“My Husband Has Been Cheating On Me For 30 Years”

Summary

The Ramsey Show – Episode Summary

Episode: “My Husband Has Been Cheating On Me For 30 Years”
Date: November 25, 2025
Hosts: Rachel Cruze and Dr. John Deloney

Overview

This episode of The Ramsey Show tackles a diverse range of listener questions around relationships, financial crises, career dilemmas, debt, home buying, and family dynamics. Rachel Cruze and Dr. John Deloney provide candid, compassionate, and firm advice—never shying from hard truths, but always reminding listeners they’re not alone. The central thread: taking control—emotionally and financially—often requires confronting uncomfortable realities, establishing new boundaries, and rebuilding trust in oneself.

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Notable Callers & Key Discussion Points

1. Sarah’s Story: 30 Years of Betrayal and Financial Neglect

(00:45–08:33)
Theme: Relationship crisis, infidelity, financial boundaries, self-trust

• Summary:

  • Sarah from Vancouver reveals she’s been married for 46 years, with her husband having a long-term affair (30 years) and a pattern of financial neglect.
  • He paid only the mortgage (over 20 years ago); she’s covered everything else since.
  • She recently caught him and his girlfriend at her home, contemplates divorce vs. "waiting it out," and struggles with the sunk costs (emotional, financial, pension implications).

• Hosts’ Response:

  • Dr. John reframes her situation: "You’ve been divorced for 30 years. Y’all just have been living in the same house." (02:01)
  • He highlights the challenge of lost self-trust: “One of the things that nobody ever talks about is that scary, terrifying realization that you don’t trust you either because part of you knew something wasn’t right.” (03:06)
  • Rachel advises keeping finances separate and asserts: "The money's the symptom, right, you guys?" (04:53)
  • Dr. John gently refuses to tell Sarah what to do but insists she get support and clarity: “You’re not crazy. You’ve been cheated on multiple times for a long, long time. I want you to reestablish yourself as somebody you can trust.” (07:46)
  • Both stress getting professionals and community support regardless of whether she stays or leaves.

• Notable Quote:

  • Dr. John: "As my boss Dave Ramsey always says, when your spirit leaves, let your body leave, too." (07:20)

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2. Sean’s Emergency Fund Depletion & Debt Spiral

(10:25–19:50)
Theme: Debt resurgence, lifestyle choices, budgeting discipline

• Summary:

  • Sean and his wife depleted their emergency fund due to HR errors (taxes not withheld), maintenance costs, and car repairs.
  • Accumulated $95k in consumer debt, $7k loan against retirement, and used a car loan solution (electric vehicle) to offset fuel costs—justifying borrowing instead of cash flow.

• Hosts’ Response:

  • Rachel challenges Sean to rethink their decision-making framework: “Everything you do going forward has to be a 180 degree difference. ... Is this really the wisest decision right now?” (15:26)
  • Dr. John asserts: “None of this will change unless one of the chief principles of your home is 'we do not borrow money.'” (15:26)
  • Advice: Create a strict EveryDollar budget, cut all nonessentials, consider selling cars to realign with income, and rebuild emergency fund.

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3. James’ Dilemma: Tithing vs. Paying Off Debt

(21:51–31:34) Theme: Financial priorities, giving, faith and money

• Summary:

  • James and wife are on Baby Step 2, questioning tithing consistency while attacking debt.

• Hosts’ Response:

  • Rachel frames giving as a holistic character issue, not just a financial/legalistic checkbox: “There’s something about living a selfless life and knowing the ownership of our money as God’s.” (23:00)
  • Dr. John: “Money is a spiritual issue and work is a spiritual issue… there is something powerful about starting every check with, ‘this part is for others.’” (26:17)
  • Both encourage continuing to give—amount can flex—in order to cement identity and value systems, not just numbers.

• Exercise:

  • Dr. John: “Come up with five to ten ‘We are’ statements (e.g., ‘The Smiths are people who...’)—let those values frame your actions.” (29:08)

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4. Family Financial Entanglements and Sibling Loans

(43:52–51:53) Theme: Enabling, family loans, boundaries, future family rifts

• Summary:

  • Mike’s sister is divorcing, expects parents to give her $800k (potentially their nest egg), wants to buy out husband from home and dental practice.
  • Mike worries this bails out her lifestyle, risks parents’ security, and cements dysfunctional family patterns.

• Hosts’ Response:

  • Dr. John: “Her world blew up. ... That doesn’t give license to avoid reality moving forward.” (48:03)
  • Rachel: The gift risks creating rifts and lifelong resentment.
  • Dr. John: “He is guaranteeing by his participation in this—in your sister’s pain—not just sitting with her in the pain... there will be a rift in their relationship forever.” (50:20)
  • Advice: Mike can't control the outcome, but should state opinion and prepare to accept parents' decision.

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5. Young People Navigating College Debt and Life Choices

(33:12–40:31) Theme: Cash-flowing college, “living a little,” working through school

• Summary:

  • Oren (20) is working through community college, has $12k in student loans, but wants to pay cash for next semester and still enjoy life.
  • Torn between advice to “live simple” vs. “missing out.”

• Hosts’ Response:

  • Rachel and Dr. John affirm finding joy in low-cost hobbies (kayaking, bowling), and recommend cash flowing school as top priority, then budgeting some for fun.
  • Dr. John pushes having more than a part-time job and defying advisor "you can't work a lot" dogma. “Work full time, get another part time job, and get done with your school.” (36:10)
  • Advice: Write a letter to his 40-year-old self, sacrificing now for future freedom.

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6. Other Call Highlights

• Co-signed Car Loan Regrets:

  • CJ, 22, co-signed for mother's car (now in $60k combined debt); hosts stress establishing boundaries, downsizing car, and starting the debt snowball. (56:10–63:25)

• Housing Choices & Emergency Fund Planning:

  • Cynthia in Miami considers selling her home to clear $200k in debt and build a new foundation. Rachel and Dr. John urge her to promise not to impulsively spend newfound equity, to set up an emergency fund, and rent before rebuying. (87:09–95:16)

• Career Crossroads for a Young Utility Worker:

  • Anthony, away for work but earning well, debates sticking it out for a higher-paying future or quitting now. Advice: Set a “number” to save before switching, reassess with spouse what life they want to build together. (97:46–106:01)

• Inheritance With Emotional Strings:

  • Ryan inherits a house with $120,000 IRS debt and sentimental value. Emotional attachment is high, but hosts agree: sell the house, pay debts, don’t take on burdensome joint property with siblings. (117:58–127:17)

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Notable Quotes (with Timestamps)

• Dr. John Deloney (on Sarah’s marriage):

  “You’ve been divorced for 30 years. Y’all just have been living in the same house.” (02:01)

• Rachel Cruze (on finances after relational betrayal):

  “The money's the symptom, right, you guys?” (04:53)

• Dr. John Deloney (self-trust):

  “What I would tell you is, for the first time, actually sit down and be honest with you about what you know. ... Do you trust yourself not to squash that inner voice anymore?” (04:03/07:46)

• Rachel Cruze (giving while getting out of debt):

  “Giving is like the one area of money I’m like, I don’t want you to be legalistic... the change that happens within you as you are giving is worth maybe that two to three months of being in debt longer.” (27:53)

• Dr. John Deloney (on family loans):

  “He is guaranteeing by his participation... there will be a rift in their relationship forever.” (50:20)

• Dr. John Deloney (on young adult priorities):

  “If you will invest in one person, and that’s you, for the next five to 10 years, you will have no idea what ‘living a little’ looks like... because you will be free.” (36:40)

• Dr. John (on sentimental inheritance):

  “My granddad is not in that jacket. He’s right here. … Sometimes these sentimental things, they become bricks we carry around.” (125:18)

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Timestamps of Important Segments

• 00:45–08:33 — Sarah’s marital crisis and self-reconstruction
• 10:25–19:50 — Sean’s debt, emergency fund, and budgeting plan
• 21:51–31:34 — Tithing, giving, and building a family money identity
• 33:12–40:31 — Oren’s college debt, life choices, and work ethic
• 43:52–51:53 — Mike’s family loan dilemma and generational boundaries
• 56:10–63:25 — CJ’s co-signed car loan and debt snowball strategy
• 87:09–95:16 — Cynthia’s house sale and fresh financial start
• 97:46–106:01 — Anthony’s career crossroads and family priorities
• 117:58–127:17 — Ryan’s bittersweet inheritance and letting go

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Tone & Style

The episode stays true to The Ramsey Show’s direct but compassionate style. Rachel and Dr. John offer empathy, especially for callers in deep distress, while also challenging their mindsets with practical, sometimes tough-love advice. Success is framed as an outcome of daily, intentional sacrifice—not quick fixes nor avoidance of uncomfortable truths.

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Key Takeaways

• Radical honesty with oneself is often the turning point (Sarah’s story).
• Setting hard boundaries—on debt, family loans, or enabling behavior—is key to preventing deeper wounds.
• Budgeting is not inherently restrictive; when values are clear, it’s liberating.
• Generational patterns and emotional attachments can sabotage financial futures unless acknowledged and disrupted.
• Identity statements and value-driven decisions outlast “tips & tricks.”
• You’re not alone—whether facing infidelity, enabling parents, job misery, or income anxiety, the path forward begins with courageous, clear-eyed steps and community support.

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Want to follow the advice or resources mentioned? Visit ramseysolutions.com, connect with SmartVestor pros, or start budgeting with the EveryDollar app.

Transcript

[Sponsor/Announcer]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Rachel Cruz]

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is the Ramsey show. And I'm Rachel Cruz hosting this hour with Dr. John Deloney. And we are answering your questions about life, money, career, relationships, anything and everything. So give us a call at 808-825-5225. All right, first up in Vancouver, we have Sarah on the line. Hi, Sarah.

[Caller 1]

Hi.

[Rachel Cruz]

Hi. Welcome to the show.

[Caller 1]

Thank you for having me.

[Rachel Cruz]

Absolutely. How can we help today?

[Caller 1]

So I've been married for 46 years and my husband is. Does not contribute financially to the household finances. And he's also not healthy. And I that he's been having an affair probably for about 30 years, which.

[Caller 2]

Has been able to go on because.

[Caller 1]

He'S had a cell phone for a long time and he worked shift work, which made it really convenient to sneak around.

[Dr. John Deloney]

Good career.

[Caller 2]

I'm wondering, is it worth divorcing at this point in time or do I.

[Caller 1]

Just wait until he dies because he's.

[Caller 2]

Not taking care of himself health wise?

[Dr. John Deloney]

Holy smokes.

[Rachel Cruz]

Gosh, Sarah. Okay, so when you say he was having an affair for 30 years, was it with the same woman or. It's been off and on multiple.

[Dr. John Deloney]

So he's, he's been running.

[Caller 1]

Well, I believe there's been others, but I believe there's been one very long term.

[Rachel Cruz]

Wow.

[Dr. John Deloney]

So he's doing shift work, but he's not contributing. So is his money go to him and then you take care of the house?

[Caller 1]

Yes.

[Caller 2]

I mean, he did pay for the.

[Caller 1]

Mortgage on the house and I paid for everything else. But then once the mortgage was paid for, which has been more than 20 years ago, he's quit paying for anything.

[Dr. John Deloney]

Let me, let me reframe this a little bit. You've been divorced for 30 years. Y' all just have been living in the same house.

[Caller 2]

Yep.

[Dr. John Deloney]

Yeah. And I guess, with all due respect, I can't. I can't give you that answer because I can't carry the weight for you of what you have to do next. You get what I'm saying? Like, it's gonna. It's such a huge call. You have to make that call.

[Caller 2]

Yeah.

[Dr. John Deloney]

But Rachel and I can sit with you and tell you that you're not crazy, but you've been feeling this for three decades though, right?

[Caller 2]

I thought there was something going on a long time ago.

[Caller 1]

And when I Confronted him.

[Caller 2]

He.

[Caller 1]

He just said, no, we're friends. And then, of course, again, because of the shift work and self. Cell phones, you know, they're able to sneak around.

[Rachel Cruz]

When did you find all this out, Sarah?

[Caller 1]

When I came home from work more than a year ago. I came home from work, and I found him and his girlfriend in our backyard.

[Caller 2]

Wow.

[Dr. John Deloney]

All right, so here. Here's the part that nobody will tell you about finding out you're being cheated on. And by the way, you've been cheated on financially, you've been cheated on romantically. Like, your whole marriage has been based on deception. One of the things that nobody ever talks about is that scary, terrifying realization that you don't trust you either because part of you knew something wasn't right. And so what. I can tell. I know. I know. But there's that intuition. There's. That something is off with this person that I pledged my life to. And over time, it's like, man, I think I'm crazy. And he confirms it, right? Yeah, you're crazy. You don't know. And, well, that's your money. That's your grocery. Like, and it just. You slowly go along with it, and all of a sudden, you find yourself three decades removed from that voice inside your chest.

[Caller 2]

Right?

[Dr. John Deloney]

And so what I would tell you is the way I can help right here is for the first time, to actually sit down and be honest with you about what you know. And that's scary to do because you either have to choose, well, this is my life, and I'm just gonna sit here on the pile of rubble that was the marriage I thought I had, or I'm gonna be about excavating this thing and building something new, and in this. In your case, by yourself. But there's a reality to that. You get what I'm saying?

[Rachel Cruz]

And do you. Do you want this marriage to be healed, Sarah? Like, if he came to you and said, I want to do the work and I want to. I want to repair this, would you want that, or are you pretty much out?

[Caller 2]

I'm out.

[Rachel Cruz]

Yeah. Yeah, yeah. Which.

[Dr. John Deloney]

And he's been out.

[Rachel Cruz]

No one to blame you. Yeah. So from a. From the financial part of the. Sarah. Yeah. I would be keeping everything separate. And even if you wanted repair, I would still say keep it separate until there's a level of trust and healing within the marriage. Because the money's the symptom, right, you guys?

[Caller 1]

Because he's not healthy enough to. To do anything yet.

[Rachel Cruz]

So is he not working anymore?

[Caller 1]

No, he's retired.

[Rachel Cruz]

Okay, so.

[Dr. John Deloney]

So why now? This happened. This all came to light a year ago. Confirming what you've known for years. Why now?

[Caller 1]

Good question. I guess because I feel stuck.

[Dr. John Deloney]

What does that mean?

[Caller 1]

Do I leave? Do I stay? Do I walk away from half of everything I've invested in? Like, when I say invested in, I mean, like, doing a lot of the work and then walking away from whatever pension he has and not being able to, you know, receive any of those benefits after all these decades.

[Dr. John Deloney]

Mm. Are you going to or are you sure that he's not leaving him to his mistress of 30 years?

[Caller 1]

Well, I saw his will recently, and it has not. It has not been changed.

[Dr. John Deloney]

Okay.

[Caller 2]

I think there's a bank account that she might be accessing, but I have no proof that either.

[Dr. John Deloney]

Okay. Maybe for the first time, begin to trust yourself.

[Caller 1]

Okay.

[Dr. John Deloney]

And it. It's worth asking questions. And the other question you have to ask yourself is, are you going to be able to sleep at night if you leave him and he dies next month? Are you going to carry that with you? It's not a reason to stay. You're like, no, no. Like, that's not a reason to stay.

[Caller 2]

Because I've dealt with some of this stuff.

[Dr. John Deloney]

Yeah.

[Caller 1]

And I've made decisions already, but it's that last final piece about staying or leaving.

[Sponsor/Announcer]

Yeah.

[Dr. John Deloney]

I think anybody in our position, and Rachel and I's position, that would tell you, yes, you need to go do this is taking a really powerful and important decision away from you, and we're not going to do that. But we can call it out and both of us will confirm.

[Rachel Cruz]

But I think, you know, Sarah.

[Dr. John Deloney]

Yeah. This is unhealthy. This is. You've already made your choice. As. As my boss, Dave Ramsey, always says, when your spirit leaves, let your body leave, too.

[Caller 2]

That's a good one.

[Dr. John Deloney]

But. And I think this is. This. This is. This is why I'm hesitant just to say, yeah, you need to. You need to run. Because it's easy for me to say that, but that comes with very real financial implications. Living arrangement implications.

[Rachel Cruz]

Yeah.

[Dr. John Deloney]

Health. Like, it comes at a cost that you're gonna have to bear regardless of what you do. And so I can tell you, you're not cr. You've been cheated on multiple times for a long, long time and dragged behind this marriage. I want you to reestablish yourself as somebody you can trust. And what I mean by that is, do you trust yourself not to squash that inner voice anymore? Do you trust yourself to write things down on a piece of paper and say, here's the reality with which I live in. And do you trust yourself to go get the professionals and friends and spiritual advisors next to you in this next season, regardless of what you do, if you choose to stay or if you choose to go. It's just a heavy path.

[Rachel Cruz]

Yeah. And not doing it alone. Your point?

[Dr. John Deloney]

That's it.

[Rachel Cruz]

People around you to help wade through some of these decisions is such a gift. So, yeah.

[Dr. John Deloney]

I'm heartbroken for you, Sarah.

[Rachel Cruz]

We're so sorry. We're so sorry.

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[Rachel Cruz]

Up next, we have Sean in Fresno, California. Hi, Sean. Welcome to the show.

[Caller 2]

Good morning. Thank you so much for having me. Really appreciate it.

[Rachel Cruz]

Absolutely. How can we help today?

[Caller 2]

All right. So my wife and I spent the last couple years completely exhausting our emergency funds. We've paid about $20,000 in federal taxes over the last two years and an unforeseen tax bill. Federal tax bills. Because my wife's paychecks did not have any federal taxes taken out by the HR department.

[Rachel Cruz]

Yep.

[Caller 2]

Even after we had talked to them about it, they missed it again. And we missed it, too. So.

[Rachel Cruz]

Okay. Yeah. I was going to say because you would know. I mean, when you get your paycheck to know. This is what I made.

[Caller 2]

Exactly.

[Rachel Cruz]

But you didn't.

[Caller 2]

There was like a couple months. Yeah. There's a couple months that went by where they were taking it out and then it stopped for some reason or it changed their HR department kind of. I don't know. And it was on us. So.

[Rachel Cruz]

Yeah. Yeah, sure. That's bizarre. Yeah.

[Dr. John Deloney]

I never heard of that happening.

[Rachel Cruz]

That's frustrating.

[Caller 2]

It was wild. And yes, Absolutely frustrating. We've also. So we live out in the country and so that incurs some country costs. So this year has been the year where it hasn't been enjoyable to live out in the country. Our solar has gone out, our wells needed fixed. Our cars have needed about $8,000 of repairs over the last two years as well. So anyway, we have spent about 40,000 DOL of our emergency fund over the last two years and has ended up where I have a loan of about $7,000 left against my 403B. We are also still $100,000, about $95,000 worth of debt in both cars as well as student loans. And so we had. We had started our marriage off about nine years ago, hardcore Ramsey. And then we got lazy. And so we're trying to get back on track and so I'm very thankful. We had an emergency fund and it used, you know, it served its purpose. But we're trying to get back on track and it just feels like we cannot get back. We keep exhausting our emergency fund and we just keep getting shelled. So I just call and I need some wiser wisdom than I have.

[Rachel Cruz]

Yeah. How much you guys make a year.

[Dr. John Deloney]

Together?

[Caller 2]

About 185.

[Rachel Cruz]

Okay. Is that before tax?

[Caller 2]

That is before tax.

[Dr. John Deloney]

Yeah.

[Rachel Cruz]

Or before the taxes that weren't paid until later.

[Dr. John Deloney]

Yeah.

[Rachel Cruz]

No. Okay, I got you. I got you.

[Caller 2]

I think on a monthly basis, we bring it in about 12,000 post tax.

[Rachel Cruz]

Okay. Okay, perfect. And out of the 95,000 of debt and you said student loans and cars, how much is. Break those down for me. How much is the student loans and how much of the cars?

[Caller 2]

50 is in cars. 51 is in cars and the rest is in student loans.

[Rachel Cruz]

Okay, the cars. Two different cars.

[Caller 2]

Two different cars.

[Rachel Cruz]

What are the ones on the own?

[Caller 2]

So one is 36 and the other one is 15.

[Rachel Cruz]

Okay. The.

[Caller 2]

So we. I have a third car. We have a third car. I have a truck that's completely paid for cash, but I also commute for work. And so getting 10 miles a gallon was killing me. I was spending 600, $700 a month in gas.

[Rachel Cruz]

How far is your work?

[Caller 2]

I actually got an elect. Yeah. To go to work, so I got an electric car. I took out a loan on that. So that's the 15,000 on an electric car. But I charge for free at work. So my gas money.

[Rachel Cruz]

Yeah, but how much is your car payment?

[Caller 2]

350 bucks a month.

[Rachel Cruz]

Okay.

[Dr. John Deloney]

You're just tripping. Yeah.

[Rachel Cruz]

So. Okay. So, yeah. Some decisions I feel like need to be made where you guys are living, considering how much it just cost you. Solar, the. Well, I mean, all of it. Are all of those pretty sustainable going forward that you foresee, or are they still like, yeah, we're probably have to fix that again.

[Caller 2]

I think we're good for now, for the next few years. But I mean, those costs or those different things just pop up randomly.

[Rachel Cruz]

Sure. Which they would for any homeowner, even if you're not in the country. I'm just trying to figure out, Sean, you know, there's a little bit of this, like we just want to be able to do everything we want. We want to live where we want to live. And so that means we have to drive so far to work, which means we have to get an electric. Like there's a reality to life. And sometimes you have to pick and choose to make it make sense, if you will. And I'm not saying you'll have to like move by any means, but I'm saying having these thoughts that, you know, you guys are kind of used to doing a little bit what you want. I mean, to a degree. I mean, there's a little bit of like, yeah, we're gonna just kind of keep moving. So everything you do going forward has to be at a 180 degree difference. Like what you would normally do, I would stop and be like, okay, is this really the wisest decision right now?

[Dr. John Deloney]

Or. You have to, you have to live on a. On a principle of. Let me put it this way, none of this will change unless one of the chief principles of your home is we do not borrow money. Because I had a long commute in an old banged up truck that I made for five years and that putting gas and it was expensive. But my wife and I had a anchor into concrete commitment. We don't borrow money on depreciating assets. Especially I would on a mortgage, but not, not on a. On a car. And so that was never even in the cards. And we would curse the gas bill every month, but we're not gonna go buy another car under the guys. Like, we're just gonna. We're not gonna rob Peter to pay Paul.

[Caller 2]

Right, Right. And that's kind of where I'm feeling like I. Yeah, on. I guess it makes sense. Like I've made it made sense.

[Dr. John Deloney]

There you go.

[Caller 2]

I'm saving this money on gas.

[Rachel Cruz]

Right, You're. It's justification.

[Caller 2]

I don't want a car loan. And like, I have my truck and I love having a truck because I do use it as a truck.

[Sponsor/Announcer]

Sure.

[Caller 2]

I don't work on the farm for the farm, but it's nice to have it. It's another tool in a tool belt. Right. And it's like a convenience thing. Then it is like.

[Rachel Cruz]

And I think what my truck.

[Caller 2]

I don't know.

[Rachel Cruz]

Yeah. And what John's saying, and I think what you have to get to before we even get to the baby steps of the thousand dollars and you pay off the debt is. There has to be a value system conversation in your household, John. There is that. There is a principle that we do not, we do not spend more than what we make. If we can't pay cash for this, we can't afford it. Regardless, fixing the well, whatever it is, we are not going to borrow money. So what does that mean? If that is like a hard line in the sand, what happens is other options come up, harder options, not as fun options, but options that you're able to actually have where. When debt is an immediate answer because it just fixes the urgency of the situation. Then you, then you wake up, you're like, oh my gosh, look at all the payments we have. And this is how we've gotten here. So what, what the no debt policy does is it forces you to be creative to look at other options because there are always other options.

[Dr. John Deloney]

Yeah, they come fix your well, I have a well out in the country and they come fix it and it cost eight grand or whatever. And you say, hey, I can give you four right now. And then next 30 day cycle I'm going to give you, I'm going to give you the other four when the.

[Rachel Cruz]

Work is complete and we're not going out to eat, we're doing nothing because we have $4,000 we got to save up this month. And I may have to work extra to get that bill, but we're going to, but, but in three weeks we're going to figure it out.

[Dr. John Deloney]

But we have water.

[Caller 2]

Right.

[Rachel Cruz]

So like it's that kind of. And it sounds extreme from how you probably making decisions, but it's the way you have to do it. So. Yeah. So if I were you guys, Sean, I would, I would sit down. Is your wife pretty on board? Is she feeling the stress and attention too?

[Caller 2]

A hundred percent.

[Rachel Cruz]

Okay. Yep. So for you guys, we're going to, if you stay on the line before, don't hang up. So when we get done with the call, Christian's going to pick up and we're going to give you every dollar for a year. And I want you guys to sit down and do a Budget. Do the everydollar budget. Because what it's going to expose is how much spending is happening without you even realizing it. This $12,000, where it's going. And so what you're going to see. And I want you guys to cut everything but food, shelter, utilities, transportation, insurance, like the things that you have to have everything else. Target runs out to eat. I mean, literally, subscriptions. I'm not kidding. Just say if we did nothing but what we have to have to survive, how much would be left? And then you guys got to look at that number and say, okay, there's that number per month. And I don't know what it is. Six thousand, whatever it is. And if we did this for X amount of months, how quickly could we pay this debt off? Now what if we sold the $36,000 car for 32,000? Maybe we had to take out a loan because it's underwater for a little bit. Okay, well, let's. Let's do that math. That 6,000. Play it out. Play it out and say, well, we don't want to do that. That seems too extreme. Okay, maybe it's 4,000. Whatever it is, you guys have to run out scenarios of your reality. But what I would push you to do is to do this in a short amount of time because you guys make great money. And I know you're in California and all the taxes and everything, but, you know, there. There's something to be said about doing a really strict plan and you and your wife saying, we're doing this for a period of time, and it may be a year, it may be two years, and it may be you work an extra, she finds some extra income. But getting out of this debt for you guys, I think is going to be a massive win. But you have to do it so intentionally and so sacrificially. And y' all haven't felt that in a while, so it's going to be uncomfortable. But that, to me, is the path forward for you guys. So hang on the line. Christian's going to pick up, and we're rooting for y'.

[Dr. John Deloney]

All.

[Rachel Cruz]

I mean, you can do it. You guys are smart people. You got this.

[Dr. John Deloney]

This show is sponsored by Better Help. This time of year can be tough, so make sure you check in on your friends, check in on your loved ones, and reconnect with people you haven't talked to in a while. I recently called one of my childhood friends. We had a great conversation. It was awesome. The conversation was hard, but we also laughed a little bit, too. It can Take a little courage to just send that message or go grab coffee or even get in the car and drive across the country to reach out with a friend. And reaching out for a therapist can also feel hard. But often it's worth it. And if you're thinking about therapy, I recommend calling my friends at BetterHelp. BetterHelp has over 30,000 therapists. They're the largest online therapy provider in the world, and they've served over 5 million people globally. And they have an average rating of 4.9 stars out of 5. It's totally online, and it's easy to fit into your schedule. To get started, just answer a few simple questions and BetterHelp will connect you with a licensed therapist. And if it's not the right fit, you can switch therapists at any time for no extra cost. This month, don't wait to reach out. Visit betterhelp.com Ramsey to get 10% off your first month. That's BetterHelp. H e-lp.com Ramsey.

[Rachel Cruz]

Welcome back to the Ramsey Show. Up next, we have James in the Dallas. Hi, James. James, are you there? Hi. Welcome to the show.

[Caller 2]

Hey, thanks for having me.

[Rachel Cruz]

Absolutely. How can we help?

[Caller 2]

Hey. So my wife and I are on baby step two, so we're working on paying down all of our debt other than the mortgage. We've been, you know, we're on a plan, so we're on a budget. We're Christians. And, you know, I got to be honest, one of the things that we've really struggled with over the years is I'm, I don't know, I guess I'm newer in my faith maybe three or four years in. And we've never been great tithers. But now that, you know, I'm getting. One of the reasons I wanted to get out of debt is because I was convicted about, you know, God tells us not to carry debt. And so my question is, should, while we're just really trying to attack all these debts, should we be tithing or should we just be laser focused on nothing but essentials and paying down the debt?

[Rachel Cruz]

Yeah, it's a great question, and I feel like one that we, we get a lot because I think people are really motivated to do whatever goal they're in, whether it's getting out of debt or saving the emergency fund. But the way we kind of approach money, the way I see money is it's very holistic and it's very much a picture of who we are as people. There's something about our character, what we believe, our value system at which then money is then handled, right? So people that, you know, don't care about debt or whatever, or like, just wanna have an urgent, you know, get whatever they want in the moment, debt's right there, you know, whatever, no worries. But if you have a value system at which probably what you are feeling from a spiritual element, even a emotional, psychological element of carrying debt, it's very heavy. And you feel that and you're like, yep. That's why God says no. Because when you owe someone something, it changes your life, it changes the reason you go to work, it changes so much. So you wanna be free of that. And so I would put giving in that same light. JAMES FROM we could go the spiritual side or even the non spiritual side, but for me it's, you know, the giving side. I don't want it ever to be legalistic. Cause I don't think that was the heart of God. I think the heart of God is when we talk, when he talks about how to give, how to sacrifice, When Jesus gives us examples of that all through the New Testament, what that looks like is living life on the selfless side of the spectrum. And we live in a world that is so selfish. Right? And I think there's something to be said when we use our money as a tool, as a reflection of who we are in our character and our value system. There's something holistically good about that. And so for me, that's giving. So, yes. Is it a commandment? You know, is there scripture around it? Absolutely. And as a Christian, like you said, but that can naturally kind of lean in a legalistic sense. And giving is like the one area of money that I'm like, I don't want you to be legalistic. So I think you miss the heart of God in that. And I'm definitely not on the prosperity side that if you give, you know there's gonna be a brand new BMW sitting in your driveway. You know, I don't think that's true either. But there's something about living a selfless life and knowing the ownership of our money as God's. And we're just the managers. We believe that as Christians. And when you actually physically live that out, it changes who you are. It changes your view about money. It changes how tightly wound and controlled you are by it. It releases so much. And that's what really giving does. Not only helps what you're giving to, obviously, but who we are as people handling money, it's just a release that I think is really, really impactful to us. As people, if that makes sense. So that's a long way to say, yes, I would be tithing and giving, regardless of where you are financially. And I write in my book, Know Yourself, Know youw Money about, you know, give a little until you can give a lot. Right. So for some people, again, we teach 10% at Ramsey. If you do the every dollar budget, literally at the very first category is giving, and it's 10% is set there. So that is something that, you know, I stick by. But again, I don't want it in a legalistic sense.

[Caller 2]

Yeah, no, that makes sense. It's a. It's a heart issue. And wanting to, you know, that's. That's the difference between the Old Testament and New Testament is you should give what you feel led to in some regard.

[Dr. John Deloney]

Well. And whether you're a Christian or not, I think as a culture, we could. We could all use a reclamation of an understanding that money is a spiritual issue and work is a spiritual issue, and your relationship with your wife is a spiritual issue. If you're a person of. If you're a Christian, then it goes with that lens on. Right. But these things are all bigger than us. And I think culturally, we've reduced it into what can I get for me? And my personal belief is that was us sitting at the top of the mountain and that was the slide off the hill. Right. And there's something powerful about saying, reminding yourself every month or every two weeks when you get paid, this is not my money. And more importantly, I am not the number on this paycheck. I'm a person who fill in the blank. I'm a person who gives. I'm a person who is generous. I'm the person who sees that exotic, exhausted waitress, and I over tip her or I over tip him because that's who I am as I keep my eyes open for others. Right. It makes it a. I keep using the word spiritual not to mean Christian, but it is a. It's an ethos with which you carry yourself in the world. And so again, like Rachel said, if y' all can't. If you don't have groceries. Right. There's something about being sacrificial that might not be this percentage, but it. There is something powerful about starting every check with this part is for others. You get what I'm saying?

[Caller 2]

Yeah, totally.

[Dr. John Deloney]

And I'm with Rachel. I will transform how you move throughout the world.

[Rachel Cruz]

Yeah. And I think, too, the money journey that everyone's on, which is more of a marathon than a sprint, this is all not, you know, you don't just, you know, do things with money for two years and you're fine the rest of your life. It is an ongoing, daily decision of what you choose to do. And as you earn more and as you guys get out of debt, James, and as you guys invest and you really do start to build wealth, because that's mathematically what's going to start to happen. We always say. Dave always says it, but it's so true. You know, money is a magnifying glass. It makes you more of what you already are. And if you can create habits now, when you don't feel like you guys have a lot or you have this big goal that is so noble and so great, but you still are doing things that are changing who you are. What is being formed today is the James that's gonna be carried through the wealth building. And there's a challenge there. I mean, I think there's something really beautiful to say that. That of like, man, you know, we could get out of debt, you know, I mean, honestly, what, two or three months faster maybe if we didn'. Give, you know, you could. You. It's. But at the end of the day, the change that happens within you guys as you are giving and you're sacrificing is worth maybe that two to three months of being in debt longer because it's changing who you are that's going to carry you through this entire journey of money.

[Dr. John Deloney]

James, can I give you an exercise I would love you to do with your wife?

[Caller 2]

Sure.

[Dr. John Deloney]

I want you all to go away this weekend. And y' all are in baby step too, so don't go spend a jillion dollars. But after Thanksgiving, if y' all have a chance to get away with just two of you, maybe it's an hour, maybe it's three hours or whatever. Go for a walk, go for a hike, sit in front of the whatever. Come up with five to ten. We are statements. So let's pretend your last name is Smith. The Smiths are people who. And let those values frame your action steps, not the other way around. Because so many of us live. When I get X, Y or Z, then I'll become. And what you find is that's not how the world works. But we, the Smiths are people who are generous periods. Well, that's going to frame everything. The Smiths are people who value a relationship with God. That's going to frame it. The Smiths are people who always invite people over to their house. When you have millions of dollars in the bank, that Just means your table will be way bigger. You get what I'm saying?

[Caller 2]

That makes a lot of sense.

[Dr. John Deloney]

But if you try to go through life plan first and identity later, that's a recipe for this year I'm going to lose £40 and whatever. You're never going to stick to that. If you wake up January 1st of 2026 and say, this year I'm going to be a person who is a good steward of his body, well, that's going to frame how you sleep, how you take days off, how hard you exercise, how you exercise when you're tired. Because I'm a guy who takes care of his body.

[Rachel Cruz]

What was the book about?

[Dr. John Deloney]

How it was James Clear.

[Rachel Cruz]

James Clear, that's right. I was going to say there's something about that identity that he talked about. Yes.

[Dr. John Deloney]

Yeah. Most people try to go into life, change with habits. First I'm going to wake up every day, 45 minutes in the and always you run out of gas on that. But if you start with I'm a person who. Or we are a family who, then you have people over when you're tired, you have, you give money. When you don't feel like you've got enough that month and you're like, you know what, we can do without ice cream or we can do without tipping or we can do without. It just changes who you are. So get together and come up with those identity statements and then reverse engineer the action steps that are going to back up your new identity.

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[Dr. John Deloney]

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[Rachel Cruz]

The all new everydollar is here and now. It's way more than just our world class budgeting app. There are so many advanced features that make winning with money and your progress to actually see you win with money so much faster. The average person finds thousands of dollars of margin in just the first 15 minutes. So start everydollar for free today. You can get it in The App Store or Google Play. All right, let's go to Oren in Maryland. Hey, welcome to the show.

[Caller 2]

Thank you.

[Rachel Cruz]

Absolutely. How can we help today?

[Caller 2]

So I am basically a college student. I am currently going to community college. Did not go with the four year because it was just too much. So right now, my situation, I'm about halfway done. I definitely did not apply myself to scholarships like I should have, and I took a. Took a semester break just to work and just to kind of, you know, absorb and try to reach out for resources. So I'll be going to school for an extra year. But I did find a lot of resources, a lot of scholarships. I talked to a lot of people. I'm currently about $12,000 in debt. And then obviously, if I were to continue, I have about 27 more credits. We're talking about $200 of credit. So my question for you is that should I pay cash? Because I'm currently working part time. Should I pay cash? I have the money to pay for a semester now. Should I pay cash for the semester and don't worry about it, or should I kind of. I know you guys hate this term, but live a little.

[Rachel Cruz]

We don't hate that term.

[Caller 2]

I know, I know.

[Dr. John Deloney]

Have you met Rachel Cruz? She lives a lot.

[Rachel Cruz]

We love to live in the right order financially, though. So that's the only caveat. So, I mean, yeah, if you have the cash to pay for the semester, 100%, that's what I would do, you know, and if you didn't, then I would tell you to pause like you have in the past and start to just work your way through. It'll take you longer, but at least you're doing it. Cash flowing it. Okay, so no, I would be. No, Yeah, I would definitely be putting that money. And I think you have a lot of life to live and you're gonna live better.

[Caller 2]

Yes.

[Rachel Cruz]

And even more wonderfully, you know, once you, like, have a job and have an income and no debt, and you're like, oh, great, I get to go on, like, really awesome stuff. Now again, it doesn't mean you do nothing. You can still enjoy life and have a kid.

[Dr. John Deloney]

What do you think living it up is or living a little is?

[Caller 2]

I mean, like my brother always say, like, live simple. I mean, he, like, you know, we're all into kayaking. We love kayaking. I live in the country. We kayak on the river. We all own kayaks, you know, so we, you know, in the. You know, in the summertime, we all love to go kayaking. I'M huge into bowling. I love bowling. I already have all my equipment. So, like going out, doing stuff like that, maybe going out to the beach during like a random weekend, two day trip. Yeah, that's kind of like what I mean by, like, live a little.

[Dr. John Deloney]

How old are you?

[Caller 2]

20 years old.

[Dr. John Deloney]

Okay. All the things you just said are either quasi free or especially in your situation, you've already bought all your gear is free. That's number one.

[Caller 2]

Yeah.

[Dr. John Deloney]

Okay, so you can always just go run out into the water, or you can take your kayak and go on the water, or you can go throw the big heavy ball at the pins whenever you want, minus lane fees. Okay, so that's already solved. The other thing is, it sounds like you're not fighting that reality. You're fighting an ethos.

[Caller 2]

Okay.

[Dr. John Deloney]

You're fighting this idea that other people have it better than you do.

[Caller 2]

And I don't feel jealous in that way, but I definitely, like.

[Dr. John Deloney]

Okay, it's, it's not, it's not the actual things that are happening. It's this older brother who's like, bro, you need to be. And you, you started this call by apologizing twice, okay. With kind of like your head down as though you've already lost something. And dude, I'm telling you, you're not even at the starting line of the race yet, which is awesome.

[Caller 2]

Yeah.

[Dr. John Deloney]

If you will invest in one person, and that's you, for the next five to 10 years, you will have no idea what quote, unquote, living a little looks like. Like, to Rachel's point, okay? If you pay cash and get out of school and go put your nose like I. You should have more than a part time job right now is what I'm saying. You should have a full time job, college. I know, dude, but I had a full time job and two kids and I got a PhD at night and on weekends you can do it.

[Caller 2]

Okay, so the counselor's telling me at college you should only work a certain amount hours a week. That's kind of BS in the sense.

[Dr. John Deloney]

I'm not gonna, I'm not gonna put that on to the counselor.

[Rachel Cruz]

I'm telling you, John, blame the counselor.

[Dr. John Deloney]

Okay, yes. It's nonsense. It's nonsense. Okay, so here's the deal. You're in community college. Work full time, get another part time job and get done with your school. And there's always Saturday mornings, Sunday evenings, you can go knock out the stuff you're right now. What. What is your brother doing professionally?

[Caller 2]

Actually, I might have. I might have.

[Rachel Cruz]

No you said he lives simple.

[Caller 2]

Yes, he does.

[Rachel Cruz]

Yeah, he's chill.

[Caller 2]

He has, he followed. He followed your guys's program. He actually introduced me to the Dave Ramsey program. She has everything paid off except for his house. And what do I mean by what I was telling you earlier? So he's into kayak and he already bought a kayak previously.

[Dr. John Deloney]

Okay.

[Caller 2]

He loves going hiking, so he already has all of his hiking gear. That's the stuff he'd. He has the most fun by spending the less.

[Rachel Cruz]

He's like a good model in that way.

[Dr. John Deloney]

Okay, so he's a good model in that way. My bad. Okay.

[Caller 2]

Yes, you're good. You're good.

[Dr. John Deloney]

How much older is he than you?

[Caller 2]

27. So seven years.

[Dr. John Deloney]

Okay. So it's very common that people are graduating high school, graduating college, and they want to move into the house the same size as their parents house that they just moved out of.

[Sponsor/Announcer]

Yeah.

[Dr. John Deloney]

They want to drive the car that their mom and dad drove them around to school in. And that's unrealistic expectations. So your brother has a seven year head start on you. Where he lived very frugally, found love and going out in nature, very inexpensive activities on the whole. Now I'm in the middle of hunting season and I figured out a way to make that very obnoxiously expensive. Right. But he's doing it the right way and he's just got almost a decade head start on you.

[Caller 2]

Yeah.

[Dr. John Deloney]

So put your head down, work really.

[Rachel Cruz]

Hard and I bet he would be a great one to be able to relate to you though, to say, yeah, you're tweeting, you don't need that stuff. I mean, I bet like, you know, his, his story should be one.

[Dr. John Deloney]

I've been kayaking with people who have fancy kayaks, fancy stuff. And I've got the rented one that's $15 and it's uncomfortable, it's annoying. You know, it's not Rachel for 40 bucks. Yeah, exactly. Right.

[Rachel Cruz]

It's great.

[Dr. John Deloney]

But, but, but listen, if you will.

[Caller 2]

Yeah.

[Dr. John Deloney]

Write a letter to 50 year old you.

[Caller 2]

Okay.

[Dr. John Deloney]

It's a letter of gratitude for. Here's the things I'm gonna do for the next six to seven years with my head down, working my butt off so that 50 year old you has the life that you want to live. 40 year old 50 may be too long. 40 year old you, 35 year old you. But dude, I want you to put some money in the bank. Don't take debt off the table. I'm a guy who never borrows money, period.

[Caller 2]

Establish that I drive a 1990 Dodge truck.

[Dr. John Deloney]

There you go.

[Rachel Cruz]

Hey, is the 12,000 of debt student loans? Is that what that is?

[Dr. John Deloney]

Yeah.

[Rachel Cruz]

Okay.

[Caller 2]

Yeah, so I've. That was. So when my first half of college, I signed up for fafsa, which is a student loan.

[Dr. John Deloney]

Yeah, yeah, yeah.

[Caller 2]

They were like, here's money. Basically. They'll basically say, hey, we'll give you 500 bucks for the semester for books. We'll give you $500 here and there. You know, we'll give you all this money. But the catch is you got to pay like 8% interest at once you graduate. The day you graduate, they start charging you.

[Rachel Cruz]

I know it's terrible.

[Caller 2]

I can get out of it, but I would pay everything cash. And that's. I really want to. Because I don't want to be on.

[Rachel Cruz]

So, yeah, I think it's that. So I think you have a couple of goals tactically, is I want you to do a written budget. I want you to pretend that you do have two jobs, like what John said. What if you had the income you have coming in and an extra job? How much money will be there? How much money do you need to save per month to make sure you cash flow the next. Starting in August? Right. Because you have enough money to cash flow the spring semester coming up.

[Dr. John Deloney]

Yes.

[Rachel Cruz]

So how much do you need to save between now and August to make sure you cash flow the fall semester or summer classes? Whenever you're going to do it, and then from there you're going to be able to see, okay, perfect. That's how much I need to save. That's priority. How much is food? How much is gas? How much is my rent? Like, go ahead and list out all your expenses and then get to the bottom and say, okay, how much is left? And to John's point, everything you just talked about, whether it's bowling or kayaking, it's not gonna cost a ton. But if you had, I don't know, I'm just gonna guess an extra hundred bucks a month or something to be able to enjoy, to be able to go do some of these things, then that's gonna feel great. So I feel like there's a part of me that says you could probably do both. I don't think it has to be this extreme case of all or nothing. But you have to make sure it's at least in priority. You want to make sure that the school is taken care of, because I don't want you going deeper than this. 12,000. And then when you graduate. Yes. Those bills start coming and that's when you're going to start attacking those. But I would not worry about the past student loans until you're out of school. My number one focus would be to get through the rest of the school without taking on any more loans and then anything extra you can have fun with, but making sure that that is covered first and foremost.

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[Dr. John Deloney]

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[Rachel Cruz]

Welcome back to the Ramsey show in the Fairwinds Credit Union studio. I'm Rachel Cruz with Dr. John DeLoney and we are answering your questions. All right, we have Mike in Ann Arbor. Hi, Mike. Welcome to the show.

[Caller 2]

Hello. Thanks for taking my call.

[Rachel Cruz]

Absolutely. How can we help today?

[Caller 2]

Yes, I've got, I think, a rather unique situation.

[Rachel Cruz]

Okay.

[Caller 2]

But my, my sister. So I'm one of the three children. I'm the middle child. My older sister is going through divorce, which is terrible situation.

[Rachel Cruz]

Of course.

[Caller 2]

She's got three kids. Her eldest, I think, is about three years away from starting college.

[Rachel Cruz]

Okay.

[Caller 2]

And previously, like my sister, all three of her kids were attending private, private schools. Her and her husband driving luxury vehicles, fancy vacations, living extremely well. And no judgment there. That's fantastic. Happy for them. But appears from an outsider that had a very high burn rate. Recently we've discovered as just kind of the discovery process going through, figuring out how the divorce is going to play out, that they have under $50,000 in savings and that includes retirement accounts. That's dead zone.

[Rachel Cruz]

Oh, wow.

[Caller 2]

Okay, so my sister is expecting to buy her husband out of their current home and her dental practice, and she needs $800,000 to do that.

[Rachel Cruz]

She doesn't have $8,000.

[Dr. John Deloney]

How is she expecting to do this?

[Caller 2]

Great question. She reached out to me, and it turns out she had reached out initially to my parents, and they had agreed to provide her with 400,000.

[Rachel Cruz]

Oh, my gosh.

[Dr. John Deloney]

Do they have that money?

[Caller 2]

They do in their retirement. They're retired, but it's their nest egg.

[Dr. John Deloney]

Are they multi. Multimillionaires.

[Rachel Cruz]

How much money do they have, your parents?

[Caller 2]

It's a great question. I don't know the number, but did.

[Rachel Cruz]

It feel like that's a significant part of their retirement? Like a fourth or a third? Or is it like, oh, no, that's 400.

[Caller 2]

400. They wouldn't miss.

[Rachel Cruz]

Okay. Okay.

[Dr. John Deloney]

Dang, Gina.

[Rachel Cruz]

It's great.

[Dr. John Deloney]

I'd miss it a lot.

[Caller 2]

Definitely. And so my sister then reached out to me and asked if my husband and I had an extra 400,000 she could borrow. And we're pretty good with money, so we wouldn't have 400,000 sitting. Getting destroyed via.

[Rachel Cruz]

Yeah.

[Caller 2]

Find place. And so, I mean, I told her that, you know, without selling one of our properties, we. We wouldn't be able to get her to 400,000, but, you know, we'd still be willing to help. And then she called me back and told me, don't worry about it. She'd make other arrangements. So I spoke with my parents, and turns out they're the other arrangements.

[Rachel Cruz]

Oh, no. They're going to give her the full 800.

[Caller 2]

Full 800. So they claim that she's over leveraged on debt and she can't get a loan from a bank. She's got a mortgage and she's got a debt.

[Rachel Cruz]

So we're going to let her go. Almost a million dollars in Deb debt to us. Awesome. Great plan.

[Caller 2]

Well, I. That's. I don't even know. Is it going to be a loan or is it going to be a gift at this point?

[Rachel Cruz]

Okay, okay.

[Caller 2]

But, you know, my parents have this parental guilt. They feel that she's a victim of the situation. She trusted her husband to manage finances. This is where I. I disagree a.

[Caller 1]

Bit on the point.

[Rachel Cruz]

We're with you, Mike.

[Dr. John Deloney]

Yeah, I'm with you.

[Rachel Cruz]

We're with you.

[Caller 2]

It's. It's trust but verify at this point. You're an adult.

[Rachel Cruz]

Yeah.

[Caller 2]

And then they also want assurances that in the event that she were to get back together with her soon to be Ex husband. They would want all of this money back immediately.

[Rachel Cruz]

Right? All the strings attached.

[Dr. John Deloney]

All the strings attached. Don't, don't, don't. Yeah. All this is a horrible idea.

[Rachel Cruz]

So what can we do to help?

[Caller 2]

Mike, I totally understand. Yeah. So from my perspective, and first of all, I want to know if I'm crazy, but my perspective is my parents have worked hard and lived frugally their whole lives. They provided us with fantastic childhoods. They paid for our college. And I want them to enjoy their retirement and spend their money on what brings them joy.

[Rachel Cruz]

Well, yeah, but you can't control that. That's what they're choosing to do. Are they asking your opinion at all?

[Caller 2]

I gave it to them because I also happen to be the executor of their will.

[Dr. John Deloney]

Nice.

[Rachel Cruz]

That's fair.

[Caller 2]

And we have similar financial behaviors. I mean, we're in. We're in similar situations. Finally, here's.

[Dr. John Deloney]

Here's the brass tacks. Let's say 100%. And Rachel and I take these calls. So it does happen that your sister was lied to, manipulated, and just got hit by a. By a steamroller with this divorce, the financial position. She had no idea. She thought everything was different. And bam. Okay, there is that mess. And in my world, we say, not by her hand, but in her lap, she didn't cause this. And boom, here it is. That doesn't give license to avoid reality moving forward. And that. What does that mean? That means she can't afford the house she lives in. She can't afford to buy a dental practice as much as she wants to own one. It's a, because I got screwed. I'm now owed X, Y, or Z. And that's how our country is in almost $40 trillion worth of debt. That's how student loan debt is almost $2 trillion.

[Rachel Cruz]

Credit card debt set an all time high.

[Sponsor/Announcer]

Yeah.

[Dr. John Deloney]

It's all I didn't get. I deserve to go to the college I want to. I deserve to have this. I deserve to have this program or that. And her world blew up.

[Rachel Cruz]

And it sounds like her world before it blew up. She never was told no either. Right, right. She never has had to. To rationalize reality. Yeah. Of. Oh, there's not enough money here. My kids can't go to the school I want them to go to. I. There's not enough money to buy a car that I really want to buy, so I'm going to choose a different one. You know, it sounds like her conditioning for years and years and years has been, I kind of get what I want. And we're gonna use debt for it. Because that's exactly what the savings show. They have no money saved. They've put nothing away. They've spent everything or more. And so for her to want these things, to me, is pretty obvious. I understand why she does, because she doesn't have another way of thinking.

[Dr. John Deloney]

Well, and we all want our kids to go to the best schools on the planet. We all want fancy cars, big house. We all want that stuff.

[Rachel Cruz]

Sure, yeah, yeah, yeah. But. And then your parents, to a degree, enabling that by continuing to just, you know, fund a little bit of her not facing reality. It's what she says, not a little bit. A million dollars. A million dollars worth of it. It's true.

[Dr. John Deloney]

Here's the way to have this conversation with your dad. It's not about money. It's a. Because he's going to say, I have it. It's my money. I can do what I want. And he's right on all counts.

[Rachel Cruz]

And he can. Yeah.

[Dr. John Deloney]

He is guaranteeing by his participation in this, in your sister's pain. Not just sitting with her in the pain and saying, this is awful. He's participating in guaranteeing that there will be a rift in their relationship forever. And after him and your mom pass, that rift will get passed to you guys, his other kids, guaranteed. Because when he gives her $800,000 and she shows up in a new car, his first instinct is going to be, why did she pay me back? Or where'd she get that money to buy that car?

[Rachel Cruz]

Yeah, that was supposed to go to the house.

[Dr. John Deloney]

That was supposed to go to this. And what about that? And. And then when this guy comes back a year later, which happens a lot, and realizes his life's awful and wants her back and sees her thriving practice, and she's gonna be like, oh, well, it is the father of our kids. And then.

[Rachel Cruz]

And in a wonderful way, the marriage is. If that's the case, and the marriage is redeemed in a healthy way. That's an applause.

[Dr. John Deloney]

Yeah, but there's an $800,000 price tag.

[Rachel Cruz]

Now there's a million dollars. You know what I mean? That gets. That gets dragged in the middle of that into a beautiful redemption story. So I'm like. Like all the way around. It's not. It's not wise. But, Mike, what sucks about your position is you have no control. You really don't. Like, he. He's gonna. They're gonna do what they're gonna do, and you can say everything you wanna say. Say it in the way you think he's gonna he all the things and at the end of the day they're gonna choose and then you're gonna have to, you're gonna have to deal with yourself in that decision. Whether it is pain and sadness and feeling like that's unfair to you and your other sibling. I mean, whatever it is that's going to be yours to carry from then on out.

[Dr. John Deloney]

Is it normal for her to call you and ask for money? I'm sorry, Is it like her calling you and asking for money that just after asking mom and dad and then asking you and your wife, that feels like a level of desperation of someone who's scared that their life is unraveling. And sometimes the greatest gift is to let it all the way unravel and sit with somebody in the ash.

[Sponsor/Announcer]

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[Dr. John Deloney]

See boostmobile.com Ramsey for details.

[Rachel Cruz]

Well, it's that time of year. In a few weeks we're going to be doing our special giving edition of the Ramsey Show. It's one of our favorite shows that we do all year and we want to hear stories from you about how you have given generously this season. So maybe you've tipped a waiter or waitress like a ton and you have an awesome story around that maybe you've bought someone Thanksgiving dinner, maybe you bought someone a car, whatever it looks like, but outrageous generosity. We want to hear from you. Or maybe you were on the receiving end of a very generous gift and then those are always obviously as wonderful. So we want to hear from you again. Whether you have been the giver or have been given to. We want to hear. So go to ramseysolutions.com ask and put giving in the subject line. And we do this, gosh, we do it once a year, always around Christmas time. It's one of the most popular shows that we do. It always gets so many listens because it's just, it's kind of like faith in humanity. You see the good that's being done.

[Dr. John Deloney]

And can I tell you now that you've just read this, this, this like promo like, we're doing this.

[Rachel Cruz]

Yeah.

[Dr. John Deloney]

It reminds me, like, back in 2007 or 2008, I was a part of this. It was like a men's group that met on Monday mornings. And there was a guy there, he's a general counsel. His name was Slade, and he was an attorney. He was one of the greatest men I've ever met. Every Monday morning, he would go around the table and ask us, what's one nice thing you all did for your wives last week? The number of times I'm a new married guy. Sunday night I did a nice thing so that I could say something Monday morning. Okay, that sounded cheap and it sounded like not in the spirit of. To this day, Sunday nights, I still look around. Is there. Can I go fill my wife's car up with gas? Can I help with the laundry before school, whatever. And so. So if you haven't done anything outrageously generous, go do it just so you can call in.

[Rachel Cruz]

You know what? That's a great.

[Dr. John Deloney]

But it's about the practice. And you start, you will feel how good it feels, and you'll be more likely to do it again. So if you haven't done something outrageously generous, let this be the call to go do a thing and then write it in and tell us. And then while you're doing that thing, keep your eyes open. Bring your kids with you. Let them be involved with it. And it will transform, obviously, somebody else's life, but it will transform your life and hopefully inspire you to give more throughout the year.

[Rachel Cruz]

I love it. It so good. Yep. So that show is coming up December 18th. So again, start sending in your stories because we do want to celebrate living like no one else. The later you get to live and give like no one else. All right, let's go to Houston. And we have C.J. on the line. Hi, C.J.

[Caller 2]

How you doing, Ms. Rachel?

[Rachel Cruz]

We are doing great. You got another Houston htone Houston?

[Dr. John Deloney]

What?

[Rachel Cruz]

Were you a resident of Houston? I guess. I don't know. Next to me.

[Dr. John Deloney]

Oh, my gosh. You're not a resident of Houston. You're from there. You know, I'm saying C.J. you get it from Houston.

[Rachel Cruz]

Yeah.

[Dr. John Deloney]

C.J.

[Rachel Cruz]

How can we help?

[Caller 2]

Hi. I'm currently 60k in debt. I'm currently 22 years old. I'm a college student, and I work full time as well. 30k. About 25k of it is a CO sign. This was before I started listening to the show. I co signed a car for my mom that she had totaled. She totaled out her previous car and she wasn't able to get a car. I'm the only one of her children that has a great credit score and very well financially stable in AI. But I feel like I'm drowning.

[Rachel Cruz]

Did. Is she. Has she stopped paying on that 25,000? Are you picking that up?

[Caller 2]

No, no, no. She's paying on it. I'm making sure she's paying on it every month. I'm currently.

[Rachel Cruz]

But you're in the hook. You're on the hook for it is what you're saying. Still. Which. Yeah.

[Sponsor/Announcer]

Yep.

[Caller 2]

Yeah, I get that makes me uncomfortable.

[Rachel Cruz]

Yeah.

[Caller 2]

Yeah, yeah, totally.

[Dr. John Deloney]

You should feel uncomfortable.

[Rachel Cruz]

What's the rest of the 35,000? Is it student loans?

[Caller 2]

I have 10k in student loans.

[Rachel Cruz]

Okay.

[Caller 2]

And I'm going to cash flow the rest of my time. I'm currently in community college. I have like a semester left. I'm going to be going to either UTSA or another college for cyber security.

[Rachel Cruz]

Okay, good for you. And then what's the other 25 000?

[Caller 2]

20 of it is my car. And then the other. I might be Ms. Wrong, but I have like 7k in credit card debt.

[Rachel Cruz]

Yeah. Okay.

[Caller 2]

Currently paying on. That's my baby. Step one.

[Dr. John Deloney]

What kind of car do you. Are you driving around?

[Caller 2]

I have a 20, 21 Honda Accord. Work?

[Dr. John Deloney]

Not for long if you.

[Rachel Cruz]

You sold it. Private party.

[Caller 2]

Great car.

[Dr. John Deloney]

I noticed. But listen, I rolled. I drove all over Houston. I'm a 6 foot 2, 200 pound guy. I drove all over Houston in an 88 Tercel Easy hatchback and moved up to a Corolla. Was it great? No.

[Caller 2]

6, 7. I'm 67. I. I like the car. The Honda is the only car, man.

[Rachel Cruz]

I'm making it fit OK though. We can. We can find. We can find a bigger car for less.

[Dr. John Deloney]

We do.

[Rachel Cruz]

We do have to. Oh no, you can't.

[Dr. John Deloney]

You can't. Honda.

[Rachel Cruz]

That's what my kids do. Six, seven. Six, seven.

[Caller 2]

It goes. Push it all the way back. The last setting in the car.

[Dr. John Deloney]

You got to take the back seat out of that thing. All right, Good for you.

[Rachel Cruz]

How much money are you making, CJ?

[Caller 2]

I'm making 2155 and we're getting a raise in about a month.

[Rachel Cruz]

How much are you bringing home a month? What's. What's hitting your bank account each month?

[Caller 2]

About 3,500 on the low end. But I have opportunities to work. Like right now it's slow. But next year, when a year starts, we're gonna have plenty of overtime.

[Rachel Cruz]

Great. Okay.

[Caller 2]

And I currently have 5,000 in my savings and I know we're supposed to have a thousand, but me and my family have went through a lot, so.

[Rachel Cruz]

Yeah. You nervous? Yeah. It freaks you out a little bit.

[Caller 2]

Yeah.

[Rachel Cruz]

Okay.

[Caller 2]

More than a little bit.

[Rachel Cruz]

Sure.

[Caller 2]

I currently am talking to a therapist. I have anxiety and depression. So the anxiety comes from stability. Yes. And I don't feel stable. It just. My world rocks.

[Dr. John Deloney]

Yeah. Trust me dude, if you will make this a mad house priority to get this debt out of your life. I've been right where you are, dude. Right.

[Caller 2]

Oh trust me, I'm on the way to. And listen, just. But you gotta hear that $4,000.

[Dr. John Deloney]

I know, I know.

[Caller 2]

Safety got you.

[Dr. John Deloney]

But listen, on the other side of paying all this debt off, you're going to sleep like you have never slept in your life. I promise. Because I've walked those same shoes.

[Caller 2]

I know, but I just can't get rid of the safety blanket of that four.

[Dr. John Deloney]

No, no, no. I, I, I'm with you on that. That's I, you do what you do.

[Rachel Cruz]

Just saying.

[Dr. John Deloney]

I'm just saying the whole get out.

[Rachel Cruz]

Of debt thing, the whole idea, okay. It's going to, it's going to, it's going to have, you're going to have peace in the way that you probably.

[Dr. John Deloney]

Have you working overtime, you going to school, you doing all this stuff. It is worth it is what I'm telling you.

[Rachel Cruz]

So what I would do CJ if I were you, cuz you that cusp of that $20,000 car. Okay. From a mathematical standpoint, regardless of height and all the things. So just you, I mean unless you're working overtime, can you afford this car? Because our rule of thumb is if you can't pay the car off in 12 to 18 months and or it's more than 50% of your annual take home pay, you have too much car. And you're, you're right there, cj. So I mean I just want you to just, just look, just look. Run some numbers and just say okay, what if I did sell at private party? Because it probably is holding its value pretty well.

[Dr. John Deloney]

It's a great car.

[Rachel Cruz]

So you may to actually, I mean depending on when you bought and how, all of it, you may be one of those rare cases that you actually may, you know, be able to sell it for a little bit more than what you owe or you may be a little underwater and then I want.

[Caller 2]

You to look around the water. I did a little bit of numbers. Is 18 okay?

[Rachel Cruz]

Perfect.

[Dr. John Deloney]

Is that, is that private sale or is that trade in?

[Caller 2]

That's Private sale.

[Rachel Cruz]

Okay. Okay. So C.J.

[Caller 2]

Was about the same thing, but I think I could get a little bit more for.

[Rachel Cruz]

Yeah. Okay, so again, I want you to. To just run the numbers that if you. If you were underwater 2000, I want you to look around and just do some research on a $5,000 car. Okay. Just pretend and maybe you find another older Honda Accord and you're like, okay, great, I can get a. A crappier car. And that means you have $7,000 you owe versus 20, which is going to fast forward this whole debt payoff so much faster so that you don't have to work overtime much longer. Right. So again, it's a give and take situation. That car is right on the cusp. But of being able to keep it and paying it off, it's just going to be a longer get out of debt process. So what I want you to do, so priority number one, is I want you to stay current on all of your payments. Stay current on everything. The second priority, since you're in school is I want you to make sure you're cash flowing that last semester. So save up enough to make sure that that is covered. Okay.

[Caller 2]

Once that's done, I plan on class flowing with the rest of the school.

[Rachel Cruz]

I don't plan. That's great.

[Dr. John Deloney]

Yep.

[Rachel Cruz]

Is making sure that that is true. Because I don't want you go in any more debt. And then I want you to start working off paying out that $7,000 in credit card debt. So if you have multiple cards, start with the smallest. Even if it's an $800 bill on one of the cards, whatever it is, cut everything up and start working your way through the debt snowball, which is paying the smallest debt off. First, it's going to be some of the credit cards, and then your student loans won't hit till after you graduate. And then that car is going to be your second big one. So that's going to decide, hey, do I want to keep it? Is it worth working all this extra? And you'll get to decide that. But cj, we're so proud of you. You're changing completely your family tree, and we are here for you.

[Sponsor/Announcer]

I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.

[Rachel Cruz]

Yeah. And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly, and they don't have life insurance. We actually took a question of a lady, and she had three kids pregnant, and husband didn't have life insurance. And I'm like, I can't even imagine. Or even if it was opposite, Right. If a mom passed away, there's a dad with kids and trying to figure out, how am I going to afford child care? How do I. How do I outsource some stuff that maybe she was doing, like, And. And it just takes the grief and the sadness of something like a sudden death to a whole new level. Like, when you have to think through, how am I going to pay my bills, how am I going to be next week. Yeah. In the middle of all that grief, like, it's just. It is. It's terrible. And so life insurance is the one thing, especially as a mom with three little kids, that I'm, like, so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And we keep re upping it because I'm like, I just want it there. Like, there's something about that safety of knowing that you have money if something suddenly happens and it doesn't cost much.

[Sponsor/Announcer]

Cause Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud. And you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. It costs us stinking pizza.

[Rachel Cruz]

There really is. So that is one thing to do, to say I love you to your family.

[Sponsor/Announcer]

So we've used Zander for all of our family's needs for insurance for many years, including, of course, term life insurance. To get a free quote, go to 800-356-4282. That's 800-356-4282. Or go to zander.com.

[Rachel Cruz]

Up next, we have Lee in Omaha, Nebraska. Hi, Lee. Welcome to the show.

[Caller 2]

Hello. Thanks for taking my call.

[Rachel Cruz]

Absolutely. How can we help?

[Caller 2]

I'm 65, retired, and I have about 1.8 million in a traditional Roth IRA and about 400,000 in a Roth as I look ahead to the required minimum disbursements.

[Rachel Cruz]

Yep.

[Caller 2]

This will be kind of a lot.

[Rachel Cruz]

Yeah. Great. Yeah.

[Caller 2]

So the last couple years, I've moved $100,000 each year from the traditional to the Roth.

[Rachel Cruz]

Good.

[Caller 2]

Would I be better off to keep doing that that way, or should I just take the Pain, Say maybe move a million and be done with the pain or, or just pedal along at 100,000.

[Rachel Cruz]

What other money do you have?

[Dr. John Deloney]

Do you have the cash to do that.

[Rachel Cruz]

To pay the taxes?

[Dr. John Deloney]

Pay the taxes on.

[Caller 2]

Would have to come out of the, out of the account behind it. Yeah, I don't have.

[Rachel Cruz]

Okay, so you'd be paying me $100,000.

[Caller 2]

In the bank, you know, but.

[Rachel Cruz]

Yeah, right. Yeah. If you don't have the cash to be paying the taxes. I would not take money out of the account just to pay the taxes. Taxes, if you can do it. But you. Yeah. Do you have any income coming in besides your investments?

[Caller 2]

Yeah, just Social Security.

[Rachel Cruz]

Yeah. How much is that a month?

[Caller 2]

Social Security is about, oh, 2,300.

[Rachel Cruz]

Okay. And are you living off of money in the Roth or the traditional.

[Dr. John Deloney]

I am.

[Caller 2]

I'm between, between Social Security and it's about $7,000 a month. I'm with total. I'm living on a month.

[Rachel Cruz]

Okay. Okay. Yeah. I mean, kind of our rule of thumb is if you don't have the cash to pay the taxes, and if this is all you have, if there was a lot of money that you were going to, you know, have. The great thing about a Roth is, you know, not only are you not paying taxes on the growth, but when you pass it to your children, they're not going to pay taxes either. So it just like becomes even, you know, a bigger pass down, which is such an advantage. That's why we are such a fan of the Roth. But again, having to pay the taxes on it each time is. That's, that's what's going to be key. And I'd hate to use your retirement investing to pay the taxes on something that's already invested. But how much are you having to take out every single year? How much is that the required.

[Caller 2]

Oh, they're making gets up there in the, you know, 3, 400,000 a year I gotta take out if I live long enough.

[Rachel Cruz]

Yeah. Do you know how quickly that's gonna be here?

[Caller 2]

Yes.

[Dr. John Deloney]

No, you don't have to take out $300,000 a year out of your 1.8.

[Caller 2]

Oh, you get to be late 80s. It gets pretty high. According to the form the man gave.

[Rachel Cruz]

Me of what it is with all the growth, I'm not sure I'm making it right now.

[Dr. John Deloney]

I'm.

[Caller 2]

My money is making about 12 to 14%, you know, thereabouts.

[Rachel Cruz]

Yeah.

[Caller 2]

Give or take.

[Rachel Cruz]

Yeah.

[Caller 2]

So, you know, I keep telling the grow or, you know, I. Yeah, I'm.

[Dr. John Deloney]

Out over my Skis on this mathematically, but that number doesn't sound right. But, dude, I could be out to lunch on it.

[Rachel Cruz]

Yeah, I know. It's that. That. That required. It's a weird. It's a weird formula when you look at it. And so I don't. I don't. I. Yeah, I can't do it right now. So, yeah, what I would say, Lee, is unless you had the cash to be able to pay the taxes because you had money saved elsewhere, that would be an automatic yes for me. But you could look to see, okay, if I. If I rolled over, how much from where you are in the tax bracket, how much would that would I pay in taxes if I took it out? And that would come out of my investments versus if I left everything in and had to start pulling money out and pay taxes on that, you know, which you're gonna have to pay anyways when they make you, you know, take it out. I would run some of those numbers, and I would sit down with the Smartvestor Pro as well, because I would want this to be the most mathematical efficient for you. But usually converting to a Roth, if you don't have the cash on hand, that's usually a sticking point. All right, let's go to Alex in Toronto. Hi, Alex. Welcome to the show.

[Caller 2]

Thank you.

[Sponsor/Announcer]

Hi.

[Caller 2]

How are you guys?

[Rachel Cruz]

We're doing great. How can we help?

[Caller 2]

My quick question, or hopefully question is, can we afford to travel? So we live in Canada. We want to go to Spain for my friend's wedding in May.

[Rachel Cruz]

That's fine.

[Caller 2]

My wife and I were just wondering if we can afford it.

[Dr. John Deloney]

Dude, my friend got married at Arby's. Man, your friends get married at Spain. That's awesome.

[Caller 2]

Well, they live there. It's my best friend from.

[Rachel Cruz]

From, like, he's international. Alex has friends all over the world, John.

[Dr. John Deloney]

That's true. You got. You got cooler friends than me.

[Rachel Cruz]

Okay, so, Alex, where are you guys at financially?

[Caller 2]

So I make about 150,000 Canadian a year.

[Rachel Cruz]

Okay. Okay.

[Caller 2]

We don't have any debt other than our home. We owe to our home about 463,000.

[Rachel Cruz]

Okay. How much does your wife make? Does she work?

[Caller 2]

She doesn't work. She's a homemaker.

[Rachel Cruz]

Okay, wonderful. Do you guys have money saved? Do you have an emergency fund?

[Caller 2]

We have a small emergency fund of 9,000. Our expenses are about 4 to 5,000amonth.

[Rachel Cruz]

Okay.

[Caller 2]

We. I have a pension with my current work that I contribute towards, and my employer matches about 20% goes towards that pension. Then I have a retirement plan. That came from another job that I had in the past that I took with me. There's about 100 grand there.

[Rachel Cruz]

Okay.

[Caller 2]

And then there is.

[Rachel Cruz]

You guys have kids, Alex?

[Caller 2]

We do.

[Rachel Cruz]

Okay. How many kids do you guys have?

[Caller 2]

Two kids, eight and six.

[Rachel Cruz]

Okay. How much will this trip cost, total?

[Caller 2]

I am total. I'm expecting around 5,000.

[Rachel Cruz]

Okay. Do you guys have 5,000 to spare? You don't have a great emergency fund, so I would want you to bump up that emergency fund to at least three months of expenses.

[Dr. John Deloney]

Yeah.

[Caller 2]

So for the last. Sorry. For the last two years we've been saving money, putting money aside. I was investing on my own, but then realizing that my pension is pretty good, that I shouldn't be. I mean, I don't know. That's up to. You're the expert. So do I continue putting towards another investment like retirement thing on the side or do I just stick with my pension that I currently have?

[Rachel Cruz]

Yeah. So the, the investing is a little different in Canada, but I can tell you from here, we would always say that your 15% of your income needs to go into retirement and your pension would be considered. I would, I would, I would cut that percentage in half. So how much? What percentage is going into the pension?

[Caller 2]

So my estimate is around 20%.

[Rachel Cruz]

Okay. So what I would say is that would be quote, unquote, 10%. So I'd be saving 5% more somewhere else. And again, the Canadian, you know, retirement, you'll have to look to see what's probably the better option. But I would put 5% of your income into that. So I'd have the pension at the 20% and then I would put 5% somewhere else. Because the reason we say the pension, it is included in that 15, but it's half is because it is still a great place to put your retirement, but you have no control over it. And so that's. It's always a little bit like, eh. So again, 5% somewhere else. But yeah, if you guys can cash flow this, this trip to Spain, I mean, I would make it a goal to get your emergency fund up. I would be putting some money away there. But yeah, if you guys have the ability to cash flow it. And again, cash flow and it not stress y' all out. Yeah, you have no debt. I mean, you guys are saving, you're doing great. So I would say, yeah, I'd be okay with it.

[Caller 2]

Okay. Hopefully my wife can listen to this now and then.

[Rachel Cruz]

I don't know. John, would you go. John's a little bit more. Not as.

[Dr. John Deloney]

Yeah, no, I would go, but here's where I would fall short. The moment I deviate from a plan. Right. Like, if I'm trying to accomplish an exercise goal, the. The one morning I don't. I don't keep my word to myself, I'm off it for the next four months. And so the only thing giving me pause here is how low that. The fact that you got kids and how low your emergency fund is. And you are one kid doing one fun thing in the front yard from burning through that $9,000 in no time. And if you do choose to go to this wedding, it can't be, well, we've done it once, and now we can do it again. And now we can go ahead and get this car. Now we can go and get this other thing. It would have to be such an anomaly, and it'd have to be different than I'm able to do right now.

[Caller 2]

Yeah, No, I totally get that. Yeah. Last time we traveled, like, that was two years ago.

[Dr. John Deloney]

Yeah.

[Rachel Cruz]

Yeah.

[Caller 2]

So it's not a, like, a constant thing that we do every year.

[Dr. John Deloney]

And it may be a thing. It may be a thing that, like, only you go. And it would be cool to take your wife to Spain and then celebrate a wedding with a whatever. But we can only afford it to only make sense for us financially, for one of us to go. So those are some more variables you can think.

[Rachel Cruz]

Yeah. And your wife might be more okay with it if she knows there's more money saved. There may be more security knowing, okay, we have some. We have good money, you know, money saved. Okay. I can take a breath and go on this trip, but, yeah, you got to figure out how to get this emergency funded and the trip. If you can do both, that's great.

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[Rachel Cruz]

The County Countdown to Christmas is on and we have a ton of great deals for you guys for Black Friday and Cyber Monday. Plus we're dropping a special one day sale on Black Friday and Cyber Monday. So we're talking about hardcover, books, audiobooks, assessments, some as low as 3 99. So don't miss out. Go to ramseysolutions.com store or if you're watching on YouTube or podcast, you can click the link in the description. All right, let's go to Ricardo in San Diego. Hey Ricardo.

[Caller 2]

Hey, how's it going?

[Rachel Cruz]

Doing great. How can we help today?

[Caller 2]

I had a question and kind of wanted to give you a little summary about my life and see if you can help me out with it. I wrote it all down, kind of just compacted in a quick summary for us.

[Rachel Cruz]

Perfect.

[Caller 2]

All right, so I'll start by saying I'm 28 and I'm calling from San Diego. I live in a rental home with my family, my two year old son and my soon to be wife. Living together is the only way to make San Diego affordable and every rent payment gets us one step closer to actual homeownership. We all share expenses so support each other and we're working towards building something stable for our future. Currently I work two jobs. Monday through Friday I'm an H vac, a career I switched into after a 10 month training program because I wanted long term stability for my family. On Fridays and Saturdays I work in a restaurant. I used to have more hours there but it's low season so I learned that I had to lean more into the H Vac to grow and stay consistent financially. I still work there in the restaurant. Don't get me wrong, I bring home about around 3,650 to about 4,200amonth after taxes depending on my tips. Also at the restaurant and I follow Dave Ramsey's like baby steps. I've saved 7,000 towards my emergency fund, budgeting and trying to use the Every Dollar app and cutting back where I can. I'm working on paying off a $29,000 car loan that I just got because I needed to be mobile in order to get me around and the car I had before broke down on me and it actually got totaled and I got an accident in it. Right now my student loans are also an administrator for parents, so interest is still piling up on them, but I'm staying focused and attacking them with the debt snowball.

[Dr. John Deloney]

Yeah, right. Get right to your question, brother. You're right to your question.

[Caller 2]

Sure. So my question is, what do I do? As of right now, even though it's tough, supporting my son, my friends, my family, dealing with the high rent, juggling two jobs, managing debt, I'm trying to stay committed. And every sacrifice is about giving my son security, helping my family in and providing teamwork. The thing is that I recently had to go to the hospital. I have a ruptured eardrum. So it's very hard for me right now to see if what's going to go next in my life because they're thinking I'm going to need surgery. So I'm thinking I just put all this time into this career I'm trying to build and now I'm thinking, thinking, can I even go back to it? Because I'm going to be around loud noises and everything and high elevation.

[Rachel Cruz]

Okay. Well, on that end of it, yeah. You will have to figure out is that, is that feasible? I don't know what that looks like. I don't know if there's protective ear wear, you know, you can wear that helps you because if you're able to stay, I think within the industry you're, you know that you have, is great because you can only move up from there. But is 4K sustainable, Ricardo, per month for you?

[Caller 2]

You as of right now, because I have my family living under the same home, it is sustainable and it's the sacrifice I have to make because I make $20 an hour in the H Vac job and then I make 1725 plus tips in the restaurant job.

[Rachel Cruz]

Okay.

[Caller 2]

So it's just more about getting my experience because I have no experience. I just have.

[Rachel Cruz]

Yeah. How quickly for the H Vac will you be able to start upping income? Have they, did you have, is there an income track that you can see?

[Caller 2]

Yeah, yeah, there is. And as of right now, when I talk to my teachers and I also talk to my bosses at work, it's between like the one to two year mark. It's because I have to get that experience and I have the knowledge.

[Rachel Cruz]

Okay. So Ricardo, I hate to say it, you can't afford a $30,000 car.

[Dr. John Deloney]

Yeah, yeah, you gotta sell your car today.

[Rachel Cruz]

That's, that's Too high.

[Caller 2]

Yeah.

[Rachel Cruz]

So you can still find a great $10,000 car that will not break down. We had a guy on the show last week doing a debt free scream, and he's driving a $4,000 car around and he's like, Listen, it's got 200,000 miles, but it's been great. It's giving me no trouble. So there still are great cars out there that are older that will not break down, like what you experience. So I would first and foremost. Yeah. Put that car. Have you looked at Kelley Blue Book, that if you sold at private party, what you would get out of of it?

[Caller 2]

So I just recently got a car. It's the 20, 25 Toyota Camry.

[Dr. John Deloney]

Oh, man. You bought a brand new car and that's the 30.

[Rachel Cruz]

That's the 29,000.

[Caller 2]

Yeah. And I'm paying monthly on it.

[Rachel Cruz]

Yeah, yeah. So I would go on Kelley Blue Book and see what, what, how much you could sell it for. And you may be underwater because it's brand new, but it won't be too much underwater if it is. So, yeah, that needs to be sold.

[Dr. John Deloney]

How much is in your emergency fund fund?

[Caller 2]

Right now? It is about 7,000. I'm trying to get it to 10.

[Dr. John Deloney]

Hold on. How much do you owe on student loans?

[Caller 2]

On student loans right now I owe about, about 6,000.

[Dr. John Deloney]

Okay. Pay those off today.

[Caller 2]

Is. Is it. My other question would be, is it feasible for me to do that? Because as of right now, since I don't have my ear, like, I can't hear from my ear, I don't know when I will go back to work. They haven't told me. I don't know if it's going to take months, like, to get the surgery or to get.

[Rachel Cruz]

Wait, do you have to. Okay, I'm. I'm a little. I' little bit ignorant. Can you not go. Can you not do your H. VAC work with hearing in one ear?

[Caller 2]

It's. It's more of the. I talked to the doctors and they said that I wouldn't be able to do it soon enough. It would take a little bit of time. So I'm not sure what time they're really giving me.

[Dr. John Deloney]

Can you, can you flip, can you flip over and go full time at the restaurant?

[Caller 2]

I can't because it's slow season right now. They just cut everybody.

[Rachel Cruz]

Okay, so maybe another one.

[Dr. John Deloney]

Yeah, you have to, like, you don't have an alternative, brother. You got to find another one.

[Caller 2]

Yeah.

[Dr. John Deloney]

And I hate that for you. I hate that with all my guts for you and that's the reality you find.

[Rachel Cruz]

And maybe it's the season. Right. So maybe for the next six months to get you through the spring, you're working two restaurant shifts and having to hold off on the H Vac because of your ear or you have to.

[Dr. John Deloney]

Go throw boxes at Walmart at night or whatever.

[Rachel Cruz]

Amazon driving.

[Dr. John Deloney]

That's right. For holiday.

[Rachel Cruz]

For holiday season. You know, they usually are picking up tons of drivers.

[Dr. John Deloney]

Is your girlfriend working? Working?

[Caller 2]

Yeah, she also works. She works two jobs. We're both hard workers.

[Dr. John Deloney]

Yeah.

[Rachel Cruz]

Yeah. We're just trying to be strategic with the hard work.

[Dr. John Deloney]

Yeah.

[Rachel Cruz]

To kind of figure out.

[Dr. John Deloney]

Here's a really uncomfortable question. You live in one of the most, if not the most expensive place in the United States to live.

[Caller 2]

I know that for sure.

[Dr. John Deloney]

What's. And it's beautiful. It's stunning. Every day is the great. Is a great day and there's a mathematical reality. You are, you are working so hard and what you're doing is so honorable. But you picked a place that very few people can afford to live day in and day out, especially seeking the kind of security you're looking for. That I hear in your voice. What does it look like to pack up and move to Texas or pack up to move to Kansas? I mean, I'm being serious because you can't, you can't afford to live. Yeah. How you're, how you're running.

[Caller 2]

It's crazy because I actually made that. I actually tried to talk to my soon to be wife about that decision to move. Moving, like to Arizona or Texas. Just because I know.

[Rachel Cruz]

Yeah.

[Caller 2]

Since I'm in my field.

[Dr. John Deloney]

I am.

[Caller 2]

And I'll find work out there.

[Dr. John Deloney]

You. You will. But, but, but here's the deal. It's a lesson emotional. It will become a very emotional decision. Make no mistake. But right now you have a math problem. You don't have a work ethic problem. You don't have a, like wanting to love and take care of your. Your soon to be wife and kid and all that. You don't have those problems. You have a math problem.

[Caller 2]

Yeah.

[Dr. John Deloney]

And I'm listening to a man who's working himself literally to death. And every month is a grind.

[Rachel Cruz]

So, you know. Okay, so here's what I would do. Ricardo, as you get off the phone, if I were in your shoes, my goal would be to save $2,000 this month and next month, however that looks. And then in January, I would be putting my car up for sale. If you're a little underwater, I think what that's going to give you is you'll have, you'll keep $1,000 in your emergency fund and then you're going to have $10,000 cash. You're going to use some of that money to pay the difference, get rid of that, use the remainder to go buy a crappy five, six, $7,000 car. Okay, that's gonna that for me. That's step one. That's what you've got to do because this car is killing you. So I would get that out of your life. That's going to free up that car payment and then you guys can start working on building back and figuring out for medical expenses for the spring. And then from there, there you're going to work on paying off the student loans. But that's going to be possibly putting two restaurant jobs together. That's going to be, you know, it's, it may driving. Yeah, it may look like moving. I don't know what that looks like. But those would be my steps car number one, cash flowing. A new car and paying the difference in cash, that would be my number one goal. And then we have to. Yeah. Figure out. Yeah. The lifestyle, which is a really, really, really big decision. But it's one that long term could relieve you guys a lot from the hard work that you're already doing. Welcome back to the Ramsey show in the Fair Winds Credit Union studio. I'm Rachel Cruz with Dr. John DeLoney. You can give us a call at 880-8825-5225. All right, starting us off this hour is Cynthia in Miami. Hi, Cynthia.

[Caller 1]

Hi, how are you?

[Rachel Cruz]

We are doing great. How can we help?

[Caller 1]

Hi. So I'm calling because to get you guys perspective. So we have a house and we are selling it to clear out all our debt that we've been having plus the house. Because when we bought the house, we didn't do it the right way. We didn't put 20% down. It was an older home. There's like a lot of work that needs to get done. So if we are able to sell it, we're able to cash out and then we'll have all our debt paid for and we'll be left with 160k around there left over. So I just kind of wanted to see what you guys think we should do because we were planning on renting for a little bit. So then when we're ready to buy, we'll buy the right way. And also just making sure we'll have money to fix things. And. Yeah. So I just kind of wanted to see what you guys Think. And also, you know, we'll use that money for investing. Just kind of see what you guys think.

[Rachel Cruz]

Yeah, absolutely. Okay, so two questions. One for you selling this house. Cause I just want to clarify. Yes, 20% is ideal for a down payment, but we always say if you're a first time home buyer, 5%'s okay. So I do want to make sure you're not rushing to move out of this house. Is it really drowning you guys financially? Like, you're like, we got to get out. Because sometimes people are like, well, we can just sell, wipe out our debt and we're all okay. But sometimes that doesn't always fix the issue, you know, if you know. Yeah. Does that make sense from like a behavior standpoint?

[Caller 1]

Of course. Yeah. So it does make sense. We actually been trying to pay off a lot of debt, like since we've been together for like about five years. And then the thing is that we keep the house. It'll be an additional 25k because it meets like a roof asap.

[Rachel Cruz]

Okay.

[Caller 1]

AC water heater. And when we bought the house, the money that we had, we fixed it inside. It was like a fixer upper kind of house.

[Rachel Cruz]

Sure. Okay.

[Caller 1]

We didn't do all the major things that.

[Rachel Cruz]

Okay, gotcha. And the end the payments too much and all the, all the expenses that are going to be with it. You're like, it's just too much for us to handle on our income.

[Caller 1]

Yes, correct. So we were just thinking of starting fresh now that we know what we know and we're more, you know, we're more diligent with our money. So we're like, we'll have a clean slate and.

[Rachel Cruz]

Okay. Yeah. How much consumer debt will you guys pay off with the equity?

[Caller 1]

$199,424.91.

[Rachel Cruz]

Oh, wow. What was that in?

[Caller 1]

It was in. Well, the house is 153,000 and then the car, credit cards, all that.

[Dr. John Deloney]

Where are you going to get the $160,000 in equity of selling the house? You only owe 150 on it.

[Caller 1]

150. Yes.

[Dr. John Deloney]

Okay, so you're going to sell it for 3:30, 3:40, something around there?

[Caller 1]

345? Yeah.

[Caller 2]

340. Yeah.

[Dr. John Deloney]

Are you confident that someone's going to come in and buy a $340,000 house that immediately needs a roof and a hot water heater and all that other stuff is actually.

[Caller 1]

Yeah, they already. It's already done. They put in the offer.

[Dr. John Deloney]

Oh, the offer is in and good to go. Okay, cool.

[Rachel Cruz]

Okay, great. So we all have great equity. I mean, you did well whether you're aggressively paying it off or it was just the market, but well done. That's great. Yeah. Okay, so, yep. So you're able to pay off the other remaining mortgage and then about that 40,000, thousand ish dollars of just consumer debt that you have. And then you have 160 left.

[Dr. John Deloney]

160 left or 120 left after you pay your debt off?

[Caller 1]

After. Oh, probably after. I believe. Hold on, let me double check. I think it'll probably be like around like 130. We might have left over possibly paying the customer debt. Okay, I know it's like over on that.

[Dr. John Deloney]

All right, I want you. Rachel's going to tell you what to do with that, but I want you to make me a promise in front of. Okay, Say all of America who listens to this show.

[Caller 1]

Okay.

[Dr. John Deloney]

After you've paid off your consumer debt, this money goes into a high yield savings account and you don't touch it for 90 days.

[Caller 1]

I will make that promise.

[Dr. John Deloney]

You can't buy anything.

[Rachel Cruz]

No new car, Cynthia.

[Caller 1]

No, we do not want nothing. We're actually paying our car now. So we will have this car for a long time and we're going to take care of it.

[Dr. John Deloney]

I know, but that money is going to burn a whole in your pocket. Y' all have to, y' all have to like, like, like, I don't know how y' all do it in your marriage. Spit shake contract. Y' all go outside and etch it into the driveway. Y' all will not touch this money because it is going to be. So you're gonna look up.

[Rachel Cruz]

The cruise is gonna look good in December.

[Dr. John Deloney]

I want you to go to Australia. A buddy's gonna to have a brand new car that he just has to sell. It's such a great deal. Your, your husband's going to want my crypto. Like it's just going to happen. Y' all can't touch this because it's. Otherwise. You're going to sell this house and you're going to find yourself right back in the same situation. I promise you. We've taken this call countless times over the, over the years.

[Caller 1]

Okay, yeah, no, yeah, definitely. That's our goal. Like, I don't want credit cards. I want none of that. Like, if you can't afford, you can't afford it.

[Rachel Cruz]

Yeah, I'm a believer.

[Dr. John Deloney]

All right. I'm trusting you. And you're gonna get struck by lightning or something like that if you spend the money. Okay?

[Rachel Cruz]

No, I've been Looking God's voice himself.

[Dr. John Deloney]

Not one penny. It goes into a high yield savings account and all your, all your friends are gonna be like, oh, my gosh, you can get higher rate. I know this is a spiritual exercise for you guys. Okay.

[Caller 1]

Yes.

[Dr. John Deloney]

Okay, cool.

[Rachel Cruz]

So we're not touching it till February. March.

[Caller 1]

Yeah.

[Rachel Cruz]

For per John's. I think that's great. I think that's a. I think it's a great. I think it's a great principled act. I think that's awesome. Okay, so Cynthia, for you guys, month to month, when you go rent somewhere, if you, if you factor in the new rent plus your life, how much do you guys spend a month? How much you guys need in operating expenses?

[Sponsor/Announcer]

A month?

[Caller 1]

Yeah, so that's actually something we've been working on. So we'll make about like 4700amonth. They arranged to 47 to 5. And what we'll do is now we factor in the rent and we're also like manufacturing our groceries. We've been really like.

[Rachel Cruz]

Are y' all post working, Cynthia?

[Caller 1]

Yeah, we both own a business together, so we're both. Yeah, we both run it together.

[Rachel Cruz]

So how's the business going? Do you see, Is there an upward trajectory of it? Okay.

[Dr. John Deloney]

Yeah, it's going good.

[Rachel Cruz]

Because around, you know, I mean, you guys are 60k ish in Miami. It's not a ton. It's an expensive area.

[Caller 1]

Yeah. So it's, it's good and it's okay. We're not like in Miami. We're around that area.

[Rachel Cruz]

Okay, so, so doable for you guys. Yes. Yeah. Okay, good, good.

[Caller 1]

Yes. Especially since we're cutting off all our expense. Like our, like those bills, like those credit cards are really just what our goal is, is to pay the rent. We'll get our groceries paid.

[Rachel Cruz]

Yeah.

[Caller 1]

Essential bills. And then all that money will be.

[Rachel Cruz]

Able to have kids.

[Caller 1]

We do. We have two kids.

[Rachel Cruz]

Okay, great. Okay, so what I would do for y' all is probably more of a six month emergency fund, which will be about 25k. So I would earmark, you know, around 30,000 of that of your new money just for an emergency fund that you're never going to touch unless you need it. And that leaves about 100K. So I would make that my baby step 3B, because you guys will have no consumer debt. You'll have a fully funded emergency fund. And then I think the next step is getting into a home. Now you guys can start doing retirement. Do y' all have like a sep or do you have any kind of thing within your business. Simple ira.

[Caller 1]

Yeah, we actually have a Roth ira. We've been investing to.

[Rachel Cruz]

Okay.

[Caller 1]

For a long time.

[Rachel Cruz]

Okay. So depending on how quickly you guys want to be back into homeownership would be if I so I would either have that hundred thousand and then start saving on top of that for a down payment. And then if you're not going to buy a home within I would say probably three years, I would start investing as well, 15% of my income into retirement. But if you think you could buy a house in around three years with the amount, you can say I probably would hold off retirement till I'm in the house and then fund 15% of my income into retirement. But if it's going to take longer than three years to buy again, I'd probably go ahead and just do the 15% into retirement and build on top of that down payment. But those would be my next goals for you guys. So yeah. Excited for you guys for this next season.

[Caller 2]

Foreign.

[Rachel Cruz]

Hey friends, our Black Friday sale is live. So if you're already feeling the pressure of holiday shopping, just take a deep breath. You'll find great gifts for everyone on your list. And with prices as low as 6.99, you won't wreck your budget. Pick up bestselling books like the Total Money Makeover or Baby Steps millionaires for just $12. Skip the shopping chaos, friends, but don't wait. These deals won't last. Visit ramseysolutions.com store. So buying or selling your home is a really big deal. And with all the clickbait headlines out there and conflicting data, it's really hard to know what's actually happening in the housing market. So we're here to make the latest trends easy to understand. So the medium home prices have held steady at around $424,000. And in October, in October, about one in five houses saw a price cut, which means that buyers might have more room to negotiate this winter. Which is great if you are looking to buy. Mortgage rates have dipped slightly to 5.49 in October, giving some buyers some breathing room. But since rates are unpredictable, the best time to buy is when you are ready. So if you are out of debt, you have a fully funded emergency fund and a down payment for first time home buyers at at least 5%. 20% is wonderful. Then you are ready to enter the market. So if you want to learn more about the housing market trends and get some free tools so you can buy or sell with confidence, go to ramseysolutions.com markets or click the link in the show notes, if you're listening on podcast or YouTube. All right, let's go to Anthony in Texas. Hey, Anthony. Welcome to the show.

[Caller 2]

Hello, guys. How are you doing?

[Rachel Cruz]

We're doing great. How come? Help.

[Caller 2]

Good. So my question is more a career question than financial. I am a apprentice for a utility company here in Texas. I gross around 150,000 a year. My wife also works. She grosses around 60,000 a year. I'm on the road Monday through Friday, usually about four hours away. I been working a lot of weekends lately. I have a kid doing February, so I'm wondering, Congratulations. Thank you for that. I'm wondering, do I stay here and journey out? And then it's almost like if I journey out, what do I do next? Or do I go ahead and do a career move now and work towards something else?

[Dr. John Deloney]

If you journey out, are you going to be able to have. Have a more local gig or you. Is that just a commitment to be on the road forever?

[Caller 2]

So you can. There is a chance to be local, but everybody else is trying to go local as well. So it's a competition, basically. So I couldn't say a month after I journey out, I'm going to be local. It could be a year.

[Dr. John Deloney]

Well, flip that conversation around. Let me say it this way. Every single friend of mine in Texas who's about my age. Age is talking about the utility boom. It's wild, right? You know this. They're paying you a bunch of money just as an apprentice, right? Yes. And they're paying you to be away from any sort of life whatsoever, right? Yes, there's. There's a premium on that. Right. The question I would ask myself is if I bit the bullet for another, how close are you to journeyman status? Status?

[Caller 2]

Two more years.

[Dr. John Deloney]

That's a long time to be gone. Seven days a week. Here's my question. Is there a possibility that y' all are able to relocate once you get established? Because you're, you're. You're looking at one of those jobs that everyone in the country is saying people need to start looking for.

[Caller 2]

Yes. So I could ease. I could relocate. Yes. I just did buy a house here.

[Dr. John Deloney]

Okay.

[Caller 2]

Um, but in two years. Yes, I could relocate if I needed to.

[Dr. John Deloney]

Is there a way to not have to work weekend? I'm just. Man, it's a tough. That's tough sledding with a. With a brand new baby. Being gone seven days a week for two years.

[Caller 2]

And, and there's some. I just worked 18 days straight before, so, I mean, there's Sometimes I work longer.

[Rachel Cruz]

Yeah. What would you do if you weren't doing this? Do you know?

[Caller 2]

Honestly, I don't know. It's. That's also a problem I have is I don't know what career path to go. Yeah, career path, kind of. Oh, go ahead.

[Rachel Cruz]

Well, is your wife going to go back to work or is it dependent? Is that dependent upon what you're making?

[Caller 2]

She is going to go back to work. She said she'll never quit working, so.

[Dr. John Deloney]

What does she do?

[Caller 2]

She's a nurse.

[Rachel Cruz]

Okay.

[Dr. John Deloney]

So anytime I feel backed into a corner, either I have to do this or I have to do that. One of my personal rules of thumb is I throw a bunch of random ideas on the table. Table just to a prove to myself I don't have to do this or that and give myself some breathing room and maybe another idea will emerge. Here's what I mean. Is there a possibility that y' all go and you're doing this. Not for right now, but you're doing this for 10 year from now, y'. All. Okay. Is there a possibility that she took a 24 month hiatus from nursing and she, she, y' all put her up in the nicest hotels when you travel or are you out in remote, desolate, nowhere west Odessa where there's, I mean, there's nothing on top of nothing. That's an idea. Could she go to travel, nursing and go with you for a season? Is there. I'm just saying throw a bunch of ideas on the table because what I'd hate for you to do is to take what every expert is saying is going to be one of the top jobs in the country for the next foreseeable future. And for two years of misery, you let that thing go. And at the same time, man, working 18 days straight with a newborn is really tough. Although I will say, man, I've got buddies who got deployed right when their wives are pregnant and they miss the first. I mean, it's not ideal, but it's not the end of the world. But yeah.

[Rachel Cruz]

So after the two years, that's tough. After the two years, the job that you'll have, is that what you want to do, Anthony? Like, do you see yourself, yourself being fulfilled in that career?

[Caller 2]

Honestly, probably not. This career kind of just fell in my lap and I took it because it's a great opportunity. Everybody in this area would die for this career. It's just, it just happened to go that way. I just don't know if I want to continue to do it. How old are you at the local 27.

[Rachel Cruz]

Okay.

[Dr. John Deloney]

What'd you do before this?

[Caller 2]

I did insurance. I was like a third party for insurance companies. Okay.

[Rachel Cruz]

Yeah, I would. Man, I would be tempted to explore. We can give you Ken Coleman's book to look at the work you're wired to do. There's an assessment in the back of it, a career assessment that it's actually amazing. That could even jog to John's point as you're starting to kind of think through other options, could maybe, you know, create some ideas of. Oh, gosh, I never thought about this or that. Cause in a per. I mean, right. In everyone's perfect world, which we're all adults and it's not always perfect, is that that you're doing a job that you love and that you are passionate about, that you're good at and you're paid really well. Right. Like that's the. That's the ideal world for 37 year old Anthony. Right. In 10 years, like that's. That's what's ideal. So I want to start moving towards a path to create that. And if this is a job, even though it pays so great and it's such a great opportunity, doesn't always mean it's great for you. But I also don't want you guys to flounder financially by any means, with any of it. Do you guys have a lot of debt?

[Caller 1]

No.

[Caller 2]

So the only debt we have is the mortgage, which is 250,000.

[Rachel Cruz]

Okay. Yeah.

[Caller 2]

I was also able to save 80,000. So I have 80,000 just saved.

[Rachel Cruz]

Wow.

[Caller 2]

In a savings account.

[Rachel Cruz]

Gosh.

[Caller 2]

Because I knew this point was coming.

[Rachel Cruz]

So good.

[Sponsor/Announcer]

Yeah.

[Dr. John Deloney]

That might be another question. Instead of looking at the work, instead of looking at the passion and that kind of stuff, at this stage. Stage. Could you and your wife sit down and agree on a number? I'm gonna do this till we have 150 grand or 125 grand. And while we're doing that, I'm gonna be in my trailer or in my hotel room on my laptop, working like mad to find other work so that when I make this jump, I'm not making this jump into nothing, but I'm making this jump to something. You get what I'm saying?

[Caller 2]

Yes. Totally agree. So. And another obstacle, and sorry if we don't have much time, but another obstacle I have is when I journey out, my pay will be significantly higher. It should be about 250,000. So I don't want to get attached to the money. If I do plan to leave, see.

[Dr. John Deloney]

What I'm Saying, yeah, but your character as it is right now, you're not. I mean, that's not how you're rolling. If you. Because we also talk to people who get this first job, make 120 grand.

[Rachel Cruz]

Okay, can I push back a little bit?

[Dr. John Deloney]

Push away.

[Rachel Cruz]

Yeah.

[Dr. John Deloney]

Okay.

[Rachel Cruz]

But I also don't think he need. They don't need it, though. Like, if you. If they had. If y' all had a ton of debt, Anthony, and no savings, I'd be like, sorry, you. You got to do whatever you can to get yourselves in a good position. Y' all are in an awesome position.

[Dr. John Deloney]

You know, I'm just trying to give them a framework for we're all going to be at peace when we cross. And that might be today. Your wife may look at you and say, hey, we're. We have enough now. We're good now. Yeah, I want you home.

[Rachel Cruz]

But find that number that you're like, this feels right one. Once we hit this number to make a transition to maybe something different.

[Dr. John Deloney]

And I'll tell you this. If you work for dollars, not for the life that dollars can supposedly give you meaning, if you think you're gonna find peace at a dollar amount, you will never catch it. So. But I'm not worried about that for you, brother, because you're already proving you're a person of integrity and stewardship with your money. You and your wife get together and ask yourselves, what kind of life do we want to live? And let's reverse engineer for that.

[Rachel Cruz]

And hold on the line. Christian's going to pick up. We'll get you Ken's book.

[Sponsor/Announcer]

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[Rachel Cruz]

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[Dr. John Deloney]

All right, today's question comes from Mary in Alaska. Mary writes, my husband and I owe the IRS over $90,000 due to property sales. We are currently paying down that monthly. We also have $15,000 in credit card debt, car debt of 14k, and a $250,000 mortgage. We have over $150,000. Oh, God. In precious metals medals and $150,000 in a CD. We are retired and our income is about 7, $500 a month. I want to cash out the metals to pay off everything. Yes. You know why? Because you are wise. My husband wants to keep the medals because the value is increasing right this second. We have no retirement accounts except the CD already mentioned. My husband has been pilfering that account in order to buy more metals. Good gosh. What should we do?

[Caller 1]

You.

[Rachel Cruz]

Okay?

[Dr. John Deloney]

I mean, this is an easy math problem. Precious metals are a speculative commodity. They go up and then they go way, way, way down. And they stay down and they go up. When people freak out, then they go down. Sell them, sell them, sell them today. Because you know what is going only up and more of a tighter and tighter chain around your ankle is, is this IRS debt. Get rid of this stuff now. And you know what's going down in value your cars while that debt stays the same. Your credit card debt is going up because of interest. Just cash the stuff out. But you have a bigger issue here, Rachel.

[Rachel Cruz]

Yeah. I mean, you guys don't have a lot of money, Mary.

[Dr. John Deloney]

Well, Somehow they've got $7,500 a month coming in. I don't know if that's Social Security. I don't know what that is. That's a pension or what.

[Rachel Cruz]

So the consumer debt in the IRS debt. Yes. Needs to be paid completely. Completely. And then I would take Money Once the CD matures, take that 150 out. And then the precious. I mean, you guys will have $30,000 left after you pay off everything. And I would then put all of that into investments. I mean, I would sit down with a smartvestor pro and say, okay, aggressively, what can we do to do this? I would not throw it all at the mortgage right now because I would rather you have some money in retirement that you're slowly paying off the house. But I'm scared, you guys, Mary, that, I mean, you don't. You'll have $150,000 left, basically. And so that, that does worry me. For you guys long term, that's not going to be enough money to retire on. And so the reality is, Mary, you guys are probably going to have to go back to work in some capacity.

[Dr. John Deloney]

Well, they're making 7,500 bucks a month.

[Rachel Cruz]

They only have $150,000 saved in a $250,000 mortgage.

[Dr. John Deloney]

Yeah. They may have to sell that mortgage and way downsize.

[Rachel Cruz]

You may. Yeah. You either downsize and I don't know how much you could get. I mean, I don't know what equity you have in your home. That's an option. Or, you know, for a few years, Mary. Of figuring out, you know, how do we. How do we make some money? Because you guys just don't have enough to cover what debt you have with your liabilities versus what you have. I mean, that's the math.

[Dr. John Deloney]

To me, the scary thing here is your last sentence. My husband's pilfering.

[Rachel Cruz]

Yes.

[Dr. John Deloney]

Our last remaining dollars to buy more precious metals. This is a recipe for a disaster crash. Yes.

[Rachel Cruz]

Yes, 100%. Agree. 100%. Okay.

[Dr. John Deloney]

So you got to address the. The lack of integrity in your husband. You got to address Yalls core marriage issues, because I guarantee this isn't the only place where he's quote, unquote, pilfering things. Y' all gotta get. Gotta get on the same page there and come up with a unified plan moving forward. And I know that's easier said than done. You wouldn't be in these other situations if y' all had been united, moving, moving together.

[Rachel Cruz]

And to your point, John, I mean, if your house was a half a million dollar house and you had 250 in equity and you owe 250, you know, you could get out and go buy a 250, you know, 250 house free and clear. You know what I mean? If you just step down. So be thinking about that long term because I want you guys to be able. Yeah. To be able to breathe. All right, let's go to Stephanie in Chicago. Hi, Stephanie.

[Dr. John Deloney]

Hi.

[Caller 2]

Hello.

[Rachel Cruz]

Hello. Welcome to the show. How can we help today?

[Caller 1]

Thank you. I've been a fan for a very long time. I appreciate what you guys do.

[Rachel Cruz]

Thank you. Thanks for calling in.

[Caller 1]

My question is related to our retirement savings. So my husband and I recently bought what we hope to be our forever home. We sold our starter, and our mortgage has obviously increased, as has the rate. So we're wondering if it's ever okay for us to pull back from retirement savings and just kind of give ourselves more margin for our increase in expenses.

[Rachel Cruz]

What percentage is your mortgage payment on this forever home compared to your income?

[Caller 1]

So I.

[Caller 2]

It's.

[Caller 1]

It's close. It's about 25% monthly income.

[Rachel Cruz]

So where's the rest of your money going?

[Caller 1]

So we do have. Our son does go to private, which is something that it was kind of one of the reasons that we did move neighborhood. So it's very likely that he may be going to, to the local public school next school year. But we also have some repairs to do in this home that were a bit unexpected. And we do have some goals for the future as far as saving for a vehicle and paying off the home faster, which is something that has kind of been weighing on me. I was very comfortable with the mortgage that we had, but we're kind of at odds at whether we should pull back. I'm kind of more on the. I think we should just keep saving where we're at and make it work.

[Rachel Cruz]

And we are doing 15%, putting 15% away. And that's too much is what you're saying.

[Caller 1]

So we're each doing 16%, not including our company match, which is pretty generous.

[Rachel Cruz]

Okay.

[Caller 1]

And then we're, we're also maxing out our Roth IRAs from our take home pay.

[Rachel Cruz]

Okay. Do you know percentage wise, how much of your income is going to all of those? Because that's going to be way more than 15%.

[Caller 1]

I don't.

[Rachel Cruz]

Okay.

[Caller 1]

If we're including our company match, we're both each putting away 24% of our income.

[Rachel Cruz]

Okay. Yes.

[Caller 1]

That's not including the Roth IRAs that we're doing.

[Rachel Cruz]

Yeah, exactly. Okay. Yeah. So yeah, you guys are probably putting too much in retirement. So what we would say is 15% of your income needs to go into retirement. How much does your company match?

[Caller 1]

It's 8% total.

[Rachel Cruz]

8%. Okay. So what I would do is go up to the match and then the remaining percentage that you guys have, I would go then to the Roth, max out the Roth. And if there's any percentages left, go back to your, to the 401k. But I would just, I would just do 15% of your income into, into retirement. You both your 401k, the 8% not including the employer's match. So that's not 16. I don't count the employers as 16. I just count your 8% going in. And then. Okay. And then the remaining 15% take to your Roth IRA. And if you max that out, depending on what you're making, if you max it out, go back to the 401k. Or it may just be enough just to do the 8% and then maxing out the Roth, I'm not sure. So you guys will have to kind of do the math on that. But yeah, I would cut back your retirement to 15%.

[Caller 1]

Okay, so you're saying just do the 8% to match the company and then put the remainder of that into our.

[Rachel Cruz]

Are Roth until you're Roth. Yes, but because how much are you. How much are you guys making a year.

[Caller 1]

Combined? It fluctuates because we both have our base salary and then commission. But I would say, comfortably, it's the most we've ever made. We're at about 160.

[Rachel Cruz]

160. Okay, well, then, okay, so. So the. The max on the Roth this year, I think, is eight. So what? I would. 8,000 each. So again, after you fund that 8%, if 7% of your income left fills up the Roth IRA, then just stop. You guys are good. But again, if you hit that max and you still have one or two percentages left of your income to hit that 15%, go back to the 401k. Does that make sense?

[Caller 1]

Yeah. It's hard for me because I know on paper, like, what we. What we have saved up looks good, but, like, my mind doesn't connect with. With. It just never feels like enough. I think I maybe worry too much about the future.

[Dr. John Deloney]

So what does. What is enough? What does enough mean?

[Caller 1]

You know, I wish that I knew. I think it just boils down to the fact that we both grew up pretty poor and no one in our family had any financial literacy. And I'm always like, you know, we're. I feel like we have a really.

[Rachel Cruz]

How old are you guys? Stephanie?

[Caller 1]

We're both 38.

[Rachel Cruz]

Okay, and how much do you all have in retirement right now?

[Caller 1]

Between all of our IRAs and 401ks, it's just about 500,000.

[Rachel Cruz]

Okay.

[Dr. John Deloney]

Oh, sister, you're good.

[Rachel Cruz]

So what's crazy is, Stephanie, if you just stop right now and don't do anything, your money will double every seven years. Okay, so you guys are going to have millions every time. Right. If you didn't do anything from now, like, if. Even if you just stopped and you're going to continue to contribute 50, so the remaining money that you're going to stop putting in retirement. Yes. Upgrade the cars if you need to and pay the house off early.

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[Rachel Cruz]

Our scripture today comes from Isaiah 66:9. I will not cause pain without allowing something new to be born, says the Lord. Malcolm Gladwell says, a lot of what is most beautiful about the world arises from struggle. So good. All right, let's go to Ryan in Minneapolis. Hi, Ryan. Welcome to the show.

[Caller 2]

Hey, how are you guys doing?

[Rachel Cruz]

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

[Caller 2]

Yeah, I'm just, I had a question. My a relative just passed away and he by default because my father passed away. Me and my brother are set to in inherit what he has left.

[Rachel Cruz]

Okay.

[Caller 2]

Which is a house and a few cars and whatnot. But the only problem is he has a IRS debt of about 120,000. And so we're going to have to sell the house, a cash out refinance to pay for the house. But what I'm wondering about is if me and my brother should sell it or if we should hold onto it. That's what we're kind of at odds about right now.

[Rachel Cruz]

Yeah. I mean, yeah, the IRS lien's gonna. How much is the house? How much is it worth? If you sold it, what would it be worth?

[Caller 2]

Give or take 200,000 probably. Yeah. Somewhere in that, in that range. Yeah. But if it was fixed up, it's worth, it's worth like easily 400,000.

[Rachel Cruz]

It would double in value if you fix it up.

[Caller 2]

Yes.

[Rachel Cruz]

Okay.

[Dr. John Deloney]

For sure, all of this is good, but the glosses over the main question here, which is can you afford to do that? Like if somebody, if somebody drove up here and said, hey, I got a brand new Lexus and it's awesome, awesome. It's just going to cost a hundred thousand dollars and there was a 200, 000 car, that'd be a great deal. But I don't have the money to go buy that thing.

[Caller 2]

Right.

[Dr. John Deloney]

And I'm not, I'm sure I'm going to take out a cash out refi with a house with liens all over it. You get what I'm saying?

[Caller 2]

Okay.

[Dr. John Deloney]

And co share it with A brother who I already have difference of opinion on how we're going to manage stuff moving forward. Like, this is just bad decision after bad decision after bad decision.

[Caller 2]

Okay.

[Rachel Cruz]

Yeah. So the smart thing, Ryan, would be to. You gotta sell, you gotta pay the IRS debt, and then you guys split whatever's left in it. I mean, that. That's the cleanest, smartest way. And then you take that money and then whatever you want to do with money, you know, whether you want to go and save and buy up a rental and have another second home to do whatever, you know, whatever that looks like for you, you can do that on your own terms. But yeah. Yeah, John's exactly right. Sharing a property with a family member is so messy. And then financially, if you're not even in a position to be able to cash flow all of this, then, yeah, it's not.

[Dr. John Deloney]

If your brother wants to buy you out, then let him.

[Caller 2]

Well, see, the only, the only problem is there's also more debt as far as, like, credit cards. And so I pretty sure the estate will. It's going to become insolvent.

[Rachel Cruz]

Okay. Yeah. You may not get anything from it, and that's great. I'd rather be out and not even be near it then. I would not try. I. I wouldn't try to make the deal work. Ryan, do you.

[Dr. John Deloney]

Do you have. Is this an emotional attachment too?

[Caller 2]

Yeah, it's for sure. Sentimental, for sure.

[Dr. John Deloney]

So, dude, like, I'm. I'm all with you on that. What's important about this house to you?

[Caller 2]

Well, it was. It was the house my dad grew up in. My grandpa and grandpa, or my grandpa basically built it. Built the whole thing with his hands. Like, it's all. Everything hasn't been updated since he did it in the 50s and 60s. So.

[Dr. John Deloney]

Yeah. So, like, your, your emotional attachment to this. The C value is very real and Rachel and I don't take that lightly. That's a real pain. That's a treasure. And. Yeah, that sentimental treasure is going to become like a weight around your neck, making it very hard to continue to tread water in an already chaotic time.

[Rachel Cruz]

Okay, do you have. What, what's your financial state, Ryan? Do you have money saved? Consumer debt? Where are you at?

[Caller 2]

No, I'm, I'm fine. No debt. I just got married a month ago and we're, we're about. Yeah, we're, we're. We're. We're fine. Personally, you know, we have. We're on track for retirement.

[Rachel Cruz]

Yeah. Do you have a lot of cash available?

[Caller 2]

Not 120,000.

[Rachel Cruz]

Yeah, yeah. Does your new wife have any? I know she hasn't. Obviously you guys are newlywed but does she have any thoughts in this? Sometimes an outside spouse, you know, that's new to the situation, who's less emotionally attached, has thoughts too. What is, what is she saying?

[Caller 2]

I mean she would, she would like to, for us to own a house eventually and me as well, but she doesn't want to live there until it's fixed up. Understandably.

[Rachel Cruz]

Yeah. And that's going to be more money.

[Dr. John Deloney]

Going into it and everybody who thinks it's going to cost X to fix it up. The rule of thumb is double if not triple that amount of money that you think it's going to cost. You're going to get into a hundred year old home and find out it needs all kind of stuff.

[Caller 2]

Yeah, yeah, yeah.

[Rachel Cruz]

And like you said, if you get into this estate and you keep this asset, it they're going to come after you for, I mean it's, it's just going to be, it's going to be a mess financially of what you're going to have to do to get above water to be able to keep it and make it make sense. And then on top of that, let alone the repairs and everything.

[Dr. John Deloney]

Can I, can I tell you something that I. An experience I had a few years ago. So when I started working in universities, my granddad, who's one of my all time life heroes, one of the greatest men I've ever known, he brought me into his closet and he gave me this tweed jacket cuz it looked like a professor's jacket, had like the brown patches on the elbows and everything. It has never fit one time, it never fit. But I carried that jacket with me everywhere, house to house to house to house. And then one day a few years ago I was packing up to move yet again and I was, I looked at this jacket, I thought of my granddad who'd passed away. I smiled and I put it in the keep pile. And then for whatever reason I turned and I looked at that jacket and I said out loud without thinking about it wasn't some big aha moment, but I just said my granddad is not in that jacket. And then I put my hand on my chest and I said he's right here. And I picked up this jacket that somebody's going to use and it's going to use it well, it will never be me. And I put it in the donate pile.

[Rachel Cruz]

Oh John.

[Dr. John Deloney]

I did. Because it's a great illustration because somebody's going to need that jacket, and I'm keeping it from them by pretending to hang on to a memory that is. Is. Is actually inside of me. And it was sad. It was heartbreaking. And I've got a couple of keepsakes on my desk right now at my house where I'm writing. It's. It's. It's. It's right there. But sometimes these sentimental things, they become. They become bricks we carry around. And, like, it's not like you're calling us and saying, hey, my. My dad steward. His money, well. And his father's money, well, we have a property worth $5 million, and we just want to buy new cars, so we're going to sell. That's not what you're saying, man. You're saying that you got an absolute mess and there's a bunch of heartstrings attached to it. And so, man, I honor that. But, dude, doing a bunch of unwise financial things, especially on the heels of a brand new Marri house, is going to turn into a deep resentment. It's going to further put a. Put a gap between you and your brother's relationship. It's going to begin to build a space between you and your new wife because you're not going to be able to buy the house you want because you're going to have all this outstanding debt on this house. It's just going to cause a mess, man. Just a mess. And also, dude, I get the heartbreak. It stinks.

[Caller 2]

Yeah. Yeah. That's a. That's a. Well, thank you for telling that story. That's.

[Rachel Cruz]

Yeah, yeah. Well. And it's so hard, too, because when it's the right thing to do, even though it's the sad thing, that's. That. That sucks.

[Dr. John Deloney]

Just because. Just because it hurts doesn't mean it's not the right thing to do.

[Rachel Cruz]

Yeah, but that is the wisest path, Ryan.

[Dr. John Deloney]

I hate it for you is that.

[Rachel Cruz]

And I know that it's heartbreaking. And, you know, and it shows, too, how much we talk about this a lot on this show. Our emotions can drive so many decisions. And then we look up four years later and think, what was. Why did I do that? Right? Out of stress, out of fear, out of grief, like, whatever it is. So.

[Dr. John Deloney]

And my fear for him is he's gonna have $300,000 out on a money pit.

[Rachel Cruz]

Yes.

[Dr. John Deloney]

And find himself in a.

[Rachel Cruz]

Stuck there. Yeah. Yeah, I know, Ryan. I'm so sorry. But I hope. I hope that helps. That's probably the answer.

[Dr. John Deloney]

You are able to pay off all the debts and.

[Rachel Cruz]

Yep. And you build a great, great life with your new wife. All right. Well, well, thanks to our wonderful audience here in Nashville at Ramsey Solutions. Thanks to all you in the booth, John. Thank you as well. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.