Financial Victories Don't Happen Without Sacrifices

Summary

THE RAMSEY SHOW

Episode Title: Financial Victories Don't Happen Without Sacrifices
Date: December 16, 2025
Hosts: Dave Ramsey, Rachel Cruze (from 21:16 on), plus guest experts

Episode Overview

This episode of The Ramsey Show centers on a core Ramsey Principles message: reaching financial victory always requires sacrifice, intentionality, and discipline—not shortcuts or debt-fueled “hacks.” Dave Ramsey, along with co-host Rachel Cruze, takes listener calls covering a wide range of financial queries: from side hustles and business growth to family budgeting, paying off debt, housing decisions, and handling life’s financial curveballs. The show features real-life stories of struggle and victory, offering actionable advice and memorable Ramsey wisdom along the way.

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Key Discussion Points & Insights

1. Entrepreneurship and Risk

Caller: Simon from Phoenix ([00:44])

• Young couple with a side hustle “Turo” car rental fleet, makes ~$30k net yearly, wants to expand without debt.
• Dave’s Core Advice:
  • Grow your business organically with cash.
  • Debt is dangerous, especially in new, disruptive industries.
  • Quote: “Patience. Build something that’s sustainable. ... There’s a 100% chance of change.” (03:11)
  • Reinforces “myth of continuity” – you can't assume the current state of business will last.
  • Highlights outside risks: regulatory changes, competition, technological disruption.

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2. Finances and Relationships

Caller: Ricky from Sacramento ([11:12])

• Struggles to bring up the topic of future finances with her boyfriend; worries about conflict and commitment.
• Dave’s Core Advice:
  • Money fights and problems are the #1 cause of divorce—getting united on a plan is crucial (“As long as we’re on the same page, doesn’t matter what the page is.” 12:36).
  • If partner refuses to join finances, take it as a sign they may not be ready for marriage.
  • Married couples build more wealth—a real statistical advantage (13x net worth).

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3. Mortgage Payoff Strategy & Next Steps

Caller: Alex from Salt Lake City ([15:23])

• Nearing mortgage payoff, asks what to do with $1,200/mo once mortgage is paid.
• Won’t have emergency fund if he puts all savings toward mortgage.
• Dave’s Core Advice:
  • Keep a full emergency fund before paying off mortgage entirely.
  • Upon payoff, prioritize three things with freed-up money:
    1. Retirement investments (15%+ income),
    2. Generosity/giving,
    3. Enjoy life (learn to both save and spend).

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4. Paying for College vs. Paying Off Debt

Caller: Corey from Bowling Green ([21:26])

• Income has increased, wants to pay for kid’s college out of pocket but is still in $50k debt.
• Dave & Rachel’s Core Advice:
  • “You can’t have three goals at once” (pay for college, maintain lifestyle, pay off debt).
  • Temporarily cut lifestyle and pause 401k; child can commute instead of live on campus; consider child working.
  • Quote: “Adults devise a plan and follow it. Children do what feels good.” (29:06)
  • Overextending by lifestyle creep, car loans with high income—a cautionary tale.

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5. Single Parent Wealth-Building

Caller: J.C. from Boise, ID ([32:45])

• Young widow, three kids, $31k car debt, rent, starting over.
• Dave & Rachel’s Process:
  • Start with baby emergency fund; attack car loan; no other debt; then emergency fund 3-6 months.
  • Emphasis on “release the guilt/shame”—giving grace for financial setbacks after tragedy.
  • Emotional encouragement: “You can do this. You’ve just been through hell.” (40:24)

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6. Career Crossroads & Changing Fields

Caller: Frank from Montreal ([43:41])

• Facing public sector layoffs, considering a master’s degree in data analytics, worried about ROI and career pivot.
• Dave & Rachel’s Wisdom:
  • Don’t go into debt for degrees; knowledge and skills matter more than credentials.
  • Get an entry-level job in the field and upskill (certificates > degrees), make sure it’s what you actually want before investing time/money in more school.
  • “Degrees do not make people successful. Knowledge… helps make people successful.” (51:04)

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7. Down Payment Dilemmas & Mortgage Choices

Caller: Brandon from Atlanta ([54:05])

• Considers putting less than 20% down and investing the difference, plus using a 5-year ARM due to expected short tenure in home.
• Dave & Rachel’s Take:
  • “Your formula left out something called risk and a good night’s sleep.” (54:45)
  • Ramsey research: self-made millionaires didn’t optimize mortgages this way—peace over maximizing return.
  • Adjustable-rate mortgages are a gamble—plans change; don’t introduce risk for a small theoretical gain.
  • Quote: “People that win with money long-term… it’s them. It’s not the system that you rig.” (60:00)
  • Consistency trumps picking the best possible investment fund.

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8. Joining Finances Before Marriage & Rental Moves

Caller: Talia from Orlando ([65:45])

• Engaged, finishing debt, getting booted from living with family, not yet married, worries about combining finances.
• Advice:
  • Don’t combine debts until married (“There’s not a ‘we’ until we’re married.”—Dave, 66:33).
  • Cheapest, non-glamorous living situation is best; cut lavish wedding plans and focus on marriage over “big party” (67:11).
  • Rice-and-beans budget will bring freedom—once out of debt, then celebrate.

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9. Living Paycheck to Paycheck Despite High Income

Caller: Lloyd from Seattle ([86:35])

• Earns $200k, owns expensive home, $100k debt (cars, lifestyle), bonuses make budgeting tough.
• Dave & Rachel’s Solution:
  • Need radical lifestyle change—austerity on cars, house, and spending.
  • If necessary, sell cars even if underwater; use bonuses to clear debt.
  • Quote: “The more radical you get, the faster you’re out of it.” (92:50)
  • Manage bonus-pay volatility by living on base salary & using bonus only for debt payoff.

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10. Other Memorable Calls & Advice

• Guns as “Emergency Fund” Expense: Dave, a gun advocate himself, argues against emotional gun purchases unless true, present danger; “That’s not an emergency—don’t escalate fear into danger.” ([106:34])
• Inheritance & Debt: Inherit $288k in investments, debate whether to pay off $127k in debt (student loans, cars, repairs).
  • Dave: “Mathematically you should pay off all the debt today—as long as you change your behavior for good. Otherwise, you’ll be back in debt again.” ([114:53])
• Retirement Abroad: U.S. citizen in Jamaica with $200k savings, no 401k eligible.
  • Use S&P 500 index funds, track a home purchase fund for the future, avoid paralysis.

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Notable Quotes & Moments

• On Debt and Risk:

  • “There’s a thing called the myth of continuity—the idea things will go on as they always have is mythology. 100% chance of change.” —Dave ([06:10])

• On Financial Unity in Marriage:

  • “If your partner says, ‘I just want to do my own thing [with money],’ he’s telling you he doesn’t want to get married.”—Dave ([13:21])

• On Lifestyle Inflation:

  • “Making this kind of money and having $20,000 in credit card debt speaks loudly.”—Rachel ([25:53])

• On Discipline:

  • “No discipline seems pleasant at the time, but it yields a harvest… There’s a price to be paid to win.”—Dave ([29:06])

• Consistency > Perfection:

  • “They weren’t that great at picking the right fund… but what they did do was never miss a month.” —Dave ([60:50])

• On Family Support & Community:

  • “If you’re not in a good church, find one… People of the Book are required to take care of widows.” —Dave to JC ([41:36])

• On Peace vs. Math “Optimization”:

  • “Peace is the win. When you do common-sense things and don’t complicate it, it’s an enjoyable life.”—Rachel ([59:43])

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Segment Timestamps (Key Content Only)

• [00:44] Simon: Scaling a debt-free car rental side-hustle
• [11:12] Ricky: Discussing money & marriage
• [15:23] Alex: What to do after paying off the mortgage
• [21:26] Corey: College funding vs. debt/lifestyle
• [32:45] J.C.: Widow with children rebuilding
• [43:41] Frank: Career change and back-to-school questions
• [54:05] Brandon: Down payment, ARMs, and investing “the spread”
• [65:45] Talia: Renting, engagement, and budgeting
• [86:35] Lloyd: High income, high spending troubles
• [106:34] Gabby: Should emergency fund be used to buy a gun?
• [113:32] Maxi: Inheritance and family debt
• [118:31] Jen: Investing for retirement as an American abroad
• [124:58] Cindy: Retire at 62 or wait?

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Special Segment: Relationship Experts

• [95:56] Dave is joined by Dr. Les Parrott and Dr. Gary Chapman (author of The 5 Love Languages)
  • New book explores “the dialects” within love languages, including impacts of personality.
  • On financial peace and love: “If love tank is full, you can talk about money more freely.” —Gary Chapman ([100:45])
  • Gifts don’t have to involve money: “The thought truly counts.” (104:37)

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Episode Takeaways

• People who win with money consistently do boring, simple things: live below their means, avoid debt, invest regularly, have patience—rather than always trying to “optimize” with risky “hacks.”
• Financial victory is about changing habits and mindsets, not one-time windfalls or shortcuts.
• Sacrifice now makes financial freedom and abundance possible later.

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Tone: Straightforward, honest, occasionally blunt, with encouraging moments of grace and humor throughout. Dave and Rachel challenge and coach, but always root for callers' success.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey network and the Fair Winds Credit union studio, this is the Ramsey Show. Merry Christmas to you. We're so glad you're here. Open phones at 888-825-5225. I'm Dave Ramsey, your host, solo today, at least for part of the time. So here's how it goes. Simon's gonna kick us off in Phoenix. Hi, Simon, what's up?

[Caller]

Hey, Dave, how's it going? I appreciate you taking the call.

[Dave Ramsey]

Sure. How can I help?

[Caller]

I am, I'm 26. Me and my wife are both working full time. She's a paralegal. I work in personal lines, insurance. But on the side we run a small that's turned into a little bit bigger than small Turo fleet of about 6 cheaper vehic. They range from 2017 to 2019. And we've kind of used some of your methods over the years. It's been about three years since we've done it. We've paid for them, gotten them paid off very quickly and we're debt free on all those. And it's pretty much just straight cash taking in cash at this point. But I want to expand it more quickly so that it maybe can turn into a full time thing for either her or for me. And I'm just curious on maybe what would be the next step from somebody else's perspective to jump into that without taking out a major loan since vehicle prices are pretty extremely high right now, especially for newer ones, but especially for cheaper ones at the moment or for older ones that don't seem to be as cheap at the moment. Without drowning myself in debt from that.

[Dave Ramsey]

When we're teaching small business people entree leadership lessons, I tell those guys and gals to grow organically with the cash that the business creates. That's what we've done at Ramsey for 35 years. 300 million dollar company this year. We've never borrowed a dime. Every bit of everything we have, we reinvested profits to grow the business. That was slower than I would have liked it. Sometimes I was frustrated at times because I think I've got something in front of me that feels like an opportunity and I don't have the money to do it right now. And that limitation has kept me from doing some pretty stupid things where I got out over my skis. So I tell our guys all the time when we're coaching small businesses to try to land on the COVID of Slow Company magazine, not Fast Company magazine. Patience, patience. Build something that's sustainable. And because the one thing we know about the space you're in, it's a brand new space, it's a disruptive space and it's going to iterate, there's going to be a lot five years from now. It will not look anything like it looks right now. Agreed?

[Caller]

Absolutely.

[Dave Ramsey]

And so if you had a five year loan, you're anticipating nothing changing and being able to make that loan. That's asinine. You're not going to get there. Okay. Because you're in a very disruptive space. So how much? So your only cost, once you pay cash for the car, the capital asset, then you're taking, obviously the customer's providing their own gasoline. Correct?

[Caller]

Correct.

[Dave Ramsey]

And so you're providing insurance and repairs and loss in value and so forth. Right, Correct. So those are your expenses. So how long have you been running these cars?

[Caller]

About three and a half years.

[Dave Ramsey]

What are you netting? What's your net profit after your expenses?

[Caller]

This year was our best year. I would say it was about, after all the expenses, it was about 32,000.

[Dave Ramsey]

So buy some cars with it. You have a job.

[Caller]

Yeah, yeah. And it was. And I guess actually net would be a little bit lower this year.

[Dave Ramsey]

That's what I asked was net.

[Caller]

Yeah. Cash in the bank would be. That's net about 8 right. Now after, after we pay the insurance in full.

[Dave Ramsey]

You've got gross revenue minus expenses equals net, which would in a cash based business would be the cash in the bank, dude. And by the way, that's all taxable. You got to pay taxes on that. So here we are at the end of the year. You're not going to, you know, you're going to get hammered. So some of that 30 something thousand is not 30,000. Probably more like 25 or 22. What was it? Yeah, minus taxes. Buy some cars.

[Caller]

Yeah, yeah, absolutely. The, I guess the only other.

[Dave Ramsey]

What's your average price of your car.

[Caller]

To sell today? They range from probably with all the depreciations.

[Dave Ramsey]

No, I mean if you went and bought a car today to put into this, what would you pay for it?

[Caller]

14.

[Dave Ramsey]

Okay. So you can buy one car. Okay. Yeah. Or two if you are two if you roll up your sleeves and don't do 14. Right. Go buy two. You can probably buy two $10,000 cars. Yeah, yeah. And that's going to. And you've got a fleet of six. And so that's going to increase your revenues by 20%. That's pretty strong growth curve, correct?

[Caller]

Absolutely.

[Dave Ramsey]

Have you discovered, have you discovered yet that some models of cars do better in terms of appeal to the potential renter?

[Caller]

Significantly, minivans.

[Dave Ramsey]

And have you discovered that some cars break down more than others?

[Caller]

Sure, I stick to only Honda and.

[Dave Ramsey]

Toyota because of that. Okay, so you've kind of got your pattern laid out here. You're tweaking your business model as you should, iterating as you go along. And I'm just going to beg you to not get out over your skis, man. I know it's tempting. You feel like you're making a lot of money, but you're really not. I mean, you make 20 grand.

[Caller]

Correct.

[Dave Ramsey]

That's not life changing money. And you're putting up with a lot of crap for 20 grand. I mean, this is Airbnb in a car. You talk about air freshener, dude, you need some after these. I'm unbelievable. So, I mean, gee, so I don't even want to think about the stuff you find in these vehicles. And so I know, I mean, yeah, this is a lot of work for 20 grand. I don't know that we want to scale this, but you can scale it and have some fun with it, but pay cash as you go. And then the worst case is the thing iterates out from under you, it becomes illegal in your city, or the driverless cars come in and take over your city and put you out of business or whatever it is something else iterates and disrupts. Because welcome to our world. And that's what business people understand is risk. And that there is a. There's a thing called the myth of continuity. And this idea that things are going to continue the way they always have is mythology. 100% chance of change. It's in the weather forecast every night. There's going to be change. There's going to be change. There's going to be change. And when you're running a small business and you go along with the myth of continuity, so you go borrow 35 or $40,000 and put six of these things on the road, only to find out you're completely out of business and have car debt. Oh, wow, that's a problem, you know, so you can't predict all the outside variables. All you can do is build a solid foundation. So when Covid hits, you survive. So when Waymo hits, you survive. So when it becomes illegal to do turo in your town, you survive. And all of those things are in play by the way. Because guess who doesn't like you. Some of the big boys. Hertz Avis. Hello. They got a little money. They're messing with your city council right now, I promise you. Guess what? Who else doesn't like you? Taxi cabs. They don't like Uber either, but they hadn't been able to run them out of business yet. But they were trying. So there's always an ongoing war. There's an outside force that you're not considering when you just look at your simple cash flow. And you haven't considered all these risk factors in there. So build something sustainable. Be on the COVID of Slow Company magazine. I don't mind you growing it. Grow it only with cash. And that'll be a governor. A limiting factor on your growth curve to keep you reasonable and keep you from getting your butt in trouble. Man.

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[Dave Ramsey]

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[Caller]

Please have me on. Thank you so much.

[Dave Ramsey]

Sure. What's up?

[Caller]

I have a question about me and my boyfriend. We've been together for about two years. Our financial system has been completely fine. We have all of our bills, we. That we've never had a true conversation about money in our future. And I want to know how I can bring this up to him without starting into argument or having him shut down on me about finances. Because it seems like every time I do bring it up and I do want to start talking about finances, it's. I want to do this by myself. Please let me do it by myself. And I want to work with him on this, but I don't know how to bring that into a conversation.

[Dave Ramsey]

Are you talking about marriage?

[Caller]

Yeah. So in about. He said when our relationship got to the fifth year that he would propose to me, but with all our financial situation is going, I don't, I'm not sure if that's actually going to happen.

[Dave Ramsey]

Okay. Well, the number one cause of divorce in America is money fights and money problems, money stress, disagreement. Okay. And so if you're going to get married, you have to solve for that not being there to increase the probability of your marriage being a success. Right?

[Caller]

Yes.

[Dave Ramsey]

Yeah. And so that's how I'm beginning to talk to him about it and say, listen, the number one thing that breaks people up is money issues. We need to get on the same page with money. And if we're on the same page, doesn't matter what the page is, as long as we're on the same page. I mean, you can have debt, you can have an income issue. I can have debt, I can have an income issue. But, you know, we've got to be in agreement about how money's being handled and that we're working our way out of debt and into wealth to have a high probability, a high chance of our marriage being awesome.

[Caller]

Yeah, I, I understand that completely.

[Dave Ramsey]

And that's how I would say it. Say that, Say that to him.

[Caller]

Yeah, absolutely, I will. Definitely.

[Dave Ramsey]

Yeah. And if he says, I just want to do my own thing, he's telling you he doesn't want to get married.

[Caller]

And I, I Should just accept that at that point and kind of go with my own financial situation.

[Dave Ramsey]

Well, just decide whether you want to live with somebody the rest of your life and. And be, you know, sharing the mustard or whatever it is you do. All right? Which, by the way, the probability of you building wealth is very low when you do that. Married people have. Married people have. Married people have 13 times the net worth of unmarried people shacking up.

[Caller]

I gotcha. I gotcha. Well, I will have a conversation with him and we'll. I'll try to bring this up and everything.

[Dave Ramsey]

Yeah, that's what you got to get. I mean, you just got to talk it through and say, listen, this. If we're. If we're not going to. If we're really going to have a future that's like 30 years from now, we're sitting on the front porch with the rocking chairs and so forth, right? 40 years from now, whatever it is, if we're really going to have a future, we got to start talking about what that looks like and what the best path is to get there and be in agreement on that. And money flows through every bit of that. And irresponsible spending does not flow through that. And big piles of debt does not flow through that. That doesn't. You know, and, you know, just buying whatever I want to buy, being immature and having a little fit. I work so hard. I deserve. You don't deserve anything. Shut up whining. When you have the money to buy it, you deserve it, and that's because you worked for it. Other than until you do, don't talk to me about what you deserve. Crud. You deserve calluses on your hands, sweat on your brow until you get the money to buy something. That's how it works, and that's what all of us face. That's how we all live. And so. Yeah, anyway, so, Ricky, you just got to talk that through. And you guys have to be in agreement about our goals and what our desired future is and where we're going from here. And, man, it makes a big difference when you do. It's very, very cool. Alex is. I was. Ricky. I'm sorry. Alex is with us in Salt Lake City. Hi, Alex. How are you?

[Caller]

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

[Dave Ramsey]

Thank you. How can I help?

[Caller]

So, in approximately three to four months from now, the two savings accounts that I have in saving will line up with what I owe on my mortgage that will be paid off. My question is with three. Approximately $300 a week that I was paying towards my mortgage. What should I do with that?

[Dave Ramsey]

Your mortgage payments are only $1,200?

[Caller]

No, no, it's $1,550. But of course, that includes taxes.

[Dave Ramsey]

Okay, so you're. You'll be rid of the 1550. And your question is, what. What should you do with that?

[Caller]

The three. Yeah, what should I do with the. The $300 a week, which I'm estimating? Do I stack that on top of my 401k contributions? Do I put it into a ACORNS account?

[Dave Ramsey]

No, I don't put it.

[Caller]

That's where my money is.

[Dave Ramsey]

Really? Yeah, I have.

[Caller]

So I've been saving in acorns two accounts later, and the one that's now for many years. That ACORNS account is worth, you see, 62,000 of today, and I've made 19.8 thousand. The later account is worth 20.5 thousand. That's a Roth IRA account. This year is the first time I've maxed out 7,000 towards the Roth IRA. IRA?

[Dave Ramsey]

You're talking about cashing out the Roth to pay off your mortgage?

[Caller]

No, no, I'm talking about the first one where.

[Dave Ramsey]

So your mortgage is only 60,000 bucks?

[Caller]

No, no. The other account is a savings account. My mortgage right now is. I owe 97,000.

[Dave Ramsey]

Oh, I see. And what's the interest rate on your mortgage?

[Caller]

3.375.

[Dave Ramsey]

You're not making any more than that on savings?

[Caller]

No, no, I'm not. No. The savings is just rainy day fund. You know, right now I have ten grand.

[Dave Ramsey]

So when you pay off the mortgage using the acorns and the savings, do you have an emergency fund left?

[Caller]

I have nothing left.

[Dave Ramsey]

We don't do that.

[Caller]

Because I wouldn't do that.

[Dave Ramsey]

I would have an emergency fund, and above that, I would pay off my mortgage. So the first thing is, you need to grow an emergency fund or keep an emergency fund. So what would I do if I were in your shoes? I'd put $60,000 on the mortgage, out of the acreage, and close the account today. And I would take the mortgage down, savings account, down to three to six months of expenses, and put it on the mortgage. And then I'd tear into that mortgage as hard as I could tear into it. Then. To answer your question, what do you do with the 1500? Are you single?

[Caller]

I'm single. I have one kid who's 28.

[Dave Ramsey]

Do you have any other debt of any kind?

[Caller]

No.

[Dave Ramsey]

What do you make?

[Caller]

I make 106,000 a year, and then I rent out my basement as A mother in law and I make 950amonth.

[Dave Ramsey]

Okay, good for you. Well done. Okay, so Alex, there's three things. When you get all this done and the mortgage is gone, and you have your emergency fund in place, and then we're putting 15% of our income into retirement into good Roth IRAs and Roth 401ks with a match if you have one at work and that kind of thing. Once you're doing all of those things, then there's three things you can do with money. And you ought to always do all three things. We've already covered the first one, which is investing it. The second thing is generosity. Giving it as a matter of a percentage of your income. Steadily giving, not just one time. I gave $10. That's not what I'm talking about. I'm talking about a steady rhythm of giving. Third thing is a steady rhythm of enjoyment of your money. You are a saver, my friend. You enjoy saving. You get a high from saving. You need to also learn to give. And you need to learn to enjoy some of this money. That's why it's so hard to get. And then you need to have all three things going at all times. And that, that's what I would tell you to do once you have the house paid off and have a fully funded emergency fund of three to six months of expenses in your savings account.

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[Dave Ramsey]

Rachel Cruz Ramsey Personality number one best selling author My daughter joins me as a co host. Corey is in Bowling Green. Hey Corey, what's up?

[Caller]

Hey Dave. It's such an honor to talk to you. Two very quick questions for you. All right, so my kid is in college. Last year he got financial aid, most of it paid for. Our income has increased to the point where next year I'm probably going to be paying for the whole thing. Our lifestyle has crept up at the same rate that our income has crept up. So while we're trying to become a little more disciplined on our spending, I've committed to paying for my kids college and trying to cash flow it. But we are still in some debt ourselves. So my question is, should I.

[Dave Ramsey]

Hold.

[Caller]

On to that commitment to cover his college? If we are still in debt ourselves.

[Dave Ramsey]

What is the expense for the college? How much?

[Caller]

I expect next year there could be a potential living on campus. So it could be $30,000. It's local, it's not too bad.

[Dave Ramsey]

And what do you make? What's household income?

[Caller]

So my wife and I's household income, it's 200,000.

[Dave Ramsey]

Okay. And how much debt do you have? Not counting your home?

[Caller]

So let's see. Not counting my home, it's about $50,000.

[Rachel Cruze]

Okay, what's it in, Corey? What type of debt?

[Caller]

It's. It's a stupid car and just very little credit card debt.

[Dave Ramsey]

So how much is the stupid car?

[Caller]

Right at $30,000.

[Dave Ramsey]

Okay. And 20 in credit card debt.

[Caller]

Yep.

[Dave Ramsey]

Okay. All right. And do you realize that what you said to me was is that we increased our lifestyle while we're in baby step two trying to get out of debt. And instead of cutting that, you were talking about not getting out of debt to pay for college and keep our lifestyle up? That's what you accidentally told us Because I'm sure you didn't say that on purpose.

[Caller]

Well, I'm aware I've been listening to y' all for a while, so there was a little intentionality there.

[Dave Ramsey]

Okay, all right.

[Rachel Cruze]

So when you say upping your lifestyle, Corey, what does that mean? Is it just that you guys are enjoying this 200,000 that you're making? You don't even. Go ahead.

[Caller]

I apologize. When my kids were very, very young, we used to not be able to afford the smallest of toys. So as our income has come up, we've started going on probably a little larger family vacations than we should be going on.

[Dave Ramsey]

Well, you needed you guys, you and your wife need to sit down, decide what your goals are. Okay. Because you can't have three goals at once. You have to have one. So what is our goal? Is our goal to build wealth and some sustainability for our family? If it is, we're going to live like no one else, which means we're going to temporarily go no lifestyle, no vacations, no restaurants, no anything until we get this stupid debt cleaned up. And when the debt is cleaned up, then we're going to build an emergency fund. Then we're going to start building some wealth with baby step three, putting 15% aside for retirement, which I have a feeling your 401 is still running too, isn't it? Oh, yeah. So you're not on baby step two, you're just kind of making up your own plan. Okay, that's correct. Baby step two is you stop all lifestyle scorched earth. You temporarily stop the 401k. The kid lives at home, not on campus, and you pay for his tuition and that's it. And you knock this debt out. And if you want to do it even faster, sell the car, but otherwise keep the car and pay it off. The car's not hugely impossible. But you can't go out to eat every night, go on a lavish vacation, put the kid on campus, have all this debt, and hope the debt just magically goes away. Mathematically, it's not gonna happen. That's what you've discovered?

[Caller]

Yes, sir.

[Dave Ramsey]

So something's gotta give. And you ought to decide what's gonna give on purpose, not be making 200 grand and end up broke someday. That'd be a dad gum shame.

[Caller]

Agreed.

[Rachel Cruze]

Yeah. And Corey. And honestly, you know, your income's great. And so you look at it and it's not gonna take you guys too long. I mean, if you think about after taxes and everything, what you're bringing home, I mean, if you guys just lived on 70 for a year, that's it. You could do all. You could pay off debt, pay for the college. I mean, all of it. You know what I mean? It's just like one year, the year of 2026. This is our year of just getting everything cleaned up. Because making this kind of money and having 20,000 in credit card debt does speak pretty loudly to.

[Dave Ramsey]

I promised junior to pay for college, but I didn't promise to pay for beer pong so you can live at home.

[Caller]

Right? That is what's currently happening this year is living at home.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

Yeah, that's not a bad thing.

[Rachel Cruze]

And maybe it's you guys, You Know, make massive progr in the spring and maybe him starting in the fall, you know what I mean? Like then he can live on campus or something. But. But I think a lot of this, these numbers are pretty doable, Corey, but it's going to take.

[Dave Ramsey]

And by the way, Junior could go get a job delivering pizzas and pay for his own dorm. Yes.

[Caller]

Yeah, I worked.

[Dave Ramsey]

I worked when I was in college. Did you go to college, Corey?

[Caller]

Yes.

[Dave Ramsey]

Did you work when you're in college?

[Caller]

I was full time father, full time worker through college.

[Dave Ramsey]

Yeah, me too. I wasn't a father, but I was a full time worker. I was going to say full time worker. And I mean he. Most adults walking around over the age of 35 will tell you that if they went through four years of college, they worked some of the time. It's not child abuse. It's actually very good. If I'm hiring as a Ramsey CEO, someone straight out of college and they've never worked. I'm nervous.

[Rachel Cruze]

Yes. They never held any job.

[Dave Ramsey]

I would rather hire a B minus student who worked 40 hours a week and knows what a callous is than I would an A student who's never worked a dime and doesn't even know what it means to show up eight hours a day. Cause they're gonna come in here and go, oh wait, this is what we do. We come every day, all day. Yeah, that's what we do. And it changes everything. So it's okay if little Junior goes and gets a job.

[Rachel Cruze]

And our research, this is probably a little bit older. We may have done this, I don't know, maybe eight years ago when we.

[Dave Ramsey]

Did the borrowed future doctor.

[Rachel Cruze]

And students that hold a job 15 hours a week while in school, 15 to 20 actually have higher GPAs than.

[Dave Ramsey]

Students that don't and a higher probability of graduating. Yes.

[Rachel Cruze]

So yeah, it is. Yeah, there's something to that for sure.

[Dave Ramsey]

The student athletes, a lot of them run and they're running full time jobs as student athletes. A lot of them run higher GPAs than the general population. It's not a new thing.

[Rachel Cruze]

And because the professors may like them too.

[Dave Ramsey]

Well, that could be. But it could be like, you know, I remember when Pat had Summit. Well, Pat had summit. Was there? Every one of them? Yes, there are.

[Rachel Cruze]

Great. I know.

[Dave Ramsey]

Yeah. Every one of those girls graduated at the University of Tennessee ladies team in those days, the women's basketball. And the vast majority of them are on the honor roll. I mean, so it was.

[Rachel Cruze]

Yes, coaches run the tight shift.

[Dave Ramsey]

Anyway, all this is possible, but Corey Y' all need to sit down and go, okay, we have three things here we're wanting to do. Send Junior to college, enjoy life, and get out of debt. We can't do all three for this year. Do we want to take a year off of enjoying life so that we can be debt free? And Junior goes to school and lives at home that year. And that's all very, very doable. You'd be debt free in a year without even selling the car. Oh, and temporarily stop the 401k for a year.

[Rachel Cruze]

Yeah, and this is a great example of kind of like the ish mentality when it comes to this. Because it's like, yeah, I mean he's funding retire. I mean he's doing some things that are, you know, fine. But it's like, eh, we'll have a credit card and we'll get that one car loan. The other car's paid for. But this one, it's just this like back and forth and you end up just so mediocre in all of it. You know what I mean? Nothing goes wrong. Yeah. So there is this like extreme mentality to take, but then you get the result out of it, which is fantastic.

[Dave Ramsey]

Live like no one else so that later you live and give like no one else. No discipline seems pleasant at the time, but it yields a harvest of righteousness. There's a process to be paid. There's a price to be paid to win at these things. And it's focused intensity. And when you're intentional with it, it changes everything. The problem is in America we make so stinking much money that it feels like we can have it all. And the old saying, you have your cake and eat it too. Right. You really can't. And so for years I was really good at making money. And I worked really, really hard to try to out earn my stupidity out earn my mediocre, undisciplined habits. And it doesn't work. You can't make enough to do that because your mediocre, undisciplined habits will go up every time your income goes up. And so you can't get away from this until you deal with the person in your mirror. All of us. Corey, you're. No, I'm not fussing at you exclusively. I mean, it's all of us. All of us deal with that same thing. But I think you and your. I have a sense that you've kind of realized this, but you're afraid to break it to the rest of the family. And so you and your wife tonight get to Have a come to Jesus meeting and we're going to decide what we're going to be when we grow up. Grown ups or children's? Adults devise a plan and follow it. Children do what feels good. Hey, it's Dave Ramsey. You've heard me talk about the importance of giving and I love that. Zander Insurance lives that out. This month, Zander is donating 25% of all ID theft protection sales to Team Rubicon, a veteran led disaster response organization that deploys wherever disaster strikes. Boots on the ground. Helping families rebuild and offering real hope for communities in crisis. Zander's been supporting causes like Team Rubicon for over a decade, donating over half a million dollars. That kind of track record shows I can TR them not just with my money, but helping protect my identity, too. Zander's ID theft protection plan is the only one I recommend because let's face it, identity theft is out of control in today's online world. It's not a matter of if, but when. Zander's plan is comprehensive, affordable, and you can even give it as a gift. So protect your family and support a powerful mission this Christmas. Go to Zander.com or call 800-356-4282. That's Zander.com. Jc is in Poise, Idaho. Hi, J.C. how are you? Hi, J.C. how Are you? J.C. hi.

[Caller]

Can you hear me?

[Dave Ramsey]

I can. How are you?

[Caller]

I'm great. How are you?

[Dave Ramsey]

Better than I deserve. How can we help?

[Caller]

Hi. I am trying to figure out how to save for retirement and leave my kids with as much money as possible since my husband passed away.

[Dave Ramsey]

I'm sorry. When did he pass?

[Caller]

Two years ago.

[Dave Ramsey]

How old was he?

[Caller]

He was only 28.

[Dave Ramsey]

Whoa. What happened?

[Caller]

He actually passed away from the accidental overdose.

[Dave Ramsey]

Oh, my goodness.

[Rachel Cruze]

Oh, J.C. i'm so sorry.

[Dave Ramsey]

Oh, it's horrible.

[Rachel Cruze]

How many kids do you have?

[Caller]

3.

[Rachel Cruze]

3? What are their ages?

[Caller]

10, 4. And my little one, I was pregnant at the time and he'll be almost 2.

[Dave Ramsey]

Oh, my gosh. Whoa. Life insurance?

[Caller]

I'm trying to get it, but unfortunately I have some medical issues I keep getting.

[Dave Ramsey]

No, no, no, no. I'm sorry. Did he have life insurance that was left to you? No. Okay. So what is your income, ma'?

[Caller]

Am? Well, I am making $50 an hour right now with my cleaning business.

[Dave Ramsey]

Good for you. That's a lot of work.

[Rachel Cruze]

That's great. How much money are you bringing home a month?

[Caller]

I'm bringing in about 2,000 a week. But I just started rebuilding my life. I went through a Lot of depression and blew through what savings I had, so I'm having a lot of guilt about that.

[Dave Ramsey]

I wouldn't. You've been through hell. I completely understand what you. What you're where you are. And I'm real proud of you for coming up out of this and rising up out of it and then starting your own business. $50 an hour. Way to go, Mom. Good job.

[Caller]

Thank you.

Thank you.

[Dave Ramsey]

Very good. Okay, so it sounds like it feels like that you're fairly new to all this Ramsey stuff. We teach a process for building wealth called the baby steps. Have you ever heard of that?

[Caller]

I have just been listening to you and started hearing of it.

[Dave Ramsey]

Yeah. So the first goal is to save a thousand dollars. Do you have any money saved?

[Caller]

I have nothing saved right now. I blew through my savings.

[Dave Ramsey]

Got it. So the first goal is to get a little baby emergency fund between you and a flat tire. Okay.

[Caller]

Okay.

[Dave Ramsey]

Are you on an alternator going out in the car or whatever it is? Right. Okay. Because you got to get to work and you got all these kids, like all these little baby birds there wanting to be fed. Right. So we got to make sure they're okay. So goal one is a little starter emergency fund then. Do you have any debt?

[Caller]

I have a car loan right now.

[Dave Ramsey]

How much do you owe on the car?

[Caller]

30,000.

[Dave Ramsey]

Okay. That's a lot. Okay.

[Caller]

Yes.

[Dave Ramsey]

And what other debt do you have?

[Caller]

Just a couple little things that probably equal $1,000.

[Dave Ramsey]

Okay. Like a little credit card debt or something?

[Caller]

Yeah.

[Dave Ramsey]

Okay. All right, good. Do you have a mortgage?

[Caller]

No.

[Dave Ramsey]

Okay.

[Caller]

We rent.

[Dave Ramsey]

And you're 32.

[Caller]

31.

[Dave Ramsey]

31. Okay. That's what. Based on your numbers, that's what I was guessing. Okay. Okay. So goal one is thousand dollars. Two is we've either got to sell this car and move down and. Or get it paid off very, very quickly. It is standing between you and the answer to your question. Your question was, how do I build some wealth for retirement and leave something to my kids? Okay. And the answer is, you get rid of this stinking car payment. That's the step one. So we got to get the thing paid off or sell it and move down so that we can get that one paid off even faster. When you are 100% debt free, then we're going to go back to the $1,000 account. And baby step three is three to six months of expenses. Let's call that 10 or $15,000 for you.

[Caller]

Okay?

[Dave Ramsey]

Now with your income and no payments and 15,000 in the bank, life feels different already. Agreed.

[Caller]

Yes. It's just my expenses are so high. My rent is 2,000amonth, my daycare is.

Almost 3,000amonth, and your car payment, 700amonth.

Yeah.

[Dave Ramsey]

And that's the only one we can deal with.

[Caller]

Okay.

[Dave Ramsey]

Unless you move into a cheaper rent. If you want to do that, that's okay. But when you don't have any payments except those payments, no car payment, in other words, and you've got an emergency fund, then you're poised to begin to build some wealth. We start talking about saving up to buy a house and we start Talking about putting 15% of your income away for retirement. And you'll be able to do all that because we're going to put you on every dollar, which is the world's best financial tool and budgeting app. So it's going to not only teach you how to do a budget, but it's going to teach you how to walk through these baby steps and do stuff. Call the Ramsey Way. Okay. Which is the shortest distance between where you are and retiring with dignity. You said you had some health problems preventing life insurance.

[Caller]

Yes.

[Dave Ramsey]

What are they?

[Caller]

I'm doing. I have a traumatic brain injury from a car acc. So I deal with things like vertigo. I have a sleep apnea I'm trying to do a sleep study for, and just a few other things.

[Dave Ramsey]

Are you overweight?

[Caller]

Spine issue.

[Dave Ramsey]

Are you overweight?

[Caller]

Yes. I gained some weight since my husband passed.

[Dave Ramsey]

Okay. Is that affecting the life insurance? Because obesity will hit the life insurance harder than smoking will. Okay. And sometimes the apnea will tie back to that and that's what will keep you from getting a decent rate. So again, something you can work on. Okay. Being overweight and smoking are the two biggest factors in driving life insurance cost way through the roof. Otherwise it's just the cost of a pizza. And those are both controllable factors. Okay. So long term, I'm just talking through your ten year game plan here. I'm not. Ten days. Okay. I want to heap a bunch of stuff on you, but there's a whole process you can go through here where the life insurance gets cheap. You make sure your kids are taken care of before you've got some wealth built. And then we get out of debt and we build some wealth and then you're taking care of at retirement. Teach them to go out and be self sufficient. But if you left them a couple million dollars, that'd be okay too. It'd be the great end of this story, wouldn't it?

[Caller]

Yes.

[Dave Ramsey]

Okay.

[Caller]

Is it too late to build that.

[Dave Ramsey]

No, no. You easily could have five or ten million dollars when you retire if you follow exactly what we teach you to do. But you're going to make some tough choices.

[Rachel Cruze]

Yeah. I'm wondering, jc, for the car. Do you know if you sold it?

[Gary Chapman]

What.

[Rachel Cruze]

What you could get? Are you underwater on it at all?

[Caller]

They said it's not worth what I bought it for. They said it's only worth, I think, like, 18,000 right now.

[Dave Ramsey]

Okay. They are a dealer wanting to buy the car at wholesale. So jump online at kbb, kellybluebook.com and run a private sale out on that thing. It's probably 25,000 or 26,000.

[Caller]

Okay.

[Rachel Cruze]

Yeah. I would just be curious, because if there was.

[Dave Ramsey]

If you can get out of it and get a $10,000 car, it sure would be helpful in this process.

[Caller]

Okay.

[Rachel Cruze]

And there's some reliable cars at that price point, because I know not forever.

[Dave Ramsey]

But just to get your life back.

[Rachel Cruze]

But I'm just thinking, if she's a mom with the three little. That is going to be a concern.

[Dave Ramsey]

I'm not saying drive a $10,000 car for the rest of your life. I want you to be a multimillionaire and drive a nice car. Okay. But we got to get. We have to pay a price to get there. And you're digging out of a tremendous hole. Hey, we're going to give you every dollar and the full upgrade to it and a full subscription. I'm also going to send you a copy of the book, the Total Money Makeover, which walks you through these baby steps we've been talking about. And we're here for you, kiddo. If you need anything, you call us back. I want to hear your story. I want to hear how you're doing. We'll put you back on the air and answer your question if you run into something. But you can do this. You can do this. You've just been through hell.

[Rachel Cruze]

Yeah. And on the financial side, J.C. like, the shame and the guilt and all that feeling of even what you've mentioned on the call, like, release all of that, J.C. because you're. I mean, I can't imagine. Imagine walking through what you've walked through. Rachel's got 300%. I would be using every dime that I had in order just to keep my head above water. So that was there as a gift. See that as a blessing. That savings was there to catch you financially, that you. You know what I mean, Jason, you really could have called us and had easily 30 grand in credit card debt, you know, and we would have understood. You know, there's a part that you're like, I could see how you got there. You know, your husband passes away, suddenly you have three, you're pregnant, three little kids. Like, it could have been so much worse. Right? And so there is the reason that savings was there. And that's a gift. And you used it as someone who lost their husband and you had two little kids and you were pregnant. And that's what it was for. So I would release that guilt right now.

[Dave Ramsey]

Amen. Can I give you one more suggestion? Can I give you one more suggestion?

[Caller]

Yes.

[Dave Ramsey]

If you're not in a good church, find one in the area and start attending. One of the things that people of the Book are required to do, and we're people of the book here, is take care of widows. And they'll wrap their arms around you and you'll have a support mechanism to help and walk you through this because you've also been by yourself while you're doing all this. And you need community. So just an idea, check it out. We're gonna give you all this stuff. You stay on the line and Christian's gonna hook you up. We're gonna set you up with everything you need, and you call back anytime you need to. K.

[Rachel Cruze]

Hey, it's Rachel Cruz. The holidays are here, which means family time, giving back and remembering what the season is all about. And let's be real, it also means shopping, y'.

[Dave Ramsey]

All.

[Rachel Cruze]

If you're anything like me, December gets really busy and really expensive. It's harder to stay intentional with your spending. And that's why I love shopping on Amazon, especially the this time of year. Named the lowest priced US online retailer for nine years running by Profitero, a third party analytics and research firm, Amazon's prices are up to 14% lower across top categories and beat competitors by up to 5% in key gift categories. Between amazing deals, stress free shopping and fast shipping, Amazon makes gift giving simpler, the holiday season a little brighter and helps me keep my budget in check. That allows me to get back to enjoying the season. What more could a busy mom ask for? So for more information about Amazon's low prices and easy, affordable holiday shopping, head to Amazon today.

[Dave Ramsey]

Welcome back to the Ramsey show in the Fairwinds Credit Union studio. Frank is in Montreal, Quebec. Hey Frank, how are you? You good? How can I help?

[Caller]

Been listening to the show for a few weeks now. I'm a big fan, so I just need a clear path because I feel a bit financially trapped. I'm currently 32 years old. I'm working at a federal agency, and I make about 3,800 gross a month.

[Dave Ramsey]

Okay, come off speaker phone. Come off speakerphone. You sound like you're in a barrel.

[Caller]

Apologies for that. Can you hear me better?

[Dave Ramsey]

Yes, sir. Thank you. So you make 3,800amonth with a federal agency, and what?

[Caller]

Yes. I have $8,400 left on a student loan and 2,300 on a consolidated loan, and we're about to face major public layoffs within the new year. So my bot. My job definitely feels a bit less secure than it used to be. If I stay within my current department, the growth feels a bit capped, and I don't really see a realistic path to buying a home or building wealth without decades. Extreme frugality.

[Dave Ramsey]

What do you mean?

[Caller]

I'm torn between.

[Dave Ramsey]

Oh, no, you told me what you make 3800amonth exactly at gross. All right. What do you do with it? What do you do at the department?

[Caller]

I'm a program officer, so I manage.

The finances of the projects that we. That we manage, actually.

[Dave Ramsey]

Okay. And, yeah. What's your degree in?

[Caller]

Studied a Bachelor of arts in law.

[Dave Ramsey]

In law.

[Caller]

Yeah, exactly. Like, it's not a. Exactly a law degree in the sense of, like, I'm not entitled to write the bar after it. It's more of, like, a bachelor's degree in legal studies.

[Dave Ramsey]

Gotcha. Okay. And what were you planning on doing with that?

[Caller]

So, yeah, I'm currently torn between the.

[Dave Ramsey]

I mean, when you. When you were studying it, what was your plan?

[Caller]

My plan was honestly to study law school. But the thing is, I ended up working immediately after, and that was sort of my trajectory at that time.

[Dave Ramsey]

Gotcha. Are you married?

[Caller]

I'm not, no.

[Dave Ramsey]

Okay. All right, cool.

[Rachel Cruze]

So are you thinking of just a whole new career path, Frank, because you don't see growth in what you're currently doing?

[Caller]

Kind of, yeah.

So if I stay in my current job, the options are a bit limited in terms of career growth, especially considering the cuts coming in the new year additionally.

[Dave Ramsey]

So what do you want to do?

[Caller]

So, yeah, my options right now is if I do a master's in business analytics or supply chain management.

[Dave Ramsey]

What do you want to do?

[Caller]

That's a good question. I mean, right now, I work in a lot with. I work a lot with data analytics. I've been really interested in it, and I've become more and more passionate about it, taking on major projects within my team. So I think I really want to gain more of an expertise within that field.

If I do Study it within my city.

I can get a major subsidy to pay off my master's degree and I would pay a total of 5k around for the degree. And it would also open up the opportunity for private opportunities, private sector roles.

[Dave Ramsey]

Yeah, okay, cool. What I would do, I would not go back to school full time though. What I would do is go get a job at an entry level position in data analytics. While you're studying to get your master's in data analytics.

[Caller]

Exactly. If I'm not laid off within my job in the new year, I will maintain my job and begin studying the analytics.

[Dave Ramsey]

Yeah, and if you are laid off, go get a job.

[Caller]

Exactly, yeah.

[Dave Ramsey]

In the data analytics field and maybe they'll pay for your masters.

[Caller]

Yeah, you're right.

[Dave Ramsey]

Yeah, that's what I would do. But you don't go to school unless you're trying to put. Because degrees are not the currency on which we trade. Knowledge is the currency on which we trade. And so I can tell you we've got 500 people that work for us in the data world. Okay. Data scientists, platform, data security, data analytics, all through Ramsey. Okay. It's a digital world we live in. And so we've got a ton of what you're talking about working here right now. And I couldn't care less if they've got a degree. What I care is do they know how to do it.

[Caller]

Exactly.

[Dave Ramsey]

And so knowledge is what you trade on, not degrees. And so getting a master's and going deeply into debt and not working while you're doing that or some kind of a plan like that's dumb. Don't do that in that world. I would go look and get some of the certificates, certifications, like a Microsoft CERT or two in the data world and see if there's a couple others you can pick up to help you land. Now that actually will get your foot in the door because it indicates that you have the knowledge and it doesn't require a four year degree or it doesn't require a master's degree to be a data scientist today. But you do have to have your brain working in the proper order and know how to, how to work through those decision tree models. And so. And you can do that. I think it's very possible. But what I would do is just say, hey, this instability is my wake up call. I landed in what I thought was a stable job where I didn't have to think much, I didn't have to work much. And turns out I do.

[Rachel Cruze]

Yeah. And hold on the line, Frank Christian will Pick up and let's get on Ken's book. Find the work that you're wired to do, too. That's good, because I do wonder with this whole new. I know you lean on what you think you want to do, which may end up being that. But it'd be just a good assessment just to take in general, because it could. Yeah. Just give you some creative ideas of things you've never even thought of as you're kind of entering into a new space.

[Dave Ramsey]

Yeah. As an adult, folks, here's what we don't want you to do. And we hear people do this all the time. A hard time comes along in my career patch, and so I quit life and go back to school. And there's a little bit of I want to hide from reality in that. There's a little bit of I may need some new tools, and that's fine. But what I really want you to do is to take two steps back and say, before I spend a bunch of money and a bunch of time going and getting in a degree in some area, I want to make really, really sure it is what I want to do. And so, A, I want to go to work in that field, even if it's entry level. I'm doing the grunt work. Okay. And B, do some testing and take some assessments like this. Finding the work you're wired to do. Assessment. And we'll give it to you as our gift. Okay. And you can buy it in our bookstore or on Amazon, anywhere you want. It's just a few dollars. And you take the little assessment and 25 or 30 minutes and changes everything. And it'll give you some real insight into what you want to do. So you just don't want to throw a dart at the dartboard blindfolded again and hope this all works out. Because obviously the last time when you went and got an undergrad in law, you've used absolutely none of it. So don't go do that again. Don't go to the expense and the trouble to do that again. Only go to school to get knowledge to do what you're sure you want to do.

[Rachel Cruze]

Yeah. And I'd say also if the industry requires it, too.

[Dave Ramsey]

Exactly.

[Rachel Cruze]

Because sometimes they don't. Right. And people go get an MBA and they're like, they probably didn't really even need to. You know what I mean?

[Dave Ramsey]

So it's just as if the MBA is a ticket to success. It's not. The knowledge you get while studying at a good MBA program will really help you in business. It's a master's in business. That's what an MBA is. But it doesn't guarantee success at all. And it doesn't guarantee you're going to like the company you're working for and it doesn't guarantee anything. So, you know, just use education to get knowledge, not to get a guaranteed path of success and happiness because it's not going to provide that. Degrees do not make people successful. Knowledge, on the other hand, helps make people successful. It's a lot easier to be successful when you're not dumb, you know, a lot easier. So knowledge is a good thing.

[Rachel Cruze]

Hey guys, it's open enrollment time for health insurance and if you have ever felt overwhelmed trying to figure out your health care cost, you are not alone. For a lot of families, health care is one of the biggest line items in the budget and it gets more confusing every year. But you don't have to settle. Christian Healthcare Ministries is a biblical and budget friendly alternative to health insurance and I am proud to recommend them. With chm, you are joining a community of believers who actually help share each other's medical bills. Yeah, it's true. Members have shared over $12 billion in healthcare costs since CHM started nearly 45 years ago. And it's simple. You choose your provider with no network limits. You submit your eligible bills online and other members help share your expenses. CHM has program options for every stage of life, whether you're single, self employed, or raising a family, y', all. Open enrollment has a lot of people scrambling right now, but CHM lets you join anytime. So go to chministries.orgbudget to check them out. That's chministries.orgbudget.

[Dave Ramsey]

Brandon is in Atlanta. Hi Brandon, how are you?

[Caller]

Good. How are you doing?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Awesome. Yeah. So quick question. My fiance and I just got engaged and we're looking to buy our first home and I was trying to understand the so basically we have the ability to put 20% down on the home, but based off of all the math behind the numbers I've seen, it seems more optimal to possibly put down less and have more liquid cash available to invest. Call it maybe 10% down with having the extra cash to be able to invest long term and say VOO or QQQ or like a large cap, ETF or index fund. But I wanted to get your thoughts on it.

[Dave Ramsey]

It's not optimal. Your formula left out something called risk and it left out something called good night's sleep when your home is steady. We studied 10,167 millionaires, 89% of them were first generation rich, meaning they started where you are and became wealthy. The number of them that said we optimized our home mortgage by putting as little down as possible to invest and became a millionaire that way. The number of them out of 10,000 that said that was precisely zero. No one does that in the real world. That's a mathematical theory that doesn't hold water. And the reason it doesn't hold water is you have not risk adjusted mathematically because you're adding risk to your life. So the typical millionaire, when they hit their first million dollars in net worth, have an $800,000 paid for house and a 7 or $800,000 401 and they were sitting on a million and a half and their house is paid for. And that's the typical millionaire. Like it was stereotypical, there's so many of them, it was crazy in that study, in that piece of research. So what you left out was the fact that when you have no mortgage or you've got a rapidly reducing mortgage, there's more peace in your life. Your career choices are better, your relationships are enhanced, your physical body doesn't carry the stress with it and so you don't have stress related diseases. All of these things play into your finances, expenses. And none of that was in your formula.

[Caller]

So looking at it, you're saying including the risk adjusted returns long term, you're saying if you have the, you know, 30 year fixed mortgage, you're going to be a lot safer with that known variable and it continuing to decrease over time.

[Dave Ramsey]

A 15 year side of the 15 year fixed rate mortgage. But yeah, getting rid of, getting rid of the mortgage as fast as possible.

[Caller]

Yeah, going in my second question, which I am a long time listener, so I assume you have an opinion on this but wanted to kind of specify our exact situation. So we're touring some new construction. They're townhomes, they're smaller homes that we plan to be at for call it four to five years max. We're 26 now, we want to start having children in four or five years. Hopefully we'd get something a little bigger by then if our income continues to increase, which is our plan. What we have been seeing a lot of in our area, people doing a five year ARM due to the fact that interest rates are currently relatively high with the assumption from the Fed that they'll, you know, slightly decrease over the next few years. If we're planning on only being the house for call it five years or less. What a Five year arm ever makes sense in that situation?

[Dave Ramsey]

No, because you don't know what's going to happen. You don't know what you do.

[Caller]

Again, just playing the safe route.

[Dave Ramsey]

You have, you have a plan, but your plan is not going to unfold the way you think. One of two things is going to happen. You're going to get wealthy faster than you thought or you're going to have some kind of blocker come up, some kind of problem come up that's going to slow down something and you may end up in that house for a little while longer than you thought. So nothing works out exactly the way you think it's going to. You put together things that are sustainable and they're not based, that don't add extreme risk to your situation. So in other words, what I've talked to over the years, Brandon, in 35 years of doing this is I've talked to a number of couples who did something like you're talking about and then they think the arm is coming up and adjusted. And then they had a child that had some needs and they weren't able to continue with their income increases for a period of time because they had to take care of the kids needs and they get stuck and then they get hammered. The thing adjusts and they can't afford to stay and they end up selling the house to keep from losing it. A renter again because they took a step back in the mother may I game because they moved forward without permission, if you remember that. Older yeah.

[Rachel Cruze]

And Brandon, let me encourage you. I mean you're obviously a well thought out guy. You're trying to look at the path of least resistance in your head. I hear what you're doing, you're looking out this angle. But I just want to encourage you, Brandon, what's going to make you guys win with money? It's you guys, it's not these like small. We're going to finagle the system and get this and that. I'm not kidding. If you just do really boring common sense stuff with money, live on less than you make, don't carry debt, invest in the, invest in your retirement, pay off your house early and you guys make an insane income and you just do those things.

[Dave Ramsey]

That's all you gotta do.

[Rachel Cruze]

That's all you have to do.

[Dave Ramsey]

And so you don't have to try to shave a half a point here.

[Rachel Cruze]

Yeah. So this is.

[Dave Ramsey]

Optimize a quarter of a point there.

[Rachel Cruze]

Yeah. So Ramsey is, I mean like our principles and what we talk about on the show because You've listened to, and it's pretty boring to guys like you. There's other podcasters out there, and they're finagling this and this, and, okay, well, you can get the spread here. And they're doing this. I mean, but the amount of mental calories and how it actually ends up really, truly working long term doesn't end up like that. And so people that follow this plan while boring.

[Caller]

Right.

[Rachel Cruze]

It's not exciting. It's not the new thing. The amount of peace you're solving for. Peace. This is what it is. And when you do that and you do common sense things and you don't try to make it all complic. Complicated, and it's an enjoyable life. It really is.

[Dave Ramsey]

You're obviously.

[Rachel Cruze]

I hear what you're saying and what you're doing, and I get it. And I think there's like the math nerds out there, and they love this stuff, but I'm telling you, people that win with money, long term, it's them, they're the reason they win. It's not this system that you kind of rig here or there.

[Dave Ramsey]

Yeah. To verify that. Rachel. Brandon, you're obviously brilliant. I mean, the questions, the way you formed your thought out, the way you even formed your sentences, you actually know what you're talking about, which is rare. Sometimes I get people asking these questions that you're asking, and they don't know what they're actually saying. They just heard it on TikTok. But you actually know what you're talking about, and that's gonna work against you if you're not real careful. You're gonna analyze your way into paralysis of the analysis if you're not careful. So do that. So I'll give you another example of what Rachel's talking about, Brandon, and the data. Because what we keep following is the data of what actually works, not the theory of a think tank. Math.

[Rachel Cruze]

Right.

[Dave Ramsey]

It's not math. Think tank. So here's the data. The people that end up with a million dollars in their 401k did not pick, on average, did not pick the best possible mutual funds. They picked a subpar mutual fund. There were plenty of funds that outperformed what they picked. Now, they didn't pick the bottom 20%, but they didn't pick necessarily the top 20% of funds out there. There they were somewhere around that 80 percentile. And so I'm looking at that going, you missed it. You missed it. Because I'm a math nerd like him, right? And what the data says, and this Is that what they find? Is that what they did do is exactly what you're talking about. They weren't that great at picking the right fund, but what they did do was they never missed a month. Consistency forever, no matter what. They put money in their 401k every stinking month. Prom dress, transmission goes out, kids sick, dogs got cancer. Every month. They put money in every month.

[Rachel Cruze]

Market's up, market's down.

[Dave Ramsey]

What they didn't underperform in was consistency. They over indexed on consistency and they under indexed on fund choice. And that's an example of what you're talking about. They really weren't that mathematically savvy or mutual fund savvy. They just were consistent versus the amount.

[Rachel Cruze]

Of people that don't do anything. And they have theories of what they may want to do, but they don't.

[Dave Ramsey]

Or they try this little thing and then they try this other little thing and then they try this and they're always scheming and scamming, trying to cut a half pork.

[Rachel Cruze]

Yeah, and it's the same thing about paying off the house. We get that call all the time. If people have, you know, $80,000 left on their mortgage and they got 90,000 sitting in some fund over here and they're over like, yeah, but I could be making X amount. And the amount of people we've had at live events, people here, I mean, that were around that we asked the question, those of you that paid off your house, raise your hand and we'll have it. We'll have an auditorium of 2,000 people. And at some of these events it's.

[Dave Ramsey]

Like 5, 600, it's.

[Rachel Cruze]

Yeah, I mean, there's a lot of them. And we say, okay, keep your hand up. If you regretted it, who regretted paying off their house?

[Dave Ramsey]

None.

[Rachel Cruze]

None.

[Dave Ramsey]

Zero.

[Rachel Cruze]

Never. So again, that's not in a formula, but I'm telling you, like when you solve for peace, as Dr. John Deloney says with your money, that is worth it. That's worth the small percentage point here or there, because you have peace and you sleep good at night and you have a happy family and a wonderful new marriage and little babies. And it's great. And it's great.

[Dave Ramsey]

It's okay to wait a year after marriage to buy a house too. By the way, Everywhere you turn this time of year, someone's telling you to swipe a card now and pay later. But that mindset always leads straight to debt and post holiday stress. Fairwinds Credit Union takes a different approach. They're here to help you win with money. Fairwinds doesn't push credit cards. They help you build savings and stay debt free, just like we teach with the baby steps. And to do that, Fairwinds created the Smart Bundle with Ramsey fans in mind. It's more than a bank account. It's a tool to help you live with intention. The Smart Bundle includes a no fee checking account, a high yield savings account, and the exclusive Ramsey Beweird debit card, which says debt is normal beweird right on the front. So every time you swipe at this Christmas season, it's a reminder that you're choosing a different path to spend no more than you actually have to avoid that January budget hangover and to be free from debt traps, go to fairwinds.org Ramsey to open your Smart Bundle and get your Ramsey Beweird debit card today. That's Fairwinds.org Ramsey insured by the NCUA. Christmas deals are here. Prices won't last long. If you want to get the stuff by Christmas, you better jump in. $13 for best selling hardcovers, $13 for career assessments. $12 for questions for humans decks, $7.99 for audiobooks and ebooks go to ramseysolutions.com store or if you're watching on YouTube or podcast, click the link in the description. Talia is with us in Orlando. Hey Talia, what's up?

[Caller]

Hi. I hope you guys are doing well.

[Dave Ramsey]

Better than we deserve. Merry Christmas to you.

[Caller]

Likewise. Likewise. I'm calling because me and my fiance are in a very big transitional period in our lives right now where our gift of having no Ren living with family is coming to a close very soon. He just got another job that'll have an increase in pay. But we also are still working on baby step two, which also just got a little knockup because of the good old irs. So I'm just curious on how we should plan to move forward with gazelle intensity because now we're on the same page and I'm just not quite sure how to navigate this tricky in between stage.

[Dave Ramsey]

When's the wet.

[Caller]

To be determined? We haven't set a date yet.

Actually, there's not.

[Dave Ramsey]

There's not a we until we're married.

[Caller]

Okay, fair enough.

[Dave Ramsey]

For sure, you don't pay his debt, he doesn't pay yours.

[Caller]

Yes, sir, I agree.

[Dave Ramsey]

You can get in all kinds of trouble with that and you don't want to get there. It'll be a relational nightmare too.

[Rachel Cruze]

How much that do you guys have? Each of you?

[Dave Ramsey]

What's the point in delaying if you're living together anyway. Why don't you just get married? Married?

[Caller]

I. I'd like to, I guess. It's just I don't feel we have.

[Dave Ramsey]

The money for it right now and none cost $50.

[Caller]

You're right about that, too. I suppose. I'm just part of a Latin family, and so I always wanted to do it big and.

[Dave Ramsey]

Yeah, but you're broke and you don't have a place to live, so that's not really an option.

[Caller]

You're not wrong. You are continually wrong.

[Rachel Cruze]

You're being very agreeable. She's like, yes, yes.

[Dave Ramsey]

I want you to have a big party after you get out of debt and celebrate your marriage. That happened two years ago.

[Caller]

That's fair. And I think that's definitely worth a.

[Dave Ramsey]

Consideration because here's the thing. When two horses lean into the harness together, you can pull a lot more weight than two individuals are pulling because of synergy and this agreed thing. We combine our incomes, we combine our efforts, we combine our spirits, we combine everything. And you can only do that without a huge risk when you're married. And so we strongly recommend. And the data backs this up, by the way. So, yeah, to go ahead and get married. Lots and lots of couples in lots of generations just get married and didn't have a big party and didn't have a $78,000 wedding. And so.

[Rachel Cruze]

But the advantage, the marriage advantage on the other side from a financial, a family aspect, emotional. I mean, all of it.

[Dave Ramsey]

So if we did that, what is your income? What's his income?

[Caller]

His income is about 40,000. It should be closer to 50 since he just got this new job.

[Dave Ramsey]

Great.

[Caller]

And I'm currently at 54.

[Dave Ramsey]

Okay, so you got 104. That's great. How old are y'? All?

[Caller]

I'm 30 and he's 33.

[Dave Ramsey]

Excellent. Cool. All right. And how much debt do you have?

[Caller]

I've been doing everything combined in my head.

[Dave Ramsey]

That's fine. Combined. We're going to pretend. We're going to pretend you get married this weekend. Merry Christmas. Okay.

[Rachel Cruze]

And so now Wednesday's anniversary is on. On Friday. So it's a great. It's a great time to get married. I'll say that. I'll say that. Christmas.

[Dave Ramsey]

Anyway, the. Rachel sends you a gift if you get married Friday. So the. Anyway, the debt is how much combined?

[Caller]

112 combined. And now that we're getting Gazelle Intense, we're hoping to knock more of it out, but we're currently sitting at completed 39k already.

[Dave Ramsey]

Good. Okay. And what was the IRS hiccup?

[Caller]

The hiccup was filing 2024 late in addition to being in the process of paying off 2023 because he was an independent contractor.

[Dave Ramsey]

And is that in the 112?

[Caller]

Yes, sir.

[Dave Ramsey]

Okay, cool. All right. And what do you. What are you anticipating rent being? Have you been out and looked for the cheapest thing possible, a garage apartment out back of a rich old lady's house, and you clean her gutters and mow her grass and it costs almost nothing to live there? Yeah.

[Caller]

Haven't had too much luck with that yet, but the ballpark we're seeing is about 2k in our area.

[Dave Ramsey]

Yeah.

[Caller]

If we're looking for a bare minimum.

[Dave Ramsey]

Yeah. And I think you can get off of that. You may need. You may need to move out of town a little bit further to get off of that. But it's doable. Okay.

[Caller]

Yes, sir.

[Dave Ramsey]

Orlando is expensive, though. It's a wonderful town, but it's high. Okay. And so. Yeah. But, you know, the thing is this, whatever we're paying in rent is taking away from these other goals. Mathematically, we know that, that. So we want to pay as little in rent as possible so that we get out of the debt so we can have the emergency funds so we can buy a house. And the least we pay in rent, the better. But, you know, so what I'm going to do is rent something that is right on the edge of uncomfortable.

[Caller]

Okay.

[Dave Ramsey]

Like, Nope. Like, not really proud to have friends over.

[Sponsor/Ad Voice]

Okay.

[Dave Ramsey]

Not scared to have friends over, but not proud. Okay.

[Caller]

Understood.

[Dave Ramsey]

Not necessarily shooting up and down the street. I don't want Dodge City. Okay. But I do not trying to impress anybody with what I'm renting, for God's sakes.

[Caller]

I hear you. The lights will turn on, but maybe the AC doesn't work all the time.

[Dave Ramsey]

Well, I want the AC to work. You're in Florida, for God's sakes. The AC needs to work. But no, I'm talking about it just doesn't need to be super fancy with the skylight, the Jacuzzi and the pickleball courts. Okay. So we don't need any of that crap. What we need to do is get out of debt and a place to live and celebrate our new marriage. And so our first year of marriage. And so that's what I would do if I woke up in your shoes. And I think you're going to be just fine. If you do that and get on a beans and rice. Rice and beans budget, you could be debt free in two and a half to three years.

[Caller]

I agree. Now, tell me this, because I need first, last in security to find one of these cheaper places. Assuming it's actually not somebody's back. Back door, extra bedroom. So do we pause on baby step two to save for that?

[Dave Ramsey]

Yes, but before I save for it, I would go find the actual place, not go on theory of what I think is gonna happen. Because if you might find an actual place that doesn't have both first and last.

[Caller]

Okay.

[Dave Ramsey]

They're out there. There are people that wanted to rent places right now.

[Caller]

Okay.

[Dave Ramsey]

And there's a saying in the real estate business. If someone comes to look at your piece of real estate in December, they're a serious candidate. It.

[Caller]

Okay.

[Dave Ramsey]

Tire kickers are not out looking at open houses on December.

[Caller]

Yes. My odds are good. Hopefully we'll.

[Dave Ramsey]

Well, they're gonna. They're gonna treat you like you're a serious customer. Because you are.

[Caller]

Yes. Yeah, definitely.

[Dave Ramsey]

Yeah. Okay. So you're gonna be able to. You're gonna be able to talk him into popping. You're gonna be able to talk him into getting married?

[Caller]

Yeah, I think so. No, no, he. We've been together for. For eight years already, so that's holding everything up.

[Dave Ramsey]

Yeah. It's time to paint or get off the lake. Yeah. Really? Yep.

[Caller]

Yes, sir.

[Dave Ramsey]

You're awesome. You're fun to talk to.

[Rachel Cruze]

She's like, listen, I'm Latin. I want a big party.

[Dave Ramsey]

I'm a hillbilly. I want a big party. I don't disagree with that. Whatever. That's not an ethnic thing. That's a party thing. So I love it. Good for you. She's fun. She's fun. They're gonna do great. And it's just time to get real serious about all this stuff. Hang on. We're gonna give you every dollar and sign you up for that as our wedding gift.

[Rachel Cruze]

Okay. Yeah. And for people listening to kind of circle back on one of those prayers, even though, Talia, I don't wish this upon you, I don't think it's going to happen in your situation. But we do see couples and they. They combine it and then it's the ex fiance we get the call about.

[Dave Ramsey]

You know, two years later without being married.

[Rachel Cruze]

Without being married. You know, and then there's an ex fiance in the picture two years later for something, and they've used all their hard earned money to clean up his IRS debt. You know what I mean? So there is something very true about the separation until you're married because you have no legal protection at all. And so there's. Yeah, there's big on that. So those of you listening, I don't think Talia, I think you guys will. I think you've been together eight years. All the things that's wonderful, and I think it'll happen for you guys. But for people listening, if you want to be. There are such a thing as an ex fiance, and you spend a lot of your hard earned money paying off his smallest debt because his happened to be the smallest in the debt snowball. When you combine them and your money goes to, you know, his debt. And then you break up and you're like, man, that. That was 12K. That could have been going to mine, you know, so.

[Dave Ramsey]

And if you get married on Friday, you'll be getting married on Rachel Cruz and Winston's anniversary.

[Rachel Cruze]

That's right. December 19th.

[Dave Ramsey]

That's a big deal. You can. You can just say that.

[Rachel Cruze]

I'm telling you, though, a winter wedding, it's underrated. Everyone wants the summer and the spring. A holiday wedding, it's so fun. Everyone's in good moods and everything is. Is decorative.

[Dave Ramsey]

And the look we got, the wedding gifts kind of got combined with the Christmas gifts. Nah, that didn't happen, did it?

[Rachel Cruze]

I don't think so. We left Joel on cr. We left the family on Christmas and went on honeymoon.

[Dave Ramsey]

No, I was talking about the wedding gifts. Oh.

[Rachel Cruze]

Your wedding gift to us.

[Dave Ramsey]

No, no, no, no.

[Rachel Cruze]

I say you paid for my wedding, so thank you for that.

[Dave Ramsey]

You're welcome.

[Rachel Cruze]

Thank you.

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[Dave Ramsey]

Ramsey. Question of the day is brought to you by why Refi? If you've been turned down by other lenders because your private student loans are in default, why refi is for you. They help borrowers restart with dignity and clear direction. Check out why refi.comramsey. that's the letter Y, R, E F y.comramsey not in Allstate.

[Rachel Cruze]

Today's question comes from Kristen in Ohio. How should I deal with the issue of Christmas gifts for teachers? I have four children who have multiple teachers for physical education and music, plus their cafeteria workers, teachers, support staff, I mean, all of it. So I understand and appreciate that they are hard working professionals. But we're still on baby step three. Is it okay to skip this until we're in better financial terms for our family? Yeah. I mean, I would say for a year or so. I mean, I still think appreciation is wonderful. And I still think, honestly, a lot of people in that position, I'm like, yes, nice teacher gifts. That is one thing I prioritize on the other side of baby step three because I very, very much appreciate our teachers. Oh, I love them. Yeah.

[Dave Ramsey]

I love them and appreciate them. I've never given any of them a gift.

[Rachel Cruze]

Well, you haven't. Mom did. Girl, did she really?

[Dave Ramsey]

Did she really? Yes.

[Rachel Cruze]

Yes.

[Dave Ramsey]

I had no idea. I'm generous. I like giving gifts, but that just wasn't on my list. I mean, I like giving the garbage man a bunch of money. I like doing that. A big tip at Christmas time. They got a whole lot of gifts.

[Rachel Cruze]

Because you take out the garbage. Yes.

[Dave Ramsey]

They gotta haul off all the way.

[Rachel Cruze]

Interact with the teachers.

[Dave Ramsey]

I do that. That one.

[Rachel Cruze]

I did love giving teachers nice gifts.

[Dave Ramsey]

Cause yes, I like the teachers. I love them. I'm happy with them. Yeah. That's interesting.

[Rachel Cruze]

Okay.

[Dave Ramsey]

I guess I'm so old. It's like an apple.

[Rachel Cruze]

No, I just think you were teaching FPU classes at the Holiday Inn. Mom was raising his kids in elementary school. I think that was it.

[Dave Ramsey]

Yeah. I would not. That would not be a huge guilt trip thing for me. It would just be.

[Rachel Cruze]

But for sure, when you have the opportunity to. It's great. And honestly, people in this position. Yes. Do they love a nice gift? Absolutely. But also just a note and some cookies that you've made. I mean, at least it's the recognition, honestly, that they.

[Dave Ramsey]

Nice letter clearly stating what you have appreciated is worth more than $20 a day.

[Rachel Cruze]

And then something homemade or something, you.

[Dave Ramsey]

Know, definitely make Some cookies. Definitely. Make some cookies. That's it, though. I mean, that's.

[Rachel Cruze]

I'm having, like, a flashback childhood memory. Do you. I remember this. You probably don't. I remember in the third grade, Mrs. White.

[Dave Ramsey]

I remember Mrs. White.

[Rachel Cruze]

Her Christmas gift was your book. Financial Peace. I think we gave your book.

[Dave Ramsey]

That was now. That was her mother. I wouldn't have done that. I definitely didn't.

[Gary Chapman]

True story.

[Dave Ramsey]

That's so much ego. I couldn't do that. Here's my book. Yeah. That no one has yet read. No one knows who we are and no one cares about. If you need something to light the fire in the fireplace tonight, you can use this paper. Yeah, I don't. No, that's gross.

[Gary Chapman]

I do. I do.

[Dave Ramsey]

At least your mother was proud of it. Oh, my God. Laura is in Jacksonville, Florida. Help us, Laura. What's up? What's up?

[Caller]

Hi, Dave. Thank you so much for taking my call. How are you doing today?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So my question is, my husband and I received our escrow analysis today, and we are going to be short $2,400. So we either can pay that up front or have it rolled into our payment. And I'm wondering what is the best thing to do?

[Dave Ramsey]

First and foremost, do a full audit on the thing, because most of those are calculated poorly.

[Caller]

So what happened with ours was our. We just got our mortgage literally last November. So we've only had it for a year. They underestimated our property taxes, number one. And then number two, we forgot to file for our Florida homestead exemption. So we paid property taxes on the full value of our home.

[Dave Ramsey]

Okay. All right. So you have filed for that. Now, has the property taxes come down?

[Caller]

Yes. So we. We have the homestead exemption in place for 20, 26, but they don't print the tax bill.

[Dave Ramsey]

Yeah.

[Caller]

Until October.

[Dave Ramsey]

Yeah, but the. So wait a minute. So you know they can calculate it? Exactly.

[Caller]

I called them this morning and they told me they couldn't.

[Dave Ramsey]

They have valuation on the house. There's a tax rate on the valuation. A sixth grader can calculate it.

[Caller]

I calculated it. I had it already. I have it on a spreadsheet right in front of me. And they told me that unless I could provide them with an updated tax bill, they would buy the current tax bill.

[Dave Ramsey]

Oh, you're talking about the idiots at the mortgage company, not the. Not the tax people.

[Caller]

Correct.

[Dave Ramsey]

Yeah. Okay. All right. Now that makes sense. Okay, so.

[Caller]

So my husband and I are in baby step two, but in January, I get three paychecks, plus A bonus. So I have. We have the money to pay the shortage.

[Dave Ramsey]

The problem is it's going to be an overage after you pay the shortage.

[Caller]

It is going to be, yes. And that was one of the things I talked to my husband about was what do we do? Do we pay the shortage up front?

[Dave Ramsey]

No, I wouldn't pay it up front. It's like prepaying it and putting it in a savings account of the mortgage company. Then they're going to give it back to you with no interest. So I'm going to pay it as slowly as possible because it's still wrong.

[Caller]

It is, yes. I saw it like they. They calculated our new payment without the shortage. Our payment is going to go up $150 no matter what. Because what their estimate on the property taxes was versus what our actual property tax bill they received.

[Dave Ramsey]

I think my answer is I want to talk to your supervisor. I want. Give me. Give me to someone who knows how to think and not answer without thinking because your answer is not acceptable to me. You want me to overpay escrow now. And so now there's going to be an overage and you people are going to owe me. So I don't like saving money at no interest with a mortgage company because you can't do math. So let me talk to your supervisor. I'm going to become a problem for them.

[Caller]

Got it.

[Dave Ramsey]

God, they're done. Dumb. Oh, that's so aggravating. Most escrow accounts are screwed up. That's what's so aggravating.

[Les Parrott]

But.

[Dave Ramsey]

But because it's really not hard. It is 1/12 of the actual tax and 1/12 of the actual insurance bill. And we should have both of those in front of us. And that's what the thing ought to be running on. Now. Are you in the hole from last year? Did they come up short last year?

[Caller]

Yeah. So the mortgage company estimated our property taxes to be 3,500. And it's a new build home. So they hadn't. They said they didn't have anything to go off of. They estimated it to be $3,500. Our actual property tax bill without the home set in place with $5,300.

[Dave Ramsey]

You did pay that?

[Caller]

We did.

[Dave Ramsey]

And that doesn't get refunded. It just doesn't get charged next year.

[Caller]

Well, they.

[Dave Ramsey]

You're not gonna get that money back. That money's gone, right?

[Caller]

Yeah. Correct. So we would be paying the shortage.

[Dave Ramsey]

Yeah, that created. That created the shortage. And I don. Mind paying that shortage because that's an actual Shortage. What I don't want is an adjusted payment going forward based on wrong numbers.

[Caller]

Yes. And that's where part of my problem is.

[Dave Ramsey]

Yeah, that's the one where I'm going to talk to the supervisor. The actual shortage. Let's pretend your payment was recalculated for January accurately from January on. Okay. Whatever shortage there is up to that point. Yeah, just pay that. That.

[Rachel Cruze]

Okay, but don't wrap it into the payment. You're saying.

[Dave Ramsey]

Yeah, don't wrap it into the payment and then have the proper payment going forward. That's the one I'm talking to the supervisor. Because I want the payment properly calculated. I have the tax bill in front of me, I have the insurance bill in front of me. Here's actually what escrow should be. And when you properly calculate that, that's the payment I want in January. And until you can tell me that's going to be the payment, I'm going to continue to ask for whoever's on the phone supervisor until I get to the president of freaking mortgage company company. Find somebody over there that can add because it's real simple. Because I'm not trying to create a shortage and I'm not trying to live off of you. I'm going to write a check for the existing shortage, but I don't want to create an overage next year because you guys didn't do the math right. You didn't do it right last time either. Yeah, because even in a new build you can calculate property taxes closer than 50, closer than 2,000, 50% off. Unbelievable. Wow. Oh my goodness. Oh my goodness. Yeah, that. No, no, no. Nope, nope, nope, nope, nope, nope, nope, nope, nope, nope, nope. Yeah, so it is not a bad idea to jump online if you have a mortgage once a year and check and make sure they're having the right amount, you know, right amount in your house pay for 1/12 of your insurance and 1/12 of your taxes because truthfully, this is what you deal with at the other end. It's the, it's the lowest common denominator answering the phone over there. And you know, apparently they studied something other than math in college or. No, they probably didn't make that anyway in 8th grade or wherever it was that they missed the lesson. But yeah, it's not hard. But it seems to be hard. Sam. Welcome back to the Ramsey show in the Fair Winds Credit Union studio. Rachel Cruz Ramsey personality number one best selling author and my daughter is my co host. Today Lloyd is in Seattle. Hi, Lloyd, how are you?

[Caller]

Hi, I'm well. How about yourself?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So I make about $200,000 a year and my family and I are living paycheck to paycheck. We're on baby step two. And I'm just wondering if there's anything I can do to help jumpstart our process of paying off our debt.

[Dave Ramsey]

Where do you think all that money's going?

[Caller]

It's all payments, it's all consumer debt and it's, it's all a bit overwhelming. I'm sick and tired being sick and tired, if you know what I mean.

[Dave Ramsey]

So, so, okay, so how much debt do you have, not counting your house?

[Caller]

About a hundred thousand dollars. Okay, and what's that on two car payments?

[Dave Ramsey]

How much is the first car? How much do you owe on the first car?

[Caller]

220,000.

[Dave Ramsey]

What do you owe on the second car?

[Caller]

30,000.

[Dave Ramsey]

Okay, and what's the other 50?

[Caller]

It's credit cards and personal loans.

[Dave Ramsey]

Okay, so 50,000 in credit cards and personal loans. Loans.

[Rachel Cruze]

Was that all lifestyle, Lloyd, or did something happen that you guys had to take out a loan for?

[Caller]

It's all lifestyle. We purchased a house last year and we got a little in over our heads with, with the renovations and decided it was better to follow through on it than to live in a half finished house.

[Dave Ramsey]

Okay, so it's finished now?

[Caller]

Close to it.

I've got one more bathroom I gotta finish. It's about halfway through the remodel.

[Dave Ramsey]

Okay, and how much is your house payment?

[Caller]

4,500Amonth.

[Dave Ramsey]

What's your take home pay?

[Caller]

I make about 8,000 per month without bonuses. But with bonuses it can be upwards of 14,000 per month.

[Dave Ramsey]

Okay.

[Rachel Cruze]

It's a big swing.

[Dave Ramsey]

Let's see. Well, I mean, to get, to get to 200, you have to be at 14.

[Caller]

Yeah, well, I'm, I'm on track to make 200 this year before taxes. And that's with the bonuses. My bonuses are quarterly and they're based on how, how I do it work, obviously.

[Rachel Cruze]

Yeah. Because if it's, if it's a month.

[Dave Ramsey]

You got a large chunk of your income that comes quarterly. Wow.

[Caller]

Yes.

[Dave Ramsey]

That makes a cash flow management tough.

[Caller]

It does, yeah.

[Dave Ramsey]

That's why it feels like it's paycheck to paycheck. You're not, you know, you're trying to live more like on 130 and then 70 is bonused.

[Caller]

Yeah, I mean, if I make my bonus, we feel more than comfortable making all of our payments, but if I don't make bonus, then we're in the red?

[Dave Ramsey]

Yeah. If you could get down to living and making your payments on your base and then when bonus comes in, it clears debt, that would work.

[Gary Chapman]

Yeah.

[Caller]

My plan was to get rid of one of our cars because I have a company vehicle I drive, but I'm actually. They're pulling my company vehicle and giving me a gas card and a stipend instead of dead. So now I have to start using my personal vehicle again to commute. So going down to one family vehicle is kind of out of the question at this point.

[Dave Ramsey]

Yeah, that makes sense. Okay. And how much are you putting in your 401k? None. How much of a refund, tax refund did you get?

[Caller]

Well, last year I think it was about 7,000. This year, I'm hoping it'll be about the same. We had a kid last year and we're gonna have another kid this year. And we also bought a house last year. So that also helps us a little bit on our.

[Dave Ramsey]

So you're. So you're over withholding, correct? About 600 bucks. 600 bucks a month?

[Caller]

Yeah, I guess. Yeah. When I was filling out my paperwork, it's all. It's all a bit confusing. And when my wife stopped working with our first kid, I was trying to figure out how to make it so we didn't end up owing. So I actually, I think I put. I think I have them withhold an extra 300 per paycheck just to make sure I don't end up owing at the end of the year.

[Dave Ramsey]

And that ended up actually being a save interest free savings account with the irs, and they give it back to you in April because that's about what you're over withholding. Is a 300 a paycheck okay? Yeah. That's 7,000 a year, by the way, right? Yeah, that's what turns out. So, I mean, you're over withholding and then you get it all back with no interest. So, no, I think we'll stop that. And that'll help some.

[Rachel Cruze]

I mean, half of this is your cars, like what you're saying, Lloyd. I just wonder if.

[Caller]

Yeah, I mean, that's really what I wanted to do.

[Dave Ramsey]

We were on track.

[Caller]

I mean, we're underwater on both vehicles. We have to pay off at least 4 to 5,000 on either vehicle to be able to sell them without selling private sale, which is obviously difficult. I'd like to be able to just go take it in and have a dealership take it off my hands.

[Dave Ramsey]

Yeah, but difficult is what you've got right now. That's Your whole life is difficult.

[Caller]

This is true.

[Dave Ramsey]

So we need to do some things that are difficult, like never going out to eat again and never going on vacation. And I don't know what the deal is with that bathroom, but it needs to be either finished in the next 30 days or you need to pull off of it and start getting these bills paid. Because you guys, you guys have got to tighten up. Been kind of living a little sloppy.

[Rachel Cruze]

Yeah, 50 grand and.

[Dave Ramsey]

Yeah, all of it. Yeah.

[Caller]

More than.

More than a little sloppy, that's for sure.

[Dave Ramsey]

Yeah. Well, but I mean, even if you're just a little sloppy with your income, with these debts, you are paycheck to paycheck.

[Gary Chapman]

Yeah.

[Dave Ramsey]

Because your $4,500 house payment is outrageously high on your base. If you don't, like, if you don't. If you don't make bonus, this house is insane.

[Caller]

Yeah.

[Dave Ramsey]

But if you make bonus, you're fine. I mean, 4,500 as a percentage of 14,000amonth is okay, but not of 8,000. That's over 50% of your take home pay then. So we can't.

[Rachel Cruze]

Do you guys have good monthly planning, Lloyd, that with the bonus. Like, I'm just wondering to put you guys like from a budget standpoint that there's an account where the bonuses come in and you're able to use most of that for debt, but it's also there as a cushion. That's like the highs and lows is what we call, call it a fund that. That's able to kind of sustain some of this monthly. The monthly expenses. Like, I'm just trying to get as consistent for you guys as possible. And sometimes having an extra account where there's money in there that you're. That you guys have already planned out throughout the year, you know what I mean? That you can kind of pull from just to. And again, low lifestyle. It's not for going out to eat and all of it. But I'm just trying to think from a. I just, I don't know, I could imagine month to month feeling like this. And then you're waiting on that bonus check. I just wonder if you can just spread it out a little bit more to give you more advantage.

[Dave Ramsey]

Here's the theory that I want to leave you with the thesis better than theory. The thesis I want to leave you with. The more radical you get in your reaction to this situation, the faster you're going to be out of it. Because the deeper.

[Caller]

Can we agree that I need to get rid of the cars somehow?

[Dave Ramsey]

I think we can agree with that. But move way down in car. That'd be a radical. I don't want you to be to one car, but, you know, okay, I borrow 5,000 from the credit union, I borrowed 12,000 from the credit union. And instead of 30,000, I got a $7,000 car and a $5,000 hole from the last car that I'm paying out of. I'd rather have 12 than 30. And that's moving out of that. 30. Whatever. Let's just work our way down this thing and say, all right, what radical things can we do to shock this family system temporarily and get this math moving in our direction so we can see a light at the end of the tunnel? Because it feels like we're kind of stuck like a rat in a wheel by the mediocrity, the mediocre handling of things. And so what I want to do is get extreme over here, extreme over here, extreme over here as a one or a two year plan so that I get rid of all of this. And then we've got the renovations of the house in the rear view mix mirror, and we've got no payments. We have an emergency fund. Then we can do a lot of stuff with this quarterly bonus stuff coming in and out. And you got a lot of wiggle room and you can start your 401k and start building some wealth. But you feel really stuck right now. And so what I'm going to do is throw dynamite in the middle of this thing, blow it up. Let's create some chaos and shock the system of the family. And we always laugh and say, they sell so much stuff, the kids think they're next. And we're not gonna see the inside of a restaurant unless we're working there. And we're not going on vacation. And we're gonna be on a written plan. And it's beans and rice and rice and beans. And we're gonna make an adventure out of this. And we're gonna put a piece of plywood across that bathroom for right now. And we're gonna use the rest of the house. It's $4,500. Screw it. And we're gonna get this car sold and moved down. And we're gonna be radical then foreign.

[Sponsor/Ad Voice]

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[Dave Ramsey]

Changing it up little boys and girls. Ken Coleman Ramsey personality number one bestselling author is at my right. To my left is Dr. Les Parrott, number one bestselling author. And to my far left, iconic number one best selling author, Dr. Gary Chapman, who wrote the absolute perennial bestseller, the Five Love Languages that most of you have learned and heard and used in your marriage. And if you didn't, you should have some 20 million of those have sold. And my friend Les and Dr. Chapman have teamed up to do a brand new book called the Love Language that Matters Most. Welcome, gentlemen. Good to have y'. All. Thanks.

[Gary Chapman]

Good to have you.

[Dave Ramsey]

So what is the love language that matters most?

[Les Parrott]

It's yours.

[Dave Ramsey]

Yeah, thank you, Les. I'm going to tell my wife that tonight.

[Les Parrott]

Right now. That's the one that matters. Well, the love language that matters the most is the love language of your partner, of your spouse or your child or whoever it is that you're in front of that you want to express love. And for the longest time, Gary's incredible book, by the way, isn't that amazing? 20 million. That's why I wanted to help him. I want to come alongside.

[Dave Ramsey]

Yeah, he needed a lift, huh?

[Les Parrott]

And but you know, so many times we read that book and we go, okay, now love me that way, right now, you know how to love me. And this is kind of turning the tables and helping us.

[Dave Ramsey]

Yeah, like you missed the point. Yeah, I remember I took the disc, remember that thing? A thousand Years ago, like 40 years ago, I came home, showed it to my wife and she read it and she goes, yeah, that's what's wrong with you. It's the same thing, right? Same thing. I love it. This is great, guys. And of course, Les, you're the master of assessments. You put together some of the best assessments out there. Simbus and several others that have gone worldwide best selling, assessing different things. And you guys have done an assessment to go with this?

[Les Parrott]

We have a premium assessment. This is one of Gary's biggest dreams for the longest time. Right, Gary?

[Gary Chapman]

Yeah, absolutely. We have had a free assessment for determining the Five love languages.

[Les Parrott]

We call it a quiz.

[Gary Chapman]

It took a quiz, and 155 million people have taken the free quiz. And I told my publisher we should have been charging a dollar apiece for real minimum. But this one, we're dealing with things we don't deal with in the original book. Two things, primarily. One is how personality interfaces with the love languages. And I mentioned dialects in the original book, but I didn't give any of the dialects. But in this premium assessment, you find out which dialect or dialects within the language are most important to you. You. And the same thing true with your personality. And so if the husband and wife both take the premium assessment, which we are hoping that's the ideal man, they're going to have valuable information on how to more effectively communicate love to the person.

[Les Parrott]

Because you can sometimes try to speak the other person's love language and still not fill up their love tank. Because you don't quite hit the nuances.

[Dave Ramsey]

Of, for instance, gift giving.

[Les Parrott]

Exactly.

[Dave Ramsey]

As you know, there's a lot of different ways you can do there. That's right. Or service. There's a lot of different ways that can manage. And that's what you mean by dialect.

[Gary Chapman]

That's right. Yeah.

[Sponsor/Ad Voice]

Let's dive into that, because, Les, you.

[Dave Ramsey]

Were sharing with me earlier, you and Leslie, obviously Leslie's on this book as well. Her love language, primary love language, is words of affirmation.

[Sponsor/Ad Voice]

Yet you were giving her the wrong dialect.

[Dave Ramsey]

Explain that.

[Les Parrott]

Words of affirmation meant encouraging her. And so I became a walking Hallmark card. I was just like, you can do it, and, man, yeah, you'd be great at that. And anything that would come up. And it turns out that was putting all kinds of pressure on her to do things she didn't even want to do. And what we learned in the research was her real dialect within words of affirmation is compliments. So if I could say, oh, my goodness, I saw you interacting with our son John, and that was amazing piece of parenting that you did, that fills up her love tank.

[Dave Ramsey]

It's not more catching something. In her case, catching or doing something right, rather than trying to impress power.

[Les Parrott]

Yeah, exactly. And for some people, though, their love language is words of affirmation, and they want encouragement that that is their dialect. It's just like, you know, I don't know if you've ever noticed this, Dave, but if you go to Boston, they don't sound like you do up there. You know, they have a different dialect. So we have different dialects in our love language.

[Dave Ramsey]

Yeah, I've noticed That people hanging around together sound alike too. Most of those people have an accent.

[Les Parrott]

That's right.

[Dave Ramsey]

So I got two of the best marriage minds and researchers on the planet sitting beside me. We know that money is the number one reason for divorce. Or at least something is manifesting itself as money issues as the number one reason for divorce. How can couples use this book to change the way they communicate about money?

[Les Parrott]

Great question, Gary.

[Gary Chapman]

Well, I think that one of the things is if they feel loved significantly, if that love tank is full. Full, they'll be able to talk about money much more freely than they could talk about it if they don't feel loved by the person.

[Dave Ramsey]

Not threatened.

[Gary Chapman]

That's right. It creates a totally different. Different atmosphere to discuss financial issues.

[Dave Ramsey]

That makes a lot of sense. It makes a lot of sense.

[Les Parrott]

Yeah. That emotional safety is what allows you to talk about the finances without spinning out of control. Right. Because you know, you're accepted. If you're loved, then you can process it and communicate. It really does come down to communication. Communication.

[Dave Ramsey]

If you've not read the five love languages, you need to, folks, it's a standard. I mean, you do 20 million of anything, it's a standard. Right. And it sets you up then to understand the other person. And that's the whole purpose of this book, is to redirect it and go. Not intake, but outgo.

[Les Parrott]

Yeah. And that's another way of saying empathy. Right. If we can put ourselves in the other person's shoes and accurately meet their needs, actually fill up their love to tank. You know, the love tank is such a great metaphor because it's so easy to just ask your partner, hey, how full is your love tank right Now? Scale of 1 to 10? It's just an easy thing to do. And they'll tell you. Ask Sharon tonight when was the last time he asked her. But it's been a while, Dave, hasn't it?

[Dave Ramsey]

No. Let me tell you, my wife is an introvert. And so when I know that her tank in general is when she's had too many people.

[Les Parrott]

Yeah.

[Dave Ramsey]

And she needs some space.

[Les Parrott]

Right.

[Dave Ramsey]

And that that refills her tank in general. It's not a love language. That's just an introvert extrovert.

[Les Parrott]

No, but you know, that's brings up something pretty cool that we did in this book and with the assessment and that is to identify not just your love language, but bring your personality, like, are you an introvert or an extrovert? So words of affirmation. If you're an extrovert, you want to be Affirmed. In front of other people. And if it's gifts, bring them in front of other people. Make it a big celebration. If you're an introvert. Oh, please don't embarrass me.

[Gary Chapman]

Right.

[Dave Ramsey]

Do that one on one. I've got to ask a follow up with you two in the room. Okay.

[Sponsor/Ad Voice]

So we've got a lot of people. People that are in baby step two, which for us it's, you're taking your smallest debts to your largest debts. And it is Gazelle.

[Dave Ramsey]

Intense. Dave says, rice and beans. Beans and rice. You know the drill. If one of their spouses love language is gifts, and we're telling you, you're not doing any gifts until you get out of this thing, what advice would you give to that other spouse who they, you know, they're trying to be disciplined.

[Sponsor/Ad Voice]

Gazelle intends to get out of this. But yet that love tank may be.

[Dave Ramsey]

A little empty because they can't give gifts. What do they do?

[Sponsor/Ad Voice]

Gary?

[Gary Chapman]

I would say the gifts do not have to involve money. Money.

[Dave Ramsey]

Okay.

[Gary Chapman]

I remember a man, he said, I was taking a walk. I knew her language as gifts. I saw a bird feather. I picked it up and brushed it off. And when I got home, I said, honey, when I was walking, I found this bird feather and I want to give it to you because it reminded me that you are the wind beneath my wings. And she said, oh, that is so sweet.

[Dave Ramsey]

That is so corny.

[Sponsor/Ad Voice]

Might be all you can do, though. It works, right?

[Dave Ramsey]

Marriage. Saved by a bird feather. I'm just saying. That is great. That would. Yeah, it is symbolic that the thought. The old saying around Christmas time. We always say the thought that counts, right? And it truly is. There was a guy we did a thousand years ago. You guys probably remember the book writing letters to your family treasure, something I think it was called. And each year he sold a box. And you put these letters in a box each year. But it was nothing more than affirmation and just other things in the letters. But again, it was a type of gift giving that didn't cost a lot of money, but it elicits a lot of tears of joy.

[Les Parrott]

Well, and for some people, that is their dialect when it comes to gifts. They don't want something extravagant. I don't want an iPhone. I don't want a big fancy dinner. I just want something sentimental. Write me a poem. Give me a card.

[Dave Ramsey]

Dr. Gary Chapman, honored to have you in our studio. Proud to say I now know you. I've admired you for years and love the work you do. Fabulous stuff. The Five Love Languages. The new book with Gary Chapman and Les and Leslie Parrott comes out the Love Language that Matters Most, along with the premium assessment. Be out after the first of the year. Sure you're looking for it. Absolutely incredible stuff. Thanks, gentlemen. Good to be with you.

[Gary Chapman]

Thank you.

[Dave Ramsey]

When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan. And that begins with our get started assessment. Go to ramseysolutions.com start answer some questions and we'll show you what steps to take next. Don't stay stuck. Take control of your money. Starting Today, go with ramseysolutions.com start. Gabby is in Columbus, Ohio. Hi, Gabby. How are you?

[Gary Chapman]

Hi, Dave.

[Caller]

Thanks for taking my call. I'm good. How you doing?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So my question is whether my husband and I should pull some money from our emergency fund in order to buy a gun.

[Dave Ramsey]

35 years of doing this, that's the first time I've heard that question. What is the emergency? How would a gun be an emergency?

[Caller]

Yeah, I don't necessarily think it is, but my husband does. So we had a weird situation that happened just a couple of days ago where it was like 11 o' clock at night and some guy started banging on our door. And he was, we talked to him through the ring camera and he was saying that somebody stole his phone and that it was GPS pinging to our address. And then it was probably 45 minutes to an hour before he actually left. Like, he was looking around our property and then he was sitting in his car, just like sitting in front of our house waiting. It was very strange.

[Dave Ramsey]

Why did it take the police that long to get there if had a property invasion going on?

[Caller]

I'm not really sure. They said that he, we did call the police. They said that he had also called them about the phone and I guess they decided it wasn't an emergency. He wasn't. He didn't seem like he was trying to break into the house. He was just looking around on our yard.

[Dave Ramsey]

So you're going to shoot him?

[Caller]

Well, my husband, I think, is concerned that if he did come back and, like, did decide, like, he was just.

[Dave Ramsey]

Not going to shoot him, just going.

[Caller]

To break into our house instead of.

[Dave Ramsey]

Tell the cops to come. Yeah, well, listen, listen. Let me just tell you, Let me, let me stop, okay? I, I carry a gun. I'm a gun, I'm a gun guy, okay? But there's no case like that that I'm going to shoot somebody. Yeah, we just escalated from a lost cell phone to somebody dead on your front porch, right? No, this is not okay. That's not the way to solve the problem. The only reason you would shoot someone is if they're inside your home about to harm your family. Not banging on your door, not scaring you, not all of that. You don't go out in the front yard and wave your gun around because he's sitting in your driveway. You call the cops six times and say, get your butt over here. One of us is in danger. And I'm not sure which one it is, but you got. You jack the police up and let them do their job. Job. But you don't wander out in the front yard. You'll get shot.

[Caller]

Yeah, I think he's just concerned that if something were like worse were to happen and somebody were to break into our house, he's like, if, if we don't have it now, we're not going to be able to. We're not going to want to wait until something worse happens. I guess is where he's coming from. But I'm with you. I really.

[Dave Ramsey]

What is your. What is your household income?

[Caller]

So annual is about 85,000, but our monthly income during the winter, a lot. It's pretty heav. It's higher in the summer. So during the winter we make about four to five thousand dollars a month.

[Dave Ramsey]

Okay. All right. Because I don't like his attitude about handling a firearm. I'm not going to tell you to buy a gun because I think you're going to get yourself in a lifetime of hurt if you handle these situations with a firearm. You don't use a firearm unless someone is about to die. Okay. That's. You just don't. I mean, it's not. That's not what that's for. And he's this guy on the ring doorbell thing is not even close to that. This is. People like that, when they get shot, that's when you go to jail.

[Caller]

Right.

[Dave Ramsey]

That's not. Or you spend a million dollars trying to not go to jail. And because you weren't even defending yourself, you just got spooked or you thought you were a ba or something and so don't do that. Now, I will tell you that there's a product out there that I would put in your budget to address this concern. Okay? But it's not a firearm. It's a non lethal firearm called a burna B y R N A And It'll cost you about 500 bucks. And it shoots a projectile that can either be pepper spray or a hard projectile that if you shoot someone with it, they will wish they had been shooting shot. They'll go down, but they're not going to die. It's non lethal. But if your husband pulls a Glock and empties a Glock into the guy's windshield because he freaks out, he's going to jail.

[Caller]

Right?

[Dave Ramsey]

So that ain't cool. And you can buy a glock for about 500 bucks. Okay.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

So either one will do the job. And you can do that in your budget. It's not an emergency, though. But the fact that you all are reacting to this situation emotionally and actually calling this an emergency emergency means you need to rethink how you're going to defend your home.

[Caller]

Yeah.

[Dave Ramsey]

And I got to tell you, I again, I have a gun on my person most of the time, but the chances of me pulling it out are zero. I will run away. I'm not going to shoot somebody.

[Caller]

Yeah.

[Dave Ramsey]

There's just too much involved and it's not the answer. And you know, the only time is if one of my grandkids or my kids or somebody was in danger, my wife was in danger.

[Caller]

Yeah.

[Dave Ramsey]

But that's not. That's the only, the only way. And it would not be that I was scared at somebody knocking at my front door. I'm gonna be on 911 talking to dispatch until somebody rolls up on this boy and puts him down. He doesn't be running around my front yard scaring my wife and me. This guy needs to go down. And you know, you guys did not communicate with law enforcement accurately and urgently enough to get some reaction. People don't need to be squirreling around my dadgum house. I don't care if he's drunk. I don't care if he's got the wrong address or whatever with a cell phone. Doesn't matter. All that stuff doesn't matter. You can't bust up on somebody's house like that without consequence. And so put law enforcement on that, for God's sakes. No, buying a firearm for self protection is not an emergency. What is an emergency is changing your situation so that if you need to spend some money on changing your situation so that you don't have this emergency, like you don't live there anymore, you move or something like that. If you've got a place that's unsafe, then I would do that. But I'm not going to build Fort Knox over here. And Stop stick, you know, AR barrels out of every window to protect my house. No, we're not doing that. That's just not a good use of your. Of your life. You should be doing something other than that with your life. So. And I'm about as gun. About as much a gun guy as anybody you'll ever talk to. So don't misunderstand. I'm not anti 2A. I'm anti shooting people. Hello? That's a bad idea. Yeah, Maxi is with us. Maxi is in Knoxville. Hi, Maxi. How are you?

[Caller]

Hi, Dave. Thank you.

[Dave Ramsey]

What's up?

[Caller]

I'm doing well.

[Dave Ramsey]

Good. How can we help?

[Caller]

My. Yes. My husband and I owe about a year ago, inherited just over a million dollars in assets, including a home. And after paying off the home and the debts that that family member left behind, we have approximately $288,000 left in investments and including our. So we've rolled that into an S&P 500 account, which stands about $220,000. Excuse me. And my husband and I have about $127,000 in personal debt, and we're wondering if we should go ahead and pay off that debt. My husband wants to jump the gun and do it. Wipe it out. My personal debt includes student loans, cars, and some home repairs. Or if we get a little bit of a slower approach and do a snowball method with our debts and do it that way.

[Dave Ramsey]

What's your household income combined?

[Caller]

120,000.

[Dave Ramsey]

Okay. And you kept the other house and it's paid for?

[Caller]

Yes, my husband and I were renting an apartment before.

[Dave Ramsey]

So you're moving into the paid for house?

[Caller]

Yes, we paid it off.

[Dave Ramsey]

Okay. And that was the family home? That was a family home or whatever that. That you inherited?

[Caller]

Yes.

[Dave Ramsey]

Okay, I got you. I got the picture now. Okay, so here's the problem. Mathematically. You should pay off all the debt today, okay. And then from this point forward, take all the payments and live on a written budget and start investing aggressively. Because you don't have a house payment, you don't have $127,000 worth of bull crap payments. And you put all the bull crap payments in the old house payment or rent payment payment into one lump, and that starts going back into that S and P or back into some good mutual funds with a smartvestor pro, and you'll be back to 200,000 in a heartbeat. If you change the way you've handled money to this point. If you keep handling money the way you handle to this point, in four years, you're Going to be back in debt again. Because every time I want something, I go get it. No way. You got to stop that. No more buying crap unless you have the money. Ever. And if you can't, pinky swear and spit shake and write that down in blood and both of you agree to it, and we're going to be on a written budget the rest of our lives, then you're going to screw this up by going back into debt by not changing you. So change your habits. If you're both convinced you can do that, then I'd pay off the debt. It's one of the best times of the year, but it's also the time of year when people let their money get totally out of control. Everywhere you look, it's just buy, buy, buy. So you start swiping the credit card and suddenly it's January and you got a mess on your hands. Don't let that happen. Tell your money where to go instead of wondering where it went with our budgeting app, EveryDollar. EveryDollar not only helps you stay on budget and in control of your spending this holiday season, it also helps you find extra margin in your budget. Thousands of dollars of it. And every day will coach you to build better money habits and attack your goals faster than ever. So while most people will be starting in January with a taste of regret in their mouth, you'll already be working. Winning. Start every dollar for free by downloading the app today. Our scripture of the day. First Peter 5, 6, 7. Humble yourselves therefore, under God's mighty hand, that he may lift you up in due time. Cast all your anxiety on him because he cares for you. James Clear says worrying about the future is like watching a leaf fall and trying to predict where it will land. Stop trying to guess where the wind will blow and get to work. Amen. One of our favorite things is hearing people share their stories of how they're winning. And we just heard this from Claire and Winston. This is me and my husband's third month budgeting with the EveryDollar app. And I'm amazed at how much money we found. Found. We went from feeling like we were living paycheck to paycheck to finding $3,500 extra margin each month to put toward our debt. We each had four credit cards and have been able to pay them all off. Never going back. Man, that's great, you guys. Hey folks, you can do this, too. You can take control of your money. You can change your family tree. You can live like no one else. Go download our every dollar Budgeting app for free in the App Store or Google Play. Jen is in Jamaica. Hi, Jen, how are you?

[Caller]

I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So I'm a 13 year teacher and I've saved up about $200,000 and I'm trying to figure out how to best invest this. I don't have any retirement because I'm an international teacher. There are no 401ks. So it's just intimidating to try to figure out where do I put all of that money. But I know I need to.

[Dave Ramsey]

You're a U.S. citizen?

[Caller]

I am, yes.

[Dave Ramsey]

Okay. You're filing taxes in the U.S. no.

[Caller]

Because I live overseas and I'm claimed as a resident overseas, I don't have to pay U.S. taxes.

[Dave Ramsey]

Okay. Roth IRA is based on earned income and I suspect that would mean even if you're a citizen and earned income that is reported to the irs. So I, I don't know, but I don't think you're going to qualify for that. I'd have to.

[Caller]

I don't think I do either.

[Dave Ramsey]

Yeah, I would have to double check that. So I mean you're left then with just buying mutual funds. And as a US citizen abroad, you can do that without any trouble.

[Caller]

I just don't know how to get started with that.

[Dave Ramsey]

Yeah. Okay. What I, what I would do is sit you with a financial advisor or get you on the phone with a financial advisor. Ramsey Vest, a SmartVestor Pro Pro on ramseysolutions.com they don't work for me, but they're people that we have vetted that are in the investing community. And the main thing we make sure they do is that they have the heart of a teacher, meaning they're going to teach you what your options are. And I do not know what their licensing rules are regarding an international investment, but as I remember it, the since you're a U.S. citizen, they probably can do the investment for you. So what I would do is just pick Nashville where I live because I know I don't have one in Kingston, Jamaica. I'm 100% sure. Okay. So pick Nashville and get in touch with them and ask them if there's something they can do to help you get started investing. If they can, that's your best route.

[Caller]

Okay.

[Dave Ramsey]

All right.

[Gary Chapman]

If.

[Dave Ramsey]

Go ahead.

[Caller]

Oh, I was just going to ask the other thing that I was because, because we are international, we move a lot. We don't currently have a home. And I've liked that because I don't not. We used to, but we got rid of it. I'm just trying to decide is that something that would you think that that's okay and that we're just putting things into.

[Dave Ramsey]

I think that's fine. What I would do is just make sure you have a. What's your end game target and how you're going to handle real estate in the end game. Okay. Are you planning to retire in the start?

[Caller]

Yes.

[Dave Ramsey]

Okay.

[Caller]

Yeah.

[Dave Ramsey]

So at some point we've got to have a home fund. So let's call it the magic 65 or 70 years old or whatever. We buy a home for cash and we still have a nest egg beyond that to live on for the rest of our lives for retirement. Because your home is your largest item in retirement in your budget and to not have it paid for destabilizes your retirement retirement. So I would just have a target of saying when we call this foreign teaching quits and come to the States to retire, you know, we need to have a big pile of money in a mutual fund to buy a house and another big pile of money in some mutual funds to live off of and that. So this is our overall. So in other words, you're paying Yourself, you're investing 15% of your income or more for your retirement and then you're also paying yourself a house for payment into another fund.

[Caller]

Oh, that makes sense. Yeah.

[Dave Ramsey]

So that that fund is going to be enough to buy you a house later. So hopefully the smartvestor pros can help you as a fallback rather than just having it sitting in savings. There's a thing called I hate the phrase but I'm going to use it passive investing. Okay, so the average of the stock market is the S&P 500. Have you heard?

[Caller]

Yes.

[Dave Ramsey]

The S&P 500 index funds do what the market does. No better, no worse. And you can just reach over to Fidelity or Vanguard or American or somebody and buy that. You could just jump online and buy that and you'd have 200 grand in there and it would be going up. What the stock market does. No better, no worse. Now I don't. I have some parked in the that that I'm using to save to buy some real estate later. But I also have regular retirement investments in the four types of mutual funds I talk about called Growth Growth and Income Aggressive Growth and international that I buy through my SmartVestor Pro. All right, but if you want to do a dumbed down version that's much better than doing nothing. That would be just put it all in an s and P5,500.

[Caller]

Okay.

[Dave Ramsey]

And you can do that online and you won't have any trouble doing that, but that's your worst case scenario. And just, you know, the market is average between 10 and 12 a year, depending on what you read and who you believe. I see, I see. 11.8 is the average that the S and P has done for 70 years. And see, that's a lot better than a 3% high yield savings.

[Caller]

Right, right.

[Dave Ramsey]

And this calendar year, year today at this moment, the S and P for this, for this calendar year is up 17%. That's not normal. That's unusually good. But.

[Caller]

Right.

[Dave Ramsey]

You know, instead of three, you could have made 17. And so that's a $35,000 error with 200 grand. Okay. So that's what I mean. At least do that. If the other thing, if they, if you call the other people and they go, nope, can't help you. We're not licensed. We can't do it. You can't do it the way you are. You don't have a US address. I can't help you all that. Then just jump online and buy an S and P. Okay.

[Caller]

Yeah.

[Dave Ramsey]

At least it'll grow. And the good news is it doesn't usually generate much income tax on the growth until you sell it. And when you do sell it, it's actually a capital gains rate rather than personal income rate. So it's a great investment tool if you don't have anything else available. Available kind of a thing, or if you've maxed out all retirement but you don't have. You don't have much available because of your situation. Very interesting. Good question. Thanks for calling us. Merry Christmas to you. Cindy's in Charleston, South Carolina. Hey, Cindy. What's up?

[Caller]

Hey, good afternoon. Thank you so much for taking my call.

[Dave Ramsey]

Sure.

[Caller]

What's in need? I am in need of your wise counsel about retiring at age 62 instead of waiting for a few more years.

[Dave Ramsey]

Okay. What's. How. How large is your nest egg?

[Caller]

We have 1.5 million in investments, and I have 135,000 in my TSP, which is the government equivalent of 401k.

[Dave Ramsey]

I'm familiar.

[Caller]

And then we have 45,000 in high yield savings accounts and no debt. No debt? No, sir.

[Dave Ramsey]

House paid off?

[Caller]

House is paid off. It's worth about 335,000. Another part of this equation is that when I do retire, we would like to move closer to our grandchildren. So that may involve spending a little bit of our nest egg. For that move.

What do you make 150,000.

[Dave Ramsey]

What does he make?

[Caller]

My husband is already medically retired.

[Dave Ramsey]

Ah, okay.

[Caller]

So he's got disability drawing, so.

Yes, sir. Yes.

[Dave Ramsey]

Well, here's a good rule of thumb. I was just talking to the other lady about mutual funds, okay? If you've got the mark, if you've got your stuff invested in that 1.2, and it averages what the market has averaged. 11.8. Okay.

[Caller]

Yes.

[Dave Ramsey]

Let's call it 12 for easy math right now. And you leave 4% in there every year and took off 8%. The nest egg on average, will grow at the rate of inflation. So if you can live off of 8% of that nest egg, or a little less, you can make it pretty fine. If you want to add, if you want to work a few more years, you can obviously double it again and live more than pretty fine. Either way is fine with me. That puts this 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.