. Is you have to be able yourself because that is not your responsibility, even though the dynamic may feel like it is. And there's always a weird element with adult kids when their parents are in trouble to feel like they've helped me. They raised me. They gave me a roof over my head growing up, so I in turn, feel obligated, indebted to help them. Is that true?

[Caller (Lorena)]

Yes. No. That's exactly what happened. I had recently moved back five months ago. And since they're not letting me pay any rent, that's why I feel obligated to help them.

[Rachel Cruz]

Because they gave you that gift.

[Caller (Lorena)]

Correct.

[Rachel Cruz]

Right. Well, and that's. And that's a false obligation.

[Caller (Jennifer)]

Yeah.

[Dave Ramsey]

That wasn't the deal.

[Caller (Lorena)]

Okay.

[Dave Ramsey]

The deal wasn't you move back in and so you're indebted to us for the rest of your life.

[Caller (Lorena)]

Right.

[Dave Ramsey]

That wasn't the deal. You move back in, don't pay us any rent. Get yourself straightened up. It's a gift we can give you right now. We can't continue giving you that gift because they're making us move to demolish the house. And so now we've got to move to an area that's. That's not even what we want to do because we can't afford to live here anymore, Right?

[Caller (Lorena)]

Correct.

[Rachel Cruz]

Lorena, how old are you?

[Caller (Lorena)]

I'm 26.

[Rachel Cruz]

Okay.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

Yeah. I just want to give you that permission to have that freedom to build your own life. And what it's going to force you to do as well is to say, oh, crap, I don't have mom and dad as a safety net anymore because it's not good for them, and ultimately it's not good for me. So I'm going to have to make hard decisions as well. And that's a tough spot. And I'm sorry. I'm sorry. That's all coming to a head because of the situation. But I would look at it as a gift in that way.

[Dave Ramsey]

Five years from now, when you guys are all emotionally and financially sustained without leaning on each other, you're going to be better people and better for each other. This is the Ramsey Show.

[Rachel Cruz]

Hey, guys, this is Rachel Cruz for Helix Sleep. And I got to say, Winston and I love our Helix mattress. Winston likes a firmer mattress than I do, but differences like that are why Helix has lots of mattress models to choose from. So whether you sleep on your side, your stomach, or your back, Helix has you covered. And one of the best parts for us was taking the personalized Helix Sleep quiz. They matched us with the perfect mattress, and it only took two minutes. We also got the Glaciotex cooling cover, which pulls heat away from our bodies while we sleep. For the coolest, most comfortable sleep we have ever had. Not to mention our mattress and Topper were all easy to set up, and the quality is incredible. Plus, Helix offers a hundred night trial, and all mattresses come with either a 10 or 15 year warranty. But here's the best part. The Helix Black Friday sale is happening now. Get 25% off all mattresses and get a free bedding bundle on select products. Go to helix sleep.com Ramsey that's helixsleep.com Ramsey with Helix Better sleep starts now.

[Dave Ramsey]

Rachel Cruz, Ramsey personality, is my co host today. Open phones at 888-825-5225. Jennifer is with us in Phoenix, Arizona. Hi, Jennifer, how are you?

[Caller (Jennifer)]

Hi.

I'm doing well. Thanks for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller (Jennifer)]

I wanted to see what y'all would do with a, I'm in baby steps three, B and four. But then I found myself in storm number one. Surprise. I'm pregnant. And.

[Rachel Cruz]

Oh, congratulations.

[Caller (Jennifer)]

Thank you. Storm number two. Five weeks later, I suffered a major medical event. Found out I have an underlying condition that will put me at risk for more major medical events. And we can't really address the problem for a year or two until baby gets here and we can do a lot of testing and investigate it. So I had been saving a bunch of money for a house, but it had been sitting in a high yield savings account. But those rates are declining. So would you guys leave it in high yield savings or would you move it into, like a brokerage account to maximize the yield? Because I feel like that goal is now three to five years down the road.

[Dave Ramsey]

How much money in your emergency fund and how much money in this fund we're talking about?

[Caller (Jennifer)]

My Emergency fund is 50,000. It's 12 months.

[Dave Ramsey]

And this money is how much?

[Caller (Jennifer)]

My house fund is currently at 150,000.

[Dave Ramsey]

Okay, so you have $200,000. So this medical procedure, what's the financial dent that this might make?

[Caller (Jennifer)]

That's a million dollar question. Literally, a million dollar question. I don't know.

[Dave Ramsey]

Well, you have health insurance.

[Caller (Jennifer)]

Yes, I do.

[Dave Ramsey]

Okay.

[Caller (Jennifer)]

And I have very good health insurance, but I'm also out of work and currently on unprotected leave because of everything going on. So all of that.

[Dave Ramsey]

What do you mean, change?

[Caller (Jennifer)]

I make 140 a year.

[Dave Ramsey]

What's your husband make?

[Caller (Jennifer)]

I don't have one of those.

[Dave Ramsey]

Okay. All right. And so you're unprotected. You're not making any money. You don't have an income right now.

[Caller (Jennifer)]

That is not a true statement. I had a bunch of sick time and vacation time that.

[Dave Ramsey]

I thought you said unprotected leave. I thought you meant your own family leave act with no pay. Okay, so again, what you've got to ascertain, not from a fear base, but just some actual analysis, is, is this a $50,000 problem? You're facing or a $200,000 problem out of pocket with your health insurance, with your potential loss of income that'll be unpaid once you run out of these other things. And I kind of think you got a lot of savings here.

[Caller (Jennifer)]

So I shouldn't tell you about my brokerage fund or my sinking fund.

[Dave Ramsey]

You are a savings maniac, girl. I love it. How much is in the brokerage account and how much is in the sinking fund?

[Caller (Jennifer)]

The brokerage fund is 80,000.

[Caller (Gus)]

Mm.

[Caller (Jennifer)]

And the sinking fund is 30,000.

[Dave Ramsey]

What's it sinking for?

[Caller (Jennifer)]

A car, vacation, travel.

[Dave Ramsey]

Okay. All right. So now we have $310,000 to weather this. I think you're okay. Breathe. Right.

[Rachel Cruz]

Well, I think that. I think the. The scary thing, Jennifer, is you don't have a lot of answers. And you won't have a lot of answers till after the baby comes. Correct?

[Caller (Jennifer)]

Absolutely.

[Rachel Cruz]

With the health situation. So I. I'm a no. There's no panic to do anything with this money. I would just keep everything. We would tell you to pause everything anyway, since you are pregnant, there's nothing else to, like, majorly do. And I would wait till baby comes. You're good. Run some tests. And if. And if you're in the same position in 18 months, financially, you're okay. And then you can make some big, you know, decisions. But I think you can take a portion of this and put it in a brokerage account. Would you tell her to go get a house right now? Dave's kind of smirking. I feel like.

[Dave Ramsey]

No. No, I wouldn't. I would sit where I am and just. You could throw it in a high yield savings, and it doesn't matter what you do with this money for 18 months. But you weren't going to put this brokerage account down as the down payment on your house, were you?

[Caller (Jennifer)]

No, that was.

[Dave Ramsey]

Come on.

[Caller (Jennifer)]

That was a retirement fund.

[Dave Ramsey]

That's not a retirement fund. It's a brokerage account.

[Caller (Jennifer)]

Well, where I worked previously, they didn't offer.

[Dave Ramsey]

How much do you have in your 401k super saver, 500. Okay. Come on. Okay. You need to put. When this is over and you take your 3B 150K, add the brokerage account to it for your down payment on the house. I want you to put 230 down on the house when this is over. Right now, I don't want you to do anything. I just want you to lean into the security that you've built for yourself. You are a master saver. Saver. Your amazing saver. But you're taking it too far. But for today it's okay that it's too far until you get past this storm. So when you get past this storm, though, buy the house. Yeah, buy the house. And put all this money towards a stinking house.

[Rachel Cruz]

You know, seriously, after the realization of the medical expenses and the lost income.

[Dave Ramsey]

Whatever'S left out of the brokerage account, out of the 150. But a 12 month emergency fund. No, stop that. You know, plus a brokerage account. Just because I didn't have a retirement before, but I got a half million over here. You're in. Good. You're fine. You're gonna be so rich, it's unbelievable. You can't keep yourself from saving money. You're amazing. Well done.

[Rachel Cruz]

So, yeah, your challenge, Jennifer, is gonna be resting in the peace of what you've created. Yeah, I mean, that's it. So this so, so lower the stress. Enjoy this pregnancy bre. Just like Dave was saying, like, you're good, you are good. Don't make big moves right now. Have the baby. But between now and baby, like you're, you are, you are secure and great.

[Dave Ramsey]

Yeah. Let's get the medical thing in your rearview mirror and then let's get the savings trim back down to where it should be. And that's that, that's what I would do if I woke up in your shoes. Zach is in Charleston, South Carolina. Hi, Zach, how are you?

[Caller (Zach)]

I'm doing all right. Thank you all for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller (Zach)]

So basically I was in a car accident not too long ago and the guy totaled my car. And the settlement check is about 6,000 and I still have 4,200 or 4,500 left over on the car. So I was wondering if I should pay off the car and then basically just wait till I can get another car or get another car and then like slowly chip off the debt.

[Dave Ramsey]

You can't. They're not going to give you the check unless you give them the title for the total car. And you're not going to get the title for the total car unless you pay the loan off. That's a lien on the car.

[Caller (Zach)]

Well, they already gave them the title and they, they gave me, they're sending me the check today, so I bet.

[Dave Ramsey]

It'S net of the payoff. They probably sent the payoff to the bank.

[Caller (Zach)]

Oh, okay.

[Dave Ramsey]

Because you got a lean on the car title, Right, right, right. Yeah. Unless you did something that was not a lien on the car title. But either way, let's pretend that that I'm. That I'm wrong on this for some reason under South Carolina law and I'm missing something. Then when you get the check, pay off the debt.

[Caller (Zach)]

Okay.

[Dave Ramsey]

And then you've got like a thousand bucks left or whatever it is. 1500 bucks left to go buy a beater car.

[Caller (John)]

Yeah.

[Caller (Zach)]

Okay.

[Dave Ramsey]

And that's what I would do if I woke up.

[Rachel Cruz]

Do you have any money saved, Zachary? Do you have like an extra thousand somewhere?

[Caller (Zach)]

No, I'm very new to all.

[Rachel Cruz]

Okay. No, you're great. Yeah, yeah, yeah. The goal would be to get to buy a car in cash. And let me challenge you, Zach. So we're in Nashville and on Sunday, for whatever reason, maybe it's because I knew you were calling in Zach, and the Lord spoke to my heart, but I was. I literally googled five thousand dollar cars in Nashville because I'm like. Because we get this car call a lot and people like, well, I can't get a $5,000 car. And I looked up and I'm like, oh my. I mean, you just can scroll and scroll and they're not terrible looking cars. I mean, you know, they may be like 9 years old or something. But I'm just saying you have $15,000. I would save up another 2,000. And you can, and you can get what? You can get a 2500.

[Dave Ramsey]

1500.

[Rachel Cruz]

1500. I'm sorry, that's what I meant. 1500. But you can get a three thousand dollar car.

[Dave Ramsey]

Yes.

[Rachel Cruz]

And they're. Here's the trick. They are out there.

[Dave Ramsey]

What was your old car payment?

[Caller (Zach)]

My old car payment was like 400.

[Dave Ramsey]

Okay. So I would say $500 a month after I buy my beater car so that I can move up in car in six months. Because I don't want to drive this piece of crap for very long. Right. Okay. Yeah. Five hundred bucks for six months is another $3,000. And 500 bucks for another six months is another $3 thousand dollars. This is how you get rich. You don't pay people car payments. You buy things with cash and don't have payment. That's the goal. And that you're new to this stuff. That's the, that's the bottom line of what we teach, brother. Proud of you. Thanks for asking the question. This is the Ramsey Show. If you're like most people, your financial and personal documents are scattered all over, making it hard to find a specific account number or password when you need it. And even harder for our loved ones when we pass away. One key to having a healthy financial life is being able to access your information and Knockbox makes that simp. Knockbox, N o K, as in next of kin, is a complete system that helps you organize your important documents, accounts, IDs, tax returns, insurance policies, estate plans, and other personal history in one secure place. Knockbox saves your family the trouble of tracking down random scraps of paper or hacking into your laptop, so don't add headaches to their heartache. Start getting organized today by visiting knockbox.com Ramsey that's n o kbox.com Ramsey if you want to listen in to everything we do around here, you can do it on the Ramsey Network app. Download it. It's completely free and including the last hour of this show every day and you can jump in and catch the video and the audio and whatever else you search it. There's all kinds of good stuff and you can ask questions on the Ramsey Network app. This one is from Todd.

[Rachel Cruz]

Yes, Todd asks should I consider converting my employer match each year in my 401k to Roth dollars and pay the taxes now I'm 31 years old and wondering if converting the match each year will benefit our financial future in retirement.

[Dave Ramsey]

Yes, yes, yes, yes, yes, yes, yes, yes. You ought to do it and pay the taxes, of course, out of your pocket when you do that, especially Todd, if you're out of debt. If you're if it's going to be a large amount of money out of your pocket because of this, you may not want to do it for a while. Just let it build up and you can go back and do it all at once. You can do it anytime you want. You let let it build up for four or five years and then do it all at once at that time. I do mine every year because my company that I own is required to match my because I'm an employee of the company I own, which is weird, but I get a 401k with the company match and the match is required to be in traditional and I roll it to Roth at this time of year every year, and that creates that amount of money to be taxed on. But then I'm never taxed on the growth after that, nor are my heirs, because inheriting a Roth IRA is not anywhere near the problem that inheriting a taxable traditional IRA is. And so it even helps later on with your estate planning because I don't have a single thing right now in my name or my wife's name that's not Roth. I have rolled everything to Roth and paid all the taxes in it. So I'll have no required minimum distributions either at 72 and a half when other people will. So that's an interesting part of the equation. But yeah, yes, definitely. Especially if it doesn't affect your get out of debt plan. Now if it's taking money out of your pocket that you need to use to pay off your car. No, let's wait a year or two and do it later after.

[Rachel Cruz]

Do you have to do it all at once?

[Dave Ramsey]

You can do it every year at one time. The match for that year you can do it.

[Rachel Cruz]

No, I know, but if you had a full one and you were converting a lump sum, could you divide the lump sum into half and just convert half of it? Half of it? Like take it at a time.

[Dave Ramsey]

So if you had $100,000 in traditional and you wanted to roll it but you didn't want the taxes in one year, you could do 50,000 and then next year do 50,000 if you want to do that kind of thing. And so you can let it build up if you're still getting out of debt and then go back and fix it later. I mean, you're only 31. So if you fixed it at 36, you're still going to have all the benefits of it growing tax free for years and years and years and years and years. Gus is in Boston. Hey Gus, how are you?

[Caller (Gus)]

Hey Dave. I'm good, how are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller (Gus)]

So I was working a well paying job, 100,000 a year and I got laid off. I've been looking for work, something similar, something paying about the same for the past few months, but no luck. I haven't gotten any interviews at all. I believe that it's just the current market conditions. There's been lots of layoffs. This is in the biotechnology sector by the way. And so right now I'm debating going back and getting a master's degree because I think it would make me more qualified, more likely to land one of these high paying jobs again. However, I think that I would need to either cash out a brokerage account that I've been saving for a house eventually or take on debt to pay for this now I have no debt otherwise, not even a credit card. I've been listening to you for years and so I guess I'm really nervous at the idea of either cashing out this brokerage account which I'm making gains, gains on or taking out debt to get another degree.

[Dave Ramsey]

But are you married?

[Caller (Gus)]

No, I'm not.

[Dave Ramsey]

Okay. What have you been living on while you've Been laid off for six months or three months.

[Caller (Gus)]

So I have an emergency fund, fully funded. Six months. But also I've been collecting unemployment.

[Dave Ramsey]

Okay. And you're living on the unemployment.

[Caller (Gus)]

Yes.

[Dave Ramsey]

Because you're not touched the emergency fund. I can tell by talking to you.

[Caller (Gus)]

Yeah, no, yeah.

[Dave Ramsey]

Okay. How much longer does that run?

[Caller (Gus)]

So unemployment will go through the end of February, and then I'll have six months on the emergency fund. But as you know, I don't want to touch that unless it's a true emergency.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

Gus, what's the line of thinking that this degree is the thing that will get you in the job if you haven't had interviews anyways? Is it. Is it on the applications, like what you're seeing? You're like, oh, I need that advanced degree for sure. Or is this just a. It's going to look better in general and you think that's going to help you?

[Caller (Gus)]

So previously my title was senior research associate and I got that with a year and a half experience and a bachelor's degree. Now I'm seeing for the same titles, largely same responsibilities. All of the postings are saying bachelor's or master's, and then I got a free trial, a LinkedIn Premium. And it's been telling me that, you know, there's 60 plus applicants, all with master's degrees who are applying to these same jobs with the same title. So I'm concerned that because a lot of biotechs went bankrupt this year, the market's been flooded with high quality applicants.

[Rachel Cruz]

Gotcha.

[Dave Ramsey]

So what was your day job? What did it look like? What did you do as a research researcher?

[Caller (Gus)]

So it was operating automated liquid handling systems like pipetting, working in a lab, lab coat, goggles, gloves, the whole deal. And so specifically, it's next generation sequencing. So it's all sort of furthering research objectives of these large pharmaceutical companies.

[Rachel Cruz]

Got that, Dave?

[Dave Ramsey]

Yeah, I did. Yeah. I'm just trying to. What I'm looking for, and the reason I paused is what I'm looking for is how that is applicable beyond just the narrowness of this field.

[Rachel Cruz]

Something else.

[Dave Ramsey]

Yeah, because the other thing is that we're starting to see some early signs of the economy getting a jumpstart. And so by first quarter of next year, I think the job market may look considerably different than it looks today. That's an opinion from your perspective. What I don't know is the world that you're in and what the lab coat goggles and the Bunsen Bernard, how that applies to other industries other than the specific one. You were in. I'm not sure that a master's degree gets you a job. Let's say, for instance, that 30% of the players in that nuanced area are now out of business. A master's degree doesn't necessarily get you in the door on the remaining 70% because the job market shrunk so dadgum much that what does get you in the door is Ken Coleman's proximity principle. You know, somebody that knows somebody there that they'll at least give you a look and, and your one and a half years of experience actually doing the sequencing and actually doing the research is far superior if I'm the employer, to someone that got a sheepskin, got a master's degree.

[Caller (Gus)]

Yeah. So now I'm at three years experience.

[Dave Ramsey]

That was one of the. Three years experience is far superior to a master's degree. I don't want someone that was taught to do it by a college professor. I love someone who's actually done it like for three freaking years. I think your experience is superior to their master's degree is what I'm saying. But you haven't just gotten your foot in the right door to where someone will actually talk to you and will respect that. Three years. But within that nuanced world, the number of people walking around with a master's degree and three years experience is fairly low. You might have a bunch of kids coming out of school with a master's and no experience, and I think you got them beat. I think you're holding a straight flush here. So, yeah, I'm going to work Ken Coleman's system and I'm going to work some other jobs and I'm going to start expanding my idea. Maybe I don't want to be doing this three years from now, five years from now. Maybe I want to apply these skill sets in some other areas of research in the lab, but not necessarily this nuanced area. I want to broaden the scope of my search. And how applicable are these skills in other labs and in other situations? Even petroleum or something way off the grid. I mean, where is it that there's a lab? I don't know. And I'm going to try to get in those labs because lab experience is lab experience. I understand it's petroleum would be different than gene sequencing. I get that. But I still. Well, you would know more about going into any lab of any kind than I would because I've never been in one as an employee. So that's, you know, I think you've got some broadening number One, Number two, I'm going to send you Ken Coleman's book, the Proximity Principle. And I want you to use that to get in touch with people that you know, that know people that know people that get your resume looked at, because I think you've got a trumpet card here. This is the Ramsey Show. I've been doing this show for over 30 years. And some of the saddest calls I have taken are from situations that are completely preventable.

[Rachel Cruz]

Yeah. And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible air people that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills.

[Dave Ramsey]

In the middle next week.

[Rachel Cruz]

Yeah. In the middle of all that grief. Like, it's just, it is. It's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance.

[Dave Ramsey]

And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com.

[Caller (Jennifer)]

I'm.

[Dave Ramsey]

Dave Ramsey, your host. Thank you for joining us, America. Rachel Cruz, Ramsey, personality, is my co host, number one bestselling author. And the new book is out. The new children's book came out today. That means a set of three is now available. I'm glad when I can share. There it is. Teaching Kids Generosity, the last of the three. So contentment, gratitude and generosity are the messages of the three books. This is the third in the trilogy and the final book. They're all available@ramsey solutions.com starting today. Great Christmas presents. Elisa is with us in or Lissa Rather in Jacksonville, Florida. Hi, Alyssa, how are you? Hi, Dave.

[Caller (Lorena)]

Hi, Rachel. How are you guys?

[Dave Ramsey]

Great. How can we help?

[Caller (Lorena)]

So I was wondering how much a mortgage rate should decrease before it's worth refinancing.

[Dave Ramsey]

Well, that's a the weird question Is how long are you going to. Are you going to break even on the savings before you get rid of the mortgage? Is the way you look at it. So here's how you do the math. Okay. What is your current loan balance?

[Caller (Lorena)]

256.

[Dave Ramsey]

Okay. And so if you save 1% a year, you save $2,500. If you save 2% a year, you save $5,000. Does that sound right?

[Caller (Lorena)]

Yes.

[Dave Ramsey]

Okay. So if your closing cost, if you're saving, if your closing cost is $10,000 to refinance, I'll just make up a number. Okay. Then how quick do you get your closing costs back with the rate that. With the savings that you have from a lower interest rate. And so if you're saving 2%, in your case, you're saving about $5,000 a year. You would recoup a $10,000 closing cost in two years. And everything after two years, you're going to make money. That's gravy on the biscuit. After two years. You see how I did that?

[Caller (Lorena)]

Yes.

[Dave Ramsey]

So you divide the actual dollars saved with the lower interest rate into the closing costs, and that gives you the break even point. And that should be less than three years. Typically, people say two years. You need to break even on the closing costs in about two years. So a lot of times it takes a one and a half to a 2% savings for it to make sense.

[Caller (Lorena)]

Okay.

[Dave Ramsey]

The average mortgage rate right now is.

[Caller (Lorena)]

Adjustable after 10 years.

[Dave Ramsey]

When does the 10 years come up?

[Caller (Lorena)]

Not till 2033.

[Dave Ramsey]

Okay. So you got a little time to ride the market. And again, when the market is. What's your current interest rate?

[Caller (Lorena)]

6.5%.

[Dave Ramsey]

Okay. And so you know you're not going to get a 2% savings right now.

[Caller (Lorena)]

No, definitely not.

[Dave Ramsey]

And you're probably not even gonna get a 1% savings today. You might, but depending on how you structure the loan, whatever. But that doesn't account points. We're not paying points to create a false thing. But the bottom line is the interest. The refinance saves you money on interest, and that gives you the money to pay back the closing costs. And you need for those closing costs to be paid back in two to three years for it to make sense. And that's how you run the actual calculation on it. And you'll have that happen long before your adjustable rate kicks in. In 2033.

[Rachel Cruz]

I was going to say, in that many years, who knows what the interest rates are going to look like?

[Dave Ramsey]

So who knows? I mean, but the average mortgage folks out there across the span of my 40 years of being around real estate and in the real estate business, the average mortgage stays on the books only five and a half years either due to refinance or sale of the property. And so you don't, you really don't keep a 30 year mortgage. 30 years in reality. So very often, I mean, a few people do. I'm talking about the average. And so you certainly don't want something where the break even on Your refinance is 10 years in a world where the average mortgage has gone in five and a half. So that's bad. Of course, also you would include in that if I'm paying aggressively on the mortgage, how quickly will it be paid off? Am I going to have it paid off before I break even? That's another thing you would have to look at. So but we're just, you're trying to look at the actual dollars saved as a result of the lower interest rate versus the actual dollars in closing costs. And that gives you your break even analysis from an accounting perspective. And that'll help you make the decision very, very quickly. The good news is, Rachel, that that's now a thing again that, you know, rates have softened a little bit. They're not up, they're, you know, they're not, they're not way up, they're not way down. But there's a lot of optimism out there and a lot of people starting to look at this. And four months ago no one was even talking about that. They're just frozen right during the headlights that.

[Rachel Cruz]

And it's just fascinating the way real estate shakes out because we were even talking on one of my shoots, the Rachel Cruze show shoot yesterday, that, you know, in 2021, 2022, people were afraid it was a bubble and everything was going to pop. And you know, the, because of how quickly prices rose and increased and now they've just stayed there, which has made the market tough, right, to get in. What you had to have in 2017 looks so much different than what you have to have today. So it is difficult. But if you go to Ramsey Solutions.com real estate, that's kind of our real estate home base, if you will. And we have so much information because we know this is a big topic for people. So this is everything from talking about agents to your first time home buying or if you're looking to move what the market's doing, there's articles, podcasts, there's so much there. So if you have interest on real estate and more, what Ramsey has to say, you can go to Ramsaysolutions.com real estate and check it out. Check it out there.

[Dave Ramsey]

Matthew's in Omaha. Hi, Matthew. Welcome to the Ramsey Show.

[Caller (Zach)]

Hi. So I'm looking to basically minimize the taxes my parents are paying in retirement on their IRAs that they're taking distributions out of. That's basically my question.

[Dave Ramsey]

Can't.

[Caller (Zach)]

You can't.

[Dave Ramsey]

No. Required minimum distributions are taxable. You can't get out of them. Well there.

[Caller (Zach)]

So we're not in required minimum distribution yet. So my dad's 66 and my mom's 61.

[Dave Ramsey]

Why are they growing on it?

[Caller (Zach)]

How are they growing on it?

[Dave Ramsey]

Why are they drawing on it? They need the money.

[Caller (Zach)]

I mean, they're drawing on it basically for, you know, just like they want a deck, so they want to put a deck on the back of their house. So they're thinking about drawing on their retirement fund. They're still making about 140k a year, plus around 20,000 dividends. So. And they've also got a, we got five real estate properties with about a. They're making about 60,000 a year, I think they're pulling.

[Dave Ramsey]

So the $200,000 a year income, they can't figure out. What about deck?

[Caller (Zach)]

Yeah, so they're trying to put about an $80,000 deck on, on the house, the residential house.

[Dave Ramsey]

Nice day and I'm sorry, Nice deck.

[Caller (Zach)]

Oh, yeah, it will be a very nice deck. It's gonna have a covering and it'll be pretty nice. So. But yeah, so they're, they're looking to do that, but it's kind of. They were thinking about pulling $100,000 out. $100,000 out on the house.

[Dave Ramsey]

How much do they have in retirement in their portfolio?

[Caller (Zach)]

They have about 2.2 million.

[Dave Ramsey]

Okay.

[Caller (Zach)]

And then they have about a million dollars worth of real estate that it makes rent. And then they have about a million dollar residential house.

[Dave Ramsey]

Okay. I think they've got this figured out. I don't think they need you or me. I think they've got the money. And when you pull money out of a traditional IRA and you got $2 million in there and you pull money out, it's going to be taxable. There's not a hack on that, man. There's no hack. It's just taxable, period. That's the problem with the traditional instead of the Roth. That's why we want to move as many people towards Roth as we can. Because when they get up here, if it was in a Roth, it'd be a no brainer. There'd be no taxes.

[Rachel Cruz]

Is there any time to pull money out of retirement? If you're still working, you're at retirement age, you can do it without penalty. Is there ever a time you'd say, yeah, yeah, use your retirement for that.

[Dave Ramsey]

They can do it without penalty and they can pull this hundred grand out of there and it's 2.2 million. They can afford it. Yeah, but he's wanting to not pay taxes on it.

[Rachel Cruz]

You can't.

[Dave Ramsey]

You're gonna pay taxes on it. There's not a hack for that, dude. It's just taxable, period. And there's not a, there's not an offset on it. If there's an offset, you know, Interesting. So I, I'm probably personally not going to do that if I'm in their situation. I'm going to budget for the deck. They can afford it. It's not going to kill them, it's not bankrupting them. But they don't want to pay the taxes on this. It's an ouchy. I hate taxes. I don't pay the taxes on it either. It's an ouchy. So I'm going to find another way out of $60,000 worth of real estate income and 140 to get the rest of this paid. So simple. That's going to be my plan. So that puts us hour of the Ramsey show in the books. Do you ever feel like you're finally making progress towards your goals only to get quickly distracted by something else in your feed? Well, that's why we created the Ramsey Network app. Your single source for content that keeps you motivated. The Ramsey Network app is designed to keep you laser focused on reaching your goals. Loaded with over 7,000 hours of Ramsey shows, this free app is the best place for uninterrupted content and no distractions. Plus, you can search specific questions to get more personalized content in seconds. So for the days you need some extra motivation, you'll have proven advice at your fingertips. It's time to get serious about your goals and shut out the distractions for good. Simply search Ramsey Network in the App Store or Google Play. If you're listening on a podcast, just click the link in the show Notes. To download our free Ramsey Network app Today, live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. Rachel Cruz, Ramsey personality, is my co host today, my daughter and number one best selling author and the new book, the new children's book. I'm glad when I can share is out today. So be sure you check it [e-mail]. that's the third of the children's books that three. That trilogy makes a great Christmas present. So be sure and check it out. I am Dave Ramsey. Your host. Don is with us. And Don is in Alaska. Hi, Don. How are you?

[Caller (Don)]

I'm doing good, sir. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller (Don)]

I have a gold dredging operation that I'm part of. And I can expect to gain just about 24 to 35 ounces of gold this upcoming season. And that is the operation is paid solely in the metal that we collect and no cash or payroll is given. And I'm kind of curious on what would be the best way of selling that gold or capitalizing on that gold. Because with the current gold price that would be right around from the very worst that we could do. On average speaking, I could get around about 50 or so thousand dollars with the current gold price.

[Dave Ramsey]

So that's your pay for a year.

[Caller (Don)]

Not for a year. It's a three month operation. So in January to April.

[Dave Ramsey]

But it's your pay for your.

[Caller (Don)]

For your.

[Dave Ramsey]

For your job, for the hours Go.

[Caller (Don)]

Yeah, it's. It's more of a kind of a partnership than it is a job necessarily.

[Dave Ramsey]

Okay. All right. So some guys are going out dredging gold. You're going to get your cut. Yeah. And it's 50 grand. Well, you may know more about actually liquidating the raw gold than I would know, but what I would do is liquidate it. I'm going to turn it into money.

[Caller (Don)]

Okay.

[Dave Ramsey]

I'm not. I'm not holding it as an investment. I'm going to turn it into money and use that money to achieve my particular financial goals. Which around here we would call baby steps.

[Caller (Don)]

Yeah. And I already have the 25,000 in for merchants fund. Sorry. Good. I was just kind of curious.

[Dave Ramsey]

Are you debt free?

[Caller (Don)]

I am debt free right now.

[Dave Ramsey]

You own your house free and clear?

[Caller (Don)]

I don't have a house. I currently live employee housing with my current employer in Dutch harbor. And I would like to get. Eventually get to the point where I have a duplex or a triplex or something of that nature. But current gold prices or, sorry, the property prices where I call home is a little bit more than I'd be able to save up for, in my opinion.

[Dave Ramsey]

Well, what would a duplex cost?

[Caller (Don)]

The current one I'm looking at right now is about 499.

[Dave Ramsey]

All right. So take a few years of saving up to do that. What else do you do other than this?

[Caller (Don)]

I'm a commercial diver. I dive for gold. And I also. I work for a company up here.

[Dave Ramsey]

Yeah. So what's your income on that?

[Caller (Don)]

And about 60 a year.

[Dave Ramsey]

Okay, so your income, your household income, so to speak, you is 50 and 60. So 110. Does that sound right?

[Caller (Don)]

Just about.

[Dave Ramsey]

Okay, cool. All right. And you're a single guy with all your housing paid for. So you can save a ton of this and just start throwing it in good mutual funds and use those mutual funds to pay cash for a duplex later. So the danger of what? Of your situation is that you and your buddies, your employers, are all very familiar with touching and owning and transacting in raw gold. Because it's just part of your culture where you are. Right. It's like everywhere. It's all around you.

[Caller (Don)]

Yeah. I mean.

[Dave Ramsey]

And so the danger of that psychologically is it causes you to kind of normalize that where it's not normal anywhere else to do that, but it is right there in your world. And if it normalizes it cause you not to look at it through the lens of an investment. Instead, it's just kind of part of your life. And so I'm going to step back and look at it as an investment and say, I don't want to do this as an investment. I would rather have my money in good mutual funds and let the volatility of the gold world not affect a young single diver in Alaska. I want you to go make a bunch of money and end up with a bunch of it instead of rolling the dice. And when you're playing with metals like gold, you're rolling the dice. You see what I'm saying?

[Caller (Don)]

Yeah, it's definitely a gamble.

[Dave Ramsey]

That's what I mean.

[Caller (Don)]

The different ways that you can liquidate, I mean, we're only. Since it's 90% pure, it's not the kind of stuff you go buy at Costco necessarily. No, it's 90% gold, 7% silver. So it's. It's a little bit different than what you go and liquidate at a jeweler.

[Dave Ramsey]

Or going, yeah, so how do you sell the gold? I don't know how to do that. How do you do it?

[Caller (Don)]

So there's a few different ways. The first way that a lot of people do, there's a company up here called gcr. I think I got that right. They'll take a small cut of it, and they'll refine it. They'll give you a 50% check right off the bat. And then a couple weeks later, After a thing is said and done, they give you a check of it. But that check is about 10% less. Than the actual value of it. So that digs in a little bit to it. The other way that I've been doing it, I will either go to somebody who wants to sell, Like, a truck or something, and I'll buy the truck with the metal. I did that. That was pretty fun going on. Got my vehicle. And the last way is, some people, Especially those folks that do the bering sea gold show, they will do what's called pay dirt bags. They take a little bit of gold, they take a handful of dirt. And put it in a bag. And sell it to people that think they want to be all cool and fun. And be a prospector for a day. And that's one way. I was kind of wondering if it be smart to do that.

[Dave Ramsey]

That's a business model. You're starting another business now. I'm not doing that. I'm just looking for a way. The first way sounds the most logical to me. Is you're giving up a cut to turn it into money. It's that simple. And the only question I would have, Is there someone down in the lower 48 that you can jump on a plane. That does the same thing that company does, but gives you a better cut? Like, are they up? Because they're up there. Are they. Are they leaning into this?

[Caller (Don)]

In certain cases, yes. There's. I mean, new york's kind of one of the big places, but that's quite a large plane ticket to get over there. And that'd be cutting into the amount that you get back. But roughly, the gcr is kind of the one that you want to go with. Really. It's anywhere, Depending on the purity, anywhere from 5 to 10%.

[Dave Ramsey]

Yeah. Your option is you got a pile of rocks in the corner, or you go JCR and give up 10%, turn into cash. And so I'm gonna turn it into cash. I'm gonna turn into cash. I like that. And I'm not getting in the dirtbag business. That's a different thing Now. It's a tourist thing. And you have a new business. And it's a business move. We're starting a small business. In order to liquidate this stuff. And so that's probably not the way I'm going either. How interesting.

[Rachel Cruz]

I know. Well, I was gonna say, because first.

[Dave Ramsey]

Time I've gotten that call in 32.

[Rachel Cruz]

Years, he actually finds the gold.

[Dave Ramsey]

Yeah. Never got the pretty cool Don, the cold water deep diver in Alaska dredging gold call. Now, Mike Rowe actually knows those guys, and so he's up there all the time. He's been out on those boats. But, yeah, that's a different thing. Interesting.

[Rachel Cruz]

Fun way to make some good money, too. 50 grand.

[Dave Ramsey]

Yeah. Pretty cool. Don, honored to have you in our audience. Very neat what you're doing, Donna. It's very adventurous. This is the Ramsey Show. Hey, you guys. I'm not a fan of the big banks, and you probably already know which ones I mean, but I do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fair Winds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years, and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join, and Fairwinds partners with more than 5,000 credit union locations around the country, so you can bank in person wherever you live. But if you prefer the online experience, you can log on to Fairwinds and do anything you could do at a physical location. So go to Fairwinds.org Ramsey to learn more. And while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's Fair Winds. F A I R W I n d s.org Ramsey hey, guys, it's Rachel Cruz.

[Rachel Cruz]

And guess what? It's my favorite time of year. The lights, the music, the decorations. I mean, I love it all. And as a natural spender like myself, it's really easy to overspend. And I want to do all the things and give my family the kind of holidays they'll always remember. And at the same time, I don't want to look back at my bank account in January and think, oh, what did I do? So that's why I use the Every Dollar budgeting app. It helps me plan for all of my spending. And that's what a budget is. Then once I have my plan in place, I don't have to worry about overspending. I am free to spend guilt free and have fun doing it. Plus, with every dollar, you can customize your budget however you want. So whether it's buying gifts, hosting dinners, or even turning your living room into a winter wonderland. Every Dollar helps you plan for it all so you guys go out and create some great holiday memories with your family without the stress of overspending. Download the Every Dollar app for free today. Go download it today.

[Dave Ramsey]

Rachel Cruz, Ramsey personality, is my co host today. The Ramsey Show Question of the Day is brought to you by. Why refi why refi refinances defaulted private student loans, which are different than federal student loans? Why refi refinances your defaulted private student loans and builds a custom loan based on your ability to pay? So kick your private student loan debt out of your life by going to wirefi.com Ramsey that's the letter Y might not be in all states Today's question.

[Rachel Cruz]

Comes from Jamie in Minnesota. She said, my husband and I are 51 and 53. We're debt free and have three cars that are fully paid for with a household income of $150,000. We are debating whether or not we should sell one of our cars worth $50,000 and apply that to our mortgage. We owe about 90,000 on our mortgage and will be paid off in one year if we sell the car versus three years if we do not sell the car. My husband thinks you should not pay off your house early because we can't deduct the mortgage interest on the tax returns and he's afraid we'll owe the IRS. Last year we paid $3,097.66 in mortgage interest. Can you provide some feedback on that and what your recommendations are?

[Dave Ramsey]

Okay, well, the mortgage or the tax deduction in general, including mortgage interest, is the biggest piece of mythology in all of personal finance because it requires that people forget how to do sixth grade math. Let me walk you through it. If Jamie, if you actually itemize, then you can claim your charitable deductions and your mortgage interest rates. By the way, last year, because the standard deductions are so high, almost no one itemized, including you, you probably didn't even itemize. So your husband is completely unaware of how this whole thing works because you didn't take a deduction for your mortgage interest unless you itemized. 9% of Americans itemize. 91% do not. If you do not itemize, you do not get a tax deduction for your charitable or for your interest. So 91% of the people, this doesn't even come up with right? So that's just dumb. Not you, not you, Jamie. But when people are saying, well, I don't want to lose my, you're not taking it anyway. You just don't even know how your taxes work. You're that. Gee, plug into it all right? Now if, if you do, if you did itemize, then you sent the mortgage company $3,000. $3,097, 3,100 bucks. And that reduced your income, your $150,000 income by $3,000. A tax deduction is not a tax credit. It lowers the amount of income that is taxed. So the tax savings is not $3,100. The tax savings is $3,100 times your tax rate, which is 32% in your case. Okay? And so you saved $1,000 in taxes if you itemized. So here's how this works. Your husband is suggesting, absurdly, that you send the government $3,100 or you send the mortgage company $3,100 to keep from sending the government $1,000. You're trading dollars for quarters. Dumb trade. So always pay off your mortgage, never keep it for the tax deduction. If you send somebody $10,000 to keep from sending the government $3,000, by definition, that's mathematically stupid. And then I call myself sophisticated because I didn't pay off my mortgage because I had the tax deduction. But I don't even take the tax deduction because I'm not even one of the people that itemized. And I just didn't even know that. That's. Most people with this opinion around the Thanksgiving table, they're just absolutely do not know how to do math and they don't know the reality of the situation. Now, worse than that, worse than your broke brother in law telling you this at Thanksgiving. You're silly. Dave Ramsey doesn't. Worse than him, the one that pisses me off to no end are people that do taxes for a living. And they tell the small business person or they tell you to not pay off your mortgage because you'll lose the tax deduction or to run your expenses up on things you don't need to buy. You need to spend some money by the end of the year, otherwise you're going to get taxes. Well, that is asinine. It's ridiculous. You own a hair care place and you spend 10,000 bucks you don't need to spend because your tax preparer is a moron. Who told you to do that? That's dumb. Let me help you. You got two words for these people that give you that advice. You're fired.

[Rachel Cruz]

The tax write off. It's like the Schitt's Creek episode where he's like, well, just, it's, it's a write off. And he's like, yeah, but who's writing it off? He's like, I don't know. The write off people. It just gets written off. It's like this like mystical idea of the tax write off, like it is.

[Dave Ramsey]

Like justifies all my stupidity.

[Rachel Cruz]

It's like, well, I don't know. It's a tax write off.

[Dave Ramsey]

It's a write off.

[Rachel Cruz]

Well, who's going to pay tax? I don't know.

[Dave Ramsey]

The write off people. That's great. I hadn't seen that episode. So listen, if your tax person is telling you to run up your expenses or to not pay off debt because you're getting a tax deduction, they're telling you to trade dollars for quarters. You don't need someone that can't add doing your taxes. You need new tax people. Go to Ramsaysolutions.com and get with one of our tax people. They do not make this mistake. Believe me, we wouldn't. They would not have a Ramsey trusted sign on their door if they made this mistake. Because they wouldn't be trusted by me. Because they don't trust people that can't do math. So there you go. That's what we're doing here. So guys, whatever you do, don't fall for the tax deduction myth. And the irony of ironies is all of these people discussing it, 91% don't itemize in America today. That's everybody, y'all. I mean, so.

[Rachel Cruz]

Because you. Because for majority of people, you get a better deal if you just take the standard deduction anyways.

[Dave Ramsey]

That's what I mean.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

That's why you don't. They don't need to.

[Rachel Cruz]

Items you don't need to.

[Dave Ramsey]

Because.

[Rachel Cruz]

Yeah. It's not like you're stupid.

[Dave Ramsey]

Actually, under the, under the Trump tax code in his last administration, he ran the standard deduction way up.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

You get an automatic deduction just because you breathe.

[Rachel Cruz]

Yep.

[Dave Ramsey]

And your real deductions don't add up to that. So you're better off to take the big one.

[Rachel Cruz]

Right, right.

[Dave Ramsey]

The breathe. The breathing deduction.

[Rachel Cruz]

Yes.

[Dave Ramsey]

From the write off people.

[Rachel Cruz]

That's right. But they're there.

[Dave Ramsey]

That's. The standard deduction has changed the game and it's made the tax filings very easy.

[Rachel Cruz]

And that's probably up to more. In the last, what, 10 years. In the last what, 10 years?

[Dave Ramsey]

15 years ago, if I was talking about this, it had been 70%.

[Rachel Cruz]

Because this was a main point back in the day at our live events, back in 20, you know, 2004.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

This was a big discussion. And now it's not. You don't hear it as much because.

[Dave Ramsey]

The standard deduction was raised and the number of people therefore, that don't itemize is so few.

[Rachel Cruz]

Yes.

[Dave Ramsey]

So it was absurd back then because you're trading dollars for quarters and we cover it in the live events in those old arena events.

[Rachel Cruz]

That's right. That's right.

[Dave Ramsey]

And it was absurd back then. It's just as absurd now for the same reason. But it's doubly absurd because it really doesn't apply to hardly anybody anymore.

[Rachel Cruz]

Yep.

[Dave Ramsey]

And I'll bet you money Jamie doesn't itemize.

[Rachel Cruz]

Yep.

[Dave Ramsey]

91%. And so it doesn't even come up. So her husband's arguing a theory that he's not even doing, and then if he was doing it, he's trading dollars for quarters. Yes. So don't trade dollars for quarters. Pay off your mortgage.

[Rachel Cruz]

And the other, the other argument for not paying off the mortgage is I can make more in the market versus what I'm paying in interest.

[Dave Ramsey]

Yeah. Said no millionaires ever.

[Rachel Cruz]

Right.

[Dave Ramsey]

The millionaires that we. The 10,000 millionaires that we studied. None of them. Precisely zero. Said I became a millionaire by not paying off my house and investing the difference into the market. None of them say that. It's always broke people that say this stuff. The broke people that don't want to lean in and do the smart long term financial plays like getting your home paid off.

[Rachel Cruz]

Yep.

[Dave Ramsey]

So, yeah, it's, it's, it's asinine, you guys. The data just does not back it up. The math does not back it up. Pay off your house people when you get to baby step six, finish the baby steps and pay it off. And don't deal with tax people that can't add. Please, God, this is the Ramsey Show. Hey, guys. I've never done this before, but I'm partnering with a nutrition company, Field of Greens. Each fruit and vegetable in Field of Greens is selected by doctors to support heart, liver and kidney health plus metabolism for healthy weight. And your doctor will notice your improved health. Or. Or Field of Greens will give you your money back. I can get behind a promise like that. Go to fieldofgreens.com Ramsay and get 15% off with promo code Ramsay. Fieldofgreens.com Ramsay Folks, the Ramsey Christmas cash giveaway is here and you could win big. We're giving away $500 prizes each week and one grand prize of $5,000. Enter daily for your chance to win at Ramsaysolutions.com giveaway it's that easy. Plus our 50 Days of Christmas Christmas deals is on right now. Get up to 30% off bestsellers and life changing gifts that won't break the holiday budget. Ramsaysolutions.com store Rachel Cruz number one best selling author Ramsey personality My daughter is my co host today. Feel free to drop by and visit us in the Ramsey headquarters. We do this show from 1 to 4 central time every Monday through Friday and it's free to drop in and watch the show. We do the show on the glass in the lobby and there's always 50 to 200 folks out here watching the show. There's free chocolate chip homemade cookies. Smells like Mama's kitchen when you walk in here. And free coffee. So come hang out with us. Watch the show. Whoever's taping it and doing it that day, it's not taping, it's live. But you know, we're here doing it. And in the lobby of Ramsey Solutions, when we built this building, we, we put up the debt free stage right across from our glass here. And one of our favorite things is to do a debt free scream on the debt free stage. The only thing that is more exciting for us than to do a debt free scream on the debt free stage is to do it with a Ramsey Solutions team member. And Brianna Moore is with us. She's one of our team members. Welcome, Brianna.

[Caller (Jennifer)]

Hi.

[Dave Ramsey]

Way to go.

[Rachel Cruz]

Congratulations.

[Caller (Jennifer)]

Thank you. I can't believe I'm here.

[Dave Ramsey]

Tell folks what you do here at Ramsey and how long you've been with us.

[Caller (Jennifer)]

I've been here for four years and I do SEO and content marketing for our amazing real estate department. Shout out to real estate.

[Dave Ramsey]

So our Ramsey trusted real estate agents all across the nation benefit from your hard work.

[Caller (Jennifer)]

Yes.

[Dave Ramsey]

And you writing, doing the content on the website and other things to cause content marketer to cause all that to happen.

[Caller (Jennifer)]

Yes.

[Dave Ramsey]

Okay. Very cool. Good for you. Four years you've been on the team. All right, now we do not. This is the one time we don't ask the folks income because you know, 30 or 40 of the people standing around, 50 of the people standing around work with her and that would be a wee bit awkward. So we're not going to do that. But we will ask you this. How much did you pay off?

[Caller (Jennifer)]

$204,000.

[Dave Ramsey]

Good Lord.

[Rachel Cruz]

Gosh.

[Dave Ramsey]

And how long did it take?

[Caller (Jennifer)]

Six years.

[Dave Ramsey]

Six years. Wow.

[Caller (Jennifer)]

And 40.

[Dave Ramsey]

What kind of debt was this?

[Caller (Jennifer)]

Student loans. One hundred and sixty four of that was the principal and then 40,000 of that was Interest.

[Dave Ramsey]

So it's all student loans.

[Rachel Cruz]

Yes, student loans.

[Caller (Jennifer)]

Would you get your degree in digital media management? So business. Four year business degree.

[Rachel Cruz]

Yes.

[Caller (Jennifer)]

At a private school in Austin.

[Rachel Cruz]

So there you go.

[Caller (Jennifer)]

Yeah.

[Dave Ramsey]

And you pay for it. Wow.

[Rachel Cruz]

Oh my gosh. How great though.

[Dave Ramsey]

Okay, how long have you been out of school?

[Caller (Jennifer)]

Six years.

[Dave Ramsey]

Okay, so you started immediately and it took you six years to clean it up.

[Caller (Jennifer)]

Yep.

[Dave Ramsey]

You leaned in four of those years you've been here.

[Caller (Jennifer)]

Yes.

[Dave Ramsey]

So does it make it more awkward to work at Ramsey while you're working your debt snowball or easier? Because I would think all the peer pressure is positive.

[Caller (Jennifer)]

Yeah, it was definitely easier and more fun and I felt less, less shame telling people how much I was paying off. So that was really fun to be like. Yeah, it's.

[Dave Ramsey]

Your co workers are like cheering you on, right? I mean your team members. Right. They're like, yes, yes, yes, yes, yes, yes. Okay, that. I hope so.

[Caller (Jennifer)]

Yeah.

[Dave Ramsey]

If not, tell me who they are.

[Caller (Jennifer)]

I'll do.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

Yeah. I love it. Very cool.

[Rachel Cruz]

So incredible. Okay, so what happened six years ago? So you graduate college.

[Caller (Jennifer)]

Yeah. So I think it was towards the end of college I was realizing what I had gotten myself into. I don't think before I went to college I really understood what, you know, is a loan and that you have to pay that back.

[Rachel Cruz]

Yeah.

[Caller (Jennifer)]

And so towards the end of college I knew, okay, it's kind of a non negotiable. I can't live with this debt for the rest of my life. So I knew I was going to have to take fpu. So I did that as soon as I graduated and I knew I had.

[Dave Ramsey]

How did you know to do that?

[Caller (Jennifer)]

My parents informed me of you and your program. Yeah, they're everyday millionaires and teach fpu. So they were able to kind of learn with me at first and become those everyday millionaires and everything too. And then we kind of like did it together.

[Rachel Cruz]

And they're here with you today, right?

[Dave Ramsey]

Yeah.

[Rachel Cruz]

Yeah. So fun.

[Dave Ramsey]

So way to go mom and dad. You got to be proud. Very good. So that's some of your other cheerleaders other than your teammates?

[Caller (Jennifer)]

Yes. Yeah. But yeah, so after graduation took fbu, started paying it off and I would actually like cry myself to work because I hated my job. And I was doing it basically because I knew that I had to have an income and do something and I was living rent free at home and I would listen. I knew I was going to cry.

[Rachel Cruz]

No, you're great.

[Caller (Jennifer)]

You're doing great. Okay.

[Dave Ramsey]

Where were you living?

[Caller (Jennifer)]

In Houston. With my parents.

[Dave Ramsey]

Okay. All right.

[Caller (Jennifer)]

Sorry.

[Dave Ramsey]

That's okay.

[Rachel Cruz]

No, you're good.

[Dave Ramsey]

You're good.

[Caller (Jennifer)]

It's been a long journey of doing this.

[Dave Ramsey]

Six years is a long time. You've been fighting this by yourself. Warrior princess. Way to go. Proud of you.

[Caller (Jennifer)]

Anyway, so I would listen to the Ramsey show on my way to work and cry and listen to the debt free screams and envision myself doing this one day. So it's really cool. And I didn't know I was gonna work here.

[Dave Ramsey]

How did you end up coming to work here?

[Caller (Jennifer)]

Y'all found me on LinkedIn and asked me to apply, and I did, and then y'all gave me the job.

[Rachel Cruz]

Great recruiting team.

[Dave Ramsey]

Wow.

[Caller (Jennifer)]

Shout out to Aisha.

[Rachel Cruz]

Yeah, that's.

[Dave Ramsey]

We tracked her down and snagged her out of a miserable job pretty much.

[Caller (Jennifer)]

Yeah. And yeah. So then the rest of the four years has been here, and it's been an amazing journey. And.

[Rachel Cruz]

Wow.

[Dave Ramsey]

Oh, my gosh.

[Rachel Cruz]

Okay. So you moved to Nashville.

[Caller (Jennifer)]

Yes.

[Rachel Cruz]

And it's a fun.

[Dave Ramsey]

Now wait a minute. You get the call from us and you're working this plan because of us, and your mom and dad are FPU graduates and you've been through fpu, and we call up out of the blue and say, do you want to join us?

[Caller (Jennifer)]

Yeah.

[Dave Ramsey]

I mean, that had to be weird.

[Caller (Jennifer)]

It was. It was very much a God thing. Yeah.

[Rachel Cruz]

Jesus.

[Caller (Jennifer)]

Yes.

[Dave Ramsey]

Don't call Jesus weird. All right. But, yeah. Oh, my gosh.

[Rachel Cruz]

Okay, so I want to know from the moment you. So you moved to Nashville, and Nashville is a fun city, right? I mean, there's things happening. Stuff is, you know, people are going out. I mean, it's. It's an enjoyable town. So what. What was the pressure like, or what was the feeling, the sacrifice, like, the hard of saying no, you know, to a life. Like, what were the things that you said no to that were really difficult?

[Caller (Jennifer)]

Shopping.

[Rachel Cruz]

Yeah, girl.

[Caller (Jennifer)]

I'm like, I like to look cute. And I couldn't for a long time. So shopping, definitely for six years. Though I did have to budget, like, some fun in there because I was just gonna go. It's a long journey if I didn't. So I was able to do some very small, like, weekend trips with friends and keep it in, like, control it. Totally. And I just really. The sacrifices were not having any time to myself. I was working up to seven jobs at one point.

[Rachel Cruz]

Oh, my gosh. What were you doing?

[Caller (Jennifer)]

So working full time. I have a photography business on the side. And then I was doing anywhere from like three to six to Seven additional freelance jobs where I had SEO clients on monthly retainer. And so I was doing that for several years and it was exhausting and miserable and I was just working non stop. I would work here. I have memories of working here, getting off at 4, going downstairs and sitting in the cafe and working for an hour on side jobs, going to work out and then going home and working until I went to sleep. And I would do that for just like five days in a row.

[Rachel Cruz]

Just straight all the way, grinding it out.

[Dave Ramsey]

You're making some good money on the side.

[Caller (Jennifer)]

Yeah, I was making on a low year, 15,000. All the way up to like 30,000 a year inside jobs.

[Rachel Cruz]

Amazing. Which is what helped. Helps put a dent in 200k.

[Caller (Jennifer)]

Right.

[Rachel Cruz]

Of debt. I mean. Yeah, that's what had to be done.

[Caller (Jennifer)]

Yeah. The budget was obviously helpful, but I'm already kind of naturally a frugal person. So for me having that much and being a single income, I just had to get more money.

[Rachel Cruz]

Yeah.

[Caller (Jennifer)]

Like I have to do anything to make more money.

[Dave Ramsey]

Because you feel to be free feels good.

[Caller (Jennifer)]

I kind of didn't. I haven't really felt what it feels like to be free. Murphy hit me two weeks after I paid off my debt and I got in a car accident. Somebody hit me and totaled my car. So I haven't really felt debt free because I've been financially dealing with that too. So I'm like, hopefully after today I'll feel really debt free.

[Dave Ramsey]

Wow. Well, it's official. You are?

[Caller (Jennifer)]

Yes.

[Dave Ramsey]

By the way, congratulations. So proud of you. So your mom and dad, your teammates cheered you on. Anybody else was your cheerleader?

[Caller (Jennifer)]

Yeah, my parents, my brother, my sister in law, and then all my friends, Annalise and Alyssa specifically. And then all of my awesome team and co workers.

[Dave Ramsey]

Yeah. Very cool.

[Rachel Cruz]

Well done.

[Dave Ramsey]

Congratulations.

[Caller (Jennifer)]

Thank you.

[Dave Ramsey]

All right, other than getting a job at Ramsey and having us track you down, what is the key to getting out of debt for all those FPU graduates out there listening?

[Caller (Jennifer)]

For me, it was making extra income, definitely. And just not. There's no other option but to do it and get out of debt. And no matter how much you have, you can do it. I'm. I did it as a single person and I made it happen.

[Dave Ramsey]

So how old are you?

[Caller (Jennifer)]

29. That was the other thing I was going to say. I paid it off three days before my birthday. That was my goal. So I had 30. A little over 30,000 at the beginning of this year. And I said, okay, I want to do this before I turn 29.

[Dave Ramsey]

Happy birthday. Well done. I love it. I love it. I love it. Well, we're proud of you. I know your mom and dad and all your friends are. Way to go. All right. It's Brianna. She paid off 204,000 in six years. Four of those years working on this team. Count it down. Let's hear a debt free scream.

[Caller (Jennifer)]

Three, two, one.

[Dave Ramsey]

I'm debt free. Yeah. So good, man. She leaned in.

[Rachel Cruz]

She's amazing.

[Dave Ramsey]

That was strong.

[Rachel Cruz]

So good.

[Dave Ramsey]

This is the Ramsey Show. Well, it's decision time again. Every year during open enrollment, you have the chance to check in on your insurance and make sure it's right for you and your family. Whether you have health coverage through your job, a private company, or a government program like Medicare, you don't have to figure this out alone. We have reliable folks we trust to help you get the right coverage for whatever stage you're in. Go to Ramsaysolutions.com health coverage. Rachel Cruz, Ramsey personality, is my co host today. We tell you around here, if you'll pay a price to win, you get to win. We say live like no one else, so later you can live and give like no one else. And when you're in baby step steps one and two and even three, where you're finishing the emergency fund and you're paying off all your debt but your house, you should not go on vacation. You should not go out to eat. You should lean in and knock your debt out as fast as you can. But when you get to baby step four, you go from intense to intentional. And that's when you get to buy that new couch or upgrade your car or go on vacation. That's why we named the cruise the Ramsey Cruise, the Live like no one else cruise because it's for baby step four and beyond. It is almost sold out. There's a handful of cabins left for March 22 through 29 in 2025. This is a premium Caribbean cruise. Turks and caicos, Puerto Rico, St. Thomas, the Bahamas, Holland America is one of their newest ships. It is a high standard. Listen, I don't go on these cheap cruises, okay? I like the nice ones.

[Rachel Cruz]

David's bougie with his travel. I don't know about that.

[Dave Ramsey]

I'm not staying in the freaking Holiday Inn anymore. I've worked too hard, so. And I'm not staying in the Holiday Inn on the seas either. So this is a nice ship. It's going to be a lot of fun. Sharon and I will be on the ship the entire time. All of the Ramsey personalities will be on the ship the entire time. The comedian Trey Kennedy that makes fun of me will be on the ship. That's fun. World class chef from the Food Channel, Monit Chauhan will be on the ship. Dove award winner, Grammy award winner, Stephen Curtis Chapman and Deana Carter both will be on the ship. And there's going to be others. It's going to be a wonderful, fun, laughing, celebrating, entertaining week. And most of you are not going to get to go because there's just a handful of cabins left. You need to get your cabin while you can. You can put down a small deposit and lock it in and we would love to have you do that. Ramseysolutions.com Cruise if you don't get this done, you're going to have FOMO or whatever that version is for Krusemo. So there you go. Don't, don't miss out on this. Open phones at 888-820-55225. John's in Pittsburgh. Hey John, what's up?

[Caller (John)]

Hi Mr. Ramsey. Thanks so much for talking to me. So in a nutshell, our issue is that our home is more expensive than we probably should have gotten. We are living paycheck to paycheck and quite often the paycheck doesn't even cover for two weeks. So we are bleeding from our minimal savings and paying for the things with our credit card and only paying the minimum to get.

[Dave Ramsey]

How much is your house payment?

[Caller (John)]

It is $2,090 a month.

[Dave Ramsey]

And what's your take home pay?

[Caller (John)]

Take home pays about 55 to 75. Sorry, no, that's not take home. That's total.

[Dave Ramsey]

Your take home pay in a month.

[Caller (John)]

Sorry, take home pay in a month is $4,200.

[Dave Ramsey]

Oh yeah, you have to sell the house, John.

[Caller (John)]

That's the, that's what we were thinking about doing.

[Dave Ramsey]

You don't have a choice.

[Caller (John)]

Biggest expense.

[Rachel Cruz]

Yeah, you can.

[Dave Ramsey]

Your house pays 50% of your take home pay. Hun, you can't do that. That's why you're dying. You had a feeling of that, but the arithmetic is screaming that you're starving to death.

[Caller (John)]

So I guess my biggest concern with that is if we're not able to, like if we don't have enough equity in the home to cover clothing costs.

[Dave Ramsey]

John, you can't stay in the house. You can't stay in the house.

[Caller (John)]

How does that, how does that look like? Where does that, that money come from? I guess.

[Dave Ramsey]

Well, right now you're putting it, right now you're putting on credit cards.

[Caller (John)]

Yeah, that's true.

[Dave Ramsey]

Yeah, so I'd rather have $5,000 on a credit card than a mortgage you can't afford.

[Rachel Cruz]

So what's that, what's the math of the, of the mortgage right now, John? What do you guys owe?

[Caller (John)]

We owe 287.

[Rachel Cruz]

Okay. How much is it worth?

[Caller (John)]

I mean, we actually just got it back down to what, what it was worth when we got it was 287,500. But some of the closing costs were rolled into the. When did you not 293. It was in November of 22.

[Dave Ramsey]

Okay, go [e-mail] and get one of our Ramsey trusted real estate agents that are high performers that actually know what the flip they're doing. Have them come out and look at this and give you a market analysis and tell you what you can do. But you've got to find a way out of this thing. It's not sustainable. That's what you already knew. You just needed someone else to say it out loud.

[Caller (John)]

I think you might be right.

[Dave Ramsey]

It's not even close. You're not like on the bubble or anything. You're over in the deep end of the pool. There's no, there's no debating now. The only, the only thing that could happen is do you have anything in the near future, in the next six months with your daytime career, your normal career, that looks like you're going to have a huge increase in pay?

[Caller (John)]

Second job would be the.

[Dave Ramsey]

No, no, no, no. I wasn't. What I was talking about. Second job is not sustainable. I don't want to sign up for something where I do a second job for 15 years. I'll do a second job for a short period of time to get out of a mess, clean up a mess. Right. But you don't want to do that. Your house, poor. This house owns you. You don't own it. I'm so sorry. And it's, it's going to be a little embarrassing. But you guys, you got married and everybody yelled at you and said, young couple, go buy a house. Go buy a house. Go buy a house. Go buy a house. And then we went and found a house we liked and the idiots at the mortgage company just signed your butt up and they put you in a crack, didn't they?

[Caller (John)]

Feels that way.

[Dave Ramsey]

Yeah. Yeah.

[Rachel Cruz]

Do you guys have kids, John?

[Caller (John)]

Well, that, that's one of the other things that's costing is we kind of have one that we weren't exactly expecting. Very thankful for it, sure, but we were not expecting.

[Rachel Cruz]

Is she, Is your wife expecting or do you guys already have. Is. Do you have the baby?

[Caller (John)]

No, she's been around for a little while.

[Rachel Cruz]

Okay, good.

[Dave Ramsey]

How long you guys been married?

[Caller (John)]

Since 2015, so almost 10 years.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

Okay, so you're like 30 years old?

[Caller (Lorena)]

35.

[Caller (John)]

Yeah. Yeah.

[Dave Ramsey]

Yeah. Okay, well, let me tell you a couple things, all right? When I was 28, I went broke and lost everything. And I was in a much more severe situation than you're in. But it taught me some things about situations with stress in this. The number one cause of divorce in North America today is money fights and money problems and money stress, and you got that. So your wife is afraid, and she may not want to leave this house. And you're confused and feel like you did something really dumb. And maybe, you know, maybe it hit. Maybe you took a hit in your confidence in that. That would be normal. Those things. If y'all are having money fights and she's very afraid and you're not as confident as you were before all of this mess, you would be normal. That would be a normal reaction to your situation. Okay? What I want you to do is get away from all that. The destabilization of your marriage, your lack of confidence, her terrify. Her being terrified. This house is not worth it. It's just a stupid house. There's a house on every corner in Pittsburgh. I've been there. They're everywhere. And you'll get you another house that doesn't get you. You'll never do this again. You'll never make this mistake. You got the rest of your life to make other mistakes, but you'll never make this one again, right?

[Caller (John)]

Yeah.

[Dave Ramsey]

It's no fun, is it?

[Caller (John)]

It's not.

[Dave Ramsey]

Yeah. Is what I was saying true?

[Caller (John)]

Everything except for my wife. She's totally on board with getting rid of this place.

[Dave Ramsey]

Okay?

[Rachel Cruz]

She's like, I want out.

[Dave Ramsey]

Yeah, well, it's not fun for her.

[Rachel Cruz]

And.

[Dave Ramsey]

And.

[Rachel Cruz]

And the interesting thing, John, is, you know, we. We have a phrase called financial peace. It's one of the books that Dave wrote. But. But that is it. It is. What we want for people is peace. We want peace. And just like you said, Dave, like, it's a house. It's just. It's a house, and it's not worth the stress and the anxiety and any level of status of home ownership or, like, whatever the play is for you, it's not worth it. Your piece is worth so much more than stuff. And that's true for cars or anything, but it feels magnified. Because a house, it is big. I mean, you know, it's a three. It's a $300,000, you know, idea. And it's where your family lives. There's emotional attachment. I mean, all of it. But get rid of it and go rent somewhere and just. Just breathe for two to three years.

[Dave Ramsey]

And save some money and get a down payment and then buy something else based on your income at that time. And you don't take out folks more than a house payment, more than a fourth of your take home pay, not half your take home pay. And just because the idiots at the mortgage company will give you the loan does not mean it's a good idea. They will ruin you if you let them. And they'll pinch you if you let them. And they'll make your life miserable if you let them. They don't care. They don't have a soul. This is the Ramsey show.

[J]

Hey, you're still here. What are you doing? You do know that the rest of today's show is playing right now over on the Ramsay network app, right? All you gotta do to finish the episode is search Ramsey network in the app store, Google play store, or just click the link in the show notes to download the app for free. Yep, you heard me right. For free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here.

[Dave Ramsey]

Enjoy.

[J]

We'll see you on the app.