Financial Peace Is Built, Not Borrowed

Summary

---

The Ramsey Show: "Financial Peace Is Built, Not Borrowed"

Date: June 30, 2026
Hosts: Dave Ramsey & Rachel Cruze
Theme: Building sustainable financial peace by making wise, disciplined choices, avoiding debt, and addressing real families’ money problems with actionable advice.

---

Episode Overview

This episode of The Ramsey Show centers on building wealth the right way—through diligence, sacrifice, and clear-headed decision-making, not shortcuts or risky bets. Dave and Rachel answer a range of questions from listeners about working long hours to pay off debt, supporting spouses’ "dream businesses," handling old financial products, navigating family financial tensions, and investing for the future. Throughout, they reinforce the mantra: “Financial peace is built, not borrowed.”

---

Key Discussion Points & Insights

1. Work-Life Balance and Family Business Sustainability

(Erica from South Bend, Indiana | [00:42–08:33])

• Caller Issue: Erica’s husband works 80 hours/week in their food businesses; concern over kids resenting the family business later.

• Dave:

  • “He gets away from these hours when he learns to run the business, not let the business run him.” ([02:46])
  • Stresses the necessity of hiring and training quality people to offload duties and create a sustainable operation.
  • Warns, “What he’s doing right now is not sustainable.” ([03:52])

• Rachel:

  • Encourages focus on the marriage and communicating openly that the hard season is temporary.
  • “When he’s home, he needs to be present. Put the phone down, play, engage.” ([05:11])

• Memorable Moment: Dave jokes about Rachel resenting him – “I did resent him. No, I’m just kidding. I’m kidding.” ([01:05])

• Practical takeaway: Train and delegate to avoid burnout; make family time count, and be united as a couple.

---

2. When the Dream Business Fails to Provide

(Samantha from Toronto, Canada | [14:08–19:55])

• Caller Issue: Husband’s gym business hasn’t made money in 4 years; she’s the main financial provider and frustrated.

• Dave:

  • “A business that doesn’t make money for 4 years is not a dream, it’s a nightmare.” ([14:37])
  • Advises setting a hard deadline and “trend lines” for real profit; otherwise, shut it down.
  • “The boy needs a job.” ([19:04])

• Rachel:

  • Sympathizes with Samantha’s frustration; stresses the need for urgency and clearly defined action steps.
  • “He needs to go make some money.” ([19:09])

• Advice: Set a 6-month deadline, demand real changes, and stop waiting on hopes and projections.

---

3. Handling Large Tax Debt with the Debt Snowball

(Gene from McDonald, Alabama | [24:48–30:46])

• Caller Issue: Gene has $80k debt, $21k to the IRS, and is attacking it with the debt snowball but unsure if he should deviate to pay IRS first.
• Dave:
  • The only time to break the snowball is for IRS debt: “They have unlimited power... Dumb and powerful is not a good mix.” ([27:03])
  • Advises setting a date. If IRS isn’t paid by then, move them to the top of the snowball.
• Rachel: Encourages: “Your enthusiasm is incredible. $30,000 in three months!” ([30:46])

---

4. Family Financial Entanglements and Whole Life Insurance

(Stacy from Indianapolis | [33:00–39:10])

• Caller Issue: Stacy wants to cash out whole life policies she purchased on her daughters, but one daughter feels entitled to the money.
• Dave:
  • Affirms Stacy owns the policies and isn’t obligated to give the cash to her daughters unless she made a lifelong promise.
  • “You totally got screwed [with whole life].” ([34:11])
• Rachel: Notes that investing the same money in an S&P fund would have grown far more—“Should be $58,000, not $6,800.” ([35:48])
• Advice: Be clear about ownership; keep promises if explicitly made.

---

5. Retirement Accounts vs. Debt Repayment

(Jocelyn from Houston | [39:20–41:58])

• Caller Issue: Should she cash out small 401ks to pay $7k in credit card debt?
• Dave:
  • “Mathematically, it doesn’t make sense... It’s like borrowing at 30% interest.” ([39:58])
  • Recommends rolling over the 401k to an IRA and paying off debt by increasing income/hours.

---

6. Credit Scores, Marriage, and Debt

(Louise from Tampa, Florida | [44:05–51:42])

• Caller Issue: Fiancé believes carrying a balance on a credit card helps build credit.
• Dave:
  • Explains credit score only measures debt interaction: “Your credit score, technically speaking… is your ‘I love debt’ score.” ([46:52])
  • Advises: Don’t own joint debt (like credit cards) before marriage; keep finances separate until married.
• Rachel: Warns that misalignment on money values before marriage is a relationship red flag.

---

7. Navigating Mortgage Servicers and Forebearance

(Jeff from Birmingham | [54:20–64:07])

• Caller Issue: Owes $43,000 in arrears due to forbearance fiasco, bureaucracy, and slow paperwork; risks foreclosure but has assets tied up in divorce.
• Dave:
  • “You can’t make Freedom Mortgage be competent... The best thing you can do is write that $43k check.” ([61:32])
  • Advises: Push ex to release blocked assets, sell something, or aggressively cash flow the arrearage.
  • “If not, sell the house before you lose it.”

---

8. Family Traditions and Money Gifting Discomfort

(Evan from Tulsa | [66:46–72:43])

• Caller Issue: Uncomfortable with her husband’s adult family exchanging significant cash gifts for birthdays.
• Dave:
  • “Your husband has to handle his family, not you. Otherwise you end up being the ‘stinky one’.” ([72:43])
  • Suggests the couple set boundaries quietly without confrontation unless the husband leads.

---

9. Managing and Reallocating Unused College 529s

(Linda from Knoxville | [72:52–74:51])

• Caller Issue: Daughter’s college was covered by scholarship; $330k is sitting in a 529.
• Dave:
  • Amount of the scholarship can be withdrawn tax and penalty-free ([73:27]).
  • Penalties only apply to non-qualified withdrawals on growth.
  • Natalie should talk to a tax professional about prior years’ options.

---

10. Real Estate & Credit Card Debt Compound Risk

(Elizabeth from Salt Lake City | [98:39–104:03])

• Caller Issue: Bought a new home before selling old one; rental properties vacant; $30k in credit card debt; $100k in dwindling savings.
• Dave:
  • “You have all the symptoms of someone who’s going to be bankrupt in 36 months.” ([103:33])
  • Advises immediate sale of properties and deep business discipline, not hope or denial.
  • “You can’t out-earn chaos and bad decisions.”

---

11. Buying New vs. Used Cars and Wealth Building

(Adam from Green Bay | [107:14–116:12])

• Caller Issue: Considering a new Toyota Sienna, believing prices for used are the same.
• Dave:
  • “You can buy it $10,000 cheaper by getting a used one. You just haven’t looked hard enough.” ([110:04])
  • Explains that wealth is built by minimizing losses on depreciating assets—not buying new cars until net worth exceeds $1M.
  • “People who become millionaires don’t ask, ‘how close to dumb can I get?’” ([107:38])
• Rachel & Dave debate relatability vs. transparency about their own wealth.

---

12. Student Loans Without a Degree

(Brock from Manhattan, KS | [86:41–94:57])

• Caller Issue: Wife has $177k in student loans, no degree, low income; baby on the way.
• Dave:
  • “Who loans someone $175,000 to get an almost degree? Only the U.S. Congress.” ([93:05])
  • Advises saving cash until baby arrives, then throwing all savings at the loan and both working hard to pay it down.
  • Expresses outrage at the student loan system: “Congress has screwed Americans... with a student loan.” ([92:24])

---

Notable Quotes

• Dave Ramsey:

  • “Financial peace is not microwaved. It’s slow-cooked.”
  • “You can’t out-earn chaos and bad decisions.” ([104:03])
  • “Your credit score is your I love debt score.” ([46:52])
  • “Who loans someone $175,000 to get an almost degree? Only Congress!” ([93:05])
  • “People who become millionaires don’t try to get as close to dumb as possible and still get ahead.” ([107:38])

• Rachel Cruze:

  • “If you promised your kid the money, keep your promise. Otherwise, it’s your money.” ([38:05])
  • “It’s about being present at home—even if it’s just turning on ‘daddy’ for a few minutes.” ([07:05])
  • “You are not choosing a shortcut—you're choosing a path at a high cost.” ([41:10])

---

Important Timestamps

| Segment/Topic | Key Timestamp | |-------------------------------------------|--------------------| | Work–Life Balance & Family Business | 00:42–08:33 | | Dream Business Without Profit | 14:08–19:55 | | Tax Debt and the Debt Snowball | 24:48–30:46 | | Whole Life Insurance, Family Conflict | 33:00–39:10 | | Retirement Accounts vs. Debt Repayment | 39:20–41:58 | | Credit Scores & Co-mingling Finances | 44:05–51:42 | | Mortgage Servicer Nightmares | 54:20–64:07 | | Cash Gifts for Adult Family Birthdays | 66:46–72:43 | | Reallocating Unused 529 Accounts | 72:52–74:51 | | Real Estate Risk & Business Chaos | 98:39–104:03 | | New vs. Used Cars & Millionaire Habits | 107:14–116:12 | | Student Loans, No Degree, New Family | 86:41–94:57 |

---

Conclusion & Takeaways

• Sustainable Success: Financial peace comes from living on less than you make, investing steadily, avoiding unnecessary debt, and confronting reality—not chasing shortcuts.
• Communication: Whether between spouses or generations, clear, honest communication about money is essential.
• Hard Deadlines: For struggling “dream businesses” or unpaid debts, set hard targets for turning things around—don’t drift on hope alone.
• Avoid Complexity and Entanglement: Don’t co-mingle finances before marriage, and avoid financing depreciating assets (like new cars) unless you’re truly wealthy.
• Learn from Mistakes: As Dave says, “A person who never made a mistake never tried anything new”—just don’t make the same mistake twice.

---

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm Dave Ramsey, your host, Rachel Cruz, Ramsey personality, number one best selling author, co host of the Smart Money Happy hour on Ramsey Networks. My daughter, she's my co host. Today, Erica is in South Bend, Indiana. Hi, Erica. Welcome to the Ramsey Show.

[Caller]

Hi, Dave. Hi, Rachel.

[Dave Ramsey]

Hey, what's up?

[Caller]

Hey. So my question is, I was just wondering what some steps were that you and Sharon took when you were young and working hard that your children did not resent you or your business once they were older.

[Dave Ramsey]

Hmm.

[Rachel Cruze]

I did resent him. No, I'm just kidding. I'm kidding.

[Dave Ramsey]

Too late.

[Rachel Cruze]

That's a good question though. Are you, Erica, are you working a lot right now, you and your husband?

[Caller]

Yes. So I'm a stay at home mom and my husband is working a lot right now just trying to get us out of debt. We own two. Two businesses and they're both in the food industry. So there's a lot of.

[Rachel Cruze]

Yeah, a lot of hours.

[Caller]

Time. Yeah.

[Rachel Cruze]

With that, how long have you guys been going at it at this pace? Has it been a while?

[Caller]

I would say yes. Three to four years.

[Rachel Cruze]

Okay. So, yeah. So you guys are in. You're in the thick of it. You're feeling it and you probably feel like a single mom a lot of the time.

[Caller]

Yeah. Yeah.

[Dave Ramsey]

So how much debt do you have left? How much longer is this journey going to be?

[Caller]

Business debt, we are at 486. And then our personal house, we're at 470,000.

[Dave Ramsey]

That's all there is?

[Caller]

Yes.

[Dave Ramsey]

Okay. Well, both of those are baby step six. Neither one of those require hours to be 80 hours a week. If your 80 hour week is to get your business up and running, that's a different equation. What is it? You're not working 80 hours a week to pay off $400,000 in debt.

[Caller]

No, it's not so much a money from a money standpoint for us as it's just finding good employees that can work.

[Dave Ramsey]

Yeah, like welcome to business.

[Caller]

Yeah.

[Rachel Cruze]

Yeah. And the food industry is.

[Dave Ramsey]

I was so dumb when I first started.

[Rachel Cruze]

Nights and weekends.

[Dave Ramsey]

Yeah, a lot of it's a hard. It's hard. I was so dumb when I first started the business. I thought if you hired people, they would work, but you have to hire people that are willing to work first and not just Anybody? So welcome to running your business. So the deal here is he gets away from these hours when he learns to run the business instead of the business running him. Meaning that he's got to get above cooking and get above food production and get above waiting tables and get above general management and start to put some people in the seats that can actually do that. I'll send you a copy of my latest bestseller called Building a Business yous Love. And he's at the treadmill stage, which is where everyone starts. You feel like you're on a treadmill, you feel like you're stuck. Run, run, run, run. But the way you get off the treadmill is hiring quality people that are delegatable, meaning they're humans that you can delegate to because you can train them. Because they have two brain cells and they have character and they have work ethic and there's not that many of them. They're hard to find, but you can find them.

[Caller]

Okay?

[Dave Ramsey]

And you must find them. Otherwise he will. What he's doing right now is not sustainable. You can't do that for 10 years. Yes, you run out of steam. Okay, that wasn't your question, but that's the answer now. Then back to the other thing is if we're solving for the day that dad is not working 80 hours, then we just talk to the kids about that. We own our own business. And for right now, until we get the people in and get them trained, I've got to be there. And we had that period of time here when I was opening this business.

[Caller]

Yeah.

[Rachel Cruze]

How old are your kids, Erica?

[Caller]

We have a two year old and another one on the way.

[Dave Ramsey]

Well, they're not resenting anything.

[Rachel Cruze]

You're. You're exhausted.

[Dave Ramsey]

You might be resenting something. They're not resenting anything. They just want their diaper changed.

[Caller]

Yeah, they're still young.

[Dave Ramsey]

Yeah. Does not need to go on until they're 12. Not because of the kids, but because the business won't work. Your husband will run out of steam. It's not sustainable. He's got to build the business out in such a way that by the time the kids are of age that they might actually resent it, that he's already home. That does solve your problem. But in general, to answer your question, is we communicate that this is a price to be paid on a temporary basis to win.

[Rachel Cruze]

And for a two year old, Erica, I mean, I would say when he's home, he's home. Like he needs to put his phone down. He needs to play, engage with the two year Old, you know, and with you guys in your marriage, like I know during. And it's not at the length that it is for you over years and years and years, but I know even for busy work seasons, you're exhausted and your spouse almost gets your leftovers because you've just been giving all day. And so for you guys in your marriage, that's almost where I would put my focus and my energy first and foremost. Because if you guys are connected, if you guys are in sync and you guys are unified on the plan, then the household feels all of that. Right. And so I think because mom and dad were such a great team and mom was. Can I say bad A. I won't go for. I don't know. I don't know if we're allowed to cuss on the air. But she was, she's. She was an amazing mom. Amazing mom. And just took care of stuff, you know what I mean? In that, in that season when we were little and then as we got to be more middle school, I mean, dad, your job still required long hours and travel.

[Dave Ramsey]

And I was gone periodically.

[Rachel Cruze]

Both tours. Yeah, yeah, yeah. But there were periods of that. A book tour, but it would be

[Dave Ramsey]

gone 30 days, not even home.

[Rachel Cruze]

Yeah, but. But that's communicated at that age. Right. And we were older with all of that. But I think that the presentness of having a solid marriage, the kids pick up on that and, and everyone pulling their weight, whatever that looks like. And then for the kids, when you're just present in your home, and I'm guilty of this too, coming home and checking my phone and all of it. Right. So it's just like putting that away and being. And him being present with your 2 year old is going to be big. And then you guys need to figure out a schedule at some level that's doable when you have this next baby, baby number two. And so to feel supported in that, I think is. I think is an important conversation.

[Dave Ramsey]

Yeah, they're not. If Hills just turn on daddy a few minutes a day at this age, they're not gonna be resentful. They're not gonna have any memory of it. But by the time they get age that they age out, the two of you need a plan. You need to see a light at the end of the tunnel that this business is maturing to the point that I'm gonna have some team members that I can delegate to that I don't have to finish, do everything. And that's called training. Hiring the right quality people, getting the right people on the bus, the wrong people off the bus, as Jim Collins says. And then it's not micromanaging to teach them to finish your sentences. That's called training. I want this cooked this way. I want the customer spoken to in this way. I want eye contact and a smile. And when you finish, if you work at Chick Fil A, it's my pleasure. And whatever it is you train, train, train, train, train for the result you want. And the people that can't make the training, they don't get to stay. And so that's, you know, you as a leader, learning to hire and learning to fire and start to build out your team with high quality individuals. And I've done that for 40 years and I got a thousand of them in this building and I'm proud of every single one of them. I know that because if I wasn't proud of one of them, they wouldn't be in this building.

[Caller]

Sam. Foreign

[Rachel Cruze]

I'm all about practical ways to save time and mental energy. Especially during the summer when life gets busy. Between vacations, camps, deliveries, travel plans, online shopping and trying to keep everyone organized, my mental load can get pretty full. That's one of the reasons why I love Delete Me. Most people don't realize how many data broker sites have their information online, like old addresses, phone numbers and even family connections. And that can can put you at risk of being a target for spammers and scammers. But removing all of it yourself can turn into a giant project. That's why Delete Me is amazing, because Delete Me handles it for you. Their Privacy team of experts removes your personal information from hundreds of data broker sites and they keep monitoring it throughout the year. So far, Delete Me has saved me about 90 hours I would have spent myself removing my information. And honestly, it feels so good knowing that someone is in the background helping me and I don't even have to think about it. So this summer, give yourself a vacation with one less thing to manage. Get 20% off annual plans at joins elite me.com Ramsey that's joinseliteme.com Ramsey.

[Dave Ramsey]

So Rachel, you haven't heard this story yet, but the other day I had lunch with about twice a year I get with one of my old high school buddies. There were three of us that ran around together, did everything together in high school and when I went off to college.

[Rachel Cruze]

Probably glad there weren't phones with cameras during those days.

[Dave Ramsey]

Thank God there is no record of the things that we did. Yes, that's true beyond belief. But anyway, one of the Three passed away of cancer last year. And the other one I meet with and have a hamburger with at least twice a year. And he lives right here in the neighborhood. Right here in the area and hang out with him. And the other day I was down there having a hamburger with him and he said. I said, what have you been doing? He's single again. And I said, what have you been doing? He goes, I just went on six cruises in the last little while. He goes, I'm addicted to cruising. And I went, you got to go on the Ramsey cruise.

[Rachel Cruze]

Is he coming?

[Dave Ramsey]

He signed up. Well, he's going to go on the Ramsey cruise.

[Rachel Cruze]

Look at the air.

[Dave Ramsey]

So there we go. Which I'm going to have to have him sign an NDA, but we gave him a good deal on the room. But we're going to have him sign an NDA because we can't have any exposure on the Ramsey cruise. But if you don't know what this is, if you're debt free, the Live like no one else cruise is a high end. Very nice. This is not Walmart on the seas. This is the good cruise lines, if you know what I mean. Wink, wink. And this is the best of the best. The live like no one else cruise hang out with all of us. All the Ramsey personalities will be there. And other celebs of miscellaneous not to be mentioned yet. But we're going to do new sessions on there. Everybody's going to be speaking every night. Worthy entertainment. We're doing all kinds of get togethers and hang out with you guys. New sessions this year on building we live episodes of our shows the world's largest debt free scream. We did it last time. We're going to do it again. And last year we did it. We did it. It'll be two years between the two cruises. We did it last March, year ago March. And this one will be next March. And it was. It was really fun.

[Rachel Cruze]

It was great. It was a great week. And just the crazy.

[Dave Ramsey]

I was a little bit worried about being trapped on a ship with 3,000 Ramsey fans. Right. That could be a long week for me. You know, that could. I could. That could have gone sideways. But honestly, I. A blast.

[Rachel Cruze]

Yeah, it was great.

[Dave Ramsey]

Sharon and I, we would just sit down, have dinner, we talk to people. It was just. We had the best time. We really did. It was a lot of fun. So you can secure your cabin. They're not quite sold out. Getting close with a $600 deposit and join us and my high school buddy and we'll all be There. And click the link in the show notes.

[Rachel Cruze]

Rednecks from Antioch on a cruise.

[Dave Ramsey]

That's right. That's what you need if you might be a redneck if you're cruising with so and so and Dave. Right. I'm not going to throw the guy under the bus, but there we go. So click the link in the show notes. Go to ramseysolutions.com events. Book your cabin. It will be March, it will be sold out. You will be really fomoing now. You do not come if you're in debt. This is only for baby step four and beyond. We're not hypocrites. We tell you when you're in baby step one through three, you're not going on vacation. This is a vacation. But if you've hit baby step four and beyond and you save up the money and you want to go on this night, this is Holland America. I mean, this is a good line. It's Caribbean cruise. It's going to be amazing. But if you've saved up your money and you want to hang out with us for the week, it's an incredible week. You're going to learn a lot too, because the sessions are incredible that we're teaching.

[Rachel Cruze]

So that was the funniest part. Is it. It really is a vacation. You get to go to all these islands. And so we have all these sessions booked out with things that, you know, we, we teach from stage and a couple of things. And I'm like, yeah, you know, the room might be like half full. I don't know. Most people, I'm sure, are out on the pool deck or at the island. I don't know. You just assume people are vacationing. Every session is packed, full packed.

[Dave Ramsey]

It's like we had a pastor do devotionals in the mornings and you couldn't get in.

[Rachel Cruze]

Yeah, I mean, it was like everyone went to everything, which was so fun.

[Dave Ramsey]

It was a lot of fun. All right. Samantha is in Toronto, Canada. Hi, Samantha. How are you?

[Caller]

Hi. Good, thank you. How are you guys?

[Dave Ramsey]

Better than we deserve. What's up?

[Caller]

So my husband has been doing his dream business for almost four years now. And I just want to know, because he hasn't really brought in any income from it, how long is enough for me to support him in this overarching?

[Dave Ramsey]

You have a business that you ran for four years that doesn't make money. That's not a dream business. That's a nightmare.

[Caller]

Yes. In my perspective, it hasn't.

[Dave Ramsey]

Knowing his perspective, I mean, it's a business. It's not a Hobby. We're supposed to make money.

[Caller]

Yep.

[Dave Ramsey]

So what kind of business?

[Caller]

He's doing a couple of sports training. He's part of the gym ownership, and they've just been putting lots of efforts. Even his partners been doing some investments in it, but nothing yet. They have projections, but I'm tired of looking at projections of what could be. He's thinking of this business as our way out in the future, but it's hard to see in the future when right now, for years, we've been kind of struggling. Right.

[Rachel Cruze]

For sure. Are you working, Samantha?

[Caller]

Yes. So for the past, throughout the duration of our marriage, I've been the financial supporter, and I was okay doing that. But once we had our first son, three years, two and a half years ago. And I'm still working. Yes. In a completely different perspective. And then I have to go work back right away. And we've had many conversations of why is the burden on me when. And then his. And then we come up with compromises, but it still feels like it's. And then we're having our second. And then now my worries that we're back in a situation where we were with her force. And I'm sorry, I'm still at work. I'm doing. We made some compromises of our living situation. So we keep our cost down. We're at my parents, so we're not really paying, you know, for rent.

[Dave Ramsey]

Okay. So here's what needs to happen. All right? He needs to sit down with his partners. And proper business acumen would dictate that we see a pattern of growth in the revenue and in the profits to get us to where we can eat out of this thing in a short period of time. So we need to see some directional move in the numbers that give us hope. He needs to do that, not you. And he doesn't need to do it for you. He needs to do it. Cause it's good business.

[Caller]

Okay.

[Dave Ramsey]

The byproduct is it's good for you. Cause you get some hope, too.

[Rachel Cruze]

No, she's saying that they've been doing that.

[Dave Ramsey]

I know they've been doing projections, but projections that aren't hitting. Okay. And so that's not. If we have a business unit at Ramsey that sets projections and they don't hit them, then we assess. Okay. How much longer do we go with not hitting projections? And then we close it. If it doesn't hit projections, you know, if you don't have a reason to believe other than just I hope, I wish. But in business, you need to see some things Move. I need to see some trend lines in my sales. I need to see some.

[Rachel Cruze]

Yeah, my fear is that they've been propping themselves up thinking all these things. They might.

[Dave Ramsey]

They might, but I want to.

[Rachel Cruze]

And it's not been real.

[Dave Ramsey]

But here's the difference. Here's the difference. You need to set a deadline. You need to set a deadline.

[Rachel Cruze]

Yeah. With you, Samantha.

[Dave Ramsey]

And he needs to come back and say, all right, we're going to go until this date, and at this date, we're going to see some profit and we're gonna see some trend lines towards that date between now and then. What's killing you guys is this sense that there's no end to this and

[Rachel Cruze]

you got a second baby on the way.

[Dave Ramsey]

Well, that's the.

[Rachel Cruze]

Samantha, does he not have any. I know, but he's the dude. A part of me is not. I mean, I don't want to offend your husband, Samantha, but I'm like, good God, go mulch lawns. Like, go do something to bring in income for your wife and your baby and your soon to be baby. Like, that's wild to me. For four years, not making anything. Does he have any of that in him? Like, is he. Is he mad about. And he's angry and he wants to change this and that, or is he just like, I love it, it's been great. I don't know, we'll see where it goes. We're hoping the next thing's gonna hit.

[Caller]

So the compromise that we had, because he wants to work around his schedule with the gym, he has to be pretty flexible, is that he went back to school. And in here in Canada, the majority of the grants, like, we learned how to take a loan with our income.

[Dave Ramsey]

School to do what?

[Caller]

He went back to school just to gain some grants so that you can just sustain us just a little bit.

[Dave Ramsey]

That's not an income. The boy needs a job.

[Caller]

Yes.

[Dave Ramsey]

Boy needs a job. He needs. Rachel's right. He needs to go make some money. And they need to set a deadline by which this gym and this member, this. This dream is profitable. Otherwise it's not. It's not going to stay open. I'm not gonna be.

[Rachel Cruze]

And I would challenge them, be like, hey, yeah, we have six months, or whatever you guys decide.

[Dave Ramsey]

Six months comes to mind.

[Rachel Cruze]

And I wanna see two big changes in the business. Like, what are two drastically different things you're gonna do?

[Dave Ramsey]

To be fair, if I own the gym, you're gonna have to do something that makes me want to keep it open six more months. Or I'm gonna fire all of you and we're gonna close the thing.

[Rachel Cruze]

I'm sorry, Samantha.

[Dave Ramsey]

I'm sorry.

[Rachel Cruze]

That's tough. That's a.

[Dave Ramsey]

He needs to do that. And it's being exasperated by the fact that you are carrying a child and

[Rachel Cruze]

you're living with your parents and you're

[Dave Ramsey]

living with your parents.

[Rachel Cruze]

I mean, all of it. And you. You have the right.

[Dave Ramsey]

This needs to be. This needs to end.

[Rachel Cruze]

Yes. To feel urgency.

[Dave Ramsey]

It needs an end date. It needs an end date. If it's not profitable. Now. When I started, I had great ideas and I knew how to serve people, but I didn't have systems in place yet. At that time, I sold books out of the trunk of my car. It was a lot harder to start a business back then. Shopify makes it easier. Shopify is the business platform powering millions of businesses and about 10% of all E commerce in the United States. If you've got a product or even just an idea, Shopify makes it simple to get moving. You can build a storefront, write product descriptions, and even improve your product photos all in one place. You don't need 10 different systems duct taped together. Shopify handles everything you need to make sales, from payments to marketing and analytics. Plus, that purple shop pay button is one of the best converting checkouts on the planet for fewer abandoned carts. And if you get stuck, Shopify offers 24. 7 support. So if you've been sitting on the sidelines, it's time to turn those ideas into. Sign up for your $1 per month trial at shopify.com Ramsey that's shopify.com Ramsey shopify.com Ramsey. The land of the home of the brave. The best representation of the free enterprise system in the history of mankind. It's called America. And already two times this hour, the side hustle. And the small business has risen to the point that they give us a question or two this hour. So a couple things to remember. If you're starting a side business or you've started a business, got a side hustle that's growing into a business. Here's some book recommendations for you. You ready? Write these down. The premier book in the last 30 years, probably that most of us love, and we love, the man too, is our friend Jim Collins wrote the book Good to Great. You need to read that book. You need to pick up the book by Michael Gerber. It's called the E Myth. Entrepreneurial Myth, E. Myth. And in that book, my friend Michael says that you will either learn to work on your Business or you will forever work in your business, which you just own your job then. But if you learn to work on it, then you can take a vacation and it keeps running while you're not there. That's the proper growth of business. And that applies to both of our calls this hour. Our latest book, Build a Business yous Love is wonderful in this regard. It'll help you with laying these things out and help you recognize the stages of business as you go along. And my friend Dr. Henry Cloud who wrote the book Boundaries also wrote a fabulous book called Necessary Endings. And everyone should pick that book up because how do you know when to end something? A relationship, a marriage, a career, a job, a business, a business unit. Employment of a team member. Needs to end or I don't want to work for this toxic boss anymore. Needs to end. How do you know? Well, there's actual steps that you should go through in a decision making framework and Henry walks you through it. One of the core thesis in that is if you lose hope that it's going to get better. So a horrible example would be you're married to an alcoholic and fourth time through rehab and now they fell off the wagon again. Well, I lose hope that that one's going to get better and this marriage has come to an end. That's an example. But if you think it's going to get better, then real reasons, pattern indicators, not, not wishes, not words, but actual behaviors and things happening in the revenue. If it's business, whatever it is, give me a reason to have hope and then we'll continue. Necessary Endings by Henry Cloud. That's the fourth book so some good books to help you guys along. And those are where I get some of the thoughts where Ramsey personalities get some of the thoughts we throw at you on side hustles. Businesses, small businesses. Our entree leadership materials. We coach about 10,000 small businesses. If you're interested in that, you can find all of [e-mail] all right. Jeans and McDonald Alabama. Hi Jane, how are you?

[Caller]

How you doing today, Dave?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

First of all, I just want to say thank you guys for all the work you guys have done. I've been just started following you guys about a month ago and I've, I've got my thousand dollars saved. I'm on baby step two.

[Dave Ramsey]

Great.

[Caller]

And I've listed all of my debts.

[Dave Ramsey]

Great.

[Caller]

20. Thank you guys. Seriously, back in 2024 I didn't, I messed up my taxes and I'm 1099. I'm a truck driver, and that year I just filed my taxes and I owe them, and it's a $21,000 balance that I owe them. But I just started the debt snowball, and I listed all my debts from largest to smallest, and I. I'm struggling to attack this $21,000. And I've been doing all the other ones I've paid off so far. I paid off three credit cards so far. Momentum. But listening to the show the other day, you told one of the other callers to attack the IRS first. But it's just I'm staring at that mountain, and I don't know if you guys could kind of give me some direction or should I just continue going from smallest to largest.

[Dave Ramsey]

Okay, how much debt total?

[Caller]

The total debt that I have left over right now is $80,356.

[Dave Ramsey]

And 21,000 of it is the IRS. And what's the rest of the it?

[Caller]

The rest of it, $41,000 is the student loans. $10,000 is on my wife's car. And then I got 5,000 on my daughter's car. And I think, where's the other one? And I got 8,000 left on one more credit card.

[Dave Ramsey]

Okay, and so you're going to be to the pretty quick. How much. How much have you paid off so far and in what period of time?

[Caller]

So I've been following you guys for the last three months, and in the last three months, I paid off 33,056 dol for Eugene.

[Dave Ramsey]

Three months?

[Caller]

Yeah. Yeah. I'm a truck driver.

I'm.

[Dave Ramsey]

Well, if. Are you going to be able to maintain that pace?

[Caller]

I hope so. In the name of Jesus. I really do. My wife is mad at me. I want to be honest with you.

[Dave Ramsey]

Because you're going so hard.

[Caller]

Yeah, well, because I'm gone. Because I'm on the road.

[Dave Ramsey]

Yeah.

[Caller]

I haven't been home in like two or three weeks. And she's on board with me on this vision and goal, and she sees what I'm trying to do, but she does want me to come home.

[Dave Ramsey]

Yeah, I don't blame her. That makes sense. You have to pace it out so you can make it, but that's a great start. So if you. If you were to maintain that pace or even close to it, you will be through the IRS and the other smaller debts very, very quickly. Agreed?

[Caller]

Absolutely. Yes, sir.

[Dave Ramsey]

So this is only a question. This is only a question of is it going to be 2 months or is it going to be 1 month or is it going to be 3 months or is it going to be one month? That's the only real question. Right.

[Rachel Cruze]

We did 10,000amonth. He did 10,000.

[Dave Ramsey]

10 and 8 and 5 and 5.

[Rachel Cruze]

So it'd be 4 to 5 months.

[Dave Ramsey]

Yeah, or you can do it now. Either one. So the only question is just, you know, so the trade off between the momentum that you're feeling, which is very positive, and I don't blame you for wanting to maintain that, is that the stupid IRS has unlimited power. They can just decide to screw up your life. They don't have to go to court. They can just start garnishing things. They can start keeping tax returns, and they will. They can take your money out of your bank account. They don't have to go to court. Everybody else has to sue you, win the lawsuit and then go to court. So they've got unlimited power, which is scary as crud because they're also not real smart most of the time. So dumb and powerful is not a good mix. And that's what you're dealing with most of the time. Not always, but most of the time. And I mean, I get audited by these people like it's their hobby.

[Rachel Cruze]

It may be too much work to do it. Gene. But also, we always say, if there is a larger amount owed, you could go down to your credit union and get a personal loan for 21,000, get rid of them, pay off the IRS and put the 21,000 back in your debt snowball, so that you pay off your daughter's car, credit card, your wife's car. Right. And then you deal with that personal loan of $21,000 to the credit union versus the IRS. You could do that.

[Dave Ramsey]

The second reason we move them to the front of the line is that they are not bankruptible. The third reason you're not going to bankrupt anyway. The third reason we move them to the front of the line is that the interest rate and the penalty is very, very, very high. So all of those reasons cause us to interrupt the debt snowball. The only time, by the way, that we interrupt the debt snowball and move it to the front. But I don. It's not the end of the world. That's the reasons we move it. If you want to, if you understand those things and you want to leave it there, or you want to go get that credit union loan and then you knock it out in four months instead of this month, that's okay with me. But you just. You're taking some extra risk when you do that. And, you know, when I'm Coaching people that are struggling. And they got six, you know, they got Chase MasterCard suing them, they got a Citibank suing them, and they got Lexus Motor Credit suing them on a repo and they got the irs. I'll take all of those other three versus the IRS every time. And what they can do to you, the other ones and what they will do to you. So I. But I don't think any of them are suing you. I don't think that's where you are. You're under control. You're knocking this out. You've got momentum. So I'm not scared for you now. But this comes from years of coaching people that really, really were struggling in behind the eight ball. And I just always want to get the IRS out as fast as I can. But listen, dude, you need to set a date. If they're not gone by September 1st, you got to move them back up. You got to move in the front. So set yourself a deadline. I'm going to knock them out by this date or I'm going to move them to the front of the line. Yep, one of the two. And then knock them out and then go back to your debt. Snowball.

[Rachel Cruze]

Yeah. And I appreciate your. Your enthusiasm. I mean, that's incredible. 10,000, 30,000 in three months.

[Dave Ramsey]

Yeah, that's. Boom.

[Rachel Cruze]

Unbelievable. Maybe your wife and you said for three more months, I'm going to do this pace. And then you're going to dial it back a little bit because you guys can. Got. You got some.

[Dave Ramsey]

You know, we ought to have his wife. We ought to have his wife talk to the gym owner's wife.

[Rachel Cruze]

Her. Be like, my. My husband's working to.

[Dave Ramsey]

I wish my husband was gone working and making money.

[Rachel Cruze]

You would want someone like Jean.

[Dave Ramsey]

I wish he would leave and go make some money.

[Rachel Cruze]

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

[Dave Ramsey]

Stacy's in Indianapolis. Hi Stacy, how are you?

[Caller]

Hi Dave, how are you?

[Dave Ramsey]

Great. What's up?

[Caller]

Well, my daughter is 29, she's married, she's a nurse, just works part time because I have a two and a half year old granddaughter. Her husband makes $57 an hour. I'm disabled, divorced, and I used to work in insurance. So. I know you don't like this, but I bought whole life insurance. I want to cash in her whole life policy that I've had for 29 years. And just so you know, they each have their own life insurance policies outside of their work. She feels entitled to have that cash value. She thinks it is hers. I disagree. I think the money's mine. I could use the money. What do you think?

[Dave Ramsey]

Well, you're the owner of the policy and you paid every dollar for the policy, correct?

[Caller]

Yes, I've been paying $26 a month for 29 years.

[Dave Ramsey]

And how much is the cash value when you cash it out?

[Caller]

$6,800.

[Dave Ramsey]

Good God. You totally got screwed. Oh my God, yes.

[Caller]

Like I said, I worked, my career was in insurance before I had to go on disability 15 years ago.

[Dave Ramsey]

Okay, so how many kids do you have that have these policies? Policies?

[Caller]

Two.

[Dave Ramsey]

All right, so we're cashing them both in, right?

[Caller]

Well, at the moment, cashing the other women because long story short, my other daughter, I'm just not sure where her life's taking her. So I'm just kind of holding on right now.

[Dave Ramsey]

I don't care. How old is your other daughter?

[Caller]

She's four years older. So should I just go ahead and cash that one in?

[Dave Ramsey]

Yeah, you better cash them both in. They both suck beyond belief. You've gotten screwed. Don't keep them. And you're. It's not your obligation to take care of the one that has her act together or the one that doesn't have her act together. These are 31 year old grown women and you paid for this policy. It is not their money. Okay, in neither case are you to Take care of them.

[Caller]

Well, thank you. I just wanted to kind of have somebody else tell me that that's not.

[Dave Ramsey]

That's not only moral, that's also what the law says. They're not the owner of the asset. You are.

[Caller]

Are. Okay.

[Dave Ramsey]

You own it. That's why they call you the owner.

[Caller]

Yeah, I should.

[Rachel Cruze]

What. What age did you open at the policy for your daughter?

[Dave Ramsey]

One year old. She had 20, 29.

[Rachel Cruze]

Okay. And you did $26 a month. A month. Okay. I was just going to say. So you should have. If you just had that in an S and P just for. And people for listening, it should be $58,000 is what you.

[Dave Ramsey]

If you put it in a real investment instead of a ripoff whole life policy, instead of $6,800, you.

[Rachel Cruze]

And it says she would have put in $8,736. So she put in more than what the investment that's.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

Made.

[Caller]

Yeah.

[Dave Ramsey]

Had a negative rate of return. This is why you don't buy whole life. Life insurance and why you don't buy it on your kids. For sure.

[Rachel Cruze]

So bad.

[Dave Ramsey]

So.

[Caller]

Yeah.

[Dave Ramsey]

So bad. Whole life sucks. Have we been unclear about that on this show?

[Rachel Cruze]

That is a good question, though, that her daughter assumed it's hers because her name was attached to the account.

[Dave Ramsey]

You know, probably Stacy's gone, but probably what has happened is that Stacy has told these kids their whole lives that she's invested this money for them for sure. And. Oh, that's my policy. You made an investment for me. Thank you.

[Rachel Cruze]

Mm.

[Dave Ramsey]

And you got this money because I've set this money aside for you.

[Rachel Cruze]

It's in my name.

[Dave Ramsey]

Yeah, it's in my name, but it's for you. And that's probably what she said all along.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

And so now they're going, yeah, but you told me, mom, it was mine.

[Caller]

I know.

[Rachel Cruze]

Yeah, that would make sense.

[Dave Ramsey]

That's probably not some entitled brat. She probably just messaged it wrong. But, you know, but technically speaking, you own the money. And by the way, you laid the whole thing out on how she makes money. Her husband makes $57 and you're disabled and all that. None of that matters to the discussion. It's either her money or your money, regardless of who is deserving or who's hurting or who is more healthy financially like the other daughter. I don't. I'm not sure she's going to turn out yet. Well, she's 34. I think we're pretty sure. You know, and so, second, she's gonna have to have an Encore to get this straightened out.

[Caller]

She.

[Rachel Cruze]

34 is young.

[Dave Ramsey]

I know, but you can have an encore 34 for so. And you need one, apparently, if your mom still don't know if you're going to make it.

[Caller]

Yeah.

[Rachel Cruze]

So the victim language in it exactly.

[Dave Ramsey]

Doesn't matter.

[Rachel Cruze]

Taints maybe the attitude that the daughter's having to. I don't know. But yeah. Just some thoughts, Stacy. But yeah, the. It was your money. You put it in under your name.

[Dave Ramsey]

Technically your money. But, you know. You know, I might. I might take back my answer. If you promised her this money her whole life, then probably you ought to just keep your promise.

[Rachel Cruze]

Promise.

[Dave Ramsey]

And give it to her. Morally, legally, it's your money. Except that if you said, this is your money, this is your money. This is your money. You know, if I had a mutual fund, I opened up for you and I said, this is your college fund. We're gonna use it for college. And it's your money. It's your money. We're saving for your college. Which I did, by the way. It was a uniform Transfer to Minors act and UTMA was in your name. And then you went to college. We ended up paying for college out of our pocket. And then when y' all graduated, we gave you your UTMA to start your life off as an adult.

[Rachel Cruze]

Adult.

[Dave Ramsey]

And so. But that was in my name was my money.

[Rachel Cruze]

Yep.

[Dave Ramsey]

And. But I had. I had allocated that emotionally and relationally.

[Rachel Cruze]

And we didn't know it, though.

[Dave Ramsey]

You knew you had a college fund.

[Rachel Cruze]

I thought you were paying for college. So there was a little bit of

[Dave Ramsey]

a. I thought I was using it for college.

[Rachel Cruze]

Yes.

[Dave Ramsey]

Yeah. Yeah, that's true.

[Caller]

Yeah.

[Rachel Cruze]

But so how it's communicated is important, too.

[Dave Ramsey]

Did you make a promise?

[Rachel Cruze]

Yes.

[Dave Ramsey]

So did you promise your kid this was their money. Money.

[Rachel Cruze]

And if that's.

[Dave Ramsey]

You ought to keep that promise.

[Rachel Cruze]

Yeah. And that's the expectation. So she would be disappointed.

[Dave Ramsey]

So I would. I would take my answer back if that's the case, Stacy.

[Rachel Cruze]

But if not yours.

[Dave Ramsey]

Yeah. And you know, who. Who is making money who's not is not relevant to the discussion. Jocelyn's in Houston. Hi, Jocelyn. How are you?

[Caller]

I'm good. How are y'?

All?

[Dave Ramsey]

Better than we deserve. What's up?

[Caller]

So Basically, I have two 401ks that's like, has $2,600 in them. I have about 7,000 dol. Credit card debt that I kind of just racked up being financially irresponsible. But I want to know if I should take those out to just kind of put towards that debt I'm on baby step one. And like, just trying to get my life together. I'm 26, I live rent free right now.

[Dave Ramsey]

What do you make?

[Caller]

Yeah, just about $3,000 a month.

[Dave Ramsey]

Okay. I'd pick up my hours and attack the credit card debt and leave this alone. And I'd roll it to a 401, cash. It doesn't matter much. And I roll it to an ira. I'm sorry, it doesn't matter much mathematically. Cause it's such a small amount. But percentage wise, it's suicidal. Here's why. Okay. You cash out the 401ks, you get a 10% penalty plus your tax rate. Let's call you in the 20% tax bracket for the fun of it. Don't think you are, but you might be. That means at 10% plus 20% taxes, that's 30%. That's like borrowing money at 30% interest to pay off your credit card. So they're going to take almost half the money if you take it out instead of rolling it to an ira. So I think as a matter of starting to make good, wise financial decisions, more than just the math, I would go ahead and roll it to an IRA and force myself to pay off the credit cards with hard work.

[Rachel Cruze]

Yep. And just keep it in there and don't touch it and let it grow. And at retirement. Retirement, maybe 100, 200k in there. I don't know what it'll grow to, but that'll at least be a little bit of a safety net too for retirement, which is great.

[Dave Ramsey]

Yeah. And you just add to it as you go along. I've had some IRAs that were so small at different times. And I move them around, put them all together later, put them in a pile. And it has ended up turning into some serious money over time. But the big thing here is I just want your brain to get used to not looking for shortcuts at high cost. And this is a shortcut at a high cost, even though it's 2,600. So you're probably going to lose 1,000 bucks of that in taxes and penalties. And so you're still going to get out with 1,600. And $1,000 does not change your life one way or the other. It's not the dumbest thing you've ever done by any stretch or will ever do. So it's really not that much money. But if you add a zero to it, it starts to be $10,000. If you had two zeros to it, it'd be $100,000.

[Rachel Cruze]

Yeah. And what changes your life in this, Jocelyn, is your income going up, making 3,000amonth. I would look to see where can I get an extra thousand, two thousand. What does that look like from a income perspective? Because that's going to get you through the $7,000 in debt so much faster and then your emergency fund and beyond. So it's kind of your. That's your ticket out. Not that's the old 401k.

[Caller]

Foreign.

Hey, I want to talk to you for a second about love and not love like in Titanic or something. I mean, responsible love. The kind of love that moves you to take care of the people closest to you. And one of the most important ways to show that kind of love is

[Rachel Cruze]

by having term life insurance.

[Dave Ramsey]

If you have anyone depending on you,

[Caller]

a spouse, kids, anyone, anyone, you need term life insurance. Term life insurance gives your family real protection if the unthinkable happens, so they can spend their time grieving and not worrying about how the bills are going to get paid. Zander is a broker who works for you, shopping the top companies to find the right coverage options for your needs and your budget. In many cases, there are options available with no medical exam and instant approval. My wife and I had term life insurance through Zander for years, long before I worked at Rainbow Ramsey, because we trust them. Getting term life insurance is a way of saying I love you when you can no longer say it yourself. Go to zander.com or call 1-800-356-4282 to

[Rachel Cruze]

find the coverage that fits your family.

[Dave Ramsey]

Welcome back to the Ramsey show and the Fair Winds Credit Union. Union Studio Rachel Cruz, Ramsey personality My daughter is my co host today. Louise is in Tampa, Florida. Hi, Louise. How are you?

[Caller]

Hi. I'm doing good. How are you guys?

[Dave Ramsey]

Better than we deserve. What's up?

[Caller]

So I had a question about. Me and my fiance have a credit card and I am always making sure that if we use it, we pay it off before statement date. He was telling me that why don't we let. Why don't we carry a balance to build credit? And I'm. I don't know if that's how that works. So I kind of wanted to ask you guys, does that make sense?

[Dave Ramsey]

How old are you guys?

[Caller]

We're 27. Both of us. Okay.

[Dave Ramsey]

And when are you getting married?

[Caller]

We. Well, we're saving money, so I can't say a date just because we're on. That's one of our steps.

[Dave Ramsey]

I'm sorry, you. You have to have Money to get married.

[Caller]

Wait. Well, I mean, yeah, we can just go get it done and that's it. Yeah, like the wedding. I would like, like, you know.

[Dave Ramsey]

Yeah.

[Caller]

Okay.

We've been saving for a while now

[Rachel Cruze]

how much y' all have saved for the wedding.

[Caller]

So so far we have 20 and then we also have another 20. That's our six months of living.

[Dave Ramsey]

So what kind of wedding are you going to have?

[Caller]

Well, I don't know. Everybody.

[Rachel Cruze]

Weddings are expensive.

[Caller]

A lot. But I, I want to make sure that if I want something, I can have it.

[Dave Ramsey]

There's not that much money in the world.

[Caller]

Yeah, I know.

[Dave Ramsey]

That much money doesn't exist. I want, I want it. I can have it. That's not a, that's a, that's a four year old. No, you don't get to do that. You set a budget on your wedding. You're a grown woman and you get married and you do it for 20,000 and you start planning it this weekend. Okay, back to your question now. So your fiance is correct that if you were to run a balance on your credit card and pay it on time, it will cause your credit score to increase. Because your credit score is based on. It's by an organization called Fair Isaac and it's called your FICO score. And it's based on how you interact with debt, how much debt you have, the type of debt you have, and whether you pay your debt on time or not.

[Rachel Cruze]

New types of debt.

[Dave Ramsey]

New types of debt gives you, if you have too much debt or too little debt, that gives you your credit score. So your credit score, technically speaking, if you analyze how the algorithm works, is your I love debt score. And the higher your credit score, the more you love debt.

[Caller]

Yeah.

[Dave Ramsey]

So if your goal as a married couple is to get in debt and stay in debt deeply the rest of your life, the credit score will serve you well. Well, but if your goal is to build wealth, then you would avoid this at all cost because you don't want to play kissy face with the bank to build a score that shows how much you've been playing kissy face with the bank. Instead, I want money. I want to build a net worth. I want to become wealthy. And the credit score is not an indicator of your financial health or wealth wealth. It's simply, mathematically speaking, an indicator of how much you've been playing kissy face with the bank. That's how it's determined. And so what he's saying is, hey, let's owe the bank more money and pay it off a Little at a time so that we can make other banks happy.

[Caller]

Wrong.

[Dave Ramsey]

Bad plan. You follow my logic?

[Caller]

No.

Yes, of course. That was what I was telling him. It's like, if you just want to be more in debt, then what's the point of doing all your steps? Let's say.

[Dave Ramsey]

Exactly. You wouldn't do any of our steps. If you're going to. If you want to stay in debt, you need to go do a different plan. Our plan won't work.

[Caller]

And, Louise, this is going to be.

[Rachel Cruze]

And this is an important subject for you guys to get aligned on. On when it comes to your marriage, money fights and money problems are one of the always in the top three reasons for divorce. And so this is. It's a. That. This is a big tension point. It may not feel huge. I mean, it's. It's big enough for you to call to be like, hey, this doesn't feel right. But if your value system is different with money, not that you guys have to be the same person, but that you're moving in the same direction financially because you're a team. And you're like, well, this is how we're running our household if or when we have kids. Like, I mean, it continues on. And when you start in such a different place, it's a red flag for me. I would want to be in the same place. And you may decide. Luis, getting off this call, you could totally decide, like, I'm okay with debt. Right. Like, we're not trying to push you. Right. But you need to be on the same page. Clearly, a life of peace and building wealth is avoiding debt, and that is what we do believe.

[Dave Ramsey]

And then your credit score means. My credit score has been zero for 35 years.

[Rachel Cruze]

Rachel has never had credit scores undetermined. Yes.

[Dave Ramsey]

Never had a credit score in her life.

[Rachel Cruze]

But then you have to pay cash for cars. You know what I mean? Like. Like you're saving up for vacations. Like, you are choosing a life without debt, but you also are choosing a life of living below your means of delayed gratification, but have a lot of peace and control and autonomy over your

[Dave Ramsey]

money, which gives you a large pile of money, by the way, because you're not giving it all to some stupid bank. So there we go. That's where wealth comes from. The other thing I'm going to throw in, and you didn't even ask about this, but for God's sakes, cut up that credit card and close the account tonight. If you're not going to get married. The two of you don't need to be on a credit card together. Super dangerous for you. Super dangerous for him. The credit card balance runs way up and one of you runs off the other one stuck holding the stupid thing. And now you're going to get sued or you end up paying a balance for the one that left. And I know no one ever leaves. Bull crap. You're not married, okay? They leave all the time. So get off that car. Do not be doing stuff financially and legally with somebody you're not married to. Danger, Danger, danger, danger, danger. My daughter. Don't do that, please.

[Rachel Cruze]

And especially since there's not a date agreement and a date set.

[Caller]

Right.

[Rachel Cruze]

It's kind of of this endless feeling of the abyss of like we're going to figure it out and then that. And then when you live in that. Which people do for years and years, you know, we talk to people, they have engagements for four years. They live in that. They start playing house. You start commingling finances. You get down the road. It's just. It starts to. It starts to be a problem. So I would keep everything separate.

[Dave Ramsey]

At which point I always.

[Rachel Cruze]

Until you guys get married. And if he is the one, like you guys set a date, paint or

[Dave Ramsey]

get off the ladder.

[Rachel Cruze]

If he is the one. And that could be in December. It's not like you have to do it tomorrow. But. But put a date on the calendar that you guys work towards just for some certainty in the relationship.

[Dave Ramsey]

But if you have the money to get married, set the date now. Get married. You're not. This is not good for y'.

[Caller]

All.

[Dave Ramsey]

It's not good. We don't care. We make no money. When you get married. It doesn't help us at all.

[Rachel Cruze]

You're not in the wedding business.

[Dave Ramsey]

Too bad. I wish. I need to get in the wedding business. I need to do something. As often as I tell people to get married these days. I need.

[Rachel Cruze]

It's your. I was gonna say priest. You won't be a priest. It's a. What is it? What is it? When you. You're ordained.

[Dave Ramsey]

You want me to officiate the wedding?

[Rachel Cruze]

Ordained?

[Dave Ramsey]

I'm gonna start doing weddings. Dave's weddings.

[Rachel Cruze]

Yes.

[Dave Ramsey]

That way I can make some money off all this advice.

[Rachel Cruze]

Annoys can get hurt.

[Dave Ramsey]

Then I can have a conflict of interest.

[Rachel Cruze]

Then she can get the fiance and they can call in the next hour and we'll get the wedding. You know what I mean? You can keep it rolling.

[Dave Ramsey]

Well, we'll just fly you up here and you can stand on the debt free stage with your little bouquet There we go.

[Rachel Cruze]

There you go. Coming, pretty person.

[Dave Ramsey]

You're getting ready to hit the road this summer. You want to feel confident your car is ready to go. But when you don't fully understand what's going on under the hood, it's easier to either ignore something important or spend money you didn't need to. Because let's be honest, you're not a mechanic and you shouldn't have to be. That's why we trust Christian Brothers Automotive, the official auto repair part of the Ramsey show. They bring clarity to car repairs and maintenance with their digital vehicle inspections. You can actually see what your technician sees, understand what needs attention now and what can wait so you can make wise decisions without second guessing. Listen, when you're counting on your car to get you where you need to be, you don't want uncertainty, you want confidence. And Christian Brothers stands behind their work with the nice difference warning. Three years or 36, 000 miles, whichever benefits you more. Go to cbac.comramsey to schedule your service and get 10 off your visit. That's cbac.comramsey 10 off up to a 250 value. See store for details. Jeff is in Birmingham. Hey Jeff, what's up?

[Caller]

Hey Dave, how are you? Thank you for taking my call.

[Dave Ramsey]

Sure. How can we help?

[Caller]

I'm facing kind of a crisis I never intended due to some illness and due to some other things. I went into a government sponsored forbearance program with the largest servicer in the country and that was in 2023. Since then I've gone back and forth several times trying to get back on to where I just pay my payment. And you know, I've been told numerous different things and you know, I was told, hey, you can do, you know, back end payment. And so I paid, you know, trial payments and then they send me the paperwork. The paperwork's not right.

Right.

I send it back and the longer the short is is I've gotten down now to where the last trial payment I paid, I paid on the last day of November. Screenshot of the email they sent, you know, confirming the payment. And then they came back and said that I failed the trial payment plan because of the payment being late. I filed a respa and a notice of contacted fha. I've been through a lot of different steps to get them to acknowledge that the payment actually was made on time because I wanted to get off of this, you know, cycle that's been going on almost three years now. And so I have a document in front of me that says if I don't pay them $43,000. They're going to foreclose on my house, which I have over 50% equity in. And I was looking for some kind of suggestion. I've done everything I can do up until this point.

[Dave Ramsey]

So $43,000 is the amount you're in arrears right now, Correct. Net of everything. And that number is probably correct. But what you're saying is that you had a forbearance plan, which is a plan to pay payments greater than the normal payment to catch up. And apparently that's gone sideways several times to get $43,000 behind. What's your normal monthly payment supposed to be?

[Caller]

Be $1200.

[Dave Ramsey]

So you're at least 40, 38 months off in only three years. How's that possible?

[Caller]

Well, it takes them instead of the 30 days that they.

[Dave Ramsey]

No, no, no. I mean, just think about it. From 23 to 26 is only 36 months. That's as if you haven't paid a payment the whole time.

[Caller]

Well, so that's the other thing. They're holding, I think, six or eight payments in escrow somewhere that they don't even account for during my trial payments. But then, you know, there's. There's three. You know, they did three appraisals. I mean, they just rack up fees like it's, you know, going out of style.

[Dave Ramsey]

Yeah. And they're charging you. Are they charging you huge late fees as well?

[Caller]

Yeah.

[Dave Ramsey]

And if they tack on. Have they tacked on legal costs in that 43 as well?

[Caller]

Well, I. It doesn't list it as a line item, but I can't even get them to give me a line item.

[Dave Ramsey]

I can't get to 43,000. That's what my problem is.

[Caller]

You and me both. And when I start doing the math and every time I ask them about it. Oh, you know, I don't know, the loan that they sent me after they told me they would just put the back payments in the rears of my current mortgage I had, which I was never late on. Then they sent me a loan for 40 years that was going to raise my payment $15.

[Dave Ramsey]

Yeah, well, that would be. That would probably be correct, actually.

[Caller]

But, yeah, well, it would be. And so I called him and I said, this is not what we ever discussed. And the person that talked to you had no idea. But are you talking.

[Dave Ramsey]

Are you talking to FHA or to the loan servicer?

[Caller]

I've talked to both.

[Dave Ramsey]

No, I mean, who. When you made that phone call, who was it to?

[Caller]

So when I Talked to fha, they said, well, you can, you know, if you filed an appeal and a notice of error with, you know, with the mortgage servicer. Yeah, let them answer and then we can work that through it. But basically the loan servicer is the one that decides whether they, the payment was late. I just, you know, and I explained to the FHA person, I said, I don't understand how you can send me an email that I have a screenshot and it's in my inbox in the correct month that it was due and tell me that my payment was.

[Dave Ramsey]

Yeah, okay. All right. So the net, net net is, is that you probably have in reality six payments or seven payments of some amount laying in escrow. So 7,000, $8,000 and you have $43,000 owed in arrears. So somewhere around $36,000 would get you caught up. Obviously you don't have that and obviously we're dealing with bureaucrats at the FHA and incompetence at the, at the servicer. Who's the servicer?

[Caller]

It's free to mortgage.

[Dave Ramsey]

Yeah, okay. All right. Yeah. Incompetence at the servicer, then that would be normal because they're massive and, and they massively don't give a rip.

[Rachel Cruze]

What a name too. Freedom.

[Dave Ramsey]

Yeah, that's what they're getting. Opposite.

[Caller]

I also have a 2.7% interest rate. So every time they try to do anything they're like, well, you know, your payment will go up a lot, so

[Dave Ramsey]

what, what is your interest?

[Caller]

So I, then that's the other thing. The reason I went on forbearance originally was from long Covid. And then I had, I almost, I had to go into the hospital and I almost died and it took me a little while to heal. Well, they told me, well, you can't pay payments while you're on forbearance because it'll kick it into, you know, it'll kick it automatically into foreclosure. So every time I've tried to get back into kicking, you know, into paying for my mortgage. Mortgage. It's a seven month, eight month process.

[Dave Ramsey]

Yeah.

[Caller]

Give me some kind of answer. And if it's not perfect, it goes right back into the loop.

[Dave Ramsey]

Yeah. What do you make? What do you make?

[Caller]

Well, so currently I don't have a job, but I have the. I mean I do contract work, I do other things, but prior to getting sick, my income was 230.

[Dave Ramsey]

Okay, what, what will you be making in the coming months? Enough to pay a twelve hundred dollar payment.

[Caller]

Ten to fifteen thousand a Month. Okay.

[Dave Ramsey]

Oh, good.

[Caller]

All right. And then I have, you know, I have money that, I mean, I have. I have assets. I've just had them tied up from, you know, a divorce. That was five years ago.

[Dave Ramsey]

So what assets do you have? What assets do you have?

[Caller]

So, I mean, I have an account that has $400,000 in it, but I can't touch it until my ex sense the paperwork, which. That's like the last thing, and she just kind of keeps dragging her feet on it.

[Dave Ramsey]

Wait a minute. What is the 400,000?

[Caller]

It is a. It's. It's a. It was a investment account that we had, you know, when we were married.

[Dave Ramsey]

Okay.

[Caller]

But it's frozen.

[Dave Ramsey]

So. Let me help. Let me. Let me put it to you this way. I can't make Freedom Mortgage be competent or the FHA not be bureaucratic idiots, and you can't either. And so the best thing you can do is write them a $43,000 check. You owe them anyway. You owe. Yeah, you do.

[Caller]

Yeah, you do.

[Dave Ramsey]

You make $10,000 a month.

[Caller]

I don't currently make 10,000.

[Dave Ramsey]

You said you're going to in the coming months. I asked you.

[Caller]

Yes. Correct? Yes. No, I will.

[Dave Ramsey]

Okay, then go make $43,000. They're not going to foreclose in 20 minutes. It'll take them six months to a year to get around to it. Have you noticed that they. That they're slow?

[Caller]

Yeah. The one thing that concerned me is they sent me a letter saying that if you don't make it by X date, then we're going to.

[Dave Ramsey]

What's the day?

[Caller]

Tomorrow.

[Dave Ramsey]

Okay, Then they're going to start foreclosure,

[Caller]

right? Okay.

[Dave Ramsey]

Yeah. And in Alabama, that takes at least a month. But I don't think. But it probably takes six months because they're probably going to sit on their thumbs because it's what they do, their thumb sitting visitors. So really, I mean, you probably have time to cash flow this. In the meantime, call your ex. Going to the judge and saying, I'm gonna smack my ex into next week. I'm gonna have the judge smack her into next week and get her to sign the dadgum paper holding up 400 grand. I'm getting ready to lose a house because of it. So those are variables you can control. You're asking for some way to make your stupid butt mortgage company and your inept FHA behave. They can'. Things you can control. You need to go control and get $43,000 out of that $400,000 account or go get $43,000 out of some work you do in the next 90 days before the actual foreclosure date occurs and pay this thing current. That's what I would do if I were in your shoes. If you don't do one of those two things, you need to put your house on the market right now and sell it before you lose it. But you need to go get some money and get stupid freedom out out of your life. That's what this comes down to. Because you have tried for three freaking years to negotiate with morons and it doesn't work.

[Rachel Cruze]

Hey guys. Healthcare is one of the biggest stress points in your budget. It's confusing and most of the time it feels completely out of your control. But there is a better way to handle it. Christian Healthcare Ministries isn't health insurance. It's a health cost sharing ministry where Christians share each other's medical bills. And it's not a new idea. CHM has been around since 1981. It's predictable and proven and they've shared over $13 billion in medical bills for their members. Plus, you get more flexibility. There are no network restrictions, and you don't have to wait for open enrollment. Now let's Talk about how CHM helps your budget because programs start at just $115 a month and many families save hundreds of dollars a month compared to traditional options. So if you are tired of feeling stuck, check out Christian Healthcare Ministries. Right now, CHM is offering new members a 50% credit towards their first month of membership. Go to chministries.orgbudget and use promo code RAMP. That's chministries.orgbudget and Use Promo code Ramsey.

[Dave Ramsey]

One of the signs after all the years of doing this that we know when someone ready to change their life is when they've had an I've had it moment where they say, that's it, I've had it. I'm sick and tired of being sick and tired. I feel like a rat in a wheel. I run, run, run, run run run, run, run, run. Get nowhere. I'm sick of this. When you reach that point, we're ready to help you. Cause that's the point. That's when things change. Cause that's when you're ready to sacrifice to win for the first time. Otherwise you're too worried about your own dadgum cooking comfort to go win. If you're sick and tired of being sick and tired and having nothing to show for it, we've got a way out. The Every Dollar budgeting app will not only help you get on a budget, but it's build you a personalized Ramsey plan that helps you find extra money every month. You have a coach in your corner. It's like having Rachel, me in your ear, and Jade and George and even Deloney. In just 15 minutes, you'll find thousands in hidden margins, and you're gonna feel like you got a raise. Don't be normal. Get sick and tired of being sick and tired. Live like no one else. Start every dollar for free in the App Store or Google Play. Evan is with us in Tulsa. Hi, Evan. What's up?

[Caller]

Hi. How are you guys?

[Dave Ramsey]

Better than we deserve. How can we help?

[Caller]

My husband's extended family likes to meet for their birthdays, for dinner, and cards are exchanged with money at each gathering, and. And we're a bunch of grown adults, and I feel like it's just a little unnecessary, and I just want to know how I can be the bad guy to get kind of put a stop to it.

[Dave Ramsey]

Oh, I wouldn't do that.

[Caller]

Oh.

[Dave Ramsey]

Wouldn't do that at all.

[Rachel Cruze]

Well, how much?

[Dave Ramsey]

I would have him do it, but I wouldn't do it.

[Caller]

Well, he always makes me the bad guy, though, you know? I know.

[Dave Ramsey]

That's the problem. You're gonna be the Wicked Witch of the West. It's his family. He's got to deal with them, not you.

[Caller]

Well, I might already already be that with the family. So I just want.

[Rachel Cruze]

So why do we want at this point, then?

[Dave Ramsey]

Why do you get invited to the party?

[Caller]

That's a great question. I wish they would understand.

[Dave Ramsey]

Because you give money, that's why. Yeah, you bought your way.

[Rachel Cruze]

I mean, how much is it? I'm just curious.

[Caller]

Usually. And. Okay, I would also say my husband's a very generous man. Like, he's not one he'll like. It's fine. It's fine. Whatever. And so usually we put, like, you know, 60, 80 bucks in each card.

[Dave Ramsey]

Good God.

[Caller]

Thank you.

[Dave Ramsey]

That's weird.

[Caller]

Thank you. Oh, my gosh.

[Rachel Cruze]

Okay. How many? Okay, I. I just. I'm trying to picture how many people are at the table. How, like, how many brothers and sisters, spouses, parents.

[Caller]

He's an only child, and I think. So they view their family, like, cousins, aunt, as, like.

[Rachel Cruze]

Oh, it's not even, like, siblings.

[Caller]

No. Oh, no, no, no, no.

[Dave Ramsey]

How many people are at this dinner?

[Caller]

Uncle, grandpa. So usually it's 1, 2, 3, 4, 5, 6, 7. Not including us.

[Dave Ramsey]

Okay. Not counting grandkids, there's eight of us. Rachel, Winston, Daniel.

[Caller]

No, there's no grandkids.

[Dave Ramsey]

So there's no. Not counting grandkids. So there's eight of us. I can see all eight of us sitting at a table. And the chances of us giving each other money is precisely zero.

[Rachel Cruze]

The degree of getting a birthday.

[Caller]

Brother, are you lucky to get a text from me.

[Dave Ramsey]

You're lucky to get a text.

[Caller]

Yeah, yeah, but.

[Rachel Cruze]

So it's been a tradition forever and ever. But these are all 30, 40 year old, 50 year old people.

[Dave Ramsey]

50. Yeah. And 60 and 70.

[Caller]

Yes. Yeah. And there's a birthday tomorrow. That's why I'm calling right now.

[Dave Ramsey]

Too late. You're in on that one. You can't fix that. That one.

[Caller]

Well, on that one, yeah. But like, how do I bring up like.

[Dave Ramsey]

You don't.

[Caller]

I don't mind getting together.

[Dave Ramsey]

You don't. Your husband has to. And if he won't, it's not going to happen. But he just doesn't want to upset his mommy.

[Caller]

No, it's not even his mom. I think his mom would be completely fine with us doing it, but just people who go with the flow. They don't want to cause any risk.

[Dave Ramsey]

Yeah, exactly. I wouldn't cause a rift. I wouldn't cause a stink. I would not make it about them. I would not make it. His job, though, is to fix his family, not yours. Really? That's bad mojo. You do not want to get in that relationally. But he should sit down and say, hey, guys, we're working on some financial goals and we'll be happy to pay our part of the dinner and come to dinner with everybody and celebrate and we'll send you a nice text and buy you a nice card. But we're not going to give grown adults any cash anymore because we're working on some other stuff. We love you all, though. Hope it works out for you. And he just needs to raise his hand and say that. I did do that inappropriately, actually. I had my wife's participation and she may have actually done it. She should have done it. Her family, they all. There's 90 million of them and they all gave each other Christmas gifts. And she's got like five brothers and sisters. There's 13 grandkids. There's people everywhere, all over this house. And we go down there and you buy all these adults that you see twice a year. And I love them, they're good people.

[Rachel Cruze]

Yeah, we're buying all the time.

[Dave Ramsey]

We're on three weekends or some socks and it's just. Or whatever. Try to guess what University of Tennessee paraphernalia they need this year or whatever. It is, right? And we finally, when we went broke, I told Sharon, I said, the little kids under 12 get a gift. Everybody else gets a nod or we'll draw names. And so she said, oh, that's a good idea. We'll draw names. And I said, okay. And I don't remember whether she brought it up at Thanksgiving or I did, but she raised her hand and she said, hey, guys, we're broke. We're drawing names this year because we can't do everybody's gifts. And we'll buy the kids under 12 the baby's little baby gifts or whatever because it's Christmas. And we drew names. So it was a similar discussion, by the way, that went real well. Everybody else went, oh, yeah, we kind of thought the same thing, but we wouldn't want to be the first one to bring it up.

[Rachel Cruze]

Yeah. And if anything, Evan, and I know you're not major fans of the family, but if he wanted to give some, like, thoughtful gift or something, you know what I mean? Like, you can do something for 20 bucks of like, hey, I saw this, you know, uncle. You know, Uncle Rick, and I thought of you, and that's his birthday gift versus giving a check of 70 or

[Dave Ramsey]

2320s or some 420 something.

[Caller]

Yeah, yeah. Okay.

Yeah.

[Dave Ramsey]

But let me say this, Evan, you're correct. This is absurd.

[Rachel Cruze]

But if it, if it ends, it almost wouldn't be a hill, though, that I would just push and push and push and push because it happens six times a year and it may be a thing. You just. If you didn't want to address it, you got to just live with it. And it's a roll the eyes kind of thing. But he should. But because it is kind of gets.

[Dave Ramsey]

I don't disagree. It's weird. It's just a bunch of 60 year olds giving each other 80 bucks. That's just weird. Okay. But, yeah, but if you want to do it, it's okay. I just don't. I think it's weird. But yeah, and I just raised my hand and go, we have some other goals. We're not doing it. But your husband has to do it. Otherwise you're just going to come off all stinky Evan. You don't want to be stinky Evan. Yeah, no, always let. When you have a conflict with the other side, you let the other side handle the other side.

[Caller]

Mm.

[Dave Ramsey]

That's, you know, because otherwise you end up being the stinky one. And it's just. It's not a plan. Not a plan. Linda is in Knoxville. Hi, Linda. How are you?

[Caller]

Good.

Thank you for taking my call, Dave and Rachel.

[Dave Ramsey]

Sure.

[Caller]

My question is about 529account that has been growing since my daughter, who's about six years out of getting her masters, did not have to use much of it. And it has been growing and growing. She's single with no children.

[Dave Ramsey]

Did we not use much of it?

[Caller]

She got a wonderful scholarship.

[Dave Ramsey]

You can pull that much out without any taxes. The value of that scholarship can be withdrawn with no taxes.

[Rachel Cruze]

Or is she too late?

[Dave Ramsey]

Six years ago, you might have to go back and you might have to file an amended return and. Well, you wouldn't have to file unless you got audited, but you know, you might have to go back and do that, but talk to your tax advisor about how to do it. But you can pull the amount, the value, market value of the scholarship out at any time with no taxes or penalties.

[Caller]

This was worth the call. Wow. Okay.

[Dave Ramsey]

Well, since you didn't pay nothing for it, it definitely was worth it.

[Caller]

Well, no, high, high value. And your high school curriculum has a lot to do with why all three of my children are very financially stable.

[Dave Ramsey]

Wow.

[Caller]

I'm honored.

[Dave Ramsey]

So what was her scholarship worth, do you think? Was the tuition worth

[Caller]

15 a semester? So 100,000.

[Dave Ramsey]

How much is in the 529?

[Caller]

330.

[Dave Ramsey]

Awesome. We can get a bunch of it

[Rachel Cruze]

out and then would you take the rest out and pay taxes on it?

[Dave Ramsey]

10% penalty plus taxes on the growth on everything else. Or you can move it to a sibling or a child.

[Caller]

Yeah, she's. She is one who's earning the least out of her siblings, and so they're fine. And she is really wanting to look at getting a house. And that's kind of what makes my

[Rachel Cruze]

heart hurt is there's money sitting out there.

[Dave Ramsey]

Yeah, you're gonna get, you know, you're gonna get a hundred thousand out for the house easy. If you pull the other 200 out, you're gonna get a 10% penalty on the growth only. I don't know how much y' all put in and on and taxes as well. If you're planning a summer trip, you're probably spending a lot of time getting everything ready. Because responsible people prepare for things that matter and try to travel has a way of reminding us life can change fast. That's why I recommend Mama Bear legal forms. See, a lot of people put off getting a will because they think it's complicated, expensive, or they'll have to sit in a lawyers office for hours. But without a will, your family is left trying to figure out who gets what and who takes care of your children. Instead of grieving. Mama Bear helps you solve that problem. They make completing your will easy, affordable, and specific to your state. The whole thing is designed to help you quickly get a will done without hiring a lawyer. In fact, you can finish your will in less time than it takes to pack your carry on bag. So before you load up the car or get on a plane this summer, go to mama bearlegalforms.com and make your will. Use the promo code Ramsey and save 20%. That's Mama Bearlegalforms.com promo code Ramsey. Ann is in Salem, Oregon. Hi, Ann. How are you?

[Caller]

Hi.

Pretty good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

I was married for almost 43 years. I divorced my husband. I moved out into an apartment. Apartment. He moved in. He's in the house now. And we can't get rid of it because he will not get out of the house. He's been there for like two and a half, almost three years. I don't know how. He tells me he can't pay the rent and taxes and everything and then move to somewhere else and pay that too. So I'm kind of confused. And how do I get him out of the house to clean up the house?

[Dave Ramsey]

Okay, so it's not selling because it's cheap junkie.

[Caller]

Well, that outside the yard is pretty messy and stuff, but I just. And they do show it. One lady did offer 250, but she's a flipper. She wanted to buy it cheap and flip it, you know, and that wouldn't give us probably about 360.

Okay.

[Dave Ramsey]

All right. 43 years. Anne.

[Caller]

Yeah. I should have left a lot sooner, but I didn't. It's one of those things.

[Dave Ramsey]

Wow. What.

[Caller]

What.

[Dave Ramsey]

What is your income?

[Caller]

I have every month is 22.97.

[Dave Ramsey]

How old are you?

[Caller]

71.

Okay.

[Rachel Cruze]

How much you guys owe on the house?

[Caller]

About 152,000.

[Rachel Cruze]

Okay.

[Dave Ramsey]

What does he make?

[Caller]

Well, he's retired from the. From. I won't tell you where, but he's retired and he. I get 40% of his pension. He gets 60%.

[Dave Ramsey]

Your 2200 is 40%?

[Caller]

No, my. It's like 1654 is my 40%.

[Rachel Cruze]

Where's the rest coming from?

[Caller]

Social Security, so I barely get by. And I have about 120 left for

gas and food, which, you know. Yeah.

And I've got 6,800 in credit cards,

[Dave Ramsey]

which he doesn't really have. He's correct in that he doesn't have the money to pay rent and the house payment.

[Caller]

Right, right, right.

[Dave Ramsey]

And neither do you.

[Caller]

Right.

We're kind of stuck.

I don't know what to do.

[Rachel Cruze]

In the plan, in the divorce that he. What, he was going to sell the house and you guys were going to split the equity?

[Caller]

Yeah, or else he was going to buy me out. But he can't refinance. Yeah, he says he can't. I don't know. But he has.

[Dave Ramsey]

I don't think he can. I don't think he has the income if that's his only income.

[Caller]

Yeah, it is.

[Dave Ramsey]

Yeah. And. Well, I mean, so. So if you got your wish and he moved out and then your house gonna get foreclosed on, isn't it?

[Caller]

No, that's lower the price enough where somebody would buy it. But I. I'd like to. I like it cleaned out so I could, you know, paint a few things and make it look a little nicer. It doesn't look real good right now.

[Dave Ramsey]

Yeah. Okay, so it's on the. It's on the market at 360.

[Caller]

Right now it's 350.

[Dave Ramsey]

350, okay.

[Caller]

Yeah, he started at 440, which is good. Crazy.

[Dave Ramsey]

Okay, Well, I mean, The problem is you light a fuse, that's six months to a year long before the house gets foreclosed on when he moves out. And so you go over there, paint it, you clean up the yard, and if it doesn't sell every single month, you're going to be dropping the price. Price. Because you're going to have to get rid of it. You may wish you took the 250.

[Caller]

Yeah, I'm kind of thinking that I should have.

[Dave Ramsey]

Well, I'm just saying if you light this fuse, you're creating a pressure on time ticker.

[Caller]

Yeah.

[Dave Ramsey]

Time's ticking when he moves out. Now the clock starts ticking. The sand start going through the hourglass. The pressure's on. You follow me?

[Caller]

Yep.

[Dave Ramsey]

And I just. I want to be careful what you sign up for that, you know, what you're signing, what trip you're taking here. What would I do? Obviously, he is not going to help by cleaning up the artery or would have already. For his own sake, he should have done that because he would get more money in his pocket.

[Caller]

He's disabled, too. He had six back surgeries, and I don't know what it can lift or.

[Dave Ramsey]

Yeah, he's not doing anything. Okay. And for good reason. Now, we're not going to accuse him of. Okay.

[Caller]

And can't. He can't afford to hire people to do it.

We don't have the money to.

[Dave Ramsey]

No, you don't.

[Caller]

You don't.

[Dave Ramsey]

So you have children?

[Caller]

Growing children, yeah.

[Dave Ramsey]

Where are they?

[Caller]

One's here in my town, but they both have back problems. One's in Roseburg, one's in here, Salem.

Okay. All right.

[Dave Ramsey]

And so obviously they're not able to help, and they were probably affected by the divorce. In terms of their motivation to help, one is.

[Caller]

Yeah. Yeah, definitely.

[Rachel Cruze]

What's he paying in mortgage payments every month?

[Caller]

About what I'm paying. I'm paying 1122, and he's paying probably about 1312 or 1300 or 13.

[Rachel Cruze]

I'm just wondering rent wise, if. If there's anything cheaper.

[Dave Ramsey]

I don't know if him moving out and you going over there at 71 with a paintbrush and a trash can is going to make this deal work enough that I'm thrilled with the bomb that we set a fuselage on.

[Rachel Cruze]

May not move that much.

[Dave Ramsey]

Yeah, I mean, I don't know. I don't know the house, I don't know the deal. So who's. Do you know the realtor? Do you trust the real estate agent?

[Caller]

I do. Well, we bought the house from the same guy.

[Dave Ramsey]

Okay. And what does the real estate agent say you should do?

[Caller]

He says just keep waiting for the right people to come by, which I don't agree with because we can't keep waiting. I was going to pay all my credit cards off when this house sold. Now I still got credit cards, bills.

[Dave Ramsey]

How much credit card debt do you have?

[Caller]

6,800.

[Dave Ramsey]

That's not bothering me much. We'll get there. That's not a panic. You're eating. Everything's okay. I don't. It's not ideal, but. None of this is ideal.

[Caller]

Yeah.

[Rachel Cruze]

And no retirement accounts or anything. It's just the pension.

[Caller]

Right.

[Rachel Cruze]

Just wondering if there's any other.

[Dave Ramsey]

There's no money in the.

[Caller]

Well, not that I know of. I don't. He's. He's not the truthfulest person in the world, but I don't know what he's got, really. But I doubt if he has much more. Mm.

[Dave Ramsey]

So sad. And I'm sorry. So what I would do would be to try to work with your ex to allow some access and begin to get some things clean, cleaned up that you would do if he moved out while leaving him there and dropping the price. And if that doesn't work, Then you're gonna have to ask a judge to have him move if he doesn't voluntarily want to Move. Because he's gonna stop.

[Caller]

What?

Because I. I did call him one day. I was gonna talk to him about the house. He hung up on me. He wouldn't even talk to me.

[Dave Ramsey]

Okay, well, then you're left with a judge, I guess. Yeah.

[Caller]

Yeah.

[Dave Ramsey]

So I'm thinking either we sell the price, either we drop the price, or. And, or you move out. And if he won't do that voluntarily, the judge will have to tell him to do that because he's invited. I assume there's a divorce decree saying the house has to be sold and the house is not actively being marketed, it's not in marketable condition, and so you can force that. But Ann, be aware you may be playing some cards here that lights a fuse on this bomb that you lose the house. I mean, it's possible. Possible if the real estate market slowed down for some reason, there's a jump in interest rates and nobody wants to buy anything. Even the flippers are out of the market and that price drops on down. Yeah. You may be wishing you'd taken the 250. I'm kind of wishing you'd taken the 250 right now, but I don't think he wanted to take it either.

[Rachel Cruze]

Yeah, well, if it's at 350 some, I mean, there's probably other flippers in the area. I mean, hopefully you can get it. But the, but the thing is, is if you don't get somebody to make a transaction, transition, transaction quickly, that real estate, that can go months. And that's the, that's the part that scares me where I'm like, I don't feel like you have that financial margin

[Dave Ramsey]

to go that long. Don't confuse this move with any of the 43 years worth of emotions. If there's any. I didn't detect it. But if there's any anger or, Or I'm revenge, I'm hitting back. Or I'm trying to make this guy finally behave one time.

[Rachel Cruze]

Yeah, no.

[Dave Ramsey]

Or something like that. You need to make this move because it's the right strategy.

[Rachel Cruze]

I think she wants $100,000 of equity to pay off credit card debt and live exactly. Live a little more comfortably.

[Dave Ramsey]

Welcome back to the Ramsey show in the Fair Winds Credit Union studio. I'm Dave Ramsey, your host, Rachel Cruz, Ramsey personality. My daughter is my co host. Today Brock is in Manhattan, Kansas. Hey, Brock, what's up?

[Caller]

Hey, guys. How you guys doing?

[Dave Ramsey]

Better than we deserve. How can we help?

[Caller]

So I got married a few months ago and a few weeks ago we found out my wife Is also pregnant. Yay. Yeah, I know. We're very, very excited, and we have a little bit of a debt problem. So she had a car payment that she paid off all on her own. And then after we got married, I helped pay off the credit card, which wasn't too much. It was about. It was about 2,000. But she also has about $177,000 in student loan debt. And I was wondering how we should attack that.

[Dave Ramsey]

Is she a doctor or a lawyer?

[Caller]

I wish I could say either one, but she is. Either she is a at home daycare, or she's a freelance nanny, basically.

[Dave Ramsey]

A freelance what.

[Rachel Cruze]

What was her degree in? Nanny?

[Caller]

She actually never finished college. I. I know.

[Rachel Cruze]

Oh, no.

[Dave Ramsey]

She got a degree in what?

[Rachel Cruze]

She didn't finish.

[Caller]

She didn't get her degree.

[Rachel Cruze]

Was it a private school and private. It was.

[Caller]

It was a D1 state school.

[Rachel Cruze]

Oh, so out of state. Probably.

[Caller]

Yeah. And she. Yeah. This is a bad situation.

[Rachel Cruze]

Oh, man.

[Dave Ramsey]

Bad's probably not the word. Dumb might be the word. Wow.

[Caller]

What.

[Dave Ramsey]

How close did she come to finishing?

[Caller]

She had a little bit left. It wasn't a ton, but it was enough where it was like, we can't afford to keep going.

[Dave Ramsey]

The degree is in what. What was she studying?

[Caller]

Like a bachelor's?

She was. She was.

She started out in, like, education. She wanted to be a teacher, and then she decided that she changed her mind and wanted to be. She was doing business marketing, what I'm doing now. But thankfully the. The army pays for mine, so. So we don't have to worry about it.

[Dave Ramsey]

What do you make?

[Caller]

I make about 54,000 a year, and she makes about 36.

[Dave Ramsey]

Okay.

[Caller]

And then I also have about. I do have some savings, thankfully. I have about $35,470 in a mutual fund that just basically mimics the S and P. And then I also have just under 30,000 in a money market.

[Rachel Cruze]

Okay.

[Dave Ramsey]

Okay. And you have how much owed on her car?

[Caller]

Still none. That's all paid off.

[Dave Ramsey]

And the credit card paid off as well. So the only Debt left is 175,000?

[Caller]

Yes, sir.

[Dave Ramsey]

How old are you guys?

[Caller]

I'm 20 and she's 23.

[Dave Ramsey]

And you graduated from college as well?

[Caller]

I am about 65% through mine. I'm doing it online while I'm in the army.

[Dave Ramsey]

You're in the army?

[Caller]

Yes, sir.

[Dave Ramsey]

I thought you were in marketing.

[Caller]

No, that's. That's what I'm getting my degree in.

[Rachel Cruze]

Oh, and is your school being paid for?

[Caller]

Yes, ma'. Am.

[Dave Ramsey]

So you see your 54, 000 is your army service, your military service?

[Caller]

Yes, sir. Yes, sir.

[Dave Ramsey]

And she makes 36,000 as a nanny.

[Caller]

Yes. Okay.

[Dave Ramsey]

And you have 70,000. You have 30 and 35,000, 65,000 laying around.

[Caller]

Okay.

[Dave Ramsey]

All right, all right. So, yeah, what I would do is I would continue to stack cash until the baby comes. And when the baby comes and everyone's healthy, I have bad news. Your wife is not going to be a stay at home mom. She's going to be working. She has $175,000 worth of debt she signed up for, and so she's going to be working for a while. So we need to get used to that idea because when you have your first baby, particularly, there's a tremendous draw to want to be home with a child unless someone has a tremendous professional draw into the marketplace. And so you guys need the 85,000. So let's pretend that you stack another $10,000 worth of cash. That's $75,000. And when the baby comes home and is healthy from the hospital and mommy's healthy and mommy goes back to work, we write a check for $75,000 on, put it on the student loan, and you have $1,000 in your account and you attack the 100,000. Thousand.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

With a vengeance. And you guys work extra. You do everything you can. You sell everything in sight. When are you going to re up with the military?

[Caller]

I wasn't planning on it, but when

[Dave Ramsey]

will you, when will you leave the military?

[Caller]

I have two and a half years left. Okay.

[Dave Ramsey]

With a degree.

[Caller]

With a degree.

I will, I will leave with a degree.

[Dave Ramsey]

Yeah. Okay.

[Caller]

And then I will also make more as I, as I stand.

[Dave Ramsey]

I would hope your income will go up substantially at that point.

[Rachel Cruze]

It's going to be a three or four year.

[Dave Ramsey]

Yeah. You're going to be a while to get through this hundred thousand that's still remaining after the baby comes.

[Caller]

Yes, sir.

[Dave Ramsey]

But you guys are going to get used to working a lot, both of you, to clean up this mess.

[Rachel Cruze]

Well, and it's a good thing that she is and what she does because she can be watching her baby along with another baby or two, assuming the

[Dave Ramsey]

people that she's nannying for are good with that.

[Rachel Cruze]

Yeah, Yep, that's right. But so there's probably, there's some flexibility because if not, she's going to be paying for child care and it's going to be eaten into that. You know what I mean? Like you're, it's not, it's not going

[Dave Ramsey]

to be that kind of Side and face palm. Because I feel so bad for this baby and this young married couple that was terrible that, that they're, that they have been screwed by student loans and by the whole lie that Congress has put out by continuing to issue student loans. Congress has screwed Americans with a student loan.

[Rachel Cruze]

This generation, millennials and Gen Z's, yeah,

[Dave Ramsey]

they're just, they're screwed. And you're sitting there and who loans somebody $175,000 to get an almost degree?

[Rachel Cruze]

An 18 year old.

[Dave Ramsey]

Yeah, only the US Congress would do that. Only there's only one organization that's that screwed up and it's the U.S. congress. And they go, oh, there's a student loan crisis. It's awful. We should forgive the student loans. Biden said, well, yeah, but you keep making them, you bunch of bozos. So why do we need to forgive them if you're going to keep making them? You keep making these loans over and over and over. And some poor young girl goes across the state line and goes to another state to get a degree and oh wait, she didn't. Did you know that 54% of the people that start 4 year degrees finish them. That by definition means half don't. And you get where she is. And she married a young man serving his country. Thank you sir for serving your country. And now they've got a beautiful baby on the way. What an awesome start to life. But they got this cloud hanging over their head full of nine that Congress set up. And we Americans have allowed this because we keep electing the morons that keep this stuff on the books. They're called congressmen and congresswomen. Yeah, they're morons because they keep doing this over and over and over and over again. And then they talk about it like a politician. It's awful, this sort of shit. Well, you caused it. You can't talk about it being awful. And you sit there and call it and moms and dads. You ought to have your butt kicked up around your neck and wear it like a collar. If you let your kid do this, you really should. I mean, what kind of parent says, oh honey, go live your dream, go get a degree in left handed puppetry and go 100,000, $175,000 in debt. You parents ought to be smacked in the next week for your lack of backbone to stand up to your own teenager. No, you're not doing that. That's stupid. That's a parental answer.

[Rachel Cruze]

Welcome to a Ramsey family.

[Dave Ramsey]

Hey guys, Dave Ramsey here. Every day on this show we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Rams. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com. If your private student loans are in default when you've fallen so far behind, the loan is considered unpaid. That's what default means. Why Refi might be able to help. They help borrowers in tough situations. Explore low fixed rate refinancing options that fit your budget. Go to yrefi.com Ramsey that's the letter y r e f y.com Ramsey might not be in all states.

[Rachel Cruze]

Today's question comes from Sam in North Dakota. My wife and I are 29 with no debt and are currently saving for our kids car college. When the rainy day comes and you have to dig into your three to six months emergency fund, do you pause investing and saving for college to focus on replenishing your emergency fund? I would say depends on how much you have to dip into it. Hopefully you don't have to go through all the paperwork to pause all that, especially retirement, having to go into HR and pausing it to refill it. But if, if it's a significant amount, yes, you probably would. But in a perfect world you would just cash flow some extra money and get it filled back up in the next month or two to it would depend.

[Dave Ramsey]

It kind of feels like this is a hypothetical.

[Rachel Cruze]

Yes.

[Dave Ramsey]

Because if you have a situation where let's say you got $15,000 in your emergency fund and you take 12 out, you're probably going to stop everything for a little bit and rebuild that and you wouldn't even ask the question. But most of the time what has happened in reality with people we're coaching and, and Dave and Sharon's house and Rachel and Winston's house is you have a little bit of an emergency or some kind hit and you cash flow the emergency without even touching the emergency fund. A lot of times, if not your emergency fund takes a little hit, a 3 or 4,000, $5,000 hit or something like that, and you just cash flow the replenishing like you were saying. But if it takes a major hit, most people don't even ask. They kind of know I got to get that rebuilt.

[Rachel Cruze]

Yeah. Like if you lose a job, for instance, I mean Everything kind of goes on pause until we get the income back, you know, so that would. That would just happen naturally.

[Dave Ramsey]

Exactly. So, yeah, you got 401k, certainly would have been stopped. But, yeah, you stop your 529s, you stop the other spouse's 401k, that kind of stuff. You stop all investing while we, you know, get straightened around. But again, that you're diminishing your expenses or your money going out.

[Rachel Cruze]

Right.

[Dave Ramsey]

In order to not have to touch the emergency fund. And that's case. Elizabeth. Elizabeth is with us. That is in Salt Lake City. Hi, Elizabeth. How are you?

[Caller]

Hi. Good. How are you doing?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So I fear that my husband and I have gotten ourselves into a bad situation. We just moved into a new house before selling our old house. And then we also have some rental properties that are not currently rented. So we are basically drowning in mortgage debt. And the house that we're in now, we've been in for about a month. And we're almost considering listing this house, too, and just seeing which one sells first just to get one sold. And so I just wanted to see, I guess, what you would do in our situation.

[Dave Ramsey]

So the other two are on the market.

[Caller]

So one is not on the market. We're trying to get it rented. It's a duplicate.

Has a.

It's a house with a. Oh, no,

[Dave Ramsey]

no, no, no, no. Sell it.

[Caller]

Okay.

So you're broke.

[Dave Ramsey]

You don't need a duplex.

[Caller]

Okay. We just don't know that we could sell it. We could make probably a thousand a month on it. We just don't. I guess we haven't listed it, but we don't know that we could sell it to make enough money.

[Dave Ramsey]

But, I mean, I want you to sell it anyway.

[Caller]

On it.

[Dave Ramsey]

It's not. It's not an asset. It's a liability because it's not renting for enough to screw with. If you think you got $12,000 gross cash flow, you know what that means? That means annually you're probably losing money when you incorporate. Vacancy and repairs and legal fees for evictions and so on. Yeah. You're not making money.

[Caller]

Okay?

[Dave Ramsey]

That duplex has zero fun in it.

[Caller]

So list that and then just keep our other one.

[Dave Ramsey]

I get them both listed. Get them both listed aggressively so I don't have to sell my new house.

[Caller]

Okay. The house that we moved out of, we have had it listed for four months, and we've had almost no interest.

[Dave Ramsey]

Drop the price.

[Caller]

We've dropped it. 25,000.

[Dave Ramsey]

Drop it again.

[Caller]

Okay. Just keep dropping it until and when

[Dave Ramsey]

you lose your butt on this. Learn your lesson.

[Caller]

Yeah.

[Dave Ramsey]

You should never have done this deal.

[Caller]

Yeah.

[Dave Ramsey]

You turned yourself into a motivated seller.

[Caller]

Yeah. Okay.

[Dave Ramsey]

Yeah. And I hope you don't have to sell your house. You may have sell your house though.

[Rachel Cruze]

How much, how much short are you guys a month, Elizabeth?

[Caller]

Well, I don't really know. My husband does construct. He has a, he has a construction company. So he. Some months makes no money. Some months will make 50 grand. But we have, we have about $100,000 in our savings and we are feeling like for the next few months if we keep all these properties we're going to be taking out of our savings. And then we have some credit card debt too.

[Dave Ramsey]

Yeah. How much credit card debt?

[Caller]

30,000.

Okay.

[Dave Ramsey]

Yeah. My hope is, is that you can get these two properties sold really fast without having to dip into the hundred too much. And then you can write a check when that's done and get rid of the credit card debt. And you guys need to, you guys need to quit living hand to mouth construction businesses. I grew up in the real estate and construction business and too many people in our world think we can out earn our bad decisions and chaos. And I tried for a long time and I couldn't do it. And I don't think you guys can either.

[Caller]

The problem with dropping the price on the house we moved out of is that right now if we, if we sold at the price it's at now, we would make about 175,000. His dad loaned us the down payment for this house which was 150,000. So the deal was that he would loan us that until we sold the house and then we would use that money to pay him back. So would it be worth it then to just keep dropping the price?

[Dave Ramsey]

You may have to write his data check out of your hundred thousand. Thousand.

[Rachel Cruze]

Yep.

[Caller]

Okay. Okay.

[Dave Ramsey]

You've become that. It's that or sell the house you're in. I mean I don't care. But you, you called me and said you're drowning. I'm trying to keep you from drowning.

[Caller]

Yeah.

[Dave Ramsey]

And you have to get very precise, very clear and sharpen your machete to keep from drowning and quit trying to hold on to all these different things with I'm going to hold on to this. And the problem with this and I got a whole and it makes a thousand dollars and it's a stupid duplex in my daddy in law and you know, you just, you're going to have to go, something's going to give here. We better decide what it is or it's going to decide for us.

[Caller]

Yeah, I think the, one of the bigger problems is my husband really wants to. We have a few other rental properties that don't, I mean, make maybe a few hundred a month, but he wants to have eventually a bunch of rental properties that you're going to go broke.

[Rachel Cruze]

You can't. Yeah, you guys, you're going to go.

[Dave Ramsey]

You guys are going to lose everything.

[Rachel Cruze]

Elizabeth, I wish I could just wave a wand and just create peace in your life. You guys are just running and running and running and it's not worth the stress.

[Dave Ramsey]

He has, he has bought off on this idea that if you buy real estate, it'll make you rich. Real estate will cause you to go bankrupt if you're highly leveraged in it and you have no money. I know I did it. I'm an expert on that. I have a PhD in that. And so, you know, just.

[Rachel Cruze]

Did you guys have. What's the 30,000 in credit card debt? Was that just to keep something else? Is that lifestyle or was that a specific part?

[Caller]

That's my husband. For his, for his business. He will like run up his credit card for a job that he's doing and then when he gets paid for that.

[Rachel Cruze]

Yeah, you're living, y' all are all living backwards.

[Dave Ramsey]

If you guys, if you guys don't get your business organized and you don't sell off all this rental property and you're probably not going to. Going to, you're going to go broke. You're going to lose everything. It's going to come crashing down around your head. I've done this for 30 years. You have all the symptoms of somebody who's going to be bankrupt in 36 months. You're not going to make it if you don't get your freaking business act together and get your business acumen going where you actually know what you're making and quit running a dadgum construction company of this size out of your hip pocket with a credit card that's just completely privileged. You're going to have to add to your sophistication level to stay open. And you're going to have to quit borrowing money up your eyeballs on all these real estate deals and acting like there's no tomorrow and have to go to dad. When you bought a duplex, you bought properties that are cash flowing 100 bucks. Translation, they're losing money every year. You're losing money on all of that. And then you bought a house without having the other One sold. And you're handcuffed to your father. I mean, you guys have done, like, a whole laundry list of everything that's going to cause people to go broke. And if you guys don't rush and undo that laundry list, you're going to go broke. Yes. I hope I'm scaring you. I hope I'm terrifying you enough that you go in and put for sale signs on everything and you hire a freaking accountant and get somebody in there to straighten this construction company up and make sure it's actually making a profit. I'm not even sure it is. We may just be swapping dollars the way we do things over there. You guys gotta stop this. Elizabeth, you're scaring me to death. Hey, guys, George Camel here. You ever feel like you make good money and still have nothing to show for it, you run into Target for one thing and Somehow walk out $87 later with toothpaste paste and emotional support candles.

[Rachel Cruze]

Just me.

[Dave Ramsey]

Okay, well, that's the problem. Most people don't pay attention to how they spend their money, so it does whatever it wants. And that's why we created EveryDollar. It's a budgeting app that helps you create a simple plan for your money. Everydollar is simple. It's clear, and it helps track where your money's actually going. Plus, you get daily lessons to DOs and reminders along the way. It's like having a money coach in your pocket. Your money's been freelancing long enough. It's time to give every dollar a full time job. Go download everydollar for free on the App Store or Google Play. Adam is in Green Bay. Hey, Adam. Welcome to the Ramsey Show.

[Caller]

Hey, Dave. Thanks for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller]

Well, I thought maybe I could get Dave Ramsey to tell me it's okay to buy a new vehicle.

[Dave Ramsey]

Nope.

[Caller]

That's a short answer. Huh.

[Dave Ramsey]

Do you have a net worth of a million dollars or greater?

[Caller]

Not exactly.

[Dave Ramsey]

Well, it's either yes or a no. There's a not exactly. I mean, it's a math thing.

[Caller]

It's a no.

[Dave Ramsey]

Okay, a no. All right, then. If you're buying a new car, you're losing too much in value. I mean, it's very simple. You can do whatever you want to do. Dude. But that's. I don't find millionaires that ask this question. People that become millionaires don't ask this question. They don't say, how close to the edge of being dumb can I get and still become wealthy? They don't ask it that way they go. I want to stay way away from the edge. I'm going to drive an old used car and build up money because cars go down in value like a rock. That's where Chevy gets that.

[Caller]

Yep.

[Rachel Cruze]

All right, but what's your. What's your.

[Dave Ramsey]

What's the car?

[Rachel Cruze]

Yeah, well, I want to hear the numbers.

[Caller]

Yeah, well, we kind of have our heart set on a Toyota Sienna. For. We're in Wisconsin, so the all wheel drive is nice. This one can tow, which would be really handy for us. Got a couple small kids. We want to be able to have a little bit of extra room for toting people around. So that's the one we kind of settled on. And the trouble is, I would be very happy. My wife and I have talked about it. We'd be very happy to buy a used model for a few years old or maybe even a little bit older that has reasonable miles for a big drop down in cost. But the problem is with this one, man, you look at ones that are two or three years old and they're still going for virtually the same price as a new one. You got to get to 100,000 miles or better and, you know, six, seven, eight years old before you really see the prices coming down. In our case, we'd be buying cash, you know, so we're not financing it. And even with paying the cash, we still have our emergency funds stocked.

[Dave Ramsey]

What's your household income?

[Caller]

About 180.

[Dave Ramsey]

And this is what, an eighty thousand dollar car?

[Caller]

55.

[Dave Ramsey]

55.

[Caller]

Okay. All right.

[Rachel Cruze]

And brand new. They're going for what, close to that?

[Caller]

Yeah, well, that would be. That would be a brand new price, you know, tax title and all. That would probably be a little bit more about 57, 58, somewhere in that ballpark.

[Rachel Cruze]

And what other car do you guys have?

[Caller]

Yeah, well, my wife has got into a car accident, so we're kind of under the gun. And I have. I have a Tesla model. Why? That's also paid off.

[Rachel Cruze]

Okay. And worth What?

[Caller]

Probably about 30.

[Rachel Cruze]

Okay. I'm just trying to make sure you're

[Dave Ramsey]

within that 20, 24 Toyota Sienna. I'll sell you for $43,000 because I can buy it right now for 42

[Caller]

anywhere near me.

[Dave Ramsey]

I don't care if it's near you or not. For $10,000 you can figure it out. Yeah, yeah, I just looked it up online. It took me about a half a second while I was talking to you.

[Caller]

Okay.

[Dave Ramsey]

In other words, your whole price scenario is absolute bs. You've completely convinced yourself that the new one is the same price. It's not. Here's another one for 45 and another one for 45.24.

[Caller]

Should have. Yeah, I'm sorry, I should have specified. I think if you filter out the. If you're only looking at the all wheel drive and with the tool, the ability to tow, I think that's going to change a little bit.

[Dave Ramsey]

Okay. What are you towing?

[Caller]

We have a pop up camper and a trailer. Huh.

[Dave Ramsey]

Okay. And what's your other car?

[Rachel Cruze]

Tesla.

[Dave Ramsey]

A Tesla model Y. Oh, yeah, you said that. I'm sorry I missed that while I was looking up the Toyota. Okay. And. All right, you can do whatever you want, but the thing that the overarching decision making paradigm is what you have to fight against. And number one thing that you violated is. I mean, I haven't looked up, I honestly just typed in 2024 Toyota Sienna just to see what they're doing and they're all in the 45, 41, 42, 43. There's like seven of them on the first page. Came up 30 seconds later and I even, even, I haven't even searched yet. Okay.

[Caller]

Yeah.

[Dave Ramsey]

So I don't know about the towing part of the all wheel drive part. And she totaled her car. Her car was what?

[Caller]

It was a Nissan Rogue. And we were kind of, we were already. The funny thing is we were leaving the dealership from talking about getting the new vehicle when she got rear ended. So it's. All right.

[Dave Ramsey]

So. So problem number one is. And we all do this, so I'm not going to pick on you too harshly, I'm not gonna mess with you because you're asking the question in a proper tone and I appreciate that and thank you. I'll be nice. But. So when I do the thing that you're doing, it's just, I'm rationalizing and I'm trying to figure out a way to get what I want. And you can probably afford it and it's not gonna bankrupt you, okay. So you do whatever you wanna do, but I'm not gonna tell you to do it because you can buy this car $10,000 cheaper than, than new. For sure. 100% chance you can. And you just hadn't found it yet. You haven't looked yet, you just hadn't

[Rachel Cruze]

poked around and the urgency to replace

[Dave Ramsey]

and the, you know, and you know, we're moving up, for God's sakes, from a Rogue, which is a completely different vehicle. It's in a different class. The Sienna is a bazillion Times a better car than the Rogue, right?

[Caller]

Yeah.

[Dave Ramsey]

I'm really glad she's gonna be. I mean, and you know, we love a minivan. Yeah, it's a great, it's a great car. Maybe there's another class A minivan that's the same. They'll give you the same stuff, you know, the, the Honda Odyssey or something. Right. What's the one you got? Is that what you got, the Odyssey? Yeah.

[Rachel Cruze]

And so that's the, it's the queen jewel.

[Dave Ramsey]

Is it more. It's probably more.

[Rachel Cruze]

I don't know, probably similar.

[Dave Ramsey]

I got no idea. But it's a good car, though. And I don't know about towing and I don't know about all wheel drive and both those things are okay. But the second thing is this. You've got to adopt everyone, including you, Adam, and including me. The mindset of saying, okay, the rich get richer and the poor get poorer because the rich people keep doing rich people stuff and poor people keep doing poor people stuff and middle class people keep taking out car payments on new cars that they can't really afford to pull a pop up camper.

[Rachel Cruze]

But he said he's gonna pay taxes.

[Dave Ramsey]

He's not taking out payments. But that's what middle class people. And you're going to lose $10,000 when you drive it across the. When you go across the curb and it goes bloom, bloom. That was the sound of $10,000. That's what that sounded like.

[Caller]

Bloom, bloom.

[Dave Ramsey]

That's exactly what it sounded like. And so you've got to get out of that mindset that that's okay until you have enough money to waste that much money. Now I waste that much money. I buy new cars, but I've got several hundred million dollars in that way worth. And so I can afford the bloom Bloom sound. It's not that big a deal. The building I'm sitting in 600 million. So, you know, you just. That it's okay. But I want you to get there. I want you to be where you

[Rachel Cruze]

have millions of dollars. Whatever. You just threw out like insane numbers. Okay, no, I didn't. But to all of us just talking.

[Dave Ramsey]

The point is.

[Caller]

The point is.

[Dave Ramsey]

The point is you build wealth by not buying things that go down in

[Rachel Cruze]

value as your largest primary purpose with your income. You have a unique situation.

[Dave Ramsey]

I do, but I can't care about doing this stuff.

[Rachel Cruze]

Yes. And also you make a great income. I mean, like. Yes, but for the, but for people that we talk to that are, that are doing this, that are baby steps,

[Dave Ramsey]

millionaires People we talk to are different. They're not different. We're not better than them.

[Rachel Cruze]

Not that we're better. What you just said. You are sitting in a $600 million building.

[Caller]

That, that. That's not normal.

[Rachel Cruze]

That's okay. We're normalizing that life.

[Caller]

Everyone.

[Rachel Cruze]

The average person who makes 64,000 average millionaire. Can I finish.

[Dave Ramsey]

Doesn't buy a new car.

[Rachel Cruze]

The 100%. But they don't have to sit in a 600 million dollar building to that. The average income in America is $64,000. The baby steps. Millionaires that we talk to do very simple things. They live on less than they make. They invest into their Roth IRAs and their 401ks. They don't send $1,200 car payments to car companies. They pay themselves and they don't buy new cars. All of that you.

[Caller]

Yes.

[Rachel Cruze]

Yes.

[Dave Ramsey]

They don't buy new cars.

[Rachel Cruze]

So all that to say yes, you do not have to.

[Dave Ramsey]

That's how they became millionaires.

[Rachel Cruze]

It is. That is how they became millionaires.

[Dave Ramsey]

Same point. It's exactly.

[Rachel Cruze]

Are you serious?

[Dave Ramsey]

I'm dead serious.

[Rachel Cruze]

Okay. The average person isn't going to go and build a 600 million. You were thrown.

[Dave Ramsey]

No, that's not the point.

[Rachel Cruze]

And you said I.

[Dave Ramsey]

The point is.

[Rachel Cruze]

I said I or whatever.

[Dave Ramsey]

I don't want to be a hypocrite and say don't buy new cars when I do.

[Rachel Cruze]

Yes.

[Dave Ramsey]

Without explaining why.

[Rachel Cruze]

I can afford to a million dollars and anybody. Yes. If you have a net worth of a millionaires, you can buy a new car.

[Dave Ramsey]

I can afford it. I want you to be able to afford it.

[Rachel Cruze]

We're doing this.

[Dave Ramsey]

I want you to be able to afford it 100%. And so you know, Adam, we were harder on each other than we were you. That's great. You should not feel uncertain about investing. And you don't have to to. That's why we created Investing Essentials, a two night virtual event where George Camel and I walk you through my playbook for investing and wealth planning. We'll simplify everything from 401ks and mutual funds to passing on wealth so you can invest with confidence. Tickets start at $199. Get yours [e-mail] or click the link in the show notes. Our scripture of the day. Isaiah 43, 18 and 19. Forget the former things. Do not dwell on the past. See, I'm doing a new thing now. It springs up. Do you not perceive it? I'm making a way in the wilderness and streams in the world. Wasteland Albert Einstein said a person who never made a mistake never tried anything new. I like the Henry Ford quote too. He says those of us who make mistakes have those who never make mistakes work for us. Buying or selling your home is a high stakes proposition because one bad deal could really screw up everything. That's why Ramsey trusted connects you with vetted real estate agents who are trusted by Ramsey because they're high octane, high protein. To find one for free, a Ramsey trusted agent, that is go to Ramsey or click the link in the description if you're listening on YouTube or podcast. Okay. There's some backstory and history that's worth going into to make sure that we settle that last little interchange exchange. So number one, the bottom line is that wealthy people that we have studied, 10,000 millionaires in our research do not buy new cars even after they get their first one to $5 million. They're driving the typical is out. He was looking at a Toyota is honestly a two year old Toyota. When I'm interviewing millionaires, I ask them all the time what they're driving and they drive a 10 Chevy or they drive a Toyota, a crap old car. And I tell them to upgrade their car because they're still being too big a tightwash. They've gone too far. But that's the millionaires. People who want to drive new cars typically land and stay in the middle class most of the time with high car payments. That's what our data says. So we're not going to tell you to buy a new car until you have a million dollars and you can afford to take the loss. Then let's talk about me saying I've got sitting in a $600 million building or whatever and Rachel not liking that because it's not relatable and other people don't understand and they just blow me off because they don't want to listen to that. So the history is this. I've got several brand new cars that I bought and I don't want to be a hypocrite. The first time on the Dave Ramsey show it was called back in those days because it was me.

[Rachel Cruze]

I honor my elders. Thank you.

[Dave Ramsey]

Because it was me. No, I'm not. That's not the point. Back in the day when the dinosaurs roamed the earth, I was driving a. What was that? I can't remember the number on the thing. The little Mercedes, blue. It was a blue, little blue Mercedes coupe and it had 230,000 miles on it. I bought it for $7,000. It overheated on the way to a live event in Chattanooga. I was driving from Nashville to Chattanoo, Chattanooga. The vice president of live events was in the car with me. We're on the side of the road and I'm pouring water over the water heater, the radiator, trying to get it to cool off and get water back in to get to the live event. And the car is worth probably at that point, $3,000. I'd driven it in the ground. And he's like, this is ridiculous. You're a millionaire. You need to buy a good car. And I said, I can't drive a good car and be on the radio telling people to drive junky cars so they can get out of. Of debt. And he goes, yeah, you can. You need to be the proof that it works on the other side.

[Rachel Cruze]

Yeah, absolutely.

[Dave Ramsey]

And I live like no one else.

[Rachel Cruze]

Later, you get to live.

[Dave Ramsey]

Great. I was so worried that Twitter was going to attack me.

[Rachel Cruze]

That was before Twitter.

[Dave Ramsey]

It was, it was. I was so worried that the people were going to hate me.

[Rachel Cruze]

The family had.

[Dave Ramsey]

Because I was inconsistent and I was a hypocrite. And I bought a two year old Jaguar, which was a very nice car at the time and upgrade considerably from like $3,000 to $20,000 in those days or whatever it was. But I went through this great angst that it was okay for me to buy something nice when I had the freaking money.

[Rachel Cruze]

Yeah. So I, Yeah, you just had to overcome that.

[Dave Ramsey]

And instead I'm going to be the poster child that goes, you can go do this if you go do this. And so that's why I still don't want to come on the air and say, I buy a new car. I bought several new cars and I can afford to lose that money.

[Rachel Cruze]

Yeah. So you're justifying saying, here's what I have so that I can afford it.

[Dave Ramsey]

But I wasn't talking down.

[Rachel Cruze]

No, no, I don't think you were talking down at all. I was just saying you don't have to justify. I think majority of people that listen, they know.

[Dave Ramsey]

Well, no, some of them don't. And you'll read it in the comments later after this argument.

[Rachel Cruze]

But yeah, actually it'll be because you

[Dave Ramsey]

read the comments and I don't.

[Rachel Cruze]

Every now and then I will.

[Dave Ramsey]

Everything hits different after that first sip of Rockstar Energy.

[Caller]

Early gigs, late night sessions, power through anything with Rockstar Energy, Original Punched or Pure Zero. Rockstar Original is the OG and it always hits.

[Dave Ramsey]

Rockstar Punched will give you a serious kick of fruit flavor. Rockstar Pure Zero has all the taste and none of the sugar. Original punched Pure Zero. Whatever flavor flavor you're after, Rockstar has you covered.

[Caller]

Rockstar Energy live, Loud.

[Dave Ramsey]

James is in Chicago. Hi James, how are you?

[Caller]

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

[Dave Ramsey]

Better than we deserve for sure. What's up?

[Caller]

So my mother in law's got a house that recently went under contract to sell for 335 and then a couple weeks later it appraised for 360. They haven't closed on the house and they won't for another two or three weeks. Is there any recall course for to close that gap at all?

[Dave Ramsey]

Okay. Somebody missed it. The real estate agent.

[Caller]

I believe so. And you know, I hear all your commercials about the trusted real estate agents and I think it that was certainly the case. But no, no, no, no, no. Oh, I'm saying it wasn't a great age.

[Dave Ramsey]

You think the agent screwed up in the original pricing and confirmed convinced your mother in law to sell her house too cheap?

[Caller]

I believe so.

[Dave Ramsey]

Do you think the appraisal is actually accurate?

[Caller]

Yes, I do. Because the houses I was surprised when she said we should list at 335 and then she went and sold it before it even listed. It was just kind of a, you know, friend of a friend situation I

[Dave Ramsey]

bet everybody jumped on. So it's $35,000 underpriced or about 10%

[Rachel Cruze]

and there's already somebody, it's bought, it's

[Dave Ramsey]

under contract, supposed to close any minute. You're, you're. Yeah, well, I'm. The first thing that pops into my head, James, and I'm just going to off the cuff is well, she sold her house too cheap. That's sad because she's given her word, she signed a contract and I don't want her to get sued for specific performance under this contract. And then the second thing that pops into my head is I'm going to kick the incompetent real estate agent's butt. But I don't ethically. I can't tell her to break that contract.

[Caller]

Right.

[Dave Ramsey]

I wish she had done a better job and listened to you. I wish she'd done a better job at selecting her agent. And I bet I'm going to hear that this lady needs this money bad, doesn't she?

[Caller]

Something like that, yeah. Gosh, it would help if she had it. We could put it that way.

[Dave Ramsey]

Well, it always would help. Yeah.

[Caller]

Right. Yeah.

[Dave Ramsey]

Is there anything else going on in the deal? Is the contract contingent upon a. Whatever. Whatever, whatever like a, like the Sale A home inspection. Has the home inspection report come back?

[Caller]

The home inspection came back clear. There's. There's nothing pending there. The only thing I can think of is if their loan falls through last minute. Yeah, I mean, I. There. There's. Sorry, I'm trying to think. Three weeks until closing.

[Dave Ramsey]

Yeah.

[Caller]

So I don't know if their loan is approved. I. You know, I have no idea. But if there's. If that falls through, we can relist

[Dave Ramsey]

and then, you know, we solve that problem. Exactly, exactly.

[Caller]

You know, and then.

[Dave Ramsey]

And get a new real estate agent.

[Caller]

Certain, certainly.

[Dave Ramsey]

Yeah. I mean, unless there's something sideways in the contract deal that she can use to ethically get out. Like, I knew a guy who had his house on the market and the radon inspection came back and found radon, and they wanted him to spend $500 to fix the radon. And he said, no, contract's over. Canceled the whole thing because he wanted out of the deal. And he used that to get out of the deal, but he had a legal ethical out because he refused to fix the radon, and he had the right to do that in the contract. So, you know that. That's the kind of thing, like if they came back with something in the home inspection, you say, well, I'm not going to do that. You can do that. That's part of the home inspection process. And then they would go, well, you know, okay, we'll take it anyway. No, we're not going to fix it. And we're not based on this home inspection. We're not selling the house. You could just. I mean, there'd be a way to walk out of it then, legally and ethically, but I don't think there is here. You know, I'm not an attorney in Illinois. You might ask one to be sure, just to see.

[Rachel Cruze]

I know, but would you.

[Dave Ramsey]

Real estate agents are important.

[Rachel Cruze]

I know. And I would feel bad for that family on the other end who's in contract for something that you kind of go back on your word just from like a. I mean, it's worth it. It's. It's worth the. What I'm saying, like, the new price is what the house is worth. I get it.

[Dave Ramsey]

We think it is, you know, but

[Rachel Cruze]

that still feels off. Yeah.

[Dave Ramsey]

You gave your word. You sold the house. And people walk away from contracts like they walk away from everything in this society today. Too much. You should honor your word. And so I hate it. I don't like it. I've signed up for things I wished I didn't. Sign up for but.

[Rachel Cruze]

And also too it's a. You know, to sell a house today is harder than it was a few years ago. So she may have even. Even if it was at 360, had to negotiate down some anyways. Right? So you may not have gotten the full 60 anyways. You would never know.

[Caller]

But.

[Rachel Cruze]

Yep. Sorry, Jason.

[Dave Ramsey]

So you should get a high octane, high protein Ramsey trusted real estate agent or you shouldn't get one at all. This is what you get. You make a mistake, it's a $30,000 mistake. It's huge. That puts us hour of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace. And that's to walk daily with the Prince of peace, Christ Jesus.

[Rachel Cruze]

Your package says delivered, but delivered where exactly?

[Dave Ramsey]

The hallway, the lobby?

[Rachel Cruze]

Your neighbor's apartment?

[Dave Ramsey]

Instead of playing detective with your deliveries,

[Rachel Cruze]

get a mailbox at the UPS store. We'll sign for your packages, text you when they arrive.

[Dave Ramsey]

And to keep your deliveries low key

[Rachel Cruze]

under lock and key, get 3 months free mailbox services with a new annual agreement at the UPS store. For full details and to get your Coupon, visit the upsstore.com offer.