Don’t Try To Solve an Income Problem With More Debt

Summary

Podcast Summary: The Ramsey Show – "Don’t Try To Solve an Income Problem With More Debt"

Introduction

In this episode of The Ramsey Show, hosted by Jade Warshaw alongside relationship expert Dr. John Deloney, listeners reach out with pressing financial dilemmas. The central theme revolves around addressing income challenges without resorting to additional debt, emphasizing ethical, moral, and legal considerations. The hosts provide personalized advice, blending financial wisdom with emotional support to guide callers toward sustainable solutions.

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Caller 1: Eric from Seattle, Washington

Situation: Eric, a small business owner, shares his predicament regarding a dissolved partnership and an outstanding debt of $16,000. Two years ago, his business partner abruptly announced a cancer diagnosis, leading to the closure of their venture. Eric single-handedly covered the debt, but his partner has since become unresponsive.

Discussion: Jade Warshaw probes into the relationship dynamics between Eric and his former partner, questioning whether emotional factors or financial disputes are at play. Dr. John Deloney raises the possibility of Eric's emotional exhaustion over the prolonged period without resolution.

Advice: Both hosts agree that the persistent silence suggests differing motivations. Dr. Deloney advises considering legal avenues such as sending a lawyer’s letter or visiting in person to address the debt. However, recognizing the emotional toll, Jade emphasizes the importance of preserving the professional relationship by approaching the topic with sensitivity.

Notable Quotes:

• Dr. John Deloney [03:02]: "Let it go, but you just like lobbing a text every once in a while or lobbing a voicemail every once in a while, it's just not making you crazy."
• Jade Warshaw [07:43]: "If you press it and he kind of gets feeling some type of way about it… it's not your dad or your best buddy. It’s business."

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Caller 2: Michael from Mobile, Alabama

Situation: Michael earns just under $40,000 annually as a cemetery maintenance manager and has recently launched a landscaping business that generated $18,000 in its first year. Despite efforts to cut costs, he struggles to save and manage debt, primarily stemming from high-interest car loans totaling $30,000.

Discussion: Jade delves into Michael's financial snapshot, uncovering that car payments consume a significant portion of his income. Dr. Deloney emphasizes that Michael's current income is insufficient to sustain his debt obligations, highlighting the unsustainable nature of his financial commitments.

Advice: The hosts recommend that Michael prioritize increasing his income over reinvesting in his side business. Dr. Deloney suggests drastic measures such as selling one or both vehicles to alleviate the high-interest debt. Jade concurs, advising Michael to seek higher-paying employment opportunities and consider financial education resources like Financial Peace University (FPU).

Notable Quotes:

• Dr. John Deloney [17:29]: "You’ve got to figure out these car loans and stop doing what looks fine."
• Jade Warshaw [29:39]: "If you just say to yourself, let's take a thousand dollars at a time, I need to make a thousand dollars more a month…"

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Caller 3: Brandon from Grand Rapids, Michigan

Situation: Brandon and his wife are navigating $140,000 in student loan debt alongside a $75,000 mortgage. Recently, Brandon has begun experiencing panic attacks due to financial stress, despite making strides in paying down his loans through an Income-Driven Repayment (IDR) plan.

Discussion: Brandon reveals that the pressure of debt has manifested physically through anxiety attacks. Jade praises his progress but acknowledges the emotional strain. Dr. Deloney explores the root causes of Brandon's stress, linking it to his role as a caregiver and the societal pressures surrounding debt and financial security.

Advice: The hosts commend Brandon for his proactive approach but encourage him to seek professional mental health support to address his panic attacks. Financially, they reinforce the importance of continuing to apply extra payments toward the smallest debt to achieve financial freedom progressively.

Notable Quotes:

• Dr. John Deloney [38:07]: "I wish there was an easy button… but your core income is an issue."
• Jade Warshaw [37:12]: "You're doing everything right as far as these student loans are concerned."

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Caller 4: Isaac from Arizona

Situation: Isaac received a voluntary severance package amounting to $150,000 before taxes amidst a turbulent job market in the tech industry. Coupled with a $175,000 mortgage, $5,000 in credit card debt, and $40,000 on two cars, Isaac is uncertain whether to preserve his severance funds or address his debts proactively.

Discussion: The discussion centers on Isaac's financial stability post-severance and the urgency of managing existing debts in an unstable job market. Jade and Dr. Deloney analyze the feasibility of maintaining his current lifestyle without incurring additional debt.

Advice: Jade advises against using the severance to pay off debts immediately, suggesting a cautious approach to preserve funds. Dr. Deloney emphasizes the necessity of seeking additional income sources and potentially downsizing expenses. Both recommend Isaac focus on eliminating high-interest debts to improve his financial resilience.

Notable Quotes:

• Dr. John Deloney [33:08]: "Make enough money to eat."
• Jade Warshaw [26:30]: "If postulated a million dollar net worth… but if you don’t, you need to go with the 2024 and pay cash."

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Caller 5: Shannon from Harrisburg, Pennsylvania

Situation: Shannon and her husband, both 54, are nearly debt-free except for a mortgage and are concerned about securing their adult son with autism's financial independence. Their son, who lives with them and is nearing the age where he might move out, has shown commendable saving habits.

Discussion: Shannon seeks advice on how to best prepare their son for independent living, balancing financial support with fostering autonomy. Jade and Dr. Deloney commend their efforts and discuss the importance of setting up structures like a Special Needs Trust to ensure their son's financial security without undue burden.

Advice: The hosts recommend enhancing financial literacy through investment accounts like Roth IRAs and reinforcing the principles of budgeting and saving. Dr. Deloney emphasizes the significance of preparing emotionally and financially for their son's potential move towards independence, encouraging proactive planning to support his transition.

Notable Quotes:

• Dr. John Deloney [60:47]: "Treat money like a tool, not a seat."
• Jade Warshaw [50:42]: "They’re doing good… you want life insurance, how much 401k…"

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Caller 6: Wes from Evansville, Indiana

Situation: Wes is contemplating replacing his family’s minivan and grapples with the decision of purchasing a new model versus a used one. Concerned about the immediate depreciation of a brand-new vehicle, he seeks guidance on making a financially responsible choice.

Discussion: Wes explains his situation, highlighting that his wife has saved $38,000, and with an additional bonus, they are considering a $52,000 new Kia Carnival. Jade and Dr. Deloney examine the financial implications, including the high depreciation rates of new cars and Wes's overall financial health.

Advice: The hosts advise Wes to evaluate his net worth, suggesting that significant purchases like a new vehicle should align with a robust financial foundation. They recommend opting for a slightly used model to mitigate depreciation losses and ensure that the car purchase remains a manageable financial commitment.

Notable Quotes:

• Jade Warshaw [69:54]: "Imagine if… you think it's going to lose 60% of its value in the next three to four years."
• Dr. John Deloney [72:10]: "Make sure you’re truly confident you can afford this."

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Caller 7: Scott from Phoenix, Arizona

Situation: Scott is debating whether to upgrade his family minivan to a new 2025 Kia Carnival, priced around $52,000, versus a used 2024 model at roughly $40,000. With a combined household income of $190,000 and cars currently worth $8,000, he seeks advice on balancing desire with financial prudence.

Discussion: The conversation delves into the practicality of purchasing a new vehicle amidst life's financial demands. Jade emphasizes the importance of aligning such purchases with long-term financial goals and stability. Dr. Deloney reinforces the notion of prioritizing essential financial commitments over depreciating assets.

Advice: Jade and Dr. Deloney suggest that Scott opt for the older model to avoid significant depreciation and ensure that the purchase does not compromise his overall financial health. They stress the importance of maintaining a substantial net worth to accommodate such large expenditures without jeopardizing financial security.

Notable Quotes:

• Jade Warshaw [72:26]: "It checks your gut… how much can I really afford this?"
• Dr. John Deloney [72:10]: "It's a good gut check to go."

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Caller 8: Wes from Evansville, Indiana

Situation: Wes discusses his intention to replace his family's minivan with a new Kia Carnival, navigating the financial considerations of paying cash for a new versus used vehicle.

Discussion: The hosts evaluate Wes’s financial capacity, emphasizing the impact of purchasing a high-cost vehicle on his overall financial strategy. They highlight the importance of assessing net worth and ensuring that such a purchase aligns with sustainable financial practices.

Advice: The recommendation leans towards purchasing a slightly used minivan to prevent substantial depreciation losses. The hosts advise maintaining a balanced approach to large purchases, ensuring that they do not impede long-term financial goals or stability.

Notable Quotes:

• Jade Warshaw [72:26]: "It checks your gut… how much can I really afford this?"
• Dr. John Deloney [72:10]: "It's just a choice you have to make."

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Caller 9: Drew from Wichita, Kansas

Situation: Drew and his wife find themselves upside down on a $14,000 car loan, with the vehicle worth significantly less than the owed amount. With a combined annual income between $40,000 and $50,000, and a second child on the way, they grapple with the decision to let the car be repossessed or find alternative solutions to manage the debt.

Discussion: Drew explains his financial strain, particularly the burden of high-interest car loans that consume a substantial portion of his income. Jade and Dr. Deloney assess the implications of voluntary repossession versus proactive debt repayment strategies.

Advice: The hosts strongly discourage voluntary repossession due to its deleterious impact on credit scores. Instead, they advise selling the car privately to minimize losses and aggressively paying down the remaining debt. Emphasis is placed on taking immediate action to reduce financial strain and prevent further credit damage.

Notable Quotes:

• Dr. John Deloney [75:28]: "You're not going to do that."
• Jade Warshaw [23:30]: "I would not do a voluntary repossession that is going to drop an atom bomb on your credit."

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Caller 10: Shannon from Harrisburg, Pennsylvania

Situation: Shannon and her husband, both 54, are nearly debt-free aside from their mortgage and are planning for their adult son with autism to gain financial independence. Their son, who has shown strong saving habits, may eventually move out.

Discussion: Shannon seeks advice on facilitating her son's transition to independence, balancing financial support with fostering his autonomy. The conversation explores setting up financial structures and encouraging responsible financial behavior.

Advice: The hosts recommend setting up a Special Needs Trust to ensure financial security without burdening the family. They also suggest teaching their son fundamental financial principles such as budgeting, saving, and investing, tailored to his capabilities and future independence.

Notable Quotes:

• Dr. John Deloney [60:47]: "Treat money like a tool, not a seat."
• Jade Warshaw [50:42]: "Think about the long-term financial security for your son."

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General Advice and Conclusion

Throughout the episode, Jade Warshaw and Dr. John Deloney emphasize the importance of aligning financial decisions with long-term stability and personal values. They advocate for proactive debt management, income augmentation, and emotional resilience in the face of financial stress. Key takeaways include:

• Avoiding Additional Debt: Instead of borrowing more, focus on increasing income, reducing expenses, and selling depreciating assets.
• Legal and Ethical Considerations: Address debts with former partners or business associates through respectful and legal channels.
• Emotional Well-being: Recognize the mental toll of financial stress and seek professional support when necessary.
• Financial Education: Utilize resources like Financial Peace University and budgeting tools to foster financial literacy.
• Strategic Financial Planning: Prioritize high-interest debts, consider the cost-benefit of major purchases, and plan for future financial independence, especially for dependents with special needs.

Notable Closing Quotes:

• Jade Warshaw [83:35]: "The Ramsey Show. Helping you with your life, your money, your relationships, your career."
• Dr. John Deloney [82:50]: "It's a choice you have to make. Do I want to do this job or not?"

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Conclusion

This episode of The Ramsey Show serves as a comprehensive guide for individuals grappling with income insufficiencies and high debt burdens. By combining practical financial strategies with compassionate support, Jade Warshaw and Dr. John Deloney empower listeners to make informed decisions that align with their ethical and personal values, ultimately fostering financial independence and emotional well-being.

Transcript

[Jade Warshaw]

From the Ramsey Network, it's the Ramsay Show. I'm Jade Warshaw. Next to me is Dr. John DeLoney. We're going to be taking calls about your life, your money, your relationships. You guys already know this, but Dr. John is the resident relationship. Can I call you a guru?

[Dr. John Deloney]

You can call me anything you want to. The guru would be the nicest thing. Somebody called me today.

[Jade Warshaw]

I'll go with guru, and I'll hit you up on the money side and we'll cross paths as needed. If you want to get involved, this is a live show, so you can call in right now. 888-825-5225 gets you on the line. All right, we got Eric from Seattle, Washington, starting us off. What's going on, Big E?

[Caller]

Hi, guys. Thank you guys so much for having me.

[Jade Warshaw]

You're welcome. How can we help?

[Caller]

A little bit nervous. So I'm currently a small business owner, and I'm looking for your advice on what to do legally, morally and ethically. So I started a business two years ago with a good friend of mine. Well, just knew him professionally. And after one year, he called me out of the blue and told me that he has cancer. And I felt really bad. And we decided to kind of close up our business. At that time, we had about $16,000 of outstanding balance that we owed in various debt. At that point, I just messaged him once to see if he's okay with covering his share. He didn't respond. So I didn't want to press him because he has cancer. So I just paid the 16,000 from my own pocket and we closed the business. It's been about two years now. I've been kind of just calling him, just not even mentioning money. He's like, hey, are you okay? How's it, like, is everything okay? He hasn't answered me, doesn't reply. I was wondering what you guys would do, know, legally, morally, and ethically. Should I just let it go? Should I try to pursue it? Yeah.

[Jade Warshaw]

So do you feel like he's ducking you because he thinks that you're going to ask about this money? What do you think? You know, the guy and you know, what your relationship was like before this, or is it that he's quite sick and he's kind of off the radar?

[Caller]

I mean, knowing him, he's a little bit. I feel like it can be both, really. My gut tells me that, you know, he's actually sick, but I feel like he can at least answer a text or a call in, you know, three years.

[Jade Warshaw]

I Mean, you guys.

[Caller]

I'm not even mentioning about the money.

[Jade Warshaw]

You were friends?

[Caller]

We weren't like friends. We just knew each other, like, professionally from, like, previous work. We worked at the same place and.

[Jade Warshaw]

Yeah, I mean, what was it like when you guys closed the business? What. What did that look like? Because I can't imagine running a business with somebody that I'm not in direct contact with on a daily basis. I mean, you're. You're doing everything together. So what happened? Something happened that caused you guys to kind of. We don't talk much anymore. Something had to have happened. Am I Ron, Am I wrong? Yeah.

[Caller]

Well, so we were just planning for our next stages of expansion. He was in charge of, you know, like, tracking down new clients and trying to expand us. And he just called me like one day and says, hey, like, well, he hasn't been picking up my phone lately. And, you know, he finally got back to me after a week and he told me that, hey, I'm currently dealing with some health issues. And I was like, what happens? Like, I currently have cancer and I know he's a single dad.

[Jade Warshaw]

Okay.

[Caller]

So, you know, I just wished him all the best. And then on the same call, we're like, okay, well, like, you know, let's close up the business then, because I want you to focus on this, and I can't carry this on without you.

[Jade Warshaw]

Okay?

[Caller]

So the next step was we called our accountant and, you know, we term. We submitted the, you know, the notice of termination, we got his signature, and then our accountant sent us the bill as well. And after that, didn't really hear back from him.

[Dr. John Deloney]

Here's my thoughts, dude. On any front, let's say he's a total scumbag and he's just playing you to run a two or three year. I've got cancer, I'm a single dad ruse, dude. I want nothing to do with that human being. Let's say he does have cancer. Maybe he's in remission, he's working really hard. It scared him to death. He's just trying to keep one foot in front of the other. Or I just go back to the emotional and spiritual calories you have burnt over the last two years for $8,000.

[Jade Warshaw]

Which is a lot of money.

[Dr. John Deloney]

Yeah, I don't want to minimize it. But, bro, I mean, if I'm in your seat brushing my shoulders off and I'm going on about my life. Interesting, John, interesting, because either you're gonna sue a guy that told you he's got cancer, right?

[Jade Warshaw]

Yeah, I don't Think you have to go to that? I mean, can I just ask, have you. I know that you're saying, hey, I'm. I'm contacting him. And I'm contacting him under the guise of, like, seeing how he is, but have you just actually said, hey? I don't know if you realize this, but when we close the business, there are 16,000. I just paid it. But are. You know, truthfully, we went into this together. Cuz there's. Business is business. This is not your brother. This is not your uncle. Like, it's not your dad. Like, business is business. And so there's part of it that I would be like, hey, I would love for you to pay your half because I came out of pocket on this, and $16,000 is a lot of money. And then maybe he does say, bro, I'd love to pay you, but here's what's going on. Like, I don't feel like there's anything wrong with opening up that conversation.

[Dr. John Deloney]

There's not.

[Jade Warshaw]

Yeah.

[Dr. John Deloney]

There's nothing wrong with it. Okay, but what. Let me. Let me put it this way. What you're doing is not working.

[Jade Warshaw]

Yes.

[Dr. John Deloney]

So either you're a true friend and your buddy's dying of cancer, your former business partner and buddy, and you go knock on the door and you say, hey, man, I miss you. You're not returning my calls, are you all right? Or you let this thing go, but you just like lobbing a text every once in a while or lobbing a voicemail every once in a while, it's just not. It's making you crazy. And if there is a hurting person on the other end of this phone on the other end of that line, it's not working. It's not getting through to him.

[Caller]

Okay, so you recommend just. Just visiting him in person or just forgetting about it?

[Dr. John Deloney]

I mean, I think. I mean, Jade and I. I mean, I. I think she's exactly right. Business is business. And so if you want to go track down your $8,000, the way you're trying to track it down isn't working. So either knock on his door or send a letter from a lawyer. That's really your two options. Or you've tried for two years or two and a half years, you either he's a scam artist or he's just struggling, man. And either way, he doesn't. He's communicating to you through his behavior. He don't want to talk to you, so let it ride.

[Jade Warshaw]

Yeah. For me, you've said nothing about this guy that denotes man. I had a great relationship with him, and I really want to keep that together. Like, there's been nothing of, like, we used to be best friends or good buddies. At least you haven't said that in this conversation. So in many ways, it's like, if you kind of press this, there's no. It doesn't feel like there's much lost if you press this and he kind of gets, you know, he starts feeling some type of way about it. Right. It's not like it were your dad or if this were your best buddy. Am I right, or is there more that you didn't tell us?

[Caller]

Oh, yeah.

[Jade Warshaw]

You're.

[Caller]

You're. You're completely right. You're completely right.

[Jade Warshaw]

Yeah, I'd press it. You're. The truth is, if somebody says, I don't. I'm not going to give you this money. Yeah, you're not going to get it without some sort of illegal situation going on there, and you get to decide that. But I'm with John, man. I. I'd press him. I'd find out where he works, or I'd find out where he lives, and I'd pay him a visit. I'd be like, hey, man, what's going on? You just dropped off the face of the earth and. And check in with them first. But then it's like, hey, let's talk about this $8,000, because that's not a little bit of money. Most people feel that greatly, so thanks for the call.

[Dr. John Deloney]

Are you struggling right now financially?

[Caller]

No.

[Dr. John Deloney]

No.

[Caller]

I mean, $8,000 is a lot of money, but, you know, it's not like it's going to kill me or, you know, I'm going to be homeless or anything I have, like, about some savings.

[Jade Warshaw]

Okay.

[Dr. John Deloney]

Do you. Do you want to be friends with this dude? Are you genuinely worried about him or are you reaching out just to get your money back?

[Caller]

At this point, I think it's more about the latter than the former because it's just giving me a little more. Like, my suspicion is just growing more and more just because it's been, you know, about two years and I just even haven't heard from him back, like.

[Dr. John Deloney]

Hey, is he alive?

[Caller]

Okay.

[Jade Warshaw]

Or, you know, that's what I'm wondering. Is he with us?

[Caller]

I. I have no idea.

[Dr. John Deloney]

Yeah, so you're. You're creating stories that are keeping you up at night, not him. So I would say act. Either. Either make it a point in your spirit just to let this thing go. Go get in a car and go visit him, or go contact a lawyer and have a lawyer write a letter, but that those are the three direct things. You can drop it, you can friend it, or you can make it a legal action, but you just sitting around spinning up stories about what he may or may not be doing that's making you crazy on the inside. It's not worth it.

[Jade Warshaw]

This is the Ramsay Show. Okay, here's the hard truth.

[Dr. John Deloney]

Your investment dollars could be winding up.

[Jade Warshaw]

In the pockets of companies that hold.

[Dr. John Deloney]

Positions you don't agree with.

[Jade Warshaw]

People are unknowingly putting money into tech giants and household brands that don't match.

[Dr. John Deloney]

Up with their core values.

[Jade Warshaw]

But here's good news. Timothy Plan is at the forefront of biblically responsible investing. That means Timothy Plan uses a strategy that lets investors chase competitive returns while.

[Dr. John Deloney]

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[Jade Warshaw]

A clean conscience, it's time to check out Timothy Plan. Request [e-mail] to learn more or contact your financial advisor today to see if Timothy Plan is right for you. Timothyplan.com investing includes risk, including possible loss of principle. Before investing, carefully consider a fund's investment objective, risk, charges and expenses contained in the prospectus or summary Prospectus. [e-mail] Read carefully before investing. Mutual funds distributed by Timothy Partners Limited and ETFs distributed by Foresight Fund Services, LLC. It's the Ramsey Show. I'm Jade. Next to me is Dr. John Deloney. Happy Halloween. If you celebrate that sort of thing. Are you a spooky Halloween? Like creepy Halloween.

[Dr. John Deloney]

I like scary movies and I like haunted houses and I love eating my body weight in candy and having everyone not like, look at me like I've got something wrong with me.

[Jade Warshaw]

So I want to have a normal night without everybody looking at me like I'm crazy.

[Dr. John Deloney]

Yeah. I mean, you can just mainline candy and everyone's like, yeah, it's Halloween, so I feel like I get a pass. But also I like going to bed like at 9:00. So this is a tough night for me.

[Jade Warshaw]

Yeah, I hear that. Are you like a chocolate or like a candy, like, hard candy person?

[Dr. John Deloney]

I'm not super discerning.

[Jade Warshaw]

Okay.

[Dr. John Deloney]

I'm not super discerning. I always get frustrated with the Jolly Rancher folks, but other than the Jolly Rancher people. And I got, I got a stiff dad tax. I'm trying to teach my kids about the future of the world they're going to be inheriting with high, high taxes. And so when they get home with the candy, I go through it and dad Tax it pretty hard.

[Jade Warshaw]

Got you, got you.

[Dr. John Deloney]

Got you pretty hard.

[Jade Warshaw]

Listen, I always say payday is very underrated. I get sad every Halloween. There's less and less paydays that are given out as candy. I know, and that's one of my favorites.

[Dr. John Deloney]

Kids like mine ruined it.

[Jade Warshaw]

Yeah. There's less and less butterfingers going out. That bothers me deeply with all of my heart.

[Dr. John Deloney]

Yes.

[Jade Warshaw]

Kelly knows what I'm talking about.

[Dr. John Deloney]

All right, well, because I talked a lot of. I used to make fun of everybody when I was a kid, and that's how. Why the universe gave me a peanut allergy kid. They're like, oh, that's what you get. So it's kids like mine that are ruining it for.

[Jade Warshaw]

I got you. I. I didn't. I didn't make that connection. Now I know there should be.

[Dr. John Deloney]

Oh, my gosh. If there was an adults only, peanut like, candy party.

[Jade Warshaw]

Let's move on.

[Dr. John Deloney]

I realized I just wandered into some. Some. Some fragile territory there. That's not what I meant. I was just saying there's a bunch of people that got together and they were like, hey, let's all bring paydays and butterfingers have been awesome.

[Jade Warshaw]

It would be awesome.

[Dr. John Deloney]

Let's go to Mobile, Alabama. Michael. What's up? Michael?

[Caller]

Hey, how's it going? That was a little bit weird with the adult party.

[Dr. John Deloney]

It was all weird. That makes perfect sense.

[Jade Warshaw]

I'm glad you called it out. Michael. We're sorry.

[Dr. John Deloney]

What's up?

[Jade Warshaw]

What's up?

[Caller]

Messing around. How are you doing?

[Dr. John Deloney]

Good, good, good. What's up, dude?

[Caller]

Yeah, so I was actually calling. I. I live paycheck to paycheck, man. I make like, right under 40 grand a year. My wife doesn't work. She stays at home with the kids. I've cut cost. I mean, as much as possible. And we're still just not really saving any money. Like, I just feel like I'm beating my head against the wall and I'm trying to get us into a house and things like that. But my main question is, what is the best way for somebody like me? I have no retirement. I have no savings. I have nothing for the future. I'm 32.

[Dr. John Deloney]

You gotta. Michael, you gotta make more money, brother. Like, you're making. You're not making 40 grand. What do you do for a living?

[Caller]

I'm a cemetery maintenance manager. Okay. And you know, work 40 hours a week or whatever, but I started my own business this year, landscaping and stuff.

[Jade Warshaw]

And what's that? Bringing in?

[Caller]

It's gone. It's Gone pretty well. I brought in right at like 18,000 this first year.

[Jade Warshaw]

Okay.

[Caller]

But I've also spent every single dollar getting new, better equipment, just, you know, stuff like that.

[Jade Warshaw]

So you invested it all back in. You didn't?

[Caller]

Yeah. And next year I'm actually in a good spot to, I think, actually make a profit. But I haven't paid myself out of that business, and I'm. I feel like I'm just killing myself trying to juggle everything and then not getting anywhere. Yeah, on top.

[Jade Warshaw]

Well, let me, let me bust in here. Tell me, tell me a little bit more about your financial snapshot because we know that you're making the 40,000 that it's. I'm not going to lie to you, it's going to be tough to make your way with that. And then you started the side hustle, but you're reinvesting all the profit, which in this case, if it's a side hustle, pay yourself and grow the business later. Right now you need cash. So let's find out about the debt. Do you have any debt going on? Is that robbing you?

[Caller]

Well, so the past year and a half that I've been here, I've focused on paying all my credit cards down. I have, like, practically no credit card debt.

[Jade Warshaw]

How much?

[Caller]

150. You know, and the main things I have are mine and my wife's vehicles.

[Jade Warshaw]

Okay, tell me what they're worth and.

[Caller]

What you all wanted, what they're worth.

[Jade Warshaw]

Is and what you owe on it.

[Caller]

I mean, probably selectively, 20,000 together, and I owe probably collectively 30 on both of them.

[Jade Warshaw]

Tell me individually, tell me what you.

[Caller]

Owe on it, and tell me what 21% interest rate. And I'm actually refined. I'm in the process of refinancing it right now, but it's really all I could get at the time. And so I took it, the truck, I bought it for 15,000.

[Jade Warshaw]

Okay, at 40, 41% exactly.

[Caller]

Yes, yes.

[Jade Warshaw]

Okay. And what, what's it worth? You bought it for 15,000. What's it worth? Now, if you were to Kelly blue.

[Caller]

Bucket private sale, it probably be about. About nine or ten thousand.

[Jade Warshaw]

Yikes. Okay, and what's your payment on it?

[Caller]

My payment is $445 a month.

[Dr. John Deloney]

Sheesh.

[Jade Warshaw]

Okay, now tell me a little bit about your wife's car because I'm going to try to find you a way out of some of these payments because these are. What are you. Can't breathe, you know. So tell me about your wife's car.

[Caller]

She has a Tahoe it's a 20. It's a 2013.

[Jade Warshaw]

Okay.

[Caller]

We got for 25. 5,000.

[Jade Warshaw]

Oh my.

[Caller]

Years ago.

[Dr. John Deloney]

Lee. Dude.

[Jade Warshaw]

Hey.

[Caller]

Yeah.

[Jade Warshaw]

What's going on here is your cars, your cars are almost what you make in a year.

[Caller]

Trust me, I know. Yeah, I mean, it's literally I weekly and it takes one of my checks to pay both of the vehicles and most of insurance.

[Jade Warshaw]

Okay, so now that you've, now that you feel that, then I don't need buy in going forward. We know we've got to get rid of one or both of these vehicles somewhere somehow. So hers is worth 25 or you paid 25 for hers. What's hers worth if you were to sell it?

[Caller]

Not, not trade in probably 12,000.

[Jade Warshaw]

What's going. Why are.

[Caller]

I'm sorry, go ahead.

[Jade Warshaw]

Why are you going into these subprime loans? Why are you paying 41% interest and do. Doing all this? What's the, what does it get you.

[Caller]

On the, on the Tahoe? We got like an 8% interest rate. I got a pretty good interest rate on there. The thing, it's just, it was so. It was just older but real. An 80 year old woman had it. It had like 60,000 miles on it. It's still going great.

[Jade Warshaw]

Yeah. But here's, here's where I want to get you to. Here's where I want to get you to. I want to get you to the point where you look at these vehicles and you go, this was the worst decision. This is getting me nothing. As long as you look at it and go, oh, well, it was kind of good, or I needed this, or there's not going to be much I can do to help you. You have to look at this and go, that was the dumbest thing I ever did. I'm never doing it again. That's how we know there's a turning point that's going to happen. And I hope you get to that point because truly something's behind this. For you to make $40,000 a year and have almost $40,000 in vehicles, I mean, you, you, you're shooting yourself in the foot at that point.

[Dr. John Deloney]

So to John's point, Michael, I think, I think I know what it is. You don't make any money, but y'all are living a life that you want to be living. And what I mean by that is, bro, you can't afford for your wife to stay home right now. Y'all don't make that kind of money. And I know you want that and I want it for you, but you can't afford it.

[Caller]

I have three kids as well and that's the main reason.

[Jade Warshaw]

That's even more reason.

[Dr. John Deloney]

Totally get it, dude. But, but, but you got, you got, you got cars that are nice and they may be old or whatever, but that you can't afford. It's like this. I want to have a Tahoe. I want to have this nice truck. I want to. We're going to be a stay at home, single income family. All of that works good on paper and it looks good on Instagram. It doesn't look good in reality. How old are your kids, man?

[Caller]

Thirteen? Ten? Two. And my wife's pregnant right now with another one.

[Dr. John Deloney]

Okay, so you have two that are in school and you have a two year old, right?

[Caller]

Yes.

[Dr. John Deloney]

Is she homeschooling also?

[Caller]

No, no. The girls are in school and she stays at home with my youngest. And like I said, she's seven months pregnant now, so she hasn't been working for. I guess it's been the past two years. She took off for my youngest.

[Dr. John Deloney]

Let me ask you, we're going to run out of time here. I just need to say this out loud, bro. You got to look yourself in the mirror and I want you to like, there's nobility in the job that you do. There's nobility in starting a side hustle. You've got to go make more money. You've got a family of five and another one on the way. You gotta get rid of these cars, right? You gotta figure out these car loans and stop doing what, quote unquote looks fine. You gotta go scorched earth with cars. No debt. Hang on the line. We're gonna give you FPU as our gift. I want you to watch those videos.

[Jade Warshaw]

And Ken Coleman's career assessment because your core income is an issue. No side hustle is gonna help you get out of this. You need to change career paths and Ken Coleman can help you with that.

[Caller]

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[Jade Warshaw]

But there's no such thing as a crystal ball.

[Caller]

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[Jade Warshaw]

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[Caller]

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[Jade Warshaw]

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[Jade Warshaw]

You'Re listening to the Ramsey Show. I'm Jade Warshaw. Next to me is the doctor, Dr. John Deloney. I'm really excited because the time is running out yet again to book your cruise. John, I've told you many times, if you don't book it, you got it. You got to book it. Now. They're more than 90% full. And so if you were thinking about going on this cruise, now's the last chance. And there's no guarantee that I'll, you'll have another chance. So you better book it.

[Dr. John Deloney]

And there's the, yeah, it's going to go as a Christmas gift. And don't forget the Ken Coleman Pickle ball challenge and the George Camel Cannonball in the Pool challenge. He's taken on all comers if you want to go see that.

[Jade Warshaw]

Interesting. Okay, Speedo required.

[Dr. John Deloney]

Speedo. What's George's personal request?

[Jade Warshaw]

That's right. That's right. Well, I do need to say we're talking about all of these fun amenities, but it's not your average cruise. This is actually a very premium cruise. Holland America is top draw, if you will. John. It's a, it's a nice, it's a nice cruise and we're going to really nice destinations. I've cruised a zillion times. I've been to all these places. They're actually really, really great. Turks and caicos, Puerto Rico, St. Thomas, Bahamas and more. Holland. Americ's new St. Dom ship is beautiful the way the theater is, John. It's like around and all the way around.360 basically are LEDs. And so it's a very immersive experience. So it'll be really, really fun. Really great food, really great entertainment. There's specialty restaurants on board. There are excursions that you can do.

[Dr. John Deloney]

So this food's all included, right?

[Jade Warshaw]

Everything's included.

[Dr. John Deloney]

Room service is included.

[Jade Warshaw]

Everything's man, you can go, you can have a hot dog at 3am and no one's going to stop you.

[Dr. John Deloney]

And will they bring you, they Bring you like it's indigestion and anti diarrhea.

[Jade Warshaw]

That you might have to provide on your own. But all the Ramsey personalities are going to be there. And I keep saying by the end of this is a seven day cruise. By the end of this, we're going to be bffs forever.

[Dr. John Deloney]

Or we're going to be nffs. We're going to be no. Forever friends. I think we'll be bff.

[Jade Warshaw]

I think we will too. As long as nobody wears a spring speedo. But there's going to be lots of celebrity guests. It's just going to be great. So book your cruise. Ramsaysolutions.com Cruise is how you do it. Or you can click the link in the description if you're listening on YouTube or podcast. All right, I'll see you there. Let's go to the phone lines, shall we? Wichita, Kansas, we've got Drew. What's going on, Drew?

[Caller]

Hey. I appreciate you guys taking my call. It's a little embarrassing of a phone call, but here we are. My wife and I bought a car two years ago and we are absolutely upside down in this thing. Kelley Blue Book. I can trade it for 3,000. I could probably do a private sell of 5,500 to 6,000.

[Jade Warshaw]

Okay.

[Caller]

We owe just about $14,000 on the car. Whoa. We are trying to figure out, do we just let this thing get repossessed and deal with the money that we're going to have to pay later on to free up that 5, $600 today, or do we keep it?

[Jade Warshaw]

No, I would not do a voluntary repossession that is going to drop an atom bomb on your credit, which is unnecessary. And you're still going to be on the hook for it's. It's, it's not. I would not make that option. What's the, what's the payment on this for you? What's it costing?

[Caller]

We. $450 a month.

[Jade Warshaw]

Okay, that's a lot. Tell us about your income.

[Caller]

So my wife and I stepped down from ministry, just obeying holy spirit and rest. And I am currently driving a semi truck. So I'm gone a lot.

[Jade Warshaw]

And what do you make?

[Caller]

We hit right now I'm sitting at about 40 to 50,000 a year.

[Jade Warshaw]

40 to 50,000 a year. What are you taking home? What's it look like? Monthly, after taxes, after all your expenses are taken out. What's it look like that you're bringing home in your check every month?

[Caller]

It just depends on miles. Obviously we're looking probably two to sometimes 4,000amonth.

[Jade Warshaw]

Okay, two to 4,000. And is your wife doing anything during this time?

[Caller]

No, she is a stay at home mom. She's actually worked having a baby tomorrow.

[Jade Warshaw]

Wow. Okay. And is this going to be your first child or how many do you have?

[Caller]

This would be number three.

[Jade Warshaw]

Wow. Okay. You know what? This, this, in many ways, this call is very similar to one we took earlier this hour regarding the car. You're probably going to have to bite the bullet and pay this thing off. Is it your only debt?

[Caller]

We have a credit card of like $1,000, and then we have student loans, which are probably about 20, and that's all the debt that we have.

[Jade Warshaw]

Okay. Because here's the thing. If I said, hey, go to the credit union and get a loan for the difference, but then also keep some money out to buy yourself a cash car, you'd be right back at 14,000. Right. And so there's no, there's really no way getting out of. The only difference is you might have a. A slightly lower payment every month, but not by much. Okay. So for that reason, I would say you're going to have to bite the bullet. And how quickly can you pay off $14,000? That really needs to be the goal. This could be a lot worse. You know, John, we're not talking about a $45,000 situation. This is a $14,000 car plus a $1,000 credit card. If you both decided it's. And I'm not saying this to be ugly, but it's. It's. It's adult go time, and we've got to work and we got to bring in an income, then you can clean this mess up very, very quickly. But the problem is making two to three thousand dollars a month. It ain't happening.

[Dr. John Deloney]

Yeah, yeah. I hesitate to get into this, but when you say the Holy Spirit told you to stop working at the church, what does that. What does that mean? Something happened? Did y'all get in trouble or did you just say, my time here is done?

[Caller]

It was a little bit of church hurt with it. I'll be honest there. But we definitely needed rest. My wife has had some health issues through this pregnancy. We just needed to focus on us and our kids that way later on in life. They did not hate the church and hate being totally follower of Christ.

[Dr. John Deloney]

If I can be honest, just listening to your voice, you sound terrified.

[Caller]

A little bit, yeah.

[Dr. John Deloney]

Okay. You've got a. You've got a pretty brittle tenor. You got a baby coming tomorrow. You have a job that is putting you on the road all the time. You're not home, your wife's not doing well, you still got. It is. There's. My dad was a minister for a while too. There's a hurt like no other when your church family turns on you. Right. I think you're worth More than $40,000 in your current area. Okay. And I applaud you for going to do the next thing you could do to get a paycheck to take care of your family. That's noble and that's good. But if I were you, I'd go down and see if what would. What I could make being an assistant manager at Walmart or stocking or something like that. Because you need to be around your family when you have this other kid. And if your wife has. Has had health issues, I know that's weighing on you, and I want you to make more than 40,000 bucks.

[Caller]

Yeah.

[Dr. John Deloney]

Okay. It's a scary moment right now. Does that sound tenable? Every trucker I know is struggling right now. It's just, it just, it's a reality. It made a jillion dollars three years ago and people are gnawing off their arms and legs to try to make it work right now. And so I'd rather see you walk away from that and go work at McDonald's and make 11 bucks an hour and go from there and then go down the street and throw boxes at Walmart until 11 o'clock at night and do the night feeding so your wife can go to bed. I'd rather y'all figure that out the next six months. And even if you're only making 40 or 50 grand doing that until you cobble something else together. But man, oh man, oh man, I can hear it in you, dude.

[Jade Warshaw]

I mean, the truth is, when you really put math to this, if you just say to yourself, okay, let's take it a thousand dollars at a time, I need to make a thousand dollars more. If I can make a thousand dollars more a month, for the most part, I can have this car paid off. Right? I mean, that's what we're whittling it down to. And if you do that, you're out of this car. And you know, you do a little bit more than that, you're out of the car and you're out of the credit card. Right? And then the next year you start tackling the student loan. And so just by breaking this down into bite sized pieces, because again, again, similar to the call we took earlier, this is a core income issue. I don't know if your Plans are to go back into ministry or not. But whatever your plan is, career wise, it has to shift from where it is right, right now. And I'm not going to sit here and act like that's a light switch. I think that that's more of a journey that you're going to be going on. But in the meantime, do what John said and take the jobs that you can get because a lot of them are paying a lot more than what you're making right now.

[Dr. John Deloney]

And you miss your family, don't you?

[Caller]

Absolutely.

[Dr. John Deloney]

Yeah. Don't. Don't. If you were making $140,000 a year and this was a season, I'd give you a hug and say, man, this is a season. You're making 40,000 bucks. That's not worth missing everybody in your family and your life and watching your little baby be born without you, right? To do that. Not. Not when there's $40,000 worth of jobs down the street, if not more. And you can get on an assistant manager and associate manager track and then go make yourself some good money down the road here. I'm proud of you, man. Let's reverse engineer this thing. And congratulations on having a new baby. And Jade and I will be cheering you guys on that you guys have a healthy. A healthy birth and everything's good to go this time tomorrow. Blessings, man.

[Jade Warshaw]

This is the Ramsey Show.

[Caller]

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[Jade Warshaw]

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[Caller]

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[Jade Warshaw]

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[Caller]

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[Jade Warshaw]

You're listening to the Ramsey show, where we help people build wealth, do work they love, and create amazing relationships. I'm Jade Warshaw Next to me is Dr. John Deloney.

[Dr. John Deloney]

Ah.

[Jade Warshaw]

Today's Ramsay show. Question of the day is sponsored by why Refi? Hey, it's hard to make progress when you're trapped under an avalanche of defaulted private student loan debt. But why Refi helps you dig out and get momentum with custom refinancing based on your ability to pay and a lump sum payoff option that you could qualify for after 24 months. That's a good thing. So go to wirefi.com Ramsey that's the letter y, r, e f y.com Ramsey. Remember, this may not be available in all states.

[Dr. John Deloney]

All right, today's question comes from Isaac in Arizona. At my current job, I was given the option to take a voluntary severance package, which I accepted. I'll be leaving at the end of the year with roughly $150,000 before taxes. My wife and I have a $175,000 mortgage, 5 grand in credit card debt. We owe 40 grand on two cars. I'm already job hunting, but I don't have anything lined up yet. And given the current bloodbath in the tech industry. Pause. Hey, you know what we should do? Let's make a bunch of things that make our jobs obsolete. Yeah, that sounds great. I'm praying for the best, but planning for the worst. Assuming I'm still jobless in a couple of months, would it be better to leave the money alone until I find a job and pay myself every two weeks for living expenses or go ahead and work the baby steps regardless of my job situation? All right, so off the top of my head, you tell me if I'm wrong here, Okay? I don't feel like Isaac's taking this seriously enough. And what I mean by that is you have no job and you're looking on the horizon. And the prospects for the war. I'm assuming he works in tech. The prospects are going away.

[Jade Warshaw]

Okay.

[Dr. John Deloney]

And so this is a sell cars. This is a scorched earth. We are going to live like, as though we just lost our job because we did. And yes, I guess I don't think you pay yourself a salary for living expenses, but you cover your living expenses with the seven. That's what a severance is for, right? To pay for the fact that you don't have a job.

[Jade Warshaw]

Yeah, I think that you're half right.

[Dr. John Deloney]

Okay.

[Jade Warshaw]

And mostly right. This is a storm mode situation. So my goal would be to not touch this 150 he listed out, and there might be some information list missing here. He told us how much debt he Has. But he didn't allude to the fact that he had any other savings laying around. Which makes me think, okay, now is not the time to take this money and pay off a bunch of debt. Now's not the time to be walking the baby steps. Now's the time to pause and go, okay, this money's sitting there in case I need it, but let's make sure we don't need it.

[Dr. John Deloney]

So, and, and get up at 6:00 in the morning, go to the grocery store, start working.

[Jade Warshaw]

Yes.

[Dr. John Deloney]

Start bagging groceries. Dude, you don't have any money.

[Jade Warshaw]

Otherwise you're going to look at this and it could be a false sense of security and it could cause you to kind of like sit back on your haunches a little bit, wait for the perfect job to roll up as opposed to know, I'm going to act like this money doesn't exist. I'm going to go get it. And you know, it might take a while, but I've said this to Ken and this is just my thought. When you're unemployed, take any job until you can get any.

[Dr. John Deloney]

In all jobs, multiple. And when they say like I'm searching, how long does that actually take? Yeah, like an hour or two hours. Of course, you can take time off if you get an interview.

[Jade Warshaw]

Right, right, right.

[Dr. John Deloney]

But you're shooting emails, you're, you might be having coffee every once in a while with somebody. You're making phone calls and texts. Go work and then work on top of that. And then work on top of that. You're unemployed, you have no job.

[Jade Warshaw]

Yeah. Because the last thing you want is to feel like the longer you go without a job, the less your self esteem is there.

[Dr. John Deloney]

Right, exactly right.

[Jade Warshaw]

And it just, you, you go, you bring that into the interview.

[Dr. John Deloney]

Yes. And you sound so lame, but this is how it works, you guys. I'm sitting here because I gave a talk at a university and one of the executives here was dropping her daughter off at show up in other places. And it might be that you're bagging groceries and somebody that you used to work with who also took this bath and found a new job is like, bro, what are you doing? You're like, dude, I'm. I'm taking care of my family. And they'd be like, I got you, so go be seen. That's Go bag groceries. Go drive. Go get out and take an any kind of job you can get kind of job. I might, If I have 150 before taxes and probably take home 100, 110,000 or whatever that would be. I might pay off this $5,000 credit card. I mean, like, maybe clear that if that's all the debt you have. And I'd probably try to sell one of these cars because 40,000 bucks total in cars is going to be, what, a thousand bucks a month?

[Jade Warshaw]

Oh, yeah. He could get. He could definitely get out of those cars. Definitely. And I'm not mad if you paid off the 5,000, but you definitely don't have to yet. But listen, I'm with John.

[Dr. John Deloney]

Go work and then go work. And on top of that, go work.

[Jade Warshaw]

And go make do things that cause you to form relationships with people because that's where the opportunities are in the relationships.

[Dr. John Deloney]

Yes.

[Jade Warshaw]

All right, we got Brandon. He's in Grand Rapids, Michigan. What's going on? Brandon?

[Caller]

Hey, thanks for taking the call. I appreciate it.

[Jade Warshaw]

You're welcome. How can we help?

[Caller]

I have $140,000 in student loan debt and a house payment, a house mortgage of $75,000. My wife and I just started on the Ramsey program. We're trying our best. I think there's a lot of fear that the mountain's just really big.

[Dr. John Deloney]

Welcome. Welcome to the cult, Brandon. You're in good hands, man. You're in good hands.

[Caller]

I started having panic attacks, different things. I picked up a second job. So working full time plus a second job, just trying to figure out how to get them out and taken care of.

[Jade Warshaw]

Okay.

[Caller]

As quick as I can.

[Jade Warshaw]

Are they private?

[Caller]

The only debt we have.

[Jade Warshaw]

Are they private. They're fed. Okay.

[Caller]

I'm still paying on them because they're in the forbearance right now. So I'm still making payments on them. I've knocked about actually about $10,000 off already.

[Jade Warshaw]

That's great.

[Caller]

On my student loans.

[Dr. John Deloney]

Good for you.

[Jade Warshaw]

What's the monthly payment combined?

[Caller]

My monthly payment on the IDR is 182, but I'm putting about like 3 to $400 on it.

[Jade Warshaw]

I think you're doing everything right as far as these student loans are concerned. You've. You've utilized a payment plan to make sure the minimum payment is as low as possible, and that allows you to free up all of that extra money to throw out the smallest student loan. So are they lump. Is it all one lump thing, or are they individual loans?

[Caller]

So I have one that's consolidated for like 1001000 and some change and then individual ones that make up the rest of that total.

[Jade Warshaw]

Okay. And you're throwing all the extra money at just the smallest one, right? You're calling it in or you're going on there to make that principal payment.

[Caller]

I can. On the servicers website, I can dictate.

[Jade Warshaw]

Excellent. Okay.

[Caller]

So where the money goes.

[Jade Warshaw]

You're doing that exactly right. I wish there was a easy button that I could hit for you. The only thing that's going to make this. I know and I wish it was the only thing that makes this go faster is you making a bigger shovel. But even that, I mean there's going to be a time aspect to this. But. Tell us about the panic attacks.

[Caller]

Yeah. I think, Dr. John, I've read your book and I think the panic attacks are my body doing what it's supposed to. As uncomfortable as it is.

[Dr. John Deloney]

I was going to say, I wonder if your body's telling you the truth. Right.

[Caller]

Yeah. They started years ago when I tried to just shove the debt thing aside and forget about it. I mean I never, did not. I was always making payments. I never shoved it aside at that point. But it was always something was like, oh, I'll just pay it for the 20 or 25 years and be done with it. And then it just kept building and my body was like. Which is always waiting for that other shoe to drop.

[Dr. John Deloney]

Yeah.

[Caller]

And it, it didn't. My body was like, no, we're not going to wait for the other shoe to drop. We're going to let you know.

[Dr. John Deloney]

Good for you, man. What do you do for a living, dude?

[Caller]

So I work, believe it or not, with panic attacks. I work in community mental health.

[Dr. John Deloney]

Okay.

[Caller]

So I'm a community based mental health worker.

[Dr. John Deloney]

What's your, what's your schedule?

[Caller]

I work about 7am to 4.30pm I'm a salaried employee. There might be times where I might have to work a little bit on weekends, but I try and protect that time as best I can.

[Dr. John Deloney]

So can I tell you, can I tell you something? And you're not going to want to hear it, but this is me just trying to help. Okay. Yeah. I did a lot of my internships at a community mental health program and there's some of the most amazing people in the world and I've got a big heart for those programs. They also, they hire people who are service oriented who are in this for something other than the money. And I love that. But you can't afford to be doing this right now when on the other, on the other shoe, you could go do private practice and take 120 bucks of cash and get your loans paid off.

[Caller]

Okay.

[Dr. John Deloney]

And so it might be a season where you go See what that would look like. And I'd probably tip, dip my toes into it and say, on Saturdays, I'm going to do private clients on my own. Do they. Would they allow you to do that or have you signed your life away?

[Caller]

I have not signed my life away. I would be allowed to do that.

[Dr. John Deloney]

Okay. I would recommend you start going to see clients on Saturdays, all day Saturdays at 100 bucks an hour. Do cash or 120 bucks an hour and do cash and begin to build a client list. And if in two months and three months, if you're like a lot of good therapists in town, you'll fill up real, real, real fast. And you can get up to 100 grand or 150 grand in cash just cooking and then go back to community mental health when you're. When your family is in a more secure place. You just can't afford to be making 60 grand with that kind of debt right now.

[Jade Warshaw]

That's awesome. And there's, like, little to no overhead on that. Yeah. Amazing. All right, that does it for this hour of the show. Thanks, John, for hosting with me. Thank you to the folks in the booth. We'll see you next hour. Do you ever feel like you're finally.

[Caller]

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.

[Jade Warshaw]

Today from the Ramsey Network, it's the Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John DeLoney. We're going to help you build wealth. We're going to teach you how to do the work that you love and create amazing relationships. That's what we do here. So if you want to get involved in the conversation, we'd love it if you did. It's a live call. Triple 888-882-55225 is the number a Lot of numbers. I did a lot of eights.

[Dr. John Deloney]

Do that again.

[Jade Warshaw]

8, 8, 8, 8, 825-5225. It's a lot.

[Dr. John Deloney]

Halloween. We got lots of. Lots of Kit Kats.

[Jade Warshaw]

Yeah, it was. It was spooky the way I said that. All right, if you want to get involved. Who's back there? Christian, I can't see. We'll pick you up and get you on the line. We got smooth jazz.

[Dr. John Deloney]

Christian.

[Jade Warshaw]

Smooth. I like smooth jazz.

[Dr. John Deloney]

He answers the phone. Oh, yeah.

[Jade Warshaw]

Is that. Is that what you get?

[Dr. John Deloney]

He's got the best phone answering voice on the planet.

[Jade Warshaw]

Interesting. I've never heard that voice. Christian, whenever I see you in the hall, it's like, hey, Jade, what's up?

[Dr. John Deloney]

When he answers the phone, he's like. He's, like, laid back.

[Jade Warshaw]

Okay, good to know. I got Vince. He's in Indianapolis, Indiana. What's going on, Vince?

[Caller]

Hi, guys. Thanks for taking my call.

[Jade Warshaw]

You bet.

[Caller]

So I'm currently working through the baby steps right now. But my question isn't about me. It's for my parents. How do I get them to be Gazelle, Intense and, you know, start budgeting, working through the baby steps, you know, what can I do to get them on board?

[Jade Warshaw]

Listen, when you find out, tell me.

[Dr. John Deloney]

Because write that book, you'll make a billion dollars. And, hey, your second book will be how to Tell Teach My Parents About Sex.

[Jade Warshaw]

Oh, man.

[Dr. John Deloney]

The two things that no parent wants to hear from their kid about is get lectured on is money and sex. So tell me, what is happening that has landed you here?

[Caller]

Yeah, so, I mean, I just sat down. Sat down with them earlier this week just to kind of get a financial picture for them and you know what their retirement is going to look like. They're both 53 right now, so they got another 10 years or so before they retire, if they can afford. Right, exactly. They've got about 100 grand in debt, 100 grand on a mortgage, and to my knowledge, I'd say they probably have around 800 in retirement.

[Jade Warshaw]

Okay, and what do they make?

[Caller]

My dad told me that they're around the $200,000 mark, which is, you know, a lot of money.

[Dr. John Deloney]

Yeah, they're doing great.

[Jade Warshaw]

They're doing good. I mean, the truth is, this lump sum, a lump sum is going to double every seven years. So this 800 at some point is going to be 1.6. And on down the line, it'll double again.

[Dr. John Deloney]

They have a house?

[Caller]

Yes, they do. They have about 350 in it, and they said they can sell it for 450.

[Dr. John Deloney]

So your parents, for all intents and purposes, your dad, mom, are millionaires, right?

[Caller]

Almost, I think. Yeah. I think if you tacked on the debt, it'd be just shy of it.

[Dr. John Deloney]

Okay.

[Caller]

But obviously, you know, that's got to last them 20 years in retirement.

[Dr. John Deloney]

Or did you call, did you call the financial picture meeting or did your mom or dad call it?

[Caller]

You know, I kind of called it just to make sure that, you know, they're going to be okay.

[Dr. John Deloney]

Okay, good for you for having the courage to do that and good on them for sitting down and walking you through where they, where they are. Most parents wouldn't do that. So that's, that's a pretty cool situation you found yourself in. Good for you.

[Jade Warshaw]

Here, here's the truth. In 20, 21 years, they're going to have $6.4 million doing nothing different. All right? And they're in their 50s, so that puts them in their 70s. They're, they're what I would call normal in that way of, hey, we're, they're clearly putting aside in their retirement, but they're also carrying debt. Right. That's kind of the normal American way. To their point, to the, and to their credit, at least they've continued in retirement. And so I, I'm with you. Yeah. I, I want them to pay off the $100,000 of debt. I want them to be mortgage free before they retire. I don't know if you, I don't know that you will be able to convince them to do that. I like that you're thinking about that, but either way, what I thought you were going to call and say is if my parents don't get their life together, I'm going to be on the hook for taking care of them. But I don't think you're going to be, because I think they're going to have plenty of money to be able to float what they're doing. It's not going to, it could be more peaceful, to your point, but I think they're going to be okay because they'll be able to live off the interest that this floats off. John, what can he do?

[Dr. John Deloney]

I mean, here's, here's what I'm going to do for you, Vince. We're going to give you a copy. We're going to give you a. I think it's a digital link here to Financial Peace University. Okay. And it's all nine lessons. I'm gonna hook you up with it and I want you to share that with your parents and all you, all you have to do is say, hey, dad, Mom. It really means a lot to me that y'all sat down and walked me through the finances here. Most moms and dads won't do that, or they can't do that because they don't even have their house in order, even know. Thank y'all for doing that. This is something that's meant a lot to me. It would mean a lot to me if y'all listen to this, if y'all watch these videos. That's it. And if your dad wants to ask you questions, cool. He's probably not. He's like. I say he's got a million dollars. Right.

[Jade Warshaw]

He's probably feeling pretty good. Yeah.

[Dr. John Deloney]

And so he's probably got a plan, and that plan's different than yours. We're going to love him anyway. And what we're going to do is we're going to live consistently, and we are going to, like, reverberate. Peace. We're going to eat anxiety at the dinner table at Thanksgiving, at Christmas. And eventually your family members will ask, hey, can we go for a walk? Tell me what you're doing. Okay. But we'll give it to you, and you can give it a shot. But I think it's done fully, respectfully, and with gratitude for the transparency with which they met with you earlier. But don't get your feelings hurt if they say no. And I want you just to keep living the values and principles that you believe in. It's good for you.

[Jade Warshaw]

Yeah. Thank you for the call. That's tough. I mean, what I thought he was going to say was. What he ended up saying was a lot better because so many times we get the call where it's like, listen, my parents have misbehaved with money. I'm in my 40s. I've got my own kids. I've got my own kids who are going to college, and they're hitting the age where it's. It's like it will all hit the fan at the same time. Right? Right. When my kids are going to college is right about the time that my parents are going to be going to Social Security age. Social Security is not going to be enough. They're going to be hitting me up for funds. Right. And when you see that oncoming train, you want to have that talk with your parents to say, hey, let's talk, because I don't want to be on the hook for this. I can't afford to be on the hook for this. But then to your point, John, you have to deal with the fact that they're not having it. A lot of times they're thinking, this is my life. I don't have to tell you what I'm doing with my money. Who are you to tell me what that is? A very difficult situation. And parents, if you're listening, please don't do that. Because it's in many ways it's not that they're trying to control you. It's not that they're trying to tell you what to do. They're trying to get themselves in order.

[Dr. John Deloney]

That's right. That's right. And I think any 30 or 4 year old person who's got any sort of thinking about tomorrow in their mind and spirit is thinking about, am I gonna take care of my parents? I wonder what that's like. Are they gonna have to move in like you mentioned? I mean, we're gonna hit college right when they're hitting their late 70s. And I'm hearing more and more, Jade, that this, the boomer generation owns a big chunk of the real estate with a ton of equity in these homes.

[Jade Warshaw]

That's right.

[Dr. John Deloney]

But they're saying, I'm not moving this my house.

[Jade Warshaw]

And why would they. The interest rate, I mean, but, but.

[Dr. John Deloney]

It'S like, oh, your nest eggs in this house. Yeah, like, yeah, moving though, like what? You can help out with groceries and it's like, no, no, no, that's why we have this. You're going to sell it, I'm moving.

[Jade Warshaw]

Well, and then the painful part of that is it's, and forgive me if this sounds any sort of way, but it's like if all the equity is tied up in that nest egg and you're thinking, okay, like, you know, when they pass away, this is going to the family. But then if they have a bunch of debt and you also know, like, not only is it, but the debt is going to eat up that estate that is just like, oh, so parents, if you can, I know it's tough, but if you're in your 50s and you're, your kids are sniffing around trying to get information, they're not trying to tell you what to do. They're not trying to get up in your grill. They're just, we just want to make sure. We are planning, Invite your kids over.

[Dr. John Deloney]

For dinner and tell them about your financial situation.

[Jade Warshaw]

Tell us, we want to know, do you have life insurance? How much? We want to know, what do you have in your 401k? We just, we want to help us, we're trying to help us by knowing about you. This is the Ramsey Show.

[Dr. John Deloney]

This show is sponsored by BetterHelp. This month is all about gratitude. And most of us have people in our lives that we're grateful for. One of those people, for me, is the wonderful Marilyn Fanon. She gave me a chance. She taught me poise and professionalism and she challenged me. But there's one person that we often don't take time to thank. Ourselves. We don't always acknowledge that we're barely surviving or that we're moving forward or that we're working towards a better life and better relationships. And in a world where everything seems to have gone bonkers, it's not always easy to be grateful. So here's my reminder to thank the people in your life, including you. And sometimes to do that, we need some professional help. We need to talk to someone trained to help us discover true gratitude for ourselves and others, especially in the holiday season. That's why I recommend BetterHelp. BetterHelp is 100% online therapy and you can talk with your therapist at just about anywhere so it's convenient for your schedule. You just fill out a short online survey to get matched with a licensed therapist and you can switch therapists at any time for no extra cost. This season, let the gratitude flow with BetterHelp. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H E L p.com DeLoney folks, the.

[Caller]

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 [e-mail] giveaway. It's that easy. Plus, our 50 Days of Christma Deals is on right now. Get up to 30% off bestsellers and life changing gifts that won't break the holiday budget. Ramseysolutions.com store.

[Jade Warshaw]

You'Re listening to the Ramsey Show. Thanks for hanging out with us. I'm Jade Warshaw. Next to me is Dr. John Deloney. We are your hosts for this hour. Something exciting coming up. We're heading into the fall and you all know that before you know it, it's to be Thanksgiving and then it's going to be Christmas and then it's going to be New Year's. And if you're not careful, your money can go down a slippery, slippery slope, John. But we're here to help you. We're doing a series of webinars and we've been doing them a couple a month here to make sure that you have everything you need not to lose control. And so join Rachel Cruz and the every Dooll team. We're doing a free live training. This One is Monday, November 4th at 1:00pm 12:00pm Central Time. This is your lunch break, right? I just got off of one and it's great. There's so many people on there. Over, over a hundred thousand people have registered over the lifetime of these events and people love them. If it's your first time, you can do it. If you've been to a couple before, but you still have more questions, you can still sign up. And by the way, if you're not available right at that time, still sign up because you can watch it later on when you are available. And so the way to register is you just go to Ramsaysolutions.com webinar and this. That's it. We'll provide the rest. This is the number one way, guys, for you to eliminate your debt. This is the number one way for you to learn to build wealth. The number one way for you to get on the same page as your spouse, and the number one way for you to eliminate stress. It all starts with the budget. So get help with what you need. These Every Dollar webinars are popping off again. That's Monday, November 4th at lunchtime. We'll see you there. All right, John, you ready to go to these phones?

[Dr. John Deloney]

Let's do it. Let's go out to Harrisburg, Pennsylvania and talk to Shannon. What's up, Shannon?

[Caller]

Hi. Thanks so much for chatting today. I very much appreciate all of the advice we've gotten from you and FPU over all these years. So it's great to talk to you.

[Dr. John Deloney]

Thank you so, so much. How can we help?

[Caller]

So my husband and I are 54. We are debt free except our mortgage, which will hopefully kick off next, next summer. Wow.

[Dr. John Deloney]

Congrats.

[Caller]

Yeah, thank you. So we have three children. Our oldest is halfway through college and doing well. I'm sorry, our youngest, but our oldest is 25. He's also a college grad. He's got a great job, works with Excel. He's a numbers guy and he's paid off all of his student loans that he had. He's a great saver. He's thriving by pretty much any measurement you put out there on paper. He lives with us still, not because he couldn't live on his own necessarily, but he has autism. And by staying with us, he stays connected socially and emotionally, which is definitely in his best interest, but not something he would necessarily do on his own. We think at some point down the road, he will likely move out on his own. But as much in his life has been, it's just kind of on a later track. So we're trying to think through how best to help him be well positioned for that independence when the time comes, personally and financially. And I would welcome any guidance or input you have on us helping him be well set and think through those things.

[Dr. John Deloney]

Yeah, I mean, kudos to you all. It sounds like you all have done a lot of work and walked alongside him with. In the places where he's accelerated past his. Those who would be inside. You know, his like the normed age of development and those times when it's been slower. Right. And it's just taking more time to get there. So good for you guys. Yeah. Over the course of my career, I've worked with graduate students, I've worked with law students, I've worked with any number of students who are somewhere on the spectrum. And in fact, where I went to grad school, the connected to the College of Education, where I was in the Burkhart School for Autism was there, and it was a magical place where I saw them do some amazing things with young people transitioning in and out. I think the. Here's some. I can just throw it out there. And only you will know where your son falls in terms of where his spectrum disorder is and how he does socially. Let me ask you this one question before I start just throwing things out there. If he finds himself alone, meaning like, you go. You guys go out of town for a week. Does he end up just watching YouTube over and over again or watching videos over and over again or playing video games over and over again?

[Caller]

He. That is certainly his bent. When we have gone out of town, we'll have like, friends or family kind of check in and make sure he gets invited to dinner or to movies or something so that he's not either working or being on a video game. Okay.

[Dr. John Deloney]

Yeah. I'm hearing that more and more that young professionals who are on the spectrum disorder at some. Some place on the spectrum someplace. The allure and the way they've engineered these. These screens and. And social devices in the games, it's like. It's like their brains have been hacked. And it's tough for any of us, much less somebody with some sort of processing challenge. So I would recommend this one. And this is a hard thing. This isn't me indicting you. This is just my experience working with parents. You and your husband, y'all check yourselves first. Sometimes, not always, but sometimes letting Go of the leash a little bit or a lot. Robs a parent who has spent their whole life advocating and defending and fighting for their kids with special needs or exceptionalities or specific challenges. It robs them of their identity. And so make sure that you and your husband are intentionally together and you're intentional about feeling that loss, that sense of purpose as you let him go into the world. The second thing is I would get with a. ABA usually works with younger kids, but I'd find any sort of group or any sort of connection where he can begin what I would call a. This is the wrong language, but some sort of outpatient. We can go hang out with some guys in the evenings, hang out with different groups in the evenings. You might host them at your house. But we just want a group of people that he's going to be able to stay connected to and then you guys are going to watch that closely. And for some students, they fly. I mean, it's just been. I remember it was amazing. There was one group of students at the Burkhart center that got involved with the theater department and they were a part of theater performances that unlocked parts of. It was magic. I would sat there and wet people all these shows. And then there's some students who at 28, 29, 30 years old, just slowly loop their way back to watching YouTube 12 hours a night and then never sleeping until they collapse. Right. And so you will truly come to know your kid over time, with space and distance, with intentionality after you're out. And it might be that he's never fully on his own. It might be that he part of a special needs trust after you're gone, will get him a garage apartment in one of his brothers and sister's houses or in like an extended care kind of place. But I think it's you guys just, just facing that reality head on.

[Caller]

Right. On the financial side, like I said, he has a great job. He is a phenomenal saver. So what are some ways that beyond us considering a special needs trust like we have him set up, he started a Roth IRA this year. What might be some other ways that we can encourage him, even as he is such a saver, to be making that investment in his future?

[Jade Warshaw]

I think a lot of the things that you would do for yourself, you just transfer it and teach him how to do it. So if you're a proponent of the baby steps, then we're teaching that same method of managing those finances. The fact that you're doing Roth IRA is great. If you max that out Then now we're going to a brokerage account. And so having that money there, does he make enough that if he were able to live on his own that he could.

[Caller]

Oh, yeah, yeah.

[Jade Warshaw]

I think that's great. I think at that point you're managing the funds the same way you would. You're teaching about how to budget. We're saying this is how much we're spending and we're giving every dollar a name. And then we're going and saying, okay, beyond that, what are we investing for? Are we going to buy a place? Is, is there going to be a property that he lives at? And you guys are again with the social things. I think John has given you a good construct there. But I think if you find that there's a time where he moves on and out of your house, I think it's great to have those assets in his name and then all of that stuff can transfer to him when the time comes. And his care or maybe a brother.

[Dr. John Deloney]

Or sister that's got their name on the accounts too, just in case they need to step in. But also I always want to lean in the direction that's opposite of my kid's natural bench, special needs or not. And so if I have a kid that's a natural spender, I'm going to teach them, really. I'm going to let them watch me save. And if I have a natural saver that's just obsessed with saving, I'm going to show them the joy of spending money every once in a while and the joy of giving. So. And your kid will be none the different. Congratulations.

[Jade Warshaw]

Listen, the housing market is crazy and if you've been on the Internet, here's the sentiment. Affording a home is impossible and you're doomed to be a renter for the rest of your life, right?

[Dr. John Deloney]

Wrong.

[Jade Warshaw]

George Camel here. Listen, finding a home you love within your budget is possible and I'm excited to help you get there with our brand new course, how to buy a home you can actually afford. From saving a down payment that fits your budget to making an offer that sellers can't resist, we'll cover it all. So if you're ready to seal the deal on the right home for you, take the [e-mail] course. That's Ramsaysolutions.com course. You're listening to the Ramsey Show. I'm Jade. Next to me is Dr. John. We're taking your calls this hour. Get involved. Triple eight eight two five five two two five. Hey, has there ever been something money related and you're like, I know I should know this, but I don't. Like, I've been out on this planet for a long time and I should know what the lingo is. I should know the jargon, but I just don't. And you're. You're embarrassed to ask.

[Dr. John Deloney]

That's me every day on this show.

[Jade Warshaw]

So we started a new segment here, asking for a friend. And listen, I'll be honest, I may have been one of these people that for the longest, I was really confused about, like, what comes out of your paycheck when you get paid.

[Dr. John Deloney]

I still, I'm not confused. I just get mad.

[Jade Warshaw]

Listen, I know I'm not the only one. And when I saw this clip, I was like, that is. That is me. Take a look at this. My first paycheck. Look at the window.

[Caller]

There's my name. Hi, me.

[Dr. John Deloney]

God, isn't this exciting?

[Caller]

I earned this.

[Jade Warshaw]

I wiped tables for it.

[Dr. John Deloney]

I steamed miles milk for it, and.

[Caller]

It was totally not worth it.

[Dr. John Deloney]

What's fica?

[Caller]

Why is he getting all my money?

[Jade Warshaw]

Relatable. That's so true. Like, you look at your paycheck. I mean, it happens all the time here. People call in. I'm like, how much do you make? They're like, I make a hundred thousand dollars a year. But then like, by the time, what they actually take home after 11, so.

[Dr. John Deloney]

Or it's fine to me. I get madder now when I. I hit potholes. I'm like, no, no, no. You took my money. You fixed the potholes.

[Jade Warshaw]

Well, let's talk about. What is it like, what's happening with this payroll tax? What is FICA asking for a friend. You know, some of you are going to be today years old when you figure this out. But it's basically, this is Federal Insurance Contributions act, right? This is, that's what FICA stands for. This is what you're required to pay into, basically as an American citizen. It says the FICA tax, also known as just payroll tax, just refers to taxes that employers and employees have to pay. And these are programs like Social Security and Medicare, right? And when you, when that money goes out of your check to fund those programs, it's funding them in real time. It's not like I'm just setting this aside for me for later. It's for everybody. Goes into a big pool for everybody. And so big picture is, when you pay those FICA taxes, your money just goes into that big pool, a big fund. And it's for whoever's currently receiving Social Security, whoever's currently receiving Medicare. That's why we say all the time to people like, hey, go on ahead and fund your own retirement because you don't know what Social Security will be when your time comes.

[Dr. John Deloney]

I think they're really clearly telling us it's not going to be very much. I mean, I feel like they're like, we don't know. And they're like, we're going to run the money. It's like, yeah, but we don't know.

[Jade Warshaw]

I just want to know what happens if we do. I want my refund back because I've been paying.

[Dr. John Deloney]

Right.

[Jade Warshaw]

So FICA tax, it breaks down into two categories. Like I said, you've got the Social Security and then you've got the Medicare. And if you're wondering like how much is this? So for employers, you're withholding 6.2, they're taking 6.2% of your taxable gross, which is, it can be pretty high depending on how much you make.

[Dr. John Deloney]

But.

[Jade Warshaw]

And then they take that and they match your contribution. So 6.2 on your end, 6.2 on their end, and it goes into that big pool. And then for Medicare it's 1.45% of your taxable wages. And again they match that. Now the kicker is if you are like self employed, you pay both sides because you're the employer and the employee and that hurts like especially when you're.

[Dr. John Deloney]

Trying to get a small business off, man.

[Caller]

What?

[Dr. John Deloney]

Yeah, yeah.

[Jade Warshaw]

I remember my mother in law, she always helped us with our taxes because she's a bookkeeper. And when she explained that to me for the first time back, back, back in the day, I was like, my jaw was on the floor.

[Dr. John Deloney]

Yeah.

[Jade Warshaw]

I was like, it's so much money. But you know, even if you're self employed, you still got to pay old Mr. Fica. So freelancers, like I said, independent contractors, self employed workers, they're required to pay both ends. Yeah. And so again, just make sure to plan. Yes. You can't stop it. It is the force of the government. There's, there's nothing you can do. You got to pay it, but at least you know what it is. And if you were so excited to earn your paycheck and then when you looked at it, it was a little bit less, that's probably, probably where it went. For more information about taxes, go ahead and visit Ramsaysolutions.com taxes or you can click the link in the description if you're listening on YouTube or podcast.

[Dr. John Deloney]

And think about this. If you're like, wait a minute, 6%, like that's not very much. I pay way more than that. This is not state income tax and federal income tax. This is, this is just the other numbers.

[Jade Warshaw]

Yeah. This is just Social Security and Medicare.

[Dr. John Deloney]

That's right.

[Jade Warshaw]

That's it.

[Dr. John Deloney]

And I love. Dave said this once and it never occurred to me, he said the greatest scam the government ever pulled was automatic deduction facts. He said if you had to write. And honestly, when it comes to like Medicare, like taking care of the least of these in our communities, I don't think that'd be the uproar. I think the uproar would be those that state and federal tax. If we had to write a check every month and give it to the government, I think the average US citizen would be much more. No, I don't think we would get. I don't think we'd be where we are.

[Jade Warshaw]

Yeah.

[Dr. John Deloney]

Because it wouldn't be this money that just out of sight, out of minds and this given to a small group of people who just do whatever they want to with it. I think people would be much more invested as citizens.

[Jade Warshaw]

Yeah.

[Dr. John Deloney]

Like you. And take my money. You're going to demand it legally from me, then I'm going to demand my, my voice be heard with how you spend that.

[Jade Warshaw]

I mean, they've basically tapped into what we say all the time about credit cards, which is when there's no friction, that's it. You don't feel it and you're like, yeah, take my money, I'm fine with it.

[Dr. John Deloney]

Then they came up with scam number two, which is every year, some of y'all, we're going to send you some of your money back and you're going to think you won something.

[Jade Warshaw]

Right.

[Dr. John Deloney]

They're going to think you scratched something off and got it.

[Jade Warshaw]

Isn't that crazy? We think that we're getting like a, a treat or a prize when really.

[Dr. John Deloney]

They'Ve just, they held our money interest free.

[Jade Warshaw]

Interest free.

[Dr. John Deloney]

By the way, they lent it out and are making money off of it.

[Jade Warshaw]

Right, right. They're making interest off our money. Listen, we could go on and on all day. Maybe we should, John.

[Dr. John Deloney]

Nope. Let's go out to Phoenix az, where it's still a thousand degrees even though it's October. Talk to Scott. What's up, Scott?

[Caller]

Hi. Thanks for taking the call. How are you guys?

[Dr. John Deloney]

You got it, bro. What's happening to your weather out there?

[Caller]

It's actually really nice right now.

[Dr. John Deloney]

Did it finally break? It's been bananas.

[Jade Warshaw]

Wow.

[Dr. John Deloney]

Well, that's good to hear. How can we Help, man.

[Caller]

Well, we're looking to replace our family minivan and I'm debating how much to spend and whether or not I'd feel okay buying something new, which is something I've always thought I wouldn't do. And I can hear Dave in my head talking about how much a new car depreciates as soon as you drive it off the lot. So I'm just trying to balance being responsible and not being a cheapskate.

[Jade Warshaw]

I love that. I love that Dave's voice lives rent free in so many Americans head. Okay, well, tell us, tell us what it is and we can tell you if, if it's a good idea or not, or at least point you in the right direction. So what are you thinking of getting? What does it cost?

[Caller]

We're looking at the 2025 Kia Carnival, which was just updated and I'm expecting it to be around 52,000 or so.

[Jade Warshaw]

Wow.

[Caller]

Which previously we were looking at the 22 to 24 models. And this is going to be, you know, 10 or 12,000 beyond that.

[Jade Warshaw]

But so a 2024 would be what, 40 they made with it?

[Caller]

Yeah, like about 40 of us. What we were planning.

[Jade Warshaw]

Okay.

[Caller]

My wife is at home with the kids full time, but she's a rock star and still brings in an income too. And she's just been saving up like nearly all of her income for a while. So she saved up like $38,000. So we were going to pay cash for it. Then we started looking at the newer one and then I actually fortuitously happened to get a bonus. So we actually do have the money that we could pay cash for the 50 2001. Trying to get over the mental barrier of the depreciation and of the new one.

[Jade Warshaw]

Well, let's walk through that a little bit. So you've got cash. There's a couple boxes we need to check to get the green light. So you've got cash, that's good. Let's talk about what your combined income is. What do you and her make together? Because again, this needs to be no more than half of your, you know, annual salary, give or take. So what do you guys bring in?

[Caller]

Yeah, together it's about 190 or so.

[Jade Warshaw]

Okay. Okay, so we're firing on that cylinder. Well, how much is your car worth?

[Caller]

Maybe 8 to 9,000.

[Jade Warshaw]

Okay, so we got a checkbox there. Now, if you're talking about doing this 2025, a brand new vehicle, you know what has to be in place next, don't you?

[Caller]

All the insurance and registration that goes into that. That's way more too.

[Jade Warshaw]

Yes. But there's something quite critical to buying a brand new car. You need to have a million dollar net worth.

[Caller]

Oh, gotcha.

[Jade Warshaw]

And here's why. Here's why. And this answers the question that you're talking about. When we're talking about this depreciating asset. You've got to basically be okay with putting that money right in the center of your living room and burning it and saying, I could care less that this thing is going to lose 60% of its value in the next three to four years.

[Dr. John Deloney]

Yeah. The million dollars is an arbitrary number, but it's right. It's a good. It's a good like. Like it checks you.

[Jade Warshaw]

It checks your gut. It's a gut check to go. How. How much can I really afford this? How meaningless is this money to me?

[Dr. John Deloney]

Right. And donating 20 or 30 grand to the car dealership.

[Jade Warshaw]

Yeah.

[Dr. John Deloney]

Over a couple years.

[Jade Warshaw]

The truth is, if you have a million dollar net worth, all boxes and all roads lead to you being able to do this. That's right. But if you don't, you need to go with the 2024 and pay cash. This is the Ramsey Show.

[Dr. John Deloney]

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

[Jade Warshaw]

This is the Ramsey show. Helping you with your life, your money, your relationships, your career. I'm Jade Warshaw. Next to me today, the doctors in the house. Dr. John Deloney.

[Dr. John Deloney]

What up?

[Jade Warshaw]

How's it going in your world?

[Dr. John Deloney]

We're. Dude, I'm. I'm. We are busy, busy. We had a wild and adventurous money marriage as best we can, and it was off the hook. Dude, you spoke at it. It was the deepest and probably most impactful thing I've ever been a part of.

[Jade Warshaw]

Yeah.

[Dr. John Deloney]

Yeah.

[Jade Warshaw]

What you got right there?

[Dr. John Deloney]

I got these questions for humans. The intimacy deck. They actually sold out on campus. They're gone. You get them online now? I'm waiting for our own new shipment back. This is the only deck that exists in this. In this building. But it's just questions about sex and intimacy and connection and communication and couples trying to find their ways back to each other with all the anxiousness and schools and games and stuff and stuff and things we got to do and I like it. Just sit down across the table and get to know each other again.

[Jade Warshaw]

I like it. I'll be getting a dick. All right, let's go to the phone lines. We got Wes. Evansville, Indiana, is where he's at. What's going on, Wes?

[Caller]

Hey, guys.

[Dr. John Deloney]

How you doing?

[Caller]

I appreciate the time.

[Dr. John Deloney]

You got it, Wes. What's up, man?

[Caller]

Yeah, for sure. So this may be a man, maybe a question for more of a counselor. And I might need some serious therapy. But let me lay it out here for you, if you can give me just a second.

[Dr. John Deloney]

Go for it.

[Caller]

So I feel like I got a couple problems and basically they deal with internal conflict, you know, within myself. I feel like I got a value disorder, meaning laid out there. I'm seeking.

[Dr. John Deloney]

Lay it out there.

[Caller]

Yeah, yeah, yeah. So I feel like I'm seeking comfort while I'm trying to seek my.

[Dr. John Deloney]

My dreams.

[Caller]

In my business, obviously got a money problem, debt versus cash flow, and then a self belief. So let me lay it out here. I'm 35, I'm divorced. I got two kids living at home with me over half the time. I started a window cleaning business 12 weeks ago, and I've made 12,000 bucks in 12 weeks. My expenses are about $5,000 a month that I make. $4,000 a month as of like what I've shared with you, I got 32 bucks in the bank. I'm behind on two credit cards, my light bill, and my mortgage as of 30 days ago. And here, here's. Here's where I'm basically looking for some counsel here. I'm kind of frozen in time with building this business and getting Gazelle Intense because of the, you know, where I'm at financially. And so I'm struggling with getting Gazelle Intense to climb myself out of my hole, you know, with my business of my own. I'm a one man show. And basically I'm at a place where I'm considering getting some, you know, getting a debt relief company to do their thing.

[Dr. John Deloney]

No, you're not going to do that, West.

[Caller]

Okay, go ahead.

[Dr. John Deloney]

Did I hear you right? You make 4,000 bucks a month. But you. It cost five grand a month to run this thing. Yeah.

[Caller]

So there's. Yeah, basically my expenses. There's hardly any overhead. I'm a one man show, going door to door, getting window cleaning businesses and home services gigs.

[Dr. John Deloney]

But how does it feel like I can make probably. How does it cost five grand a month in expenses?

[Jade Warshaw]

Is that just business or is that your personal stuff rolled in?

[Caller]

It's basically all personal.

[Jade Warshaw]

Okay.

[Caller]

Because there's really no, there's really no overhead. Like I'm banging on doors.

[Jade Warshaw]

So to clarify. To clarify, you're going out, you're hitting the pavement, you're making $4,000, you're pocketing it all as income. You're one man show, that's fine. But to run your personal life is $5,000. Your personal budget is $5,000 a month. So you're a thousand dollars deficit every month.

[Caller]

Yeah. So give or take 4600 bucks one month.

[Jade Warshaw]

Okay. And how do you, how do you account for it? Is it going on a credit card? What do you do when you're. When you're at a loss?

[Caller]

Yeah, I. Well, it's only been 12 weeks, but I'm behind on those, you know, so.

[Jade Warshaw]

You just don't pay them. You don't. You're just not paying them. But are you putting more debt on a credit card is what I'm asking?

[Caller]

Well, I'm maxed out everywhere, so I.

[Jade Warshaw]

Don'T really have anywhere to go.

[Caller]

I'm kind of at a place where my credit's toast. I can't get any more. Okay.

[Dr. John Deloney]

Okay.

[Caller]

I just need to put energy into this thing.

[Dr. John Deloney]

No, that's not it. That's not it, dude. Okay. What. How long ago is your divorce?

[Caller]

So it finished about a year and a half ago.

[Dr. John Deloney]

Is that still hanging on your neck?

[Caller]

It was a crazy divorce. Yeah, it's, it's, it's trauma, man. It was crazy as a circus.

[Dr. John Deloney]

It was. But I'm talking about is, sit with me for a second. You back and forth, you toggle to keep yourself safe from the past and oh my gosh, it's crazy to the future. It's all coming down. I want you to sit right here in the middle. Right here in the middle. Is it still weighing on you that the person you said I do, the mother of your kids, that y'all had to blow up like this?

[Caller]

Yeah, I mean, I'm still, I'm still kind of hoping that we can kind of fix it.

[Dr. John Deloney]

Okay. You got to let that go.

[Caller]

Process doing that.

[Dr. John Deloney]

Are you Are you dating again?

[Caller]

No.

[Dr. John Deloney]

Okay, so here's the thing. I think you have a core reality problem. Okay, I don't think.

[Caller]

Like I said, value disorder.

[Dr. John Deloney]

Yeah, yeah, but it's not a value disorder. It's that you. You want things to be. You want to be your own boss. You want to be a present dad. You want to re. Get together with the ex wife that blew your life up. You want to do all this stuff all at the same time.

[Caller]

I do. I want to do it all now.

[Dr. John Deloney]

I know, but in the meantime, math is working against you. Because math doesn't care what your dreams are. It doesn't care what pain you've been through. It just keeps doing math. And you're.

[Caller]

It keeps doing math.

[Dr. John Deloney]

Yes. You're getting further and further and further behind and your kids absorb that tension in your house and you want to have a different mindset. People think they can just. They can just think their way to confidence. Confidence is built through.

[Caller]

I can't.

[Dr. John Deloney]

You can't. You got to go do. And dude, you're grinding. And I'm proud of you. You're making four grand a month on a brand new business. That's amazing. And you can't eat on four grand a month.

[Caller]

No, dude, it's. It's been a bummer.

[Dr. John Deloney]

And so here's what I want you to do. I want you to not think about, okay, I gotta grind here and do. I want you just to exhale and sit in reality. And most people, most of the time, myself included, when you have to face reality, you have to grieve it for a minute. That woman's gone. This job, this dream we have of going all in, it's not a right moment right now. I wanted my kids all the time. I only get them half the time. That's exhale. And then I'm going to go get a regular boring bummer job where I'm throwing boxes somewhere, but I've got health insurance and I'm making X number of dollars an hour. And then I'm also knocking on doors and putting up flyers and washing windows when I can to get this thing going. And you're going to find out that the life of a solopreneur is wall to wall 24 7, 365 until it finally takes off, if it ever does. Right? And then your kids are going to have this ringside seat to a dad that got his knees capped in a divorce. But he got back up and he started grinding and he was still a person of integrity and character. And you're going to wake up in two years and three years. You're going to be really, really confident. Not because you thought your way to some mindset moogly boogly, but because you just went and did the next right thing.

[Caller]

And the next right thing is you.

[Dr. John Deloney]

Got to make enough money to eat.

[Jade Warshaw]

Yeah. How many hours are you putting into this? Every month? Every week?

[Caller]

Yeah, that's. That's where it gets embarrassing because I'm putting about 20 hours in, but the rest of it, the time I just can't get myself to move. I'm frozen.

[Dr. John Deloney]

Okay, then let that dream go.

[Jade Warshaw]

The thing is, if you. Here's the thing, though. If you're putting 20 hours a week into this and you're making $4,000. Imagine if.

[Caller]

That's why I think.

[Jade Warshaw]

Yeah.

[Dr. John Deloney]

So why don't you want to do it?

[Jade Warshaw]

Yeah.

[Caller]

Yeah.

[Jade Warshaw]

What's causing you to not do the other 20 hours?

[Caller]

That's where my value disorder comes in. The seeking comfort versus the dream. Because it's. I mean, it's hard, stinking work. I'm good at what I do, man. I can get jobs.

[Dr. John Deloney]

Every day I go out, I do. It's not a value disorder. It's not a diagnostic. Don't call it that.

[Caller]

What is it? I just need to figure it out.

[Dr. John Deloney]

Here it is. There's nothing to figure out. It's a choice. I like this work. I don't. I want to make this solopreneur thing work. I don't like this work. And I'm not going to do the solopreneur thing. It's just a choice you have to.

[Jade Warshaw]

Make or you go and pick up another job for the other 20 hours. But either way, you gotta work as an adult. We have to go to work.

[Dr. John Deloney]

That's it. It's not a disorder. It's not a thing. It's just. It is. You gotta make a choice. Do I wanna do this job or not?

[Jade Warshaw]

Yeah.

[Dr. John Deloney]

And, Jade, you and I, we have on the outside, looks like a mate. The dream job. These jobs are hard. You and I get frustrated. There's a lot of hours. It's early, it's late. I'm wearing makeup right now, for crying out.

[Jade Warshaw]

Oh, wow.

[Dr. John Deloney]

It's a whole thing, right? Every job's got hard, hard seasons. Every job does.

[Jade Warshaw]

Yeah.

[Dr. John Deloney]

You gotta decide. Is the hard season worth the work?

[Jade Warshaw]

Man, that's it. This is the Ramsey Show. Hey, you're still here.

[Caller]

What are you doing?

[Jade Warshaw]

You do know that the rest of today's show is playing right now over on the Ramsey Network.

[Caller]

App, right?

[Jade Warshaw]

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.

[Caller]

Yep, you heard me right. For free. Then right there on the home screen.

[Jade Warshaw]

You can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here.

[Dr. John Deloney]

Enjoy.

[Jade Warshaw]

We'll see you on the app.