It’s Never Too Late to Clean Up a Financial Mess

Summary

Podcast Summary: The Ramsey Show – "It’s Never Too Late to Clean Up a Financial Mess"

Release Date: January 10, 2025

Introduction

In this episode of The Ramsey Show, hosted by George Camel and Dr. John Deloney, the team delves into the theme "It’s Never Too Late to Clean Up a Financial Mess." The hosts address various callers grappling with significant financial challenges, providing actionable advice grounded in Dave Ramsey’s financial principles. The episode emphasizes the importance of reducing debt, diversifying investments, and aligning financial goals with personal well-being.

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1. Supporting Los Angeles During the Fire Disaster [00:37]

Before diving into financial discussions, Dr. John Deloney and George Camel extend their heartfelt support to families affected by the recent fires in Los Angeles.

• Dr. John Deloney [00:37-01:16]:

  "It's just devastating to see... we're praying for you guys big time."

• George Camel [01:16-01:26]:

  "Our hearts are with you all."

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2. Caller: Nitish from California – Managing Dual Mortgages and Rental Property [02:07-08:36]

Nitish and his wife own two homes and a rental property, carrying significant debt despite a high combined income of approximately $900,000.

• Nitish's Financial Snapshot:

  • Primary Home: $2.5 million with a mortgage of $2 million.
  • Second Home: $1.3 million, rented out for $4,000/month with $500k remaining.
  • Income: $900,000 annually.
  • Assets: $1 million in stocks and $1 million in 401(k) accounts.

• Advice from George Camel:

  • [04:05] "You could sell a whole bunch of that and knock out a lot of this debt."
  • Encourages selling the rental property to reduce financial risk and eliminate car loans.

• Dr. John Deloney’s Insights:

  • [05:28] "I'd much rather have two tangible assets... than a company saying no, no, I promise we're worth it."
  • Emphasizes the unpredictability of rental income and the safety of owning debt-free tangible assets.

• Conclusion:

  • Recommendation to create a peaceful financial path by reducing debts and potentially selling high-risk investments.
  • [08:36] "Nobody owns me and my family. Me and my family have freedom."

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3. Caller: Dan from Jacksonville, Florida – Handling Inherited Roth IRA and Debt Management [10:34-15:48]

Dan seeks guidance on managing an inherited Roth IRA invested entirely in Apple stock and a bond from his grandfather, alongside existing debts.

• Dan's Financial Snapshot:

  • Inherited Roth IRA: $75,000 in Apple stock.
  • Bond: $30,000.
  • Debts: $8,000 in credit card debt.
  • Income: Approximately $90,000 annually.

• Advice from George Camel:

  • [12:24] "You have $1 million in stock... I would sleep better at night knowing that was in a broad-based index fund."
  • Suggests diversifying investments and using excess funds to pay off debts, including the mortgage.

• Dr. John Deloney’s Perspective:

  • [12:43] "Let us know what's going on in your world, and we'll try to give you the right next step."
  • Encourages strategic debt repayment and investment diversification.

• Conclusion:

  • Emphasis on aligning financial strategies with long-term stability and reducing reliance on potentially volatile assets.

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4. Caller: Louise from Medford, Oregon – Overcoming $300,000 Debt and Car Loans [15:58-27:58]

Louise and her husband face substantial debt, including credit cards and car loans, while striving to save for their growing family.

• Louise's Financial Snapshot:

  • Total Debt: $300,000 (Credit Cards: $50,000, Car Loans: $50,000, Home Equity Loan: $40,000).
  • Income: $130,000 annually.
  • Savings: $19,000 in emergency funds.

• Advice from George Camel:

  • [22:19] "If you took that down to zero, that would put some money back in your paycheck every month."
  • Recommends selling cars to eliminate high-interest debts and reshorping insurance to save costs.

• Dr. John Deloney’s Insights:

  • [26:30] "You're making financial sacrifices to become free."
  • Advises involving children in financial planning to foster a unified family approach.

• Conclusion:

  • Strategic elimination of high-interest debts and restructuring of financial priorities to ensure long-term stability and peace of mind.

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5. Caller: Kyle from Portland, Oregon – Navigating Substantial Student Loans [32:58-38:21]

Kyle, a pharmacist earning $170,000 annually and considering whether to pursue Public Service Loan Forgiveness (PSLF) or aggressively pay down his $250,000 student loan.

• Kyle's Financial Snapshot:

  • Student Loans: $250,000.
  • Income: $170,000 gross annually ($120,000 after taxes).

• Advice from Dr. John Deloney:

  • [33:57] "Pursuing PLSF might not be reliable... best to pay down debt directly."
  • Recommends accelerating debt repayment to avoid uncertainties with government programs.

• George Camel’s Perspective:

  • [34:25] Encourages pragmatic adjustments and prioritizing debt reduction over reliance on potentially flawed forgiveness programs.

• Conclusion:

  • Emphasis on proactive debt management over waiting for uncertain loan forgiveness, ensuring financial independence and security.

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6. Caller: Crystal from Dallas, Texas – Tackling $300,000 Debt and Car Loans [39:36-52:24]

Crystal, a single mother of three, seeks advice on whether to use her $25,000 savings to pay off high-interest debt or maintain an emergency fund for safety.

• Crystal's Financial Snapshot:

  • Total Debt: $6,000 with 0% interest, and a car loan of $25,000.
  • Income: $90,000 annually.
  • Savings: $25,000 in the bank.

• Advice from George Camel:

  • [40:36] "Knocking out the $6,000 debt leaves you with $21,000..."
  • Encourages eliminating high-risk debts first to reduce financial pressure.

• Dr. John Deloney’s Insights:

  • [42:03] "Use your savings to clear debts and build a stronger financial foundation."
  • Advises selling depreciating assets to free up cash flow and reduce liabilities.

• Conclusion:

  • Strategic debt repayment combined with maintaining a minimal emergency fund to ensure financial resilience.

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7. Caller: Henry from Raleigh, North Carolina – Balancing Savings and Dream Home Goals [44:31-64:32]

Henry and his fiancée aim to purchase a dream home with specific land and acreage requirements but face high property costs.

• Henry's Financial Snapshot:

  • Savings: $200,000.
  • Desired Home Cost: ~$400,000 with 5 acres.
  • Income: $120,000 annually.

• Advice from George Camel:

  • [58:24] "Put 50% down today and have a $200,000 mortgage..."
  • Recommends adjusting expectations to align with financial reality, potentially opting for a smaller home now to secure financial stability.

• Dr. John Deloney’s Insights:

  • [60:31] "Make peace with your choices and focus on achievable goals."
  • Encourages setting realistic financial targets and avoiding overextension.

• Conclusion:

  • Advocates for practicality in home purchasing, prioritizing financial health over delayed dreams to ensure long-term prosperity.

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8. Caller: Wanda from South Dakota – Investing Savings Post-Retirement [67:14-71:08]

Wanda and her husband, retirees relying on savings and social security, seek advice on investing their $320,000 to sustain their lifestyle for the next 20 years.

• Wanda's Financial Snapshot:

  • Savings: $320,000.
  • Income: Social Security ($3,600/month).
  • Debts: None; house is paid off.
  • Concerns: High property taxes and medical insurance costs.

• Advice from George Camel:

  • [68:02] "Keep it simple, let it ride. Don’t touch it unless you need it."
  • Recommends investing in broad-based, low-cost index funds to grow savings while maintaining accessibility.

• Dr. John Deloney’s Insights:

  • [70:31] "Create a life below your income threshold to ensure financial stability."
  • Suggests minimizing expenses and ensuring investments are diversified to mitigate risks.

• Conclusion:

  • Emphasizes the importance of strategic investing and budget management to sustain retirement funds and ensure financial security.

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9. Caller: Sue from Detroit – Addressing Marital Financial Infidelity [71:13-76:55]

Sue confronts her spouse about unfiled taxes spanning over 20 years, revealing potential financial infidelity and its impact on their marriage.

• Sue's Financial Snapshot:

  • Debts: Spouse has not filed taxes for 20+ years; significant discrepancies in reported income.
  • Assets: Minimal savings; high-risk car loan.
  • Concerns: Legal implications and financial stability amidst marital tensions.

• Advice from George Camel:

  • [75:44] "Get a tax attorney ASAP and figure out the next steps."
  • Urges immediate professional intervention to address unfiled taxes and protect against legal repercussions.

• Dr. John Deloney’s Insights:

  • [75:58] "Financial infidelity undermines trust; prioritize transparency and legal guidance."
  • Encourages open communication and legal consultation to navigate the complexities of marital financial issues.

• Conclusion:

  • Highlights the critical need for honesty and professional assistance in resolving deep-seated financial and marital conflicts.

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10. Caller: Rick from Madison – Restarting Baby Steps [78:51-85:52]

Rick and his wife are restarting their financial journey with $5,000 in savings and $111,000 in debt, including a mortgage and car loans.

• Rick's Financial Snapshot:

  • Savings: $5,000.
  • Debts: $111,000 (Mortgage: $58,000, Credit Card: $18,000, Car Loans: $27,500).
  • Income: $110,000 annually.

• Advice from George Camel:

  • [79:37] "Attack the smallest debt first using the debt snowball method."
  • Encourages reallocating funds to eliminate high-interest debts systematically.

• Dr. John Deloney’s Insights:

  • [83:21] "Choose your hard; prioritize debt repayment to alleviate long-term stress."
  • Emphasizes the importance of reducing financial obligations to create breathing room and ensure stability.

• Conclusion:

  • Stresses the effectiveness of the debt snowball method combined with disciplined budgeting to overcome significant debt and achieve financial freedom.

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11. Caller: General Advice and Final Thoughts [Post Calls]

Throughout the episode, George Camel and Dr. John Deloney intersperse their advice with motivational insights and affirmations.

• Key Quotes:

  • Dr. John Deloney [29:43]: "Ownership. How can I invite my teenager... into the lifestyle changes we're making?"
  • George Camel [83:32]: "You're going to be out faster because of that snowball method working in your favor."

• Overall Themes:

  • Importance of reducing debt to achieve financial peace.
  • Diversifying investments to mitigate risk.
  • Aligning financial decisions with personal and familial well-being.
  • Emphasizing honesty and transparency in financial matters, especially within marriages.

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Conclusion

In "It’s Never Too Late to Clean Up a Financial Mess," The Ramsey Show provides comprehensive financial guidance to listeners facing diverse challenges. From managing dual mortgages and substantial debts to navigating marital financial issues and retirement investments, George Camel and Dr. John Deloney deliver practical, empathetic advice. The episode underscores that regardless of one’s financial predicament, strategic planning, disciplined budgeting, and proactive debt management can pave the way toward lasting financial freedom and personal well-being.

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Notable Quotes

• George Camel [03:48]:

  "With your income, I think... in under five years, that's pretty amazing."

• Dr. John Deloney [08:36]:

  "No one owns me and my family. Me and my family have freedom."

• George Camel [12:24]:

  "You could sell a whole bunch of that and knock out a lot of this debt."

• Dr. John Deloney [26:30]:

  "You’re making financial sacrifices to become free."

• George Camel [33:57]:

  "I would hit the gas in an insane way over the next 18 months and just pay the sucker down as fast as I possibly could."

• Dr. John Deloney [42:03]:

  "Use your savings to clear debts and build a stronger financial foundation."

• George Camel [58:24]:

  "Put 50% down today and have a $200,000 mortgage..."

• Dr. John Deloney [70:31]:

  "Create a life below your income threshold to ensure financial stability."

• George Camel [75:44]:

  "Get a tax attorney ASAP and figure out the next steps."

• Dr. John Deloney [83:21]:

  "Choose your hard; prioritize debt repayment to alleviate long-term stress."

---

This summary captures the essence and key financial advice shared in the episode, providing valuable insights for listeners seeking to overcome financial challenges.

Transcript

[Dr. John Deloney]

Foreign.

[George Camel]

From the Ramsey Network. This is the Ramsey show where we help people build wealth, do work that they love and create amazing relationships. I'm George Camel, joined by my good, good friend Dr. John Deloney. Taking your calls at 888-255-225. You jump in, we'll help you step with your life, your money, your mental health, your relationships, whatever is going on.

[Dr. John Deloney]

And hey, before we get going on what's going on. Yeah, before we get going, I think it's important just to let our friends and colleagues and family members in Los Angeles just know we see it. It's a, it's just a disaster, man. I'm rarely speechless and just watching some of that footage, I've got friends in the, that Pepperdine. I, I just, it's just devastating to see. So it's one of those things you feel helpless sitting this far away and you're watching on your, you know, on your, on your TV or watching on your phone. But what we can offer right now, just let people know they're not alone. We see it and our thoughts and, and, and we're praying for you guys big time.

[George Camel]

Yeah, our hearts are with you all. And speaking of which, John, our first call is from, from California out here. Nish is with us. What's going on, Nitish?

[Caller]

Hey folks, thanks for taking the call.

[George Camel]

Sure.

[Caller]

And appreciate your sentiments on LA Fire. Right now.

[George Camel]

I have a question that my wife.

[Caller]

And I bought a house worth around 2.5 million and we have another house.

[George Camel]

Which is worth around 1.3 million and.

[Caller]

It has 500k remaining. We have rented it out. It's around $4,000 per month.

[George Camel]

So our salary is around 900,000.

[Caller]

And yeah, so we were just kind of concerned whether to kind of keep the rental property or sell it off. The rental is coming like pretty nicely.

[George Camel]

Like it's around 4,500, which is kind of like covering all the mortgages and.

[Caller]

Any other insurance and stuff like that. So I was just wondering what your thought is on that.

[George Camel]

Yeah, what is the mortgage on your current home?

[Caller]

It's around two million.

[George Camel]

Okay, so you've got two and a half million. Do you have any other debt outside of these two mortgages? Just a car loan, maybe 40k. Okay, well, you're calling us because your plan isn't working as you wanted it to. There's some stress here and I would feel it if I was over 2 and a half million in debt, regardless of my income and how great things were right now, in the back of my mind, I would be Knowing this is a house of cards, it could all come crashing down any minute.

[Caller]

Yep.

[George Camel]

And so you want to reduce risk in your life. You're using language like, well, it's just a 40k car loan. That's kind of what gets us here. Right. You guys have an just undeniably insane income, and yet what happens is you just go, well, we can acquire more and handle more payments and it leads us to this place where we have to decide do we want to keep going this down this road or do we want a more peaceful path. So if I was in your shoes, I'm going to try to reduce that risk. So you have an amazing income. How much extra margin do you have at the end of each month?

[Caller]

So we have around cash coming in around 25k. After all the 401k savings and everything.

[George Camel]

We have around 1 million in stock.

[Caller]

And around 401k is around another million.

[George Camel]

Okay. And the stock is non retirement, right? It's vest, fully vested. Yes. Okay. So you could sell a whole bunch of that and knock out a lot of this debt. You could knock out the car loan instantly and knock out the rental loan instantly and make about, you know what a quarter progress on your own mortgage.

[Caller]

That's. That's absolutely correct. My wife and I like to. My wife kind of feels that the rental is self paying, so why should we worry about it? Let's just like the dentists pay for, for our mortgage pretty much.

[George Camel]

And I'm trying to convince. Kind of like lowering the risk. So I don't know.

[Dr. John Deloney]

Do you remember? I don't know if you remember. It was a while ago, there was this thing called Covid and people quit working and then the local government said they don't have to pay rent and you can't evict them.

[George Camel]

Yeah.

[Dr. John Deloney]

Remember that?

[George Camel]

Yep. Yep, I do.

[Dr. John Deloney]

So I would, I would, I would assume the mortgage on your rental property is not very safe because you don't, you don't ever know. And especially in California with the squatting laws, the res. I mean, I mean it. Y. Y'all are. Y'all have good tenants and God bless you because those tenants can go south in a hurry. And it might be 30 days, 60 days, 90 days, six months, two years. You guys get tied up in court, but the bank doesn't care. They want to get paid every month.

[George Camel]

And the other risk is having all this money tied up in a single stock in a single company. So I like the idea of offloading it for other reasons other than just getting debt free.

[Dr. John Deloney]

My mom Worked at this company called Enron that used to do that, gave everybody a lot of stock. And I had friends who went to bed millionaires who woke up one morning with zero dollars because all their retirement was in stock in that company. So yeah, man, if, if you're talking to me and George, our families, our houses, we'd sell that stock and start paying off everything we own, man. I'd much rather have two tangible assets, two homes I can go see than a company saying no, no, I promise we're worth it. I'd much rather that, man.

[Caller]

Okay.

[Dr. John Deloney]

And especially you're too rich to be holding a depreciating a loan on a depreciating asset like a vehicle, man.

[Caller]

Okay, sounds good.

[George Camel]

So I have some extra like $5,000.

[Caller]

Per month that I can contribute towards my mortgage. Do you recommend me putting that into the mortgage too?

[George Camel]

Yeah. Once the car is paid off, then your next step, you know, if you're filtering this through our Ramsey baby steps, you should be completely consumer debt free with a fully funded emergency fund. Then begin investing 15%. Then any money beyond that can go to kids college and paying off the mortgage early.

[Caller]

Okay.

[George Camel]

And with your income, I think. Sit down with your wife, show her. Okay, here's where we're at. Here's where we could be. And if we go down this path, we sell the stock, we become debt free, we free up that rental mortgage payment, we free up a car payment, we have all this extra money, we could tackle our own mortgage and probably be done with that. With your income in under five years. Yeah, that's pretty amazing. And how old are you two?

[Caller]

We are 39 and 40.

[George Camel]

Think about that. You're in your mid-40s and you will have. I'm not even saying sell the rental property. You could keep it if you're going to knock it out and reduce some of the stress and increase the cash flow, you'd be sitting with a about a $4 million net worth of paid for property in your mid-40s and a.

[Dr. John Deloney]

Million dollars in your retirement fund.

[Caller]

Yeah.

[Dr. John Deloney]

So you're worth 5 million bucks free and clear. And here's the thing you have then that you don't have right now. Absolute freedom. Peace.

[George Camel]

And guess what? Your buddies are going to think this advice is stupid. They're going to be like, you should buy nine more properties and leverage all the debt and do hel the first one. That's what's going on out there in the culture. But they don't live your life, they don't pay your bills, they don't know what happens inside your home, what's happening inside your body, how you're feeling about it. And that's where John and I go. We're solving for freedom all day long. And you're in an amazing position where you have a million dollars sitting there in stock. You have about a million dollar income. This problem is pretty easy to solve, but the hard part is the choice and getting your wife aligned on this.

[Dr. John Deloney]

I think the new, the new wealth moving forward in the 21st century, George, is can you fall asleep on your pillow at night? I think the new, the new status of wealth, like Dave used to say, it's not the, it's not the BMW. I think the new status of wealth is nobody owns me and my family. Me and my family have freedom. We've got peace. And man, I don't care how little or how big your salary is. Solve for that, man. You change everything in your home.

[George Camel]

Well said. Thanks for the call, Natish. Good conversation. This is the Ramsey Show. Remember the good old days of the Internet? Before it was a privacy nightmare filled with spammers, scammers, hackers and fraudsters. Simpler times. Now, I don't have a time machine, but I do have the next best thing. Delete me. Think of Delete Me as your online bodyguard, helping to protect you from the risks of online scams and data breaches. Here's how they do it. They scour the web to find and remove your data from these sketchy data broker websites. And this includes your name, your phone number, your email, your address and more. And Delete Me will send you a detailed report of what they did and how much time they've saved you. And They've saved me 66 hours so far, which is more time I can spend trying to nail the wordle of the day on the first try. Delete Me has been around for over a decade and they now have over 100 million data removals. Which explains why they have a mountain of rave reviews and an A rating from the Better Business Bureau. It's been great for my family and I love getting fewer targeted ads, fewer spam texts, and fewer creepy robocalls. So this holiday season, share peace of mind by gifting a Delete Me subscription to someone you love or even just like their individual. Plans start at just nine bucks a month and you can sign up today at JoinDeleteMe.com Ramsey for 20% off. That's JoinDeleteMe.com Ramsey welcome back to the Ramsey Show. Open phones at 888825 5225. Dan is up next in Jacksonville, Florida. What's going on, Dan?

[Caller]

Hey, guys, thanks so much for taking my call. Can you hear me?

[George Camel]

Yes. How you doing?

[Caller]

Good, man. Good. So my question is, I just got married about two weeks ago to my wife who was lucky enough to inherit a Roth from when she was young. And it right now it has about 75,000 in it and all of it is an Apple stock.

[George Camel]

Okay.

[Caller]

So I know, I think how you guys are going to feel about that. And then I also have 30,000 in a bond from my grandpa. And I guess my question was just how do best go about just investing that and what using it for. Whether it put it towards the mortgage or if we're saving up for a car or just kind of how to best utilize those funds.

[George Camel]

Yeah. So what you said, it's in a Roth, Is it a Roth ira, the Apple stock?

[Caller]

It. It is, Yup.

[George Camel]

Okay. And then you got 30k in a bond. And what is your next financial goal as you guys look at this new marriage? Do you guys have any debt you're looking to clear?

[Caller]

Yeah, we have about, about 8,000 right now on a credit card that, that was originally hers and we're looking to knock that out real soon. We just got a bunch of money from the wedding, so that's kind of what we plan on doing. So should be debt free and honestly the next like week or so.

[George Camel]

Awesome. And then how much do you guys have in savings for an emergency fund right now?

[Caller]

About 19,000.

[George Camel]

Well, just knock out the credit card today. What are we doing?

[Caller]

Yeah, no, you're 100% right. And after, after hearing that, I definitely.

[Dr. John Deloney]

Think we will make a declaration in front of America. Dan, you're going to do it today?

[Caller]

Yeah.

[George Camel]

That leaves 11k in your savings plus this 30k bond. That's a, that's plenty. That should be more than six months of expenses for you guys, right?

[Caller]

Of course. Oh, yeah, definitely.

[George Camel]

And then you have a house together.

[Caller]

We do, yup. So I think, I think there's about 165 left on the mortgage. So I think the next big goal would honestly just be to get that knocked out as soon as possible.

[George Camel]

Yeah. So you could use that. I mean, I know there's some, you know, required distributions from that IRA, I believe, with the new secured 2.0 act law. So I would look into that and see when you need to deplete that account by.

[Caller]

Okay.

[George Camel]

But you could use part of that money to knock out the mortgage. You could use Future income and just let that money ride and continue growing for you. But I would use any money beyond your emergency fund to start knocking out that mortgage.

[Dr. John Deloney]

Okay, can you take George, can you take the distribution, the mandatory distribution and turn on and buy a new Roth with it?

[George Camel]

Yeah, you could do your own investing.

[Dr. John Deloney]

Just flip it around and do it again.

[George Camel]

Yeah, because I would sell the Apple stock and be in a more diversified investment fund. Like you were saying, hey, there's Apple is a great company. I used to work there. I had some Apple stock. There's worse companies you could have invested in over the last several decades. But I still would sleep better at night knowing that was in a broad based index fund that had a lot of Apple in it. But it wasn't 100% Apple.

[Caller]

Right.

[George Camel]

So I would do that either way. And it's up to you what you want to use those funds for.

[Caller]

Okay. All right, perfect.

[George Camel]

How old are you two?

[Caller]

So I'm, I just turned 26 and she is going to turn 30 next month.

[George Camel]

Amazing. You guys are going to knock this mortgage out fast. What's your combined income now?

[Caller]

Right now, combined. And obviously this is super recent, but combined right now is about like, give or take 90.

[George Camel]

Okay, great. Well, debt free, making 90 grand with a 165,000 mortgage, you guys are going to be completely debt free within, my guess is three to four years if you do this the right way.

[Caller]

Yeah, that would be. That'd be amazing.

[George Camel]

What about by your 30th birthday? You guys have no mortgage?

[Caller]

Yeah, that would be something, man. That would, that would be awesome.

[Dr. John Deloney]

It's not something, it's just a choice you make today. You get what I'm saying?

[George Camel]

It sounds cool. But then you're like, crap, I got to put extra on the mortgage every single month without fail, consistently.

[Caller]

Right?

[George Camel]

Can I do that?

[Dr. John Deloney]

And then here's what y'all will do. Y'all will figure out the, the romance, the sex and intimacy, the dates, the fun. Y'all will figure out your life over the next four years and how to have fun and laughter and joy and friends over and potlucks and whatever. And then you're gonna suddenly find yourself with no mortgage four years in, and then the whole world opens up. You get what I'm saying? Like, I think a lot of times people go crazy. The first two years they put everything on their credit card, they go bananas, they buy all the fancy stuff and then they realize, oh, we spent a lot of time on external stuff and we didn't take the time to have to do the hard work internally. You guys, if y'all flip that around and you're just intentional, like we're not gonna have any money. Cause we're gonna put all on the mortgage and we're gonna make a run at this thing. Dude, that would rule. Dude, you, you know, no mortgage at 30. I can't even wrap my head around that, man.

[George Camel]

Yeah, and this inherited money, that's just leapfrogging you. So I'm gonna use that to create a legacy for my own family.

[Caller]

Yeah, no, it's definitely lucky. So. But yeah, no, that'll be the goal. So I like that by 30. So that'll be the goal.

[George Camel]

That's it, man. That, that kind of goal and that kind of intentionality, you start to get your, your new wife excited about that. You guys are aligned with money. Like John said, you can stop talking about money. You can do more fun things with your life than have money fights. So we're rooting for you, dude. Awesome. Congrats.

[Dr. John Deloney]

You could do things instead of money fights.

[George Camel]

That's what it's all about. Louise. Let's talk to Louise in Medford, Oregon. Up next, what's going on? Luis?

[Caller]

Hey guys, nice to meet you guys. How are you?

[George Camel]

We're doing great. How can we help today?

[Caller]

Yeah, so I'm 24 years old, married, my wife is also 24. Household income is about 90 to 100k a year. About 8 months ago, I started hearing about your show immediately. We went debt free. It was no brainer. Now we have an emergency fund and we are currently renting and in the process of getting money for a down payment for a house. So the question is, what advice would you guys give us as a first time home buyers? Should we save 20% down, 20% down payment, or should we do an FHA loan, conventional? What would you guys recommend?

[George Camel]

Great question. I'll give you the Ramsey parameters and we can dive into your situation after that. We Recommend at least 5 to 10% down for a first time homeowner and Only choose a 15 year fixed rate conventional loan where the payment is no more than a quarter of your take home pay. And I know once you crunch these numbers, Louise, you're going to go, oh my gosh, these guys are out of touch. How could anyone do that? We can't change the laws of math. So a lot of people go, well, I guess it'll just be 60% of my take home pay going toward this mortgage and I'll be stressed forever. And so that might mean you need to choose A different house, choose a different location, Choose a townhome instead of a single family home. Save up a bigger down payment. So knowing all that, where do you guys stand financially? What's your goal?

[Caller]

We would want to get like a single house family, like three bedroom, two bath, like that. We always have family over.

[George Camel]

And what is a reasonable home in your, in the area you want for those parameters? What's that going to cost?

[Caller]

We're looking around 400,000.

[George Camel]

Okay, and how much do you guys plan to have down?

[Caller]

That's kind of the goal that I'm trying to set. I'm fine with waiting until we get 20%, but if you guys recommend 15, 10 or something before we can pull the trigger as well.

[George Camel]

Well, I think based on the mortgage payment, with the current market and rates, where they are, where they're at, I think that's going to be a hefty mortgage payment that you guys won't be able to stomach. That might be 70% of your take home pay. So it's not as much of a down. How much down? 5 or 10. It's, we might need to save up 30% down in order to make this mortgage work for us, which means we need to get our income up and we need to rent for another two years. Okay, so those are, that's the kind of sacrifices you'll need to start looking at. Are, are we willing to compromise? Are we willing to do a three bedroom townhome? That's 300,000 because we have urgency to get into a house.

[Caller]

Got it. Yeah. Because like talking about sacrifices, I own a business and when I was a little younger, I think I made a rookie mistake of buying an $85,000 work truck. It paid off. But my, if you don't mind asking the second question. Should I sell that truck and buy a 30, $40,000 truck and then that would speed up the process of down payment?

[George Camel]

Absolutely.

[Dr. John Deloney]

You can do your job with a $30,000 truck. Sell it today.

[George Camel]

Got it.

[Dr. John Deloney]

Today. Yes. Get rid of that thing, dude. $80,000.

[George Camel]

It's not like if you get double the truck, you're going to make double the money, right? That's not how business works. You know that. So I would definitely make the sacrifices needed. And if that means downsizing and truck I'm doing, if that means working overtime for the next six months to get this down payment going, I'm going to do that. So you guys decide, you can pull all the levers you want, but don't take any shortcuts. Doing these first time home buyer 0% down type loans. They're not in your favor, my friend. This is the Ramsey Show. For free tools and resources to help you reach your home goals, go to Ramsey Solutions.com realestate or click the link in the show Notes. Mortgage rates have dropped, so if you're thinking about buying a home in the next year, contact your local Churchill mortgage team right now. If you wait, more people will be in the market, competing for the same homes and potentially driving up prices. Churchill will help you do the math to be sure your budget is correct, making your home a blessing and helping you build lasting wealth. Learn [e-mail] Churchill Mortgage.com this is a paid advertisement in MLS ID 1591 in mlsconsumeraccess.org Equal Housing Lender, 1749 Mallory Lane.

[Dr. John Deloney]

Suite 100, Brentwood, TN 370.

[George Camel]

Welcome back to the Ramsey Show. I'm George Camel, joined by Dr. John Deloney. The phone number to call is 888-825-5225. Well, there's a lot that goes into buying and selling your home, and all of those decisions can feel overwhelming and you shouldn't have to do it alone. And that's why we created Ramsey's real estate home base. It's a place with all the tools and resources you need to get prepared to buy or sell your home with confidence. You're going to find calculators, start to finish guides, how to articles, a podcast, a book, and even a video course all packed with actionable steps to help you navigate this process. So if you're ready to take those steps toward your home goals with peace of mind, go to ramseysolutions.com realestate or click the link in the show notes and description. If you're listening on YouTube or podcast, Cindy's up next in Fort Worth, Texas. How can we help? Cindy?

[Caller]

Yes, Hi. Me and my husband are reading your total money makeover book and we are trying to get serious about getting out of debt. But we currently have about $300,000 worth of debt and we're just really struggling to make minimum payments on credit card, let alone save up the $1,000 emergency fund.

[Dr. John Deloney]

Wow. Does that include your house?

[Caller]

Yes.

[Dr. John Deloney]

Okay, so how much do you owe? Not including the house?

[Caller]

So it's 140.

[George Camel]

Okay, can you break that down for me?

[Caller]

So we've got about $50,000 credit card, $50,000 car loan that was 75,000. I just sold my car to get out from under that and about $40,000 home equity loan.

[George Camel]

You Got it all. You've collected them all?

[Dr. John Deloney]

So hold on. You sold your car, but you still owe 50 on it, or does he have a car?

[Caller]

Yeah, we have. We are. We're financing three cars and now just two.

[Dr. John Deloney]

Okay, tell me about the other two you're financing.

[Caller]

My husband's car is 2022. We owe about 33,000 on it. And then my daughter's car is a 2022 Corolla, and we owe about 17,000 in that.

[Dr. John Deloney]

So we're going to sell both of those in the next 15 days, right?

[Caller]

Are we?

[Dr. John Deloney]

Yes, I think we are. Y'all are. Y'all are. Y'all very scary, bro.

[George Camel]

If you can't come up with a thousand bucks, then these cars have to go. You guys are. I mean, these cars are robbing you from a different future. You can get nice cars later. We're not saying never. You can never have these cars again. But this is part of the issue. You get rid of these car payments, you can breathe again. Right.

[Dr. John Deloney]

How much do you and your husband make?

[Caller]

I think it's about 130,000 a year before taxes. Bring home probably right around 100.

[Dr. John Deloney]

Okay.

[George Camel]

Are you guys doing any investing right now?

[Caller]

No, in our 401k.

[George Camel]

What's that?

[Caller]

Just in our 401k.

[George Camel]

Well, that counts as investing.

[Dr. John Deloney]

Yeah.

[George Camel]

So if you took that down to zero, that would put some money back in your paycheck every month, right?

[Caller]

Yes.

[George Camel]

Okay, so that's a start. You can reshop all of your insurance. You can go to ramseysolutions.com checkup and do a coverage checkup, reshop it all, because you might be able to save some big money every single month just by reshopping insurance. And on top of that, can you guys work extra, either of you?

[Caller]

Yes, I actually just picked up a Saturday job.

[George Camel]

Good, good. Do you feel the compounding effect of what a few of these things stacked on top of each other would do for you?

[Caller]

Yes. Just getting rid of my car this past Monday, we are going to be saving 1,031amonth.

[George Camel]

Boom.

[Dr. John Deloney]

Wow. And so there's your thousand bucks right there, right?

[George Camel]

Yeah.

[Caller]

Yep. Absolutely.

[George Camel]

So you'll have a thousand, and then what are these car payments that are left? What do they add up to each month?

[Caller]

See? 1259amonth.

[George Camel]

So think about that. If you sold the cars and downsized to just something you can get you to A to B, you'd be saving an extra 1200 bucks. So you freed up 2200 bucks just by getting rid of some cars like.

[Dr. John Deloney]

After taxes and take them. You just added a $40,000 year income to your house.

[Caller]

Yeah.

[Dr. John Deloney]

Right. So let me ask you this. You guys have $160,000 left on your mortgage. You got 140 grand in debt. Y'all make $130,000. This that tells me that y'all. Because y'all. Y'all don't have. I know it feels like it. You don't have a ton of debt. And I mean, you got car notes, you got credit card debt, you'll have a lot of debt, but you also make good money. This tells me you guys go out to eat all the time. Your daughter's a princess. Like, do y'all spend recklessly? Do y'all not have a budget?

[Caller]

We definitely have a budget. There was some time that we got a little bit out of control. We have two teenagers, but we have reeled all that in.

[Dr. John Deloney]

Okay. I think one of the greatest gifts you could give your teenagers is to sit down with them and say, here's how mom and dad have lived and here's how things are going to be different. And we're going to take your precious Corolla. And I know you love it. We're going to sell it because it's the right thing to do. You're the worst. I can't believe you. But I'm telling you right now, the 27 year old, her, the 40 year old, her will remember this moment as my mama did. Dad did whatever it took to become free.

[Caller]

Yeah.

[Dr. John Deloney]

And I think it will be a watershed moment for you and your family.

[Caller]

Okay.

[Dr. John Deloney]

And it will really, really not be fun at all. Right.

[George Camel]

But when you explain to them like, you guys won't have to take care of us in retirement because we made these sacrifices now and a 16 year old doesn't care.

[Dr. John Deloney]

She wants her cool Corolla right now. Especially with the crummy car you're gonna have to buy her or that she's gonna have to go to work for.

[Caller]

Right? Yes.

[George Camel]

So there's a lot of sacrifice to be made here, but this is a very hopeful situation because these cars we can kind of undo a little bit. I don't know what they're worth. Do not just go trade them into some dealership that gives you bottom dollar. Sell them private party, clean them up, take some good pics, put it on Facebook, Marketplace and Craigslist and get top dollar for these cars so that you're not underwater on them.

[Caller]

Okay.

[George Camel]

And I'm hoping because they're pretty new, you can still most of the you know, equity is still inside of them.

[Dr. John Deloney]

Versus being underwater, especially the Corolla.

[Caller]

Mine wasn't even trade. You know, just they paid it off. And then my daughter's is. My husband's is not. He would be upside down.

[Dr. John Deloney]

That's fine. Go to. Go to a local credit union and take out the difference, because I'd rather you be $5,000 in debt and then he gets a $2,000 car. I'd rather y'all owe seven grand than owe the 35 that you owe now.

[Caller]

True. Okay.

[George Camel]

And remember, this isn't forever. This might be a two year journey as you guys clean up all this debt, get to some financial foundation, then we can save up and pay cash for a car, no problem.

[Dr. John Deloney]

I'm gonna ask you a very stereotypical, like, generalized question. That's not fair. Okay, but I'm just a lifelong Texan. Is your husband in enough that he's gonna sell his truck and get a $7,000 car?

[Caller]

Yeah, he would. He's all on board.

[Dr. John Deloney]

That's an. That's an amazing. Good man. Good for you. Yeah, good for you. That's. That's fantastic. So now you just have hard work ahead of you, but it's going to clear up way, way faster on this $50,000 of credit card debt. Is it one big credit card or is it 30? Just.

[Caller]

No, it's two big credit cards.

[Dr. John Deloney]

Okay.

[George Camel]

Did you do some kind of consolidation loan or balance transfer or is these. Did you actually max out each card?

[Caller]

We maxed out. We were really frivolous on one and the other one, we had everything go wrong in one year and had to put and cars and taxes all on one.

[George Camel]

Well, from now on, here's what you're gonna promise me. We're not gonna swipe that credit card one more time. We're gonna be our own bank.

[Caller]

Yep.

[George Camel]

And we can make do without it. And if something really goes down where you need more than a thousand to cover it, you'd push pause on all the steps and save up really quickly. Cause you guys have a great income.

[Caller]

Yeah.

[George Camel]

And that's where freeing up those payments will give you a little bit of breathing room. Right now you shouldn't get your head above water. So make all the minimum payments on the debts, focus on the smallest one, get the thousand in place, reshap the insurance, pause the investing. And as you start to get more margin, it's going to become addictive. You're going to go, where else can we save? What else can we do? We can cut that subscription. And so I'M going to send you my book Breaking Free from Broke. And there's a chapter called Margin is Breathing Room where I lay out at least 10 ideas to make more, 10 ideas to spend less. My goal for you, just choose a few on each list and you will feel so free just days from now. You do what John and I tell you to do.

[Dr. John Deloney]

And I'm gonna, I'm gonna talk to everybody here, but I'm also talking to you too. Okay, Cindy, I think when you're having to to toggle a lifestyle shift with kids, especially teenagers, I want everybody to keep in mind this one word. Ownership. How can I invite my teenager, my middle schooler especially, and even my, even my, my elementary school kid. How can I invite them into the lifestyle changes we're making? That can be. I'm going to teach them about how much money we make. Right. And they're going to start doing the budget with us. I'm going to help. They're going to get to sit in my lap when they're younger and punch the button in. This is what our electric bill is. Yep. So when I tell you to turn the electric like your lights off, this.

[George Camel]

Is why they're going to put the marbles in the jar for every thousand payoff.

[Dr. John Deloney]

But when they feel a part of it, then there's less. Oh my gosh. And more. Okay, we're all doing this together. And then you get a whole family united in the same direction.

[George Camel]

Beautifully said. Hang on the line Cindy. We'll send you a copy of Breaking Free from Broke. Wishing you guys the best. You're going to make it through. This is the Ramsey Show. Self defense can be a complicated issue. But there's one solution that makes it a lot easier. A burner launcher. Burnas look like firearms, but they're not. They're non lethal self defense tools. They shoot chemical irritant projectiles that stop a threat in its tracks without the fatal consequences of a gun. Burner launchers have been vetted by government agencies, police forces and private security agencies worldwide. And no permits or background checks are required to buy or own one. Plus, burners are lightweight, easy to carry and give you the power to protect yourself and your family even if you're not comfortable with traditional firearms. Not to mention they have more than 15,000 five star reviews. And right now 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.

[Caller]

10% off for our listeners just go.

[George Camel]

To Burna.com Dave to learn more. That's B Y R N A dot com Dave. Welcome back to the Ramsey Show. I'm George Campbell, joined by Dr. John DeLoney. As a listener of the Ramsey show, let me ask you a question. Are you staying on track with the baby steps to reach your financial goals? If you're not sure or you want some clarity, take a quick quiz that we created to check your progress and you'll get a personalized plan in minutes just for you. Simply head to the show Notes, click on the link titled are you on track with the baby steps? And complete the free quiz. Kyle's up next in Portland, Oregon. What's going on, Kyle?

[Caller]

Hey crew, thanks for taking my call. Sure. My main question is regarding my student loan. So I have a pretty substantial student loan amount. It's $250,000. And so I work for a nonprofit. My main question is should I pursue that 10 year public service loan forgiveness or should I just kind of tackle it and go head on and just try and pay it off?

[Dr. John Deloney]

Are you a doctor or an attorney?

[Caller]

So I'm a doctor. Pharmacy. I'm a pharmacist. So my gross annual is about 170. My take home is about 120,000 after taxes. Oregon has some pretty, pretty insane income taxes.

[Dr. John Deloney]

Yeah, that's why we live in Tennessee. Do you. That was a dig. I love Oregon. I think Oregon's a stunning place. Let me ask you this, do you, what, what's the market rate for a pharmacist if you quit there and went over to Walgreens or quit there and went over to a local hospital? What, what would that do to your salary?

[Caller]

So I would make definitely a lot less. So I work for kind of a healthcare giant. I'm sure if I said the name, you guys would recognize it automatically. So I, I make probably the best hourly and the benefits are phenomenal in terms of how much I pay a year in healthcare and how much I pay for like their match is pretty good as well.

[Dr. John Deloney]

Oh, so you're working at like a hospital, but technically it's nonprofit.

[Caller]

Exactly. It's a not for profit hospital system.

[Dr. John Deloney]

Okay.

[Caller]

All right.

[George Camel]

So you're saying you wouldn't make more going into the private sector?

[Caller]

No, I would not. I'd run private class.

[George Camel]

Okay.

[Dr. John Deloney]

So my dude, my, I mean, here's what I just saw firsthand and I, after the, like Biden's gonna forgive it all and then it didn't. And Supreme Court, like after all that, I, I'm gonna be honest with you. I've stopped watching the. The news ticker on it every day, okay. But what I witnessed was some of the most brilliant, extraordinary law students of mine decide to go into public service because of this 10 year repayment program. And they got hosed, just got denied. They went all the way through it and then a thing happened. Or they went from one from working as a public defender to working on a nonprofit and they reset the clock. I mean, just crazy stuff that makes no sense and it really soured me on it. And so what I would tell you is ten years from now is two and a half presidential elections. If you think you can predict what's going to happen in 10 years from now, best of luck to you, right? So what I would tell you is for your soul, you make 175 grand and I know you get beat up on taxes, but you make175,000 bucks and you could probably pick up Saturday and Sunday work. I would hit the gas in an insane way over the next 18 months and just pay the sucker down as fast as I possibly could. That's what I would do. That's what I. I just watched some of the brightest minds like you just get burned alive by a governmental promise that didn't come through. Shocker.

[Caller]

Awesome. I appreciate it guys. I'll give you some stats too. So my wife and I, we own a home. We've been there for about a couple years now. We have a four year old son and we actually have a baby girl due in May. So really excited.

[George Camel]

Awesome.

[Dr. John Deloney]

Congratulations.

[Caller]

Yeah. So we've been working on the debt snowball. Step number two. So we actually paid off our first medical bill today, which is 1300 bucks, which has been nagging. So we're making some huge changes in terms of how we spend. It's actually showing. But should we keep snowballing? Because like we are still able to continue snowballing while working to save for our baby. So like, should I just.

[George Camel]

How much do you have in savings?

[Caller]

So we just have about 1500 bucks in our starter emergency fund right now. We have about 150,000 in retirement accounts.

[George Camel]

Are you guys still investing right now?

[Caller]

We're still investing right now, yes.

[George Camel]

Okay. I would recommend pausing that down to zero for a short time to knock out these debts faster. And I would also recommend pausing to stack up cash. I know you can snowball while saving, but the. I mean, may is not that far away. Four or five months of stacking cash. I hope everything goes perfectly. Mom and baby Are home safe. Great, let's hit play. And we have a bunch of money to throw into the snowball and we'll continue on. Okay, so that's what we call that stork mode in the baby steps. When you're in that baby step one through three world, it's okay to pause and just stack up cash.

[Dr. John Deloney]

And by the way, everyone you work with is going to tell you that's the stupidest thing they've ever heard. They're going to tell you, dude, you're missing out on the 2% or 4% match. Are you an idiot? Those guys are morons. And here's what you're going to have that they don't. You're going to have $25,000 in cash in the bank as your wife heads into labor, or 30,000 bucks in cash, and you're going to be able to sleep at night.

[Caller]

Yeah.

[Dr. John Deloney]

And none of your colleagues have that. They've got a bunch of like, cool things on a tin key and a cool things. Like. Like they're at like what? I don't know what they have. I'm just being a jerk. But like. But you're gonna be able to sleep at night. And then the day after the birth, when the mom's mom's doing awesome, baby's doing great. Not day after, but the week or two afterwards, you're gonna take that money and you're just gonna roll it back where it needs to go.

[Caller]

Okay.

[Dr. John Deloney]

And suddenly that loan is going to be 225, 000, because you're gonna have just dropped 25 grand on it. Knock it down.

[George Camel]

So I'm not anti the PSLF program, but again, the stats are.

[Dr. John Deloney]

I absolutely love the idea as a taxpayer.

[George Camel]

Yeah.

[Dr. John Deloney]

You have the brightest minds in the world to go actually solve some of these governmental nonsensical issues. Dude, I love the idea. I taxpayer. I love the idea of taking some of the brightest minds and saying, you work for the government for half or a quarter of your market rate. I happily pay back your student loans. Yeah, but those get screwed.

[George Camel]

It's a half a percent is what was actually approved. From September 2020 through June 2023, 4 million were processed. 19,000 resulted in forgiveness. It was a half a percent. Yeah. So I think the program itself has a lot of flaws. I'm not mad at it. And I also think devoting 10 years of your life to this and kind of putting yourself in some golden handcuffs here, because now there's a sunk cost. You're three years in. You have a Terrible boss. The work workplace changes and you go, I gotta get out. But man, it's gonna ruin my chances.

[Dr. John Deloney]

Or some A comes out and somebody calls you and they're like, hey, we'd like you to come work with our new pharmaceutical thing. It's going to be amazing. And you're like, oh, I can't do that because I've seven years into this 10 year repaint. Just get it out of your life, man.

[George Camel]

Tough.

[Dr. John Deloney]

Get out of your life. Get out of your life.

[George Camel]

All right, let's go out to Crystal in Dallas, Texas. Up next, how can we help Crystal?

[Caller]

Hey there. So my question for you is, I'm a single mom of three, I do have a mortgage and then I have $25,000 cash in the bank. I have $6,000 of 0% interest debt and I have a car loan that I owe $25,000 on. My annual income is $90,000. And so I'm just trying to figure out, you know, I feel safer having that cash sitting in the bank, right? Because I'm a single mom of three kids and if I were to lose my job or, you know, something happened, that's kind of my safety net. So I'm just trying to figure out should I put some or all of those funds towards paying off the debt that I have or leave it sit in the bank.

[George Camel]

This is a tough one. You do have a lot on your plate. And I would argue that there's also risk. And you know, it's unsafe to owe that lender. They could repo your car if you don't make the payment. And so there's a piece of me that goes, if you knocked out the 6,000 debt, leaves you with 21. If you took 15 or 20 of that and threw it at the car loan, you're done with this car loan within a few months, making 90k, right? You freed up a payment from your other debt. So this is not a, you're going to go a year with a thousand bucks in the bank. We're talking about maybe three months and then you're going to restack it with no payments in the world and get there really fast.

[Caller]

Okay?

[George Camel]

But that's the kind of fire when you feel that thousand bucks in the bank and you feel unsafe, that's when you go, I'm going to kick it into high gear. I'm going to do whatever it takes to get rid of this debt fast to get to that financial foundation.

[Dr. John Deloney]

And if you flip it around, if you were to lose your job and you have this pile of cash. All those lenders are still calling you.

[Caller]

The next day, right?

[Dr. John Deloney]

So you still, it's, it's six and one half dozen another. You could, you could spread it out, right? You could pay some a little bit, but you're still gonna have to pay that money. I would rather, I mean, just sitting here, this is me. I'm not a single mom of three kids. And so it's much easier for me to say this when I look at my own risk profile, but I would rather owe nobody and get laid off and figure out what's next, then have a whole. I have a small pocket of money, but I have a whole bunch of creditors that are. Come knocking on the door when I got no job. I, that, that's just me personally.

[George Camel]

I'd test the waters, pay off that first debt, see how it feels. I think you're going to go, all right, we can do this. You're going to feel the progress. This is the Ramsey.

[Dr. John Deloney]

This show is sponsored by Better Help. Hey, folks. We all have stories. The family and cultural stories that we were born into. The stories of the things that have happened to us, both good and bad, and the stories that we constantly tell ourselves. And while we can't go back and change any of our old stories, the world is waiting to see what you and I are gonna write next. As we enter 2025, I wanna encourage you to examine your old stories and be intentional about the new ones you're writing. And I'm not talking about goals that are gonna be long gone by February. I'm talking about writing new stories that will change your life forever for the better. And if you're like me, therapy can be a great place to explore the old stories, even heal from them and, and begin to write new ones. And if you're thinking about starting therapy, I want you to consider my friends at BetterHelp. BetterHelp is 100% online therapy, and you can talk with a licensed therapist when it works for your schedule. You just fill out a short online survey to get matched with the licensed therapist, and you can switch therapists at any time for no extra cost. So start writing a new story this month with BetterHelp. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H-E-L-P.com DeLoney.

[George Camel]

From the Ramsey Network, this is the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by Dr. Johnson DeLoney, and we're taking your calls at 888. 825 5225. You jump into the conversation and let us know what's going on in your world, and we'll try to give you the right next step. Henry's going to kick us off in Raleigh, North Carolina. What's going on, Henry?

[Dr. John Deloney]

Hey.

[Caller]

How are you?

[George Camel]

Good. How can we help?

[Caller]

So I'm kind of lost financially. I'm not really too sure what to do. I'm in a good spot, but I'd like to see if y'all are in my shoes. How would you. What would you do in the future? Coming up.

[George Camel]

All right, lay it out.

[Caller]

So me and my wife previously had a home. Then we. We actually just moved back in with my dad. He. He's not charges anything. He just wants us to save money. I currently have 14,000 in my bank account. We got a little surprise when we moved in, and my wife is now six months pregnant. So, yeah, I don't really know if I should just keep saving and then buy a home or. There's Some people were telling me to buy a trailer. Some people tell me, buy a home. I'm not really too sure. All I'm doing is just putting money in my checking account, and I don't really know what direction to go.

[George Camel]

How much debt do you have?

[Caller]

I don't have any. I actually just paid all mine off.

[George Camel]

Awesome. So you're. You're @baby Step three. You're saving up a fully funded emergency fund. What does three to six months of expenses look like for you guys? Obviously, it's tough now because you're basing it off of zero rent, living with dad, but what would it be?

[Caller]

All right, now the only thing we really have is. My wife got a new car. Betty, six months ago.

[George Camel]

But is there a payment on it?

[Caller]

Yeah. It's about Henry.

[Dr. John Deloney]

That's debt, homie.

[George Camel]

We got to start off this relationship with honesty. I asked if you were debt free.

[Caller]

Well, I'm thinking of me. She put it in her name. She did all of herself.

[Dr. John Deloney]

No, y'all. Are y'all any money she owes you. Ow.

[George Camel]

Was this against your will, or were you an accomplice in the crime?

[Caller]

Um, well, see, I work a lot. Like, I get work on call. So I was one of those. I was on call working, and she said she was gonna go look at cars, and then kind of snuck away.

[George Camel]

To the dealership and showed up with, what. How. How much Was this car?

[Caller]

32,000.

[George Camel]

And what do you guys make? A Year.

[Caller]

So I make 2150. She makes 19 an hour.

[George Camel]

Okay, so you guys are making. I'm gonna just ballpark it and say you guys are making about 80k a year.

[Caller]

Yeah, about there.

[George Camel]

Okay.

[Dr. John Deloney]

So in our world, just. I don't.

[George Camel]

John's at a loss for words.

[Dr. John Deloney]

Yeah, it's rare. I. My wife and I. I. I just can't wrap my head around any successful marriage. I know the partner would not go make a $30,000. Dave and Sharon Ramsey. They're worth $700 million. Would not make a $30,000 purchase without telling the other person.

[Caller]

And so she told me she was looking at him. And then.

[George Camel]

I mean.

[Dr. John Deloney]

Yeah, I know. But here's the deal. In our world, we call that financial infidelity. And I want you to consider it being that serious of a thing because you have cash in the bank. You're worried enough about your future finances that you moved home with your wife to live with your dad, right back to your high school house. You have the burden that most men don't fully understand until their wife tells them, hey, I'm pregnant. Right? And now sudden, it's like you're under a squat rack and someone just put two more 45s on each side, and you're like, whoa, this is heavy.

[Caller]

The. That's the thing I'm worried about. So every week, I've been doing a lot of overtime, so I've been slowly building up, buying diapers, buying things to be prepared. It's just.

[Dr. John Deloney]

Yeah, don't do any of that. Don't do any of that. Don't do any of that. And again, that's you anxiously spinning out. Okay, okay. You and your wife have to get united on how much do we owe. We're going to share a bank account. There's not your money and my money. It's our money. We're creating a home, a family. We made a human together, for God's sakes. And so we're going to share everything from this point forward, including our dreams, including our value systems. And that's where the hard conversation, like, hey, we can't have a marriage where one person just rolls off and buys a. I mean, for God's. I. I texted my wife when she knew I was at Guitar center buying guitar. Like, I let her know, hey, I'm gonna get one. And then she sends me, like, a rolly eye face. But it's in the budget. Like, you know what I mean? It's just. She's annoyed by it, but it is. But I wouldn't Even do that, like, with a small purchase like that. And so I. But it speaks to a larger unity. And you've got one of you buying cars, doing whatever, and then you're up there like. Like hoarding diapers, right?

[Caller]

Yeah.

[Dr. John Deloney]

And so that just gets to this unity. Let's be on the same page, and let's work together towards a common thing. And that may be the first time you've. Either of y'all have ever seen that in your lives. And so it's new, and we can help you with that, man. But do you get what I'm saying? How peaceful that would be?

[George Camel]

So let this new baby be a reset and say, hey, I've done a bad job leading our family when it comes to finances. Don't make it about her and her mistakes. And like John would say, use I language.

[Dr. John Deloney]

I want us to be on the same page moving forward, because I want us to create an amazing home that maybe neither of us had growing up, because I don't want our kid to ever have to move back in with us.

[Caller]

Gotcha. Yeah, I can definitely do that. My next question would be, how would I. How would we get out of it? Because, I mean, it's 15% APR.

[Dr. John Deloney]

740 smokes, bro.

[George Camel]

What's. What's left on the loan?

[Caller]

I came.

[George Camel]

I'm sorry, what's left on the loan?

[Caller]

The principal. 32,936.

[George Camel]

So she did. She put nothing down.

[Dr. John Deloney]

I get.

[Caller]

We put four grand down.

[George Camel]

Oh, so this car actually cost 36, 37 grand.

[Caller]

Yeah.

[Dr. John Deloney]

What's it worth? 26.

[Caller]

We were. Yeah. When we were looking at it, just to sell it, I mean, I'm probably paying about four or five grand just to get rid of it now.

[Dr. John Deloney]

Do it. Pay it right now. Pay it right now, bro.

[George Camel]

What's your car worth?

[Caller]

So I don't even. I have a spare vehicle, but it actually broke down, but I don't have another vehicle.

[George Camel]

So you guys are one car. Family.

[Caller]

Yeah. I don't have to drive. I don't have to drive. I have a company vehicle, so I don't have to drive. You know, a personal vehicle to get to work.

[George Camel]

Got it.

[Caller]

So that. That helps us out a lot.

[George Camel]

I would look at what the private party value is and try to get top dollar for this and be as little upside down as possible and then use whatever in your savings to cover the difference to clear the title. And then go get you a $4,000 used car right now to get out of this mess, because then you can start stacking Up. I imagine the payment on this thing is massive. What are you paying monthly?

[Caller]

With insurance, it's almost a thousand dollars a month.

[Dr. John Deloney]

Golly, dude.

[Caller]

I almost had a stroke when I saw it.

[Dr. John Deloney]

Yeah.

[George Camel]

Yeah. No wonder she didn't tell you. Goodness gracious.

[Dr. John Deloney]

Has she seen. So let's. Let's. Let's be. I want to be compassionate. Has she seen. That was dumb. Yeah.

[Caller]

Now. Oh, yeah. Now she's trying to figure out what we can do.

[Dr. John Deloney]

Okay.

[Caller]

Because now she's on the same page. Because before I wanted to just buy a cheap beater.

[Dr. John Deloney]

Yes, absolutely, she did.

[George Camel]

So I.

[Caller]

That's all I've ever done. I've never owned a brand new vehicle myself.

[Dr. John Deloney]

So that's why you have no debt and $14,000 in a bank account. But, yeah, you know what I mean. You haven't made some car dealership wealthy by paying the depreciation on their vehicle for them.

[Caller]

Yep.

[George Camel]

So your job is not to convince her that she needs to sell her car. She made a giant mistake. Your job is to give her a vision for what the future is going to look like. And a byproduct of that is we got to sell the car. That's a different conversation.

[Dr. John Deloney]

And so we're going to. We're going to go take out a loan for the difference. Or we're going to save up five grand real fast. Or you have 14 grand. You're going to go sell that thing private party, and you're going to be upside down on it. You're going to Write the other 4,000 bucks and you're going to be done.

[George Camel]

But then this baby's going to come into the world debt free with a fully funded emergency fund. Building for the future instead of paying for the past.

[Dr. John Deloney]

Don't buy a trailer. Go get an apartment that you all can rent. You can save up for a down payment on your own small starter.

[George Camel]

Yeah, I'm going to say, thanks, Dad. I got to go get my own place. And we'll figure it out. This is the Ramsey Show. Hey, George Camel here with a not so fun fact. Every American Social Security number, including our children's, has been hacked and is now on the dark web. And this is not a scare tactic. This isn't fear mongering. It's a reality that could turn into a nightmare for a lot of people. And believe me, I've been a victim of identity theft, and I would prefer it never happen again. Because once the bad guys have your social, it's the lifeblood for all of their activity. Think of all the places you use, your social, your banking, your employer, government offices, utilities, cell phone companies everywhere. And once they've got it, thieves can open new accounts, drain existing ones, steal payroll and wreak havoc all in your name. Not cool. And to be real, it's not a matter of if, but when. So you've got to protect yourself with Xander's ID Theft protection. Zander has all the cyber tools to help, including home title monitoring, full recovery services if you do become a victim, and stolen funds protection. Not to mention, it's the best value on the market. They've been protecting my family for over a decade and I trust them to protect yours too. So get enrolled today by calling 800-356-4282 or just visit zander.com that's z a n d e r.com hey George Camel here. So you're thinking about buying or selling your home? It's exciting, but there's a lot to think about and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramseysolutions.com realestate that's ramseysolutions.com realestate welcome back to the Ramsey Show. I'm George Campbell, joined by Dr. John DeLoney. Hey, if you're ready to get your finances in order once and for all in 2025, join us January 23rd for a free live stream. Take control of your money. It's hosted by Dave Ramsey and Jade Warshaw. That's how you know it's going to be good. You're going to learn how to stop living paycheck to paycheck. Learn how to free up more breathing room so you can pay off debt fast and finally get ahead with money. Plus, Rachel Cruz and I will join at the end for a Q and A where you ask your money questions live. And here's the real reason to join. When you sign up, you'll be entered to win our cash giveaway. Five people will win $4,000 each. Not a bad way to kick off the year. So go sign up for the free live stream by going to Ramsey Solutions.com livestream or click the link in the description. If you're listening on YouTube or watching wherever podcast, all that good stuff, check out the show notes. All right, Lucas is in my. My home state, Worcester. What's going on, Lucas?

[Caller]

Yeah, and not too bad, not too bad. Enjoying some of the. Some of the cold weather because I'm a skier, but, you know, not. Not too excited that there's not too much snow here yet. Oh, wow.

[George Camel]

Nashville might be beating you for.

[Dr. John Deloney]

We got plenty of snow today. We got like five or six inches today.

[Caller]

Probably. Probably. But. But yeah, no, it's a. It's a. It's a good day. And honestly, it's a good year. I mean, we. It's a. We've got some good resolutions and. And hopefully, you know, being on the call today, hopefully you can give me some advice because. Trying to find some peace of mind over here. Yeah.

[George Camel]

What's the question?

[Caller]

Yeah, so the question really is like, you know, I'm getting married this year to a beautiful woman. And, you know, we were, God willing, we're in a great position to, you know, to get married, buy a house, build a house. Part of our goals, you know, but we're faced with some challenges at the moment, and the challenges are really, like, where we're not able to find land that's kind of like in our price range. You know, homes are just very expensive in general. If we wanted to go down the route of building a home, and then we're also faced with the challenge of becoming further from our family, our friends, our church family, our communities to find that nice price that fits into our budget. So really the question is, should we keep continuously saving because we're not in debt. We have a budget. We've spoken to some of the financial advisors and whatnot. We're in a good spot. But the thing is, should we keep saving and wait for affordable land that's kind of in our budget? You know, we're kind of looking for the. We're looking somewhere in the central mass area. Or should we, you know, you know, buckle up and consider, like, buying one of these homes are on the market when it seems like those really expensive ones and the ones that are kind of like fixer uppers are all at the same price.

[George Camel]

Let me free you from two things. Number one, let's assume there will not be magic affordable land anytime soon. And number two, let's assume there's no such thing as our dream home. And so instead, if you go, all right, I'm a newlywed looking to get my very first Home. It doesn't need to be the 30 year dream, but I need to get my foot in the door and so that can free you to go. All right, we're not going to go buy land and do this dream home right now. We're going to go buy a single family in an established neighborhood with some good schools at a reasonable price. That still is too expensive. It's because I'm angry at how expensive the housing market is. I know. I wish we could all go back in time, but we can't. So instead we go, all right, how much do you guys have saved right now for the down payment? How much do you guys have saved?

[Caller]

We, so we have right now saved a little bit over 200k.

[George Camel]

Wow.

[Caller]

Grand.

[George Camel]

That's amazing.

[Caller]

First off, I want to, if my parents are listening, I just want to say thank you to them because without them, you know, it's, they really help, you know, you know, they really helped me save some of the money and also my fiance, so.

[George Camel]

Well, really? They did is they modeled it for you? Yeah, they modeled what it looks like to live on less than you make, so that's awesome.

[Caller]

Thank God they did. Yeah. So we're ready to put a down payment and details of a down payment? I have no idea, to be honest.

[George Camel]

Okay, what are, what does a reasonable home cost in the area that you would like to live right now? Not the dream land, but just hey, it's, this is near family, it's in a good area. Is it half a million?

[Caller]

Yeah, I would probably say around there even. 400. 400,000.

[George Camel]

Okay, so you could put 50% down today and have a $200,000 mortgage and your, your household income is what?

[Caller]

Household income a month is around $10,000.

[George Camel]

Great. So you guys are taking home about 120 a year.

[Caller]

Correct.

[George Camel]

Okay, so now your next step is jump on the Ramsey Solutions mortgage calculator and go. Alright, our 15 year with 200 down on a $400,000 house. The payment's going to be, you know, 2,500 bucks. Great. That's a quarter of our take home pay. Let's go ahead. This is a great home. Let's do it. I wouldn't overthink it to the point where you wait seven years to buy perfect land.

[Caller]

Yeah, I think that's the issue though. That's the thing. I mean we're very much like, we've got this money, we've got this vision, we want to just build something that we want first off the bat, but we're battling that idea of buying something or just.

[George Camel]

Are there existing neighborhoods with new builds where you could have it, you know, somewhat custom for you?

[Caller]

Not necessarily. We're looking. I think we're very unique. We're looking for something very specific. Like, we're looking for a nice little overlook of an area of land and some kind of, like, good acreage of land. Probably good, like five acres of land.

[George Camel]

You come from the Deloney lineage.

[Dr. John Deloney]

Exactly.

[George Camel]

John loves nothing, but he just. Gimme all the acres you got.

[Dr. John Deloney]

Okay. So, Lucas, here's a thing you need to make peace with.

[Caller]

Yeah, yeah, yeah.

[Dr. John Deloney]

You have a dream and a dream, and you've worked towards that dream. So here's what you've done. You've made choices.

[Caller]

Yeah.

[Dr. John Deloney]

What you're not doing is choosing to have peace with your choices.

[Caller]

Yeah. I agree with that.

[Dr. John Deloney]

You're the guy that got married and continues to talk to all his old ex girlfriends like it doesn't own the gravity of the reality of, I made a choice. I picked her. And so you guys, right now, as a family, I mean, as a couple, y'all have picked a house on five acres. And that means y'all aren't there yet financially. Great. Make peace with it. Be frustrated and be annoyed. But what you're doing is you're making yourself crazy. And so. And what I want you to see is that you're making a choice to be miserable. Now, if y'all want to go back to the well one morning, one Saturday morning over pancakes, and the sun's out and it's cold, and y'all like, hey, let's re. Let's swipe the table clean with this five acre dream, and let's. If we had to go right now, is that still our dream? Great. It's awesome.

[Caller]

Yeah.

[Dr. John Deloney]

And maybe y'all are like, you know what? We don't need five acres. We can go play at the public parks. Dude, we want to get a house, let's get a house right now. Okay. But right now, you're.

[Caller]

You're.

[Dr. John Deloney]

You're working really hard towards a dream. You're way ahead of the curve. Most Americans don't have $250,000 in an account somewhere.

[Caller]

Yeah.

[Dr. John Deloney]

So I want you to focus not on the scarcity, on what we don't have. Bro, you are on your way.

[George Camel]

You're in the 0.00001% of people.

[Dr. John Deloney]

Yeah. Be frustrated that it's so expensive to buy land.

[George Camel]

That's annoying. You still can't afford a million dollar piece of property.

[Dr. John Deloney]

And I'm not gonna choose misery now with $200,000 in the bank.

[Caller]

Yeah.

[Dr. John Deloney]

You know what I mean? And then if you want.

[Caller]

Yeah, no, yeah, go ahead.

[Dr. John Deloney]

I was gonna say if you want to. If you want to change your values, change your values. But right now Your value is 15 acres. And I love that. That's me and my family, too. And I'll tell you, after three or four years, my wife wanted something crazy like cell signal, and she wanted to.

[George Camel]

Live in a society.

[Dr. John Deloney]

Yeah. Like water. To always come out of the faucets when we turned it on. Right. And so, yeah, who knows what's going to happen in four or five years. Or land is really a fun idea until you have two or three kids and going to the grocery store takes an hour and a half round, or.

[George Camel]

Dropping them off at school is a two hour round trip.

[Dr. John Deloney]

Right. Yeah. So all I have to say is, dude, I'll be in pursuit of acres until I. I don't live anymore. I love that dream and vision. And if that's for y'all, awesome. Just don't choose Misery today because y'all are doing great, man.

[George Camel]

How old are you guys?

[Caller]

Yeah, that's what it. We're. We're in. We're in our late 20s.

[Dr. John Deloney]

Awesome.

[George Camel]

You're running out of time, man. Come on, dude, you're so far out of the game. I know, but think about it. If you guys got a normal house now in a normal neighborhood, and you get it paid off in your early 30s, probably by the time you guys are 30, you'll have this thing paid off, knowing how you, how intense you guys are. Then we start stacking up cash on top of that, we can sell it, we can get the land on top of that, who knows? Your income is only going to go up from here. You're obviously, you two are sharp. You're going to be newlyweds combining income. You're going to start off your marriage debt free with $200,000 in the bank. I'd be grateful. And I would, you know, take my chips home from the gambling table and go, we did real well.

[Dr. John Deloney]

Or. Or you can rent a house once a year. You and your wife can go stay at a farm somewhere for an obnoxious week and then keep the dream alive. Right? And then when you got the money, you got the money and you go get your place, man. But let's don't choose Misery today by just sitting there fretting and, and googling and checking Zillow every five minutes. Like, don't make yourself bananas.

[George Camel]

There's A secret listing I haven't found yet.

[Dr. John Deloney]

A dollar amount. And work your butt off to get that. I'd rather see you working instead of googling.

[George Camel]

Right.

[Dr. John Deloney]

Don't choose misery.

[Caller]

Hey, y'all, it's Rachel Cruz. Just about everything costs more these days, and unfortunately, healthcare is no exception. So if you're looking at your healthcare options during open enrollment and finding that your costs are increasing while your number of choices are decreasing, be sure to check out Christian healthcare ministries. CHM is not health insurance. It's a biblically based health cost sharing ministry that's helped hundreds of thousands of families just like yours cover nearly $10 billion in healthcare costs. With no networks and the freedom to choose your healthcare provider, CHM is an affordable option that aligns with your values and makes it possible for your family to save on healthcare. Plus, you can join at any time, including open enrollment. You guys, CHM has been helping Ramsey fans for 15 years, and they're the only health cost sharing provider endorsed by Ramsey. So you can trust CHM to take care of you like we would. Programs start as low as $98 a month, so find out more and join [e-mail] budget. That's chministries.org budget.

[George Camel]

What's up, guys? It's Jade. So picture this. It's the end of 2025, and you're looking back totally amazed. You're looking at just how much your money situation has changed. Bills paid, savings on point, and money stress. Not having it. You're breathing easy now. Can you see it? Listen, I don't know about you, but I know that you can have this. All you need is a plan. And that's where the EveryDollar budget app comes in. Every dollar will help you create a customized plan for every single dollar that you've got coming in and going out. The app is super simple to use, and guess what? It's free. Come on, somebody imagining things being better is one thing, but putting in the work? That's how real transformation happens. So go download the EveryDollar app today and let's do this. Welcome back to the Ramsey Show. I'm George Camel, joined by Dr. John Deloney. Open phones at 888-25-5225. Our question of the day is brought to you by Wirefi. Why refi refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment you can afford with a low fixed interest rate you couldn't get anywhere else. To help you stick to your budget and work that debt snowball. Go to yrefi.com Ramsey that's yrefy.com Ramsey may not be available in all states.

[Dr. John Deloney]

Today's question comes from Wanda in South Dakota. Wanda writes, My 71 year old husband had to retire last year due to a stroke. He's okay now, but not able to work. He was self employed and did not have a 401 or a pension. We have to live off what we were able to save, which is about $320,000. I'm 67 and got out of the stock market a few years ago because I couldn't sleep at night worrying about whether the market was going to tank. Our house has paid off, but our property taxes are high and we pay a lot in medical insurance. My husband's Social Security is around $2000 a month and mine is 1600. Can you please tell us where we can invest our cash so we can live on our savings at least another 20 years?

[George Camel]

Whoo. All right, so they have a.

[Dr. John Deloney]

Can I just say this? Like, this is. Wanda's scared.

[George Camel]

Yeah.

[Dr. John Deloney]

And also, it's not as bad as, like, they're in better shape than many of the calls that we get.

[George Camel]

Yeah. They have a fixed income of 3,600 and they have 320,000 that I think is just sitting in cash right now in the bank.

[Dr. John Deloney]

That's. That's what it's. That's what it looks like. And, but they have no liabilities. They paid off their house.

[George Camel]

Right.

[Dr. John Deloney]

And so all of that at least lets me go, okay, this is where.

[George Camel]

I do a budget with my husband and go, okay, we have 3,600 coming in. Here's all of our bills. Do we have money left over or are we in the red? Every month we take property taxes, we're.

[Dr. John Deloney]

Going to divide by 12. That's a monthly bill. We're going to put aside, put it.

[George Camel]

In a sinking fund, line item in the budget so that you have that money ready come 12 months from now. Now, as far as the money goes, where to invest it, you say, where can I invest this money? Well, you just told me you got spooked by the stock market tanking. And can I give you some, some piece here? If the stock market goes to zero, we have much bigger problems. Every company in America goes bankrupt and is worth $0. That's what would have to happen. So I'm not worried about the stock market tanking. You're gonna have to ride some ups and downs. Sure. But if you look at the stock market last year, 2024, it was up 24% over your money that got 0% sitting in a bank.

[Caller]

Right.

[George Camel]

And so I'm much. I'm actually more scared for that money to sit, not being in the stock market than I am about the market tanking.

[Dr. John Deloney]

George, this makes me think stock market, that she had a bunch of stocks. And maybe I'm just looking at it when I see the word stock markets versus some a mutual fund. Mutual fund that has hundreds of stocks.

[George Camel]

So that's what you want to focus on is an index fund, a broad based, low cost index fund. If this money's not in a retirement account, I don't know where it is. I have no clue. But if it's non retirement, you can just invest it in a taxable brokerage account and as you need, pull money out of it. And obviously when the market's down, that's the worst time to pull it out because it's worth the least. But when the market's great, you can pull a little more out and pocket that away in a savings account to cover you for the future months. But it really depends on what your bills are. If your bills are three grand a month and you're taking in 3,600, breathe easy. You don't need to touch the money. Let it grow, let it rise.

[Dr. John Deloney]

In fact, I would, I would strongly challenge somebody to create a life that is below that 3, 600amonth threshold. You got no bills other than your, you got your utilities, you have your insurance, and then you've got your health insurance. Right. Your homeowner's insurance, your health insurance and your property. Property taxes. Yeah.

[George Camel]

Yeah.

[Dr. John Deloney]

So I would try to build a world that, where we did that.

[George Camel]

Yeah. If you need downsize and house and get lower property taxes, that might be an option too.

[Dr. John Deloney]

Or leave South Dakota. I mean, there's all kind of options there. But, but you would suggest just put it in a.

[George Camel]

Back in the stock market in an index fund or mutual fund.

[Dr. John Deloney]

That's it.

[George Camel]

Keep it simple, Let it ride. Don't touch it unless you need it.

[Dr. John Deloney]

And let's say the, the last 100 years, historical averages stay right?

[George Camel]

Yeah. It's 10 to 12%. Then it'll double every seven years at that point.

[Dr. John Deloney]

Right. So when he's 78, you'll have 640, depending on what you pull. Right.

[George Camel]

And so in 20 years, 85, it'll be 1.3 million.

[Dr. John Deloney]

Yeah. Yeah.

[George Camel]

I could live with that.

[Dr. John Deloney]

Yeah, could be.

[George Camel]

All right, thanks for the question.

[Dr. John Deloney]

Great, great question, Wanda.

[George Camel]

All right. Sue is in Detroit. Up next, how can we help Sue?

[Caller]

Hey, guys. Nice to talk to you as well. I was hoping I could do this a little bit better, but I got a question for you. I've been with someone and recently married three years and found out last year that my spouse has not filed taxes for over 20 plus years.

[Dr. John Deloney]

How bad is it?

[Caller]

And I'm very, very firm on this. I don't know. Things have been hidden from me. I gave them an ultimatum last year. I said, listen, you've got one year to clear this up, to get started, to reach out, get a payment system going. I was like, if you, you talk to them, they're not going to come after you. They'll work with you. Because I've had it happen before. So a year went by and I found out that the person he was supposedly taking his taxes to and filed an extension with had passed away. I had no idea this person had passed away. And come to find out, he then admitted he had never taken any information to this person whatsoever.

[Dr. John Deloney]

So if behavior is a language, what's he been telling you for the last year?

[Caller]

That he's too scared. And he's putting that fear over our relationship.

[Dr. John Deloney]

That's one way to think of it. I was thinking more him looking at you, saying, I would rather be scared and hide than to make my new wife feel safe.

[Caller]

Yeah.

[Dr. John Deloney]

Is there kids in this mix?

[Caller]

Well, there are five kids. Thankfully, they're from a previous marriage. So I, I'm not really sure how to proceed with this other than I've been researching and trying to protect myself. Luckily, I've always done married filing singly because it just seemed odd to me that, you know, I'd say, hey, let's, let's get our taxes going. He goes, well, I'm gonna be a little bit late. You know, you go ahead and do it this way. And I said, okay. And then it finally really just started gnawing at me last year. And when I found out about that.

[George Camel]

Is he ready to deal with this or is this just you wanting him to?

[Dr. John Deloney]

He's not.

[Caller]

I want him to. And it's been over a year now. I'm going to have to make good.

[George Camel]

On my word, which is, is he ready for his kids to visit him in prison? What's his game plan here?

[Caller]

I, I have no idea. Just put your head in the sand, I guess, and hope that, you know, you've dodged the bullet for 20 plus years. Maybe, maybe you'll get lucky a little bit longer.

[Dr. John Deloney]

What else, what else is he not honest with you about this. This kind of stuff doesn't happen in a vacuum.

[George Camel]

Probably other debts, his spending? I'm guessing no. Shared financial life.

[Caller]

No. I found out that had just gotten a job a couple years back with the company I work with, and the seller that he was telling me what it was was actually like 20,000 less annually than what he is actually being paid.

[George Camel]

So he's actually making more and he's using that money for God knows what.

[Caller]

Exactly. I don't know what.

[Dr. John Deloney]

So have you been through an ugly divorce before?

[Caller]

Yes.

[Dr. John Deloney]

Okay.

[Caller]

I have.

[Dr. John Deloney]

So it's really common to find yourself in this situation and when you get in to go through an ugly divorce before, especially one that you thought was going to be forever, it's common to look in the mirror and lose trust in you. Like, what did I not see? Why did I do this sooner? Like, all that kind of stuff that comes with it.

[Caller]

Right. Blaming myself for not seeing red flags sooner.

[Dr. John Deloney]

That's right. And so I guarantee you that's happening again tenfold this time.

[Caller]

Yeah. And I've been.

[Dr. John Deloney]

Here I go again.

[Caller]

Very, very Dave Ramsey approach. Actually, he introduced it to me back after my last failed marriage. And I've been working really hard to be financially sound.

[Dr. John Deloney]

Yeah, but he's a scam artist. He's a scam artist and a liar and doesn't tell the truth.

[Caller]

Yes. And so I've done the morning of my marriage, I've. I've moved on with that. I've been moving finances to a totally separate institution. We've never had a bank account together, anything like that. I just. I don't want my children to be affected by this. I want to buy my house. I rent a house from my mother. Okay. I want to buy it. I want to have that stability so that I can have my grandbabies come here someday.

[Dr. John Deloney]

Yeah. And have you pulled your credit to see if he's pulled anything in your name?

[Caller]

No, he has not. I did check that.

[Dr. John Deloney]

Okay. I would freeze that, too.

[Caller]

Okay.

[George Camel]

And then you or him, maybe both, need to get in touch with a tax attorney ASAP and figure out what's the next step, because this is not going to just go away. They don't just go. Well, I guess he doesn't exist anymore. He hasn't paid his taxes. He fled town. They're going to find him and they.

[Dr. John Deloney]

May hold you responsible for some of the tax. The joint taxes, while y'all were together. So, yeah, I would get a tax attorney. And if he won't, then you need to Go on your own. And I'm sorry that this has happened to you yet again. What a mess.

[George Camel]

This is the Ramsey Show. Hey, Dave Ramsey here. Dr. John DeLoney and I are coming to a city near you on the Money and Relationships Tour. You, the audience, will vote to choose the topics. We talk about things that impact your life, like investing in your future, money, stress in marriage, and more.

[Caller]

We're coming to Louisville, Durham, Atlantic, Atlanta.

[George Camel]

Kansas City, Fort Worth, and Phoenix in April and May, 2025.

[Caller]

Tickets are at their lowest price right now.

[George Camel]

Grab [e-mail] tour. Welcome back to the Ramsey Show. I'm George Campbell, joined by Dr. John DeLoney. Hey. The Ramsey show annual listener survey is now live. I know you guys have been clamoring just waiting for this with bated breath, and it is here. We want to know your favorite parts of the show.

[Dr. John Deloney]

Goodness, George.

[George Camel]

We want to know who your favorite host is. Is it Dr. John or is it Ken? Come on, America, don't leave us hanging.

[Dr. John Deloney]

Come on, America.

[George Camel]

But really, you can tell us what you like, what you don't like, what you want to hear more of, less of whatever it is we want to hear from you.

[Dr. John Deloney]

And.

[George Camel]

And this is the survey that our team uses to craft next year's content and what we do and the things that we do. So there are two ways to participate. If you want to help us out, text the word survey S U R V E Y to the number 337-893-3789 or just go to ramseysolutions.com survey. And if you're listening on YouTube or podcasts and you're a fan of the description, just head down to those show notes and we've got a link down there for you. And to spice it up, if you sign up today, you'll be entered to win a $500 survey gift card as a thank you from our team. So hope you win. Thanks for the feedback, by the way, John, if you did. I know John knows this, but the listeners may not know that. After the segments over, we're done here. If you're listening on YouTube or podcast, if you're on radio, hang tight. We'll be here. But the Ramsey Network app is the only place to continue listening to the show. To get full episodes of the Ramsey show, and it's completely free, go download the Ramsey Network app with the link in the show notes or just search Ramsey Network in your app store.

[Dr. John Deloney]

When things get off the rails on.

[George Camel]

The Ramsey Network, who knows what could happen inside of the app? It's our world. You're just living in it. All right, Rick is in Madison up next. What's going on, Rick?

[Caller]

Hey, guys. How are you doing?

[Dr. John Deloney]

Well, what's up, brother?

[Caller]

Good, good. Say question for you. My wife and I are restarting the baby steps, and we currently have about five grand in our savings account and about 111ish in debt. 58 of that is mortgage. 18 of that's credit card. 8,600 is a car, and 27 and a half of that would be a home equity loan. My question for you is, should I take that savings down to 1,000, use that four to put towards debt, or how do I go about tackling this gentleman?

[George Camel]

Yeah, the debt snowball. You know, you're going to attack the smallest debt first. So what is the smallest balance right now out of all those debts?

[Caller]

Smallest balance is the car at 8,600. At 1.99% are the credit cards.

[George Camel]

Did you do consolidation on those?

[Caller]

It's just one credit card. Long story short, half of that is from some medical bills that insurance didn't want to cover. Yada, yada, yada. You know how that goes.

[George Camel]

Okay, but you have an $18,000 balance on one card, correct?

[Caller]

Just one card.

[George Camel]

So if you threw that at your smallest debt, that's the car loan, that would leave you with 3600 to go. How quickly could you tackle that while making minimum payments on the rest?

[Caller]

I think we could probably do that pretty good. My wife and I make 160 combined and probably bring home like, one 110.

[George Camel]

Awesome. So you guys have a great income to tackle this, but you're still staring down a mountain. I would separate the mortgage, so take that out. When you're looking at this debt snowball, it makes it overwhelming. And that's a baby step six item, so that's going to come later. So that really, I mean, it kind of frees you. When you just look at that, you go, all right, we've got some debt, but we make 160, and we got to clean up, you know, 45. All right, we can do this. And so now your new mission is to figure out how much margin you can throw every month at the next smallest debt. And again, it's going to pick up more snow because of that debt snowball working for you as you free up each payment.

[Dr. John Deloney]

How much do you pay a month for that car?

[Caller]

325, I believe it is.

[Dr. John Deloney]

So let's pretend you get paid on the 15th. If you took the $4,000 from your savings. And y'all had four grand because y'all bring home, what, 10 or 11 grand a month. You had four grand left and you ran it and you're done with a car in one month. Now you've just dumped 325 bucks back in the system.

[Caller]

Okay.

[George Camel]

On top of the money we're already throwing. So that's where it happens faster than you think because of that snowball method working in your favor. But again, that's. This is some intentionality if you're throwing. You know, if you've got 50 grand to pay off and you're on track to do four grand a month, this is going to be a year of sacrifice.

[Dr. John Deloney]

Can you all do four? Can you do four grand a month?

[Caller]

You know what? Well, that's part of it. You know, I. We'd have to get back to a budget. So I honestly, I'm not going to say yes. I'm not going to. Well, I'm going to say yes because I want to. Right. But we haven't been on a budget. I'll admit that to you guys. We just kind of fell off.

[George Camel]

Yeah, but you're bringing.

[Dr. John Deloney]

I've been there. It's fine.

[George Camel]

You're bringing home like 10k a month, thereabouts. Are you doing any investing at all in a 401k or anywhere else?

[Caller]

So, yeah, through mine, about 8.5% gets taken. That's not voluntary. That's through the Wisconsin retirement system, the WRF. And then I have a 401K and I have a 457B that I have, and my wife has two Roths as well through her work.

[George Camel]

Okay, so you guys are doing a lot at once right now, and you're not really seeing a whole lot of progress. So what if, just for one year, we said we're going to pause retirement and we're going to come back swinging, investing 15% after that.

[Caller]

Okay, I'm going to write this all down here. So pause retirement.

[George Camel]

So pause retirement. You can reshop your insurance. That can save you big sometimes because you've been overpaying with the same carrier. So reshop it. You can go to ramseysolutions.com checkup and do a little cover checkup there to make sure that you're checking off all the boxes. And then on top of that, now it's okay. What are the other levers we can pull? Are there any subscriptions we can cut? We're going out to eat. We need to stop that and start meal prepping and being really intentional about our Grocery runs. And so once you start doing six or seven things at once, making more, spending less, all of a sudden, it's easy to find five grand sitting around in that budget that you were just kind of lazy with.

[Caller]

Okay. All right. Yeah, I appreciate it, gentlemen. That was my question. I just wasn't. You know, I'm like everybody. We're always paranoid about money and finances. So that's why we weren't sure what to do with that additional savings we had.

[Dr. John Deloney]

So you got it.

[George Camel]

It's scary. I'm not gonna lie, Rick. When you take that down to a thousand, like, your breath is taken away and you realize just how risky of a position you've put yourself in by being in all of this debt. But the good news is you get out faster.

[Dr. John Deloney]

Well, and he was saying it there, and I think it's important, you know, like I always tell people, you got to choose your hard. Right. Being 100 pounds overweight is a hard way to live. It's hard. And losing £100 is incredibly hard. It's. So it's not a matter of one's easier or not. Like, it's just choosing your heart. Similar here. It is terrifying to go to $1,000 in your savings account. Like, that's terrifying. It's also terrifying to wake up every single day and know we are 50, 60, 70, $150,000 from multiple different angles. These guys would take our house, Those guys will take our car. They'll take our insurance. Like, so you're just choosing your fear. Which one do you want to have? Right. You want to have an acute fear of, oh, my gosh, we only have a thousand bucks and we got to hustle, get this thing done? Or do you want that grinding, low level hum, that fear that never goes away, that you don't even get a say in your own life? Like, man, I'm out. But you're just using your fear.

[George Camel]

Yeah. What's interesting, as you were talking, I was thinking about how people tend to go into debt when they're desperate or when times are really good.

[Dr. John Deloney]

Yes.

[George Camel]

And they go, well, we'll just take out a heloc. We'll take out the home equity loan. Yeah, sure. Get the car payment. We can stomach it with our income. And then they don't make that income anymore. Right. There's a job loss, they need to move for whatever, for family. And all of a sudden, it gets scary because you realize just how exposed you were. That's right. What's the old Warren Buffett quote? When the tide goes Out. You can tell who's skinny dipping.

[Dr. John Deloney]

Yeah. Who doesn't have any clothes on. Yeah.

[George Camel]

And so the tide's been. I mean, you've been submerged in the water with this beautiful income, surviving, making all your payments, and all of a sudden the tide goes out and you go, oh, my gosh. Like, this is a scary way to live.

[Dr. John Deloney]

That's right.

[George Camel]

We actually had a house of card situation. And so this is. I'm really proud of Rick because this is the hardest part to get to when you're willing to just burn the ships and go, all right, we got to do it. We're willing to do whatever it takes. Show me the way.

[Dr. John Deloney]

Yes.

[George Camel]

Those are my favorite calls to take because they're not trying to argue that their plan is working.

[Dr. John Deloney]

Yeah. No. I love it when someone's like, okay, what I'm doing is not working. Help.

[George Camel]

Right.

[Dr. John Deloney]

And that's one of my favorite phone calls to make when I call buddies, like about workout programs or nutrition or, okay, what I'm doing is not working. I need some help. And I love that, man. Because that's usually when people can say, all right, I got you.

[George Camel]

Instead of arguing with John, going, well, my workout plan. This is what I'm doing. Here's why. I think it could actually work if I. And they're. They're just watching you going, all right, that's cute. Whenever you're done, whenever you're ready, we'll be here with a better lemon for you.

[Dr. John Deloney]

That's right.

[George Camel]

But that's big. If this is. This is the year you're going, hey, I'm going to get out of debt. I'm gonna do things differently. We're here for you. We've got a free live stream coming up on January 23rd called Take Control of your money. It's completely free, hosted by Dave Ramsey and Jade Warshaw. And maybe you need some new information. You didn't grow up with financial literacy. Maybe you need a little pep in your step. Well, Dave and Jade, they are. I think they're 90% PEP, DNA wise. And so if you need that, go sign up for our free livestream ramseysolutions.com live stream. You'll also be entered to win our cash giveaway. Five people win four grand each. Go check it out. Link is in the description. And again, this is it. If you're listening on YouTube or podcast to continue listening to more of the Ramsey show, go download the Ramsey network app. It's completely free in the app store. Or use the link in the show notes. We'll see you then.