Go Slow: Never Invest in What You Don’t Understand

Summary

Podcast Summary: The Ramsey Show – "Go Slow: Never Invest in What You Don’t Understand"

Release Date: February 26, 2025
Host: Dave Ramsey | Co-Hosts: Rachel Cruz and Marie

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Overview

In this episode of The Ramsey Show, Dave Ramsey and his co-hosts, Rachel Cruz and Marie, delve into essential personal finance topics, providing listeners with practical advice on home buying, debt management, generosity, wedding budgeting, and handling student loans. The episode underscores the importance of understanding financial decisions before making investments and adhering to Ramsey's Baby Steps for financial freedom.

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1. Navigating the First Home Purchase

Caller: Rachel Cruz
Timestamp: [00:54] – [06:10]

Situation: Rachel and her husband have completed Baby Step 3B and are in the process of buying their first home. They offered to purchase a reasonably priced house with a 5% down payment but encountered a negotiation hurdle when the sellers refused to include appliances, resulting in an additional $3,000 expense.

Discussion & Advice:

• Dave Ramsey emphasizes that the $3,000 for appliances is not an emergency fund expense and suggests considering alternative solutions:
  • "It's not an emergency. So it doesn't come from the emergency fund." [01:47]
  • Proposes negotiating further or opting for more affordable appliances to stay within budget.
• Marie adds that unexpected expenses can make prospective buyers question their readiness to purchase a home but reassures that such bumps are manageable:
  • "It's an easy one." [01:52]
• Dave advises standing firm in negotiations or considering other properties that include necessary appliances:
  • "What price range on the home?" [04:26]
  • Believes sellers would concede appliances if buyers walk away, asserting, "These idiots are going to lose the whole deal over $3,000." [04:34]

Conclusion: Rachel is encouraged to remain confident in their financial plan, explore negotiation tactics, or consider alternative homes that align with their financial comfort zone.

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2. Embracing Outrageous Generosity

Caller: Julia from Des Moines, Iowa
Timestamp: [10:17] – [19:22]

Situation: Julia and her husband have achieved Baby Step 7—being mortgage and debt-free—and are seeking guidance on how to practice generosity beyond regular tithing.

Discussion & Advice:

• Dave Ramsey congratulates Julia and highlights the importance of intentional generosity:
  • "If you'll do what you're doing right now and be intentional about the subject of generosity... you'll get great joy from it." [17:14]
• Marie shares personal strategies for generosity, including supporting long-term favored organizations and engaging in spontaneous acts of kindness:
  • "We put an amount of money every single month and hold each other accountable to give away at some point in the month." [13:47]
• Dave underscores the joy of random acts of kindness and strategic donations aligned with personal values:
  • "Random acts of kindness just catch somebody where a few hundred dollars means a lot." [19:25]

Conclusion: Listeners are encouraged to structure their generosity thoughtfully, balancing regular donations to trusted organizations with spontaneous acts of kindness, ensuring their giving aligns with personal values and fosters a fulfilling life.

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3. Accelerating Mortgage Payments While Planning for Retirement

Caller: Sue from Lexington, Kentucky
Timestamp: [23:57] – [37:03]

Situation: At 65, Sue has $41,000 in retirement savings and an $88,000 mortgage. She contemplates whether to aggressively pay off her mortgage once she becomes eligible for Social Security.

Discussion & Advice:

• Dave Ramsey advises focusing on eliminating debt before accelerating mortgage payments:
  • "Don't pay any extra on the house until the debt is gone." [34:01]
• Encourages Sue to save $15,000 annually for retirement post-debt repayment and then direct additional funds toward the mortgage:
  • "Once that $40,000 is gone, then the first thing we're going to DO is put 15% into retirement." [35:36]
• Marie emphasizes the importance of consistent retirement contributions and strategic allocation of funds:
  • "15% of your income going into retirement." [29:20]

Conclusion: Sue is advised to expedite debt repayment, maintain consistent retirement contributions, and subsequently focus extra resources on eliminating her mortgage, ensuring a balanced approach to debt management and retirement planning.

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4. Budgeting for a Wedding as a College Student

Caller: Riley from Jacksonville, Florida
Timestamp: [53:23] – [62:48]

Situation: Riley and her fiancé, both commissioning Naval officers after graduation, plan to marry before leaving for duty. They seek advice on allocating a $20,000 wedding budget given their current savings and income projections.

Discussion & Advice:

• Dave Ramsey assesses the feasibility of a $20,000 wedding based on Riley's current and future financial status:
  • "If you have $30,000 to your name and you're going to spend two-thirds of your net worth on your wedding, that's probably too much." [57:53]
  • Suggests postponing large expenses until after income stabilizes post-commissioning.
• Marie proposes creative solutions, such as having a smaller celebratory event now and delaying the main wedding:
  • "Could you guys go get married, have your family have a great, fun dinner out, and that be the quote unquote marriage?" [58:36]
• Dave emphasizes the importance of aligning wedding expenses with future income to avoid financial strain:
  • "You're going to be okay because you're thinking about it and because you're a saver." [60:33]

Conclusion: Riley is encouraged to either adjust her wedding budget to align with her current savings or consider splitting the wedding celebration into stages to ensure financial stability during and after her commissioning.

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5. Handling Consolidated Parent Plus Loans

Caller: Sarah from Philadelphia
Timestamp: [76:06] – [83:24]

Situation: Sarah financed her education through Parent Plus Loans, believing she was repaying only her own loans. However, her parents consolidated the loans without her consent, resulting in Sarah inadvertently paying off her siblings' debts. She seeks guidance on addressing this unexpected financial burden.

Discussion & Advice:

• Dave Ramsey clarifies that Sarah is only legally obligated to repay her own loans:
  • "You do have a moral obligation because you promised to pay your part, but you did not promise to pay your siblings' part." [78:10]
• Advises Sarah to perform precise financial calculations to determine the actual remaining balance:
  • "Go online and find a calculator... What is the balance?" [80:50]
• Emphasizes setting clear boundaries and asserting her fulfillment of her own financial obligations:
  • "I did my part. But you guys probably need to sit down with a good marriage counselor." [81:09]
• Marie highlights the importance of visualizing and documenting her payments to support her conversation with her parents:
  • "Have it visual. Have it on a sheet of paper." [81:05]

Conclusion: Sarah is advised to verify her loan obligations through precise calculations, communicate clearly with her parents about her financial boundaries, and seek professional counseling if necessary to resolve the debt consolidation issue.

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Key Takeaways

1. Invest Wisely: Always understand investments thoroughly before committing funds. Avoid complex financial products that are not within your expertise.

2. Generosity with Intent: Practice generosity beyond tithing by supporting trusted organizations and engaging in spontaneous acts of kindness, ensuring alignment with personal values.

3. Debt Management First: Prioritize eliminating debt before accelerating mortgage payments or engaging in additional financial endeavors, maintaining a balanced approach to financial freedom.

4. Budgeting for Life Events: Plan major life expenses, like weddings, in alignment with current and projected financial status to prevent undue financial strain.

5. Set Clear Financial Boundaries: When dealing with family-related financial obligations, ensure clarity in agreements and maintain boundaries to protect personal financial stability.

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This summary captures the essence of the episode, providing listeners with actionable insights and emphasizing the importance of understanding and strategic financial planning.

Transcript

[Dave Ramsey]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. I'm Dave Ramsey, your host, Rachel Cruz, personality number one best selling author, host of the Rachel Cruz Show. My daughter is my co host today. Open phones here at Triple 882-55-5225. That's Triple 882-55-2225. Marie's in Sacramento. How are you, Marie? Hi.

[Rachel Cruz]

I'm doing good. Thank you guys for taking my call.

[Dave Ramsey]

Sure. What's up?

[Rachel Cruz]

So me and my husband just finished up baby step 3B and we are buying our first home. So we just put in an offer for a house that we really like. It was very reasonably priced. We have about 5% down that you guys recommend for the first home. And in negotiations, the sellers weren't willing to give up their appliances. And so that was going to be an extra $3,000 cost. We have like the 5% down. We little bit extra for closing costs in our emergency fund. And I'm not sure if that $3,000 should come from taking a little bit less down our emergency fund or if it's a sign that we're just not ready to buy a house yet.

[Dave Ramsey]

Okay, so it's not an emergency.

[Rachel Cruz]

Yes.

[Dave Ramsey]

So it doesn't come from the emergency fund. That's an easy one. Right?

[Rachel Cruz]

Yeah.

[Dave Ramsey]

And I don't know if I go so far as it's just not assigned to not buy the house. What's your household income?

[Rachel Cruz]

About $150,000.

[Dave Ramsey]

Which appliances?

[Rachel Cruz]

Fridge and the washer and dryer.

[Dave Ramsey]

Where's the fridge? The house that you're in. Are you renting?

[Rachel Cruz]

Yes, we are.

[Dave Ramsey]

So you don't own the appliances there at all?

[Rachel Cruz]

No, we do not.

[Dave Ramsey]

Okay. All right. Okay. You know, it feels like to me that you're buying a first house and this bump in the road scared you and it makes you want to, it makes you kind of go, oh, no, maybe I'm not ready. Because it's not. Is $3,000 when you make $120,000 a year shouldn't be, you know, we ought to be able to figure out a workaround. Right. Like we go get a refrigerator and we wait a month and a half or we get used washer and dryer and we figured out where it's 2000 or $1500 to do all this and.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

Or you buy a cheaper version of both and upgrade it a year from now or two years from now and throw it out. I don't care. But.

[Marie]

But the 3,000 scared you that you were like, we can't even cover $3,000. Can we own a home? Because the expenses.

[Rachel Cruz]

Not necessarily. No.

[Marie]

I was gonna say because the expenses of other things could be so much more. I could see how that's, like, intimidating, where you think, oh, my gosh, if $3,000 is throwing us off, what if the roof. Something happened to the roof or the, you know, the H vac or something. That's. That's seven times more than just this.

[Dave Ramsey]

Like, you got an emergency fund for that?

[Marie]

Yeah, I know, but I'm just thinking of her thought process, like, of how that can, like, make you stop and actually question, like, oh, my gosh, are we okay for us to do this?

[Dave Ramsey]

So the contract is still under negotiation, or are you signed for it?

[Rachel Cruz]

It's still under negotiation. We offered, like, 3,000 less than we had originally offered if they're not going to include the appliances. But we're still waiting to hear back. I think that since we're just at that 5%, I think I'm just, like.

[Dave Ramsey]

Nervous that you're borderline. You're not stroking a big check here. You know, the other thing you could do is say, I don't have to buy this house.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

And walk away and go buy a different house that has appliances with it and that fits your numbers. That's the thing. And so, you know, and the interesting thing happens when you walk away from negotiations. Sometimes they suddenly give up the appliances. Like, I'm not loot. What's the price range on the home?

[Rachel Cruz]

It's 320.

[Dave Ramsey]

Yeah. So these idiots are going to lose a $320,000 sale on a house over three grand of used refrigerator?

[Marie]

We don't know yet. They've not come back.

[Dave Ramsey]

I know, but they're willing that. They're willing to put it on the line. They're willing. You know, if I'm the agent, I'm looking at these people and dope slapping them. I mean, you guys are nuts. You're going to lose the whole deal over 320 grand. A 320 grand over a used refrigerator? You've got to be kidding me. So that's dumb on the seller's part. Honestly, that's an easy.

[Marie]

So then does that same logic go to Maria? Like, you'd be dumb to walk away from a deal because of just a $3,000? You know, appliances.

[Dave Ramsey]

No, I. Listen, if you can't figure out a way to put appliances in it and put down 5%, I'm a walk away and go do a different deal. I'm going to pick out a different house. And I'll bet you money, good money, that these people give up their used refrigerator. When you. When you turn.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

You're a seller in the current real estate market in Sacramento freaking California, and you walk away from a buyer standing there with money.

[Marie]

Yeah. This is probably not going to happen.

[Dave Ramsey]

Is what you're saying stupid on steroids. Yeah. No, don't do. Yeah, I'm negotiating this. I'm going to play hard and just go street fighter and say no.

[Rachel Cruz]

Or.

[Marie]

Or refund us 3,000.

[Dave Ramsey]

Here's our deal. And it includes the appliances. Or we'll look for a house where we can get appliances because we're taking that as a sign from God. I'm kidding. It's not. It's a used refrigerator. God doesn't use. Use refrigerators as a sign. It's not in the Bible, but it's not. Second hesitations. Yeah. See what I'm saying? I mean, that's. That's the thing. So.

[Marie]

Yes. Yeah.

[Dave Ramsey]

Yeah, that's.

[Marie]

So your prediction is Maria's gonna come out okay. Or Maria's. Because you think they're gonna say just, we're gonna leave you.

[Dave Ramsey]

They're gonna cave like last week. Yeah, they're gonna. Okay, now I'm like, yeah, they're gonna.

[Marie]

Marie, call back in and see if. Dave.

[Dave Ramsey]

Yeah, call back and tell me I'm wrong later. Because I could be wrong. Sometimes I do that. Sometimes I do that in a negotiation, and I'm shocked at how stupid the people on the other side are. It's like you're gonna walk away from a 320,000 Do. Refrigerator. It's not even $3,000 if you put it in.

[Marie]

Washer and dryer.

[Dave Ramsey]

Yeah, and a washer and dryer. So what could you get for a used refrigerator and a washer and dryer? Garage sale. I mean, come on. Seven, eight hundred bucks maybe? So this is. Now, this is really dumb, but people are. People are. That's saying so, Marie. That's the way I'm looking at it. And I'm often wrong, but probably not on this one. Give it a shot. Give it a shot. Let us know how it turns out. Rachel's right. You can call back and take me to task later. I lost my dream house because of you, Dave. You can do that. That's o. It's all right. You can do that. It's perfectly legal. Open phones at Triple 882-55-5225. Listen, the real estate Market is moving it. The activity level out there is probably 4x what it was four months ago. And that's people walking around, kicking tires, making offers. But it's still not exactly a boom real estate economy. If you're selling a house, you don't walk away over $700 worth of appliance. Yeah, but the. But you, you know, in California for sure.

[Marie]

Yeah. [e-mail] realestate we have the dashboard. So it does, it kind of gives you a pulse of exactly what's going on in the market. If you are in the market, if you're selling or buying, Check it out. I do love this. Like, the median price right now is 400, 400 and oh my gosh, $400,000 is the median price of a home right now. Days on the market, 73 days on the market. You know, it shows you right now what a fixed rate mortgage. 15 years at 6.1.

[Dave Ramsey]

Yeah, but here's the thing. There's 829,000 houses on the market. That's 25% more houses on the market right now than this time last year. That's a big number. That's a big inventory lift. And so they're not going down in value, but there's plenty to pick from. So if you're a seller and you have a buyer standing there with cash, you sell the stupid house. You know, if you really want to sell your house, if you don't, don't put a sign in the yard. I mean, I mean, come on. This is the Ramsey show. You shouldn't own a gun you're not willing to shoot in moments of self defense. A burner launcher lets you protect yourself in a non lethal way. That's exactly why burner launchers were created. Everyone from parents and nurses to pastors and even special forces veterans rely on burner to protect themselves and their families. I own several burners myself. They look like guns, but they're not. They shoot a.68 caliber round, kinetic or chemical irritant projectile that can disable a threat from up to 60ft away. And they're powered by compressed CO2 cartridges, so they're classified with paintball and airsoft guns. But they're more powerful than those for increased protection. Not to mention, burner launchers are legal in all 50 states with no permits required. And because they're not firearms, they can be shipped directly to your door. Plus, Ramsey Fans can get 10% off an exclusive bundle, which includes a burner pistol, CO2 cartridges, and ammo and other burner products like safety alarms, defense sprays and body armor are also 10% off for our listeners. Just go to Burna.com Dave to learn more. That's B Y R N A dot com Dave. Thank you for joining us, America. I'm Dave Ramsey, your host. Rachel Cruz, Ramsey personality. My daughter is my co host. Today, Des Moines, Iowa is next. Julia is with us. Hi, Julia, how are you?

[Rachel Cruz]

Hi, Dave and Rachel, how are you?

[Dave Ramsey]

Great. How can we help?

[Rachel Cruz]

Well, my husband and I have been working the baby steps plan for about nine years and as of last year, we hit step seven.

[Marie]

Oh, congratulations.

[Rachel Cruz]

Thank you. We are mortgage free, we're debt free, everything. We are looking for mentorship and being outrageously generous. And I was just wondering if you had any book recommendations or how we do that. We tithe. But above and beyond that, we're just looking for a little bit of mentorship.

[Dave Ramsey]

Good for you. Well done.

[Marie]

That's a great question. So I'll just tell you what, what we do. Julia. I don't know if this is helpful at all. And I think there are some. Yeah, there's some books out there. I think when it comes to this idea of being generous. But you know, from like a tactical standpoint, above the tithe, how Winston I have done it, if there are organizations that we align with and ones that are close to our heart, meaning, like there's one organization we've given to for 15 years because it was an integral part of our story and we really believe in what they do. So we give there. There's been elements of different times in life where like, you know, foster care has been big on my heart and we've given to things towards that or Winston's had things. So from the organizational standpoint, it is always fun to be able to support someone who's doing what you love and what you believe in. So we've done, we've done it that way. And then this year in January, we're doing something different. We're just adding in on the giving section of our Everdollar app. We are putting, we put an amount of money every single month. And we're forcing us, we're forcing each other, we're holding each other accountable to have that money be given away at some point in the month. So that could mean like a very generous tip could be part of that money. It could go towards if we hear something of, you know, a friend's family member, X, Y and Z, and we're able to kind of just like anonymously give some money there. So we have found more energy in that, honestly, because the organization giving is wonderful and it's a, you know, it's great. People just do incredible things. And with the Ramsey foundation that we as a bigger Ramsey family are involved in, there's incredible organizations. But there's something about this joy for me of seeing someone or intersecting your story with someone else and able to help kind of in the moment there and again, it could be anonymous, not or not, but giving room for those things to occur. And what that's done for me, Julia, is it's caused me in an everyday instance just to be looking and I'm more aware of people because I'm like, okay, we have this money that I want to give and, and like, and I do as a believer, I'm like, there's something spiritual about it where I'm like, okay, where's the Holy Spirit kind of nudging me here? And I've just found with giving, when you're, when you have a pulse on that and you're just interacting with that part of your soul, if you will, it just creates a richer life where I feel like before we were a little bit tactical with our giving, like we gave our tithe and would give to an organization, but there's something about interacting with individuals on a day to day basis that again, just that that's one element, one way to give. And I've enjoyed that. I mean, we're only in February, it's only been two months of it, but there's, I don't know, there's just like this warmth to life there. It came alive again for us because sadly, giving can get stale if you just have it on autopilot. Right? So like part of this is interacting with the money you're giving too. So that's, that's what Winston and I do. But Dave and Sharon do it on a larger scale than us.

[Dave Ramsey]

But it's still, it's the same. We budget a certain amount just for. And some of this we keep on the books. And some of it we don't worry about as far as tax return goes, but just random acts of kindness. We just run into somebody and we want to always look across the restaurant and pick up the tab for a person in uniform. You know, we always want to do that. We always want to catch somebody doing something we love and just participate in it. That kind of stuff that's low budget, doesn't take a lot of money, but there's a lot of joy and it's a lot of fun and just, you know, we'll look across and see one of our team members and is there with their spouse and we just end up picking up. Of course I charge that back to the company, but that's an HR thing. But yeah, I may buy their dinner if they're lucky enough to land in the same restaurant I'll land in. But anyway, just something like that just catch people doing something right and random acts of kindness just catch somebody where a few hundred dollars means a lot. And I've been in those situations and a lot of people out there have been. So you want to do that, but that's a smaller portion of dollars. But it's like Rachel said, it's very hands on. It's a lot of joy in it. Random acts of kindness, we call it that. And it's just God money floating around, looking for a place to land. And so then we, with the Ramsey Family foundation, we do not give to like a bazillion different people. $500 because that'll drive you nuts doing the tax returns on it. So instead we pick just a few and really, really help them. And they're always something that is close to our heart. And many times we know the people involved in the ministry. We know the character of the people involved. We know. And the last thing I'll add to that, that Rachel didn't bring up is that I learned many years ago because I was giving a lot and we've always been outrageously generous. It's part of our DNA and it's the most fun you'll have with money. So you're going to love this. I love this question. But anyway, I treat large gifts like we're talking about as if I was doing an investment into a company. If I'm going to buy into that company, I'm going to know what their strengths and weaknesses are and I'm going to make sure that I'm not participating. I'm not enabling incompetence or bad behavior of some kind. To the extent I can tell, we don't do that. So, for instance, we don't give to organizations, ministries that run debt. Well, duh. Of course, Dave Ramsey is not going to pay a bank through a ministry. No. So if you're going to run debt, you're not going to be on our list of donations. We don't, we don't believe in debt. We don't borrow money. We teach people not. How dumb would it be for us to take our generosity and give it to a bank through your ministry because you wanted to have a building for your ministry instead of being a renter. No, be a renter. So you know that that's, that's one of the things. And that upsets people sometimes, but. Oh, well, I don't know why. It's kind of obvious to me. But anyway, so we do stuff that is consistent with us, and we're looking for their operational excellence. Because if you're going to put X number of dollars in there, you're investing it, God's money into God's kingdom. God expects some excellence there. Just like, you know, those that are faithful in little things will be given more to manage. And so it's not the diligent prosper, not the inept and incompetent.

[Marie]

Yeah. And then I would also say, Julia, and something I feel like we've learned from you guys is as you guys go down this path, I know you're on baby steps. You just. Guys just got to baby step seven. But as you continue to build wealth, and I'm talking like in the next decade or two also with your giving, we've put ourselves in a position where we're not the largest giver, meaning that they are so dependent upon us to fund the ministry or what they're doing. Because that puts you kind of in these, like, handcuffed positions where you feel bad that if something changes and you're like, oh, yeah, we're going to give over here, then you feel like I. We feel like we can't because we're disrupting such a huge part of their operating budget. If it weren't for us, they wouldn't be here. So even from a percentage level, I would not want to be the largest donation that they get and that they're dependent upon you to continue their ministry. Like, that just puts a. It puts a weird dynamic and pressure element to that too. So that's something to think about. That we had some friends that they ran into that and it was. It just gets messy. If you want to stop it, then you're like, oh, my gosh, am I closing down a ministry? Because I'm choosing not to give here anymore. So just another filter to think through.

[Dave Ramsey]

If you'll do what you're doing right now and be intentional about the subject of generosity, like you're intentional about the subject of getting out of debt, or you're intentional about the subject of investing, you'll do really good at it and you're going to get great joy from it. What happens with some people when they get to generosity, they just go, oh, I'm just going to give it. And it's all, it's up to God to figure it out. And like, no, no, God gave it to you to manage. And so it's not up to God to figure it out. So I think that person is going to misuse the money, but it's going to be between them and God. No, no, that's not how it works. You need to be a grown up. You can't be lazy on the generosity and really hardcore on the investing. So again, you don't want to take the joy out of it and you don't want to turn it into a bureaucratic nightmare every time you give $2. But.

[Marie]

And that's why I like, you know, the setup of having kind of those three buckets, the tithe, the organizational that, you know, and then just a little bit of that mind that we're talking about that you just have throughout the month that you're like, I just am going to be aware of people around me and when I feel this prompting like I get to bless them in that moment. It's kind of those three buckets that.

[Dave Ramsey]

I, that one ends up being dollar for dollar, by far my favorite.

[Marie]

Oh, it is like.

[Dave Ramsey]

But it's, it's impossible to do that at scale as an individual. It's very hard. It'd be like your full time job.

[Marie]

That's all you did.

[Dave Ramsey]

You'd be like that guy on YouTube, give him money. That'd be neat. But yeah, hadn't got that job yet. This is the Rams. Have you gotten one of those texts recently claiming to be the USPS with some sketchy link to update your address? It's annoying and a little terrifying and you probably think to yourself, I should do something about this. But where do you even start? Well, as your nerdy friend who does the research for you, I found the solution. They're called Deleteme. And here's the reason they come in the clutch. The Internet is packed with data brokers, which are these shady companies whose sole purpose is, is to collect your personal info and sell it for a profit. Enter DeleteMe. DeleteMe swoops in, finds your info on these sites and removes it on your behalf. They even send you a report with all the details. And so far, for me personally, they have reviewed 27,000 listings, removed my info from 240 data brokers, and saved me 66 hours in the process. I trust Deleteme to help protect my family. And I trust them to help you too. You're going to get fewer spam texts, fewer Phishing emails and fewer creepy robocalls. And Deleteme also makes a great gift for other people in your life that you care about. Individual plans start at just $9 a month, so take an easy step to protect yourself and your loved ones today. And as a Ramsey fan, you'll get an extra 20% off any of their plans. @joindeleteme.com Ramsey that's joindeleteme.com Ramsey if you're running a small business, you already know this. If you're thinking about running a small business, you need to know this business is hard. When you open your own business, you have a jerk for a boss. He or she will work you into the ground. It's amazing how hard you work when you work for yourself. It's tough and it's scary and sometimes it's lonely. It's hard. It's worth it. And the small business is the backbone of the American economy. 54% of our gross domestic product is businesses that have less than 500 team members. Small business is the American economy. 78% of Americans work for a small business. They don't work for the big boys. So those of you that are running businesses, you're giving jobs and food on the table and lights and water for people that work for you. You're good people. Thank you. Some days the challenges pile up. And that's why we wrote our new book, build the business you love. I started this business over 30, almost 40 years ago now. And we coach, if you didn't know this, about 10,000 small businesses across America through Entrez Leadership, our system there. And we have realized that businesses go through five stages of business as you go grow along over the years and the months. And there are six things that drive you through this. So these six drivers in five stages, in essence, are the baby steps for running a small business. Only you're not going to do them in 36 months. You're going to do them in 20 years or 10 years. But that's okay. We're going to show you the proven system, the business. The book is called Build a business You Love. It's 29.99. It comes out April 15th. It's my latest book, could be my last. I don't know. You never know. And we get over $350 worth of stuff if you pre order for 29.99 right now. And that includes instant access to the Entree Leadership hiring playbook, how we hire and fire at Ramsey. In other words, early access to the ebook, the enhanced audiobook all kinds of goodies. In other words, you can pre order [e-mail] store or if you're watching on YouTube or podcast, click the link in the description. It'll put you right in there. If you're thinking about or you are running a business, it's really good to know what the baby steps are. It's really good to know the system to do that. And that's what this is. Business is hard, but it's also fun. It's also exciting. It's also an adventure. And it's a much better adventure if you're driving from your home to Florida. If you first know where Florida is, it's less adventurous and much more predictable outcome. And good news is I'm already there. I know what the road looks like, so I can show you. And that's what this is. Build a business you love. Thanks for hanging out with us. Sue is in Lexington, Kentucky. How are you, Sue?

[Rachel Cruz]

I'm good. How are you?

[Dave Ramsey]

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

[Rachel Cruz]

Well, okay, so I'm 65 years old. I only have 41,000 in retirement. I went through breast cancer.

[Dave Ramsey]

Sue, I'm having a real problem with your phone. Can you walk to a different place, please, where it's breaking or take it off speaker?

[Marie]

If it's on speaker, that helps.

[Rachel Cruz]

It's not on speaker. Is that better?

[Dave Ramsey]

A little bit. Let's try again. You're how old? Okay, I'm gonna put you on hold, Hunt. And they're gonna pick up. We're gonna try to get you worked out so we can get you back on and understand you. I apologize. Bell is in Denver. Hi, Bell. Welcome to the Ramsey Show.

[Rachel Cruz]

Hi. So nice to talk to you guys.

[Dave Ramsey]

You too. What's up?

[Rachel Cruz]

So we bought a home in May of 2023, and my biggest goal has been to just pay off our home. I took your class when I was in high school, so about seven years ago. And it stuck with me ever since. We are only $20,000 away from paying it off.

[Dave Ramsey]

Yay.

[Rachel Cruz]

And I should be able to make that payment next month.

[Dave Ramsey]

How old are you guys? 25.

[Rachel Cruz]

I'm 24. My husband's 31.

[Dave Ramsey]

Look at you. What's the house worth?

[Rachel Cruz]

We bought it for 340 and we had to do stuff to it, but it should be worth close to 500.

[Dave Ramsey]

So high school teachers. This is what happens when you teach this stuff in high school. This is your student. She's now 25 and she's got a half million dollar house. That's $20,000 away from being paid for. You're amazing. 24 years old. Way to go. Cool, Bill. I love it. You know how weird you are, right?

[Rachel Cruz]

Yeah.

[Marie]

How much do you guys make a year, Belle?

[Rachel Cruz]

Do what?

[Marie]

How much do you guys make a year?

[Rachel Cruz]

It really varies. Like, right now we're sitting at 200 to 280, depending on our situation that we're in.

[Marie]

That's awesome.

[Rachel Cruz]

A really unique situation. Like, we're contractors for the state, and it just depends on, like, how busy we are.

[Dave Ramsey]

Well, congratulations. Okay, fast forwarding past bragging on you. What's your question? How can we help?

[Rachel Cruz]

So I remember in the class that I took in high school, it was talking about mutual funds, and if you start earlier, it's better long term than someone who starts later with a bigger initial investment. And I remember having a job. I was working at Wendy's at the time, and I was like, okay, I'm going to start doing this when I'm 17. And I asked the teacher, where do I. How do I do this? What do I. What mutual funds do I look into? She's just like, I don't know. I'm like, you don't do this. And you're a teacher. You're making 50,000 a year. Why don't you do this?

[Dave Ramsey]

Because she sitting down.

[Rachel Cruz]

Yeah. Unfortunately, she didn't have any resources for me, and I'm still in that place that I was when I was 17, and I still don't know what to do with. We're gonna have a lot of extra money once the house is paid off.

[Dave Ramsey]

Okay, rule number one, Investing is go slow. Okay, rule number two is don't put money in anything you don't understand. See, rule number one, Go slow until you understand it. Don't put money in something until you understand it. So this phone call means you're very wise. Congratulations. You're trying to resource some knowledge so that you know what to do. Very good, Sue. And then what I would tell you to do is very simple. I want you to go to ramseysolutions.com today and click on SmartVestor to find some of the mutual fund brokers that we recommend that we have vetted. And here's what you're looking for. We have vetted them for being experts and for having the heart of a teacher. I want you to meet with two of them or more and find someone that teaches you something. You may connect emotionally, relationally with one more than another one. And that's the one you're looking for. You don't want someone that tells you what to do with your money. And some people in the financial world are so stupid, they think that's what they're supposed to do. They drop their glasses down on the end of their nose and speak down to you. If anyone ever does that around the subject of money, get away from them. Your job is to understand, go slow, understand before you invest. And so you're meeting with the smartvestor pro not to have them tell you what to do with your money, but to have them teach you how mutual funds work, how to select them. And then based on that teaching, here's some we might look at. And then you would buy some. If you understand them and you look at them and you understand what you've learned. The good news is it's not really that complicated.

[Rachel Cruz]

Okay?

[Dave Ramsey]

I mean like you're going to sit down in an hour, you're going to have a real basic understanding and feel very confident and pretty competent about doing your first series of investments. And go and do it now before you get the house paid off. Because you want to interview these people, you're going to be spending the next decade with them.

[Marie]

Yeah. And from, if you want to, and just from a high level. Bell, what we teach is 15% of your income going into retirement. So I know exactly the chart that you took. It was probably the Blake and Jack that shows you compound interest if you invest at 19 all the way to 65 versus someone that starts at 32 and invests, you know, 65. And so what, what that is showing is compound interest which you're going to get when you invest in things like mutual funds. But you're going to do that within first and foremost retirement type funds. So a Roth IRA or a 401K or you guys work for the government, so maybe like a 403B situation, but 15% of your income should be going into retirement. Specific funds within those types of funds, of course there will be mutual funds and all of that of how you're actually investing. But a smartvestor pro can walk through and be very specific with your situation too, which is helpful. But just know retirement is the one place you're going to be looking. So yeah, so Roth IRAs, 403 BS, all of that. It's going to be really your first, your first step into the process. But congrats, Bell, it's awesome.

[Dave Ramsey]

Go slow enough to understand it before you do it. It's your job to manage your money. This is the Ramsey show. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something.

[Marie]

Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey.

[Rachel Cruz]

The only reason to not have life.

[Marie]

Insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

[Dave Ramsey]

That's a gut punch.

[Marie]

For decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them.

[Dave Ramsey]

Me too.

[Rachel Cruz]

They don't know what to do next.

[Dave Ramsey]

You're going to have a crisis here. You know, you got two options. While you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomor. That's exactly. These are the two options. It's saying I love you to your family. Term life insurance, Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. I'm Dave Ramsey, your host, Rachel Cruz Ramsey Personalities. My co host sue is back with us. Maybe we got our phone straightened out from Lexington. Hey, sue, can you hear me now? Yes.

[Rachel Cruz]

Can you hear me?

[Dave Ramsey]

Absolutely. That's much better. Thank you.

[Rachel Cruz]

Wonderful. No problem. Okay, So I am 65 years old. I plan to work at least five more years because I only have 41,000 in my retirement account. I have 40,000 plus give or take of debt, which I impulsively let a debt relief company take over for me. I realize now that was a mistake and that should be resolved within three years of making payments to them. I also own a home. I mean, I still owe 88,000 on my home. So I'm wondering if when I become eligible for Social Security in a year and a half, should I, and I'm going to continue working, should I then just try to get my house paid off double, double, triple my mortgage payments once my debt is gone? Obviously, just so that when I do stop working and I have to live on the small retirement that I have and my Social Security, at least I won't have a house payment. Is that the smartest way to go?

[Dave Ramsey]

It's not bad. You're debt free at that point. And what do you make with my side hustle?

[Rachel Cruz]

Combined, it's between 80 and 90. Just depends on the year.

[Dave Ramsey]

All right, well, what we would normally suggest is get out of debt first with the $40,000, which is what you're doing. And I want you to accelerate that and do it faster than you're planning.

[Rachel Cruz]

Okay.

[Dave Ramsey]

I want you to live on beans and rice. And let's not. Let's do this in two years instead of three. Start trying to figure out what would have to be true for me to do that, what would I have to get rid of? What would I have to do this. How much do you owe in your car?

[Rachel Cruz]

My car is 13 years old.

[Dave Ramsey]

Car is not the problem. Okay, What. What's the 40,000 in debt?

[Rachel Cruz]

What was that on an accumulation? I had cancer a few years ago and basically was out of work and had to live on credit cards here and there. And it just, you know, added up and interest took over and it.

[Dave Ramsey]

So most of its credit cards.

[Rachel Cruz]

Yes, it's. 40,000 is credit card. It's all credit.

[Dave Ramsey]

Oh, it's all credit cards. Okay. Yeah, but it's.

[Rachel Cruz]

But it's all with.

[Dave Ramsey]

Well, here's what I want you to do. I want you to work the debt consolidation company. I wish you weren't there, but you're there now. I want you to have them call. I want you up piles of money and have them call the small one and see if they'll take a deal, like 50% off or something, and then knock them out and then save up some money and knock the next one out. And if they won't call them and offer them that. You call them and offer them that.

[Rachel Cruz]

So can I do that? Can I take it back from them?

[Dave Ramsey]

You don't have to take it back. You can just call them. It's your debt. They'll always talk to you.

[Rachel Cruz]

Right, but does that mean I'll still owe the relief company?

[Dave Ramsey]

No, I mean, you owe the debt relief company anyway. You prepaid them. They took all their money up front.

[Rachel Cruz]

No, I'm. I'm paying them $1,000 a month to. So I have three credit cards.

[Dave Ramsey]

You're going to pay them $1,000 a month for 36 months. That's $36,000.

[Rachel Cruz]

Well, that's. That's handling one debt. I have. I have other debt that they haven't. The small ones, they haven't touched.

[Dave Ramsey]

Did you hear me? You're gonna pay $1,000 a month for 36 months. That's $36,000. You only owe 40,000.

[Rachel Cruz]

Right. The other small credit cards, they aren't. They haven't touched.

[Dave Ramsey]

No, honey, $36,000 would pay off your debt. Oh, you're not paying them that in fees. You're paying them that in total.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

And they're paying your debt. Yeah. Okay, so you can save up the $1,000 is not their fees. So you pay the thousand anyway and you call up the smallest one if they won't do it. And you offer them 50 cents on the dollar when you've got a little cash saved.

[Rachel Cruz]

Okay.

[Dave Ramsey]

Anyway, that's how we can accelerate it. Then back to your question. I want you to say 15% of 100,000. I want you to say $15,000 a year into retirement as soon as the debt is paid off. After the debt's paid off, while you put everything else you can find on the house, but don't pay any extra on the house until the debt is gone. Don't put anything into retirement until the debt is gone. Once that 40,000 is gone, then the first thing we're going to DO is put 15% into retirement and everything else we can scrape together goes onto the house.

[Rachel Cruz]

Okay, so I have a question about the retirement then. If I'm 65, are there rules around how much you can put into a 401k or do I have to do.

[Dave Ramsey]

You can put as much as you want. You can put as much as you want to put in and as much as anybody else can put in.

[Marie]

You can do catch up contributions, you.

[Dave Ramsey]

Can do even more, but you don't need to do more. You just need to do 15,000 until you get your house paid off. So what you're looking for though is you are looking for a Roth. A roth, okay, Roth Ira, Roth, 401k. That's what I want you to do. But none of this until you're out of debt. Then 15% and the rest of it towards the house. And here's the good news. I think you're going to have all this done like by 71, it sounds like if you do what we just talked about and so you have a paid for house and you're sitting with 150,000 bucks and you got Social Security. Not the best of all worlds, but a whole lot better than some people we talk to for sure.

[Marie]

Hope that helps you.

[Dave Ramsey]

Yeah, that's the right way to go. Well done. Very well done. The Ramsey show question of the day is brought to you by. Why refi when the payment on your defaulted private student Loan is as much as some mortgages. It's hard to get ahead. That's when. Why refi can help. Refinancing to a low fixed rate loan built just for you. Find out more@y refi.com Ramsey that's the letter y, r, e f y.com Ramsey might not be in all states.

[Marie]

All right, today's question comes from Greg in New York. He said, how is it considered ethical for people to own so many houses? I'm just wondering how, as a Christian, this isn't seen as greedy. Don't you know that buying up all these homes is what's causing the housing shortage? You know what?

[Dave Ramsey]

Well, actually, Greg, let's just start with not the spiritual part, but your economic understanding. That's not what's causing the housing shortage. Investors buying up houses is not causing the housing shortage. Okay. Period. So you're just wrong.

[Marie]

Now, now that is it. Can we, can we stay on that for just a second?

[Dave Ramsey]

Yeah.

[Marie]

Because that is a thing going around that these massive hedge funds or Blackstone, like all these, they're coming in a buy.

[Dave Ramsey]

They are, but that's. They don't have a soul.

[Marie]

That's right.

[Dave Ramsey]

Okay, so hedge funds don't have a soul.

[Marie]

So, so it. So because an individual investor. Right. For the average person out there who has maybe two or three rental homes, right. They're on baby steps and they're doing it.

[Dave Ramsey]

They're not, they're not causing the problem. But Blackstone, yeah, those guys are buying up houses. That's true.

[Marie]

Is that, and is that affecting the housing market at all? Because that is.

[Dave Ramsey]

It probably is to some extent, but not as much as TikTok says it is. Yeah, yeah. So I mean, you really don't want your economic lessons on tick tock. I'll just help you with that in general. But, but anyway, you're on tick tock, though. I know, but that, that just proves that I'm lacking in judgment. But yeah, so anyway, the, yeah, that's the thing now. You know, I own, I own. I don't know, I don't even know. 15, 20 houses among. And a bunch of commercial real estate as well. How is that not greed? Because I don't own anything, Greg. I'm a Christian and that means God owns it and I'm managing it for him. So I guess you're calling God greedy now.

[Marie]

Okay, so devil's advocate, what would you say if Greg was like, well, Dave, why do you need so many houses? Why don't you just give all that extra money away?

[Dave Ramsey]

Managing money for God. That's my job. Well, and I've done a good job. I've done a better job than Greg has done.

[Marie]

And.

[Dave Ramsey]

And that's why he thinks I'm greedy.

[Marie]

Well, this mindset. So this is an extreme right of, you know, 20 houses thing. But this is the same logic of, well, is it greedy to have more in your retirement than maybe you may not need?

[Rachel Cruz]

Right?

[Dave Ramsey]

Like, listen, if you got three bathrooms, if you got three bathrooms, you have three more than most people in the world. Why are you not greedy? If you have two cars, you have two cars more than most people in the world. If you make $38,000 a year, you're in the top 1% of income earners in the world. How are you not greedy? Because amounts don't create greed. Greed is a spirit. It is not an amount. And if you want to be a communist, just be a communist. Don't try to blame Christianity for it, okay? If you want to be a socialist, just be a socialist. Don't try to blame Christianity to it for it. That's a form of heresy called Gnosticism that believes that the material is bad and anyone that has the material, their soul is in jeopardy. The Gnostics taught that in the first century they were heretics. So if you want to do a little theological rabbit hole, we can do that.

[Marie]

But I love the rabbit holes. Dave. No, that's good. I think that's it, though. Greed is not an amount. It's a spirit.

[Dave Ramsey]

That's it.

[Marie]

That's it.

[Dave Ramsey]

And so hoarding is not an amount. The difference in saving and hoarding is intent. It's not the thing. You know, I have a collection of water skis, but I don't worship them. You know, it's their sweet thinking. Water ski, antique water skis on the wall. That's it. But that's not hoarding. It's a collection because it's about the intent. This is the Ramsey Show.

[Marie]

This show is sponsored by BetterHelp.

[Rachel Cruz]

You've probably heard people talk about different.

[Marie]

Kinds of flags and friendships and romantic relationships. Red flags, green flags, beige flags.

[Rachel Cruz]

Listen, it can be helpful to look.

[Marie]

For patterns or unsafe behaviors in potential.

[Rachel Cruz]

Relationships, but all those labels distract from what's really important.

[Dave Ramsey]

Your values and whether you and your.

[Rachel Cruz]

Potential partner are willing to wake up every day and choose to honor each other's values.

[Marie]

And look, I know it can be tough sometimes to even know what's important.

[Rachel Cruz]

To you in a relationship. Therapy can help you figure out what your values actually are and decide your boundaries and your non negotiables.

[Marie]

And if you're thinking about starting therapy, try better help.

[Rachel Cruz]

BetterHelp is 100% online therapy that works with your schedule. To get started, just fill out a short online survey to get matched with a licensed therapist. If it's not the right fit, you.

[Marie]

Can switch therapists at any time for no extra cost.

[Dave Ramsey]

So whether you're dating, married, building a.

[Marie]

Friendship or working on yourself, do it.

[Rachel Cruz]

With help from BetterHelp.

[Marie]

Visit betterhelp.com ramseyradio to get 10% off your first month.

[Dave Ramsey]

That's BetterHelp.

[Marie]

H E L P.com ramseyradio.

[Dave Ramsey]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. I'm Dave Ramsey. Your host Rachel Cruz, Ramsey personality is my co host today. Now number one best selling author and my daughter Bobby is with us in Chicago. Hey Bobby. Welcome to the Ramsey Show. Bobby, thanks for having me. Sure, man. What's up?

[Rachel Cruz]

So I'm 29 years old and back in 2023 after a harsh talk with my wife to manage her spending, we made the decision to get out of debt and we achieved that. And 2025 was going to be our year that we were house shopping and going to buy our first house. And about a month and a half ago, I got a statement in the mail for some credit cards and found that my wife has pulled about three new credit cards in, has maxed them out and we've now accumulated some new debt. She's always had a bit of a spending problem and I thought we got through it and we were pretty happy being debt free. Just not quite sure how we have this conversation again and how to make this stick and be on the journey of being debt free and managing our money.

[Dave Ramsey]

How much? How much debt? On the three cards from zero, we've.

[Rachel Cruz]

Now accumulated a little over $3,000.

[Dave Ramsey]

Okay. And when you said, hey, I thought we were getting out of debt and saving for a house and you ran up credit cards and you knew we, you knew I hated debt and we had worked to get out of debt and you did this and I didn't tell me, what did she say?

[Rachel Cruz]

Well, she's pretty embarrassed but defensive. Her mother stole her identity at a very young age and she's never had great finances. We did a lot to get her out of debt from debt bills accumulated as she was 8 years old with TV, utility bills, cable bills, all done by her mother. We did a lot to do that and she doesn't want to end up like her mother. She's 30 now.

[Dave Ramsey]

How old are you?

[Rachel Cruz]

29.

[Dave Ramsey]

And how long have you been married?

[Rachel Cruz]

Eight years.

[Dave Ramsey]

Okay. All right. I'll give you an observation of what I think I heard you saying, and I want to. I want to play it back to you. Okay. I think you were using the words we and our when it was only you. I wanted to get out of debt, so I talked to her about her spending and I got us out of debt so that I could buy us a house.

[Marie]

I had a harsh car.

[Dave Ramsey]

I don't think she was involved in any of this emotionally. I don't think she agreed with the decision. I think she went along with it because she's embarrassed and shamed about her handling of money. But I don't think as a grown up, she stood up and said, I'm going to join hands with you and we are going to hit these goals. Instead, I think she's been treated like a little girl again by you. That's the language you were using, and I'm going to play it back to you. Did you hear that?

[Marie]

Yes, I did.

[Rachel Cruz]

Absolutely.

[Marie]

Yeah. And you know, when he said. Or when you said Bobby, you know, I had to have a harsh conversation with her about it. And so. So, yeah, so I think. I think the real question is, number one, kind of what Dave was just proposing of. Okay, so looking back now at the whole journey and what you guys have walked through the last few years with money, you know, how. How has she been through that? And obviously not very on board or she has some. Some major issues. And, and honestly, the whole spending addiction world has really exploded in the, like, even more recent because of how easily it is to have access. So whether it's to credit cards or, you know, shopping online, all of it, just like gambling addiction has gone up with sports betting and all of it. So there's such this environment, Bobby, that she's having to honestly fight a bigger battle now, today, in 2025, than even in previous, you know, generations. So my question would be to her is, what's going on with her? You know, what. What is it that's causing this to happen? Because there, you know, we see it all the time that it. That there is, you know, levels of. Of really deep pain and the medicator is the spending. And so I'm curious. And with the. Her backstory of her mom and not trusting fully the adult in her life, and the adult in her life used her completely and stole her identity to mismanage money on Top of that. Right. Like, there's a lot there for her. And so does she recognize any of that, or is any of that in the conversation?

[Rachel Cruz]

Yes. You know, we. We sat down early on when we wanted to buy a car together, and you would like to finance something, and she didn't know anything about credit and all that, and that's where it was found. And she was very upset by that. And it came as far as she was actually arrested on felony charges for deceptive practice, for a bad check written by her mother, and luckily found not guilty. And that's where the changing point in our lives were together.

[Dave Ramsey]

How long ago was all my debt?

[Rachel Cruz]

Her debt?

[Dave Ramsey]

How long ago? How long ago was that check thing?

[Rachel Cruz]

The check was made when she was 18, still in college.

[Dave Ramsey]

I mean, when did this charge come?

[Rachel Cruz]

Charge came in 20, 21.

[Dave Ramsey]

Four years ago.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

Okay, so this is four years in the past. And apparently we've gotten mom off the stealing pattern. Mom's not stealing her identity anymore, at least as far as we know, right?

[Rachel Cruz]

No, we're completely locked down with our identities.

[Dave Ramsey]

Good. Okay, so all of that's in the past. She didn't do anything wrong there. She was a victim there. Then that changes gears when she runs up debt, in contrast to what you guys have talked about. And so Rachel's right. It could be an addictive behavior, could be coming out of pain. It could be coming out of. You just controlled everything. And she didn't have a vote, and this was her only way to have a vote. So she just ran off and did whatever the flip she wanted to do because you tell her everything to do and she doesn't. You know, she's saying her little girl's saying, you're not the boss of me. I'll show you. And sometimes people react that way, too. So because I think you told her what to do, I don't think you got agreement. There's a difference.

[Marie]

Would you agree with that, Bobby?

[Rachel Cruz]

I absolutely agree. In a half and half scenario, I know I can have that kind of.

[Dave Ramsey]

Tendency you have on the phone with us.

[Rachel Cruz]

Yes.

[Dave Ramsey]

Okay, we heard it. That's why. That's where it's coming from. I'm not being mean to you. I'm just saying that, you know, there's a difference in getting people to buy into a vision and go forward. That's leadership. There's a difference in a leader and a boss. A boss has got a cattle prod and tells you what to do. It's a stick and no carrot. And that's in business. But it's also in ministry. It's also in your marriage. And so versus getting. I'm going to get collaboration. We're both going to sit down and talk about the pluses and minuses of debt. We agree we're going to get out of debt because it's the fastest way to build wealth. We agree we're going to get out of debt because we want to buy a house, not Bobby wants to buy a house and he told her what to do so it could happen. I kind of think that's what happened, Dave. So I'm not blaming you for this. She shouldn't have lied. She shouldn't have deceived you under any circumstances. That's wrong. And so you guys probably need to sit down with a good marriage counselor, ask them about a possibility of a spending addiction. But also, let's get some different patterns to get agreement and sell a vision for the future. The Bible says where there is no vision, the people perish. Let's both buy into where we want to go, not where you tell her we're going. There's a difference. This is the Ramsey Show. Hey, you guys, I'm not a fan of the big banks, and you probably already know which ones I mean, but I do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years, and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join, and Fairwinds partners with more than 5,000 credit union locations around the country, so you can bank in person wherever you live. But if you prefer the online experience, you can log on to Fairwinds and do anything you could do at a physical location. So go to Fairwinds.org Ramsey to learn more. And while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's Fair Winds F A I R W I n d s.org Ramsey I think we'd all agree that it's a lot harder to run a race if you don't know where the finish line is. But nearly half of all Americans have no idea how much Money they'll need to retire with dignity. If you're ready to stop hoping for the best and start planning for your future, then check out the SmartVestor program. A SmartVestor Pro can teach you everything you need to know to get in the driver's seat of your own financial future. Connect with a [e-mail] Smartvestor Ramsey Solutions is a paid non client promoter of participating pros.

[Marie]

Learn [e-mail] SmartVestor.

[Dave Ramsey]

Are you staying on track with the baby steps? Well, take a quick quiz to check your progress and receive a personalized plan just for you. Simply head to the show notes and click in the link titled are you on track with the baby steps? You take a quick quiz and we'll tell you exactly where you are. Oh, and we'll start to tell you what some of your next steps are. Hey, Riley's with us in Jacksonville, Florida. Hi, Riley. Welcome to the Ramsey Show.

[Rachel Cruz]

Hi. Thank you for having me. So here's my question. Would a budget of 20,000 be unreasonable as a college student?

[Dave Ramsey]

A budget for what?

[Rachel Cruz]

For 20,000.

[Dave Ramsey]

$20,000. To do what?

[Rachel Cruz]

To get married. To have a wedding.

[Marie]

Oh, a wedding.

[Dave Ramsey]

On your wedding budget?

[Rachel Cruz]

Yes.

[Dave Ramsey]

Oh, cool.

[Marie]

Oh, well, congratulations.

[Dave Ramsey]

Yeah. When you get married.

[Rachel Cruz]

We're hoping to get married by 2027. We kind of have to. To be stationed together as naval officers since we're Both commissioning after 2028.

[Dave Ramsey]

All right, so you got like two.

[Marie]

Two years.

[Rachel Cruz]

Yes.

[Marie]

But you guys are in college, so you're thinking about getting married after or something. Is that we're.

[Rachel Cruz]

So we have to get married right before we graduate. Since we're both in nrotc, our requirement is that we commission straight out of graduation.

[Dave Ramsey]

When you, you graduate May of 27.

[Rachel Cruz]

Yes. So we, we have to be married that summer because it'd be kind of hard to plan a wedding when we're away from home.

[Marie]

Sure. Okay. Yeah. And I was just wondering what the. Why you guys are waiting. But you're in school, so you're going to wait till you're toward the end of school.

[Rachel Cruz]

Yes, that's right.

[Dave Ramsey]

So basically two years. Okay. And while you're in school, are you earning an income?

[Rachel Cruz]

We are. He's earning more than I am. I'm currently just getting a stipend, so that's about 250amonth. It'll increase slowly. So by my senior year, I'll be getting 400amonth. He's getting that as well and working, I think his annual income. He's Trying to hit under 15,000 just so that he can stay under a certain.

[Marie]

Are you guys paying parents, Riley? Are you guys paying for the wedding?

[Rachel Cruz]

Yes. So him and I will be paying for the wedding, but my parents are going to be giving another 5k by the time I get to my junior year.

[Marie]

Will you guys have $20,000 saved?

[Rachel Cruz]

Oh, yeah, absolutely. Currently, we both have combined a little over 30,000 saved, like, total.

[Dave Ramsey]

Where'd you get that?

[Rachel Cruz]

Not just for the wedding.

[Dave Ramsey]

The numbers you gave me don't equal that. Where'd you get that money?

[Rachel Cruz]

So that's just from savings, like throughout lifetime. I'm a huge saver.

[Dave Ramsey]

Okay, So I.

[Rachel Cruz]

Baby.

[Dave Ramsey]

So you have $30,000 saved today, which is your total life savings. You're going to add a little bit to that, but you're not making much money. I mean, you're making three or four thousand dollars a year. Two years. Okay. And you're eating during that time. So, you know, you've got. You're not. You're not going to have. You're not going to do a bunch of addition to this 30,000 bucks. So the answer to your question. Answer to your question is, is $20,000 too much to spend on a wedding? The answer is no. Their answer is always relative to if you've got $200,000 and you make $300,000 a year, $20,000 wedding is perfectly reasonable. If you have $30,000 to your name and you're going to spend two thirds of your net worth on your wedding, that's probably too much. What's going to be your income when both of you come out as commissioned officers?

[Rachel Cruz]

We'll both be making about straight out. I think it's about 90,000 each. Yes.

[Dave Ramsey]

Okay, good. So now we're talking about somebody making $180,000 a year, fresh out of school, and they've got $30,000 to their name, do they spend 20 of that on the wedding? But the good news is you're used to living on nothing. And so you could probably save 20,000 in three months once you're making 180. Agreed?

[Rachel Cruz]

Yes.

[Dave Ramsey]

That's 15,000amonth. Follow me. So, yeah, I mean, what I would say is this. Okay. The average wedding in America today is 28,000. The average household income, 78,000. So it's about a third of your income, is the average, is one way of measuring it. That's the average. Now, do you want to be above average, below average on your spending? That's up to you. Anywhere in there. Pay cash, number one Just listening to your story, I think I would say, yes, I'm gonna have a $20,000 wedding, but I'm gonna do it with new money that I make after graduation.

[Marie]

Well, they have to get married before graduation, is what she's saying.

[Dave Ramsey]

Before you have any income.

[Marie]

Is that right, Riley?

[Dave Ramsey]

Yeah, you did say that you did. I'm lost. Okay. My plan just fell apart.

[Marie]

Okay, so, Riley, here's a question. I don't know. Just trying to get creative here. Could you guys go get married, have your family have a great, fun dinner out, and that be the quote unquote marriage? Right. You got married, and then six months later, will you guys be stationed away? I'm just trying to think, like, is there a way to do a really beautiful, nice wedding that you really want, a celebration? Yeah. And it be. And it be a few months later.

[Rachel Cruz]

And that's what I thought as well. The only concern is we have no clue of knowing our timeline. So it could. If we do that, we could get married by chance three years later, depending on both of our deployments.

[Dave Ramsey]

Yeah.

[Marie]

Oh, like having the wedding. Because you guys could be deployed pretty quickly.

[Rachel Cruz]

Yes.

[Marie]

Yeah, I hear what you're saying. Yeah, yeah, yeah.

[Dave Ramsey]

But if you're married, do they separate you on deployment?

[Rachel Cruz]

So our deployments could be at different times. They try to keep us on the same base, but since we're both college students and under the program, there is a chance that for a year or two that we would be on different bases.

[Dave Ramsey]

Hmm. Okay. All right.

[Rachel Cruz]

But we're trying to prevent it as quick as possible.

[Dave Ramsey]

Well, thanks for your service to the country. Okay. If you spend $20,000 and you have 30,000 and you have basically no income, and you get married, and two months later, you start making 180,000 a year, that is dangerous. But it's not completely suicidal, because you're spending most all of your money and you don't have any money. You follow me? But you're getting ready to start this huge income unless something really goes sideways. So, yeah, that's the. I would not spend a dollar more than that, and I would push that as close to my $180,000 income starting as is reasonable. Okay. I realize you got to do it before the income starts, right?

[Rachel Cruz]

Yes, sir.

[Dave Ramsey]

Okay. But I want to push it right up next to it, because I don't want the gap between you having $10,000 and sitting around. You only have $10,000 left. You're married, and it's six months later, and you still got no income. We don't want that game. That's a bad game. You follow me?

[Rachel Cruz]

Yes, sir.

[Dave Ramsey]

Okay. That's what we're looking for. I just, I just don't want you living on the edge, kiddo. Life's too short.

[Rachel Cruz]

I agree. You know, that was why I called.

[Dave Ramsey]

You're a saver. You don't, you don't want to live on the edge. Yeah. So, I mean, like, if you guys get. If you do the wedding in June and you graduate and your income starts in July or August, I'm fine with that. You follow me? I'm not fine. I don't love it. But it. But at least you're not completely stinking, bro.

[Marie]

You don't have four kids and you're trying to like, you know, keep a household running like you guys can. You guys can do it.

[Dave Ramsey]

Yeah. And you got this. And then you guys got a pinky swear and spit shake with each other. We're not doing nothing to we big build up a big old emergency fund. Because I assume you have zero debt, right?

[Rachel Cruz]

Yeah, absolutely no debt.

[Dave Ramsey]

Okay. That's what I started this whole conversation with, that assumption. But yeah, I think you're on track. And here's the good news, Riley. You're going to be okay because you're thinking about it and because you're a saver, which means you're concerned about overextending because your nature is that where Rachel is a spender, I'm a spender. Our nature is woo hoo, let's go buy it, you know, and we have to guard against that nature to be wise and not get up over our skis, you know, and fall on our face. So I think because you're asking the question that tells me you're probably going to be okay because you're a saver. You're probably going to be okay if your fiance's on board with those two things.

[Marie]

And I'll say this too, that the income is pretty guaranteed. It's not like, oh, we're going into sales and I think we're going to be making X, Y and Z. Like it's a, you know, you know, the salary ahead of time. Yeah, it's laid out pretty black and white. You know, what's going on.

[Dave Ramsey]

So moving straight into officer.

[Marie]

Yeah, that predictability is helpful in the scenario too, Riley.

[Dave Ramsey]

So sharp, sharp young people serving. Serving the country.

[Marie]

I know. Thank you guys so much for that.

[Dave Ramsey]

Very cool.

[Marie]

And congrats. Have fun planning it and everything's gonna be very exciting.

[Dave Ramsey]

Very cool. This is the Ramsay show taking care of Your health doesn't have to cost a fortune. That's why Field of Greens is in my house. Field of Greens is made from fruits and veggies selected by doctors, your heart, liver, kidneys and metabolism. And here's the best part. They're so confident your doctor will notice your improved health, they offer a money back guarantee, no questions asked. Try today and get 15% off at fieldofgreens.com Ramsey promo code Ramsey. Fieldofgreens.com Ramsey hey, guys. Our two night virtual event, investing Essentials, is almost here. There's a lot of confusion out there about building wealth, so George Campbell and I are breaking it down and teaching you how to invest with confidence. You'll learn how to maximize your 401k and mutual funds. Plus, I'll be sharing my personal playbook for real estate. But hurry, time's running out. Investing Essentials is March 4th and 5th. Tickets start at 1. 99. Grab yours [e-mail] events. In the lobby of Ramsey Solutions is the Debt Debt Free stage. And if you're standing on it, it usually means one thing, that you're debt free. And that's where Patrick and Chelsea are. Hey, guys. How are you doing? Great.

[Rachel Cruz]

Hey, Dave, how are you?

[Dave Ramsey]

Welcome. Where do y'all live?

[Julia]

Louisville, Kentucky.

[Dave Ramsey]

All right, well, welcome to Nashville. And how much debt have you two paid off?

[Julia]

250,000.

[Dave Ramsey]

Oh, wow. How long did that take?

[Julia]

Just over five years.

[Dave Ramsey]

Good for you. And your range of income during that time?

[Julia]

Started around 150 and up to 280.

[Dave Ramsey]

Good for you. What do y'all do for a living?

[Julia]

We're small business owners. We own a franchise, a security franchise, and we just started a consulting business on the side.

[Dave Ramsey]

Very good. So you're killing it. Yes. Congratulations. Well done. So five years. 250,000. Did you guys pay off your house?

[Julia]

We did.

[Dave Ramsey]

Look at that.

[Julia]

Weirdos.

[Dave Ramsey]

Couple of weirdos. I love it. How old are you two?

[Julia]

I'm 39 and I'm 37.

[Dave Ramsey]

All right, mid-30s, late-30s. I like it. What's this house worth?

[Julia]

Probably about 550.

[Dave Ramsey]

Good for you. And how much in your retirement accounts?

[Julia]

360.

[Dave Ramsey]

Okay, bumping up on. Well, you own a business, too. So you are millionaires. Yes. Baby step millionaires. Way to go, guys. And you're not even 40.

[Marie]

That was our goal. I love it.

[Dave Ramsey]

Well done. Okay, how does this story start? How in the world do two people like you become weirdos by the time you're 40? Well done.

[Julia]

Well, so we've always Kind of lived by your principles, avoided consumer debt. When we started our business, I had the same mindset. You know, stay away from debt as much as we can. We moved cross country from San Diego from my previous job in federal law enforcement. Started our security company from scratch, you know, working long days, long hours. I think it was seven months in the beginning where I didn't have a day off. She's at home with the kids, just fully supporting us. And, yeah, we make a great team. And we're. We're so thankful for the position we're in now, man.

[Dave Ramsey]

So security as in, like, alarm systems.

[Julia]

And cameras, more security guards, you know, for apartment complexes, Walmarts, that kind of thing.

[Dave Ramsey]

So you're utilizing your law enforcement background.

[Julia]

Yeah.

[Dave Ramsey]

Okay.

[Marie]

I got so smart. So smart.

[Dave Ramsey]

Oh, very good. Yeah. That's a big deal.

[Rachel Cruz]

Yeah. Recession resistant is like, what we like to call it.

[Dave Ramsey]

What'd you say?

[Rachel Cruz]

Recession resistant.

[Dave Ramsey]

Definitely.

[Marie]

So good. So good.

[Dave Ramsey]

Yeah. Actually, recession can cause it. Yeah, that's true. That's fun.

[Marie]

How many kids do you guys have?

[Rachel Cruz]

We have two.

[Marie]

Okay. How old are they?

[Rachel Cruz]

Luke is five and Ryan is three.

[Marie]

Okay.

[Rachel Cruz]

They are keeping us young, man.

[Marie]

So you had babies during kind of all of this? I mean, at least the second one during this process.

[Dave Ramsey]

Yeah. Starting a business and leaning on the debt. No stress.

[Julia]

Yep.

[Dave Ramsey]

Yeah, no stress. No big deal. No big deal. Just lean in for five years. Get it done. Get it done. Well done. So how did you connect up to this Ramsey stuff?

[Julia]

So we've listened to the show for years. I've always, like I said, lived kind of by the principles no consumer debt. We just really wanted to get rid of this mortgage as fast as we can. I hated seeing the amount of interest that we're sending to the bank just for them to, you know, lend us some money. So our goal was to pay it off by 40, and we achieved it by a little over a year. So it was great to set that.

[Rachel Cruz]

Goal closer than I am.

[Julia]

I'm a little closer.

[Dave Ramsey]

She's got three years by the time he got old. Yeah. Okay, good. So where'd you come from in California? San Diego.

[Julia]

Huh.

[Dave Ramsey]

Okay, so when you move to Louisville and you buy this house, you had to go, oh, this is so cheap.

[Julia]

Right.

[Dave Ramsey]

I could pay this off. That had to be part of the emotion.

[Julia]

Yeah, the. The difference in the real estate markets are pretty significant. Obviously, our house has gone up a little bit since, you know, 2020 and the last few years, but yeah, the just being able to pay off the. The loan where we have no Debt is just. There's so much peace behind that. We love it.

[Rachel Cruz]

The grass feels different.

[Dave Ramsey]

It does feel different. And the other thing, small business people are the only ones that grasp this because you're in sales every day and you have, you know, the weight is off your shoulders and you suddenly start making different and better business decisions because you know, when you're early in business, you'll take any client. And now the problem clients, you're like, yeah, I think you need to go see my competitor. You're high maintenance. I think. I think I'll let you work for somebody else. Yeah, yeah, yeah.

[Marie]

You're not as desperate when everything's done right.

[Dave Ramsey]

You end up making more money because you're. Because everything's just peaceful and, you know, it's a different. It's a weird thing. So way to go, you guys. I'm so proud of you.

[Marie]

Well done, you guys. Okay, so in this process, because you guys started with, I mean, I think no consumer debt anyways, because you guys have been following this for a while. So when the five years kind of began, was it that, hey, we're making more money, we're just not going to increase lifestyle and we're throwing extra at it? Like, what was your plan of action for people listening that are like, okay, that's our next big step? Where did you feel like you were still intense, or do you feel like, no, we were able to, like, live and breathe, but we just didn't up our lifestyle majorly. What did that look like for you both?

[Julia]

I'd say we did increase our lifestyle some, but not nearly as much as we could have. And, I mean, we also also finished our basement. We had a new roof that we put on the house, so lots of expenses that, you know, we were still having to, you know, live, but we didn't really have extravagant lifestyle. We did take a nice trip. When we finally did pay off the house, we went to the Maldives. So that was. That was our celebration trip. But, yeah, we've. We're just thankful to be able to be able to be in this position.

[Dave Ramsey]

Well, you're making 150 to 280, and you average 50,000 a year for five years. So you were able to do some stuff there. There's wiggle room in that. Yeah, yeah, that's the proper way to do it. So very well done. Who was cheering you on? Anybody?

[Rachel Cruz]

Yeah, I would say. I mean, our friends and family have always been huge cheerleaders and each other. I mean, we. Working together is not for everyone, married couples, but I feel like we, we make a great team and we kind of offset each other. And yeah, we've been. I. When he started, he worked seven months straight. Like you said. No days off. No, he worked nights. He worked during the day during doing sales. And I just was. Tried to be there to be the grounding person because I also had a full time job. So I was also supporting us with my full time job. So yeah, we cheer each other on too.

[Dave Ramsey]

Yeah. Well done. Well done.

[Marie]

So good.

[Dave Ramsey]

So what do you tell people that are listening? What's the key to being almost 40 years old? You now have a paid for home, it's worth 550 and zero debt of any kind. And including the value of your business, have a net worth well in excess of a million dollars. What do you tell people? The key to doing that by 40.

[Julia]

Is I would say just do something, you know, get, get control of the person behind the mirror. Because the person in the mirror, you know, most of it's your behavior. And if you can get control and spend less than you make, you know, get on a written budget, you know, you can, you can set goals and achieve them sooner than you think.

[Rachel Cruz]

Yeah. And of course, discipline, just being, being, living, living like you, like no one else.

[Marie]

Like you, like you say, we always.

[Rachel Cruz]

We always kind of repeat that to each other. Like we want to live like no.

[Dave Ramsey]

One else so that later we can live and give like no one else. And here you stand.

[Rachel Cruz]

Yeah.

[Dave Ramsey]

You did it. Wow. How's it feel to not have a payment in the world?

[Rachel Cruz]

It's amazing.

[Julia]

It feels great.

[Rachel Cruz]

It feels great.

[Julia]

And a side note, so you always talk about how the grass feels different, you know, walk through your grass barefoot. So the day that, you know, we made the final payment on the house, I decided I'm going to walk through the grass barefoot.

[Dave Ramsey]

You actually did it.

[Julia]

We, we did get 10 inches of snow on that day.

[Marie]

So I'm doing it. I'm doing it.

[Julia]

So after I shoveled the driveway, I took off my boots and went for a quick little brisk walk in the grass.

[Dave Ramsey]

In the snow. In the snow. It did feel different, for sure.

[Julia]

Yeah.

[Dave Ramsey]

Because it's cold. Wow. That's hilarious. You could have waited until spring, man. Really?

[Marie]

No intense cold. You were tired for that moment. That's right. You did. Oh, man.

[Dave Ramsey]

Across coals here. Good job, man. That's fun. Well done. Very proud of you guys. You're excellent, excellent weirdos. Very cool. All right. Patrick and Chelsea, not even 40, along with Luke and Brian, whose family tree has been completely with Us.

[Marie]

I didn't know they were here.

[Dave Ramsey]

Man. How great. You guys have no idea how great their life is because their mom and dad are heroes. You completely changed everything for them and those grandkids that'll come from them. Excellent stuff. Very good stuff. Patrick and Chelsea, Luke and Ryan. Louisville, Kentucky. 250,000 paid off house and everything in five years. Now with a net worth in excess of a million dollars. Baby step millionaires at 39 and 37. Count it down. Let's hear a debt free scream.

[Julia]

Three, two, one.

[Marie]

We're debt free.

[Dave Ramsey]

They did it.

[Marie]

I heard Luke. Luke did good.

[Dave Ramsey]

I love, love it. He's ready, man.

[Marie]

Oh, so sweet.

[Dave Ramsey]

It's great.

[Marie]

So good.

[Dave Ramsey]

This is the Ramsey Show. Running a business is freaking hard. It's easy to get caught up in the daily challenges and fears that keep you stuck. That's why I want you to reserve your copy of our new book, build a business you love where we share the proven system that helped us break through those challenges and build Ramsey Solutions. From a card table in my living room to a $250 million company in the process. When you pre order today, you're going to get more than $350 in bonuses for free, including an enhanced audiobook experience, early access to the build a business you love ebook, and instant access to our hiring playbook so you can start transforming your business right now. Build a business you love. The essential guide for every business owner like you that wants to grow yourself, lead your team and scale your business. To reserve your copy, go to ramseysolutions.com store ramseysolutions.com store Rachel Cruz, Ramsey personality, is my co host today. Open phones a trip 502-55225. Investing. When I say the words, some of you are immediately intimidated. Dave, I can't invest. I don't know what that even means. It scares me. Oh, I understand. And the good news is it's not as complicated as some of the goobers in the financial world make it sound. It's as if they need to use $10 words so they can charge you a commission. So we teach investing where everyone can understand it and do it because everyone should understand it and do it. And we're gonna go even deeper for you super nerds. We're gonna do our investing Essentials virtual event March 4th and 5th. Next week, tickets start at 199. Now this is two nights. It's a two night event. The first night is several hours, a couple of hours plus on investing of all kinds. The second night, we're going to print comment or we're going to teach primarily on real estate. And I'm going to open up how I've learned to do real estate investing in detail. And it is Nerdville. If you're having trouble sleeping, you'll not have any trouble after this. I'll put you straight to sleep. It's really Nerdville. But if you nerd out on this stuff like I do, if you like doing the spreadsheets and the math and so forth, you will love this event. Investing Essentials. Both nights are gonna be where everybody can understand it. I'm kidding around, but it's really stuff I don't get into much. It's only the second time I've ever taught this much depth on real estate investing. And I own several hundred million dollars worth of real estate, so. Several hundred million dollars worth. So we're gonna get into that. It's not a theory because I actually freaking do this stuff. Okay? And I'm not teaching you to do something and then I go do something different. This is what I do. And then you can do it or not do it. It's up to you. So get your [e-mail] events and click the link in the show notes if you're tuning in on podcast or YouTube.

[Marie]

And this is a great. You guys did this event last year and it.

[Dave Ramsey]

And it's the only time we've ever done it was last year.

[Marie]

They loved it. Loved it. So honestly, it really is. It's a. It's a great, deep dive into the subject.

[Dave Ramsey]

Oh, George Camel is like, he's nerd now. From now on. He is. This is like, this is like his special spiritual gift.

[Marie]

It's like his hobby likes to do.

[Dave Ramsey]

George get a life. He is really enjoying this. It's really. He's gonna. And he's really good. It's gonna be. He's gonna. His part will probably be better than mine, but it's pretty incredible. All right. Sarah's in Philadelphia. Hi, Sarah. How are you?

[Rachel Cruz]

I'm good. How are you guys?

[Dave Ramsey]

Better than I deserve. How can we help?

[Rachel Cruz]

Okay, so I fell for the lovely money trap of taking out a lot of student loans. And I had 85,000 in my name and 50 were through parent plus loans through my parents. Now, I did tell my parents, of course I would help them pay off whatever they put into their name. So I've been working really hard for the past eight years, and I paid off all of the student loans that were in my name. So I Have no debt legally in my name. But when I went to tell my parents about it, like, hey, I know I've been throwing money at you guys for this every month, but I'm really going to start to focus on it. They kind of told me that they combined my loans and my siblings parent plus loans that I took out for them into one big student loans pot. So I am kind of. I was kind of shocked that they said that because I've been paying towards it, and instead of paying towards mine, I've kind of been paying towards everybody's.

[Dave Ramsey]

No. Now I'm like, no, no, no.

[Rachel Cruz]

I'm at a point where, like, I don't know what to do.

[Dave Ramsey]

You did not make an obligation. Okay, number one, stop. Number one, you don't have any legal obligation at all. You do have a moral obligation because you promised to pay your part, but you did not promise to pay your siblings part. Correct?

[Rachel Cruz]

Correct.

[Dave Ramsey]

Okay. So how old are you?

[Rachel Cruz]

I'm 29.

[Dave Ramsey]

Okay. How much have you paid towards the loan that your parents have?

[Rachel Cruz]

I paid almost the full amount of it. Like before. Interest. I've been giving them $1,000 a month for like eight. Almost eight years.

[Dave Ramsey]

Okay, all right. $1,000 a month for eight years. Is that what you said?

[Rachel Cruz]

Yeah.

[Dave Ramsey]

Okay. So why would a $60,000 loan not be gone?

[Rachel Cruz]

The interest rates were high.

[Dave Ramsey]

What were the interest rates?

[Rachel Cruz]

They were at like 7 to 8% per loan. And it was a few different loans.

[Dave Ramsey]

Did you. Is the thousand dollars a month steady for eight years?

[Rachel Cruz]

Yes. Yes, that's correct.

[Dave Ramsey]

And you know what the original balance was, right?

[Rachel Cruz]

Yeah.

[Dave Ramsey]

Okay. All right. So. And you're how old again?

[Rachel Cruz]

29.

[Dave Ramsey]

Okay. Are you married?

[Rachel Cruz]

No.

[Dave Ramsey]

Okay. Do you have an investment advisor?

[Rachel Cruz]

No.

[Dave Ramsey]

Okay. All right. Because it's a simple math. It's a financial calculator. I don't have one laying in front of me. Could almost do it on the air, but probably not. But we could simply say, all right, $60,000 at 7% and $1,000 on that. What would be the remaining balance after eight years? I think it's going to be zero.

[Rachel Cruz]

I know it's coming pretty close, which is why I mentioned it, like, and.

[Dave Ramsey]

So I don't owe you anymore, mom and Dad? I fulfilled my obligations.

[Marie]

How did they respond, Sarah? Because they know how much you've been paying. Did they say, oh, yeah, yeah, yeah, your term's almost up or, like, what you've given us, or was it pushed back to you?

[Rachel Cruz]

They kind of just like, dropped the bombshell, like, oh, well, this Happened, you know, like to make our. The payments lower. We've. A few years ago, we.

[Dave Ramsey]

It doesn't matter.

[Marie]

Yeah, but did they acknowledge the amount of money you've already paid them?

[Rachel Cruz]

They did, but now it's like they're treating it like it's different.

[Marie]

Like a one big loan. Yeah.

[Dave Ramsey]

Okay, so mom, that's a relationship issue. So mom and dad, here's the deal. I did not promise to pay anyone else's loans. I promised to pay mine. Mine was $60,000 at 7% and with $1,000 a month for eight years, the remaining balance would be zero or would be X. And so I have $2,600 more to go and then I'm not paying you anymore. I've met my obligation to you. The fact that you chose to consolidate it for a smaller debt and my brother has chose not to pay his. Does not affect my deal with you.

[Rachel Cruz]

Yeah, that's pretty much the exact scenario of my siblings not being able to pay theirs right now.

[Dave Ramsey]

So you just need to get real clear. Number one, you need to get the exact math done, and I can't do that for you right now.

[Marie]

Have it visual. Have it on a sheet of paper. Like here's exactly.

[Dave Ramsey]

Go online and you can print it out. Okay. You can just go online and find a calculator online and put in 7%, $60,000 and $1,000 a month for eight years. And what is the balance? And you can do it online in probably about 45 seconds. If I was smart, I could do it right now, but I'm not. So I used to keep a financial calculator here on the desk in the old days. But I think your balance is going to be zero because you're going to be up over $90,000. You've paid in, including interest. That should be at zero. Okay. Because we're talking about 45 now, 96 months that you paid in. $96,000 you paid in and 7% interest. So you're probably have overpaid. But I wouldn't worry about it if you've overpaid relationally. But I would just say I paid in $96,000 including interest. That means I don't owe anymore. Sorry, mom and dad. The rest of it's on you. And bro. I did my part. I did my part. But you can use the actual math and show it to him.

[Marie]

Yeah, and please say bro.

[Dave Ramsey]

Yeah, just since a boomer. Since I made a bad dad joke.

[Marie]

No, it's great. No, no, no. Sarah, is this. Is this going to be a hard conversation or do you like when you have the math and you lay everything out? Do you have the type of relationship that you feel?

[Dave Ramsey]

Are they going to understand this?

[Marie]

How is that going to go?

[Rachel Cruz]

Oh, God. I think it's going to be a tough conversation only because, like, they've done a lot of other things for me.

[Dave Ramsey]

You know, yeah, they changed your diaper, but you have to pay them for that. That's called being a parent right now. They fed you, but you don't have to pay them for that. That's called being a parent. So this is a. This is a mess they have made and they're very lucky, honestly, as parent plus holders that Sarah's paying. Sarah actually has paid $96,000 because 90% of the time I take this phone call, it's the parent griping because the kid has never paid a dime after they promised they would. And they're stuck with a big old hairy Parent plus loan. But in this case, mom and dad are the ones that stepped in it.

[Marie]

Well done, Sarah.

[Dave Ramsey]

They got some on their shoe.

[Marie]

Morally, you've done everything to the tee.

[Dave Ramsey]

You don't have to do anymore. I wouldn't do anymore. You don't owe any more. More. But run the numbers to be 100% sure. This is the Ramsey Show.