Short-Term Thinking Keeps You From Building Long-Term Wealth

Summary

Podcast Summary: The Ramsey Show – "Short-Term Thinking Keeps You From Building Long-Term Wealth"

Release Date: June 18, 2025

Overview In this episode of The Ramsey Show, host Dave Ramsey, alongside co-host John Deloney and Ramsey personality Jade Washaw, delves into the detrimental effects of short-term financial thinking on long-term wealth building. Through a series of caller interactions, they address diverse financial challenges, offering actionable advice rooted in Ramsey’s proven financial philosophies.

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Key Discussions and Insights

1. Managing Financial Strains Amidst Personal Challenges

Caller: Managing an Addict’s Spending

• Context: A caller shares struggles with her husband’s addiction, resulting in increased spending on tobacco and marijuana, which has strained their household budget.
• Key Concern: Deciding whether to pay off a $20,000 car loan using available cash to free up $600/month for essential expenses, fearing the freed funds might be mismanaged due to erratic behavior.

Dave Ramsey’s Advice:

• Control Over Finances: Emphasizes the necessity of taking control of household finances by ensuring the addict does not have access to funds.

  • Quote (04:14): "If you're going to call him an addict, you're going to have to act like it."

• Debt Management: Recommends paying off the car loan to eliminate the $600 monthly payment, thereby reducing financial strain and enabling better budgeting for essentials.

  • Quote (06:57): "Paying off the car and working our plan, doing the smart things with it, getting yourself out of debt, using $156,000 to be debt-free..."

John Deloney’s Contribution:

• Addressing Behavioral Issues: Highlights the importance of confronting the addiction rather than just the financial symptoms.
  • Quote (03:33): "That's you. That's on you."

2. Inheritance and Real Estate Decisions

Caller: Inheriting from an Ill Father

• Context: Caleb, faced with $340,000 inheritance from his terminally ill father, seeks advice on purchasing a new home—whether to buy the best house possible or opt for a more affordable option.

Discussion Points:

• Balancing Dreams and Practicality: Ramsey advises prioritizing affordability to ensure long-term financial stability, suggesting making a substantial down payment on a moderately priced home.

  • Quote (11:12): "I would start with what you can afford. And if you have $340,000, I like the idea of putting more than half down on something that's maybe in the $600,000 range..."

• Cultural Considerations: Dave notes potential differences in the housing market between the U.S. and the UK, advising based on U.S. trends where homeowners typically move every six years.

  • Quote (12:28): "If you were in America, I would tell you that your assumptions are BS because the number of times that people stay in a home longer than six years..."

3. Cryptocurrency Investments vs. Traditional Wealth Building

Caller: Evaluating Crypto Holdings

• Context: A caller with $130,000 invested in cryptocurrency is contemplating whether to invest further or liquidate to invest in real estate.

Dave Ramsey’s Guidance:

• Risk Assessment: Advises against investing heavily in volatile assets like cryptocurrency, advocating for more stable and predictable investments such as real estate.

  • Quote (15:11): "They sound like Charlie Brown's teacher. Are you old enough to remember that?"

• Wealth Building Strategy: Encourages reallocating crypto investments to home purchases to leverage real estate as a foundation for long-term wealth.

  • Quote (17:24): "The answer is put it up, put it all on the house..."

John Deloney’s Addendum:

• Practical Application: Reinforces the importance of sustainable and less speculative investments to build genuine wealth over time.
  • Quote (17:26): "How much a month? That's a big one."

4. Financial Alignment in Relationships

Caller: Disagreements Over Finances Before Marriage

• Context: Mike is considering proposing to his girlfriend but faces financial disagreements, particularly her insistence on a prenup while he prefers combining finances.

Key Insights:

• Compatibility Check: Emphasizes the critical nature of financial alignment for marital success, citing statistics on divorce related to money disputes.

  • Quote (22:45): "Money fights money problems, okay? And you are sitting square in the middle of it."

• Pre-Marital Counseling: Strongly recommends engaging in pre-marital counseling to resolve financial conflicts and ensure both partners share similar financial values.

  • Quote (25:06): "It's a no-go forward flag. It's not just a red flag. It's don't go forward until you solve this."

5. Special Needs Family Housing Challenges

Caller: Building a Home for Special Needs Children

• Context: Justin is designing a home to accommodate twin boys with severe disabilities and his own paralysis, facing high construction costs that could consume half his take-home pay.

Financial Advice:

• Sustainable Planning: Advises against committing to housing costs that exceed 50% of take-home pay, suggesting redesigning to reduce expenses or renovating the current home instead.

  • Quote (36:35): "You can't do that. It's not good for you, it's not good for your sons."

• Alternative Solutions: Encourages prioritizing essential expenses and exploring cost-effective modifications or smaller-scale housing improvements.

  • Quote (39:00): "Are you old enough to remember that?"

Emotional Support:

• Empathy and Practicality: Dave acknowledges the emotional toll but stresses the importance of financial sustainability for the family's well-being.
  • Quote (42:38): "I think you do all you can for all your kids. All of us do that. We all love our kids."

6. Career Transition and Debt Management

Caller: Switching Careers to Increased Income

• Context: A pharmacy technician aims to transition into trades like HVAC or electrician but faces potential short-term pay cuts and extended time to reach current income levels.

Strategic Advice:

• Evaluating Trade Viability: Ramsey advises assessing the long-term benefits versus short-term sacrifices, suggesting maintaining current income streams while gradually transitioning.

  • Quote (48:05): "How long is the cut gonna be?"

• Budget Adjustment: Emphasizes the importance of meticulous budgeting and possibly taking on additional work temporarily to bridge income gaps during the transition period.

  • Quote (49:26): "You run a lot of those scenarios out so you don't find yourself in a situation where you think that's the only option."

John Deloney’s Input:

• Flexibility and Sacrifice: Highlights the need for flexibility and willingness to make significant sacrifices to achieve long-term financial goals.
  • Quote (49:30): "There's gonna be some sacrifice in this at some point and you're gonna feel it deeply is my guess."

7. Debt Reduction Before Major Financial Commitments

Caller: Managing Debt While Expecting a Baby

• Context: A couple with student loans and savings for a house questions whether to prioritize debt repayment or purchasing a home before their baby arrives.

Guidance Provided:

• Debt First Approach: Ramsey reiterates the importance of eliminating debt before making significant financial commitments like buying a home.

  • Quote (50:38): "Save it up and keep it aside until the baby gets here."

• Emergency Fund Reinforcement: Advises using any available funds to pay off debts and rebuild emergency savings to ensure financial stability with the new family member.

  • Quote (52:52): "Get the loans cleared, get the emergency fund in place, and then by the house, house."

8. Overcoming Financial Despair and Bankruptcy Considerations

Caller: Considering Bankruptcy Amid Divorce and Debt

• Context: A caller experiencing a messy custody battle and mounting debts contemplates bankruptcy but seeks guidance on managing financial obligations.

Practical Solutions:

• Non-Bankruptcy Options: Encourages negotiating debt settlements and focusing on increasing income through business expansion or additional employment instead of declaring bankruptcy.

  • Quote (57:18): "You're not bankrupt. You're not bankrupt."

• Debt Settlement Strategy: Advises creating a plan to accumulate funds to settle debts in lump sums, thereby avoiding the long-term consequences of bankruptcy.

  • Quote (60:22): "They can just sit there and whine."

John Deloney’s Perspective:

• Focused Financial Attack: Stresses the importance of aggressively tackling debt while maintaining necessary living expenses to regain financial control.
  • Quote (61:44): "If you stack some cash by making money by gearing this business up, getting a job, or both."

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Notable Quotes

• Dave Ramsey: "If you're going to call him an addict, you're going to have to act like it." [04:14]

• Dave Ramsey: "We have the most money stacks come after the bank to have a little war chest," [16:22]

• John Deloney: "Why, if you said you've had several come to Jesus moments and he's clearly not gotten the help, at the very least, have you had the conversation of, well, if you're not going to get help, I need to be in control of the money because you're going to starve us?" [03:56]

• Dave Ramsey: "We didn't change anything for that call. Yeah, very good. Good point." [14:40]

• Dave Ramsey: "We are not going to do something else with it," [14:23]

• Dave Ramsey: "Wake up, stack as much cash as you can, clear these debts, and then figure out your next steps." [18:06]

• Dave Ramsey: "We studied 10,167 millionaires, and 89% are not millionaires because of an inheritance." [107:10]

Conclusion

Throughout the episode, Dave Ramsey and his team underscore the perils of prioritizing short-term financial relief over long-term wealth strategies. Whether dealing with personal debts, marital financial disagreements, inheritance decisions, or career transitions, the recurring theme emphasizes disciplined budgeting, debt elimination, and strategic investment to secure financial freedom and peace. By addressing real-life scenarios with empathy and actionable advice, The Ramsey Show provides listeners with practical tools to overcome financial challenges and build lasting wealth.

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Additional Resources:

• Ramsey Solutions: For personalized financial coaching and tools, visit www.ramseysolutions.com.
• EveryDollar App: Start budgeting for free today to take control of your finances.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today. Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. Jay Wash, our Ramsey personality number one best selling authority author is my co host today. Megan is with us in Chicago. Hi Megan, how are you?

[Caller]

Hi, how are you? Thanks for having me.

[Dave Ramsey]

Sure. What's up?

[Caller]

Well, just quick context. My husband is an addict. He on average spends about $6,000 a year on his addiction to tobacco and marijuana. We've had kind of a rough couple of months. His father passed away, his grandfather passed away. I'm currently pregnant with our third child and taking a toll on him. So I've actually seen his spending go.

[Jade Weshaw]

Up a little bit.

[Caller]

Shouldn't say a little bit. It's kind of doubled in the past couple months. Last month was $700 alone on his addictions. Anyway, that by way of context, my main question is we have a car payment. It's 600amonth. We currently have the cash that I could write a check and pay off the car. The loan is $20,000 and some change and we would still have six months emergency reserve like you suggest. My concern is with his kind of out of control and erratic behavior right now. I'm afraid if I do cut a check, pay off the car and we gain the $600 monthly to help with groceries and other bills, I'm afraid it's just going to go out the window and we can't contribute to savings and things are super tight anyway.

[Dave Ramsey]

So what's your household income?

[Caller]

Right now? It's 156.

[John Deloney]

Does he agree that he has a problem? Is he willing to get help?

[Caller]

He does agree and he says he wants to get help. But I have to say like the come to Jesus talk happens about every two weeks.

[Dave Ramsey]

So. Wait a minute. What. Okay, one more time. What's your household income?

[Caller]

156 a year.

[Dave Ramsey]

Okay. And what do you make? And what does he make?

[Caller]

I'm a stay at home mom right now and so the whole salary is on his side.

[John Deloney]

So if you said to him.

[Dave Ramsey]

Okay, you use language differently than I do.

[Caller]

Okay, okay.

[Dave Ramsey]

If I was to say that my wife was an addict, that would mean that our marriage was either getting ready to end or she was getting help. Next week.

[Caller]

Yeah.

[John Deloney]

How long?

[Dave Ramsey]

But you use this like it's part of the budget.

[Jade Weshaw]

Yeah, yeah, it's.

[Caller]

It has been for several years.

[Dave Ramsey]

Yeah. That's you. That's on you.

[John Deloney]

Yeah. That's that. Why if you said you've had several come to Jesus moments and he's clearly not gotten the help, at the very least, have you had the conversation of, well, if you're not going to get help, I need to be in control of the money because you're going to starve us?

[Caller]

Yeah, I am in control of the money. That.

[Dave Ramsey]

Then how does he get money for pot?

[John Deloney]

Right. How is he getting the money for drugs and tobacco?

[Caller]

He has. He only has access to his paycheck, which goes into our joint account.

[Dave Ramsey]

He has the only paycheck.

[Caller]

Yeah.

[Jade Weshaw]

Yeah.

[Dave Ramsey]

So you're not in control of the money?

[Caller]

Well, we have a joint account that.

[John Deloney]

He has, but when I say you be in control of the money, I.

[Dave Ramsey]

Mean he does not have access to it.

[John Deloney]

He doesn't have access to it because.

[Caller]

He'S not Well, I see what you're saying. I see what you're saying.

[Dave Ramsey]

If you're going to call him an addict, you're going to have to act like it.

[Caller]

Yeah.

[Dave Ramsey]

Otherwise you could just say, my husband smokes some pot sometimes and he drinks sometimes and sometimes and it runs about 500 bucks a month. And I'm not okay with that. That's a different statement than opening the call with, my husband is an addict.

[John Deloney]

Agree.

[Dave Ramsey]

That's what I mean by language differences because I kind of think your husband smokes some pots sometimes and I think he drinks sometimes, and it runs five to seven hundred bucks a month and he makes $150,000 a year. He can actually afford it. It's not really killing your household unless his behavior becomes erratic and he loses his freaking job because he's, you know, so freaking mellow from smoking dope all the time.

[John Deloney]

Okay, on the spectrum from what Dave said, where is he? Where does he lie on that spectrum?

[Dave Ramsey]

I mean, if you, if you want to call him an addict, I'm okay with that. But you're going to have to act like it then for your sake and the kids sake. You don't leave children in the home with an addict for years. Yeah, it's unhealthy.

[Jade Weshaw]

Yeah, I get it.

[Caller]

I get it.

[Dave Ramsey]

So which, you know, you got. You're going to have to re. You're either going to have to reclassify this in your mind or you're going to have to take some more severe action than you have been willing to take so far, because you're not. If, okay, if he drinks a six pack of beer or whatever, I don't know, whatever this equates to. I Don't even know what it amounts to. But anyway. And it's not affecting. He's not drunk and it's not affecting his work life. But you don't like it. That's different than an addict.

[John Deloney]

Yeah, that's the question I have. Is this. Is this just like Dave said, is it a budgetary thing? Is it a thing that you think, hey, you shouldn't be spending money on this. There's better things we could be spending money.

[Dave Ramsey]

You said his behavior, what you mean by that?

[Caller]

Yeah, I guess I didn't want to go into everything, but, yeah, we're here now. Okay, I'm happy to divulge, but was just trying to keep it to the point and.

[Dave Ramsey]

Well, the problem is. Here's the issue, okay? The problem in the household was presented as you have. There's an addiction in the household. And I can't tell you what to do with the car loan until we address the problem.

[Caller]

Okay.

[Dave Ramsey]

Because the problem is. You're right, but you're trying to say, oh, well, not paying off the car, keeping some savings back is going to make this living with an addict. Okay? It doesn't.

[Caller]

No.

[Dave Ramsey]

And paying off the car and working our plan, doing the smart things with it, getting yourself out of debt, using 156,000 to be debt free, living on a budget where you're not worried about food and that kind of stuff? Because you mentioned food. And you shouldn't have a shortage of food in $156,000 household. Even if there's a $700 addiction problem, still, the math doesn't keep you from eating right.

[Caller]

Well, it does.

[Dave Ramsey]

No, it doesn't.

[John Deloney]

What are the other. Mathematically, it does not tell us what we're missing, Megan.

[Caller]

Okay, well, so just this past month, he spent $700 on his addiction. Our mortgage is 3400.

[Dave Ramsey]

Your car payment is 600.

[Caller]

Car payment is 600.

[John Deloney]

What's your take? Home pay every month. Just so I know I'm doing this.

[Caller]

Math with you after all, after bills.

[Dave Ramsey]

After everything is his check. What check? It's the bank.

[Caller]

The check is 393every,900.

[John Deloney]

Twice a month.

[Caller]

Yeah.

[Dave Ramsey]

Okay, you got way too much coming out of this check. You must be putting money in 401k.

[Caller]

Yeah, I know. He's contributing to 401k. I'm not sure what that is.

[Dave Ramsey]

Yeah. Okay, you guys got serious other issues. Hon, y' all need to sit down with a good marriage counselor. And you need to come to a conclusion that this is not an addiction. It is A use and or it is an addiction and the marriage needs to come to an end and the children need to be moved out of the house of an addict. It's not safe for them. But when you, when you're making $8,000 a month, take home pay and you have a $3,000 house payment, you are not out of food because you spent 750 bucks. Now you are going to be out of food if he loses his job because he stays drunk all the time. So I can't tell what the flip's going on here. Let's get real, folks.

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[Dave Ramsey]

Jade Washaw, Ramsey personality, is my co host. Caleb is in London. Hi, Caleb. Welcome to the Ramsey Show. Hi.

[Caller]

Thanks for having me. Really appreciate it.

[Dave Ramsey]

Sure. How can we help?

[Caller]

My father has got terminal cancer. He's got about a year to live and he's decided to give me and my brother some money before he dies for me to buy a house and my brother to pay off his house. So he wants to give each of us $340,000. And my question is, should I try and get kind of the best house for the money I can get, or should I try and just get the cheapest thing is, if you know what I mean, the cheapest house straight out the gate?

[John Deloney]

What else? What's the other picture of your financial situation? Are you out of debt? Is it time for you to buy a house?

[Caller]

Okay, so I've just started the baby steps I will have completed. I'll have my emergency $1,000 by the end of this month. And then I have, then I have $1,600 of credit card debt, but nothing else. Oh, and I rent at the moment. I rent at the moment.

[John Deloney]

So what does $340,000 get you in your area. Is that an apartment?

[Caller]

Is that so? So the low range of houses in my area is $600,000, but I could probably borrow up to $850,000. Now. My kind of gut instinct is to. Me and my girlfriend are very simple people. We don't. When we think of what we'd need in a house, we just want three bedrooms. We don't really care about too much else. So I'm kind of, you know, we don't have children and we're not planning to have children. So it's not like I foresee us having to move, you know, another couple of times in our life. So that's why I'm kind of thinking, should I kind of get something that will be happy with for the long term, or do we just try and get something very basic to start with? I don't know.

[John Deloney]

I would start with what you can afford. And if you have 340, I like the idea of putting more than half down on something that's maybe in the $600,000 range because then you're doing what we teach and above and beyond which is going to put you in a really great situation. Because the truth, you don't know, Caleb, what's going to happen on down the line. Maybe you will get married, maybe you will have a family, and maybe you will want to move up in house. And if that does happen, maybe five to seven years from now, you'll have gained equity and you'll be able to transition out of that house into something more and maybe pay cash for it, because at that point you'll have no payments. Maybe this current house will be paid off. So it does set you up in a. In a really great way.

[Dave Ramsey]

If you were in America, I would tell you that your assumptions are BS because the number of times that people stay in a home longer than six years or seven years in America is almost none. The average house rolls every six years here. And so when someone in America tells me this is my forever home, I call bs. That's never true. Your only forever home's heaven. And so you're not going to be there forever. That's just a bull. And so I don't. But I don't know the differences in the UK and in London whether that might be. You might be there a long time. I don't know. That would be a cultural difference, is what I'm saying, that it's possible. I'm not familiar with, but I'm with Jade. I think you get into something that you know you can afford your Dad's. It's one of his last wishes that you have a home. It all needs to be in your name since you're not married. Again, I don't know UK law, but in the States you don't put girlfriends on houses. Okay, well, we. Not when Daddy gives me the money.

[Caller]

We do plan to get married. I mean, I.

[Dave Ramsey]

Well, that would be after you get married. That sure. Name could be on the house then. Because again, I'm going off of US Law and I can't. I don't know what divorce law looks like there and all that kind of stuff, but in the States, it's suicidal to put your girlfriend on your house or your car. You're asking for trouble.

[Caller]

There was one other related question I had to this, and that was whether I had the idea.

[John Deloney]

It looks like you fell off. But I saw the other part of the question. It looked like you wanted to possibly invest the money.

[Dave Ramsey]

No, I would put it in the house because this is what. It's his dad's money. His dad's giving it to him. It's his last wish in his last year of life, buy a house. Yeah. That's not. No, I'm not going to do something else with it.

[John Deloney]

Yeah.

[Dave Ramsey]

And I think you're right. I think you buy a conservative property. In his case, that sounds like it's 6, 5 or 600,000 with 300 down, and then go ahead and get it paid off and put it in your name.

[John Deloney]

And that isn't going in step with the baby steps. 3B is when you would save up the down payment for a house. In this case, it was gifted to him.

[Dave Ramsey]

We didn't change anything for that call. Yeah, very good. Good point. Dan's in Philadelphia. Hi, Dan, how are you? Hey, Dave, how are you? Better than I deserve. How can I help? All right, I had a quick question. I have about $130,000 in crypto. I'm sorry, can you hear me? Yeah, I'm sorry. Oh, sorry. I have about $130,000 in crypto.

[John Deloney]

No, but he's sorry that you have the money invested in crypto.

[Dave Ramsey]

Okay.

[John Deloney]

It was a joke, but not really.

[Dave Ramsey]

Okay. I've made out pretty well on the investment, and after newly listening to your show and hearing what you have to say about cryptocurrency, I'm starting to get a little scared with it.

[Caller]

Yeah.

[Dave Ramsey]

So also at this time, I'm looking to buy a house. I was wondering, do I, when I go to sell that cryptocurrency, do I put a large majority of it towards the house or would I sell it and keep some kind of like. And have a large nest egg? Good for you. Okay, the only, the only thing I want to change in the conversation is I want to change the word investor. Because you don't invest into commodities that are new and don't have a history. You speculate. So you're a crypto speculator. And there's people that have made money speculating in crypto, but it's a short term play, it's not a long term play, and it's very volatile. And so, yes, I would a lot rather, based on all the data we have on wealth building, the number of people that bought homes that became wealthy far surpasses the number of people that became wealthy in crypto.

[Caller]

Okay?

[Dave Ramsey]

So if I were you, I would take the money out and put it into something much more predictable, much more stable, which would be a good home purchase. And yes, I'd put it all in the house because we're going to lead you. And if you've been around this for more than five minutes, you know we're going to lead you out of debt, because then you get control of your most powerful wealth building tool, which is your income, and it's not crypto. Your income is your most powerful wealth building tool. And you go use that to become very wealthy. Once you get the house paid off, and you get the house paid off faster by putting the whole thing down. Sure, you're debt free, emergency fund, and you have an emergency fund of three to six months of expenses. And then we put everything else we have above that on the house, as big a possible down payment as you can. So the last two calls bring up the exact same point, and that is, wealthy people do not see mortgages as forever middle class. And poor people see mortgages as forever. Wealthy people ask, how much? Poor people ask, how much down, how much a month?

[John Deloney]

How much a month? That's a big one.

[Dave Ramsey]

And so if you're going to get your mortgage or your house based on how much down, how much a month, you're thinking like poor people. You're thinking, I want to be a slave to the bank the rest of my life. Wealthy people, if they take out a mortgage, detest it, hate it, fight to get it paid off, and then when they do, they yell, I'm debt free. Okay? And this is the path of the wealthy, not just Ramsey people, but when we study millionaires, this is what they do. And millionaires have a mindset that is long term and it is very freedom Oriented.

[John Deloney]

That's right.

[Dave Ramsey]

Free from control by other people. One of the reasons people build wealth is it gives you margin. It gives you distance between other people telling you what to do. If you have a million dollars in a mutual fund and you have zero debt and your boss walks in and starts cussing you, you can just walk off. Where are you going? I don't have any payments. I'm not putting up with you. Bye. Right, but if your boss starts cussing and you have payments coming out your ears and a student loan that's been around so long you think it's a pet, right? Then you'd be stuck in a toxic job because you got to eat and stuff. But you put yourself in that corner, you painted and painted and painted and painted and now you're standing in the corner and you're gonna get paint on your shoes. That's it. And so this is the thing. So the both of those calls, you know, should I invest it instead of putting it all down on the house? Both of them said that. 340 from dad, 130 from crypto. Should I invest some of it or put it all on the house? The answer is put it up, put it all on the house. And right in the four column of the check. Freedom.

[John Deloney]

That's right.

[Dave Ramsey]

This is an investment to freedom. Because freedom is where wealth comes from. It doesn't come from stepping up to the bank and kissing their butt. And poor people kiss banks butts their whole lives. And it's the borrower is slave to the freaking lender, period. Let me tell you something. Most home security systems don't work until after someone breaks in. That's like putting your seatbelt on after the wreck. It's too late. And that's why I recommend SimpliSafe. Their active guard outdoor protection helps stop break ins before the they happen. Their AI powered cameras work together with live Simplisafe agents to monitor your property in real time. So if someone's creeping around your house, those agents can talk to them, trigger the spotlight and even call the police right then and there. It's proactive protection, not just a dressed up burglar alarm. Plans start at around a dollar a day. There are no contracts and no hidden fees. And they offer a 60 day money back guarantee. So see why over 4 million Americans trust SimpliSafe? See why Newsweek and USA Today both ranked SimpliSafe number one in customer service and why CNET named it the best home security system of 2025. Plus right now you can get 50% off a new SimpliSafe system with 24. 7 professional [e-mail]. that's 50% off. At SimpliSafeDirect, there's no safe like SimpliSafe. Mike is in Pittsburgh. Hey, Mike. Welcome to the Ramsey Show.

[Caller]

Hey, Dave. How you doing?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

All right, so I'm 36, or about to be, and I want to propose to my girlfriend. But we disagree on finances. We agree on everything else, but the problem is I want to combine finances. She has a rental property, and I have a house. I just sold a piece of land that I'm gonna walk away with180,000, and I want to pay off my house. I have a budget made, a budget. It's paid off in about four years, and I want to rent it out and then buy a bigger house with her. And, you know, I talked to her about, you know, paying off my house quickly and then throwing a bunch of money at her rental and pay that off faster. So we have, you know, more cash flow coming in from the two houses. Well, she wants, you know, say, if we do get married, she wants to sign a prenup, which, you know, I don't agree with, and I see no reason for it because, you know, your.

[Dave Ramsey]

Asset base is fairly similar.

[Caller]

Right.

[Dave Ramsey]

So you're not. You're not ready to propose.

[John Deloney]

Is her family.

[Caller]

No, no, my family's got her feet on that half.

[Dave Ramsey]

Hey, Mike, how long y' all been dating?

[Caller]

About eight months.

[Dave Ramsey]

Okay. All right. You've got some more work to do on this relationship before it becomes a marriage. And here's why you called nascar opinion. So I'll give you my opinion. I'm going to treat you like you're my kid because my kids are your age, okay? And the number one cause of divorce in North America is disagreement over money. Money fights money problems, okay? And you are sitting square in the middle of it. And here's the problem. Jesus said, your treasure's where your heart is. People spend their money on what they value. And Dr. John DeLoney says, behavior is a language. And so when she says, I don't like your plan, I don't like it so much that I want my stuff to be separated in a prenup. What she's saying is, I don't agree with how you're spending your money. And our value systems are not aligned. You value different things. And if you want to go super extreme, she likes her rental property more than she likes you.

[Caller]

Right?

[Dave Ramsey]

That's that's super extreme. That's super.

[Caller]

I think she's kind of shorts. Yeah. I think she's sort of short sighted in her views because, yeah, she. All she has is her savings, which is 160 grand.

[Dave Ramsey]

She says this is not a dollar amount thing. This is a power struggle and we're not aligned on our values because you spend your money on what you value and you value different things than she values. This makes for a very long and uncomfortable life if you stay married, and you probably won't statistically. So you guys have got to continue to have this discussion until we can come to some kind of mediated agreement on what we're going to do with our lives and that we like each other, we love each other more than this stuff.

[John Deloney]

Yeah. Because the, the response to conflict can't be, well, then I'm just gonna take my stuff over here, I'm gonna take.

[Dave Ramsey]

My toys and go home.

[John Deloney]

The response is let's enter into it and figure out where we both stand and how we can do this together. So that's. To me, that's a red flag.

[Dave Ramsey]

It's no. It's a no go forward flag. It's not just a red flag. It's don't go forward until you solve this. I'm not saying you have to break up with her, but I. Please do not get engaged and get married. Because you're. Statistically, you have almost no chance.

[Caller]

Right. I think a lot of it comes from her mother. You know, her mom's always raised her. Once you have kids, your life is over. Even though she wants to have kids. And then her mom, you know, she kind of has the outlook of, you need to like her mom. You need that money to run away if something goes bad.

[Dave Ramsey]

Yeah. Yeah, that's it. There we go. So we're already planning. We're already planning our exit and we hadn't even gotten to the altar.

[Caller]

Yeah. And she said she goes to therapy to work on all that because she doesn't agree with her mom and she doesn't like that outlook. But I think, you know, we always say the app will never, never fall far.

[Dave Ramsey]

Well, it hasn't yet. It hasn't yet.

[John Deloney]

It can roll away over time.

[Dave Ramsey]

It can, it can, but it hasn't yet. But so, so because she's functioning in exactly the same fears, this. As soon as you bumped into. We're going to be closely and completely knit together with the restructuring of this situation after we get married. The thing you proposed was very interwoven. It violated this. Keep things separate. So I can bolt thing. And she retreated to a prenup. And all of that is. It's not an issue of the prenup. It's not an issue of the real estate. It's an issue of how the relationship's going. And it says you're not aligned. There are four things that if you're aligned on them, statistically you will have a 90% probability of your marriage lasting. Money in laws. Oh, wait, mother's involved. Okay. Children. Oh wait, we're already talking about that. And possibly disagreed. Okay. And oh wait, religion. That's the only one of the four we hadn't got to. And you've got to get some alignment on those things. So you guys have some work to do on the relationship. I would suggest some good pre marriage counseling and see if you can begin to not only discuss where these fears and values come from, but which of them we're going to keep and which ones we're going to take forward into the end of the marriage. It could be that you're a little uptight and spreadsheet dude, nerd dude. And you need to loosen up on that. That might be. I didn't hear that. But it could be. If you were going to fall on one side or the other, that's the side you would fall on. Based on talking to you. Yeah, it sounded like that, but it didn't sound toxic. But I think you scared her.

[John Deloney]

Well, I think what it sounded to me like what she was dealing with was fear based and it wouldn't have mattered who the guy was.

[Dave Ramsey]

That idea of the propos of the interwoven freaked her out.

[John Deloney]

Freaked her out. Yeah.

[Dave Ramsey]

And so. And so it's not the. It's not a discussion of the validity of prenups. It's a discussion of the proper way to do marriage. Relationships for statistical probability of success.

[John Deloney]

Right. That's right.

[Dave Ramsey]

Hello. I mean that sounds like. No romantic at all, but there you go. So. Because, you know, I got, you know, 43 years. I'm in. You want the statistical probability of success. It's really, really good.

[John Deloney]

Yeah, I agree.

[Dave Ramsey]

You want to be where I am. It's sweet. I got eight grandbabies. I got three wonderful people have married my children that I love dearly. I actually like them all. That's so weird. You know how we're.

[John Deloney]

That is weird.

[Dave Ramsey]

That means I raised children to pick. Well. Okay. And so the whole family actually got together Sunday night. We had a blast.

[John Deloney]

Oh yeah, I saw some of the videos.

[Dave Ramsey]

Yeah, yeah. Dunking them. Yeah. The whole Bit So the, I mean, but I mean, that's, that doesn't, that's not an accidental thing.

[John Deloney]

Well, let me ask you this because I don't want to put a broad blanket over it, but I kind of feel this way. Don't you feel like when you're dating, like when you're in that phase between dating, about to get engaged, don't you think it should be easy?

[Dave Ramsey]

It's been so long, I forgot.

[John Deloney]

Like, I just feel like I'm like, man, to have these level of disagreements and fights like that, almost 36. Feels like that's true.

[Dave Ramsey]

I was 22.

[John Deloney]

Yeah, I was 22.

[Dave Ramsey]

We got married. I was 22. So I don't have anything to put that on. He's been single a long time.

[John Deloney]

Yeah. Standards are high.

[Dave Ramsey]

You got two older singles. They have, they're more entrenched.

[John Deloney]

That's true. That is very true.

[Dave Ramsey]

When you're 22, it's like, yeah, whatever. Right. But, or at least it was for.

[John Deloney]

Me and for me too. Now that I think back, I'm like, okay, that's why I said, I don't want to make it a broad statement.

[Dave Ramsey]

But it's very important to be aligned on those four things. And if you combine that with a six month or so engagement period, minimum maximum of a year or year and a half, and you combine that with pre marriage counseling, those six things combined will put you in the 90 percentile that you'll still be married 25 years later.

[John Deloney]

Yeah, I believe it.

[Dave Ramsey]

And so pre marriage counseling aligned on those four things and a reasonable length of engagement, not too long, not too short. And the data, that's all from research folks that's studying the actual divorce stats. 50% of the marriages end in divorce. Yeah. That includes all these people that should not have gotten married in the first place because they didn't do any of those things I just talked about. And if they did them, they would have run away. That's right, run away. Like Jeff Foxworthy said, when I was a kid, we had a cat and it tore up mama's curtains. And the next day that cat ran away.

[John Deloney]

Oh, oh, yeah.

[Dave Ramsey]

So you run away, you go to.

[John Deloney]

The farm.

[Dave Ramsey]

You go to the train station, you run away, you run. So I don't think that's where the stage that he's at. I don't think Mike's at that stage.

[John Deloney]

No, he's got a lot of stuff.

[Dave Ramsey]

But he is at the, as the teenagers used to say, the define the relationship stage.

[John Deloney]

Yeah, they got a lot of thinking.

[Dave Ramsey]

And decisions to make on this PTR right now. And you're gonna have to sit down probably with a good pre marriage counselor and help you work through that. She's probably a keeper. But not. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something.

[Advertiser]

Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

[Dave Ramsey]

That's a gut punch. And.

[Advertiser]

Oh, you're telling me. And for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them.

[Dave Ramsey]

Me too.

[Advertiser]

They don't know what to do next.

[Dave Ramsey]

Me too. I mean, you're gonna have a crisis here and you know, you got two options. While you're sitting and talking to a young widow, she's concerned about how she's going to invest all this money properly and not mess this up or she's concerned how she's going to eat tomorrow.

[Advertiser]

That's exactly.

[Dave Ramsey]

These are the two options. And take care of your dadgum family, man.

[Advertiser]

Term life insurance can replace income, pay off debts, cover funeral exp. So your family can actually have the opportunity to just be sad, to just miss you.

[Dave Ramsey]

That's exactly what it's supposed to be. It's saying I love you to your family. Term life insurance Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. If you're tired of living paycheck to paycheck and you make too much money to be this broke and you wonder where your money's going, well, the first step is getting a plan. It's called a budget. Our team is hosting free budget trainings this month to not only show you how to do a budget, but show you how to get out of debt and become wealthy and outrageously generous. You'll learn step by step how to make and stick to a budget using every dollar plus you can get your biggest budgeting questions answered in a live. Q and A. Spots are limited. Sign up for [e-mail] webinar. Justin is in Madison Wisconsin. Hey Justin, what's up?

[Caller]

How are you sir? I am looking at building a new house for my family and I'm just worried about the mortgage on it and the monthly cost and what that will kind of look like for our considering we have a little bit of a unique situation.

[Dave Ramsey]

What's the unique situation?

[Caller]

So I have twin boys, my wife and I that are turning five years old but they both have semi severe disabilities and we are outgrowing our current house and we need a bigger house. But due to the things that need to be in this house, the size of it, etc. It is not going to be a small house and it won't be necessarily cheap. And I think that the monthly payment will be about half of our take home pay.

[Dave Ramsey]

What is the nature of their severe disabilities?

[Caller]

So they were both born. Well, they're twins obviously they're both born at the same time. They were born three months premature. One having a significant brain bleed which has caused fairly severe cognitive and physical delayments. And then the other one has a condition called central core myopathy. Sorry. Yeah, he's on a ventilator and requires pretty much 247 constant care. We have like some day nurses and night nurses that are able to help us out but on the times they're not here know one of us kind of has to be with him 247 so sleep in his room with him. They both need to be picked up, you know, carried wherever they need to go. So their bathrooms are going to need to be bigger, bedrooms are going to be need to be bigger than standard size things like ceiling mounted hoyer lifts. We need a larger garage because the van, you know, has a fold out ramp, all sorts of that kind of stuff. And actually I'm also paralyzed so.

[Dave Ramsey]

You're paralyzed?

[Caller]

Yes sir. Yes, I was paralyzed at the age of 12 and I work in actually the architecture field. I'm a designer and so I've designed the house and there's nothing fancy in it. No granite countertops, no hardwood floors. Trying to make this as affordable as possible but with current construction prices and interest rates it's looking like it'll be about half our take home pay.

[John Deloney]

What does your wife do?

[Caller]

She's a teacher.

[Dave Ramsey]

Okay Justin, I can't imagine what y' all are facing. The, the just the day to day grind of care in your home is. It's overwhelming and so I want nothing but good things for you my friend. And the last thing I want for you is a house payment. This 50% of your take home pay. It will add to your stress, not relieve it.

[Caller]

Yeah.

[Dave Ramsey]

It'Ll be, it's a deal breaker. You simply cannot do that. It's not good for you, it's not good for your sons. While the picture you have in your mind of them being in a better situation for care is 100% noble and valid, you've undone all of the advantages of all that care by putting your family in a bankruptcy scenario. And so you just cannot, you just cannot function. When Your house payments 50% of your take home pay. It will not work. It's not sustainable. You can't eat everything that you do. From this point forward, any other things you do with your life will be new debt and the debt piles up because you've destroyed what economists call disposable income. There's no room left in your budget for life. You become what we call house poor. And so what we've got to do, and I don't know how to do it on a phone call, on the radio, on the podcast, but what we've got to do is we have to solve for a better living situation that doesn't break your family because you got two options right now and both of them suck. Staying where you are in an untenable physical condition situation with all the things you guys are facing. And the other option is bankrupt your family. And you don't get a pass on math because of tragedy. You don't get a pass on math because of unbelievable, heartbreaking challenges that you guys are facing. So I'm not diminishing those things at all. But the math will catch you and make your life worse. And I don't want that for you, my friend. So, I mean, what you've got to talk about is, okay, what, what elements of the square footage are we going to do away with if we build to get the price down to where we can do it, or do we take some money and just start renovating where we are and create a more tenable situation there is on the twins. Can I be. You've been very kind to give us all the information and this very hard information. Can I ask a hard question?

[Caller]

Yes, sir.

[Dave Ramsey]

Is the life expectancy on the twins long term.

[Caller]

For one of the boys? Yes. The brain bleed probably has no, you know, effect on his long term life. He'll just need assistance and care throughout life.

[Dave Ramsey]

The.

[Caller]

My other son.

[Dave Ramsey]

That's why, that's why, that's why you couldn't get those words out when you were talking about him, right?

[Caller]

Yes, sir.

[Dave Ramsey]

Yeah. Okay, that's fair. I Don't. I don't blame you. I can't breathe. I can't breathe. And I just met you, so I get it. Okay.

[Caller]

Yeah, they, they don't know a ton about the condition.

[Dave Ramsey]

And so.

[Caller]

Yeah, it's hard to predict.

[Dave Ramsey]

Oh, I, I, and I, and I don't. I don't want to be indelicate, but you also don't want to. Gosh, I don't even know I'm going to say it just because I'm supposed to, but you don't put the family, the entire family in jeopardy to build a room out where there's not good life expectancy. And that's not fair to the rest of the family. And that sounds very cold and like, I don't care about the kid. That's not what I mean at all. But I'm stepping back. And you called for us to love you. Well, to be kind to you and tell you the truth. So I think you do all you can for all your kids. All of us do that. We all love our kids. And everyone listening right now's heart is broken and is praying for you guys right this second. And I want you to do something that has a good long term plan for your family. So we got to reset your plan to where it's not 50%. And I don't know what else to tell you. I do know we'll put one of our financial coaches over there to help you at our cost. We'll pay for them and get them in your corner and see if they can give you a better answer than Jade and I were able to do here on the air.

[John Deloney]

I mean, I. If he's designing this house, I wonder if there's a way he can design something that's a little less upfront but provides the space over time to do.

[Dave Ramsey]

The things they need. You know, the thing we designed was be the best for every single thing. But something's gotta give. So let's start force ranking these features in the house. And what features in the house can we cut back on that? Cut the cost down.

[John Deloney]

That's right.

[Dave Ramsey]

And I did that, but for much less noble reasons. When I built the last house, we drew it up and we went, I don't think so. So I think we're not gonna do that. And we're not gonna do that. And we're not gonna do that. Cause it got in the stupid zone, you know?

[John Deloney]

Right. Which is tough when everything seems like, like a necessary item.

[Dave Ramsey]

Yeah. When this is all but that. And my stuff was more like little Selfish little boy stuff. Not no bull dad. Taking care of kids stuff. And what a wonderful man.

[John Deloney]

I know. Wow.

[Dave Ramsey]

You're a good dad, Justin. Yeah. You hang on and I will hook you up with one of our coaches and see if we can walk with you through this and see if we can be of service to you. And I hope I wasn't unkind to you. I didn't mean to be. Wow.

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[Caller]

Insured by the NCUA.

[Dave Ramsey]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. Jade Wash all number one best selling author Ramsey personality is my co host. Today Dylan is in Dayton, Ohio. Hi Dylan, how are you?

[Caller]

Good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

I'm looking at switching careers and I'm just trying to make it make sense financially because I need to go up in income but I cannot do that where I'm currently at. But I don't know how to get somewhere better without going down first, which I can't afford to do.

[John Deloney]

What are you doing now versus what you want to do right now?

[Caller]

I'm a pharmacy tech and I wanted to transition into the trade either like H Vac or electrician or something like that.

[Dave Ramsey]

What are you making? What do you make now?

[Caller]

I'm making about 24 an hour. So there's some overtime opportunities and that's kind of how I'm getting by.

[Dave Ramsey]

So the. So an apprenticeship and H Vac doesn't pay 25 an hour.

[Caller]

Everything I've looked around, I put in a couple applications and they're paying 17, 18 around me right now.

[Dave Ramsey]

You single?

[Caller]

No, I'm married.

[Dave Ramsey]

What's your wife, Mike?

[Caller]

She's working part time as a pharmacy tech right now, so she's bringing home maybe 1300amonth.

[Dave Ramsey]

How many kids you got?

[Caller]

One. And hopefully one more soon.

[Dave Ramsey]

Okay. All right. Are you. Are you saying you're hoping to add to your family or. She's pregnant.

[Caller]

We had a miscarriage recently.

[Dave Ramsey]

Okay. So someday. Okay. All right, I'm sorry. Okay.

[Caller]

It might be coming up here.

[Dave Ramsey]

So, you know, I think the trick is how long are you at $17?

[Caller]

Yeah. So I looked into like the electrician union close to me and maybe paying 16 to start. And that would be after four years I'd get back to where I am now.

[Dave Ramsey]

Okay. Doesn't sound like a good trade.

[Caller]

No. Well, and then after that, you know, you'd be making 38.

[Dave Ramsey]

Yeah. It still doesn't sound like a good trade. So I think I'm going to keep looking. I think I love the idea of the trades, but. And you probably could actually get into something where you're making what you're making now, starting out. If you keep poking at it now, it might not be a union gig, it may be something else. Union gigs are pretty well set. They're going to be what they is.

[John Deloney]

What caused you to choose H vac.

[Dave Ramsey]

Or intellect or electrician?

[Caller]

I love working with my hands and like doing something physical. I never really intended on becoming a pharmacy tech. I just kind of ended up in it as a story. But I'd much rather be.

[Dave Ramsey]

Well, if you could find something where you, you know, 18, 20, or even what you're making now, if you find something you're making now, it's a no brainer. Go do it.

[Caller]

Yeah. Yeah.

[Dave Ramsey]

Okay. But every time you take a cut, then how long is the cut gonna be? It's a step back to take steps forward. How long is it? And four years doesn't work for me. One year. One year. One year works for me. And you work weekends as a pharmacy tech to make up the difference.

[John Deloney]

Do you have a. Do you have an every dollar budget?

[Caller]

Yeah, I got it pulled up right now.

[John Deloney]

Okay. So I'd play some games on that and find out what's, you know, figure out these numbers. What's the lowest amount you can live off of? What does that look, she's pregnant. Like run a couple of different scenarios based off of your life now, what you think it could become, what happens if she gets pregnant again and there's another child and you know, she's working part time. Run a lot of those scenarios out so you guys can get a clear picture of what this will be and what it can look like in all those different scenarios.

[Dave Ramsey]

But the price you pay might not be a pay cut. It might be a per hour cut, but an increase in hours. You might be working pharmacy tech and some, and you might be working your 40 hour on the new gig, 18 or 20 or 19 or, or whatever it is, but you make up the difference with some overtime. Keep your part time, keep the pharmacy tech job part time and you put in 1300 and she puts in 1300 and then you make the other money and you end up making more. But you're going to be working all time and that's the price you pay to make this transition.

[John Deloney]

And you have to have those non negotiables set in stone.

[Dave Ramsey]

Yeah, that's why four years doesn't work.

[John Deloney]

That's what I'm saying. You have to set in stone. Hey, no matter what, we're not going, we're not using credit cards, we're not going into debt. There's no debt. That's going to be part of this transition. And you guys need to agree with that on the forefront. That's why I said run those scenarios so you don't find yourself in a situation where you think that's the only option.

[Dave Ramsey]

Yeah, you don't back yourself into a corner. Yeah, exactly. That's a good point because it'll not go well. But is it okay to sacrifice to win 100%? Absolutely. But we have to sacrifice a reasonable amount to win an unreasonable amount. Yeah, that's what we want to do. So yeah, if you want to move towards the trades, the trades are a good place to be right now and the pay is really, really good and there's a lot of demand and I think I'd keep pushing around, keep checking again. Just because the union thing doesn't work doesn't mean that there's not another way to doing this.

[John Deloney]

Yeah, there's gonna be some sacrifice in this at some point and you're gonna feel it deeply is my guess. My pastor used to say highly successful people tend to be highly sacrificial people. There's just a part that goes with it.

[Dave Ramsey]

So, yeah, no discipline seems pleasant at the time, but it yields a harvest of righteousness.

[John Deloney]

Yeah, that's right.

[Dave Ramsey]

Exactly. All right. Kula is with us in New York. Hey, Kula, what's up? Hi. Hello. Hi. Can we help?

[Caller]

Yes. I definitely a big fan of your show. I did have a quick question. So me and my wife are expecting a baby in the next couple months. Specific. But we're trying to be wise with our money and trying to be. Just be better at our money, especially as this baby's coming. But we do have student loan, and we do have around 25,000 saved up for a house. Is. It's the question that I have is, should we just focus on that loan before this baby comes or start looking for housing with the baby on the way?

[John Deloney]

That's a good question. I mean, the order that I would do this, knowing that the baby is coming, I would start putting aside a lot of money, but I wouldn't pay it towards the debt or the student loans yet. Save it up and keep it aside until the baby gets here. Really nice and healthy and everything's good, everybody's home. And then that money, I would walk the baby steps with it. Whatever you have saved. Plus the 25,000. Yeah. I'd knock that down to a th.000 in baby step one. And then everything less left, I do baby step two, which is your debt snowball. How many student loans do you have? How much?

[Caller]

Just. Just one. That's the only debt we have. And then to kind of back $51,000.

[John Deloney]

51. 51.

[Caller]

61.

[John Deloney]

61. Okay. Yeah. So I make that the goal for the next nine months. Can we save up another 25,000 or more? And then when the baby comes, can we virtually knock out these student loans? And then after that, yeah, we're saving up three to six months. Here's what I don't want. I don't want you to buy a house after this baby is born with a bunch of debt and no savings. No.

[Dave Ramsey]

If you have to buy an extra bedroom for Sallie Mae, you did it in the wrong order.

[Caller]

Yeah.

So we do.

So I did save up for the baby and the mom for the last couple months. We have around 18,000 just for the baby and the mom until the whole thing kind of clears. And we do have an emergency fund of $25,000.

[Dave Ramsey]

I want to save up enough that when the baby comes and comes home, like Jade said, we write a check the student loans, gone, we rebuild the emergency fund. Then we save up a down payment for the house. And that's the process that we use. Don't. Do not buy a house. It's wonderful having a baby come and it's wonderful that that's your wake up call and you're like, I got to get my crap together. Good for you. You're gonna be a good dad. Now do it in the right order. Don't go buy a house with a student loan of 61,000 hanging around your neck. That's wrong order. You're gonna get yourself in a mess. Get the loans cleared, get the emergency fund in place, and then by the house, house.

[Advertiser]

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[Dave Ramsey]

Id 1591inmlsconsumeraccess.org Equal Housing Lender, 1749 Mallory.

[Advertiser]

Lane, Suite 100, Brentwood, Tennessee, 3702.

[Dave Ramsey]

You know, sometimes investing, when you sit down with an investing professional, they sound like Charlie Brown's teacher. Are you old enough to remember that? Yeah, that's it. Your investing professional needs to speak in clearly discernible English so that you know what they're saying. They're there to teach you, not to impress you. You're supposed to know as and understand your investments before you do them. And if you're a complete beginner or you're looking for next level strategies, go to ramseysolutions.com investing or click the link in the description and we'll help you with the whole process. John is in Atlanta. Hi, John, how are you?

[Caller]

How you guys doing?

[Dave Ramsey]

Better than we deserve. What's up?

[Caller]

Yeah, so I was looking for advice what my next move should be. I'm really was considered bankruptcy. Right now. I'm going through a divorce where my ex wife, she also filed for bankruptcy forcing. You know, she forced me into to consider bankruptcy because of a cosign on the car that's being pushed on to me. Then I had my car that fell behind. Then on top of that we had. On top of that we had also our son together. And then I lost my job. So I really don't know what my next move is. I do own a business, but it's a cleaning business. And yeah, that's pretty much everything. But I did have my student loans forgiven though.

[John Deloney]

Does the cleaning.

[Dave Ramsey]

You had your student loans forgiven?

[Caller]

Yes, sir.

[Dave Ramsey]

Why?

[Caller]

The school?

[Dave Ramsey]

Oh, the school was. The school was a sham.

[Caller]

Yeah.

[Dave Ramsey]

Yeah. Okay.

[John Deloney]

Does the cleaning business generate like a living income? What's it generate?

[Caller]

Well, my expenses luckily are very low for right now.

[Dave Ramsey]

That wasn't what she asked. She asked if you're making any money.

[Caller]

I'm making money weekly for me.

[Dave Ramsey]

What kind of money are you making with the cleaning business, honey?

[Caller]

Probably around 500 on average. It can range from 500 a week to a thousand a week.

[Dave Ramsey]

Okay.

[John Deloney]

Okay.

[Dave Ramsey]

All right, good. Can you ramp that up or do you need to get a job?

[Caller]

Definitely I can. I want to ramp that up. That's mainly what I want to go towards because I don't know if I want to work for anybody else.

[Dave Ramsey]

Okay. So if you get the. If you get this tuned way up, could you get it to a couple grand a week?

[Caller]

Yeah, definitely.

[Dave Ramsey]

Okay, and how long would it take you to do that? Four or five months? Six months?

[Caller]

Well, definitely trying to figure out the blueprint to that.

[John Deloney]

But is it you need more people helping you or you just need more clients?

[Caller]

Yes. Yeah. More combo? Both probably.

[John Deloney]

Okay.

[Dave Ramsey]

All right, well, here. Here's the thing. You're not bankrupt. Everything in your life got ran over by a train.

[Caller]

Yes.

[Dave Ramsey]

You lost your job, you lost your wife. Debt is piled up on top of you. I mean, you just got the snot beat out of you, man. You're not bankrupt. You're just bruised and battered. You've been in a car wreck kind of. You follow me?

[Caller]

Yes, sir.

[Dave Ramsey]

And you'd be a weird human if you weren't moving slow right now, if you weren't sore, if you weren't scared if you weren't paranoid looking over your shoulder. That's the way we all feel when we're in a situation like that. But the fix to the whole thing is to create a sustainable life that you can project out over 10 years and then we can figure out what to do with the debts. But that means we've got to get a steady income. So either you go pick up a job and you continue to grow this business or you grow this business very quickly.

[Caller]

Okay.

[Dave Ramsey]

Okay. So because in other words, if you start making $5,000 a month from some source, we have a completely different discussion than we have today. Agreed?

[Caller]

Agreed.

[Dave Ramsey]

Okay. Now then let's go ahead and move forward and say let's pretend you did that because I think you're capable of it once you get past your broken heart and your normal. The normal things that people. The anger and everything else that we face when we've been through all these things.

[John Deloney]

Things.

[Dave Ramsey]

So you said there was a car co sign and there was a car repossession.

[Caller]

Yeah. So the cosign card was my ex wife which she filed bankruptcy and which automatically going to push that on to me.

[Dave Ramsey]

I mean this current divorce or the divorce before?

[Caller]

It's current.

[Dave Ramsey]

Okay, this. This current. Okay. All right, so. So how much is that debt on that car?

[Caller]

36,000.

[Dave Ramsey]

Okay. Did that car get repoed?

[Caller]

Yes.

[Dave Ramsey]

Good. And what. Okay, that's perfect. And then the other car, is it repoed?

[Caller]

Yes.

[Dave Ramsey]

Good. And what was.

[Caller]

Was at 20k.

[Dave Ramsey]

Okay, perfect. Do you have any other debts?

[Caller]

Well, we had eviction also.

[Dave Ramsey]

You had what?

[John Deloney]

Eviction.

[Dave Ramsey]

An eviction?

[Caller]

Yes.

[Dave Ramsey]

Have they sued?

[Caller]

Yeah. So I left a balance of 5,000 on top of that.

[Dave Ramsey]

Gotcha. Anything else?

[Caller]

That's pretty much it.

[John Deloney]

No other debt.

[Dave Ramsey]

Okay.

[Caller]

Yeah. You're not bankrupt.

[Dave Ramsey]

You're not bankrupt. You're not bankrupt. You're broke.

[Caller]

Okay.

[Dave Ramsey]

And you have a broken heart. But you're not bankrupt. And you're angry and all of those are normal human emotions for where you are. But you're not bankrupt. Bankrupt. This is not hopeless. And let me walk you through why. Okay. Car repossessions. They sell the car and the difference, let's say they sell the 36 as an example for 20 on a repo lot. All right? Then they're going to come after you for the difference, which is 16. That's called the deficit balance. Okay.

[Caller]

Okay.

[Dave Ramsey]

They will settle that for a quarter on the dollar in lump sum.

[Caller]

Well, if I may add, I think most of the added money on top of that Is interest.

[Dave Ramsey]

That doesn't matter. Yeah, they're going to come after you for something. And whatever they come after you for is the deficit balance on the loan. And. And they will settle that for a quarter on the dollar. So the $36,000 car, probably four or $5,000, will get rid of both of these car loans and the evictions probably gonna take 100 cents on the dollar. It's probably gonna take 5,000 bucks to get rid of it. But you could offer them three. Okay, so in other words, let's just pretend we cleared the two cars for five each and we cleared the eviction for three. That means you have $13,000 in debt. You're not bankrupt, okay? You just need to go make some freaking money to be able to have a little war chest, little stack of cash when these. And you go, okay, I don't have enough to pay you in full, but I can pay you $3,000 if you'll take that as settlement in full, because I'm trying to not have to file bankruptcy. And they go, okay, I'll take that or no, but we'll take 3,500. And you go, okay. No payments, lump sum. Hear me?

[Caller]

Yes, yes.

[Dave Ramsey]

So you stack some cash by making money by gearing this business up, getting a job, or both. You stack some cash and somewhere around $15,000 will make you debt free. If you negotiate settlements with all three of these situations. You are not bankrupt for 15 grand.

[John Deloney]

Dude, is your son with you or with his mom?

[Caller]

So we're doing split custody, but most of the time he's with me.

[John Deloney]

Okay, Because I was gonna say, if not, then this is you working day and night, night and day.

[Dave Ramsey]

When he's not there, you're working, working, okay? Because you need a stack of cash to get this crap out of your life. So let's fast forward one year from today. You're 100% debt free. You have $15,000 cash in the bank as an emergency fund, and Your income is $5,000 a month. And you've had a horrible year with a divorce in your rear view mirror. And you thought you were bankrupt, but you weren't and you made it out. And you're a hero. That's where you're going.

[John Deloney]

Success owners.

[Caller]

Yes, yes, yes.

[Dave Ramsey]

Feel better.

[Caller]

Way better.

[Dave Ramsey]

Okay? And you call us back if you need some help. We're here. But I've walked. I've walked thousands and thousands of people through this. You are not bankrupt, okay? You just need a stack of cash. And you know where to get that Work cut works. What makes money happen. Go, go get you some and get this mess cleaned up. Put this mess in your rear view mirror and then get about the business of being a great dad and a great businessman. And we want to talk about the time that you called here 10 years later and now you're a baby steps millionaire.

[John Deloney]

That's right. That's right.

[Dave Ramsey]

That's the time I want to talk about. And believe me, I've been doing this for 30 years. I've seen it happen many, many times. Because this is more about hope than it is math. And the weird thing is sometimes the math will actually give you hope if you know how to run the number members. This is the Ramsey show. Foreign.

[Advertiser]

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[Dave Ramsey]

Our question of the day is brought to you by. Why Refi? Why Refi works with borrowers who have defaulted private student loans even when other lenders have said no. With a lower payment on a low fixed rate, you could have a clear path forward. Visit y refi.comramsey that's the letter y r e f y.com/ramsey might not be in all states.

[John Deloney]

All right, today's question comes from Jackie in Massachusetts. She says, everywhere I go these days, there's a tipping screen now at the end of the purchase. For the average person who's not in baby step seven, when is it appropriate to leave a tip at coffee shops and restaurants versus is not giving one. That's actually a really good question. I mean, I definitely feel like since COVID since the pandemic, tipping has kind of gone into the stratosphere, I think, and there's been some tipping fatigue out there. I definitely think whenever you're in a restaurant situation where you're sitting down, you're placing an order, there's somebody attending to your table, you should always tip. And I think that you should tip between 18 to 20%. That's just me. I'm a 22 tipper. That's my. That's Jade's personal thing. But you need to at least be, I think, 18 at those places. Now there are, I think also anything that's really a close. Close. I'm going to call it a closely felt service. Right. So somebody who's cutting your hair, someone who's doing your nails or like involved in your bodily person while they're doing a service. I think that they. Those people also should be tipped again. 15 is a great place to start on that. Things that I don't tip for or, you know, sometimes it's like, it just depends on if it's really great. Would be, I don't know, like a barista service, something like that. It's like I got my coffee, if it was really good and I know the person and it's like always the same guy or something. I. I might tip them a little bit. Grocery delivery, if it's raining out, always tip them. What about you, Dave? I'm just trying to think, what do you not tip for? I'm trying to think what I don't tip for. I'm a tipper, though. I. I lean heavily.

[Dave Ramsey]

For me. For me, tipping falls in the bucket with generosity.

[John Deloney]

Yeah, I think me too.

[Dave Ramsey]

So I overdo it to the point that my wife cringes.

[John Deloney]

Well, we have it on our budget as a line item.

[Dave Ramsey]

She's like, you don't need to leave that, man. It wasn't that good. And I'm like, yeah, well, they don't care if it's that good. And you know, here's the thing. The kitchen might have screwed up. Not the poor waitress.

[John Deloney]

That's right. No, please don't take it out on the waitress.

[Dave Ramsey]

Sometimes the waitress is an idiot, too. That happens. But in my case, I don't really have a choice. Cause they're gonna have a Dave Ramsey story. It might as well be a good one.

[John Deloney]

That's true. You're a known fellow.

[Dave Ramsey]

I'm a known felon. So I have to.

[John Deloney]

Fellow fellow.

[Dave Ramsey]

That too. That too. So I have to. I have to leave a tip even when I don't want to. But I want to. I like doing that. But the times that I walk up to the counter and someone spins an iPad at me and I leave a tip is precisely zero. I do not tip there ever. That is not a tippable.

[John Deloney]

Well, if I know that person is gonna be touching my food, there's a tip.

[Dave Ramsey]

Jar on the counter at the gas station and I just walked in to pay for my gas. No, no, I'm not tipping. You can flip that screen at me all you want. I'm not tipping. No, you didn't do anything. And so sorry, it's not anything. Yeah, but I over tip on everything else. Here's one where people don't tip. And I think, this is horrible. 100% of the time I stay in a hotel, I pinch a 20 and I leave it in a. Standing on the end of the bed when I leave. Every day the maid service. Yeah, every day the maid gets tipped and my wife is like, well, they didn't even do turndown service. Oh my God, would you quit with this already?

[John Deloney]

So you don't wait till the end. You do it at the end of each day.

[Dave Ramsey]

Every day.

[John Deloney]

I like that.

[Dave Ramsey]

Every day. And so. And you know what? I never have a problem with the room either.

[John Deloney]

Yeah, that's true.

[Dave Ramsey]

And the one that drives me real crazy, I saw this happen the other day. This guy pulled up in a Mercedes, like $130,000 Mercedes, and he's parking a car with a valet and it's raining and he gives this kid $5.

[John Deloney]

Stop it. I don't like that.

[Dave Ramsey]

And I'm like, no, this is just dumb. You just gave him the keys to your $130,000 car. Ferris Bueller, man, he's going to mess.

[John Deloney]

Come on, man, he's going to change all.

[Dave Ramsey]

And you gave him $5? Are you moron. I mean, come on. So I. There's certain, you know, I've tipped valets $50.

[John Deloney]

You better tip the valet.

[Dave Ramsey]

And you know what? That car sitting right there, when I come out too, they didn't even park it. It's just sitting there. They didn't even touch it. And so that's good. I like that. So that's good service goes with the good tip. So, yeah, and I listen, I used.

[John Deloney]

To work in food service, and if I.

[Dave Ramsey]

If and when I pull up with the valets, in some cases, I almost always hit them on the front end and then another person brings the car.

[John Deloney]

Back and get them to.

[Dave Ramsey]

And so no, sometimes I do, but sometimes I go, hey, the other guy, I hit the other guy on the front end. He goes, oh, I heard about it.

[John Deloney]

Oh, okay.

[Dave Ramsey]

Yeah.

[John Deloney]

At least they knew.

[Dave Ramsey]

They knew what was. So you want to do that. But that, that's a reputation thing and it's a generosity thing. But this thing of you just poured some coffee at Starbucks and you spin the thing around face it in my. I don't buy coffee at Starbucks. Why am I saying that?

[John Deloney]

But I'm saying that's never been.

[Dave Ramsey]

I haven't been in a Starbucks in 15 years. So we're. What am I saying? But, but I mean, coffee shop. If I went into a coffee shop and they pour me a cup of coffee and they hand it across the counter, quick serve. No, thank you. I don't tip Chick fil A. Yeah, I'm sorry. No, it's not what I'm doing. I'm driving through, you're handing me the Jesus chicken out, and I'm gone.

[John Deloney]

Now, I do feel like if you can't. Like when you go to actual restaurants, I feel like if you can't afford to leave a nice tip.

[Dave Ramsey]

If you can't afford tip, you shouldn't go.

[John Deloney]

You can't go.

[Dave Ramsey]

Yeah, no, that's for sure. Because those people are working for tips. They're working hard, and a lot of them aren't being paid well unless they' and so.

[John Deloney]

And have a nice demeanor towards them too. Because, listen, back in the day when I worked at Applebee's, I don't want to tell you some of the things I saw back there. No, when people were acting.

[Dave Ramsey]

When tables were acting up, payback sale on that. You don't want. You don't want to know what happened to your food before it came out. But the.

[John Deloney]

I never did anything. I would never do something like that.

[Dave Ramsey]

No, I don't think you would.

[John Deloney]

I never would.

[Dave Ramsey]

Well, it would be against your religion to mess up food because you like food.

[John Deloney]

I love food. I love people. Even if somebody's wild, I still would not do some of the things that I have witnessed.

[Dave Ramsey]

But I'll tell you the other one. You know what we used to do, because one of the things we now everybody doordashes and whatever to get out of debt. That's their get out of debt side Hustle. But it used to be that we all just go, hey, go deliver pizzas. And so we had a thing for a long time on this show. And we could start it again right now. This says, okay, if Doordash or if Domino's or Marcos or Pizza Hut or whoever shows up at your door with a pizza and you say, how are you doing? And they say, better than I deserve.

[John Deloney]

Oh, that's great.

[Dave Ramsey]

There's code for I'm working this job to get out of debt. You gotta double their tip.

[John Deloney]

I love that.

[Dave Ramsey]

You gotta double their tip.

[John Deloney]

I love that.

[Dave Ramsey]

And so. Cause they're trying to get out of debt. And you're now helping them. They're out here hustling. They're bringing you food in the rain while you're sitting on your butt. So double their tip, man, and give it to em.

[John Deloney]

Like, if I can catch the doordash person, like over the holidays, you know, you're ordering food and people are always. If you can catch them at the door and give them cash. Cash.

[Dave Ramsey]

I always do cash. Yeah, I do. I always do cash.

[John Deloney]

Yeah. Because if somebody's working Christmas season.

[Dave Ramsey]

Well, on that kind of thing, you know, valets, that kind of. Now if I'm in a fine dining restaurant, I'm going to pay a part of the bill.

[John Deloney]

Yeah, for sure.

[Dave Ramsey]

With the debit card. And they always make fun of me. Is this a debit card? Yeah. Well, is this your tip? Yeah. Yeah. So, yeah, we'll see how this works. But yeah, anyway, yeah, absolutely. It's a kindness. It's an exchange. But this spin the iPad around is not an exchange. Change. Yeah. And I got zero obligations if I'm. I picked up some queso at the Mexican restaurant to go to take to Rachel's house for Father's Day Sunday night, and I did not tip them. They had the queso at the door. I paid them at the queso. They did not serve my table.

[John Deloney]

You drove? Yeah, I drove.

[Dave Ramsey]

I walked in in the rain, got the queso, got in the truck, went to Rachel's house. Yeah, no, we don't tip that.

[John Deloney]

No, I don't tip that. Now if they bring it, there's one restaurant I go to where they'll bring it out to the car to your door. And I'm like, I do tip that one. Because I'm like, you packed it up and you brought it out to me. I did drive that one. I'll tip. That one's up to your discretion.

[Dave Ramsey]

Yeah, you can hit in the middle there. But I. This thing of. It's kind of like. It's manipulative.

[John Deloney]

Well, you have to.

[Dave Ramsey]

The spinning of the iPad is a manipulation.

[John Deloney]

Well, then they stand there and I don't appreciate you.

[Dave Ramsey]

It's. The other one is, do you want to give to the wounded Wounded Pet association or something? Do your change up to your groceries? No, if I want. Wanted to give to the wounded pet Association, I would have already given them money. I'm not adding it to my grocery bill. And you get the credit for the charity. No. So zero on those. I don't add a dollar for the blind cat Society or whatever the heck it Is that they put on there. It's just. They come up with some crap, man. It's unbelievable. Or blind dog society. I don't care. Whichever one you want. Doesn't matter to me. But. Yeah, just. No, we're not. No.

[John Deloney]

Not even in 12 cents.

[Dave Ramsey]

That's not a tip, though. That's a. That's a. But it's a manipulation at checkout.

[John Deloney]

It is.

[Dave Ramsey]

It's the same thing. It's still a manipulation at checkout, and it's nickel and diming you to death. And no, thank you. And I don't feel guilty. Kate's in Chicago. Hi, Kate. Welcome to the Rams show.

[Jade Weshaw]

Hello.

[Dave Ramsey]

Hey, what's up?

[Jade Weshaw]

My question is, how do I start a business when friends and family owe me debt or owe me money?

[John Deloney]

What's one got to do with another? How much money do they owe you?

[Jade Weshaw]

We've got one friend who owes us about, I want to say, close to two grand, and then I've got another friend that. Or family member that owes us close to four grand, and it has caused us to go into debt.

[Dave Ramsey]

Why did that cause you to go into debt?

[Jade Weshaw]

Because at first we had the money, and then we didn't. And my husband and I had a conversation about it, and I told him I didn't want to loan these people money, and he. We didn't want to listen.

[Dave Ramsey]

So you don't have a friends and family problem. You have a husband problem?

[Jade Weshaw]

Yeah, that, too.

[John Deloney]

Yeah. So what's your philosophy on loaning money? We know your husband's what's yours.

[Jade Weshaw]

We had made a vow to not loan anybody money after we had gotten out of debt the first time. And then when Covid hit and everybody was out of work, then all these people came to us, and I didn't want to do it. And he was like, well, it's just a little bit. And I'm going, yeah, but these people won't pay us back.

[John Deloney]

So you're.

[Dave Ramsey]

Well, they're not going to pay you back, so you might as well forget all that and you need to stop doing it. But what's that got to do with going into business?

[Jade Weshaw]

Over the years, God has planted a seed in my life to start a business, and I didn't understand what it was. And I've come to more realization of what he wants me to do and the cost of purchasing the land to start this business.

[Dave Ramsey]

What is the business?

[Jade Weshaw]

Way more. It would be a camp school learning center for both.

[Dave Ramsey]

You don't have a $2,000 problem?

[Caller]

No.

[Dave Ramsey]

Okay. So these things are not related at all.

[Jade Weshaw]

No.

[Dave Ramsey]

Well, that's how you framed it. You said, why can't. How can I not open. I can't open a business because I keep loaning friends and family money. And that's just not a true statement. You're not six. You don't have a $6,000 problem. You have a $300,000 problem.

[John Deloney]

So let's tackle the first one first. The debt, the loaning of money. You and your husband need to sit down and decide. I would tell you, since you called in, to stop loaning people money, period. If you have the money to give.

[Dave Ramsey]

Give it to them.

[John Deloney]

You give it and then there's no strings attached.

[Dave Ramsey]

And I would call both these people and just say, the debt is forgiven.

[John Deloney]

Yeah.

[Dave Ramsey]

Forget it.

[Jade Weshaw]

Correct.

[Dave Ramsey]

You're not going to get it back anyway. But no more lending. And then as far as living your dream. So if God gave you the dream, if it is God, and I'm not saying it's not, because I'm living a God dream myself right now. He will give you the money. Money.

[John Deloney]

And in some instructions, like to build the thing.

[Dave Ramsey]

Yeah.

[Jade Weshaw]

But I've been currently praying about it and it has been to create the plan.

[Dave Ramsey]

Good.

[Jade Weshaw]

And I read your book, building a business that you love.

[Dave Ramsey]

Good.

[Jade Weshaw]

And that made me realize that I need to pause on this dream and pay off my debt first.

[Dave Ramsey]

Good.

[Jade Weshaw]

And that is the step that I'm currently working on. We completed baby step number one. We're in baby step number two. We've got about $20,000 in debt that we need to pay off.

[Dave Ramsey]

Great. Let's get it cleared up. What's your household income today?

[Jade Weshaw]

With my income and my husband's combined, we are at 100k yearly.

[Dave Ramsey]

Excellent. So let's clean up the debt and then let's start saving towards the dream. And let's see how God provides. And I will tell you that he. He is not going to provide a loan.

[Jade Weshaw]

Correct.

[Dave Ramsey]

0 times in scripture. 0 times in scripture did God give people something to do and then put them in debt doing it. Never. Did the children of Israel get hemmed down in the Valley and the Hittites were getting ready to kill them. And so they did a bond issue. Never. Never. It never happened. So it's not in the Bible. So if you involve God in this discussion. So I'll just jump on the bandwagon with you. God will provide. God has provided at Ramsey Solutions over 35 years what we needed when we needed it. Not when we wanted it, but when we needed it. And we have paid cash from the profits to grow the business. Business. Little bit by little bit by a little bit by a little bit. And now it's a big deal. But all those 35 years of little bits all in cash, all added together.

[John Deloney]

Profits, P, R, O, F, I, T.

[Dave Ramsey]

S. Yeah, yeah, yeah, yeah, yeah.

[John Deloney]

We're talking biblical stuff. I don't want anybody to think woo woo stuff.

[Dave Ramsey]

Isaiah was not involved. Yeah.

[John Deloney]

No cash from that profit.

[Dave Ramsey]

Yeah, exactly. No, no. No one. No one brought in a suitcase of money and said, God told us to give you this. No, didn't happen. It was. We sold more books. We sold more financial Peace University. And we were able to pay cash for another studio. We were able to pay cash for this. And we continue to bless people, continue to serve and feed his lambs. And that is our call and that is what we do. So. Yeah, it's just, you know, I think the time. I'm not doubting the call of what he's given you to do, honey, but I am 100% sure he didn't ask you to do it today because he has not provided the money today. And so it's not today.

[John Deloney]

That's right.

[Dave Ramsey]

And in the $2,000 or the $4,000 that's owed to you has absolutely nothing to do with the discussion at all, except you got the opportunity to have us tell you just forgive it and move on and quit doing it. Drew's in Sacramento. Hey, Drew. What's up?

[Caller]

Hi. Thanks for having me.

[Dave Ramsey]

Sure. A little short on time. Go straight to your question.

[Caller]

So I'm wondering if I should. I know the place where I have noticed debt, except for my house, which I owe 260 on.

[Dave Ramsey]

How old are you?

[Caller]

There's a family. I'm 39.

[Dave Ramsey]

Okay, cool. Good for you.

[Caller]

Thank you. There's a family incentive. If I get it down to 100,000, my father will pay the rest.

[John Deloney]

That's cool.

[Caller]

And I have enough in my 401k to pay it off.

[Dave Ramsey]

Nope.

[Caller]

I'm wondering. No. Okay.

[Dave Ramsey]

You're going to get hit. With your tax rate plus a 10% penalty, you're borrowing money at 30% interest. Interest.

[Caller]

Okay.

[Dave Ramsey]

You're gonna get killed financially. To cash that money out of that 401k, what's your income?

[Caller]

140,000 annually.

[Dave Ramsey]

Good. Good.

[Caller]

And I'm the sole provider with four kids.

[Dave Ramsey]

Good for you. Okay. Well, I mean, I would just. I would say we're out of debt. We have our emergency fund. We're on a budget. We need to come up with $160,000 worth of debt reduction. So dad writes the other and you know, let's start working towards that. It's not going to happen in one year. It might happen in four years and it would still be a wonderful story.

[John Deloney]

That's a wonderful story. I like the idea too. That's a great incentive to.

[Dave Ramsey]

Yeah, really, really good direction to go. I like it. So, but yeah, don't, don't borrow money at 30% interest or 40% interest to make that work because at 130,000 year tax rates, 31%, 32% and then you get a 10% penalty. So it's going to be 40% interest that you're going to be the equivalent of. I mean you're going to get hit with taxes and penalties of 40%. Dave, would I borrow money at 40% interest to pay off my house? No, you would not.

[John Deloney]

And that's probably not what the dad wanted when he said I'd give you.

[Dave Ramsey]

The 100,000 if he wanted that. He didn't. He hasn't done good at math, but yeah, that's right. And he probably wouldn't have had 100k to give away. So there you go. But yeah, yeah, I think it's a wonderful situation you're in. You've done a really good job at 39 years old and I would continue to plow through and I understand the temptation, but the math tells you not to do it. Yeah. Never cash out your 401k folks early except to avoid a bankruptcy or a foreclosure because otherwise you're effectively borrowing money at 35 or 40% interest to pay off your debts. And that never, never, never, never, never makes sense. Wow. Yeah. So stay away from that game. It's a bad game. It's one you will lose. So I want you out of debt. Jade wants you out of debt. Ramsay wants you out of debt, House and everything as fast as you can. We love that idea of freedom for you. But we don't want to trade one form of stupid for another form of stupid. Not a good trade.

[John Deloney]

Good point, good point.

[Dave Ramsey]

This is the Ramsey Show.

[John Deloney]

Sam.

[Dave Ramsey]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and, and create actual amazing relationships. Jade Washall, number one best selling author and Ramsey personality is my co host. Today Logan is in Tampa, Florida. Hey Logan, how are you?

[Caller]

Hey Dave.

[Dave Ramsey]

Good, how are you? Better than I deserve. What's up?

[Caller]

So my wife and I decided in January to move into a camp. We bought A camper and decided to try to get out of debt, save some money. We actually relocated down to the Tampa area for a job. And, you know, we're going to work the debt snowball and all that good stuff. But what we really did was just started spending more money because we had some more money with our living expenses going down. And we found out last night that she's pregnant with our second baby. So we are trying to figure out what to do now. We've got about $55,000 of debt. I make 75,000 a year. So we're just trying to see, should we sell the camper? Should we sell my wife's car?

[Dave Ramsey]

What do you owe on your wife's car? I'm sorry, how much do you owe on her car?

[Caller]

It's around 14,000.

[Dave Ramsey]

Okay. And what's your household income?

[Caller]

75,000 a year.

[Dave Ramsey]

Okay, I'm sorry, that was. And that includes your wife working?

[Caller]

She.

She doesn't work. She stays home with our first child.

[John Deloney]

Okay, what'd you spend on the camper?

[Caller]

So we financed it, and it's. We owe about 15 to, I think, 16,000 on now.

[Dave Ramsey]

So your plan was to get out of debt by going $16,000 into debt?

[Caller]

I know, I know.

[Dave Ramsey]

Okay.

[Caller]

It doesn't make any sense.

[Dave Ramsey]

No, it doesn't make any sense at all. All right, so what will the camper sell for?

[Caller]

We could probably get, I would imagine, between 10 to 15 for it. I would imagine.

[Dave Ramsey]

I hope so. So it's only been six months? Yeah. Okay. All right. And so I'm sorry, you said you had 55 in debt?

[Caller]

Yes, sir.

[Dave Ramsey]

Okay, so 16 on a camper, 14 on her car. What's the rest of it?

[Caller]

22,000 of it is my wife's student loans. And there's 3,000 on the credit. Old credit card.

[John Deloney]

Okay.

[Dave Ramsey]

Okay. All right. So the way I answer questions here is, if I woke up in your shoes, knowing what I know today, what would I do? Okay. Now, I've been married 43 years. We had three kids. I have eight grandkids. The chances that Sharon Ramsey, at any point in our life, no matter how broke or how poor we were, was gonna live in a camper is pretty close to zero. So the first thing I'm gonna do is put my wife and my pregnant wife and new baby into an apartment, a one bedroom apartment, and put the kids in the living room, and I'm gonna sell the camper, and that clears half your debt. And I'm gonna work 80 hours a week, and we're Gonna live on beans and rice. And we're not going out to eat if she's staying home with baby. She cooks and she cooks from scratch. Cause it's cheaper and better for you. And we're not going on vacation. And you work 80 hours a week and you clean up this dadgum mess you made. And all this stuff about we're gonna move into a camper, but we spent more money. All that's bull crap. That's all done. It's time for you guys to get your crap together. You got two babies and your boy broke.

[John Deloney]

What's the fourteen thousand dollar car worth?

[Caller]

Probably could get eleven thousand for it.

[Dave Ramsey]

What are you, what are you driving?

[Caller]

So she uses that in my company.

I have a vehicle. If we're not together, I'm driving my company vehicle. No company truck.

Just back and forth to work.

[Dave Ramsey]

I got you. Okay, good. That's good news.

[John Deloney]

That is good.

[Dave Ramsey]

Okay, Yeah, I think you can get it paid off, but I think you're just working all the time and you guys just got to go. Okay. It got real. A pregnancy test came back and this just got real. We've got to do this, this thing. We moved to Tampa, moved into a camper. Tampa's not bad. Camper bad. We got to undo that. We got to get an apartment a little cheap, as cheap as you can get that's safe and your family's not getting some kind of crime ridden thing or something like that. But I mean, you get into something cheap, find a garage apartment out back of some rich old lady's house and cut her grass for half the rent or something. And you can guys just start like you were starting fresh because you are starting fresh. And let's clean this mess up fast. You can do that once you decide to do it. Like your life depends on it. But now your life depends on it and the life of these two babies depends on it. Agreed?

[Caller]

Yes, sir.

[Dave Ramsey]

Yeah, you can do this. How old are you? 26? 31. 31. Okay. Yeah.

[Caller]

Well, so we shouldn't pause the debt snowball and save up for the baby.

[John Deloney]

Well, I still want you to get out of the camper. Do you have any money saved anywhere whatsoever from this deal?

[Caller]

Not really.

[Dave Ramsey]

Just because, yeah, you got to get, you got to get rid of the camper and you got to get into an apartment and for your family to have a good environment is what amounts to. And you know, and so, yeah, you just, you need to take care of this wife and kids right now. And then, yes, you can pile up cash if you want, but you need to pile up $55,000 in the next nine months, minus the camper. So $45,000 or $40,000 so that the day the baby comes home, you write a check and you're debt free. So the end of the story is one year from today, you're 100% debt free with $10,000 in the bank and starting to think about saving up towards the high.

[John Deloney]

And you move with the intensity as though you were paying this money off on the debt today.

[Dave Ramsey]

Absolutely.

[John Deloney]

Just because you're piling it up doesn't mean that you can kind of take a.

[Dave Ramsey]

And anything she can do to add some income to this situation is a good thing.

[John Deloney]

There's always something you can do right now.

[Dave Ramsey]

I mean, you got a baby and a baby on the way. But still, I mean, whatever you can do that's legal and moral. Let's get after it. Time to. To get it. Time to get it. Make it happen here. And, yeah, this would, you know, what is it? Desperate times require desperate measures.

[John Deloney]

Desperate times call for desperate measures.

[Dave Ramsey]

And, you know, this is kind of your backs against the wall here, man.

[John Deloney]

Yeah.

[Dave Ramsey]

So you got to come out fighting.

[John Deloney]

Yeah.

[Dave Ramsey]

And you got to get with it. And that's. That's. That's what we're doing here. This is very doable once you look in the mirror and say, say, dude, you're doing it.

[John Deloney]

Yeah.

[Dave Ramsey]

And she says, I want to go out to eight tough.

[John Deloney]

No, I think this is the time, like, for her. If I'm her. I'm getting with a buddy or a family member and saying, can you watch the kids four hours a day so I can go do this side hustle? And even if it's. Even if the deal is we do that until we can get out of the camper to get the, you know, the first and last month's rent, whatever that deal is, I think she can contribute as well, because she needs to like this.

[Dave Ramsey]

Yeah. But you got to get six jobs. I mean, y' all gotta go create. Stack as much cash as you can stack, clear the camper, get into an apartment, and then let's stack $40,000 worth of cash in the next nine months and. And clear the $16,000 camper. And you're there, and this is doable, but you're, you know, you're not gonna see your pregnant wife much. You're gonna be working all the time, and you can ask sharing. Right, Ramsay? That's what happened at our house. I worked all the time because we were broke, and that's you know, work is a surefire money making scheme. We were b r o k e broke. It was no fun. I don't ever want to go back there. Oh God, no. Thank you. But the good news is you can get out. Logan. This is the Ramsey Show.

[John Deloney]

Sam.

[Dave Ramsey]

Foreign.

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[Dave Ramsey]

So many of you out there are trying to share this Ramsey stuff with people. You want to see them win but you don't know exactly how to unpack all this stuff you hear because you listen to the long form show. Thank you for that. We're making it even easier with the Ramsey101 playlist on YouTube. The playlist is filled with the classic Ramsey clips like what are the baby steps, how to pay off debt with the debt snowball, how to build an Amazon emergency fund, how to agree with your spouse on spending, putting together a budget, all this kind of stuff. So the 101 Ramsey 101 playlist. Click the link at the top of the show notes to open Ramsey101 playlist on YouTube. You can text it, DM it, send it in a group chat. Just say, hey, think this might help guys? If you're listening on the radio, share it. You've got the playlist featured at the top of our YouTube channel. Jump in there. Who's one person that you could share this with? It's one share, one step. It could change everything for that person. And obviously all this is completely free. Dave is in Louisville. Hi Dave. Welcome to the Ramsey show.

[Caller]

Hey Dave, thanks for taking my call.

Sure.

[Dave Ramsey]

What's up?

[Caller]

Don't really know how to handle credit card collectors while I continue to fight what's turning into being a messy custody battle. So going on three years now and don't really see an end in sight. I'm not really sure what to do.

[John Deloney]

Are you putting the legal fee. The legal fees are going on the credit cards. Is that what's happening?

[Caller]

No, actually that was initially, but thankfully my attorneys actually offered to Extend credit. And she's done that for over a year now. And. And that's just been because she believes in the case. And so I've racked up, in addition to the credit cards, about 30,000 to my attorney and actually a little bit more to a different attorney who is involved in the case and is extending credit as well.

[Dave Ramsey]

So. So how much credit card?

[Caller]

It's just under 40.

[Dave Ramsey]

What's your income? Income?

[Caller]

100.

[Dave Ramsey]

Okay. All right, so $70,000 plus or minus $80,000 makes you 100% debt free.

[Caller]

Yeah.

[Dave Ramsey]

Okay. And you make 100 and it's just you.

[Caller]

Yeah.

And then, you know, partial timeshare with the kids, but.

[Dave Ramsey]

Correct. Yeah. Okay. All right.

[Caller]

Yeah.

[Dave Ramsey]

Have you stopped 401k?

[Caller]

No, I haven't.

[Dave Ramsey]

You should match. You should. I don't care if they match. You can't pay your bills.

[John Deloney]

What kind of work do you do?

[Caller]

Finance.

[Dave Ramsey]

Okay. Yeah. So here's what I would do in this situation. The credit cards are at the bottom of the list of things to worry about. I'm not. I'm not worried about them today. Your credit's already trash. You haven't paid them in some time, right?

[Caller]

Correct.

[Dave Ramsey]

So no big deal. They can just sit there and whine. They just whine, flopper around. Eventually one of them is going to sue you. But right now I'm not worried about them. And they just scream. You don't even have to answer the phone. You don't have to talk to them. Just. Just let them sit there. So once we've kind of done that in our mind, then we've got primary, which is to not add any more debt to the attorney's fees. And so we need to start building up some cash for the next bill so it doesn't become extended credit because you make enough money. I mean, what's your rent?

[Caller]

1200.

[Dave Ramsey]

Yeah. You don't have a car payment?

[Caller]

Correct.

[Dave Ramsey]

Good. Okay. Can.

[John Deloney]

Can I ask a question about the case? I'm just curious. At any point, could your financial standing have any weight on what happens with the case?

[Caller]

Not that I know of, no.

[John Deloney]

So they couldn't look at your financial situation and say, oh, he's his home is unfit, or something like that?

[Caller]

No.

[Dave Ramsey]

All right, Well, I mean, if I'm you, I'm going to live on, like, nothing, like 15 or $20,000. Beans and rice. Rice and beans. And I'm going to work as much as I can possibly work, and I'm going to squeeze every dollar out of this budget. I'm not spending money on Anything at all. And first goal is to not add any more attorney debt. Second goal is pay down the attorney attorneys and clear them. I mean, if you lived on 60,000, you would be attorney debt free in one year.

[John Deloney]

Do you do any work outside of your 40 hours job?

[Caller]

I did that for a little while. So there was a period where I got a second job and I was working literally seven days a week.

[Dave Ramsey]

Good.

[Caller]

The problem I was having is it was affecting my relationship with my kids, which I only have part time. And because it's a custody case, my relationship with my kids was more important than paying down the debt. And so actually I actually quit that second job because I was missing all of my kids sporting meets on the weekends because I was working 20 hours on, on the weekends. So it was one of those where I just had to pick and so I just trying to then hold and you know, I don't, I don't know, we don't go on vacations or not doing that stuff and just trying to.

[Dave Ramsey]

But I mean, it's $100,000. So let's pay off these attorneys fees.

[Caller]

Okay.

[John Deloney]

Yeah, I think you can live on. On nothing.

[Dave Ramsey]

Yeah, nothing in Louisville. Definitely. Single guy in a one bedroom apartment, man. I mean, definitely. You need it. You need to get on an every dollar budget, make all of these dollars scream and let's clear these attorneys fees and then let's not add any more debt to attorneys fees. And then once we've done that, then we call the credit cards up and save up some money and start settling for them lump sum. But one thing about being in a situation like you're in, it is an emotional drain as well as a financial drain. And the financial stuff mounting up, mounting up, mounting up combined with the. You just get fatigued of dealing with lawyers and judges and idiot exes and all this. There's just a fatigue factor for it. And it's harder to fight through that when the debt is mounting rather than the debt is being reduced. If you were sitting here and a year from now and you've cleared all of the attorney debt and you're not adding any attorney debt and the only thing you got is the old credit cards, and then a year later you've got no credit cards, you're in a different head space to fight.

[John Deloney]

That's right. That's right. I think there is a fatiguing quality to this. I'm thinking this is not the same thing at all. But I'm thinking about when we all went through the pandemic and there was A fatigue that set in, and people started to ease up on good habits. Right. It's like, I deserve this. And you. You did less of the things that you're supposed to do. And I could see the same thing happening here where you're so tired. It's like, yeah, I'm gonna let go of that other job, or I'm so tired. You know what? I do deserve to go out and, you know, let off some steam. That sort of feeling when really you want to put your foot on the gas even more and steam.

[Dave Ramsey]

I'm gonna find a weekend job this Saturday night and Sunday night, because there's not any kids sports on Saturday night and Sunday night.

[John Deloney]

That's right.

[Dave Ramsey]

So I'm going to find a way around this. There's workarounds, and there's only so much of this we can not do because we're a dad so that we can do the other stuff because we're a dad.

[John Deloney]

Yeah, exactly.

[Dave Ramsey]

So I missed your baseball game, but you don't have to live with an abusive mother. Oh, there's a good trade.

[John Deloney]

That's a great trade.

[Dave Ramsey]

I'll take that trade, you know, and so, you know, whatever. That kind of stuff. So, you know, my kid's upset because my dad missed my baseball game. Well, guess what? All dads miss baseball games. And I have eight grandkids, and that means there's 17 sports on every weekend. And you know what? How many of them I make? Almost none.

[John Deloney]

Yeah.

[Dave Ramsey]

And I'm not a bad grandpa.

[John Deloney]

I mean, we've had. I've had this conversation many times on this show about the. What it really means when you say your family is the priority. And a lot of times the first thing we go to is, and the way I make them the priority is time. That's the first kind of like, bullet point under priority. Priority. When really there's a lot of different ways that we show priority. And when it comes to family, a big part of that is, you know, providing financially and making sure there's stability and all those other things that are just as valid of bullet points. And during any given season, we get to decide what's the number one bullet point underneath that heading of family as priority. It's not always time.

[Dave Ramsey]

Yeah, that's true. So, I mean, I don't know, but I'm gonna add. I'm gonna add income, and I'm gonna pinch every dollar. I'm gonna stop all of investing temporarily. Well, this is a temporary battle. This battle is not going to go on for 20 years. It's not. And so we're going to fight it through. And the better financial condition you're in, the better your headspace is in. And the way you get there is sacrifice and hours and sacrifice in, you know, spending so that, so that you've got the money to attack this and clear these debts. And that's the only thing I know how to tell you to do. And it'll work, too. By the way, does having more money.

[John Deloney]

And less stress sound nice but feel impossible?

[Dave Ramsey]

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[John Deloney]

Of going from broke to millionaire and exactly how I did it.

[Dave Ramsey]

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[John Deloney]

To be financially, I can help you finally get ahead.

[Dave Ramsey]

You can get Breaking Free from broke [e-mail] store. That's ramseysolutions.com store. Brock's in Indianapolis. Hey, Brock. Welcome to the Ramsey Show.

[Caller]

Hey, Dave, how are you? Thanks for taking my call today. I appreciate that.

[Dave Ramsey]

Sure. What's up?

[Caller]

Let me get to it. Yeah. So my father passed away in February of this past year.

[Dave Ramsey]

How old was he?

[Caller]

Yeah, he was 82. Wasn't unexpected. He was pretty sick overall. So with that, he didn't have a lot of investments per se. Right. So what he did has, he did have a house. And so my sister and I were both trustees of the estate. And so we are now working on redoing the house, et cetera, et cetera, getting ready to sell it. Right.

[Dave Ramsey]

Okay. All right.

[Caller]

We think, we think we're probably going to get, I don't know, 180 grand maybe each out of the house.

[Dave Ramsey]

Okay.

[Caller]

And so my question is, we met with our financial counselor actually last week, funny story, met with him last week and we were talking to him about do we take that money and put it on the house and pay off the house? Well, not all that. We probably still owe 80,000 on the house or so. Or do we go ahead and invest that 180 grand and thinking about the time value of money and so forth and what we could do with it. I'm just not really. My thought on it is I want to have peace in my life.

[Dave Ramsey]

Yes.

[Caller]

And so I don't know whether or not.

[Dave Ramsey]

It'S actually, it's actually the shortest direction to have peace and the shortest direction to have wealth or the same answer. And that's pay off the house.

[Caller]

Right.

[Dave Ramsey]

And here's how I know that it's not just an opinion. Okay? And Jade was there. We did the largest study on millionaires ever done in North America. We studied 10,167 of them. Them, 89% of them, 9 out of 10 are not millionaires because of an inheritance. Okay. Nothing to do with your inheritance, but a lot of people say all wealth is passed down. No, it's not. Most people that are wealthy started from nothing and became wealthy. Nine out of ten in America, okay? That's the numbers which gives everybody hope. Now, having said that, the number of millionaires that said I started from nothing and became a millionaire by not paying off my house and instead investing the money was very close to zero. The majority of them, like 85, 90% of them, paid off their home and all other debts as quickly as possible and then used the cash flow to invest. And that's what built their wealth. Wealth. So. And by the way, when the house is paid off, you also get peace.

[Caller]

Right, Right. And that's what I'm sort of shooting for. So I'm 55 years old. We haven't done a great job in our investments. We have some money invested. So he was saying, well, we're right at about 140 or so. So we really goofed off in the beginning.

[Dave Ramsey]

So if you pay off the house for 80, you could put 100 in investments and you could put the house payment on automatic draft out of your check account into investments, right?

[Caller]

Well, we could, yes. We'd also. So without the house payment, we'd have about 11,000 in margin.

[Dave Ramsey]

Good.

[Caller]

Right. I was going to put like 5 to 6 in investment goods and every month.

[Dave Ramsey]

Good, I like that.

[Caller]

And then. Okay, all right. So. So I guess my thinking was correcting because my wife's like, well, I want to use it to fix up the house and all this other stuff. And I'm like, well, we can do.

That after we get the house.

House paid off it.

[Dave Ramsey]

Only I would do that out of the cash flow and I would invest a little less and take instead of 6,000, make it 5,000 and put a thousand dollars in the rehab fund every month.

[Caller]

Okay, that's the thought. Yeah, that's good. I know she's really keen on doing stuff to the house, so I sort of have to take. Keep that in mind, I guess.

[Dave Ramsey]

I think that's a fair. I don't think that's unfair. I mean, you're. You're in good shape. You're going to be a multimillionaire when you're 65.

[Caller]

That's the plan, I hope.

[Dave Ramsey]

Well, that's the math.

[John Deloney]

How do you run the numbers out?

[Dave Ramsey]

What you just described will be that.

[John Deloney]

Okay, it's important to run those numbers out, Brock, if you've not done it, get on ramseysolutions.com and use that investing calculator and really see what this looks like for you. That'll give you a lot of the piece that you're looking for and it'll give you a plan and it'll help you better understand what we're telling you.

[Dave Ramsey]

Yeah. So if you're investing $5,000 a month for 10 years and you started with 100 plus what you've already got, which is 140, so you started with a quarter million, you' easily going to be worth several million dollars in 10 years.

[Caller]

Okay, okay.

[Dave Ramsey]

Sitting. I mean if you're putting it in good growth stock mutual funds and getting the average returns of the market, that's what you'll have. And all of the while been fixing up the house and all of the while have a paid for house.

[Caller]

Yeah. And that's to me, I think that's just key. I really want to be under the guise of debt. And so we're in baby step six now. We have no other debt at all. Still putting a child through school, but we're paying cash for that basically.

[Dave Ramsey]

Good. Well, and see, when that, when that's done, that helps them, that helps the renovation. On the house budget.

[Caller]

Oh, immensely. Absolutely. Yeah, yeah, yeah. Okay.

[Dave Ramsey]

Yeah, you get that, you get that one off the payroll. It opens up everything. So you're in really good shape here. But yeah, follow your instincts. You've got good instincts.

[John Deloney]

Yeah, I agree. You know, there's a big. I feel like that's one of the number one temptations we get when people call in is they want to invest. I mean, we had two calls earlier, they wanted to invest over paying off the house instead.

[Dave Ramsey]

And the data says you're wrong. The data says that the average millionaire doesn't do that. There you go. So buying or selling a home, by the way, is a big deal. And clickbait headlines, confusing data is out there right now. The median house price in America is a little over 440,000. That means half of them are more. Half of them or less. Just to give you an all the houses. No, that's the actual number. The average 15 year fixed rate is still under 6%. If you want to know more about housing market trends and get some free tools, go to ramseysolutions.com market or click the show notes on the podcast or YouTube and we'll help you out with that. Ashley's in Tulsa. Hi, Ashley. How are you?

[Jade Weshaw]

I'm doing well. How are you?

[Dave Ramsey]

Better than I deserve. How can I help?

[Jade Weshaw]

Well, we have quite a bit of jet, so we're kind of looking at two options, kind of consolidating all of our debt or bankruptcy. So the jet, the primary debt is student loan, house, personal debt, and then medical, and then car.

[Dave Ramsey]

Okay. You understand if you file bankruptcy, student loans are not bankruptible. And if you want to keep the house, it's not bankruptible. And if you want to keep the car, it's not bankrupt, or. So you're not really doing much filing bankruptcy.

[Jade Weshaw]

Okay.

[Dave Ramsey]

It's kind of useless. So how much is all these different debts? What's it all total up to? Not counting your house?

[Jade Weshaw]

Not including the house.

[John Deloney]

Not including the house.

[Jade Weshaw]

About 200,000.

[Dave Ramsey]

Okay. And what's your household income?

[Jade Weshaw]

65.

[Dave Ramsey]

And what do you owe on the cars?

[Jade Weshaw]

We owe 22 on just one car. We actually have three vehicles, and we own two.

[Dave Ramsey]

Okay.

[John Deloney]

How much of it's metal debt?

[Jade Weshaw]

About 10,000.

[Dave Ramsey]

Okay. And so that's 32 of 200. What's the rest of it?

[Jade Weshaw]

Student loan debt is about 80,000, which is majority mine. And then personal debt and credit card debt.

[Dave Ramsey]

What's the personal debt?

[Jade Weshaw]

Personal debt is, if I'm doing my numbers Right, about 15,000.

[Dave Ramsey]

Okay. And credit cards, 7,000. Okay. You're nowhere near 200.

[Jade Weshaw]

Am I not? Oh, that's including the house.

[Dave Ramsey]

Okay. What do you owe on the house?

[Jade Weshaw]

We owe 89.

[Dave Ramsey]

What's it worth?

[Jade Weshaw]

It's worth 130.

[Dave Ramsey]

Okay. And why are you guys only making 65? Who's not working?

[Jade Weshaw]

Well, we're actually both working, actually. Well, my husband's job actually pulls in 45. I pull in only 19,000 a year because I actually work full time out of school. However, I only make like $15 an hour. But I am actually in the process of trying to find a better job, I would hope. Well, finishing my testing for teacher. That doesn't. That. It doesn't. Even if you make more money, doesn't. It doesn't mean that you. Just because you have more money doesn't mean. Doesn't erase the problems that you currently have.

[Dave Ramsey]

Yeah, it does. You pay them off.

[Jade Weshaw]

True, true.

[Caller]

Yeah, you pay.

[Dave Ramsey]

You. You went $80,000 in debt to go do something. Not $15 an hour. You didn't go $80,000 in debt to $15 an hour. Right?

[Jade Weshaw]

Yeah.

[Dave Ramsey]

Yeah. So. So let's get our incomes up, both of you, and get in attack mode. Get you on a budget list. These debts, smallest to largest. No more eating out on vacations. You're spending money like you're in Congress around there. And y' all ain't making much. You're not working much. Y' all gotta get a bunch of hours, get your income up and start attacking this debt like you're mad at it. And that'll make it go away, kiddo. Buying and selling a home is a big deal, and you want an expert in your corner fighting for you to get the right deal at the right price. That's why we only recommend Ramsey trusted real estate agents. They're handpicked pros who know their stuff, listen to your needs, and have your back from the first call all the way to closing day. To find a Ramsey trusted agent near you, visit ramseysolutions.com agent ramseysolutions.com agent Our scripture of the day, Philippians 4. 8. Finally, brothers and sisters, whatever is true, whatever is noble, whatever is right, whatever is pure, whatever is lovely, whatever is admirable, if anything is excellent or praiseworthy. Think about such things. Herb Kelleher, that started Southwest said, the world isn't going to shower gold coins on you just because you have a good idea. You're going to have to work like crazy to bring that idea to the attention of people.

[John Deloney]

That's wonderful.

[Dave Ramsey]

Love it. Jennifer is with us in Phoenix. Hi, Jennifer. How are you?

[Caller]

I'm fine. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

That's what I expected. I have been a forever listener, but I'm attempting to get out of the hole again. I just got over three years of aggressive breast cancer and a post breast cancer caused neurological disorder. I am seriously in medical debt. It's causing me not to be able to work full time. I did pay for long term disability on my own, so I am getting paid by that, which is $2,500 a month. And I did move to a home that was less expensive, but I've been so sick for so long that everything's just been. It. I went through everything. I went through my money and more. I am. And I've. I raised three amazing children. One's in the Navy and you know.

[Dave Ramsey]

And you get a Social Security disability as well?

[Caller]

Well, my long term disability company demanded or actually required me to use their. Their partner to help me get Social Security disability.

[Dave Ramsey]

Okay.

[Caller]

But it's. I'm now being told it's going to take two years and.

[Dave Ramsey]

Okay, so you have 2,500amonth to live on. Yeah.

[Caller]

My son in the Navy is paying me $300 for a room in my house so that he can keep the address there, which is like the most amazing thing. And I do work a little bit, but I've been told I can't make more than probably $1,500 a month.

Agreed.

And be.

[Dave Ramsey]

And still be. Still be on long term disability. Yeah, yeah, that's true. At some point, they're going to start following you around with cameras to make sure that you're not working, you know, so. Yeah, right.

[Caller]

I work from home. I work from home.

[Dave Ramsey]

Most I know. But I mean, they're paying you $30,000 a year to not work. That's the point. So.

[John Deloney]

Right.

[Dave Ramsey]

They're. They're pretty.

[Caller]

And I'm. I don't have insurance, Dave. I haven't had insurance since.

[Dave Ramsey]

Okay, so how much? Why not?

[Caller]

Because I was on Cobra for 18 months and then I went on to the ACA and it was. It was 1500 dollars a month because they were looking at my previous year, which was too much.

[Dave Ramsey]

Yeah. So. So what do you. How much medical debt do you have?

[Caller]

50,000.

[Dave Ramsey]

Okay. All right. And I have no car. Right?

[Caller]

No car. I can't drive, so I sold my car.

[Dave Ramsey]

Okay.

[Caller]

To live off of. I have cashed out two very small $5,000 IRAs.

[Dave Ramsey]

Okay. So where you start is food. And you have enough for food, Then you go to lights and water, and you have enough for that.

[Caller]

Yes, and my mortgage is $1,000 a month.

[Dave Ramsey]

Okay. And we have enough for that.

[Caller]

I'm. I'm three months behind in that.

[Dave Ramsey]

Why?

[Caller]

Because I had two abdominal surgeries in December and I wasn't able to work for three months.

[Dave Ramsey]

Okay. But my point is this. You've got a very tough situation. There's no question about that. So what we have to do is we have to go all the way back to primitive basics, almost 8th grade civics class. We buy food before we buy anything. We keep the lights and water on before we do that and we pay the house payment before we do anything else. Yeah, those three things. First, food, shelter, clothing, transportation, and utilities. Basic four walls of life. And the medical bills simply are not going to get paid right now.

[Caller]

Right. And that's. And I'm not paying. Credit card. I only have like seven grand in credit cards.

[Dave Ramsey]

Yeah, you can't pay them either. You can't pay them either.

[Caller]

Can't pay them either. Right.

[Dave Ramsey]

Not right now. Not right now, because this. But everything's too temporary. It's either going to get worse or it's going to get better.

[Caller]

Well, this is the question is, do I just abandon it all because it's going to take so long that there's no way.

[Dave Ramsey]

It's not going to. It's not going to take so long because we're not going to be exactly here five years from now. This situation, this situation is not going to be the definition of your life for the next decade. It's the definition of your life for the next five. Five months, but it's not for the next decade.

[Caller]

How is it going to not be for the next five.

[Dave Ramsey]

I'm going to make the assumption that some healing is going to occur.

[Caller]

Well, this is the question is, is I, I don't have, I don't have, I don't have medical insurance.

[Dave Ramsey]

I understand. Understand.

[Caller]

So I haven't had my on call, my third year oncology appointment. I haven't had my. I haven't had the critical appointments that will allow me to take the medication that I need.

[Dave Ramsey]

Okay.

[Caller]

And this. And the state is obviously taking forever because they're not getting answers. And, and I, and I don't know what. I don't know. I don't know what to do anymore.

[John Deloney]

Can I ask a question? Are those apparent appointments, are you not going because you're just not able or because you're afraid of the bills that will come because of it?

[Caller]

Correct.

[Dave Ramsey]

What does it, what does the appointment take to go and see that one doctor for that one appointment you're talking about?

[Caller]

Well, for my critical appointments, it'll be probably a grand.

[Dave Ramsey]

Okay.

[John Deloney]

I'd go get your care. Go, go, go prolong your life.

[Dave Ramsey]

You have the money to do that and eat and pay the house payment, but you don't have the money to do anything else.

[Caller]

Right.

[Dave Ramsey]

So you can scrape out the very basic appointments, though. Very, you know, you can't do a ten grand one. You don't have that unless they want to. Unless they want to do it as a pro bono thing and as an act of kindness and you can ask for that. I certainly would. But as far as I think what's happening is the, there's the. Well, you're human. And so with all the hell you've been through, it's very easy to lose a portion of your perspective. And so what I'm trying to do is block this out and set things to the side so that I can see clearly. Yes. And so I'm saying I'm not worried about the $50,000 in debt. I'm not worried about the credit card debt today. We'll get around to that. We'll either bankrupt it, never pay it, or we'll get around to paying it. When you're healed and making good money and your life is back to some semblance of normal again, that's going to be a little while apart. Apparently it's probably not 20 minutes from now, but it's also not 20 years from now. So something's going to happen and things are going to move in one direction or another, a devastating direction or a much better direction. And in either case, the medical bills will be dealt with. So I'm not worried about those. But I do want you to go get the basic $1,000 item, a $500 item, a thousand dollar house payment and food and lights and water. And other than that, I'm not paying anything.

[Caller]

Right.

[Dave Ramsey]

You don't have the money.

[Caller]

Well, you know when people call, then.

[Dave Ramsey]

Just tell them I don't have any money.

[Caller]

That's what I've been saying.

[Dave Ramsey]

I'm on. I'm on death's bed. I'm a cancer survivor, barely. And right now I don't have a single dime because I don't have any money. I will call you back when I have some money and hang up. There's no sense having a conversation with them. They're what's called a bill collector.

[Caller]

Right?

[Dave Ramsey]

And all of that is getting, you know, somebody In a cubicle 500 miles away is getting in is interfering with the forced ranking of priorities here.

[Caller]

Right.

[Dave Ramsey]

And that's what I'm trying to force upon you is food.

[Caller]

Right.

[Dave Ramsey]

Well, as a lights and water, how.

[Caller]

I had a hard time with doing that. I keep going.

[Dave Ramsey]

Well, you're a person of honor. You would like to pay your bills, and that's a good thing. It's a person of integrity.

[John Deloney]

But it's. It's literally survival mode.

[Dave Ramsey]

But today, the best way for you to pay your bills is to not pay your bills.

[John Deloney]

Yeah. You got to live. You got to live first so that you can pay your bills.

[Dave Ramsey]

That's it. Yeah. I'm sorry, kiddo. Man, what a mess. I'm so sorry. Wow, that puts us hour of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily. Walk with the prince of peace. Christ Jesus.

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