Face Debt Head-On Before It Destroys Your Family

Summary

Podcast Summary: The Ramsey Show – "Face Debt Head-On Before It Destroys Your Family"

Release Date: March 28, 2025
Host/Author: Ramsey Network
Description: The Ramsey Show empowers listeners to build wealth and regain control of their lives, regardless of past financial missteps. Hosted by Dave Ramsey and his team of experts, the show addresses listeners' top money problems through insightful discussions and actionable advice.

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1. Introduction and Overview

The episode begins with a brief introduction by James Childs, the producer of The Ramsey Show, highlighting that this week's content is compiled from calls and segments recorded during the Ramsey Cruise event. The regular broadcasting schedule resumes the following week.

Notable Quote:

• James Childs [00:00]: "Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships."

2. Listener Calls and Expert Advice

a. Jeremy from Ottawa, Canada – Balancing Family and Finances

Issue:
Jeremy uprooted his family to be closer to his partner's family, resulting in a 65% pay cut from over $150k to below $50k annually. This drastic reduction has led to mounting bills and financial stress, questioning whether he should return to his previous high-paying job.

Advice:
James Childs emphasizes the importance of confronting the financial strain together, recommending open communication, combined finances, budgeting, and possibly seeking higher-paying jobs or additional work hours.

Notable Quotes:

• Jeremy [01:18]: "I uprooted my family and moved, ended up taking about a 65% pay cut. And now everything's just starting to pile up and pile up..."
• James Childs [04:15]: "There needs to be some big decisions that are going to be really difficult. But you both have to step up as adults and decide to face it together."

b. Noel from El Paso, Texas – Contemplating Bankruptcy Amid Personal Tragedy

Issue:
Noel is grappling with $80,000 in debt, including personal loans and credit cards. Following the tragic loss of his son, he sold his home mid-remodel, incurring additional debt, and relocated across the country, further straining his finances.

Advice:
James Childs advises Noel to consider selling his current vehicle to free up funds for debt repayment and to continue following the debt snowball method. Rachel Cruz offers emotional support, acknowledging the profound personal loss Noel has experienced.

Notable Quotes:

• Noel [15:26]: "I suffered a traumatic event back in November 2022 when my son passed away."
• Rachel Cruz [16:20]: "I pray that for you, Noel. I'm so sorry."

c. Shonda from Cleveland, Texas – Managing Multiple Debts on a Low Income

Issue:
Shonda, earning approximately $24,000 annually as a nursing assistant, is overwhelmed by $5,000 and $8,000 debts from collection agencies, alongside a necessary upcoming expense of $20,000 for driveway repairs. Her student loans total $50,000, complemented by a $75,000 home loan and additional smaller debts.

Advice:
James Childs and Rachel Cruz encourage Shonda to engage with her creditors, prioritize essential expenses (food, utilities, shelter, transportation), and explore avenues to increase her income, such as seeking higher-paying positions or additional work hours.

Notable Quotes:

• Shonda [22:48]: "I have student loans, that's 50,000. A car loan, that's 11,000. A home loan, that's 75,000."
• Rachel Cruz [25:03]: "Your first priority is food, utilities, shelter, transportation. Nothing else gets paid before those get paid."

d. Gabriella from McAllen, Texas – Dealing with Ex-Partner's Debt Responsibilities

Issue:
Gabriella finds herself responsible for an RV loan of $48,000, with the vehicle currently valued at $30,000. Her ex-boyfriend left her with the debt after being unable to continue payments.

Advice:
Experts recommend selling the RV privately to maximize returns and minimize the loan deficit or obtaining a personal loan to cover the $18,000 shortfall. Additionally, Gabriella is advised to cease leasing vehicles due to their high costs and potential to lead to further debt.

Notable Quotes:

• Gabriella [33:28]: "He took it to go work and could no longer afford the payment on it and left it to me last weekend."
• James Childs [35:03]: "You're $18,000 underwater. So you're going to grow further apart while keeping the kids fed."

e. Kenneth from Houston, Texas – Overcoming Living in a Car Due to Debt

Issue:
Kenneth is living in his car after falling behind on rent and accumulating $14,000 in credit card debt and a $16,000 car loan. He earns approximately $32,000 annually but struggles to cover essential expenses, leaving him with limited funds after debt payments.

Advice:
James Childs advises Kenneth to consider selling his car to eliminate the car loan and redirect funds toward credit card debt. Rachel Cruz emphasizes the importance of tracking every dollar spent and increasing income through additional work hours or alternative employment.

Notable Quotes:

• Kenneth [46:31]: "I'm a sterilization tech. I clean dental instruments."
• James Childs [47:45]: "You owe 16 some change. So you're living in a car and struggling to pay your debts."

f. Jennifer from New Orleans, Louisiana – Addressing Financial Infidelity with Children's Credit

Issue:
Jennifer discovers that her husband opened credit cards under their children’s names without her consent to help them build credit scores, conflicting with their shared financial principles.

Advice:
Rachel Cruz and James Childs discuss the dangers of financial infidelity and the potential negative impact on the children's credit scores. They advise Jennifer to address the issue directly with her husband, emphasizing the importance of transparency and shared financial values.

Notable Quotes:

• Jennifer [78:42]: "We have credit cards in our children's names to help them establish a credit score before they became adults."
• James Childs [80:23]: "It's a mess. It's not worth playing the game and let alone having any level of risk for another human being's financial well-being."

g. Shane from St. Paul, Minnesota – Accelerating Debt Repayment While Maintaining Savings

Issue:
Shane and his spouse are working through Baby Step Two, aiming to save $1,000 while dealing with $17,500 in credit card debt. They hold $14,500 in savings from a tax refund and seek guidance on whether to deviate from the debt snowball method to pay off higher-interest debt first.

Advice:
James Childs and Rachel Cruz advocate for sticking to the debt snowball method, suggesting Shane use his savings to eliminate smaller debts first to gain momentum. They emphasize behavioral changes over purely mathematical approaches to debt repayment.

Notable Quotes:

• Shane [84:13]: "Is there any way that you can deviate from that snowball plan?"
• James Childs [86:03]: "Your goal is to get out of debt. You make too much, you're too successful, and you're too smart to ever do this stuff again."

h. Jordan from Boise, Idaho – Navigating Early Marriage and Financial Overwhelm

Issue:
Jordan and his new spouse are six months into marriage with a combined income of $66,000. They are beginning Baby Step One but feel overwhelmed by $10,000 in debt, including student loans and medical expenses, amidst a challenging housing market in Boise.

Advice:
James Childs and Rachel Cruz advise patience, focusing on debt repayment, and building an emergency fund before attempting to purchase a home. They encourage Jordan to reassess housing expectations and prioritize financial stability over immediate homeownership.

Notable Quotes:

• Jordan [75:01]: "We're just now starting baby step one. And we just feel really overwhelmed."
• Rachel Cruz [76:54]: "You're not gonna buy a house now, you guys are broke. You don't have a thousand dollars in savings."

i. Mike from Washington D.C. – Balancing Debt Repayment with Retirement Savings

Issue:
Mike is working towards paying off $6,173 in credit card debt while contributing $600 monthly to his retirement fund. He is concerned about the trade-off between aggressive debt repayment and maintaining his retirement savings.

Advice:
James Childs recommends pausing retirement contributions temporarily to accelerate debt repayment, emphasizing that eliminating debt will provide greater long-term financial freedom. Once debt-free, Mike should resume and possibly increase his retirement contributions.

Notable Quotes:

• Mike [68:08]: "I'm really a little worried about pulling money away from a recurring retirement and savings contributions to do it."
• James Childs [70:34]: "The purpose of us telling people to pause the 401k is twofold. It frees up money to go toward credit card debt and lights a fire under you to get out of debt faster."

3. Emotional and Behavioral Insights

Throughout the episode, the hosts emphasize that financial struggles are often intertwined with emotional challenges, such as grief, relationship stress, and financial infidelity. They advocate for open communication, emotional support, and consistent behavioral changes to overcome debt and achieve financial peace.

Highlighted Themes:

• Communication: Essential for addressing and resolving financial conflicts within relationships.
• Behavior Over Math: Changing spending and saving habits is more critical than calculating the optimal debt repayment strategy.
• Emotional Well-being: Acknowledging and addressing emotional factors that contribute to financial difficulties.

4. Expert Recommendations and Resources

• Debt Snowball Method: Focus on paying off the smallest debts first to build momentum.
• Financial Peace University: A nine-lesson course offered to callers, providing comprehensive financial education.
• EveryDollar Premium: A budgeting app recommended for tracking expenses and managing finances.
• Books and Courses: Free copies of "The Total Money Makeover" by John Deloney and Dave Ramsey’s "Build a Business You Love" as resources for listeners.

Notable Quote:

• Rachel Cruz [17:17]: "Get your emergency fund back up for a few months and throw some cash in there to get that back up."

5. Conclusion and Final Thoughts

The episode wraps up with a reminder to listeners to take control of their finances by addressing debt head-on, utilizing available resources, and making informed, behavior-driven decisions. The hosts encourage continued engagement through upcoming tours and additional resources available on the Ramsey Network app.

Notable Quote:

• James Childs [74:13]: "Another one bites the dust. Rachel, we did it. Mike's on the path."

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Key Takeaways:

• Address Debt Proactively: Utilize methods like the debt snowball to manage and eliminate debt effectively.
• Prioritize Communication: Open discussions about finances can prevent and resolve conflicts within relationships.
• Emotional Support Matters: Recognize and address the emotional impacts of financial stress to maintain overall well-being.
• Utilize Available Resources: Leverage tools like budgeting apps and financial courses to stay organized and informed.
• Focus on Behavioral Changes: Sustainable financial health is achieved through consistent, positive financial behaviors rather than solely relying on financial strategies.

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Resources Mentioned:

• Financial Peace University: www.ramseysolutions.com
• EveryDollar Premium: Available through the Ramsey Network.
• The Total Money Makeover: Available for free to select callers.
• Build a Business You Love: Pre-sale available at ramseysolutions.com/store

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This comprehensive summary encapsulates the essential discussions and advice provided during the episode, offering valuable insights for listeners seeking financial guidance.

Transcript

[James Childs]

Hey, guys, it's James Childs, producer of the Ramsey Show. This week, Dave and the personalities are living it up on the Ramsey Cruise. So we've put together a compilation of some of our favorite calls and segments from the last year. Regular shows are back next week. Hope you enjoy. Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by my co host, Rachel Cruz. She's also the co host of another show we do together called Smart Money Happy Hour. The number to call is 888-825-5225. You jump in, we'll talk about your life, your money. We'll help you take the right next step and we'll try to make it entertaining, too, because, you know, life's too short.

[Rachel Cruz]

Yeah. Yeah. And money's fun. Oh, this is fun. Yeah, we can enjoy this.

[James Childs]

The world is heavy and we're out here just making light of it all and showing you some, a path forward, some hope. So Jeremy's going to kick us off across the border in Ottawa, Canada. What's going on, Jeremy?

[George Camel]

Oh, just trying to keep one foot in front of the other. How about yourself?

[James Childs]

That's right, my friend. How can we help?

[George Camel]

Well, hopefully with some answers to some money problems. But in a, in a nutshell, I uprooted my family and moved, ended up taking about a 65% pay cut. And now everything's just starting to pile up and pile up, and I, I want to know if it makes me a deadbeat father if I, if I move back to my old job where I'm making north of 150k versus south of 50k just to keep all the bills paid and food in the fridge.

[James Childs]

What was the reason for you to uproot them and take this pay cut? That was clearly a big enough reason that you guys decided to do this.

[George Camel]

Just to keep the family together, be a little bit closer to my partner's family. They're super close, but.

[Rachel Cruz]

Okay.

[James Childs]

And now you're realizing we can't sustain this financially with our lifestyle, our bills and our much lower income. This is stressful for us, even though we're closer to family.

[George Camel]

Exactly.

[Rachel Cruz]

Is. Are you in a. When you moved away, how far away are you from where you guys moved? Because when you said to go back to my job, does that mean move again to go back to the old job? Or you could do something different with where you guys live now.

[George Camel]

It's 3,000 miles and I was told if. If I go back, move. Going back by myself.

[James Childs]

Whoa, like an ultimatum?

[George Camel]

Yeah.

[Rachel Cruz]

Does she understand what's going on financially at all? How is she feeling? Is she stressed about it?

[George Camel]

She knows that it's not well, but I'm. She's kind of blind to it, and she. She just took a different job to work less hours too.

[Rachel Cruz]

How.

[George Camel]

It isn't helping anything.

[Rachel Cruz]

Okay, when you say she's blind to it, does that mean that she doesn't have all the information or. She has all the information, but the way she's processing is not correct in.

[George Camel]

Reality, I think she's just ignoring the. The issue.

[Rachel Cruz]

Okay, how much are you guys in the whole. A month financially with. After everything's paid, how much. How much more do you need?

[George Camel]

I don't know. She doesn't tell me what. What her expenses are.

[James Childs]

Okay, so you guys don't have any finances combined?

[George Camel]

No.

[James Childs]

Are you legally married or just cohabitating?

[George Camel]

Just. We're common law. We got two little ones.

[James Childs]

Okay. And bank accounts are separate. Do you guys venmo each other for the mortgage? How does this work?

[George Camel]

I take care of the mortgage in one vehicle and she does the rest.

[James Childs]

Okay. And she's not feeling the stress of this financially. Just, you know, she.

[George Camel]

She is too, because apparently she hasn't been able to. To make her minimums either.

[Rachel Cruz]

Okay, so it's sounding more like a relationship issue. Jeremy, it sounds like you guys just aren't doing well as a couple in general. I don't know if money's the main issue. I think it's become a symptom of it. But you guys. It doesn't sound like you guys communicate well or. Or have the same goals or do this life together very well. It seems very separate, even from an emotional standpoint. Is that right?

[George Camel]

It's getting there, that's for sure.

[James Childs]

Well, it sounds like you went along with this to appease her, to be closer to family, knowing full well you guys were going to be in the hole financially. And I don't know if you didn't make that clear or if she just was blind to it, as you said, and just going, I don't care. We're making this move. We'll figure it out pretty much. Well, there need. I don't know who your God is, but you need to come to Jesus conversation where you go, listen, you're clearly not doing well financially. I'm not doing well financially. This family's not doing well financially, and life is too short to live with this kind of stress. So if we're going to stay here, we have to make it work. And here's what that's going to take. And that's when we lay out the finances together, get on a budget together and figure out what the hole is and how we're getting out of it. And that might mean you need to find a higher paying job. She needs to work more hours. We need to combine bank accounts. That might be some of the step, the next steps you take.

[George Camel]

Okay. And if that doesn't work, like should I jump back out to my old jobs just so that I know that my kids are fed?

[James Childs]

I mean, that's the noble thing to do. I don't think it helps your marriage at all or with this common law situation you have going on. So you're going to grow further apart while keeping the kids fed. And so I'd rather.

[Rachel Cruz]

Can you keep the kids fed though, where you guys are to be able to work on the relationship and get a higher paying job where you are.

[James Childs]

Or can you sell the car and make other sacrifices to cover your four walls? For now.

[George Camel]

The car is upside down by about 15.

[James Childs]

Do you know what she makes at all?

[George Camel]

She's supposed to make 85 a year, but she has a habit of not going to, to work.

[James Childs]

Wouldn't you get fired if I don't show up to work enough? Dave says, all right, we're gonna find someone else who can actually do this job.

[George Camel]

Well, she works in healthcare, so they're, they're begging for people to, to work there.

[James Childs]

And what do you do?

[George Camel]

I'm in the construction.

[James Childs]

Okay, you, what were you doing before when you were making six figures?

[George Camel]

I was, I was working in a, in a mining industry.

[James Childs]

And that industry obviously doesn't exist where you're at.

[George Camel]

No.

[James Childs]

Is there an equivalent or is there a better construction job up, up the ladder that you can aim toward?

[George Camel]

I've progressed up the, up the ladder in my company a little bit already. And the, the next step would be to become a supervisor, but that's at least a year and a half out because I've asked my boss for more hours and if he would be able to give me, give me a wage increase. And he just said that I'm, I'm not there yet.

[Rachel Cruz]

Okay. So Jeremy, I think what it comes down to is you guys aren't paying your bills. I mean, what, what's happening financially? There's an issue. So the adult thing is that you both sit down together and say, here's what it takes to run our household and we have to make X amount every month for this to happen. And we don't get to decide that. We don't feel like doing that. That has to happen. So either we're cutting our freaking lifestyle and taking everything off the table and doing nothing in order to feed the kids, or we're gonna have to decide different jobs. We're gonna have to choose to move back. Like, we don't get to just sit and not make money and not pay our bills like that. Like, we can't do that. So that's not an option. We're adults and this is part of life. And so that's one thing. But the other thing I'm very concerned about, Jeremy, is. I mean. I mean, it just. It sounds bizarre to me that she's so in the clouds that she wants nothing to do with you financially. Then she's made that very clear. My question is why? Because long term, this is not a sustained relationship. You cannot live your life on two separate pages financially because what that is, it's an indicator of how your relationship is in general. And you guys are going to just keep moving further and further apart. And you guys have two kids together, so it's worth the fight. But you first, from a tactical standpoint, have to get enough money in to pay the bills, and you both have to come to that understanding. And if she is so in the clouds in that, then she may not be a great partner long term because she's probably in the clouds on everything else. So. So there has to be some big decisions that are going to be really difficult. But you both have to step up as adults and decide to face it together.

[James Childs]

Let me tell you that God's gonna cut you. It's Holy Week in Jerusalem. Crowds welcome Jesus as king. Rebellion is in the air.

[Rachel Cruz]

Jesus operates outside our jurisdiction.

[James Childs]

Rome will descend on us all. But instead of taking the throne, Jesus turns the tables.

[George Camel]

My house shall be called the house of prayer, but you make it a den of thieves.

[James Childs]

The world will never be the same. Now in theaters, the Chosen Last Supper.

[George Camel]

Get your tickets now.

[James Childs]

Welcome back to the Ramsey Show. I'm George Camel, joined by Rachel Cruz. If you want to check out some other shows that we produce, you can check out the George Camel YouTube channel and of course, the Rachel Cruze show on YouTube and podcasts. And it's all in the Ramsey Network app if you want to check that out as well. All right, let's go to Noel in El Paso, Texas. Noel, did I get that right?

[George Camel]

You did.

[James Childs]

Okay, wonderful. How are you doing.

[George Camel]

Taking it One day at a time, best as I can.

[James Childs]

How can we help today? What's going on?

[George Camel]

So, essentially my question is, you know, I've been listening to your show for a few days. I've been binging on it quite a bit now, a couple your other podcasts, and, you know, I've been contemplating bankruptcy. It's been something that's in my mind over the course of the last couple months, and I'm just trying to see if it's a better option to throw in the towel and do that or to continue attacking my debt aggressively based on what I've learned so far on the show.

[James Childs]

Sorry to hear that. Well, lay this out for us. How much do you make and how much debt do you have?

[George Camel]

Okay, so I make a profit, and I got two sources of income. One is my job, which gives me roughly about 81,000 a year. And then the other one's disability compensation, which is about 56,000. So about 122,000, 130,000 year.

[James Childs]

Okay.

[George Camel]

And then as far as debt is concerned, I have about 80,000 in debt. Three of them are personal loans. Well, two of them personal loans. One's my vehicle, and the rest is on credit card debt.

[Rachel Cruz]

Okay, what are the amounts for all those?

[George Camel]

So the most expensive one is $38,000. That one has about a $616 payment per month, and it stretched out over.

[Rachel Cruz]

15 years, which that is that.

[George Camel]

That one was a home improvement loan that I took out back in 2022. I was in the middle of a remodel of my house.

[Rachel Cruz]

All right?

[George Camel]

So I took that money for a remodel.

[Rachel Cruz]

Okay.

[James Childs]

And the second personal loan?

[George Camel]

Second personal loan was a debt consolidation loan. It's roughly about $29,000. And then the third one is the vehicle, my truck, which is about $26,000. And then the credit card debt is roughly about 10 or 13,000.

[James Childs]

Okay, how much is the car worth? The truck?

[George Camel]

The truck is worth about 57K.

[Rachel Cruz]

It's worth $57,000?

[George Camel]

Yes.

[James Childs]

Good. And you owe 26.

[George Camel]

Correct.

[James Childs]

I like where this is going. Do you see where this is going?

[George Camel]

I do see where your recommendation is.

[James Childs]

Gonna be explained to me. Why this truck when you're on the verge of bankruptcy?

[George Camel]

Because I'm in construction, and I need the truck to be able to get through the construction.

[James Childs]

I just check Google. They make $20,000 trucks.

[George Camel]

They do, but I work in heavy civil. Civil engineering construction. So I need something that can tow the amount of weight that I need to be able to tow.

[James Childs]

And you're telling me there's no $25,000 truck that can tow that amount?

[George Camel]

Probably. So it's probably going to be about 15 years old.

[James Childs]

I'm okay with that. You're on the verge of bankruptcy. You just told us you got here because you were unwilling to have delayed gratification. Sacrifices weren't made, and you made some poor financial decisions. And this is the one on the list that you can undo if you're willing to drive a 15 year old truck for a season so that you can avoid bankruptcy. Okay, what's the truck payment?

[George Camel]

It's 583amonth.

[James Childs]

So you would have an extra 600 bucks a month to go toward your debt, correct?

[George Camel]

Yes.

[Rachel Cruz]

I mean, do you realize that if you're going to file bankruptcy, they're going to liquidate and get as much as, you know, possible anyway. So, I mean, this could all be on your terms and it's going to be uncomfortable and it's not going to look the way that you've been handling your money. But something has to change. So of course your life is going to look different if you start making different decisions with money. And it's not going to be easy because, I mean, a little bit of the easy route is the debt route. You kind of can get what you want when you want it, and that's how majority of people live. But you're finding that it's causing stress. You're calling us for a reason because you're not happy with where you are financially. So something does have to change. So your mindset around money, regardless of work and construction and weight, I mean, all of that, like if you're in this desperation part, you know, if you get to this place in your life, you're willing to do anything, like anything. And I don't, I don't know if you feel that or want to experience that.

[George Camel]

I just been through a lot of suffering over the last year. And it's not necessarily the whole truck thing. It's just.

[Rachel Cruz]

Yeah. What's, what's been going on?

[George Camel]

The. What caused me to call to make all these poor financial decisions? I suffered a traumatic event back in November 2022 when my son passed away.

[James Childs]

Sorry.

[George Camel]

And so that caused me to sell my house. And when I sold my house, it was in the middle of a remodel and I ended up being upside down, about $18,000. So I had to pay $18,000 to sell a house. And then I moved my daughter and I across the country to bring my son to his birthplace to bury him and had to start all over again. So that's what caused me to take out, you know, the debt consolidation loan for 27 or $29,000. And I had a paid off truck. My truck was paid off. I had a 2500 ram that was paid off. And I traded that in to get this vehicle because it was a 4x4 and it had more pulling power.

[Rachel Cruz]

I hear you.

[George Camel]

I had to buy another house, but it wasn't a house. I bought a mobile home. That was another $121,000 there. So, you know, I spent a couple hours on the budget app yesterday that every dollar spent app, and for some reason, it's telling me that I have $2,600 worth of margin every month left over.

[James Childs]

That's with your minimum debt payments, all of your expenses. That's what it should be.

[George Camel]

Yeah, I mean, I put everything in there. All the payments that I'm making still says I got $2,600. And don't get me wrong, I. I paid off close to about 3,000, $3,500 worth of credit cards, full credit cards in the last 30 days, you know, just. Just trying to do what the Ramsey method is telling me to do, you know, and I'm putting $40 away every. Every week in savings to try to get to that thousand dollar savings, you know, in my underwear drawer to keep it. To keep it there for a rainy day.

[James Childs]

Well, outside of the truck. I added it up. I mean, if you sell the truck, you'll have $80,000 in consumer debt based on what you told us.

[George Camel]

Yes.

[James Childs]

And so you had said 80 at the top, but you got 80 plus the $26,000 truck loan. That puts you at six figures in debt. And I'm trying to help. What's that?

[George Camel]

That's including it. That's including it. The 26,000.

[James Childs]

What was the first loan you said? The home improvement loan?

[Rachel Cruz]

38,000.

[James Childs]

Yeah, 38,000.

[Rachel Cruz]

29,000. Plus 29, plus 10.

[George Camel]

29,000.

[James Childs]

Plus 13 in credit cards.

[George Camel]

26. Yeah. And then recording the credit, karma is telling me I got 13 in credit cards. But.

[James Childs]

And I'm telling you with a calculator, it's coming up at 80. And that's without your car loan. So I just want you to have a real picture of what your finances are at. And that's why I'm so desperate to get you to get rid of this truck and downgrade to number one, free you of $26,000 today before your truck goes underwater. Almost every call people are underwater on Their truck. So when you said this truck is worth 57 and you owe 26, I was doing backflips because it gave me some hope that you can get out of this faster than you think. And if you do that and then do the debt snowball, every extra dollar outside of food, utilities, shelter, transportation, insurance goes toward that 80,000 you have remaining smallest to largest balance I think you can get out of this. You make great money. You're a smart guy who works hard.

[Rachel Cruz]

And know that, I mean, from that information that you just gave us about this last year, which is just the most horrific thing that I could ever imagine is losing a child. So I can't even, I can't even imagine what that grief does. There's a fog that is there. And when you make financial decisions, usually in that time soon after something like that happens, they're sometimes not the best. So that's not to guilt or to shame you. That's to kind of free you to say, hey, yes. As you look back, like, while those may not have been the best decisions, I don't blame you for that because of what you walk through. But I do want to make sure that there's a level of healing that you're getting from this and that the money is that secondary piece. But I do, I pray that for you, Noelle. I'm so sorry. And yeah, if you stay on the line, Taylor's gonna pick up and we'll give you John Deloney's book and total money makeover. When you go through a job loss or job change and lose your employer sponsored health insurance, there's no better time to try Christian Healthcare Ministries. That's right. There's another option besides COBRA to take care of your family during that time. Because if you didn't know the cost of COBRA has gone up a lot in the past few years. And CHM is an affordable, biblically based alternative to health insurance. So do your own research. CHM is a great option that's potentially a third of the price of cobra. It's a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And the support you get from CHM goes beyond helping you pay for medical bills. Members become part of a family that prays for them when they have a medical event. Try getting that with cobra. So if you're going through a job loss, life change, or just want to explore other options to save on healthcare, CHM might be perfect for you. CHM programs Start as low as $98 a month. So find out [e-mail] budget that's chministries.org budget.

[James Childs]

Foreign.

[Rachel Cruz]

Welcome back to the Ramsey Show. I'm Rachel Cruze hosting this hour with bestselling author George Camel. We're taking your calls. Up next, we have Shonda in Cleveland. Hey, Shonda. Welcome to the show.

[George Camel]

Hi. Hi, guys.

[Rachel Cruz]

Hello. Hello.

[George Camel]

Hi. Can you hear me?

[Rachel Cruz]

Yes, we can. We can. Okay. Thanks for calling. Yeah. How can we help?

[George Camel]

Yes, I have money stress. I have. I have an income of like 22, $24,000. But I have two collection agencies. One is 5,000, which I could pay. I only have 2,000 more to pay for that one collection agency, and the other one is 8,000. And I don't know what to do or begin to pay that. That debt. I don't even know where to begin. I haven't talked to that collection agency at all because I don't know what to do because I don't have no money to pay them. A driveway that needs to be fixed, that's like 20,000, they say.

[James Childs]

So that's an upcoming expense. That's not debt, right?

[George Camel]

Yeah, that's an upcoming expense. Okay.

[James Childs]

What other debt do you have?

[George Camel]

I have student loans, that's 50,000. A car loan, that's 11,000. A home loan, that's 75,000. And I was, like, one month behind. I think I just caught up. And let's see. Credit card, that's 200.

[James Childs]

$200 of minimum payment or. That's the total?

[George Camel]

Yeah, no, that's the total. So I was going to pay them off when I. Next time I get paid.

[James Childs]

Okay. How old are you?

[George Camel]

53.

[James Childs]

Okay.

[Rachel Cruz]

What are you doing for work right now?

[George Camel]

Listen, sister.

[Rachel Cruz]

But I feel like I'm overwhelmed.

[George Camel]

I don't know what to do. And I know y'all say don't play the lottery, but that's. I've been trying to do that.

[James Childs]

Oh, no, don't step in the convenience store, a gas station. Stay far away.

[Rachel Cruz]

How many hours a week are you working?

[George Camel]

That's right. Like 40 hours. And then sometimes I pick up on my off days. Okay, so I'm working. I'm working.

[Rachel Cruz]

And you're doing what again? I'm sorry. Say it one more time.

[George Camel]

Nursing assistant.

[James Childs]

Nursing assistant.

[Rachel Cruz]

But you're only making $24,000 working as a nursing assistant and working 40 hours a week.

[George Camel]

Yeah.

[Rachel Cruz]

Okay. Okay. Yeah. I mean, I think the. The first thing to be looking at because what's your degree in? Because you have some student loans.

[George Camel]

Yeah, well, I went to school for different. Well, I really went to school and didn't really get much of a degree. I got one degree.

[James Childs]

And how long you've been paying on these student loans?

[George Camel]

Years. And haven't made a debt. And I mean, you know, during COVID they didn't. They wasn't taking any payments during COVID They were sending money right back.

[James Childs]

Are you single?

[George Camel]

Yes.

[James Childs]

Okay, well, there's some simple steps you can take that are tactical to help you, but it's going to take sacrifice, it's going to take making more, spending less, all of that. So here's the thing with the collections. You've got to talk to these people. We can't bury your head in the sand. And even if you call them and say, listen, I can't pay you, I make $10 an hour and I got a lot of bills and a lot of people who want to get paid, and so I need to keep the lights on. So your 1 priority is food, utilities, shelter, transportation. We call that the four walls. Nothing else gets paid before those get paid. I don't care who the debt is to, what the collectors are saying, you gotta keep the lights on, keep the mortgage paid so that you don't get foreclosed on and eat something too. And so beyond that, you got to make your insurance payments. We need to keep all of that to protect us, and then we can start tackling the debt. But clearly there's not much to tackle it with because you have no money left after making minimum payments, right?

[George Camel]

That's right. So, I mean, so what do I tell them or what do I do? Do I write a letter? Do I call them?

[James Childs]

I call everyone you owe debt to and say, listen, I want to pay you, but I don't have any money. I make $10 an hour. I'm six figures in debt. I'll pay you when I can and what I can, but right now I'm flat broke.

[George Camel]

Okay.

[Rachel Cruz]

Yeah. And then on the income side, Shonda, I mean, honestly, I mean, I was, you know, Walmart, Target, like these places are paying up to 20 an hour. Like you could double your hourly rates by working somewhere else. I think you're going to need a different job. I just don't. This job is not going to be able to sustain you, and you're working 40 hours. So I'm like, you're. You have a, you know, a great work ethic, but that energy is going to something that's not giving you your rate of return of what you need right now. And so in places like Walmart, Target, some other places, I mean, they have great benefits. Like they really do a great job in helping their employees. So I honestly would be switching jobs. You have to make more. You can't be living on this.

[James Childs]

Is there a path for you to make more in the nursing assistant world, like to CNA where you could be making 40,000 a year?

[George Camel]

Oh, I don't know, like the hospitals or something like that. I don't know how much they.

[James Childs]

I would do some homework and research and talk to people who are in these fields, in these positions and ask them the path and what it's going to cost and what it's going to take and how long.

[Rachel Cruz]

Yeah.

[James Childs]

Because long term you need a solution.

[George Camel]

Yeah. Agency pays amazing. I mean, I guess agency, but beyond the agency.

[James Childs]

You know, as a certified nursing assistant, you should be able to make 30 to 40 versus 22. And with your experience, I'd imagine this wouldn't be a huge leap. And so I would just at least start to do some homework. I know life has got you down, but this is the time. The next 10 years we need to be really getting focused. Get the income up, get rid of this debt and have no mortgage payment.

[Rachel Cruz]

And Shawn, to start binge watching some of our debt free screams here on the YouTube channel or even podcasts. But go through and, and watch some of these stories because I know it feels like you're in such a hopeless situation and numbers wise, it does feel hopeless. Right. And so we want that some of that to change with your income and starting to get a grapple on this debt. But just know that there is an, there is a way out. It's just gonna, it's gonna look different than probably what you've done in the past and that's okay. But there's people that do it every day. So continue to feed your mind with this stuff. If you hold on the line, Shonda, Austin's gonna pick up. I wanna give you Financial Peace University. It's our nine lesson course on money. Just to get you the basics, we'll throw in everydollar Premium as well, which is our budgeting app. And they have a great tutorial there when you sign up there to really walk through and teach you there. Here's detailed how you do a budget. And Austin, go ahead and throw in total money makeover too. And that's Dave Ramsey's bestselling book and it's the seven baby steps. I just want to get some knowledge of this plan in you, Shonda and I want you to just soak all this up because it's gonna kind of be a different world that you'll be navigating with money. It's going to look different, but I want you to have motivation and people behind you cheering you on. And even if it's us on YouTube cheering you on and giving you some encouragement through other callers or watching their stories, I want that for you because I want you to know that. That this can change. It's going to be different. It's. Yeah. It's gonna be different from what you've done, and it's going to be hard. None of this is easy. None of this is easy, but it is possible.

[James Childs]

I'm going to throw even one more thing just because I feel for Shonda. I'm going to gift you a free coaching session with a trained Ramsey financial coach who can walk through all of this with you, help you with the collection side, navigate this wild journey, help you make a plan with the debt snowball. Just because we can't do that in a radio call. And I really want Shonda to have hope because I know a lot of older caller. There's older people out there listening who are in their 50s, Rachel. And they're going, well, I'm in her shoes. There's no hope for me. And it takes. It's harder to do as you get older.

[Rachel Cruz]

It's just harder, deeper habits that are. You have to break.

[James Childs]

The mistakes have been compounding for years. The debt's been sitting around for years, is in collections. So hang on the line. We'll get you connected and give you a free session with a trained Ramsey financial coach.

[Rachel Cruz]

Yeah.

[James Childs]

Who can help. So that's. That's a big part of the problem is.

[Rachel Cruz]

Yes. And it is hard.

[James Childs]

And getting a game plan.

[Rachel Cruz]

That's right. And you know, we talked to, to people. Yeah. In their 50s, 60s, sometimes in their 70s. Right. And they're. They don't have anything for retirement. They're trying to figure this out. And, and even though it's a hard hill to climb, to say, okay, I'm gonna buckle down. I'm gonna. I'm gonna learn something new, change what I've been doing. Sacrifice, take on that extra job. Like all of that is hard, but it's also hard to go into retirement with nothing if you continue down that path. Right. So it's one of those things, like you choose your hard.

[James Childs]

Yeah.

[Rachel Cruz]

And one heart is actually going to be able to give you money when you start working a plan and get out of debt and be able to have some level of control over your life versus not at all. Right?

[James Childs]

So don't give up. Shonda.

[Rachel Cruz]

You got this, Shonda. We believe in you. This is the Ramsay show. Foreign.

[James Childs]

This show is sponsored by Better Help. All right, you've heard me say this a thousand times, and I'm gonna keep saying it. You're worth being well, and I believe therapy can Help. Right now, BetterHelp is offering 90% off your first week of therapy, now through March 31st. So if you've been on the fence, this is your chance to try therapy for a fraction of the cost. Because let's be honest, we all spend money on things we hope will make us feel better, like new clothes, organic groceries, gym memberships. But when it comes to actually digging.

[Rachel Cruz]

In and getting real with our mental.

[James Childs]

And emotional well being, we hesitate, we pause. And I know actually going to therapy can seem like a huge first step, but please hear me. Your mental and emotional health are just as important as your physical health. BetterHelp makes therapy more accessible than you think because it's online so you can talk with your therapist. When it works for your schedule, you just fill out a short online survey to get matched with a licensed therapist.

[Rachel Cruz]

And you can switch therapists at any.

[James Childs]

Time for no extra cost. Your well being is worth it, and this offer makes it easier than ever to start. 90% off your first week of therapy now through March 31, 2025. Visit betterhelp.com DeLoney to get started. That's BetterHelp. H E-L-P.com DeLoney I'm George Campbell, joined by Rachel Craig Cruz. This is the Ramsay show, and if you enjoy this show, you should check out Smart Money Happy Hour, co hosted by myself and Rachel Cruz. We have a blast. And if you need to, like, send someone the show that's not too heavy, too intense. Smart Money Happy Hour is. It's a breath of fresh air, there's lots of laughs, and you kind of. We sneakily teach you money things while.

[Rachel Cruz]

You don't even know it.

[James Childs]

You don't even know.

[Rachel Cruz]

It's like a what?

[James Childs]

Our writer Savannah said she was at the nail salon and some Gen Z girls were like, hey, you know that Dave guy? She's like, yeah. She's like, well, his daughter has a really cool podcast. I love it. You're talking about smart money at the.

[Rachel Cruz]

Nail salon, current events, pop culture and money.

[James Childs]

Rachel's like the cool sister.

[Rachel Cruz]

It's the best.

[James Childs]

And I'm the cool uncle.

[Rachel Cruz]

I guess Uncle George that's right.

[James Childs]

All right, Gabriella is up next in McAllen, Texas. Gabriella, what's going on?

[George Camel]

Hi guys. Thank you for taking my call. So my question is my ex boyfriend left me with an RV payment and I do not want to pay it.

[Rachel Cruz]

Oh my gosh. So what happened, you guys?

[George Camel]

So he took it to go work and could no longer afford the payment on it and left it to me last weekend and was like, here you go, here's the RV with the payment.

[James Childs]

What do you mean left it to you? Whose name is on the loan?

[George Camel]

It is under my name. We were together for 10 years. I got it for, for him. So he had to go work in the oil field and he. We split up about a year ago and he, he can't afford it anymore. He. So he brought it back to me and I'm left with it.

[Rachel Cruz]

Oh no. Shoot. Well, Gabrielle, you'll never do that again, will you?

[George Camel]

I've learned my lesson. Oh, no.

[Rachel Cruz]

You know, we talked to somebody earlier in the hour and her and her boyfriend, well, fiance, they don't really have a date, I don't think a wedding date. We asked, but yeah, both their houses, their names are on the deed of the house and I just thought, oh, no, no, no, no.

[James Childs]

You're a great, I guess, poster child of what can happen when you sign on to debt and buy things with people you're not married to. And I'm so sorry you. I mean, on top of the hurt from this long term relationship.

[Rachel Cruz]

And it was a year ago though, so now you're like, well, crap, now I gotta.

[James Childs]

What is it? What's left on the RV loan and what is it worth?

[George Camel]

It is the balance left is around 48,000 and looking it up, it's worth around 30,000.

[James Childs]

So you're $18,000 underwater.

[George Camel]

Basically for some reason they took like the prices in RVs were just expensive when I bought it and have dropped.

[James Childs]

Well, that's been the theme on the show for the last week or month is everyone is underwater on vehicles and things with wheels because it was really expensive and they had good intentions. And then the market turned and now everyone's underwater. So there's only two ways to go about this. Number one is you need to come up with the $18,000 in cash in order to sell it and pay off the loan. Or number two, you go get a personal loan for the difference of that 18,000 to get out from under this. Do you have any money?

[George Camel]

Yeah, I have around 10,000 in savings.

[James Childs]

Good. And any other debt?

[George Camel]

Well, yes, I Have a mortgage. I pay my vehicle, but my vehicle is actually a lease, and I hadn't learned my lesson at the time, but I have a bedroom set under. Under my name that somebody else owes. About $3,000 of that. Really? No credit card debt.

[James Childs]

Somebody else owes?

[George Camel]

Yes, it's under my name, so technically I owe it, but.

[Rachel Cruz]

And are they paying? Are they paying on it or you're.

[George Camel]

Yes and no.

[James Childs]

Gosh, is this family? Is it a friend that you like said, hey, it's family.

[George Camel]

It's a family member.

[James Childs]

Oh, gosh. I think you need to stop being generous with money you don't have, Gabriella. That's what's been happening. It's a theme in your life. You sound like such a sweet, wonderful person.

[Rachel Cruz]

And now, how much do you make a year?

[George Camel]

So this year I made. So I'm actually a nurse. And with COVID I made really good money. 2022. Kind of gone down some. So this year I made 133. But it will probably drop again this year because there's no more Covid crisis. So that's just how it works.

[James Childs]

Not if I can help it. You're going to be out there busting your tail over time, doing Uber eats and doordash and instacart. It takes. You're climbing out of this thing. And I think you're not scared of work, which is great. And we got to start with the smallest debt here, which it sounds like is this bedroom set.

[George Camel]

Yeah.

[Rachel Cruz]

Yeah.

[James Childs]

I think you just pay it off. And if they ever pay you any more for it, great. You can apply that.

[Rachel Cruz]

Don't expect it.

[George Camel]

Just.

[James Childs]

But don't wait around.

[Rachel Cruz]

Yeah. Be. Be done with it.

[George Camel]

Okay. Even if it's zero interest. I should pay that one off.

[James Childs]

Especially if it's zero interest. All of it.

[George Camel]

Okay.

[James Childs]

We're done with payments. We're done with debt. You make too much, you're too successful, and you're too smart to ever do this stuff again, regardless of the interest rate. Does that track? Gabriella, are you with us on this? Yes, we are team Gabriella. And so we want you to win. And that's going to mean you have, you know, if you count up all your debt and if you want to get out of the lease, you can look at the early buyout amount and see if that's going to be worth it for you to do now. Otherwise you turn the car in, and then you need to go get another car. But don't just get another lease.

[George Camel]

Okay?

[James Childs]

It's the most expensive way to get A vehicle and dealerships love it because they make the most money off of these leases.

[George Camel]

Okay, so no more leasing.

[James Childs]

No more leasing. Buy your next car with cash, which is going to be good.

[Rachel Cruz]

When is the lease up?

[George Camel]

In about two more years.

[Rachel Cruz]

Okay. Yeah. I would look at the early buyout. I would just kind of do some research in that. But then in the meantime, between now and two years, be saving some cash knowing that you're gonna have to replace this car. But I would take. Yeah, this 10 grand, Gabriella. I would pay off the. Yep. The bedroom set, and then the. Be looking at the 18 that you'll probably have to take a loan out for for the remainder of that RV after you sell it.

[George Camel]

Okay, so I shouldn't give it back to the bank and then let them sell it and then me pay the difference?

[James Childs]

You're saying to have the RV repossessed?

[George Camel]

Yes.

[James Childs]

I wouldn't do that.

[Rachel Cruz]

No, I wouldn't do that. Because I would go on your credit. I would. Yeah, I would. I would just find the private sale.

[George Camel]

Okay.

[Rachel Cruz]

List it, sell it yourself. Get as much as you can for it, obviously. And then, yeah, you'll have to have. Have a loan for the difference, and then you'll be working your way out of that.

[George Camel]

Oh, okay.

[Rachel Cruz]

Yeah.

[James Childs]

I wish we had better news. The good news is you make great money. You make six figures. We've seen bigger, scarier numbers than this. Yeah, but it's the hurt and shame and guilt and baggage and oh, my gosh, I'm so stupid. You got to just pick yourself up and go, listen, that doesn't define me. Yeah, I'm going to make different decisions and.

[Rachel Cruz]

Gabriella, is it just you? Are you single kids?

[George Camel]

Yes, it's just me and my two girls.

[Rachel Cruz]

Okay, so you do have two girls. Okay, how old are they?

[George Camel]

I have a nine year old and a three year old.

[Rachel Cruz]

Okay, so sweet. That's so great. Okay, so what you're probably going to be doing, I mean, where you can work extra and even if it's, you know, at night, online or something, like, if there's like something that you can do to find that extra money. But with this 133, I mean, I would act like I would. I would tighten everything up and I mean, give yourself a goal to say, I'm going to act like I make 70,000 a year or whatever it is, and then find that difference. To have an endpoint to say, okay, I could be completely debt free, be done with all of this and start fresh, not owing anyone anything, and. And start this whole process, I'm like that you could do this in 18 months, Gabriella. I mean if you really focused and did this, the car lease, you know, kind of hangs in the balance of what you decide there. But being able to have no payments and this income going to you and your girls and you guys keeping all of it, that's the goal we want for you. Have you been through Financial Peace University?

[George Camel]

No.

[Rachel Cruz]

Okay, so if you hold on the line, Skyler's gonna pick up and we're gonna gift that to you as as well as everydollar Premium, which is our budgeting app. And so what I want you to do, Gabrielle, is watch these lessons. Even Benjam, there's gonna be seven lessons. And I want you to go through and watch all of this and really get a game plan to say, okay, here is how I take control of my money. And what that's gonna teach you is, is everything from budgeting to getting out of debt to saving up for an emergency funds to investing to your kids college. I mean it kind of runs the gamut of everything and it's all packaged in there. And so to be able to walk through that and apply this stuff, Gabrielle, because what you've already witnessed and experienced is that money, it's personal finance, it's 80% behavior. It's only 20 head knowledge. You're going to watch these videos and be like, I knew that. I knew I shouldn't probably co signed some furniture for a family member. I know that I probably. Okay, now, okay, you know you're gonna get all that. But actually changing the behavior and doing it is gonna be the key to you winning. And I believe in you. I know you can do this. Gabriella, we're cheering you on. So hold on the line. Skyler will pick up.

[James Childs]

That's the theme of this hour. Don't spend money you don't have, especially with people you're not married to. That puts this hour of the Ramsey show in the books. My thanks to my co host Rachel Cruz, all the folks in the booth and you, America, thank you so much for listening. We'll be back before you know it.

[Rachel Cruz]

All right, Dave, you have some strong opinions possibly. Yeah, I think so. Okay. Because you really prefer credit unions over big banks. So why, why is that?

[James Childs]

Well, credit unions for one thing are.

[Rachel Cruz]

Nonprofit, which means that the members, the.

[George Camel]

Customers own the credit union.

[James Childs]

So any profits that the credit union.

[George Camel]

Makes goes back into customer pricing.

[James Childs]

So you get better interest rate on savings, cheaper checking and so on, that kind of thing. And what's more important than that, though.

[George Camel]

Is the fact that the customer is the owner, changes the spirit on the credit union.

[James Childs]

So I find very few credit unions.

[George Camel]

That aren't very customer centric.

[Rachel Cruz]

Yes, well, and I think we have found one that is incredible and that's Fair Winds. They are an incredible credit union that is really out with the heart to help the customer.

[James Childs]

You know, that's why we're partnering with them, because they've got a scope to be able to handle the Ramsey audience. And they're the right kind of people.

[George Camel]

With the right kind of values and they've done a really, really good job with customer service and the deals that they're offering. The Ramsey Tribe is incredible.

[Rachel Cruz]

Yeah, absolutely. And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account.

[James Childs]

Yeah.

[Rachel Cruz]

And I'm not kidding, it took, it took less than five minutes. It was so user friendly. Like the step by step approach was unbelievable. And then the next day my phone rings and it says fair wins on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience. And I, I so, so appreciate that. So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fair Winds, again, they make it so easy. Plus, anything that you can do at a traditional branch, you can do with [e-mail] or on their app. And you'll have free access to over 33,000 ATMs.

[James Childs]

You guys know how much I hate banks in general. And so for me to do this.

[George Camel]

Is a big deal.

[James Childs]

Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey Tribe. You guys, it's incredible.

[Rachel Cruz]

Yeah, you guys, it's so easy to join Fair Winds no matter where you live. So go to Fairwinds.org Ramsey to learn more. That's F a I r w I n d s.org Ramsey.

[James Childs]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by best bestselling author Rachel Cruz. This is your show, America. Give us a call at 888. 825. 5225. You jump in, we'll talk about your life and your money and we'll try to help you take the right next step when it comes to your biggest Life's decisions and maybe smallest. You know, it can be a first world problem. We're down to chat about that too.

[Rachel Cruz]

We're here for everything.

[James Childs]

No problem too small. Kenneth kicks us off in Houston, Texas. Welcome to the Ramsey Show. Kenneth.

[George Camel]

Hello.

[James Childs]

Hey, how you doing?

[George Camel]

I'm doing fine for now.

[James Childs]

What's going on?

[George Camel]

So currently in a situation where I'm living in my car. I started in November because I racked up about $14,000 in credit cards and I have 16 on my car as well.

[Rachel Cruz]

16? 16,000.

[George Camel]

Yes, on my car.

[Rachel Cruz]

Okay.

[James Childs]

Where were you living before this?

[George Camel]

I was actually living in an apartment with my cousin and her boyfriend but they decided to get their own place so I ended up in a car.

[James Childs]

And right now you can't afford rent because of the debt?

[George Camel]

Yes, it's taking about half of my paycheck every two weeks and my car payment is 346. So I'm left with about $200. So I am. I started this debt snowball and I managed to pay off one credit card. But it's. It's still not enough. Not enough.

[James Childs]

Sounds like we need to get your income up. Are you working full time right now?

[George Camel]

Yes, yes I am. I actually, I submitted applications to places I still haven't had. Like I haven't heard back yet.

[James Childs]

So what are you doing right now for work?

[George Camel]

I'm a sterilization tech. I clean dental instruments.

[James Childs]

Okay. What do you make doing that?

[George Camel]

I make 18 an hour on my W2. It said I made 32,000 this year.

[James Childs]

Okay. And you're working 40 hours a week?

[George Camel]

It's between that we work half days on Fridays, sometimes full days. So between 36 and 40.

[James Childs]

Can you work extra if you chose to?

[George Camel]

Yes, I'm currently looking.

[James Childs]

Okay. I would see if you can work overtime with your sterilization job on top of that getting another job on the side. I mean $18 an hour is not nothing. And so it feels like it's not just a car loan. What's your minimum payment on the credit cards?

[George Camel]

Altogether is over 500. 529. I have a spread between 7.

[James Childs]

And you have. Do you have any friends or family that you could have to help support you? Go live with some friends for now, Crash on a couch, anything like that?

[George Camel]

Friends? No family? I do. They have offered but the environment for me around them is I, I do not enjoy. So I rather stay in the car instead of having my emotional well being.

[James Childs]

Are you safe living in this car? Where are you actually staying?

[George Camel]

So I stay around around near my job. So far, nothing has happened. I believe, I don't know how many months, like four months.

[James Childs]

Now are you able to shower and how are you doing all of that?

[George Camel]

So I actually have a gym membership. So showering, doing whatever I need to do, I can handle that at the gym.

[Rachel Cruz]

Okay. Kenneth, how much is your car worth?

[George Camel]

It. I checked on Kelly Blue book. It's at 12,000 the last time I checked.

[Rachel Cruz]

Okay. Worth 12,000. Okay.

[James Childs]

You owe 16 some change.

[George Camel]

Yes. Yes.

[Rachel Cruz]

And no money saved.

[George Camel]

No, no.

[Rachel Cruz]

And because my biggest concern right now, Kevin, for you. Yeah. Is what kind of George was hinting at. But it is your living situation. I mean, one of these, you know, four walls is what we say, food, shelter, utilities, transportation. Like these are things that are necessities, those are needs, and you're lacking, obviously, one of those. So the family situation, would it be like, is there a way to at least have a roof over your head and give yourself a time frame and say, within 90 days I'm gonna be out of here and looking for my own place. But just for the, you know, just the bare necessity of, you know, having. Having a home, that's what I just worry for you when it comes to that is just having a place to stay.

[George Camel]

Well, the place at my family's place, I would have to pay rent, which is not much, but I wouldn't have any left to put towards my credit cards.

[James Childs]

So right now, if you're working 40 hours a week at 18 an hour, it's about 2,900 bucks a month before taxes. So how much is getting taken out of these paychecks? Are you actually looking at the paychecks and seeing where it's going?

[George Camel]

No, I know that about 180 is being taken out for insurance, but taxes wise, I have not checked.

[James Childs]

Okay. I would go look at that. Make sure you're not taking out too much in taxes. Make sure that you're not putting any money away into investments. Right now, every dollar you can get out of those paychecks needs to go to covering your four walls, like Rachel mentioned.

[Rachel Cruz]

Yeah. Because besides the. You have the car payment, the credit cards, but you should have around $2,000.

[James Childs]

Left because you got about 900 in payments.

[George Camel]

That's what it's looking like. I get each paycheck, it depends. I get about the minimum, at least 1060 each month. I meant each every two weeks.

[James Childs]

Okay. So the first thousand covers your debt payments. Where's the other thousand going?

[George Camel]

I have no idea.

[Rachel Cruz]

Okay, so I think that's. That's gonna be a. That's a key piece to this, Kenneth, because a thousand dollars, I'm like, that's a significant amount. Right. So I would want you to be tracking and knowing like this is exactly where every single dollar is going.

[James Childs]

Right.

[Rachel Cruz]

And even just going back to the basic of a budget. And we can, if you hold on the line, we'll give you every dollar premium to be able to figure out so specifically where that is. Because I don't want you. Yeah. I don't want you behind on payments. In a perfect world, I want you to be able to have enough money to pay rent somewhere and you need.

[James Childs]

To be working every weekend.

[Rachel Cruz]

I was gonna say weekends and even nights, Kenneth. It's gonna be exhausting. But you're. I mean you're. You're gonna have to dig yourself out of this hole. And one of the, I mean the two ways to do that is income and expenses, right? Those are the two parts of the equation. So upping the income, lowering the expenses is gonna. Is gonna help you gain some traction.

[James Childs]

Do you have insurance bills as well to pay outside of healthcare?

[George Camel]

No, it's. It's too much for me right now. Like auto insurance? Yeah, for. The minimum for me is 400. So.

[James Childs]

Why is that?

[George Camel]

I can't driving record. No, my driving record's good. It's just been like that. The lease I have paid is 300. Maybe it's because I. I was in an accident, but it wasn't my fault.

[James Childs]

Kenneth, you need auto insurance, man. Even if it's 300 bucks, you're in a very risky position right now. Jump on ramseysolutions.com Connect with one of our insurance pros to help you with that. And hang on the line. We'll send you every dollar premium to help you make a plan for every one of those dollars. Wishing you the best. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind, scrambling to pay bills and trying to make ends meet.

[George Camel]

I also discovered that there are a.

[James Childs]

Lot of rip offs in the life insurance world. Like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options. And they've been around for over 95 years so you know they'll be there when you need them.

[George Camel]

Zander is the real deal and that's.

[James Childs]

Why they've handled all my personal insurance for over 25 years.

[George Camel]

I trust them and you can too.

[James Childs]

Visit Zander.com for instant online quotes or.

[George Camel]

For a more personal touch, give them a call at 800-356-4282.

[James Childs]

Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes. But thankfully you don't have to dread filing when you've got Ramsey SmartTax. It comes packed with everything you need to file online before the big deadline. That means all major federal forms and deductions are covered with no hidden fees. Plus, with Ramsey Smart Tax, you can save up to 70% compared to other tax software out there. It's a no brainer. Just go to ramseysolutions.com smarttax and see how simple tax filing can be. That's ramseysolutions.com smarttax. I'm George Camel joined by Rachel Cruz this hour. Open phones at 888-255-225. Call us and we'll help you take the right next step for your life and your money. Jennifer's in New Orleans. Up next, what is going on? Jennifer?

[George Camel]

Hi.

[James Childs]

How are y'all doing? Well, how are you?

[George Camel]

Great.

[James Childs]

How can we help today?

[George Camel]

So I have a 17 year old son, almost 18, and we pretty much raised him on FPU principle since he was about 6 or 7 years old. And he is in a pretty serious, healthy relationship with a young lady that we do really like. And I know it may seem like too early to tell or anything like that. We're not the kind of parents that's like, oh my God.

[James Childs]

But you know, you're hopeful she might be the one.

[George Camel]

I'm pretty sure. So, you know, not anytime in the near future. But she is, she is set on being an orthodontist.

[James Childs]

Sounds expensive.

[Rachel Cruz]

Exactly.

[George Camel]

That is my question of how to approach this with them. We have talked to him just briefly. The conversations have just started. He does think it's dumb to take out student loans. She's briefly said that she's totally fine with having $250,000 of student loans that might take the 20 years to pay off because that's what usually what orthodontists have. And I kind of briefly said that you guys may not even be afford to eat. And I just don't know how else to approach this besides maybe getting them to watch the borrowed future take foundations and finance. But, you know, it's just starting. Yeah.

[James Childs]

Well, a lot of this stems from how she grew up with money and what her parents believe about money.

[George Camel]

Right.

[James Childs]

And so this is a money values conversation that your son will eventually need to grapple with as they head toward maybe a marriage.

[George Camel]

Right? That's what we've been talking about with him.

[Rachel Cruz]

Yeah. And I think it's. It's. I mean, he's getting to the age he's 17, almost 18, so. And again, I don't have kids that age. But, you know, there starts to be that level of letting go. Right. That eventually they're going to be off in college, they're going to be making their own decisions. Like there is that. That that season of life is. Is coming soon. And so it always begs the question. It changes a little bit because he's still under your roof, in my opinion. But it always begs the question of if no one's asking advice, you know, when do we give it and what. What can we control? Because the truth is, you can't control what she chooses to do. And it gets to a point too, that eventually, soon they're gonna just be making their own decisions, regardless of what you guys think or not. Right. So. So if anything, it would be a conversation with him. I. I don't know what Yalls relationship was. Obviously they've been d. That you're not her parents. Right. So. But you are your son's parent. And so I think having that relationship of being able to have the conversation of, hey, this is what. This is what life will look like, you know, if she chooses to go down this path. And. And then, you know, we get people, you know, in the medical field call us all the time, Jennifer, pharmacists and all this, and they have $200,000 in debt, but they're making 160,000. Right. And so usually the hope is, is that you have a bigger shovel if you're choosing to go a path, you know, in this medical type field, it doesn't always happen. You know, they could get married, she gets pregnant and wants to stay home, and then all of her options are gone. Right. Because she has to go pay the step back. So there's a lot of life in there. But as a for. I don't know, I. I don't know how much you can control it. Right.

[James Childs]

And until they're Married, he doesn't really get a vote in her life. He may have influence, but he doesn't have a financial vote as to what she does or doesn't do. The. The worrisome part was how flippant she was about it.

[Rachel Cruz]

Well, she's seven.

[James Childs]

Just saying, like, well, this is normal. I'll just pay off my 300, 000 over 20 years. I think we need to give her a dose of reality. And I think you're right. Like sitting them down and saying, hey, would you guys watch this documentary?

[Rachel Cruz]

Yeah, but if it's not her daughter.

[James Childs]

Well, if she's.

[Rachel Cruz]

But if they're not engaged and stuff like, I don't know.

[James Childs]

I mean, I'd probably pop on bar in future because I am that dad.

[Rachel Cruz]

And just to have it on in the back. Yeah, I mean, I guess if it's in, like, a very organic conversation, you know, But I don't know. I don't know.

[James Childs]

I feel like overstepping boundary. Do you feel like that if you brought this up, it would be overstepping your boundaries?

[George Camel]

Well, I have brought it up to my son and he.

[Rachel Cruz]

To your son? Yes.

[George Camel]

She would watch it with him. He has brought it up to her. And so we do plan on doing that this summer.

[James Childs]

Okay.

[Rachel Cruz]

And is her family, Jennifer, Is he. Is he about to buy a ring? Like, when you say they're serious. Okay, so honestly. Honestly, too. And you know this, Jennifer, at 17. You're 17. I'm like. I knew multiple friends that were dating in high school. They go to college within, you know, nine months or so. They're. They're off on different schools. They meet. I mean, you change so much in that.

[James Childs]

But also, Rachel got married in college.

[Rachel Cruz]

I wouldn't have had a semester left, thank you. Winston had been graduated a year. I had a semester left, thank you, George. So it can happen. But what I'm saying, though, is I do wonder if you're ringing your. I don't want you to worry about something that's not your problem right now. Do you know what I mean? Like, it's not like they're getting engaged this summer and getting married, and then she's choosing to go in at 18 years old. Right. Like, I don't know. Yeah. We may have different opinions, George.

[James Childs]

I just think it's one of those things you gotta. You cross the bridge when you get there. And if she ends up in a bunch of debt and they do end up getting married, and she's aligned on the values of wanting to get out aggressively, then they'll be okay.

[Rachel Cruz]

Yes.

[James Childs]

Their life's not over. You can still have a great marriage. But it is going to add a wrench in whatever their plans are.

[Rachel Cruz]

Yes, that's right. It just adds that weight which we.

[James Childs]

All hold them back building wealth. But the long term hope is that she gets on the same page with money and goes, you know what? I'm not waiting 20 years. If she does end up taking this debt, it's. I want to be done with this thing in three or four.

[Rachel Cruz]

Yeah. And Jennifer, you do this after school too. And I know people, majority people change their major. Right. Like halfway through. So I'm like, she may not even end up doing it anyways. Right. So that's what I'm hoping. Yeah. Yeah. And they may not even be dating. I mean, I don't know.

[James Childs]

That's a tough one. Yeah, yeah. There's no easy answer here.

[Rachel Cruz]

I don't want you to worry, Jennifer, because I just don't feel like the reality is happening. It may happen in like four years, but a lot of factors have to play in for this to actually happen. But I really do appreciate you, you know, looking out, obviously for your son. That's what I'm thinking. It's for your son. What she does though is I don't know.

[James Childs]

Yeah, well, keep us posted. Call us back in a few years.

[Rachel Cruz]

Yeah. Okay, so tell me this. Let's flip the tables a little bit, George. Okay, let's say Mia comes home.

[James Childs]

Oh my goodness.

[Rachel Cruz]

We need a different. Okay, let's go.

[James Childs]

First of all, America, mia is my 8 month old daughter. Just for context. Okay?

[Rachel Cruz]

She comes home and this is not picking on Jennifer, but it does raise.

[James Childs]

The question, where was she?

[Rachel Cruz]

If she wasn't, she was at her boyfriend's house.

[James Childs]

Okay, okay.

[Rachel Cruz]

And her boyfriend's. I was gonna use health. I don't use money as the example, but health. Okay. And she comes home and she says, yeah, I mean, Brad's mom set me down.

[James Childs]

She's dating a Brad.

[Rachel Cruz]

She has to trade a Brad in this scenario. She's dating a Brad.

[James Childs]

I already have feelings about this.

[Rachel Cruz]

She says, oh my gosh, Brad's mom, you know what? You're not the mom. You're the dad. You may feel differently. Brad's mom set me down and told me like, the way you've been feeding us gluten free, all this stuff is actually really harmful and I actually need gluten and dairy and all of this that you've, you've deprived me of, dad. So I, I like, because of this Brad's mom. Like, I'm choosing to say, would you be like, Brad's mom? What the heck? Stop teaching Mia about.

[James Childs]

I'm trying to put myself in a place where there's a contentious argument about gluten.

[Rachel Cruz]

I'm trying to put it in my world. I'm trying to put it in your world. Yeah.

[James Childs]

I mean, I think as an adult, I would have an adult conversation with the other adult and come to a compromise.

[Rachel Cruz]

Okay. So you would reach out to Brad's mom and be like, hey, okay, so that's what I'm saying. Like, the blurred line with Jennifer and this girl who's not her daughter, Is it overstepping boundaries? Is it parenting another person's child when the girl isn't asking you what I mean?

[James Childs]

Yeah. And it's not a fiance. It's just a girlfriend.

[Rachel Cruz]

That's right. Yeah. Yeah.

[James Childs]

I feel like future mother in laws give unsolicited advice all the time. That's just a part of being a potential future mother in law, you know?

[Rachel Cruz]

I guess so. I don't know.

[James Childs]

They may never get along.

[Rachel Cruz]

I'm glad you called, Jennifer. That's a really good. It's a. It's an interesting scenario to be thinking about for sure.

[James Childs]

I would love to hear from. From the girlfriend's parents, but I also am.

[Rachel Cruz]

I'm thinking about little Charles now my son. Like, if he was. Yes. Dating a girl and she was gonna go, I would be like, y'all don't do. Like, stop. No, no. Like, I would feel that, you know, that tension. Oh. I'd feel the way of, like, you're about to enter into something really hard that you don't have to enter into right now.

[James Childs]

Like, you know, because the damage hasn't been done yet. So we're going. Like, we can prevent a lot of this.

[Rachel Cruz]

Yes.

[James Childs]

Is there another way?

[Rachel Cruz]

Right, right.

[James Childs]

That's why. I don't know. Did the girlfriend parents save for college at all? Did she just, on a whim, decide, I want to be an orthodontist one year before going off to college?

[Rachel Cruz]

Yeah.

[James Childs]

There's a lot of further questioning that we don't 100.

[Rachel Cruz]

But yeah, if Mia starts eating gluten and she may.

[James Childs]

We have had that discussion in the camel house. You're like, will she eat gluten one day? I don't know. We don't have it in the house. What will she get?

[Rachel Cruz]

She dates a Brad.

[James Childs]

It's like alcohol. It's like, she's not drinking in our house. I'll tell you that much.

[Rachel Cruz]

Oh, that would have been a better one if you don't, if you're a family that doesn't drink and then.

[James Childs]

Oh, save that one for next time.

[Rachel Cruz]

Yeah, we'll do that next time.

[James Childs]

Hey, more of your wonderful calls coming up. Always a great conversation. Triple 882-55225. This is the Rams.

[Rachel Cruz]

Hey, guys, I'm Jade Warshaw and I want to talk to you for a.

[James Childs]

Quick second about student loan refinancing.

[Rachel Cruz]

If your payment and your interest rate.

[James Childs]

Are burying you and you feel like you can't dig out, refinancing your student loan debt might make sense. That's because a lower rate could free up more money in your budget and a shorter term could help you pay down your debt faster. So reach out to the student loan refinancing experts today@l Laurelroad.com Ramsey There you'll find helpful resources like a student loan rate table, a refinancing calculator and other tools. Plus, you can get an initial rate in just a few minutes. Laurel Road offers low competitive rates starting under 5%. And you can get your interest rate even lower if you sign up for auto pay. But if your situation is more complex, sign up for a free 30 minute consultation with one of their student loan refinancing experts to get your tough questions answered. Listen, not everybody should refinance their student loan. So make sure you run the numbers.

[Rachel Cruz]

But for some people, it is the right move.

[James Childs]

Learn more@l Laurelroad.com Ramsey to find out.

[Rachel Cruz]

More about their student loan refinancing.

[James Childs]

That's LaurelRoad.com Ramsey Laurel Road is a brand of KeyBank National Association. All credit products are subject to credit approval. Hey guys, good news. Presale is on now for my new book, build a business you love.

[Rachel Cruz]

If you're a business owner, you know.

[George Camel]

Running a business is hard.

[James Childs]

That's why I wrote this book, to share what we learned over the last 30 years so business owners can grow your business faster with fewer mistakes.

[George Camel]

Pre order your copy today and you'll.

[James Childs]

Get access to over $350 in bonus items only at ramseysolutions.com store ramseysolutions.com store pre order today. Welcome back to the Ramsey Show. I'm George Campbell joined by best selling author Rachel Cruz. And we're taking Your calls at 888-255-2225. You call in and we'll help you take the right next step with your money and your life. Mike is in D.C. up next. Mike, how are you doing today?

[George Camel]

Hey, I'm doing great. Thanks. How are you doing?

[James Childs]

Well. How can we help?

[George Camel]

All right, so around August last year, I finally decided to accept the fact that I found myself about. Well, I'll just tell you. $11,660 in credit card debt. So I decided to put myself on a budget and start paying it off.

[James Childs]

Good.

[George Camel]

I made about $5,486 in payments toward that debt, which is about.

[James Childs]

Is that exact?

[George Camel]

Wow, that was. Yeah, that was exact. And then it leaves me with exactly $6,173 in remaining debt to pay.

[James Childs]

Is that all of your debt?

[George Camel]

Yes.

[James Childs]

Okay.

[George Camel]

So. And as I'm paying this off, I want to get more aggressive with it, but, you know, I'll be honest, I'm really a little worried about pulling money away from a recurring retirement and savings contributions to do it. I just wonder, sort of, what's your perspective on should I stop, you know, paying my 401k to get that debt paid down as aggressively as possible, or should I just continue on?

[Rachel Cruz]

How old are you, Mike?

[George Camel]

I'm 32.

[Rachel Cruz]

Okay.

[James Childs]

What are you contributing right now to retirement?

[George Camel]

I contribute about $300 a month towards it.

[James Childs]

What percentage of your income is that?

[George Camel]

I make $81,000 a year. So I guess, I don't know, back at the napkin math, I'd say That's probably like 6%.

[James Childs]

You're saying 300 bucks a month, 300.

[George Camel]

Bucks a pay period. So 600 bucks a month.

[James Childs]

Okay. Okay, 600 bucks a month. Well, I'll tell you this much. That's not going to give you a great retirement anyways. And so our plan is to pause contributions to retirement so that when you get back to investing, you're investing 15% consistently, without fail, for the next decade or two, until you get your house paid off, and then you can invest even more. And so that's the purpose of us. Telling people to pause the 401k is twofold. Number one, it actually frees up the 600 bucks a month that can now go toward the credit card. Right, right. And number two, it lights a fire under your butt to get out of debt faster because you desperately want to get back to investing, don't you?

[George Camel]

Yes.

[James Childs]

And the problem right now is you're a little bit comfortable, like, yeah, you want to get out of debt, but you also want to invest. And, you know, nothing's on fire. And I like the fire that is created when you pause the investing. It tells your own body this is serious. We need to get out of this debt asap because I want to build wealth and stop paying for the past. What is the debt of the interest rate on these credit cards?

[George Camel]

Well, I actually was able to consolidate my debt into a 0% card. So I had some high interest debt that I've already paid off. And the debt that remains is one single amount on a 0% card. And that 0% goes until March next year.

[James Childs]

Okay, so how quickly can you pay off? If you pause investing, you got the extra 600 bucks back. You got six grand left on the credit card. You're making 81. How quickly can you pay this off if you do all of that?

[George Camel]

Probably seven to eight months.

[James Childs]

Call it six months.

[George Camel]

Okay.

[James Childs]

How would you like to be debt free in six months? Do you have any money in savings?

[George Camel]

Yes, I do. I've got about. I've got three grand in a brokerage, 70 in retirement, and 1500 in my emergency fund.

[James Childs]

Okay, so you got 4500 in liquid cash right now.

[George Camel]

Yep.

[Rachel Cruz]

Well, you could. You could lower this, I mean, more than half today if you wanted to. If you wanted to keep a thousand dollar emergency fund and then throw the brokerage account and $500 that's in your emergency fund at this debt, then you're down to, you know, 2,600 bucks. Yeah.

[James Childs]

And if you pause investing now, you have an extra 600. This thing's done in like two or three months, dude.

[Rachel Cruz]

Done like really soon. And then just build your emergency fund back up for a few months and throw some cash in there to get that back up, and then I would.

[James Childs]

By the end of the year, you'll be investing 15%.

[Rachel Cruz]

Yeah.

[James Childs]

You'll have almost tripled your investing. Do you see the excitement that we have as to why this plan works?

[George Camel]

Yes, I do. And I think I just needed to hear somebody tell me it was okay, because, you know, I'm just very wary of liquidating that extra cash. But I totally see what you're saying.

[Rachel Cruz]

Yeah. And, Mike, and the reality is to, you know, people kind of are like, oh, $1,000 emergency fund. These Ramsey people are crazy. But here's the truth. If a. If a larger emergency fund or a larger emergency comes up, usually you don't have to pay for that, like today. Usually you can say, okay, I have two to three weeks. I got to come up with some cash with my emergency fund and figure out how to pay this. You know, you'll pause the debt, snowball and figure it out. But the problem is, is that people try to do kind of what you're doing, Mike. Six different things. @ once. Or they try to go and build up this big emergency fund before they get out of debt. And they never even get to getting out of debt because they spend so much time with just the savings portion to feel comfortable. And there's really never a number that you're like, okay, now I feel good that I can go pay off debt. It's kind of this idea immediately when you become debt free, what we say, your largest wealth building tool, it's your income, it all comes back to you. And it's an amazing thing. You say, okay, all these credit cards are gone, there's no bank in my life left, and now I get to decide what to do with my income. And you're able that much faster than to build up an emergency fund to three to six months of expenses. Was. Which is what we want you to do. We don't want you to stay at a thousand dollars forever. But for you, Mike, you're only going to stay there for like two months, month and a half. Right. I'm like, it'll be so fast that you're going to be fine.

[George Camel]

Okay. All right, So I think. I think I know what I need to do.

[James Childs]

Booyah. Another one bites the dust. Rachel, we did it. Mike's on the path. All right, let's see if we can help Jordan out in Boise. Up next. Jordan, what's happening?

[George Camel]

Hi. So my wife and I, we've been married about six months, and we're just now starting baby step one. We're working towards getting $1,000 in the savings account. And we. We just feel really overwhelmed. So we had to move to Boise for my job. And the housing market is awful here, and we only have about $6,000 in student loans left, and then probably at about another 4,000 because of a medical emergency that happened with the ER.

[James Childs]

Okay, so you got 10k in debt.

[George Camel]

10K in debt. Right. So I separated those because we're not getting interest on the. On the hospital. It's just a payment plan. And so, yeah, just this idea of, you know, once we get to that point, by the time we get to, you know, 20% down on a minimum of a $400,000 house, which is not like. That's the lowest I've ever seen it in Boise. It just seems impossible to buy a house.

[Rachel Cruz]

Well, you're not gonna buy a house now, Jordan. You guys are broke. You don't have a thousand dollars in savings. Yeah, exactly. I'm scared it's gonna be a few years. Yeah. So it's not a 20% down payment. That's a suggested amount you can for a first time home buyer. So 5%. And by the time you guys do all of this, how much do you guys make a year?

[George Camel]

Together we make about 66,000 before taxes.

[Rachel Cruz]

Okay, so yeah, by the time you guys pay off $10,000 of debt and get a fully funded emergency fund of three to six months of expenses, it's going to be, I mean, 18, 24, three years, you know, till that happens. And honestly, Jordan, it's going to be a whole new world. We got an election year. Who knows what interest rates are going to do? Like, we don't know what's going to be going on, but we would still stick with that at least 5% down idea. And I just don't believe that the lowest house you can Find is a $400,000 house in Boise. I don't believe that. Well, you know why? Because I live in Nashville and it's the hottest market right now. And my husband, him, I mean, he just went and you know, we were doing the investment real estate right now and he got like a great $200,000 house. It's a two bedroom, one bath. They're flipping it in a, in a place outside of Nashville. So I just, I, I just don't believe the $400,000 I get.

[James Childs]

I debunked it, Rachel. I'm literally on realtor.com right now. There's at least 30 houses that are beautiful three bedroom single family homes under 400.

[Rachel Cruz]

All right, Jordan, let's.

[James Childs]

So you can do this.

[Rachel Cruz]

Sounds a little like us when we.

[James Childs]

Get dramatic sometimes, focus on one thing at a time.

[Rachel Cruz]

Never to happen. It's going to happen, George.

[James Childs]

Get your income up and you'll get there.

[Rachel Cruz]

Calm down. You've been married six months. You guys just, you guys just be patient. And in three years, it's a whole new world. And hopefully there'll still be these wonderful houses in Boise that I'm looking at right now on Georgia's computer.

[James Childs]

It's not in the constitution that newlyweds have to own a home. So I hope that frees you. Jordan, thanks for the call. This is the Ramsey Show. Foreign. I talk to people every day who want to know how to do better in two areas. Money and relationships. That's why I'm pumped to bring the Money and Relationships tour to a city near you. Join me and Dr. John DeLoney for.

[George Camel]

A night that will challenge the way you think about this stuff and possibly.

[James Childs]

Change how you live forever. Starting April 21, we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort.

[George Camel]

Worth and Kansas City. Grab your [e-mail] tour before they're gone.

[Rachel Cruz]

Today's question of the day is brought to you by Y Refi. If you are struggling with defaulted private student loans, why Refi offers a great solution to get you back on track. For a low fixed rate and more flexibility, go to yrefi.comramsey today. That is the letter y r e f y.com Ramsey may not be available in all states.

[James Childs]

Today's question comes from Alexis in Tennessee. We recently received credit cards in the mail for my son and daughter who are both under the age of 12. When I showed them to my husband, he responded that he had taken them out in our children's names to help them establish a credit score before they became adults. We have followed your principles for years, so I was shocked that he did this without talking to me about it. How should I handle this situation? This feels like there's a, there's a tinge of financial infidelity here. Behind her back, opened up credit cards.

[Rachel Cruz]

Yes. And not and not mention it. And the way that you're. When you said, you know, we've followed the principles from year for years. If I'm assuming that means you guys are on the same page. You're talking about money. I mean, there's some couples that, you know, they don't know what the other one's doing. But if you are following a level of Ramsey and that means you are, you know, connected and you're talking about money. So the fact that he didn't bring it up, that feels, that feels very off to me very often.

[James Childs]

Yeah.

[Rachel Cruz]

And the fact he opened up credit cards in your kids names.

[James Childs]

Well, I'm guessing he. It's in his name. They got cards with their names on it as authorized users.

[Rachel Cruz]

Yeah. Because if you take out a cr. Yeah. A line of credit for a child. Right. I mean, you, you.

[James Childs]

It's a trend because of these tick Tock videos where they go, hey, parents, here's a life hack for you. Add your kids as authorized users and they can take your credit score when they're 18 and have great credit so they can go get some more debt.

[Rachel Cruz]

Yep. Well, when. What we've heard too is people calling the show saying, yeah, my parents took out debt in my name to build up a good credit score. And then they ended up destroyed the credit because they couldn't handle it. And so you're just like, oh, it's. Yeah. And it gets to be a fine line too of identity theft. I'm like, if you're, you know what I mean? Like it's kind of to a point.

[James Childs]

Of like there's no consent here.

[Rachel Cruz]

I mean, yeah, so it's, I, I don't like it, I don't like playing the game. And so. Yeah, but a lot of it is a TikTok trend.

[James Childs]

Yeah, there's. We have an article here related to this. Parents are gaming their kids credit scores. And it's around the same idea of stories of people who had their parents add them as authorized users. There's some horror stories in there, there's some explanation, but it says many are taking advantage of these tools. A 2019 poll commissioned by CreditCards.com that's perfect. Eight percent of roughly 1500American parents surveyed said that at least one of their minor children had a credit card, presumably through authorized usership because kids under 18 can't get their own card. And transunion data showed that nearly 700,000 22 to 24 year olds had authorized user accounts.

[Rachel Cruz]

Oh, dang. Yeah, so.

[James Childs]

And here's the thing. I don't think these are terrible people. They're just well meaning parents who have fallen for the system who go, well, this is the path they got to have the credit score because otherwise how are they going to rent an apartment and how are they going to travel? And they can't book airlines with that. And I'm going, have you ever tried a different route? You don't need to do all this gyration to live your financial life.

[Rachel Cruz]

Yes, there's so much more freedom, you guys, when you're not chasing the credit score. You can live life without a credit score. You can do everything you just said without a credit score. It is possible. You can even get a house through manual underwriting without a credit score. And so yeah, I think like you said, it's good intentions them going in saying, I'm trying to set my kids up, but you're falling right into the system that gets so many people, millions of people stuck and in that wheel of debt. And it's like, it's not worth it, it's not worth playing the game and then let alone having any level of risk for another human being of their financial well being that if you screw this up, it doesn't just hurt you, it's hurting your kids then at that point, I mean, so it's just, it's a mess.

[James Childs]

It is absolutely bonkers. And I cover this in my book Breaking Free from Broke. I have a whole chapter on credit Scores a whole chapter on credit cards. And I unpack how to live life outside of the system. And it's not as complicated or as difficult as people would have you believe.

[Rachel Cruz]

Yes.

[James Childs]

In fact, it's way more peaceful. It's way more simple. I don't have 16 cards to manage to try to get the rotating cash back rewards. I have a debit card and I use it and it has my money on it. And when that money's gone, it is gone.

[Rachel Cruz]

You know, it's funny, George, I feel like when things are less complicated, they feel less sophisticated. Right. Everyone's like, oh, but that's the part.

[James Childs]

That can't be the smartest way.

[Rachel Cruz]

Yeah, yeah. There's got to be so many other hoops to jump through. And you can live your life that way. Financially, you can, but you're going to be exhausted. You're going to be exhausted again. With a system that is set up to screw you, like, that's what it is. It's not there to free you and for you to be financially free. They want you in the system because they make so much money off of you. But when you exit out of the system and you're like, you know what? I'm going to live with a debit. With a debit card, with cash. We're going to save up and pay for things, and we're not going to sit here and try to play the industry's games over and over and over and over and over and over. What is sophisticated is peace. It is. I'm like, there's just that level there that is. It is so much worth it than the mental dance and gymnastics that you have to play.

[James Childs]

So here's the game. Here's a wild concept. What if, as a parent, you taught your kids how to manage money instead of managing debt? That's all a credit score is, is how well you've managed debt.

[Rachel Cruz]

Yeah.

[James Childs]

Doesn't reflect how much money you have in the bank. Doesn't reflect your income. It just reflects your relationship with the lender. And so that's. That's how I'm aiming with my kid. I'm going, they're not gonna. They're gonna look at people with credit scores and credit cards going, why are they doing all that work, dad? And I'm like, I don't know. America's. It's crazy. Lost our minds.

[Rachel Cruz]

It's crazy out there. Oh, man. Yeah. Parents don't take credit cards out and don't be an authorized user.

[James Childs]

You follow our principles for years while you still clearly have credit cards. You don't get to pick and choose. This isn't a buffet.

[Rachel Cruz]

This isn't a buffet.

[James Childs]

Get out of here.

[Rachel Cruz]

Get out of here. All right, let's go to Shane in St. Paul. Hi, Shane. Welcome to the show.

[George Camel]

Thanks, Rachel, for taking my call. How are you today?

[Rachel Cruz]

We are doing great. Glad you called in. How can we help?

[George Camel]

Thank you. Well, I'm a relatively new listener. We're on baby step number two. And my question is we have probably about $17,500 in credit card debt.

[Rachel Cruz]

Okay.

[George Camel]

And a couple other small loans. And we have some money set aside. And I was wondering, is there any way that you can deviate from that snowball plan?

[Rachel Cruz]

Tell me. Yeah. Why would you want to? What are the numbers? You're seeing? Shanks. It usually comes down to numbers.

[George Camel]

Okay. Basically the biggest one we have is we have a. A credit card with a high interest rate that has a balance of about 10,000.

[Rachel Cruz]

Okay.

[George Camel]

What's the interest rate on that? It's like 18.5%, I think.

[Rachel Cruz]

Okay.

[George Camel]

And then we have another credit card with the balance of 7,500 and that interest rate is 9.9%. And then we have a kind of like a small home improvement loan with the balance of like $350 that you have to pay off. And then I have a work loan that I got through my work with 0% interest and I have a balance of like $800 on that.

[Rachel Cruz]

Okay, and how much do you guys have saved?

[George Camel]

Well, we just got our taxes back and so we have about 14,500.

[Rachel Cruz]

Amazing. Oh, my God.

[James Childs]

So the math doesn't matter that much because you've just knocked out all the debts but the last credit card. Yeah, in this scenario.

[George Camel]

Right. So my. I guess my question is, you know, what would it make sense to pay off at the highest one, the $10,000 first and then pay the two small loans and then whatever is less pay on that last credit card?

[Rachel Cruz]

No, I mean, listen, if you're doing the math, I understand what you're saying because of the interest rate and what we always talk about on this show, Shane, and what you're going to start to realize is that personal finance and winning with money is so much more about your behavior than it is about math. And so if we were all, you know, chasing math, we wouldn't be in debt in the first place. Right. So it's not a math problem. It really is us winning. And so the fact that you do have a bulk of money, which is absolutely amazing, what that does to me that just that jump starts mean tonight you could have that $800 paid off, that 350. I mean those are just like ankle biters, right. You're just like, you just need to get in there and just get them done with and then to pay off a $7,500 credit card in full and it be completely done like and knock.

[James Childs]

The next debt down to probably around six grand, almost six grand. To throw at the 10k debts, you'd be down to about $4,000 left. So the 18% interest, the way you're going to attack this thing, it's not going to amount to much because you're.

[Rachel Cruz]

Not going to be in debt, Shane, that much longer. I mean, when you're looking from a math standpoint, you guys could take on extra jobs and get that paid off in two months.

[James Childs]

You know, you throw a thousand bucks a month. This thing, it's gone in four months.

[Rachel Cruz]

Yeah. So it's, it's going to be so quick that the math at that point doesn't matter. But I'm excited for you. You said you're a new caller so I'm so glad that you're joining in.

[James Childs]

And using that refund for good instead of vacation cuz he.

[Rachel Cruz]

Well done, Shane. Well done. Well, thanks to all the men and women in the booth making the show happen. George, thank you. Thanks to our great audience here in Nashville, Tennessee and thank you America. This is the Ramsey Show.

[James Childs]

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