Stop Being Normal, Attack Your Debt Now!

Summary

Podcast Summary: The Ramsey Show – "Stop Being Normal, Attack Your Debt Now!"

Release Date: August 5, 2025

Introduction

In this episode of The Ramsey Show, host Dave Ramsey, alongside co-host Ken Coleman, dives deep into the pressing financial dilemmas faced by listeners. The central theme revolves around breaking free from the constraints of "normalcy" in financial decisions and aggressively tackling debt to build wealth and secure a stable future.

Ken Coleman's Financial Predicament [00:46 – 04:10]

The episode kicks off with co-host Ken Coleman sharing his personal struggles:

• Income Challenges: Ken and his wife both work full-time for a school district, yet their combined income barely scratches the surface, making them eligible for welfare despite their efforts (Ken Coleman, [00:48]).
• Housing Issues: They own a house worth approximately $189,000 but owe $120,000. The current real estate market prohibits them from selling and moving without quickly falling back into the same financial trap (Ken Coleman, [01:24]).
• Debt Stress: Ken expresses feeling cornered with no viable exit from their debt situation ([01:44]).

Dave's Unfiltered Advice [03:03 – 07:56]

Dave Ramsey doesn't mince words as he addresses Ken's situation:

• Income vs. Expenses: Ramsey emphasizes that Ken's issue is not overspending but insufficient income. He recommends resetting their careers and seeking better-paying jobs, even if it means taking low-paying positions to increase their income (Dave Ramsey, [03:03]).
• Job Performance: Dave bluntly tells Ken that his current jobs "suck" and that they need to find more sustainable income sources (Dave Ramsey, [03:03]).
• Generosity vs. Frugality: Rachel Cruz joins the conversation, urging Ken's wife to secure a reliable job to bolster their income, highlighting that even low-paying jobs surpass their current earnings (Rachel Cruz, [05:34]).

Supporting Ken's Family Situation [05:34 – 7:56]

Further discussion reveals:

• Autistic Sons: Ken's two adopted sons require additional care, complicating their ability to increase income as his wife must stay home with them ([05:34]).
• Debt Sustainability: Ramsey reiterates the unsustainability of their current debt, advising against selling the house as it won't resolve their core income issues ([07:09]).

Listener Calls and Financial Solutions

Throughout the episode, multiple listeners call in with diverse financial challenges. Each segment provides practical advice, emphasizing the importance of budgeting, increasing income, and eliminating debt.

1. Steve from Lynchburg, Virginia [10:24 – 19:42]

   • Parents' Foreclosure: Steve seeks advice on assisting his parents who face foreclosure and have multiple debts.
   • Ramsey's Recommendation: Sell the current house, purchase a more affordable condo, and eliminate all existing debts using the proceeds, ensuring a sustainable financial plan ([16:10]).

2. John from Texas on Car Purchase [21:40 – 29:46]

   • Car Debt Dilemma: John contemplates buying a new used car versus keeping up with his current car loan.
   • Dave's Strategy: Sell the current car, use savings to pay off the debt, purchase a reliable yet inexpensive vehicle, and focus on systematically managing finances through Ramsey's Baby Steps ([22:56 – 27:17]).

3. Carson from Provo, Utah on Frugality [26:05 – 34:34]

   • Being Too Frugal: Carson questions if his extreme frugality is viewed negatively.
   • Balanced Financial Management: Dave and Rachel advocate for balancing generosity, enjoyment, and investing, ensuring that frugality doesn't impede overall wealth-building ([26:05 – 29:46]).

4. Jane from Florida on SBA Loan and Housing [34:01 – 42:44]

   • Small Business Acquisition: Jane and her fiancé recently purchased a business with an SBA 7A loan and are debating renting versus buying a home.
   • Ramsey's Guidance: Advise against buying a house immediately due to the significant debt load, recommend focusing on paying off the SBA loan first, and suggest reconsidering the timing of such financial commitments ([34:01 – 42:44]).

5. Mel from Nashville on Debt After Loss [54:28 – 65:09]

   • Debt Amidst Grief: Mel lost her husband and has accumulated $25,000 in credit card debt while managing two children.
   • Comprehensive Support: Dave offers emotional support and practical strategies, emphasizing budgeting, eliminating credit card usage, and seeking community and pastoral support to navigate grief and financial hardship ([54:28 – 65:09]).

6. Will from Ohio on Receiving Family Loans [75:31 – 100:34]

   • Debt Consolidation Offer: Will's grandmother offers to pay off his credit card debt, but he hesitates due to strained family relations.
   • Ramsey's Advice: Reject loans from estranged family members to preserve relationship quality and avoid further complications, advocating for self-managed debt repayment ([75:31 – 100:34]).

7. Megan from Vermont on Vehicle Replacement [100:47 – 114:54]

   • Road Warrior's Car Needs: Megan needs a reliable car due to extensive driving for her job but is strapped with car-related debt amidst other financial obligations.
   • Strategic Car Purchasing: Dave advises saving aggressively to buy a reliable used car outright, avoiding new car debt, and choosing cost-effective vehicles that meet her work needs without financial strain ([100:47 – 114:54]).

Success Story: Lee and Liz in Tampa, Florida [85:53 – 114:54]

One of the episode's highlights is the inspiring story of Lee and Liz:

• Debt-Free Journey: Within six years, the couple eliminated $261,000 in debt, including mortgage, while building a substantial net worth.
• Strategic Financial Planning: They adhered strictly to Ramsey's Baby Steps, consistently paying off debts, investing in their 401(k)s, and maintaining a clear net worth tracking system.
• Balanced Lifestyle: Despite aggressive debt repayment, they managed to enjoy vacations and home improvements, showcasing that disciplined financial management doesn't preclude living a fulfilling life ([85:53 – 114:54]).

Philosophical Insights and Motivational Guidance

Throughout the episode, Dave and Rachel emphasize shifting mindset from survival to proactive wealth-building:

• Rejecting "Normal": They encourage listeners to break free from societal norms that perpetuate debt and financial instability, advocating for intentional financial planning and disciplined execution.
• Overcoming Shame: Dave addresses the emotional toll of debt, urging listeners to shed feelings of shame and recognize that many are in similar situations, fostering a community of support and shared goals.
• Importance of Budgeting: Consistent emphasis on budgeting as the foundation for financial peace, ensuring every dollar is accounted for and directed towards meaningful financial goals.

Conclusion

This episode of The Ramsey Show serves as a comprehensive guide for individuals grappling with debt and financial instability. Through real-life listener stories and unfiltered advice, Dave Ramsey and his team underscore the importance of intentional budgeting, increasing income, eliminating debt, and maintaining a balanced approach to spending and saving. The episode reinforces the message that financial freedom is attainable through disciplined action and a supportive community.

Notable Quotes

• Dave Ramsey [03:03]: "Your job just sucks. We've got to reset your careers, and you'll be happy to help you with that."
• Rachel Cruz [05:34]: "We're going to literally go, where are the open jobs that most people don’t want to go, but they're already going to make more money than what you guys are making."
• Dave Ramsey [07:56]: "There's a spirit over him. That's just the 'I'm stuck' spirit. Yeah, I'm trapped. There's nothing I can do. There's nothing I can do."
• Rachel Cruz [26:05]: "I don't want to put you on the spot, but I feel like I need to ask you this."
• Dave Ramsey [79:36]: "You cannot live on Social Security with what you're talking about, right? You got mortgage, you got HOA, you got liens from credit cards, all because you were trying to live on money that is not enough to cover your bills."
• Rachel Cruz [90:57]: "If you want to play the 4% game, it just doesn't add up."
• Dave Ramsey [72:54]: "Here we go."

Final Thoughts

The Ramsey Show continues to deliver actionable financial advice coupled with empathetic support, making it a valuable resource for anyone seeking to regain control of their financial lives and build a foundation for long-term wealth and security.

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. Ken Coleman Ramsey personality number one best selling author and host of the brand new hit on the Ramsey network called Front Row Seat. He's my co host today. Open phones at Triple 882-55-5225. Jackson St. Louis. Hey Jack, how are you?

[Ken Coleman]

I'm great. How are you guys doing?

[Dave Ramsey]

Better than we deserve. What's up in your world, Dave?

[Ken Coleman]

I'm broke. I'm borrowing money from family to live. My wife and I both work for a school district. We work all the hours they'll work as every every chance they get to do some extra job. I'm qualified for welfare now. I've got two adopted sons at home. We've adopted a lot of children through the years. Never made much money. And I've got a house that I.

[Dave Ramsey]

Owe about a hundred working 120. I'm sorry. Go. I won't interrupt you. 120.

[Ken Coleman]

I'm sorry.

[Dave Ramsey]

What's it worth? What's it worth?

[Ken Coleman]

It's worth about 189. Okay, here's the problem. Every house that's for sale in our area is cost more than what I owe on the house I've got now. So I could sell the house and break out with my equity and start over. Then I'm going to be right back in the position I'm in again. So I feel like I'm in a corner I can't get out of.

[Dave Ramsey]

Okay. One thing I drove by there that I wanted to ask about and I almost interrupt you to apologize was the problem. You're both working full time jobs and somehow you still qualify for welfare for the fee program?

[Ken Coleman]

Yes.

[Rachel Cruz]

What's your combined income?

[Ken Coleman]

It's a little less than 35.

[Rachel Cruz]

And you work for the school system?

[Ken Coleman]

Yeah.

[Dave Ramsey]

Wait a minute, wait a minute. That's not even $7 an hour. You're not working 40 hours. Not two people.

[Ken Coleman]

Well, she. Well here, here's the catcher. She is a substitute teacher but she works every time they call her.

[Rachel Cruz]

Yeah, but that's not full time.

[Ken Coleman]

We don't know what else to do.

[Rachel Cruz]

Well, that's not a full time job. That's sporadic at best.

[Ken Coleman]

Well, my, my contract is for a little bit less than 20 and then she makes the rest.

[Rachel Cruz]

What do you do to make $20,000 for the school system?

[Ken Coleman]

I'm in transportation and I drive five routes A day.

[Dave Ramsey]

Okay. And how long you been doing that, hon?

[Ken Coleman]

This will be my sixth year.

[Dave Ramsey]

Okay. All right. What did you do before that?

[Ken Coleman]

I pastored churches and ran a bank. I actually ran a bank for eight years. This is. This is. This is a world I'm not used to. I don't know what to do. I don't know what to do.

[Dave Ramsey]

Okay, well, I do. Your job sucks. You need a different job. You make no money, sir. That's the problem. You guys are lit. You are living at the poverty level. I mean, with two kids and $35,000. Because she's not working full time. And. And when you work, you're not getting paid anything. And so, dude, you can make more than you make working at Target 40 hours a week, putting boxes on shelves way more than you make.

[Ken Coleman]

Yeah.

[Dave Ramsey]

And so your job just sucks. We've got to reset your career sites. You do, and we'll be happy to help you with that, but you have an income problem, not an outgo problem. And your house. And you're correct. I agree with your assessment. Your house sale will not fix this.

[Ken Coleman]

Situation because you've cost me $17,000 to sell it. That might be commission.

[Dave Ramsey]

Doesn't matter. Doesn't matter. It doesn't fix the problem because you have an income that is not sustainable. You cannot live on it.

[Ken Coleman]

Yeah.

[Dave Ramsey]

And so you have to reset your career.

[Rachel Cruz]

Yeah. I don't want to put you on the spot, but I feel like I need to ask you this. If you were sitting across from somebody who used to go to the church you pastored and they told you what you just told, what would your advice to that person be?

[Ken Coleman]

Well, that's a good question. I. You know, if it's.

[Rachel Cruz]

Don't, don't listen. You've already.

[Ken Coleman]

Insanity is. You know, as they say, insanity is doing the same thing over and over again, expecting different results.

[Rachel Cruz]

Correct.

[Ken Coleman]

So my. My advice would probably be what you just told me.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

So you are. I think that there's been a series of things that have happened that have led you to this. We don't need to break all those things down, but if I could just encourage you to do what you believe, to do what you would tell someone else. And your wife needs to go get a real job today. I don't care if she's being a cashier at the local supermarket, but we're going to literally go, where are the open jobs that no teenager. Most people don't want to go, but they're already going to make more money than what you guys are making. And you're going to have to get to the point where you say, I can do more things if I can turn a wrench, if I'm handy. I'm going to start working on some construction crews. Because at this point, you guys have been making so little money, you have gotten to the point where you believe that's all you're worth.

[Dave Ramsey]

Yeah. And you're not. That's not true.

[Rachel Cruz]

Garbage. So, pastor, I would say I'm going to use the word pastor on you. Get after it, man. Let's change our day. Let's change our week. Let's change our month by going and getting to work.

[Dave Ramsey]

If you're working 40 hours, you're making $9 and target and targets paying 20.

[Ken Coleman]

Grace, I do have a separate issue here. I've got two. The two boys that adopted are autistic, and my wife has to stay with him. Some. At least some.

[Dave Ramsey]

Yeah.

[Ken Coleman]

So she's doing as a substitute has allowed us to be able to take care of them.

[Dave Ramsey]

You know what happens when she's substituting and you're driving?

[Ken Coleman]

Well, I get a few breaks during today, but that's about it. We. We. We take. We tag team.

[Dave Ramsey]

How old are the boys?

[Ken Coleman]

15 and 11.

[Dave Ramsey]

Are they going to require care their whole life?

[Ken Coleman]

Yes, sir.

[Dave Ramsey]

Okay, so you don't have a choice. You have to find a workaround.

[Ken Coleman]

Yeah, yeah. It's. It's. I'm telling you, I'm in a predicament. I don't know what.

[Dave Ramsey]

No, you do know what to do. You've got to get a different job. Dude, it's very simple. It's a math problem. You are not making any money, and you have decided that this is the only possible thing for you. And that's so fatalistic and incorrect. So I don't care what you do. I don't care if you start a business. I don't care if you cut grass. Dude, if she starts cleaning toilets, she can make four times what she's making now. Being somebody's maid. Yeah. People are paying $25 to $50 an hour to be for maids right now.

[Rachel Cruz]

And take the boys with her, you know, or she gets a customer service job, or she's on the phone just doing a basic script. She could be making $15 an hour easy from home.

[Dave Ramsey]

But we have to get in the generating income mode rather than we are trapped mode. You are not trapped. You have the worst possible jobs, both of you, for this situation. And so you've got to start going, what can I do to make Some money. And that's not greed. That's survival. Because your house is not unreasonable. Your life is not unreasonable. You're not a bunch of overspenders. You're not out of control. You just are broke. You just don't make any money. Sir. Yeah.

[Rachel Cruz]

There's a spirit over him. There's a spirit over you, Jack, and you know it.

[Dave Ramsey]

That's just the I'm stuck spirit. Yeah, I'm trapped. There's nothing I can do. There's nothing I can do. You said it like four times and it's just not true. We are talking to a guy who's done things and can do things. And you've got to do something else in your situation. You cannot survive. And so, yeah, you, both of you are looking for jobs today. And you may be looking for jobs and upgrading jobs and jumping in and out of jobs for the next year to get your income up. 20, 30, $40 an hour. And let's get after it. Go get you a lawnmower, man. Get you a pressure washer. Do something. You make a lot more money than you're making right now. Smart people don't wait for trouble to show up. They think ahead. It's true with money. And it's just as true about protecting your home. That's why I recommend, recommend Simplisafe. Because most security systems only respond after someone's already broken in. But by then, the damage is done. That's not a plan, that's a patch. Simplisafe is different. Their active guard outdoor protection helps stop break ins before they happen. Their AI powered cameras watch for suspicious activity. And if someone's lurking live, Simplisafe agents can talk to the person, turn on spotlights, and even call the police. That's the kind of thinking that prevents crime in real time. Monitoring plans start around a dollar a day for your first month. It's free. And there are no contracts, just proactive protection. That's why over 4 million Americans trust Simplisafe and why it's been named best home security system of 2025 by CNET. And right now you'll get 50% off a new system with professional monitoring. Go to simplisafedirect.com that's simplisafedirect.com there's no safe like SimpliSafe. Steve's in Lynchburg, Virginia. Hi, Steve. How are you?

[Ken Coleman]

Good. Guys, how are you all doing today?

[Dave Ramsey]

Better than we deserve, sir. What's up?

[Ken Coleman]

Trying to help my parents that have gotten into pretty bad position. Their house was Foreclosed on. They did a loan modification to get it out of foreclosure. So the loan's current. They currently have about $13,000 and judgments against the house based on two credit card debts and a medical debt and a HELOC and a HUD loan. And I don't know, you know, what advice to give them to help them out but not enable them. I don't know if bankruptcy would affect the HUD or heloc, so just trying to look for different answers.

[Dave Ramsey]

The foreclosure must not have occurred. There's not a plan with a traditional HUD mortgage where you actually get foreclosed on and then they give you the house back on a modification. They must have done the modification right before the actual foreclosure sale occurred, while the house was in foreclosure. Does that sound right?

[Ken Coleman]

Yes. Yes, sir. The foreclosure was in process.

[Dave Ramsey]

But once they drop the hammer at the actual auction at the courthouse steps, there's no going back. That's my point. Okay, so that's. Anyway, so they've got a loan modification, a HELOC and a bunch of debt. Why are they not able to pay their bills?

[Ken Coleman]

They're, they just haven't made smart decisions with their money and I think they were, you know, depending on Social Security and other stuff and realize that how old are a lot quicker than what they are both 65.

[Dave Ramsey]

Okay. Do they both work?

[Ken Coleman]

My mom has never worked due to, we'll say, medical issues. My dad has worked and he still works some jobs. He's a contractor, so he does like remodels and stuff. But it's not able to do as much as he used to from doing construction for 40 years.

[Dave Ramsey]

He's not physically able.

[Ken Coleman]

He'S not physically able to do a full time position. And I've tried to talk what's wrong.

[Dave Ramsey]

With him physically because I'm 65 and I work full time and I could work full time swinging a hammer if I had to.

[Ken Coleman]

Yes, sir. He's, he's just, he's broken his ankle a couple times and when he was in the military, he broke his back falling off a tank. So it's just something that he can't, you know, carry lumber and stuff up.

[Dave Ramsey]

And he never has been able to break it in, break his back six months ago. He broke it 20 years ago.

[Ken Coleman]

Right.

[Dave Ramsey]

So what do you do for the last 20 years for carrying lumber?

[Ken Coleman]

He's, he's been able to do it. I guess just the age and arthritis is catching up to Him.

[Rachel Cruz]

Well, but here's the thing though. He's an actual contractor. So if he were to go out and beat the bushes for some restoration projects, renovation projects, he can put a crew together of young guys. He knows how to do it. And a contractor doesn't have to be swinging the hammer.

[Dave Ramsey]

If he goes or lifting the lumber.

[Rachel Cruz]

He goes and gets good guys, young guys that want to learn the trade. My point is he could make really good as a gc.

[Dave Ramsey]

The reason we bring this up is you can't live on Social Security with what you're talking about, right? You got mortgage, you got hoa, you got liens from credit cards, all because they were trying to live on money that is not enough to cover their bills. Right. It's an income problem. Am I wrong?

[Ken Coleman]

You're absolutely correct. I just don't know if there's, I've heard you say so many times, you know, if you talk to creditors, you know, they'll usually settle pennies on the dollar.

[Dave Ramsey]

They will, they will. But he's going to be right back there again, right? Well, if we clean them up, I don't want them coming back. I don't want the same, same mathematical problem in the household recurring. And so we've got to fix. Now if we fix the overall situation to where, in other words, the income is enough to cover the household expenses through whatever reason, we either reduce the expenses that far or we increase the income. Either one of those. If we do either one of those, then we've got a sustainable situation. Then if you went in and used some of your money to settle some of the old debts and get them cleaned off to where they've got a clean slate to start going forward. That would not be enabling and that would be a good move on your part if you've got that extra money but where you just pay off that stuff and they keep doing the same thing that got them there in the first place, they're going to be right back again. Follow me.

[Ken Coleman]

Right? And that's kind of where I'm selfishly like, well, maybe if I get them to file bankruptcy, I'll clear this up and they won't be able to go into further debt because they're.

[Dave Ramsey]

Oh no, they can get into that. Oh, you can definitely get into that. After bankruptcy. Credit card company will send you a pre approved credit card 20 minutes after you file.

[Ken Coleman]

Okay, well the, well, HELOCs and HUD loans, are those negotiable down? Do you not have, you know, they.

[Dave Ramsey]

Will not negotiate because they have a house securing Them.

[Ken Coleman]

Right.

[Dave Ramsey]

So how much do they owe? How much they owe on the first mortgage?

[Ken Coleman]

121,000.

[Dave Ramsey]

What about the HELOC?

[Ken Coleman]

HELOC and HUD are both 30,000.

[Dave Ramsey]

Okay. And what's the house worth?

[Ken Coleman]

350Ish.

[Dave Ramsey]

Okay, so here's an idea. Get them on a budget. They can live on with a paid for house. Sell the house and buy a $200,000 condo. Paid for, no debt. Now they got no house payment. And if you settle the credit cards and get rid of them, well, you could actually pay them off out of the sale proceeds. You don't even use your money. And then buy a house with the money that's left over in cash. A condo with a house, money that's left over in cash. And if that sets them up on a budget that they can live on the amount that they've got coming in without either one of them working much, then fine. But I still think your dad ought to go do something.

[Ken Coleman]

Right, I agree. What about the idea that I've been floating now is buying the house from them?

[Dave Ramsey]

No, Absolutely not. No, because we're not addressing the core issue. The core issue is they can't live on it. I mean, if you just gave them a free house. Yeah, I guess, if you want to do that. I mean, do you have an extra $350,000 laying around?

[Ken Coleman]

I do.

[Dave Ramsey]

You do. What's your net worth?

[Ken Coleman]

I do. Close to 2 million.

[Dave Ramsey]

Okay. All right.

[Rachel Cruz]

You buried the lead on us.

[Dave Ramsey]

Yeah. That's information that would have changed the whole discussion from the start. But if you want to do that, then you own the house. But I still want them to create a sustainable life. And so I want them to go through Financial Peace University. I want them living on a budget, and I don't want them to. I want them to promise to never borrow another dime the rest of their entire lives.

[Ken Coleman]

Right. And we've talked about it. I think without the house payment, you know, their Social Security income and the side jobs they could easily get by on.

[Dave Ramsey]

They mathematically could. But they've chosen not to do that in the past. They've chosen to let their house go all the way into foreclosure. They've chosen to not pay credit cards to the point they now have a judgment lien on their house. And so they'll choose that again unless we have a very clear understanding. And I would write it down not as a legal agreement, but as a clarity agreement.

[Rachel Cruz]

And my concern is, if you buy the house, and I'm wondering here, are you planning to let them live there rent free.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

I just wanted to clarify that. Is that the plan?

[Ken Coleman]

That's the plan. I just feel like if I try charging rent and they got behind, it would just.

[Rachel Cruz]

No, no, no, I get that. But here's. Here's the thing. I'm going to say I don't even like this because let's say you do that and they live rent free, but they don't stick to a budget now the resentment is so high. And then you got this stupid house. I'd make them sell the house. I wouldn't buy this house if I were you. Whether you have the money or not.

[Dave Ramsey]

I might buy it. I might disagree with Ken. But under the conditions that address his concern, and that is me and mom and dad have a very clear understanding. We're going to have zero debt when this transaction is complete. And you are promising to a live on a written budget that the two of you run every month. And I'll help you with it. I'll coach you along and be you promise to never borrow money again under any circumstances ever.

[Ken Coleman]

Right.

[Dave Ramsey]

The rest of your breathing freaking life. Okay? And if you do those, if they stick to those two things, they can sustain on Social Security with no house payment. And you're paying. You own the house. House is going to go up in value. You'll be all right over time. You're going to have some repair costs and taxes and insurance you got to come out of pocket with annually and you'd have to do those. You have to plan on that. But you've got the money to do this. If they agree to make the changes in their behaviors, characters, habits, and they agree. And I'm literally going to write this out as a one page document that we agree to. I'm afraid they sign it.

[Rachel Cruz]

I don't know why.

[Dave Ramsey]

I. There's no evidence that they will, so. You're right. You're right. Yeah. That is. That is a correct assumption. But that's the only way I would do the deal. Yeah. Otherwise I simply make them sell it. And that's really hard to do. You've got the money and it's super hard to do since you got the money.

[Rachel Cruz]

Yeah, it is. But I'm a little heartless today.

[Dave Ramsey]

You are? Yeah. You're just kind of getting with it today. Glad I got you on here because I might have wussed.

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[Dave Ramsey]

John's in Texas. Hey, John, how are you? Hey, Dave.

[Ken Coleman]

I'm doing good. How are you?

[Dave Ramsey]

Doing better than I deserve. What's up?

[Ken Coleman]

So I kind of got an issue. I need to know. I just need someone With a. With more insight than I do on this. If I'm taking a more of a risk than I should, I'm. I'm looking at buying another car. A used car. Since I've been 18, I've been driving 500 beaters. And that's just the way I've lived. I got married, got my wife pregnant, and I bought a new car. And I kind of regret it because I have 13k and of that car I still need to pay off. It's reliable. But I've all said, you know, I should just stuck with a good used car. So I'm looking at getting another one. My usual budget buying a car is around 5k. But I've been. I live in an area where it's hard to find a reliable car for 5k. You'll typically buy it for 5k and then you'll have to sink another 1, 2, 3 grand and repairs into it. And I've come across car that's at $9200. It's got 43,000 miles on. It's Alexis ES300, super reliable. The dude said he has receipts from every time they got gas. I mean, it's got every record that you need there. It's a mint condition.

[Dave Ramsey]

John, do you have 90, $200?

[Ken Coleman]

I do, I do. Yes sir, I have. So in cash wise, I have about 30k disposable income and about 5k in crypto and silver that I don't consider spending money. But I have right Now I have $10,000 in cash on my desk and I'm looking at it.

[Dave Ramsey]

And. And you have a $13,000 car payment?

[Ken Coleman]

Yes, sir.

[Dave Ramsey]

Okay. All right. I would sell the crypto today.

[Ken Coleman]

Okay.

[Dave Ramsey]

For all the reasons. And I would pay off your car today and I would buy this car.

[Ken Coleman]

Okay. Okay.

[Dave Ramsey]

You've got the cash to do all of that?

[Ken Coleman]

I do, yep.

[Dave Ramsey]

I'd be debt free by the end of this transaction and have two decent cars and then start saving with no car payment. Is that your only debt other than.

[Ken Coleman]

Your home, that is. Me and my wife got a. We got a lawsuit from a car wreck. We finally settled a lawsuit and I paid off all my debt this past year.

[Dave Ramsey]

Except her car. Except that car she's driving, yeah. Okay. And you got a baby on the way you said, or brand new baby?

[Ken Coleman]

No, he's one and a half.

[Dave Ramsey]

Oh, good. Okay, perfect. And you're, you're what, 26 or 25?

[Ken Coleman]

27.

[Dave Ramsey]

27. Pretty good guess. Okay. And so almost like I've done this. Yeah. And so. Yeah, that's exactly where you are. And now here's the trick, dude. Okay? You have mastered the art of living frugally in order to save money. You have not mastered the art of managing money, which will make the money that you have coming in now with no debt grow really, really fast. And so I'm going to give you guys every dollar premium for that baby. And I want you and your wife to sit down with zero car payments. And you have the newer, you have Lexus. She has the paid for $13,000 of debt that's gone. And you've got some money over here to work your baby steps. And now we got to build and make sure we have an emergency fund of three to six months of expenses. And then once we have that, we're going to start investing in our 401ks. And you're going to be wealthy, but you're going to systematize your frugality rather than just saying frugality is going to save me. Frugality won't make you wealthy. It is one of the things that will cause you to build margin and the margin will make you wealthy. But you can't frugal yourself into rich. You can only frugal yourself into survival. And you live in a cave, collect lent and only come out on triple coupon Thursday. And so that's frugality, but there's no life in there. And so that's the $500 car thing. And so you've been very wise in that sense. But I want you to just harness that energy and focus it now and system. And that's called managing money, not just cheaping. Cheaping is good for a while to get you where you need to go. You're going to be a great dad. You're going to be a great husband. You're a good man. I'm glad you called. We want to help you and your family. You hang on. We'll have them pick up and get you going on this. Carson's in Provo, Utah. Hi, Carson. Speaking of frugal, what's up?

[Ken Coleman]

Hey, how's it going? I'm doing great. How are you?

[Dave Ramsey]

Better than I deserve. How can I help?

[Ken Coleman]

Yeah, no, I loved hearing what you were saying before. I guess my question is how do I know if I'm being too frugal or too cheap? I love kind of what you talk about giving and I think that's something that I could be a little better at. But it's like sometimes I'm a little too frugal or a little too cheap or the people around me can come back.

[Dave Ramsey]

Well, you live in a cult. You live people around you that overspend. And so if a congressman says you're being too frugal, that's not an indication you're frugal. It's just an indication you're on track. So broke people make fun of your finances. That's okay. So that doesn't bother me. What bothers me is you're wondering. So are you married?

[Ken Coleman]

I'm not. So I'm 24. I just started my first full time job and I'm making pretty good money.

[Dave Ramsey]

What's pretty good money?

[Ken Coleman]

I'm making 85,000 a year.

[Dave Ramsey]

Good. What are you doing?

[Ken Coleman]

I'm a computer, well, software developers.

[Dave Ramsey]

Good, good for you.

[Rachel Cruz]

Give us some examples. Let's say Dave and I go to lunch with you. Give us a couple of examples where we might think you're too frugal. What is your best guess?

[Ken Coleman]

If I didn't offer to pay if I chose or like made some comments about the most expensive thing on the menu is, you know, ridiculously expensive, or if I chose, maybe like the cheapest thing on the menu is a little obvious.

[Dave Ramsey]

I don't know.

[Rachel Cruz]

That's. I don't. That's not jumping out.

[Dave Ramsey]

That's just somebody that's being aware.

[Rachel Cruz]

Yeah. I think you may be beating yourself up.

[Dave Ramsey]

Yeah. I think you're doing okay on that. Yeah. Here's the thing. There are three things you can do with money, and you should always do all three things to be psychologically and spiritually mature. You should always be generous. So when you're at lunch, regardless of what you order, I want you to leave a nice tip. Those people work hard, okay? The second thing is you can enjoy money. And I want you to get some joy from money. I used to work for a guy that was trying to help me build wealth. And he said, dave, I want you to build enough wealth that you read a menu from the left to the right. Most people spend their whole lives looking down the price column to choose what they're going to order. I want you to order what you want to order regardless of the price. And that means you've built enough wealth that it doesn't matter what you have for freaking lunch, okay? And so I want you to enjoy your life within reason and the, you know, so generosity, enjoy and then investing. And I want you to be systematically investing. So if you're giving money and you're enjoying money, you're doing no investing, you're out of balance. If you're investing and you're enjoying money but you're not doing any generosity, you're out of balance. You follow me? So any of that, it's a three legged stool. You got to get all three legs to sit down on that stool. And I'd be working on that and practicing. You're good at living on less than you make. That's a natural gifting. My wife is the same way. My wife has leftovers in the refrigerator and we're multi, multi, multi millionaires. It makes no sense at all, okay? But they're there and then tells me how great they are over and over and over again just to try to sell me on them. After 43 years, she's still trying to make this sale. Her natural gifting is frugality. Okay? Some people's natural gifting is generosity. Some people's natural gifting is they love saving. They get a hive from investing and watching their mutual fund account grow. So lean into that, enjoy the ride, but make sure you're doing some things that feel a little bit like you're spending too much that's you enjoying your money while you're being generous while you're investing. And if you're doing all three, you're going to be okay.

[Rachel Cruz]

That's right. Quick question. Would you describe yourself as fearful or hopeful with money?

[Dave Ramsey]

Will?

[Ken Coleman]

Oh, me, I'm sorry.

[Dave Ramsey]

Oh, my bad. I pushed the wrong.

[Rachel Cruz]

Carson's already on hold.

[Caller]

I got.

[Dave Ramsey]

Put him on hold.

[Rachel Cruz]

Yeah, I think. Here's what I was going to get at. I think people have to. It's a great point you made. You got to ask yourself, is my natural default because of the environment I grew up in or the experience that I've lived to this moment? Both your environment and experience is what shapes the way you see any issue and certainly money. So ask yourself, am I, is my default my natural pin towards fear or is it towards hope with money? And there's no wrong answer here. But when you can see that, then you can go into the roots of this and go, why am I naturally fearful about money? Or why am I tending to be a little bit more hopeful, a little bit more optimistic? And that's really key to kind of know yourself. When Rachel wrote her best selling book, I'm looking at it, number one bestseller, know yourself, know your money, I thought it was very insightful.

[Dave Ramsey]

Let's give him a copy.

[Rachel Cruz]

Let's do that. I think it'd be a great gift.

[Dave Ramsey]

Give him a copy, Carson. Hang on. We'll get you a copy of Rachel's book. I think it'll help you with this whole discussion.

[Rachel Cruz]

Really good.

[Dave Ramsey]

Yeah, very good. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind, scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip offs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options and they've been around for over 95 years so you know they'll be there when you need them. Zander is the real deal and that's why they've handled all my personal insurance for over 25 years. I trust them and you can too. Visit Zander.com for instant online quotes or for a more personal touch. Give them a call at 800-356-4282. If you're tired of living paycheck to paycheck and feeling like you can't get ahead, you think you're stuck. You're not. Join one of our free Every Dollar trainings. There are new trainings every week this month and they're all hosted by one of the Ramsey personalities. Rachel or George or Jade will be teaching you about how to run Every Dollar. We're going to show you how to stick to a budget and even find the average is $9,560 worth of margin of the people that have done it in the last 90 days. That's the average using EveryDollar. Got a new improved version of this and it is blowing up. You can get out of debt, start building wealth, put you on the plan. You hear on Ramsey all the time. You can ask questions at this webinar during the live Q and A. So it's a little bit like this show, only it's easier to get in. Sign up for [e-mail] webinar. Jane is with us in Florida. Hi, Jane, how are you?

[Caller]

Hi, I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

I had a question about what you would think for our situation. We just bought a small business using an SBA 7 loan.

[Dave Ramsey]

I'm sorry, say that again. I didn't hear the first part garbled.

[Caller]

Oh, I'm sorry. I was just asking what you think we should do in our situation. We just bought a small business using an SBA 7A loan and we live in a very high cost of living area, my fiance and I, and we're considering buying a house versus renting, considering that we have this new debt with us. So what do you think we should do?

[Dave Ramsey]

You both signed an SBA loan together and you're not married or about to be married?

[Caller]

Yes.

[Dave Ramsey]

When?

[Caller]

This. This year.

[Dave Ramsey]

Friday.

[Caller]

Got it.

[Dave Ramsey]

This is very dangerous. How much is the FBA SBA loan?

[Caller]

Around 700,000.

[Dave Ramsey]

How old are you two?

[Caller]

I'm 28, he's 29.

[Dave Ramsey]

What is this business?

[Caller]

It is a blue collar service business that does very well. It's specific area that it services and it's a necessary service.

[Dave Ramsey]

Have you opened?

[Caller]

Yeah, we took over two weeks ago.

[Dave Ramsey]

Oh, someone else had it. And you bought it?

[Caller]

Yeah, yeah. Yes.

[Dave Ramsey]

What's the annual profits on this business.

[Caller]

Gross last year was over a million. The owner last year paid himself from 350,000.

[Dave Ramsey]

Geez. And you paid 700 grand for it. Okay, Correct. What? And you're both working it full time.

[Caller]

I have a job.

[Dave Ramsey]

Making what?

[Caller]

Working 100,000 around there.

[Dave Ramsey]

Okay. And so hypothetically, your household income is 350.

[Caller]

Well, he's not going to pay himself.

[Ken Coleman]

As much, you know, I mean, you.

[Dave Ramsey]

Have a profit in the business of 250, right?

[Caller]

Yeah.

[Dave Ramsey]

That's a profit even if he doesn't pay himself. He paid himself. It's profit, it's taxable income. It's got to come somewhere. If and it's not a salary or not, it comes to you at the end of the year, you're going to pay taxes on it. You might as well take it home.

[Caller]

Okay, right.

[Dave Ramsey]

So make 250 there, 150 with you, that's 350. You owe 700. No, I would not buy a house. I would rent a cheap one bedroom apartment and I would pay this crazy butt loan off that you got yourself into in two years or two and a half years.

[Caller]

Well, that's what we're doing now, so.

[Dave Ramsey]

Good. I would just stay right where you are. And I also think that you're extremely vulnerable when you did this without being married. And so you're not going to do it, but you should get married immediately. Yeah, yeah.

[Rachel Cruz]

And by the way, we've taken this call many, many times where an unmarried couple gets into a business and the relationship goes kaput and then it's nasty. I want to make sure audience understands why you're so certain about that. We hear that over and over again.

[Dave Ramsey]

We get it. When everything doesn't work out exactly like you planned, which is every time. It never works out exactly like you planned. It might be better than you planned, it might be worse than you planned, but it never works out exactly like you planned. So folks, here's what you got to think through. What? What Ken's right, What we hear, what we see is what causes this. Okay? So here's an example of things that have come in over the years. Now, this is pretty macabre, but it's actual phone calls, okay? And over the 30 years of doing this, they're in the situation that that young lady is in and he gets T boned and is in a wheelchair. Can't speak, can't move. Now what? Oh. Or he gets killed. Now she owns a business with her future mother in law because there's no will of course. And his half of stuff does not go to a fiance under Florida law unless there's a will that states that it does. So you need that done by the end of the day. But, yeah, you end up. And you didn't really like the mother in law, you just loved the son in law. You just loved the son. That's all you loved. And so you were. But now you're partners with her. And she's not gonna work there, by the way, but she wants her half. And you gotta go down there and work full time because you are about to get foreclosed on by the SBA if you don't. All this stuff happens all the time. And so the other thing that can happen is you go in there and you take it over and it runs better than you thought it would and you're able to pay the loan off in 18 months instead of two and a half years. That would be an awesome thing. I hope that for you. I hope that's what occurs. I hope it's better than you thought it was. But, yeah. This thing of running a business, there's three rules of business. It takes twice as long as you think it's going to. It costs twice as much as you think it's going to. And you're not the exception. Those are the three rules of business. And I've experienced them in depth over 35 years of running Ramsey. So I'm not the exception either. And so I have to plan everything out for worst case scenarios. And that's certainly A, not borrowing money, and B, certainly not borrowing money with someone I'm not married to. The same thing applies to buying a house with your sweet little fiance. Don't do it. That's right.

[Rachel Cruz]

Well, see, they're living together now. A more common scenario, too, is that he gets under pressure. He's never run his own business before. And I got to tell you something, folks, that's a whole different enchilada. And if he gets super stressed, the relationship starts to break.

[Dave Ramsey]

He's called him an enchilada.

[Rachel Cruz]

I said no, not him. I said, being a businessman.

[Dave Ramsey]

He will change. He will change form.

[Rachel Cruz]

He will. And you hope none of this happens. But that's why we're not, you know, the sky is falling. This isn't Chicken Little advice. This is a lot of experience.

[Dave Ramsey]

Don't ask Sharon Ramsey about Dave Ramsey going broke version versus Dave Ramsey today version. You won't like the discussion. Yeah, because she will tell you the truth. It's not pretty. I'm just saying Yeah, I agree with you, Dave.

[Rachel Cruz]

Get to the courthouse, get a will. Let's get this stuff. We jumped into this massive partnership, but we didn't really cover it all the way around. Yeah, that's what concerns us.

[Dave Ramsey]

Doing things in the wrong order. Get your head taken off. It's pretty simple. The data's there, folks, the data's there. It's not simply a moralistic argument, although you could make the argument on that basis alone. But it's not simply that. There's legal implications, financial implications. All of these things roll into these discussions and running out your worst case scenarios. So now, no, I would not buy a house and add to the problems that you have already. I would run like my hair was on fire to get these problems cleaned up.

[Rachel Cruz]

One thing I want to do, I want to ask a question on behalf of our very large audience here. We didn't discuss. I'd love for you to give them a fundamental okay, if you're going to buy a business, how much you should spend based on revenues?

[Dave Ramsey]

Because I think, I don't think they overpaid.

[Rachel Cruz]

I don't think they did either.

[Dave Ramsey]

But I thought if they got a good buy, if they, if they, if the numbers are what they think they are.

[Rachel Cruz]

Right.

[Dave Ramsey]

If their due diligence when they're signing up and going through the books. That's right, they actually did that. I mean, because here's the thing. You're buying a business, there's the owner will tell you this is what our books say. I don't care what are the tax returns say. Yes, well, they file taxes on. Well, we didn't report everything. Oh, so you're telling me you don't have integrity. Okay, and now I'm supposed to believe your books? No, I think I'm going off the number on the tax return. What you're willing to pay taxes on is your real profit. What you actually have to pay taxes on, that's your real profit. Well, I have depreciation schedule. Yeah, you also had the expenses of the buy the item that you are depreciating. So that's bull crap. And so help you with the math on that. There's no depreciation on anything that you didn't first pay for. That's how that works. So anyway, I want to see what the real bottom line is, what the real taxable income is. And based on that, that I'm going to do a multiple of 3, 4, 5. Somewhere in there is going to be the valuation of that small business and that's after a manager is paid to run the business. If you're an absentee owner. This is the Ramsey Show. These days, business as usual is anything but. Tariffs make trade policy a moving target. Supply chains are squeezed and cash flow is probably tighter than ever. So if your business can't adapt in real time, you're in a world of hurt. That's why you need NetSuite by Oracle, trusted by more than 42,000 businesses, including Ramsey Solutions. You need to see what's happening, what's stuck and what's costing you and how to fix it. And NetSuite is the number one cloud based business management suite because it helps your business make the right decisions fast. It brings accounting, financial management, inventory and HR into one place so you're not left shuffling a dozen different spreadsheets. That gives you the visibility you need to make quick decisions based on actionable data. And NetSuite AI automates everyday tasks so your team can focus on strategy. It's one system for full control and no guesswork to tame the chaos. And right now, if you're leading a business doing more than a million dollars in annual revenue, download NetSuite's free ebook, Navigating Global Trade. Three insights for [e-mail] Ramsey that's NetSuite.com Ramsey Rams. Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they actually love and create actual amazing relationships. Ken Coleman, number one best selling author, Ramsey personality and host of the new hit on the Ramsey Network. Front row seat. And you need to check that out. If you haven't checked out that podcast, it's a long form. Interviews with some of America's best and brightest and some of the world's best and brightest, as a matter of fact. And yet Gary Sinise on the other day.

[Rachel Cruz]

Yeah, you know what a great actor, probably one of the most respected men in Hollywood and really probably the most respected servant of our men and women who have served in the military. He's got a great heart for veterans, does incredible work, of course, on the backs of probably one of the most beloved characters in movie history as it relates to our military characters. And that's Lieutenant Dan. And doing great work. Is a good friend of yours and came in and we had a great time.

[Dave Ramsey]

Yeah, he's moved to this area a few years ago and we've gotten to be friends and genuinely the kindest. Yeah. Gentle guy, very humble. Yeah, yeah, you guys will love watching that interview. It's great. So check it out. And the Jimmy John interview has been going zoom, zoom. Yes, absolutely.

[Rachel Cruz]

It's huge feedback on that as. As we really had a hunch that it would because a. The guy knows what he's talking about. When you go from offering three sandwiches with used equipment to selling for $3.3 billion, you should probably listen to this guy. He's got the American dream figured out. He did it and did it well. And one of the kind of just.

[Dave Ramsey]

Talk about kindness and generous. Yeah, yeah, yeah. Unbelievably generous. Yeah.

[Rachel Cruz]

He shoots the whole theory that billionaires are evil people to pieces. He really does.

[Dave Ramsey]

He's pretty funny about that. I thought he would be more bombastic to that answer. It was a good answer, though.

[Rachel Cruz]

Yeah, yeah.

[Dave Ramsey]

He.

[Rachel Cruz]

He was starting to heat up.

[Dave Ramsey]

Yeah, he was. But he caught himself.

[Rachel Cruz]

He did, he did.

[Dave Ramsey]

You know, I just feel sorry for him. They're just not smart. It's like. Yeah, that's good. Oh, my gosh. Check it all out. It's called Front row Seat with Ken Coleman. It's on YouTube and on podcast anywhere. Great podcasts are sold. You'll be able to follow it up, watch it, listen to it. You will get great information and inspiration, and that's what we do here. Alex is with us in Texas. Hi, Alex. How are you?

[Caller]

Good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So I'm a newlywed just wanting to get your opinion on the best way to join financers.

[Dave Ramsey]

Cool. How long you been married?

[Caller]

I got married in July, so just a couple weeks.

[Dave Ramsey]

Oh, look at you. Way to go. How old are you guys?

[Caller]

27 and 28.

[Dave Ramsey]

Okay, that's a very important question. And the reason it's very important is 30 years of doing what we're doing. We know that very few couples have a high quality marriage and build wealth without combining their finances. And as a matter of fact, one of the things we found in the millionaire study where we're studying millionaires, 83% of millionaires said they were working hand in hand as a team with their spouse. Both had a vote, both were pulling the wagon together, and that's how they became millionaires. So it's a great question. Now the question is how to do it from a tactical standpoint. Your monthly income, pretty simple. One checking account. All the money goes into one checking account. That number, that monthly income number goes at the top of the budget. And the two of you sit down together and have a budget committee meeting and you say, okay, before the month begins, we're going to have $3,273 or $8,642 or whatever the number is this coming month, that's what we're going to have. Now let's spend all of those dollars. Give every one of those dollars a name in the everydollar budget and we both agree to it. There cannot be any money left over. It has to go into savings, it has to go into generosity. It has to go on. It has to go be spent on groceries. It has to go to something. Every dollar has to have an assignment. Exactly to the penny. No leftover squash money. No need. If you want to put it in savings, put it in savings, I don't care. And then call it, you know, call it my emergency fund. Whatever you're doing with it, do it on purpose and do it together. Is that what you're asking?

[Caller]

Yes, but also. So we have some debt. I just wasn't sure. I've seen how some people say they do like 95% all in one account. You each get like 5% for fun money, whatever you want to do.

[Dave Ramsey]

Some people are broke, so don't listen to some people. Some people got an opinion about everything and they're wrong. So no, I wouldn't do any of that. The thing is this. You're going to attack your debts together. It's for better, for worse, for richer, for poorer. And the old marriage vows from the book of common prayers say unto thee, all my worldly goods I pledge. So we're truly joining everything. He, he got you and your debt. You got him and your debt, you got him and his income. He got you and your income. And now we are we. Not you and me.

[Caller]

Okay, perfect. And I have one other question, if that's okay.

[Dave Ramsey]

Okay.

[Caller]

We do have a daughter. She'll be too. And we were trying to find out the best saving option for her future.

[Dave Ramsey]

Okay. That would be a 529 plan for her college. And you don't need to worry about that until you're out of debt. Have your emergency fund in place and that'll be called the baby steps. I'm gonna send you guys a wedding gift. It's called the Total Money Makeover. It's our best selling book. We've sold 14 million of them. America's greatest coffee table coaster. And so it's sat there on people's coffee tables for years and they don't read it. But I'm gonna send you one. It's got the baby steps in it. And people that follow those baby show you exactly how to do it. They become wealthy and they get out of debt, and they learn to work together.

[Rachel Cruz]

I'm going to add a little wedding gift as well, Dave, since you've got me. In the spirit of giving, Rachel Cruz wrote a great book. Number one best seller, it's called Know Yourself, Know youw Money. And this is the advice I want to give you. Dave gave you great tactical advice, but you two are learning how to truly live together. And one of the most important things you'll do in your marriage is learn how to manage money together. And one of the reasons I want you two to read this book together is because you both need to know, based on your experience in life with money and then your environment, the way your parents talked about money, that's all shaped you. And then you guys are wired a certain way towards money. And knowing how you guys are wired for money, which this book will teach you and you'll be able to really grasp it, it's a great book for young couples that are getting started because if you two can understand each other as you go into the budgeting and into the baby steps, I think it'll make it so much more. I think it's a great book for every young couple to read. So we'll give you that book as well.

[Dave Ramsey]

Yeah, I agree. And Rachel wrote it actually out of the pain of her and Winston learning to work together because they're very different. Rachel's got a little bit of her father in the sense that this abundance versus scarcity. I've always thought I could out earn my stupidity. And Rachel definitely goes along with that. And Winston, on the other hand, is very methodical, very careful, and as a saver, and is very wise. And so the two of them working together have woven that together over a decade plus of marriage into a wonderful marriage. So that's good advice. And you learn to work together. Larry Burkett used to say, opposites attract. If two people just alike get married, one of you is unnecessary. Typically, a spender attracts a saver. Typically, abundance attracts scarcity. Typically, you know, the nerd that likes details attracts the person who is not that concerned about details and would much rather have a party. And so the free spirit, so the nerd and the free spirit, the spender and the saver, the scarcity and the abundance, all these things are typically opposites. And you need each other. You learn from each other. You add spice to the gumbo from each other. One's not right, one's not wrong. But learning to work together, as Ken's pointing out, is absolutely vital.

[Caller]

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[Dave Ramsey]

Mel is in Nashville. Hi, Mel. How are you?

[Caller]

I'm good, Dave. How are you?

[Dave Ramsey]

Better than I deserve. How can I help?

[Caller]

Oh, hey. So I am set up with trying to figure out what I'm doing. I have no clue what I'm doing, just to be honest. I'm trying to get on a plan to get. Get out of debt, and I don't really know where to start. And the last year has been awful. I have about approximately, probably $25,000 in credit card debt, and it also includes a personal loan. But about a year. Well, a little over a year ago, I lost my husband. He passed away. And ever since then, I. I like I was doing. Actually trying to do a little bit better before that happened. I was starting to get things paid off, and then I went back right back into the cycle of just using my credit card for everything and just trying to stay afloat. And I still have two kids at home, so I'm trying to navigate all of that, and I'm trying to get through this without crying. So.

[Dave Ramsey]

So, Hunt, how old are your babies? How old are your babies?

[Caller]

They are 10 and 15.

[Dave Ramsey]

Okay, and what do you mean? What do you make?

[Caller]

What's your income before taxes? It's almost 60.

[Dave Ramsey]

Okay, all right, cool. How old are you?

[Caller]

I'm 44.

[Dave Ramsey]

What do you do for a living?

[Caller]

I work in insurance.

[Dave Ramsey]

Okay. All right, well, there's several touch points that help you get control. Okay. Some of them are emotional, spiritual, psychological. Some of them are mathematical. Okay. Math Is we get our income up, looking at some side hustles that you can do with babies at home, and we get our out go down and we make the money that we have behave. And that's called a budget. Budget. The money that you have is not behaving, it's living from desperation to desperation. Because you are right. When you're scared and you're scared, I can hear it, you get desperate. And every time I get desperate right after that, I get stupid.

[Caller]

Yeah.

[Dave Ramsey]

And that's what piles up. And then you feel stuck and then shame comes and all those other things. All that's the emotional part part and the psychological part and the spiritual part. Okay. But the good news is you actually make enough money to live on. You don't make a ton of money, but you can probably figure this out. What do you owe on your car?

[Caller]

Actually, I don't.

[Dave Ramsey]

Oh, good. That's good news. So, 25,000 in credit card and student and personal loan. What are the debt.

[Caller]

That.

[Dave Ramsey]

What do you own your home?

[Caller]

Nothing.

[Dave Ramsey]

It's paid off.

[Caller]

It's paid off. Well, we live in a trailer, but it's paid off.

[Dave Ramsey]

It's paid off. You don't have any house paid off.

[Ken Coleman]

Right.

[Caller]

No mortgage.

[Ken Coleman]

Yeah.

[Dave Ramsey]

That's good. That's good. Okay. So no mortgage is a good thing. And 25k in credit card and you make 60. This is doable. Okay.

[Caller]

Right.

[Ken Coleman]

And so myself, I'm like, it's doable.

[Caller]

I don't know why I can't seem.

[Dave Ramsey]

Well, because. Because your heart was broken. You lost your husband. Huh? And you were struggling. Struggling. Okay. And that's just normal human stuff. So what we've got to do is help you put together a system to live on the money that you have. And we're going to put you on the every dollar budget and we're going to get you a Ramsey coach and we'll pay for all of it. Okay. I'll take care of you. Make sure you get up on and get running here. You can do this mathematically, but the first thing is you've got to change the way you look at it and the way you think about it. Of course we're going to get the credit cards out and cut them up. They've been such a blessing.

[Rachel Cruz]

Not.

[Caller]

Not.

[Dave Ramsey]

Okay. So we're going to stop using the stupid things. We're going to have a plan to eat and pay the lights and, you know, make sure the water is on. And then we'll start talking about how we can pay off this debt after we've met our basic needs in the household. But if you've. If you've eaten food, if your family has food and your family has lights and walks and you got gas for your car to drive to work, you make plenty of money to do all that, right? And so we've just got to make the money behave, and then we can start using some of it after we've taken care of Mel and her kids, then we'll use some of it to start taking care of the stupid banks and get them out of your life forever and ever. Amen. Never go back.

[Ken Coleman]

Yes.

[Dave Ramsey]

Okay, so that's what we're gonna do. So we can show you exactly how to do this. But you're just by yourself. And it's what I would be doing if I lost Sharon. I'd be just flailing around a little bit, and you're just kind of flopping around, and it's just going everywhere, and you're just running and going, and you're tired and you're stressed. Is this true? Am I telling the truth?

[Caller]

Yes. Yes, very much.

[Dave Ramsey]

Okay. All right. Are you in a good church?

[Caller]

I am, yeah.

[Dave Ramsey]

Good. Does your pastor know you're facing all this?

[Caller]

Yes.

[Dave Ramsey]

You sure?

[Caller]

Yeah. I mean, they know. I don't know if they know how. How bad I'm in the last few months.

[Ken Coleman]

Probably not.

[Dave Ramsey]

Yeah. You need. You need to tell your people that. Love you.

[Caller]

Yeah.

[Dave Ramsey]

The book that I read and the book that you read says, we take care of widows. Okay? So give your. Give your. Give your congregation and your pastor the opportunity to do what they're called to do. Okay. And Ramsey's gonna do that, too. Ramsey's gonna set you up with a Ramsey coach free of charge, sit with you, help you put together your budget, and then coach you and then also hold you accountable. That means they're gonna be mean to you. You and make you do it. Yeah, you're going to freaking do it. Okay.

[Caller]

Yes.

[Rachel Cruz]

And Mel, Mel, listen. This is really doable, and I want to just throw a number at you. Not that you have to take on you, but I just want to show you something. If you were to make an additional $2,000 a month, and you put every nickel on that towards this debt you're talking about getting out of this in a year. Now, I'm not saying you have to do that, but I want you to catch because we're going to give you all the help, But I want you to be able to see that what seems. Seems insurmountable to you at the start of this call, you can actually knock this out. And you've had horrible change thrust upon your life by losing your husband. But you're still here and your kiddos are still here. And this, this, this is not going to be fun. Getting a budget and cutting out credit cards and not relying. It's not going to be fun.

[Dave Ramsey]

But you've already had a horrible than the hell you're sitting in.

[Rachel Cruz]

That's exactly right. You can get through this. I just want you to hear that you can actually get out of this.

[Dave Ramsey]

Yeah, this is very, very doable. And you hang on. We're going to put our arms around you and help you make sure you do it. You get on the phone with a Ramsey coach. As soon as you get hooked up with one, sit down with them. They're going to take. We're going to take care of you and we're going to make sure you get on that every dollar budget and stay on it. And you let your pastor and your community know where you are and that you. They may not need to give you money. They may just need to love you. You. That's okay. I'm not saying you're a charity case. I don't really think you are. But if they want to give you some money and put towards this would make me mad. But it depends on the congregation, how they, how they work and all that. But I mean more than anything, they just need to love you.

[Ken Coleman]

That's right.

[Dave Ramsey]

You know, you don't need to do this by yourself. Life. It's not good that man be alone. You know, when you do these things together.

[Rachel Cruz]

You picked up on something and she broke when you said it. And you were right. You mentioned the word shame. You've coached so many people one on one on the air. How does shame hurt us in times like this when we're trying to jump out of debt and because you've experienced it personally. Just talk about shame.

[Dave Ramsey]

It's the great lie from the pit of hell is what it is. It makes you people when they get in a situation like that. When you're broke and you can't pay your bills, you think and you screwed up. You think you're the only one. Right? It turns out if you've got your act together, that's when you're the only one. Most people are broken out of control. Most people don't have their crap together. 78% of Americans say they live paycheck to paycheck. That's 8 out of 10 houses on your street are broke and out of control. So don't let anybody whisper in your ear. Call the devil and say you're not worthy because you're broken, out of control. You're just a normal person. Normal just sucks, that's all. You don't be normal. Normal. Normal sucks bad. So it's the great thing that I. I used to think when I went broke, I was the only one on the planet earth that was that stupid. And when I started telling my story, it's like everybody's like, yeah, me too, me too, me too, me too, me too. It's like everybody raised their hand, said, I've been, I've done stupid. I was stupid. I went broke too, Dave. I went broken real estate, just like you. I kept hearing it over and over and over. Now for 30 years, I've heard it everywhere. Normal is this. You just don't want to be normal. Normal, that's the trick. Today's question of the day is brought to you by why Refi? If your private student loans are in default and you feel stuck, you're not out of options. Why Refi specializes in helping borrowers like you find real solutions with low fixed rate refinancing. Start from zero and go. Go to yrefi.com Ramsey that's the letter y r e f y.com Ramsey not available in all states.

[Rachel Cruz]

Today's question comes from Victoria in Texas. My 14 year old son wants to allocate some of his earned money to online gambling. He says, everyone, and this is in all caps at school. Does it? Please help me explain to him why it is 100% wrong. Ay yai yai.

[Dave Ramsey]

How old is your son, your youngest?

[Rachel Cruz]

My youngest is 17. I got a 17 and a 19. So I will answer it as if they came to me and said, dad, everyone is doing it. First I'd start with, I can't help but hear my nanny's voice right now. He used to say to us, if everyone's jumping off of a bridge, would you do it too? You know, that's just old school, you know, And I'd start with that. Then I would say, all right, let's look at gambling. And I actually would come to it with numbers. I'm a little bit of a data geek and so I would actually go pull real numbers on this particular type of online game. Let's say it's sports, okay? And I would show the rates of success on this and let the numbers talk for you to some degree. Second, I would explain gambling as a whole and how it does not pay, pay off and I would say just because they live in your house, if they're going to do something that you are philosophically or spiritually or whatever you want to say, opposed to. What I would tell them, my son, is if you're going to do that and you're going to go around me and not honor the advice I'm giving you and do something so stupid, then you are not going to receive these blessings from me. Now that may be too harsh, Dave, you may disagree with that, but I would take a pretty strong stance after I've made the numbers case and make it very clear I don't believe in this. I think this is foolish and this is against the values of my home. And therefore there are going to be consequences if you do this. And then they got to learn the hard way.

[Dave Ramsey]

Yeah. Everyone at school that is male and 14 is looking at pornography. Not everyone is gambling.

[Rachel Cruz]

That's a good point.

[Dave Ramsey]

He's lying, he's overstating. He's being a 14 year old using hyperbole. Okay. And 14 and 15 year olds are interesting beasts. They're very interesting. I raised a few up at our house with teenagers. We went with the Andy Andrews approach that we are not trying to raise great kids, we are trying to raise kids who become great adults. And so at that stage of their development, the process that Sharon and I used was pretty simple because inside of every 14 year old there are two people, a 34 year old and a 4 year old. And so I would ask them, which one am I speaking to? Sybil. Y' all don't remember Sybil with multiple personalities? It's an old show from the 70s. Okay. But yeah, which one am I Speaking to? The 4 year old or the 14 year old? If I'm speaking to the 4 year old, I'm simply going to tell you what to do and you're going to mind because I'm older than you and I can make another one that looks just like you. You will behave, period. You will do exactly what I say for your own good. Because I love you. I don't care if you have a feeling. It doesn't matter to me. You're simply going to do what I say if you're four years old. That's how we deal with it now. I'll be gentle and kind, but at the end of the day, I'm in freakin charge. You're not. The inmates don't run the asylum. I'm bigger than you. I have more power than you. You're simply going to mind me for Your own good. You're not going to play in the street, you're not going to touch hot stoves, you're not jumping off of waterfalls. You're four. You're not driving cars, you're four. We're not having a negotiation with a four year old. However, if you want to be an adult and sit here and talk about this, I will talk to you like an adult instead of a four year old. If that's the case, then I would do exactly what Ken's preference saying. Here's the data. Since the Internet opened when I started this show, people used to call me with addictions all the time. When we started doing financial coaching in 1992, we've been dealing with addicts ever since. 100% of addicts have money problems. There's no exceptions. That's the nature of being an addict. Okay, When I start started addiction was alcohol and drugs. The number one addiction in America today being treated is pornography. Online has exploded. It, it's huge. Porn online makes more money than all professional sports put together in America today. It's vastly profitable. And it's everywhere. It's ubiquitous. Keeping a 14 year old away from porn if they have a phone is impossible if they have connection to the Internet. And it is the fastest growing addiction, it's destroying the sexual function of young men for an entire generation. The second. And we see them in our office every day here where they've lost everything. They've lost their families, they've lost their homes, they've lost their jobs, they've lost their careers because they're addicted. Just like when they were doing cocaine. Same thing. And son, this is the truth. And son, here's the other truth. The second fastest growing addiction in America is online gambling. Do you think DraftKings can afford all of those ads because everyone that bets on DraftKings won? No, they can afford all those ads because everyone that bets on DraftKings loses. That's why the bookie always wins, the house always wins. Period. It's a statistical fact. It's how gambling works. And if you're so stupid that you don't understand that, then you can understand this. Gambling is a tax on people who can't do math. Walk into the lobby of the Bellagio, walk into the lobby of the MGM grand and you will see some of the greatest architecture. You'll see light fixtures that cost millions of dollars. And it's all built on house money. Money. You people gave them the money to build it. That's how it works. It's a Mathematical fact. So, son, if you're 14, I'm going to explain these facts to you and so I don't want you to be involved in it. By the way, honey, I'm not involved in online porn and I'm not involved in online gambling. I sadly spoke with a 32 year old the other day that's run up $600,000 in sports betting. He makes 180 a year. He's going to lose his marriage and his two little babies and his beautiful wife are going to leave and there's nothing he can do about it because he can't stop himself. He's addicted. So why would I let someone that I love be engaged in that? Sweetheart, I love you. There's no chance I'm going to let you be engaged in things that will destroy your life. By the way, you're not doing cocaine either, even if everyone's doing it. By the way, you're not doing crack either, even if everyone's doing it. By the way, you're not going to drive 110 miles an hour and act like you're Speed Racer or something out here because everyone's doing it. You're going to do things in this house because I love you, that benefit you. This does not benefit you. And so you're not doing it. Now if I can convince you and persuade you as an adult, I will persuade you as an adult. Like I just did. Yeah.

[Rachel Cruz]

Here's some data.

[Dave Ramsey]

Here we go.

[Rachel Cruz]

UC San Diego new study. 96% of over 700,000 online gamblers. That's a big sample size. 96% lost their money.

[Dave Ramsey]

That's all of them. Yeah. I mean nobody wins.

[Rachel Cruz]

You want to play the 4% game, it just doesn't add up.

[Dave Ramsey]

That makes you is an idiot.

[Rachel Cruz]

And that's what I.

[Dave Ramsey]

6%. Yeah.

[Rachel Cruz]

If you want to be an idiot.

[Dave Ramsey]

Idiot.

[Rachel Cruz]

If you want to join the 96 of losers. That's how I talk to a teenager.

[Dave Ramsey]

I get entertainment from it. That's the, that's a glass.

[Rachel Cruz]

Yeah, whatever.

[Dave Ramsey]

Yeah. You, you know all week and you get entertaining. You get entertainment from losing the money that you worked all week for.

[Rachel Cruz]

At those rates, you might as well buy a donkey and go mine for gold. Get yourself a pan.

[Dave Ramsey]

So the deal is I'm going to try to convince you you're not doing it, but I'm going to try to convince you and put persuade you. If you're willing to talk this through with an adult with me and you're going to understand why you're not doing it if you don't want to do that and you want to just throw a fit and be a 4 year old, I'll just simply tell you you're not doing it. We don't do. We don't negotiate with idiots. Not when they live in my. Coordinating a Financial Peace University class is a great way to stay motivated on your own baby steps journey while you get to encourage other people as well. That's pretty fun. And hey, you'll when you lead a class, you get access to the Financial Peace University lessons, the premium version of every dollar plus additional content and perks for free for an entire year just for leading a class. We're going to give it all to you. Plus you also get support from a community of other coordinators, our team of experts, and tons of free resources to help you lead the class. So far this year, we've seen over $75 million in debt paid off and money saved in the Financial Peace University classes. If you got a passion for serving others, this is a great way to help others experience the life change you've seen yourself. Go to ramseysolutions.comfpu and get your first class set up or click the link in the [e-mail] fpu we'll help you get going. Will is with us in Ohio. Hi Will, how you Are you?

[Ken Coleman]

Hey Dave, thanks for taking my call.

[Dave Ramsey]

Sure. What's up?

[Ken Coleman]

So until about a year ago, we were living in a single wide trailer to save money, pay off debt, and we paid off about 60 grand in debt. We bought some land to hopefully build a house on in the future. But then we found black mold in our trailer and had to move out. So now we're renting and between the rent and the land payment, that's destroying our savings and we're kind of struggling here. So I'm wondering, should we sell this land that we plan on for the future and want and keep renting to pay other debts off or you know, we've got some family that's offered us land to build on for free, but houses are so daggone expensive now, I'm not sure what to do.

[Dave Ramsey]

Okay, what's your household income, sir?

[Ken Coleman]

About 120 grand.

[Dave Ramsey]

How long you been married?

[Ken Coleman]

Married 10 years.

[Dave Ramsey]

Okay. All right. What's the land worth?

[Ken Coleman]

It's worth about double what we owe on it right now. It's worth about 120.

[Dave Ramsey]

And you owe 60?

[Ken Coleman]

Yes, sir.

[Dave Ramsey]

Okay. All right. What would happen if you sold the land and took the 60,000 in cash? That would be in your pocket and use that as a down payment on a house.

[Ken Coleman]

Be a heck of a down payment. Yeah. Just. It's real good for commutes. We like the land. I think it's an emotional connection to it, you know, but there are. There are some other houses in the area we can look at.

[Dave Ramsey]

Yeah. I mean, you just buy a house and then, you know, later on do a land deal Right. After you get. After you get some things going, get the house going up in value, start getting it paid off. You make good money, but you're kind of trapped right now. You can't really afford to build on it.

[Ken Coleman]

Right.

[Dave Ramsey]

And you said it's destroying your savings with the paint and the rent. And so putting those two together and a down payment off the land and that buys a house that makes a lot more sense as a. As a first step. It's not necessarily a permanent decision. You know, it's always funny when you're buying a house, it feels more permanent than it is. Yeah. That's why people say stuff like, I bought my forever home, which is a load of crap because it's never your forever home. There's only one forever home that's heaven. And other than that, you're going to move. So this idea. I'm never moving again, that's just not true. Okay. Unless you're 85, you're probably moving again. So, you know, and you may even be moving again there to the nursing home. But anyway, so something's going on. Anyway, you're moving again. So anyway, it's not a permanent deal. Buy your house, sit there five, six years, save up some more money, take the equity you make on that property with the equity you put into it, buy and start talking about building a house and buying you a piece of land at some point. But you know, it's called a starter house, right?

[Ken Coleman]

Yeah.

[Rachel Cruz]

What's your total debt?

[Ken Coleman]

We've got about 100k in debt, 20 on a student loan, 20 in a car, and 60 on the land.

[Dave Ramsey]

Okay. All right. So you got that 40 in debt. Good. Good call. Can I drove past that. I went straight to the real estate deal. Yeah, I need you to clear that stuff, too. And that makes this discussion harder.

[Rachel Cruz]

What's the car situation? $20,000 debt on the car. Is it worth more than you know?

[Ken Coleman]

It's. It's right. It's probably worth. Right about that. It's fairly new.

[Rachel Cruz]

What's the car payment on it?

[Ken Coleman]

400 bucks a month.

[Dave Ramsey]

Okay. Yeah. Again, the way we answer questions here is what would I Do. If I woke up in your shoes, I'd sell the car and the land and I'd take five grand, go buy me a car to get back and forth to work. And I start talking about buying a house and get these student loans paid off. And now we only got 40k to put down. Not 60, but anyway. But we're still doing a starter house deal and we're going to do a 15 year fix where the payment's no more than a 4th year take home pay. And you don't have a payment in the world, dude. And not a student loan payment, not a car payment, not a house payment, not anything. And at this point, I mean not land payment, not anything. And you're gonna put 40k down and. Yeah, I'm gonna go buy a house. That's what I'm doing in that situation. And then I'm gonna. The emotional tide of the land I get. I've got a piece of ground over here not far from where I'm sitting right now. That's. I go over there and shoot guns, ride four wheelers and everything with the grandkids, all that stuff. And I love that piece of dirt. I have an emotional connection to it. I understand what you're talking about. I don't want to sell it, but you know, what's the best thing for my family long term? That's a lot of money to shoot guns. So you got to think about what you're doing and what is more important than something else in my case. I'm not saying that's what you're doing with it, obviously, but. Okay. Chris is with us in Cincinnati. Hey Chris, how are you?

[Ken Coleman]

I'm fine. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Ken Coleman]

I have a question. I have got about 45 to $50,000 in various debts. I think about 15,000 in credit card debts and about 22,000 or so in student loans and then a couple of other things. And I have been contacted by this debt consolidation or debt reduction company and.

[Dave Ramsey]

Run away, run away quickly. What's your, what's your household income?

[Ken Coleman]

About 25,000 a year.

[Dave Ramsey]

25,000 a year? Yeah, I mean hours a week.

[Ken Coleman]

Are you security?

[Dave Ramsey]

Oh, you're on Social Security. How old are you?

[Ken Coleman]

Yeah, 75.

[Dave Ramsey]

How have you got a student loan debt?

[Ken Coleman]

Well, I was, I went to this community college that I started about 10 or 12 years ago and then at one point I just, I was a little short of money, so I signed up for some student loans for total about $20,000.

[Dave Ramsey]

And then what did you do used to do for a living before you retired computer programming?

[Ken Coleman]

I mean, I'm not actually. I'm looking for a job doing that.

[Dave Ramsey]

Yeah. Again, I think that would be helpful. Yeah.

[Ken Coleman]

Yeah. Because I enjoy doing it and it pays good.

[Dave Ramsey]

Here's the thing. The debt consolidation doesn't work because it doesn't change anything except the interest rates. Your student loan interest rate is so small, it doesn't matter. Your credit card debt's so small, you're gonna pay it off fast anyway once you get this new job. And so that's why I'm saying run away, because they're making you a promise that if you just take this pill, everything will be okay. No, you don't need to take the pill. You need to just make everything okay. So. And the way we work that is we list your debts, smallest to largest. We pay minimum payments on everything but the little one. And let's do something to get some income coming into this house and approaching it that way. But credit cards and student loans, as you approach your 70s are. Yeah, those got to be cleared up because it's taking all the fun out of your life. I bet that's just no fun at all. Yeah.

[Rachel Cruz]

Dave, you and I were talking about this during a commercial break several shows ago. We were on together and we were. We were seeing what the call was coming up next. And I said to you, you. I said, I'll bet you this lady, because she was in her 70s, got a student loan when she was in her early 50s, and it came true. Now, I've taken this call a lot and I've seen it a lot where, you know, people would call me and on the old Ken Colen show and they'd say, hey, I tried to transition at 50 or whatever. And I just want to say this. We're anti. You know, this idea of just going for a student loan just to get a degree without any kind of focus as to why we're getting it. But Dave, I want to say, if you're in your 50s, there is no scenario by which you should ever take a student loan. I. I'm going to go that hardcore on that.

[Dave Ramsey]

Let me go harder court. If you're breathing, there is no scenario which you should take out of student loan.

[Rachel Cruz]

Yeah, I agree. Yeah, yeah, yeah. But just what is happening, we're seeing this happen a lot where people think they're going to change their life midstream.

[Dave Ramsey]

Yeah. With a student loan or downstream. That's the of part possible, too.

[Rachel Cruz]

I like what you did there. I See what you did there?

[Dave Ramsey]

We've all done dumb things with money. I've done them with zeros on the end. One of the biggest mistakes I see people make with money is not having a plan for. You got to have a plan, you got to be intentional. And you need to get a budget. You have to tell your money where to go so you're not wondering where it went. Our budgeting app, EveryDollar helps you do just that. It's the easiest and fastest way to make a monthly plan. For every dollar you've got coming in and going out, now's the best time to get started before the ridiculous holiday spending season gets here and sucks you in because you didn't have a plan. Don't let that happen. You're done making that mistake. Go download every dollar for free. Free in the app store or Google Play. 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. Ken Coleman, Ramsey personality number one best selling author and host of the Ramsey network's hit Front Row Seat. He's my co host today. Be sure and check that show out. The phone number here is, is, 882-55-5225. Sarah's in San Francisco. Hi, Sarah, how are you?

[Caller]

Good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So I have kind of a unique dual job situation. I'm a property manager and a teacher. So basically what that means is I live at a property and I get to live here for free in exchange for doing housework. You name it, I've probably done it. Dog care, pet care, laundry. I mean, I designed a golf cart one time. It's really random. So I don't have to pay rent, which is incredible. I've been doing this for about four years for really, really affluent people. But the household that I'm currently with, there's a lot of secrets that I unfortunately have to like carry with me of really terrible things that are happening and I just don't know how to weigh, like, should I leave and start paying rent somewhere or should I stay and just kind of like push down the gross feelings and continue saving money?

[Dave Ramsey]

Wow.

[Rachel Cruz]

Life is too short to be feeling gross because of somebody else's behavior. Behavior.

[Caller]

Yeah.

[Dave Ramsey]

So yeah, you've got to leave now. The question is, how do we leave? Smart. So what are you gonna do with your life now? Now that you don't work any there anymore, what are you gonna do?

[Caller]

I mean, I just, I feel like I could Save so much money for a down payment on a house. If I. If I stayed, since I'm.

[Dave Ramsey]

No, no, no. We've already established you're leaving.

[Caller]

Okay, because they're.

[Dave Ramsey]

Are they doing illegal stuff? Stuff?

[Caller]

No, they're just like, cheating on each other and like, stealing alcohol from me. It's just really, like, bad.

[Dave Ramsey]

Stealing alcohol from you?

[Caller]

Yeah, I. And then they blamed me for it about a year ago.

[Dave Ramsey]

It's just blamed you for stealing your alcohol?

[Caller]

So they. They drink a lot? That's their trust fund kids. All they do is just like, drink and party all the time. And about a year ago, they thought I was stealing alcohol until I found out one of them was an alcoholic.

[Dave Ramsey]

Oh, okay.

[Rachel Cruz]

Sarah, if you're representing your position in a court of law and Dave and I judges, you're not doing a really good job, you keep giving us multiple reasons as to why you should be running from these spoiled brats. Listen, the amount of money you're saving is not worth the toll it's taking on your life. True or false?

[Caller]

This is probably true.

[Rachel Cruz]

Well, then there you go.

[Dave Ramsey]

How old are you?

[Caller]

I'm 23.

[Dave Ramsey]

Okay, now what are you gonna do with your life? 23 year old?

[Caller]

I mean, I can move, really, anywhere I want. Like, I'm a teacher, so I can move wherever.

[Rachel Cruz]

Do you want to stay as a teacher? That's what we're trying to figure out.

[Dave Ramsey]

No, she. She's a caretaker.

[Rachel Cruz]

No, she. Teacher and a property manager.

[Dave Ramsey]

Oh, you teach out inside the home or outside the home?

[Caller]

Outside the home. Just like a public school teacher.

[Dave Ramsey]

So you have a. You have a teaching certificate? Yeah, a four year degree?

[Caller]

Yes.

[Rachel Cruz]

And it's. You're still currently teaching, if I understood you correctly, right?

[Caller]

Yes.

[Dave Ramsey]

You have any money at all?

[Caller]

I. The only debt I have is my car loan.

[Dave Ramsey]

I said money.

[Caller]

Thousand dollars? Yeah, like six grand in my savings and like.

[Dave Ramsey]

Okay, all right, leave. Load up the car. Load up the car and move. What city do you want to be a teacher in? Because you're leaving and it's not San Francisco. I'll help you.

[Caller]

It's not San Francisco.

[Dave Ramsey]

What city do you want? Where did you grow up?

[Caller]

I grew up in Oregon, which, I'm sorry, I would never go back there, but.

[Dave Ramsey]

Okay, that's fine. We've established one state. You're not going to two states. We got 48 states. The state of San Francisco and the state of Oregon. You are not going to those two states. Okay? Now where are you else are we going? Because you, you. You. You're 23 have wheels, have $6,000. We're going to move and get a one bedroom apartment and be a teacher. Tada.

[Caller]

Just like that.

[Dave Ramsey]

Just like that. You're like a free person and everything. And this is America, not Russia. It's awesome. Where you want to live, kid? Where's your next adventure?

[Caller]

Even though it saves me a bunch of money.

[Dave Ramsey]

Where's your next adventure? You're leaving.

[Rachel Cruz]

Or go do this again somewhere else. But not for alcoholics. Go to the state where you want to.

[Dave Ramsey]

You're going to end up getting sued or put in jail for something one of them do. Yeah. You know, evil is in the house. You can smell it. It's in the air. Get out of there, girlfriend. Now. Now. Where are you going? What city? I want to know what's your next adventure? That makes you smile? Where have you always wanted to live?

[Caller]

Gosh, Florida's pretty great.

[Dave Ramsey]

Head out, load up the truck and head to Beverly, kid. Yeah.

[Rachel Cruz]

No per. No income tax. State income tax there. That's great.

[Dave Ramsey]

Florida is good to their teachers too. Yeah.

[Rachel Cruz]

And you can property manage for sane people in Florida. If you want to save up money for a house, you keep coming back to how much money you're saving as if you can't reproduce this somewhere else. And it must much better situation. You've become a prisoner to this situation because you're only looking at how much money you're saving as if you can't do it anywhere else.

[Caller]

That's true.

[Rachel Cruz]

I know. That's why I said it.

[Dave Ramsey]

Okay, so here's the deal. Okay. I want you out of there before labor day. You have 27 days. Ready, set, go. This is your. This is your old uncle Dave. Old ugly uncle Dave who loves you, telling you ready, set, go. Set yourself free. You are free. Leave. Let these fine people know that by the end of the month we're going to load up the stuff and go. And if they want you to go sooner. Oh good. Oh good. Get in the car. Put your crap in the car. You can put all your crap in one car, can't you?

[Caller]

Yeah.

[Dave Ramsey]

Load up the car and drive to Florida. What city in Florida do you want to live in?

[Caller]

I like nascar. Daytona is pretty cool.

[Dave Ramsey]

All right. Daytona is a neat and affordable, by the way. It's a neat little town. Yeah, head on over there, kiddo. Not that far from Boca. And there's some rich crazies there too.

[Rachel Cruz]

That's a good place point. Who's your favorite NASCAR driver? All time.

[Caller]

Oh, I've been watching a lot of documentaries Lately. But I just got to go with probably Kyle Busch.

[Dave Ramsey]

Okay. So I want you to channel your inner Kyle Bush and drive from San Francisco. Yeah. Under the speed limit. We're not trying to get you to break the speed limit.

[Rachel Cruz]

He's aggressive.

[Dave Ramsey]

I want you to go all the way to Daytona. Yeah. And when the sun's coming up, by the way, Daytona, you can still drive on the beach. I want you to drive out on the beach and sit there and smile and go, I am 23, have money and my pocket. I can be and do anything I want in the greatest land the world has ever known. I don't have to put up with a couple of cheating, drunk trust fund morons and I'm gone. How's that feel?

[Caller]

It feels good.

[Dave Ramsey]

It's scary, but it's good scary. But it's an awesome scary. It's like bungee jumping. Go.

[Ken Coleman]

Yeah.

[Dave Ramsey]

We're pushing you off the bridge. I don't know if you felt it or not. Yeah.

[Rachel Cruz]

This was our answer 20 seconds in. We were into this answer 20 seconds into the call. Now you're ready to do it. Go do it.

[Dave Ramsey]

We love you and we want you to have a great life. Yeah, you're not going to have a great life staying where you are. As a matter of fact, your life's going to go downhill pretty quick if you stay there. You know, in your deepest inside. God's spirit inside of you is telling you to get away from the evil. He's telling you. Listen to him. And then we told you too listen to us.

[Rachel Cruz]

Then there's the fact that two trust fund babies are stealing your alcohol and blaming you for it.

[Dave Ramsey]

What? How bass ackwards is that? It's way too easy to put off making a will. And believe me, I've heard every excuse in the book. But not having the time is one excuse we can kick to the curb right now. Because these days, most folks can make a legally binding will on their lap between loads of laundry. If you're wondering if you can make your will online or if you need a lawyer, we have a quiz to help you figure that out in less than 5 minutes. Just go to ramseysolutions.com willsquiz ramseysolutions.com willsquiZ Buying or selling a home is a big deal. And there's a lot of opinions out there about the real estate world. If you don't believe me, just open up your social media. There's a lot of opinions. And opinions are like armpits. Everybody's got them. And most of them stink. They really don't know what they're doing. Everybody's got an idea. Some. Everybody's got a course on TikTok. Everybody's got something you can get into. Listen here. When you got all this drop drama, one thing you know about drama. Here's how you beat drama. Facts. Facts are your friends. If you want to know the facts about real estate, you can simply go to our website. We've got all the market trends on there. You can tell exactly what's going on and then you can make your decision. Are house prices going up? The answer is facts. Yes. Not quick, quickly, not a lot. But they are going up. They've gone up every single month this year. That's a fact. Interest rates are low. The average 15 year fixed rate is 15 is 5.95 right now. In any stretch of history, 6% or less has been considered a low interest rate. It's just tough for it to be a low interest rate when you're coming off of 2A and half three. And some of you still have a recent memory of that. So it makes it feel like it's high. It ain't High. High is 14. High is 10, 12. This is not high. So you can start to figure this out and look at actual Trends. Go to ramseysolutions.com market or click the link in the show notes and we'll get you helped out. Colin is with us in Missouri. Hey, Colin, what's up?

[Ken Coleman]

Up. Well, so my grandmother that I haven't really talked to in years that's been estranged from my father and I'm recently estranged from him and all that, just recently offered the other day to pay off my credit card debt. Never told her how much. Just told her I was going through your steps to get out of debt and she said, oh, well, I'll help you so you don't got to pay interest. I'll pay off your credit card. Sorting. Pay me back. And I'm over here. Like, I don't feel comfortable taking money from her.

[Dave Ramsey]

I would take it if it was a gift, but it's not a gift, it's a loan.

[Ken Coleman]

Yeah, it's a loan.

[Dave Ramsey]

No, no, no, thank you. I'll pass.

[Ken Coleman]

Yeah.

[Dave Ramsey]

So estranged and estranged and estranged. There's a lot of estranged going on in your family. The last thing you need to be doing is owing one of them money.

[Ken Coleman]

Yeah, that's kind of how I felt. Not only just for the fact that I'm not sure how tough she's going to be on making me pay back this debt to her, but just I don't personally feel comfortable taking money from family.

[Dave Ramsey]

Well, I mean, if she has $2 million and wants to give you 25,000 to pay off your credit card debt as a gift, we'll talk about it. That's fine. That's one thing. No strings attached. But this is not that. This is you loaning money. No, we do not loan money to family. We do not borrow money from family. You will change the quality of the relationship. Relationship. And you guys have trouble with quality of relationship in your family anyway.

[Ken Coleman]

Yeah.

[Dave Ramsey]

Don't add to the character. I mean, you've actually re established a relationship with this lady that you have hardly ever known, and don't ruin that.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Do you still have doubts about this?

[Ken Coleman]

I mean, I never really considered for more than like three seconds for.

[Dave Ramsey]

Okay, well, then your voice sounds like you're like.

[Rachel Cruz]

Yeah, well, maybe that's what I'm picking up on. Are you afraid to tell her? No, thanks.

[Ken Coleman]

Kind of. I knew it. Yeah.

[Rachel Cruz]

But here's the deal. Let me help you. I'm sorry to cut you off.

[Dave Ramsey]

Let me.

[Rachel Cruz]

Let me help you with this.

[Dave Ramsey]

Okay?

[Rachel Cruz]

You just seem to say grandmother or whatever you call caller. I really appreciate that, but I need to take care of this myself. I got into this mess. I need to get myself out of this mess. Dave and his team are going to help me get out of this mess, and I'm reestablishing this relationship with you. And I just don't think it's a good idea for me to be in debt to you when I'm already in debt over here. So I appreciate the offer, but I just want to build my relationship with you and just move on. I think it's going to be a.

[Ken Coleman]

Okay. All right.

[Rachel Cruz]

And by the way, let me say this, and I want Dave to weigh in here. She may not like that, but I doubt it. I think she's making this gesture because I think she wants some reparation she wants to repair, and I think she's trying to make a good gesture here, and I think she'll be okay with that. Dave, do you see a problem with that approach?

[Dave Ramsey]

No, it's the only way I would do it. I think you just go in kindness and say, this is me. It's not you, it's me. Yeah. Yeah. I could tell I need to pay off my debt because of the way I feel and the guy I look at in the mirror. Granny. But thank you, Granny. You're very sweet. I appreciate the offer. It's very kind of you. It's kind of hard to pass up, but I'm going to because I need to do this for me, what Ken said, and just blame it on you. And that's the truth, by the way, too. But the last thing you need is weirdness between family that already has its old boatloads of weirdness. Estranged and estranged and estranged and then not estranged and then estranged. There's a lot of strange. And so, yeah, just stay away from it. And that's a, you know, don't. Don't muddle this up. So. Yeah. And I think she'll receive that.

[Rachel Cruz]

Well, maybe.

[Dave Ramsey]

And if she doesn't, then that's another sign.

[Rachel Cruz]

That's right.

[Dave Ramsey]

That's another signal that you shouldn't have done it. Yeah. The last thing you want to do is be, you know, owing money to people that get weird when you start talking about money. So it's a bad idea. Megan's in Vermont. Hey, Megan. What's up?

[Caller]

Hi. Thank you so much. So my husband and I are on baby step two. We started off at $200,000 in debt. We're at $172,000 in debt as of now. I need some help with my car situation. So I'm a road warrior. I do 60,000 miles a year and my car is unfortunately out of service. It's not fixable at this point. So I'm borrowing my mother in law's extra car for the time being. But I'm wondering, with the amount of mileage that I do and how much I'm on the road, what is the best way for me to go about purchasing a new vehicle that's going to be reliable?

[Dave Ramsey]

You guys don't have any money? No.

[Caller]

We're throwing everything at our debt.

[Dave Ramsey]

And you're down to $1,000. You're doing it the way we teach?

[Caller]

Yes.

[Dave Ramsey]

What's your household income?

[Caller]

It's 250,000.

[Dave Ramsey]

Excellent. Okay. All right. That's good news. What do you do?

[Caller]

I am a home repair salesman.

[Dave Ramsey]

Okay. Excellent. Okay, cool. All right. How long can you use this borrowed car? A month? Two months? Months.

[Caller]

I probably six weeks. I'm on week two right now.

[Dave Ramsey]

Okay. Another month then. Okay.

[Caller]

Yes.

[Dave Ramsey]

All right. Well, I'm going to tell you what to do, and then I'm going to tell you what to do long term. Okay. And how to think about this is. Here's the thing. Okay. So first thing I would do is answer your question. Let's let the. Let the pressure off. I would stop your debt snowball and save up $10,000 in one month and pay cash for a $10,000 car.

[Caller]

Okay.

[Dave Ramsey]

All right. And what you're looking for is a car that is ugly and low miles and has a lot of life left in it. An old Camry, an old Honda Accord, maybe an old Chevy of some kind of. But that's what you're looking for. Something that's got a lot of life left in it. But it's not pretty because no one buys home repairs from you based on your car.

[Caller]

That's true.

[Dave Ramsey]

Okay, now then, let's talk about a principle for road warriors. For everyone listening, including you, whatever you. Let's pretend you've got unlimited money and you're out of debt. We're a couple of months or years down the road from this discussion. I think it's fair to say, say that when you put $60,000, 60,000 miles a year on a car, whatever you are driving, you are destroying its value. Agreed?

[Caller]

Absolutely.

[Dave Ramsey]

Miles destroys a car's value. That's a fact. That's a statistical fact. Okay, so a two year old car with 120,000 miles on it, piece of crap. All right? A four year old car with 240,000 miles on it, it's got no value. You've rung all the value out of it. So, so what? The question is how? And when you destroy the value of a car, you're destroying the value of what you paid for. And so from a business perspective, what you want to drive is the least expensive car that will get the job done. Now let's define get the job done. It's got to get there, number one. Number two, it's got to get there with reliability. And number three, it's got to get there with a reasonable level of comfort. So you're not driving a freaking Dodge Neon. You'll be in the chiropractor's office. Okay, so what is the cheapest car that's reliable and reasonably comfortable? Because I'm in it all the time and that's a twelve to a fifteen thousand dollar car. And I don't care what you're making or how rich you are, that's all you ought to be driving. Because if you buy a fifty thousand dollar car, a $100,000 Escalade, you're going to destroy away $100,000 in three years.

[George Kamel]

Does having more money and less stress sound nice, but feel impossible? Well, in my brand new book, Breaking Free from Broke, I share my story of going from broke to millionaire and exactly how I did it. You'll learn about the Money traps and cultural lies out there designed to keep you brainwashed and stressed out. From credit card schemes to mortgage myths to investing traps. So if you're not where you want to be financially, I can help you finally get ahead. You can get breaking free from broke [e-mail] store. That's ramseysolutions.com store.

[Dave Ramsey]

In the lobby of Ramsey Solutions on the debt free stage. Lee and Liz are with us. Hey guys, how are you doing?

[Caller]

Great, Dave, how are you?

[Dave Ramsey]

Better than I deserve. Where do you live?

[Caller]

Tampa, Florida.

[Dave Ramsey]

Oh, fun. Welcome to Nashville. And how much debt have you two paid off?

[Caller]

260. 781.51.

[Dave Ramsey]

Love it. How long did that take?

[Caller]

Just about six years to the day.

[Dave Ramsey]

Cool. And your range of income during the that time?

[Caller]

We started at 181,000. Our best year was 215,000. And then I became a stay at home mom when our son was born and we ended up at about 133,000.

[Dave Ramsey]

Cool. Very cool. Good for y'. All. What do y' all do for a living?

[Caller]

Lee is a police officer and I was a certified nurse midwife and now.

[Dave Ramsey]

I'm a stay at home mom. I love it. Very cool. Good, Good, good. So six years, 261. Did you pay off your house? We did, we did. I love it. Looking at weird people. Very cool y'.

[Ken Coleman]

All.

[Dave Ramsey]

So what's the house worth?

[Caller]

The house is worth $512,000.

[Dave Ramsey]

Very cool. And how much is in your nest egg, your 401ks and stuff?

[Caller]

About 570.

[Dave Ramsey]

Ah, millionaires. Woohoo. Baby steps, millionaires. I'm proud of you. How old are you two?

[Caller]

36.

[Dave Ramsey]

36 year old millionaires in Tampa, Florida with a paid for house. Ladies and gentlemen, let me introduce you to Lee and Liz. Way to go man.

[Caller]

Thank you.

[Dave Ramsey]

That's so fun. So fun. Excellent. So did somebody give you like $300,000?

[Caller]

No.

[Dave Ramsey]

No, no. You just went and got money and lived on less than you make and all that. So six years ago, tell me the story. How did you get introduced to this Ramsey stuff?

[Caller]

Well, we had been married and in our house for about a year and a half and we were making a lot of money. We were making extra mortgage payments, we were investing, doing a lot of different things all at once, but didn't have any shared goal or vision. And then Lee found the podcast and listened to the audiobook of the Total Money Makeover one night during one of his night shifts and came home and shared it with me and I was really Concerned that I wanted to be a stay at home mom. But I wasn't sure if we would be able to do it with the mortgage payment. So we got on board. We were doing some dumb stuff like chasing credit card points and paying it off every payday. So we quit doing that, got on a written budget and started attacking the mortgage. And the bulk of it was paid off in the first three years. And then when I stayed home and left my six figure job, it slowed down. But even still, we surpassed our goal by about 13 months.

[Dave Ramsey]

Wow. Good for you. Well done. So. So your big motivator, your why was for you to be home.

[Caller]

That was our plan all along.

[Dave Ramsey]

That's why we scratch, clawed and did all the things we did, right?

[Caller]

Yes, sir. Overnights, night shifts, overtime, extra duty, whatever we could pick up at the time, we just did it. There were some days where somebody was always asleep and we would cook or.

We were both at work, or we.

Were both at work, we would high five and then one of us would leave and the other one would leave shortly thereafter. So we just worked.

[Dave Ramsey]

Also, we'd be home. That's a good. That's a good why? Yes, sir. It's a good reason. You gotta have something that is bigger than the pain to make you go do it. Because you sacrifice deep.

[Caller]

It's hard to believe that as a police officer for 13 years, 10 of that was on night shift or swing shift. So here we are.

[Dave Ramsey]

And now you don't have to do that. No, sir. You're a millionaire.

[Caller]

Yes.

[Dave Ramsey]

So you have to work the shift you want to work?

[Caller]

Yes, sir.

[Dave Ramsey]

And you've been there long enough. You probably do get to choose now.

[Caller]

That's correct.

[Dave Ramsey]

Yeah. I love it. Very good, very good. And you got the shift you want, which is mommy shift 24 7. There you go, babe. I love it. That's good. Very good.

[Rachel Cruz]

So I want, I think a lot of people listening and watching going, how in the world did you walk away from a six figure job and still finish? I want you two to answer this. I think some people are going, how'd you do it? So how did you still finish ahead of schedule when you lost that big income?

[Caller]

The grace of God, I think anytime we were worried, it was like the budget just made sense by the end of the month. And I had paid off some of my nursing school loans before we got married and then went to grad school debt free. So if you're a nurse out there thinking you want to become a nurse practitioner, you can absolutely do it without going into debt. And that helped a lot, knowing that anything that I earned was going towards the mortgage.

[Dave Ramsey]

Yeah.

[Caller]

There will be some months where we would. We have a goal to pay to pay down the mortgage, and then we would surpass that. We would say, okay, let's do X. And we would do double that because of just either the paychecks would come in or just all the work. Like, I forgot how much we worked. And then the paycheck will show up two weeks later on a Friday. And you would go, well, I guess we're doing more.

[Rachel Cruz]

By the way, signs, you know, you're working really hard is you forgot how much you made. That's a great sign. You're like, wow, I actually worked a lot last month.

[Caller]

And when we first got started, we were like, man, every dollar is not for us. We have an irregular income. We get paid every two weeks. It's not lining up on the monthly budget. So if you're out there and struggling with the same thing, just stick with it. Give it a couple months, keep practicing, keep plugging away, and chunk up those big balances. Because when you're doing a big mortgage or a consolidated loan or something like that, every year, we would look at our plan and say, by the end of the year, we want X number on that balance sheet on New Year's Eve. And some years, we made it. One year, I totaled our car, so we had to cash flow it, and we didn't make it that one year. We made it by July.

[Dave Ramsey]

Yeah.

[Rachel Cruz]

So that's fun.

[Dave Ramsey]

So how's it feel? Paid for house. You're millionaires. You're 36 years old.

[Caller]

It's pretty cool.

[Dave Ramsey]

It's.

[Caller]

It's surreal. Still.

[Dave Ramsey]

Was it worth it?

[Caller]

Absolutely.

Absolutely.

[Dave Ramsey]

Because you guys went crazy for a while. Yeah, it's awesome. Yeah. Because people always ask us, you know, I don't know, man. I think I want to live my life. We got. You could do anything you want for the rest of your life now.

[Caller]

And we also. We also did live life, too. I mean, being on baby steps 4, 5, and 6 and doing those simultaneously. And following the program, we were still able to cash flow home repairs, go on vacation, and do the things you talk about when you're on those baby steps. And so we. We did it and just stuck to the plan.

[Dave Ramsey]

Pretty cool. Was that the breakers in the picture?

[Caller]

The dances are.

[Dave Ramsey]

Oh, okay. Okay. I thought. I couldn't tell. Just got a quick look on it when it flashed in front of my peripheral vision there. But, yeah. Wow. Good for y'. All. Nice Vacation. Good, good. Good for you. Wow. What do you tell people? The key to being a millionaire by the time you're 36 is being consistent.

[Caller]

Being content, and working hard together, even if you're not seeing a lot of each other.

[Dave Ramsey]

Yeah.

[Caller]

Also, the tracking your net worth was big for us because, yes, you can see some of the debt going away on the house, but then you would also. We would also see our net worth rise. And so. And having a goal, we would like to have X by the end of the year. And once again, something.

[Dave Ramsey]

Because you're simultaneously paying off the house and putting money into your 401k.

[Caller]

Yes, sir.

[Dave Ramsey]

Yeah. Because you're doing baby step. Four, five, six. Yeah. Which is what you're supposed to do. And so tracking the net worth is. It doubles the equation.

[Caller]

And it. And it helps me because I'm the natural spender, so it helps me to kind of see the end. It was hard in the beginning for me to see $260,000. I was like, well, I'll just work hard at the end. She told me, no, you should work hard now because it will. In the end, it will literally fall off a cliff.

[Dave Ramsey]

Yeah.

[Caller]

And that's what it did.

[Dave Ramsey]

Yeah. Wow.

[Rachel Cruz]

I love it. You just learned to say yes, dear. That's such a great example there. What did you guys learn. Learn about each other in your marriage as a result of this serious commitment?

[Caller]

I think how much we are willing to sacrifice for each other and how much humility we can have and just choosing that over and over again.

[Dave Ramsey]

Yeah. I'm proud of y'. All. Thank you. And I know your parents are here bragging on you and cheering you on. I got to meet them earlier. And you brought the kiddos with you. Bring them up. Let's introduce them with their ages and names. The reason for doing this. They need the T shirts that say, I'm the why I'm why they did this. Oh, my goodness. So, names and ages.

[Caller]

We have John Edwin, who's two and a half, and Maggie, who's 11 months.

[Dave Ramsey]

Ah. So they're too young to even know how big a hero their parents are. Your old man and old lady Vanderbilt. You got the whole thing started right here. That's awesome, man. I'm proud of y'. All. Well done. Very well done. You changed every thing. Very cool. Very cool. Very cool. All right, Lee and Liz. 261,000 paid off in six years, including putting money in their 401k. They are now baby steps millionaires at 36. Count it down. Let's hear a debt free scream.

[Caller]

Three, two, one.

[Dave Ramsey]

We're debt free.

[Ken Coleman]

Yeah. Woohoo. Love it.

[Dave Ramsey]

Aren't they fun? What Rock stars, man. Absolutely amazing. Sam, Our scripture of the day, Isaiah 30:21. Whether you turn to the right or to the left, your ears will hear a voice behind you saying this is the way. Walk in it. J.P. morgan said the first step towards getting somewhere is to decide you're not going to stay where you are. That would be be true. Here we go. Tyler is in Reno, Nevada. Hey Tyler, what's up?

[Ken Coleman]

Hi Dave. So I'm just gonna just kind of jump right into it. Recently lost my job back in the middle of July. We used our, our emergency safety fund that we had to make sure bills are covered and such. My question is, you used your emergency fund for what? For like our other utility bills and such to catch up on. We were a little bit behind and so my question is my 401k from my previous job now since I got fired, do I withdraw my 401k to cover the other debt that we have?

[Dave Ramsey]

No.

[Ken Coleman]

Or should I not?

[Dave Ramsey]

No. If you withdraw money from a 401k before 59 and a half, you're going to be charged a 10% penalty plus your tax rate and so you're going to be charged the equivalent of about 40% interest. So Dave, would I borrow money at 40% interest to pay off my debt? Of course the answer would be no. So mathematically that is suicide. So how's the new job hunt going?

[Ken Coleman]

It's going good right now. I currently serve for the Army National Guard, so my leadership was able to put me on orders to keep income coming for my family and I, which thanks to them that it is helping a little bit. Other than that the biggest thing that is wanting to, was wanting to do the withdrawal is our car load, which we still have a pretty good amount of balance and I just wasn't sure whether.

[Dave Ramsey]

What's the balance on your car?

[Ken Coleman]

About $7,000 left.

[Dave Ramsey]

That's not bad. Okay, so what does the. They put you on orders. What does that, how much money does that amount to.

[Ken Coleman]

Every two weeks? It's roughly 2200.

[Dave Ramsey]

Okay.

[Rachel Cruz]

Does that preclude you from doing anything else?

[Ken Coleman]

No, I mean I typically it's like a full time job with the Army National Guard which the orders is only like three months. For three months only. So at the end of September, it's my last month that they will help me. And then from there I.

[Dave Ramsey]

What Ken and I are trying to understand is they put you on 4400 bucks a month, which is very nice. That's all awesome. But you're going in and working every day at the Guard?

[Ken Coleman]

Yes.

[Dave Ramsey]

Okay, so you have a full time job until the orders run out in three months. Okay.

[Ken Coleman]

Correct.

[Dave Ramsey]

So you're going to go get a job, right for the end of September?

[Ken Coleman]

Yes, yes. I've actually applied for a few jobs. I'm just waiting to hear back. There is one in particular that I am hoping to get more than anything because it's right around the corner from where we live live and the pay rate is actually pretty decent that would help us keep afloat. I just wasn't sure to make a drastic move now or kind of hold off.

[Dave Ramsey]

What would be the drastic move?

[Ken Coleman]

The 401k, we've already established.

[Dave Ramsey]

No, we're not doing that. That's not a drastic move, that's a dumb move. Okay, what were you doing that got.

[Rachel Cruz]

Where you were fired? What were what were work?

[Dave Ramsey]

What happened?

[Ken Coleman]

I was in a manufactured warehouse and had a forklift incident which bent a pole and from there on I got suspended from the job. Waited because they do like the urination test and breathalyzer just like normal policy job normally does. And from there I was suspended, waited for about a week and a half and then when the time came they called me say I was terminated from the incident and never really gave me a more depth.

[Dave Ramsey]

So there were drugs? There were drugs in your system?

[Ken Coleman]

No, not at all.

[Dave Ramsey]

Okay, so you're just ran a forklift into a pole and they don't do that from a safety perspective they fired you?

[Ken Coleman]

Correct.

[Dave Ramsey]

Okay, what were you making?

[Ken Coleman]

I was making, I mean total because I worked a lot overtime over there but I was at around 77,000 a year.

[Dave Ramsey]

Okay, and how long have you been driving a forklift?

[Ken Coleman]

5 and a half years.

[Dave Ramsey]

Okay, and one incident.

[Ken Coleman]

Yes.

[Rachel Cruz]

What happened?

[Dave Ramsey]

Give us a short version. That's a little weird.

[Rachel Cruz]

Yeah, just. Just one mistake. You weren't paying attention.

[Dave Ramsey]

What happened?

[Ken Coleman]

It simply was just a. Yeah, it was simply just a mistake. I was just exiting out the roll up door to have at the warehouse and checking my left and right as I normally do. And as soon as I started accelerate I just turned a little bit while looking at the same time and ran into a poll. From there on suspended me and they ended up firing me.

[Rachel Cruz]

Well, the reason I'm digging into this is because you know there's you can get paid really nicely and you were getting made, you were making good money. I would get back into that field if I Could, I don't know what this thing is around the corner. That would be ideal. But I would, I would be looking at, at multiple options in that space where you had experience before.

[Dave Ramsey]

If you have the ability to operate heavy equipment. There is a tremendous shortage of heavy equipment operators. And so, you know, I'd be looking in the bulldozer, backhoe world as well as the forklift world. There's a tremendous shortage. Mike Rowe, our friend from Dirty Jobs and I were talking about the other day, he said he's got one guy in Phoenix that would hire 22 people right now, today, but he can't find them. Yep. That have, you know, have experience and can, you know, run a piece of equipment. In other words, that's the thing. So that's, that's what I'm looking for there. And so, yeah, you just need to get the next thing lined up. As far as the 401k goes, Tyler, what you're going to do is get with a Smartvestor Pro, go to ramseysolutions.com click SmartVestor and sit down with the one there in Reno or one of the ones there in Reno know, and they'll have the heart of a teacher, and they'll show you how to roll it over from your old job into an ira. There will be zero taxes. You pick a couple of three mutual funds like we teach, four types of mutual funds. Growth, Growth and income, Aggressive growth and international. And you roll it into that, you only have a $7,000 debt. Don't borrow money at 40% interest, which is the effect of taking money out of your 401k and getting a 10% penalty plus tax rate. So don't do it. Roll it over. It's called a direct transfer rollover. Do not have the old company send you the check. Have it go straight to the investment. They do not withhold. If they send it to you, they're required to withhold 20%. Now you don't have 100% to roll over. Creates a problem. So get with your Smartvestor pro today. Jump on that website today, ramseysolutions.com, get your SmartVestor. They'll help you do a direct. Direct transfer. Write that down. Direct transfer rollover. But do it before HR sends you a check from that other place because you don't want them sending you a check. You want the check sent by direction of the new IRA directly into the ira. That's the direct part of this transfer.

[Rachel Cruz]

The other thing I would challenge you with, Tyler, as you mentioned, you were Working some overtime. A lot of hours at this previous job. So let's go. You've got the National Guard paying you every hour you come work. I would set a goal to try to pay this 7,000 off before you're done with your guard duty. This. This next mission, I think that's doable and it's certainly if it's not, you're going to get a long way there. But you can do this with extra work selling stuff. No reason why you shouldn't be able to knock that seven grand out.

[Dave Ramsey]

Yeah, and we you said so I would assume your wife is working. If not, she could be as well. So there's no reason for us to be have a shortage of money in this house. You make enough with your guard duty and with whatever else you can do and then leaning into the next job and moving right ahead. There's no reason for you to be behind on utilities again. So. Changes your life when you stay in control of these things. Very, very good question, sir. Sorry. You've been through that. Sounds like you're going to be okay. Might end up being a blessing. You might end up making more at the next gig. You may look back and give those people a great thank you for the bent pole in their warehouse. They could put a little sticker on it says Tyler was here. That puts the sour of the Ramsay show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace and that's to walk daily with the prince of peace, Christ Jesus.

[Ken Coleman]

Sa.