Stop Chasing Payments and Choose Freedom

Summary

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The Ramsey Show: Stop Chasing Payments and Choose Freedom

Date: October 30, 2025
Hosts: Rachel Cruze & Dr. John Deloney
Podcast Network: Ramsey Network

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Episode Overview

This episode delivers no-nonsense, actionable guidance on escaping debt, ending the cycle of payments, and making principled money decisions. Hosted by Rachel Cruze and Dr. John Deloney, the episode features live calls tackling auto loans, raising salaries, debt relapses, family financial boundaries, homeownership struggles, and inspirational debt-free success stories. The show’s consistent theme: stop normalizing debt, avoid family entanglements, and purposely design your financial future for long-term freedom and peace.

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Key Discussions & Insights

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1. Student-Auto Loan Trap and Family Dynamics

Caller: Emma in Ohio
Timestamps: 00:42–09:01

• Situation: Emma is 21, pays $420/month on a car loan that's not even in her name. The cosigner (her mom's ex-husband) is uncooperative and threatens legal action. She considers switching to a smaller, affordable car but would need to borrow $200 from her future mother-in-law to do so.

• Advice:

  • Rachel: “Drop off the car. It’s not in your name, it’s his problem now. But avoid more borrowing for a car even from family; give yourself time to save up instead.” (04:41)
  • John: “Repeat after me: never, ever, ever, ever, ever borrow money again—especially from family! Start by telling the seller, ‘I’m committed to paying cash, can you hold the car while I work hard and save?’” (07:00)
  • Key Principle: Breaking the cycle of debt requires setting new standards—no more family borrowing and embracing temporary inconvenience in pursuit of long-term freedom.

• Memorable Quote:

  • Dr. John: “Ubering around and getting rides for three months will change your life because you will never, ever, ever, ever, ever borrow money again.” (07:36)

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2. Negotiating Raises: The Humble, Honest Approach

Caller: Chris in Pennsylvania
Timestamps: 11:15–19:31

• Situation: Chris earns $125k as a marketing manager and expects a standard 4% cost-of-living increase. He feels underpaid based on experience and workplace contributions but struggles with how to ask for more.

• Advice:

  • Rachel: “Approach with humility—bring tangible evidence of how your value has increased, ask for a conversation instead of making demands, and avoid personal financial needs as leverage.” (13:34)
  • John: “The best question is: ‘What’s the path for me to $150–$175k in this company?’ It’s about inviting your supervisor into the vision, not cornering them.” (16:31)
  • *Prepare for rejection by knowing your next ‘or what’ move—side hustle, new job, or making peace with the salary.

• Memorable Quote:

  • Dr. John: “When employees came at me and said, ‘I want a path to … $150k,’ that’s an invitation, not an accusation.” (14:38)

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3. Financial Backsliding: From Baby Step 7 Back to Debt

Caller: Carlos in Miami
Timestamps: 21:29–30:49

• Situation: Carlos and his wife previously achieved financial freedom, paid off their house, and reached Baby Step 7. After COVID, they regressed by spending on travel, luxury cars, and racking up $29k in credit card debt.

• Advice:

  • Rachel: “You’re living on $300k/year—this debt could be gone in three months if you cut your lifestyle and behave like adults. Right now, you’re acting out of impulse and immaturity.” (25:51)
  • John: “There’s always another day after the party. Learn from this, or you’ll repeat the cycle—act like grown-ups for the sake of your family’s future peace.” (28:48)
  • Challenge: Gently, but firmly, hosts push Carlos to own his behavior and reset boundaries, not lifestyles.

• Memorable Quote:

  • Rachel: “Children do what feels good, adults devise a plan and follow it.” (29:17)

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4. Bankruptcy Consideration & Downsizing

Caller: Martha in Florida
Timestamps: 32:11–41:58

• Situation: Martha is overwhelmed by $20k in credit card debt, $12k in personal loans, $15k in medical collections, $16k in a car loan, and a house that consumes 70% of her income. She wonders if bankruptcy is the only solution.

• Advice:

  • Rachel & John: Absolutely no bankruptcy needed. You have an income problem, a house you can’t afford, and a negotiation opportunity with creditors (especially for medical debt). Prioritize selling the house and negotiating medical bills. Start rebuilding with new, aligned financial decisions.

• Memorable Quote:

  • Dr. John: “My wife cried when I said we have to sell the house. But I had a math problem.” (40:06)

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5. Should I Use Retirement Funds to Pay Off Debt?

Caller: Christopher in Florida
Timestamps: 43:22–51:45

• Situation: Christopher paid off $32k in credit card debt only to accumulate $10k more due to emergencies. He contemplates cashing out his 403(b) to pay it off.

• Advice:

  • Rachel & John: Never use retirement to pay consumer debt! Penalties and lost growth make it an expensive mistake. Leverage new income (he’s making $100k/year), side jobs, and a strict budget to clear the debt fast.
  • Ownership of Decisions: Shift from “I had to” to “I chose to”—take control of your money story.

• Memorable Quote:

  • Dr. John: “It’s about sitting in the driver’s seat of your own life, not blaming everyone else.” (45:00)

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6. Friendship Pressure While Paying Off Debt

Caller: Kristen in Arkansas
Timestamps: 54:23–62:56

• Situation: Kristen and her husband are hustling hard to pay off $162k in non-mortgage debt. Their friends pressure them to spend more time and money socializing.

• Advice:

  • John: “Friendship changes in your 30s; values diverge. True friends will find ways to support you—maybe potlucks at home or camping. Make your financial values known.” (55:34)
  • Rachel: “This isn’t forever. Focus on selling off assets like a rental property and land. Margin comes with boundaries.”

• Memorable Quote:

  • Dr. John: “I want land so bad—not healthy bad—but I don’t want to mortgage my anxiety.” (60:22)

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7. Caregiver Burnout & Rebuilding After Sacrifice

Caller: Susan in Florida
Timestamps: 98:19–105:18

• Situation: Susan, age 66, has sacrificed all her retirement savings to provide for three handicapped family members, is now burnt out, and worried about her future security.

• Advice:

  • Maximize available support programs, clarify trust/estate arrangements, and start routing income toward rebuilding personal financial stability.
  • Get legal and financial advice to ensure everyone’s protected—especially Susan.

• Memorable Quote:

  • Dr. John: “The greatest thing you can do for your family is make sure you’ve got a plan for yourself.” (101:42)

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8. Debt-Free Scream: Single, $207K Mortgage Payoff in 7.5 Years

Caller: Rebecca from North Carolina
Timestamps: 106:16–115:13

• Story: Rebecca paid off her entire home by herself—achieving $207,000 in principal elimination over 91 months, making $100K–$130K/year. She is fiercely methodical, ran budgets, used overtime, and even cashed out stocks as she went.

• Key Learnings: Do the baby steps in order; make owner decisions; expect and weather inconveniences; celebrate and inspire others.

• Memorable Quote:

  • Rebecca: “Single people can if they truly want it.” (107:20)

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Notable Quotes (with Timestamps)

• Rachel Cruze:

  • “Normal is broke and common sense is weird—so we’re here to help you transform your life.” (00:15)
  • “Children do what feels good, adults devise a plan and follow it.” (29:17)

• Dr. John Deloney:

  • “Ubering around and getting rides for three months will change your life because you will never, ever, ever, ever, ever borrow money again.” (07:36)
  • “Friendship changes in your 30s—values emerge, and that means sometimes friendship does, too.” (55:34)
  • “It’s about sitting in the driver’s seat of your own life, not blaming everyone else.” (45:00)
  • “I want land so bad—not healthy bad—but I don’t want to mortgage my anxiety.” (60:22)

• Rebecca (Debt-Free Caller):

  • “Single people can (pay off a house) if they truly want it.” (107:20)

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Additional Timestamps & Segments

| Segment | Timestamp | Topic | |----------------------------|--------------------|---------------------------------------------------| | Emma & The Car Dilemma | 00:42–09:01 | Dropping a toxic car loan, family money traps | | Asking for a Raise | 11:15–19:31 | Humble, data-driven asks, planning next moves | | Relapsing Into Debt | 21:29–30:49 | Owning backslides, resetting boundaries | | Facing Bankruptcy? | 32:11–41:58 | No bankruptcy, downsizing house, negotiating debt | | Retirement vs. Debt Payoff | 43:22–51:45 | Never touch retirement to pay consumer debt | | Navigating Friendship | 54:23–62:56 | Choosing peace and boundaries during debt payoff | | Caregiver Burnout | 98:19–105:18 | Burnout, estate planning, rebuilding retirement | | Debt-Free Scream | 106:16–115:13 | Solo $207K payoff, intentional vs. intense living |

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Episode Tone & Style

• Direct and kind, but no-nonsense: Tough love, clear steps, and honest encouragement—never shaming but always moving listeners toward principled action.
• Relatable, sometimes humorous: Hosts don’t shy from teasing each other or the callers about Florida, Miami parties, or pop culture gaps.
• Heavy on practicals: Each call is met with detailed, next-step advice—no “just try harder” platitudes.

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Conclusion

This episode encourages listeners to stop normalizing debt, break free from payment cycles and family money traps, and to chase real, lasting peace rather than fleeting convenience. Whether you're buried by credit cards, torn about helping adult children, juggling friendship amidst sacrifice, or considering a risky home purchase, the Ramsey principles—self-control, hard conversations, written plans, and no more debt—hold the key to financial freedom.

Listen if you need:

• A financial wake-up call with heart,
• Real-life solutions to debt and family drama,
• Step-by-step courage to take back control.

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Transcript

[Dave Ramsey]

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

[Rachel Cruze]

Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fair Winds Credit Union studio. This is the Ramsey show, and I'm Rachel Cruze hosting this hour with Dr. John Deloney. And we're answering your questions, so you can give us a call at 880-882-55225. Up first, we have Emma in Ohio kicking off the show. Hi, Emma. Welcome to the show.

[Caller]

Hi. Thanks for having me.

[Rachel Cruze]

Yes, absolutely. How can we help?

[Caller]

So, basically, the car I'm currently driving, there's still $15,000 owed on it, and it's not in my name. My mom's ex husband signed on it for me, and the divorce was messy, so he's been letting me pay it off while I'm still in college, but the payments are 420amonth, and it's just too high for my income right now. And I've tried to work with him to get it dealt with, and he's not very cooperative.

[Rachel Cruze]

Well, he should be. His name's on it. If something happens to the car, it's all in his.

[Dr. John Deloney]

Are you on it at all?

[Caller]

No.

[Dr. John Deloney]

Oh, then just drop it back off to him. Yeah, that's.

[Caller]

Well, that's what I'm planning on doing today. I'm actually driving home. It's two and a half hours away. I'm driving home, and I have the opportunity to get a car for a thousand down from a family friend who owns a dealership, and he'll let me basically pay 200amonth on it. And it's a $3,500 car. That's within my means, and it's a reliable car. And so I guess that's my question. Should I just, you know, drop it off and tell him?

Because he's.

The only problem is he's threatening to sue my mom.

[Rachel Cruze]

Well, what. What's. What's his basis legally to do that? I mean. Yeah, I was going to say. I mean, there's not much he can do in a court system unless there was something in the divorce decree that states that this was an asset or something. I don't know if there was something in there about the car. Is there?

[Caller]

The only thing that I know that was in there was that he basically has the right to repossess it if it gets behind.

[Rachel Cruze]

Yeah. Which is exactly what he's.

[Dr. John Deloney]

His car. Just hand it to him. Just give it to him.

[Caller]

Yeah.

[Rachel Cruze]

Yeah.

[Caller]

Which is Kind of what I'm trying to explain.

[Dr. John Deloney]

How old were you when you took this loan out from him?

[Caller]

I think, I think I was freshly 19.

[Dr. John Deloney]

Okay.

[Caller]

And I'm 21 now.

[Rachel Cruze]

Yeah, I mean, I'm torn and I'm.

[Dr. John Deloney]

I'm, I'm talking to Rachel here on your behalf. I'm torn between. It's his car. It's, it's. He signed the note for it and he gave it to a teenager, which is his issue. It's his issue. Give it back. And also if you were 17 or 16, this would be a no brainer for me. Part of it is you were 19 and you shook hands and said, I'll pay this thing. And so there is, I mean, you're.

[Rachel Cruze]

Going back on your word is what.

[Dr. John Deloney]

John's saying, but you can't afford it.

[Rachel Cruze]

From a moral standpoint. Well, and if we're talking all morals, he should be able to say, okay, great, if you can't pay it right, then as the guy that put you in this position, let me go ahead and just sell it and like, yeah, here's your car and help you figure.

[Dr. John Deloney]

It out, but please don't then go jump into another family loan situation.

[Rachel Cruze]

That's what I was gonna say. You're not gonna like that part of my advice.

[Dr. John Deloney]

Yeah, don't do that.

[Rachel Cruze]

What's your. Are you working or are you just a full time student?

[Caller]

I work and go to school. Yes.

[Rachel Cruze]

Okay. And do you have any money saved?

[Caller]

Just the. I have 800 saved right now and my. I'm engaged in my future mother in law was going to loan me another 200.

[Dr. John Deloney]

No, no, don't do that, don't do that, don't do that.

[Rachel Cruze]

We got to stop the, we got to stop this whole borrowing money in general, let alone from people that we know. So I mean, if, and again you called the show, so what I would do, number one, drop it, drop off the car. It's in his name, it's his issue. And yes. Are you going back on your word? Yes. But he also did this to an 18 year old. So it is kind of like okay, or 19 and I don't know. It is what it is. And so that's his issue. He's going to have to figure out. And then for you, how much do you make? How much do you make a month? If you don't have this car payment, you're not paying 420. How much extra margin do you have on top of this? 420 per month.

[Caller]

I would probably have 1500 for the.

[Rachel Cruze]

Month total or extra?

[Caller]

Extra would be an extra 500 probably.

[Rachel Cruze]

500. Okay. So honestly, what I would probably do, Emma, is I would just, I would work and it's so inconvenient. I know it is, but the car you're talking about is what, $3,000 or something. And just say, hey, it's going to take. You have $800 that you're starting with, which is great. And just say, hey, this is going to take me a couple of months. I'm going to be inconvenienced. I'm probably going to be asking people for rides here and there. You know, I mean, it's going to be annoying for a few months, but that way you at least have cash saved up so you're not continuing this cycle. And I know you may not do that, but that is, that's probably what I would do just to avoid any more debt. To avoid getting back into this. Yeah. This payment cycle of cars, you're going.

[Dr. John Deloney]

To owe money to your mother in law first, which means you're going to be in debt to her, not only financially and she might be a great, a great, wonderful person if she called into the show. I would say just give you 200 bucks if that's what she wants to do.

[Rachel Cruze]

Yeah. Because what's $200 going to do him? I don't get it.

[Dr. John Deloney]

Well, it's going to get her the thousand dollars as a down payment.

[Rachel Cruze]

Oh, for the, for the car.

[Dr. John Deloney]

Yeah.

[Dave Ramsey]

You can't.

[Dr. John Deloney]

You have to borrow the down payment to them for the privilege of borrowing more money from yet another family member.

[Rachel Cruze]

Yeah.

[Dr. John Deloney]

In the middle of a situation that you're dealing with, which is you borrowed money from a family member. It just creates so much internal chaos.

[Rachel Cruze]

Yeah. And it'll literally be three months, three months to pay cash for it. And the fact that it's a 3000. What? $200. $3200 car. Maybe you can talk them down to 3000, do you know what I'm saying?

[Dr. John Deloney]

Or 2,500 bucks. If I go get cash, if I.

[Rachel Cruze]

Have cash, can I pay you this in 60 days? And I would figure a way out because what that's going to start, Emma, is this new way of not just looking at money, but acting out of a set of principles that is going to be good for you long term. And this is a really small step to do that. So in my head I'm like, it' encouraging, you know what I mean? That it's that you have the opportunity to buy this car. It's not that much money, you're working hard, you're making some good money that you can set aside each month.

[Dr. John Deloney]

Here's how exactly how I would have this conversation at 21 years old. I would call the family member who's going to sell this. Who. Who's selling it to you?

[Caller]

My. My fiance's family friend.

[Dr. John Deloney]

Okay. I would call that family friend and say the following. I am dealing with a relationship issue where I borrowed money from a family member and it has cost me tons of grief. And so I've made a commitment to not put relationships, not put money between me and those that I love and care about. And so I really want that car. I don't have $3200 and I've committed to not borrowing money, especially from friends and from family. And so please hold that car for three months and I'm going to work really, really hard to save up that money. E. What's going to happen is they're going to say, give me 1,000 bucks and I'll just sell you this car. Because. Because that's pretty awesome and noble. I want to be a part of supporting a young 21 year old like that. Or I promise you there's going to be $3,000 cars that are all over the place coming up. So if they sell it, then so be it. The you ubering around and getting rides for three months will change your life because you will never, ever, ever, ever, ever borrow money again. And then you'll never find yourself in a situation where you owe your stepdad and your stepdad's threatening to sue you're ex stepdad.

[Rachel Cruze]

I mean, it's just like, yeah, good grief.

[Dr. John Deloney]

But yeah, great. I hate that you're in this situation. Totally honor the. I mean, appreciate the call, but I don't think we would be doing our job if we told you, yes, get out of this bad situation where you borrowed money from a family member and go do it two to three with two other people. I wouldn't sleep well knowing that we told you to go do that.

[Rachel Cruze]

Yeah. So it's a little bit of a different reason why you called is how we ended it. But yeah, I think it's gonna give you more peace. And again, it's gonna set you up for a way of making decisions with money that's gonna just prosper you in the future instead of take away.

[Dave Ramsey]

I love entrepreneurs. Don't forget, guys. I started my company on a card table myself, so I know what it's like to have people counting on you, your team, your family, not to mention your customers. And when you're the one signing the paychecks, you can't afford to fly blind. But I'll be honest. Early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, just fix it. And they did. We got netsuite. That was years ago and we've never looked back. See, netsuite isn't just for tech giants. It's built for growing businesses like yours. Over 43,000 businesses already run on NetSuite, including a lot that started just like you. And now with built in AI, NetSuite is helping them even more. It's one system connected to every part of your business. For real time insights, not guesswork. NetSuite AI flags inventory issues, cash flow risks, even supplier delays before they become problems. So you can trust the data, stop wasting time, and make the right decisions faster. Take a free product tour [e-mail] Ramsey that's netsuite.com Ramsey.

[Rachel Cruze]

It'S official. The Ramsey Christmas cash giveaway is here. Give it away means each week someone's gonna win 100. John. 200, 300, $500 more. Rachel more $500 each week we are giving away. And the grand prize winner will win $5,000. So you can enter every day from now until December 20th and enter daily. To increase your chances to win, go to ramseysolutions.comgiveaway now to enter. No purchase necessary. All right, let's head to Chris in Pennsylvania. Hi, Chris. Welcome to the show.

[Caller]

Hey, thanks for having me.

[Rachel Cruze]

Yes, absolutely. How can we help?

[Caller]

Yeah, so I have a performance review tomorrow and I wanted to get some tips about how to ask or raise.

[Dr. John Deloney]

Oh, do you not have one built into this that's triggered by performance?

[Caller]

Nothing triggered by performance, though. We typically get, you know, yearly cost of living increases and a firm performance bonus at the end of the year based on how well the whole company does.

[Rachel Cruze]

Okay, so how much is. So how much are you slated to probably. How much will. What percentage will your income increase after tomorrow? And how much more are you wanting?

[Caller]

Yeah, I'm thinking it's been going up about 4% for cost of living. And then, you know, the last couple of years for bonuses have ranged from 4,000 to $8,000.

[Rachel Cruze]

Okay, and what are you wanting all that? What are you thinking?

[Dr. John Deloney]

I don't know.

[Caller]

I've been. I've been thinking about asking for a raise for a couple of years, and because of the economy and the things that are going on with COVID I've just been sitting on it, and I feel like the time is right based on the increased that I've had over the past couple years. And I'm really getting to the point where my kids are almost college age and I'm looking to cash flow college. And I don't want to use that as a reason to ask for the raise because, you know, I feel like it should be based upon my effort and my performance, but that's really what's driving it. I'm in baby step seven, but I'm really, you know, trying to keep the kids staying out of debt.

[Rachel Cruze]

Okay, so how much are you making a year right now?

[Caller]

I'd say 125 is the base.

[Rachel Cruze]

Okay. And then if you go out marketplace value for your line of work and what you're doing with your experience, how much should you probably be making considering your workload and everything?

[Caller]

I think it could range from starting there all the way up to maybe 150, 1. 75.

[Rachel Cruze]

Okay. Are you guessing, Chris, or have you done some research to know a lateral move at a different corporation or a different company would bump me up?

[Caller]

I've looked at a couple things, but I feel like they're all going to be in that range.

[Rachel Cruze]

Okay, so 150 isn't. Isn't wild. How long have you been with the company?

[Caller]

10 years.

[Rachel Cruze]

Okay, so a good amount. Yeah. Well, we always say around Ramsey, the phrase is always that your raise is effective when you are. So when you are showing something that's going above and beyond that, you are actually doing a workload that is more than what is traditionally inbound for this specific salary. I would have specific examples of that. I mean, I would start with, obviously, a level of humility and gratitude to your employer. But to say, hey, here are the things that I'm seeing have increased over time. My salary has not kept pace with it. I have noticed that very similar positions and other companies are ranging more in this way. Can we just talk through this? Or what is a way, a pathway for me to be able to make more, because that's my desire and, you know, kind of just open the floor. And again, with more humility than ever. Because I feel like from an employer standpoint, a leader, they're going to be more apt to want to help you if you're wanting to help yourself versus going in with demanding anything, which you don't sound like a guy that's going to do that.

[Dr. John Deloney]

I love that question. When Employees used to come at me and say, hey, I want a raise. That would always put me on the defensive when they came in and said, I want a path to a hundred thousand dollars. Or I want a path to 150. 150 in your case. Or I want a path to 175. Is there a path to 175? Then what you do is you are like Rachel said, it's an invitation, it's not an accusation. And that gives your supervisor the opportunity to say, dude, I see how hard you work. There is like, here's what's happening above me and you are capped as high as you could go. Or it gives him or her the opportunity to say, well, there's actually a leadership position opening up. Or this role's capped here. But we've, we've been thinking about you for another role. But it gives them an opportunity to talk through it. And then I, you are dead on. Right. I would not bring up you have extra costs coming on your horizon that your boss needs to solve for you because that's man. No boss wants to be put in that position. And so I think you need to ask yourself if, like if they can't or if your boss says no, what is your or what statement is your or what going to be? I actually like this job. I like making 125 base and I.

[Rachel Cruze]

May not be able to help my kids the way I thought I was going to be able to.

[Dr. John Deloney]

They're going to have to stay in school.

[Rachel Cruze]

They're going to have to.

[Dr. John Deloney]

Yeah, or I'm going to get on the market and try to go get one of these 150, $175,000 jobs. But asking them what is a path for me here to 150, 175, I think that's a great way to open up that conversation.

[Caller]

So actually don't say, you know, bring up because money doesn't typically come up in these reviews. So what would be the right phrase? Maybe to the.

[Dr. John Deloney]

It's a starting with gratitude. The last few years I've made 125,000 with a 4 to 8 thousand dollar thing is amazing. I'm getting paid. I'm super grateful. What is a path that I could move my salary to 150 or 175 here doing this job that I'm doing or any other job in this, in this company. And that is, that's a. I'm, I want to partner with you supervisor, not a, you haven't been paying me fairly and I've caught you, which puts them on the defensive.

[Caller]

Yeah, I don't actually feel that way, but. Yeah, but I am doing more than.

[Dr. John Deloney]

Yeah.

[Rachel Cruze]

Yeah. And I think.

[Dr. John Deloney]

And I.

[Rachel Cruze]

And I would be okay because I do think depending on how your company's structured and your relationship with your leader, they may not even know what you're doing. All the extra stuff. Do you know what I mean? So I think that's fair to be like, hey, listen, here's what I. Here's what's been on my plate. And I want to talk through this, because I feel like I am adding a lot of value. So I do want to figure out, like, how can I, you know, not just see that from a compensation standpoint, but also for the company. I love adding value. I want to continue to add value. What's my pathway to do more so I can make more? I mean, I think all of that is.

[Dr. John Deloney]

And then saying appropriate. Saying, I want a raise of $25,000 or 50,000 bucks, saying what? Like, I'm doing all, here's my assignment, and here's what I'm doing. Extra. Here's the other roles I'm taking on. Is there a path for me to 150 or 175 with all of this. With all this that I'm doing? Is there a path here? And again, you want to. You want your supervisor, your leader, to feel like you want to partner with him and continue to add value to the customers. Y' all are serving into the company, not making it a. You versus me. You've been screwing me. I've been doing all. And now I want this because in a. At the end of the day, he's. He or she's got hierarchy over you. They got power over you. So entering into a fistfight with somebody that is ahead of you, what's your losing proposition?

[Rachel Cruze]

What's your position, Chris? What are you doing?

[Caller]

I'm a marketing manager.

[Rachel Cruze]

Marketing. Okay. I was going to say, because sometimes those skills, whether it's writers, marketers, I mean, like, sometimes the outside world, you know, goes faster than a company is actually keeping up. And if you don't have a good, you know, compensation plan as a company, those positions can outrun what you're paying.

[Dr. John Deloney]

And.

[Rachel Cruze]

And this sounds so ignorant, but I think it's true. I think. I think some leaders, depending on how big the businesses look up, and they're like, oh, my gosh, we haven't kept up with market value in two years, you know, and they may not even know, like, there could be a level of small ignorance. I don't know. I hope companies are run a little bit more efficient than that, but I think that is the case a lot. Is it a small, is it a small company or big company?

[Caller]

It's a big company.

[Rachel Cruze]

Okay. Yeah. Well then they may have, they may have tiers in place that they keep up with it. But that's also always in the back of my mind too because I just know those kind of positions, especially if they start to have a lot of value in the marketplace, they can outrun the average salary and a company doesn't even realize it. So.

[Dr. John Deloney]

But keep your or what question, your or what statement, if you will, to yourself if he says or she says, no, absolutely not. You're paid fairly. This is all this is going to talk dropout. Are you going to then think to yourself, okay, I'm going to get some side hustle, work as a marketer or social media marketer on the side to put my kids through college. Great. Tons of people do that. Or I'm actually going to go hit the market. Or I like this place, it's comfortable. I'm going to make some changes with my kids. You get to decide what you do next with that information. But I always like the partnership Question.

[Rachel Cruze]

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[Dr. John Deloney]

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[Rachel Cruze]

Up next, we have have Carlos in Miami. Hi Carlos, welcome to the show.

[Caller]

Hi.

Thank you for having me. Quick question. I have since both of you have a PhD on the seven baby steps and I only have barely a GED. Why don't I ask you a quick question for one split second. In 2020, my wife and I, I'm 54, she's 52. We make decent money. She makes about 170, I make about 115. We have three children.

Children.

One of them is in college, two in high school and for one split second around this time in 2020, right in the middle of Pandemic, we were on baby step seven. We had everything. We had paid off the house. We did everything. But now we're kind of like, okay, obviously, we have step one, we have step four. We invest probably 25% of our entire, entire, entire income into retirement.

[Dr. John Deloney]

Hold on. Did you go back? After you paid off everything, did you go back and borrow some more money?

[Caller]

Oh, yes.

[Rachel Cruze]

Oh, no. Carlos, what did you do backwards? We're supposed to go forwards. Like, 1, 2, 3, 4, 5, 6, 7.

[Dr. John Deloney]

You won.

[Caller]

Yeah.

[Dr. John Deloney]

Like, you crossed the marathon finish line. You're like, you know what? I'm gonna go back to the starting line and start again.

[Rachel Cruze]

What happened?

[Caller]

Well, we. Like I said, we were ready to start step seven, and, you know, things started opening up after Covid, and we're like, we would like to go here, we like to go there, and we like to get this Mercedes. And next thing you know, we.

[Dr. John Deloney]

Carlos.

[Caller]

Oh, no.

[Rachel Cruze]

You fell into Miami.

[Dr. John Deloney]

You went full Miami.

[Rachel Cruze]

South Beach. Oh, okay.

[Caller]

Yeah.

[Dr. John Deloney]

So how bad is it? How much do you owe right now, brother?

[Caller]

Look, we have about $29,000 in zero interest credit card debt where they were trying to pay off. And then we have. We have one lease of a vehicle, and the other vehicle is. All the other vehicles are paid off. So we decided to buy a car for each one of our kids and pay it off. So our daughter's car is paid off. Our second son's car is Leoni. It's brand new car. We have about 17 grand. We're going to pay it off in exactly one year because we're sending three times the payments on a very low interest loan. My car is paid off. So 29,000 in credit card debt and.

[Rachel Cruze]

17,000 in a car loan and a car lease.

[Dr. John Deloney]

Wait, you said your wife makes what, 170 and you make what, 115? 115.

[Rachel Cruze]

Oh, 15. I put.

[Dr. John Deloney]

Okay, so you guys make about 300K. You said at the beginning of the call, y' all do pretty well. Y' all are doing incredibly well.

[Rachel Cruze]

Okay, so, Carlos. Okay, is that it? The credit cards, the lease car, and then the car payment. Is that it?

[Caller]

That's it.

[Rachel Cruze]

Did you take out a second mortgage after the house was paid off?

[Caller]

Oh.

Oh, hell no.

[Dr. John Deloney]

Okay. All right, Good, good, good, good.

[Rachel Cruze]

At least we are on the same page here. Okay, I just need everyone to hear this because this doesn't always happen. We get Carla, we get people like Carlos every now and then that they do the baby steps, and then they go backwards. So I just want to know from you, Carlos, did you have more peace in 2020 financially or today?

[Caller]

Yes, in 2020. But then the whole world opened up again, and I was screwed.

What were you doing?

[Dr. John Deloney]

You weren't screwed. You were perfect. Yeah.

[Rachel Cruze]

You could have kept on going into.

[Caller]

Well, you know. The whole world open up. No, no.

[Dr. John Deloney]

You know, hey, listen, homie, you. You've got to take ownership of, like, it's like mom and dad went out of town, and you're in high school and you're. You didn't have to throw a huge kegger, and you're like, I'm going to.

[Rachel Cruze]

It's like mom and dad. Listen, y' all went out of town. What was I supposed.

[Dr. John Deloney]

We had to do it. There was five kegs we had to go get. We had to fill them all up. So listen.

[Caller]

Yeah.

[Dr. John Deloney]

Take ownership. You did it. But here's the thing, dude. 300 grand a year, you can have this paid off, like, in three months if you'll just suck it up.

[Caller]

Yes.

[Rachel Cruze]

Yes.

[Caller]

Yeah.

Why are you.

[Dr. John Deloney]

Why are you waiting a year.

[Caller]

A year to pay off the car, Pay off everything.

[Rachel Cruze]

Now, Carlos, if. If you guys lived, you don't have a house payment, okay? So I know you have all the. I know you have some car payments, but if you just lived on a hundred thousand, God Forbid, you'll have $200,000 extra.

[Dr. John Deloney]

And you put. You put a quarter of your. Of your money away every month.

[Caller]

Stop.

[Rachel Cruze]

For two months. Y' all have to be able to say no to yourself. Yalls behavior has gotten completely out of control.

[Caller]

Yeah. Yeah. Well, we like to travel.

[Dave Ramsey]

That's our.

[Caller]

That's our key.

[Rachel Cruze]

So do I. But I. I can't go to Italy right now. Like, I can't. Like, you know what I mean?

[Caller]

No, I know it's different.

[Rachel Cruze]

They look pretty on Google image. Like. But I.

[Dr. John Deloney]

No, see, you're blaming. You're blaming Miami. You're blaming the pen.

[Caller]

Number one international port of the. Of the world. Doesn't matter.

[Dr. John Deloney]

Be a grown up.

[Caller]

The brand new Royal Caribbean ship is docking next month. And I'm like, oh, we gotta check that out.

[Dr. John Deloney]

Oh, my gosh, dude. All right, you're giving me hemorrhoids, Carlos.

[Rachel Cruze]

I don't know. I don't think you really want to be. Carlos. I think you're. I think you are fine with your life. That's how I feel.

[Dr. John Deloney]

What do you do for a living?

[Caller]

Go. Well, that's the other thing. I'm not getting paid right now, because I'm a federal employee, but my wife is not. But at least we have her check. But here's the thing. We've noticed that we can live off her check.

[Dr. John Deloney]

No way. You mean y' all barely scratch and claw on 170,000 in dollars? Tell me more. Carlos. Yeah, we have a live studio audience out here, and they're all just sobbing for you. They're devastated for you.

[Caller]

I told my wife last night, I go, you know, I'm going to call the show because we've proven one thing with this government shutdown. With me not getting paid for a month, we can live off your check and then use my check to pay off this stuff.

[Dr. John Deloney]

Good God, if y' all can scratch my. Hold on. You missed two humongous lessons, though. You missed the two bigger lessons, which is y' all make a bunch of money right now, and covet happened, and then y' all made a whole bunch more money, and then the leaders of our government decided to sit in a sandbox and throw crayons at each other. And so what the. The thing you're missing here is there's always another. There's always a day after the party, right? And in between those days after the party, you live like, this is the last party that's going to happen, right? And if you go back to 2020, if you had not have just gone bananas, if you had lived just a regular ridiculous life, you would have taken a whole bunch of vacations and gotten some nice cars. You wouldn't have bought your kids brand new ones that depreciated 20% the day they drove them off the lot, but you would. Your kids would be fine. Y' all be fine. And you'd have 200 grand in cash in the bank.

[Caller]

Oh, you're killing me.

[Dr. John Deloney]

Okay? I know this is you. And listen, this government shutdown is going to happen, and then you're going to go. You're going to be like, dude, we can live off my check. And you're going to pay all this off in three months, which is all it's going to take, or maybe two months for you guys. And then you're going to. That. You're going to be like, the boats in the harbor. And you're going to go down there and you're going to start this whole thing over again. And then one of y' all is going to get laid off, or one of you is going to get the call that, hey, go to the hospital, because one of your kids, like, you're going to get those calls. And so let this be the final time.

[Caller]

Yes, 100%. I think it's a lot easier to sell to my wife if we can say we can live up one of our checks and take the other one.

[Dr. John Deloney]

No, no, no, no. There's a layer beneath that. You're not, you're not hearing me. The greatest thing you can give to your wife is to say, hey, for the first time in our marriage, I want to act like grown ups.

[Rachel Cruze]

That's the hard thing for me. Carlos. I know we're joking around and having fun because, listen, I love a great trip. Like, it's fine. Like, like the things you're saying, a nice car, nice trip, those are not bad things.

[Dr. John Deloney]

They're awesome things.

[Rachel Cruze]

But you're, and you're doing it in a level of impulse and a little bit of just kind of immaturity. And so there's, you know, Dave always says that children do what feels good, adults devise a plan and follow it. Like there's a level of growing up. And to say this to Carlos, you have two kids in the do. Are your kids still in the house?

[Caller]

All three kids are still in the house.

Yeah.

The college one has a year left and the other.

[Rachel Cruze]

That's fine. Yeah, yeah. But I'm just saying, like, what are you setting for them? The example? Yeah, I'd rather set an example of, hey, we have a level of limits and boundaries. Cause that's what money. We have to. With money, like that is part of the name of the game. We can always make more and all of it. That's great. It's not a scarcity mindset, but we have to live within our means because that creates a level of peace and stability. So when I get furloughed and I don't get a paycheck, we're totally fine. And guess what? We can still go on the Royal Caribbean because we have no debt and we're able to save up and we have a great income, but we're living with a level of reality. And there's a little bit that you guys are just like, oh, that feels right. Let's just go, go, go. And what scares me is you both sound like that, you and your wife. Usually there's like one boring person in the marriage that doesn't want to spend or do anything and then you have the partier. But both of you, I mean, that's what it's going to take, Carlos, for you guys to buckle down and just say, hey, we are going to live on less than we make significantly.

[Dr. John Deloney]

You can Live off half of your.

[Rachel Cruze]

Check, by the way. Peace. Clean up the car and the credit cards. Cut up the credit cards and we're going to live life differently. I don't know if you're going to do it, Carlos.

[Caller]

I don't know.

[Dr. John Deloney]

But I want peace for you. I just can't want it more than you want it for yourself.

[Dave Ramsey]

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[Dr. John Deloney]

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[Dave Ramsey]

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[Dr. John Deloney]

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[Dave Ramsey]

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[Dr. John Deloney]

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[Dave Ramsey]

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[Dr. John Deloney]

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[Rachel Cruze]

If you are wondering if you are on track with the baby steps, well, you can find out. You can take a quick quiz to check your progress and receive a personalized plan just for you. Just head to the show Notes if you are listening on YouTube or podcast and you can click the link titled are you on track with the baby step steps? And complete the quiz. All right, let's go to Martha. She is in Florida. Hi, Martha, welcome to the show.

[Caller]

Hi. Thank you for having me.

[Rachel Cruze]

Yes, absolutely. How can we help?

[Caller]

Yes, so I am just wondering if.

You know, if I should file for bankruptcy or not.

[Rachel Cruze]

Oh, what's going on? What's happening?

[Caller]

So we've kind of overwhelmed ourselves, mine and my husband.

And about 90% of the debt is mine and you know it.

[Dr. John Deloney]

What does that mean? Tell me what that means. What's the debt?

[Caller]

We, you know, we have about, like including his debt with mine, we have about 20,000 in credit card debt, about 12,000 in personal loans. I have about 15,000 in collections.

[Rachel Cruze]

Is that credit card collections or medical debt?

[Caller]

That's, that's medical.

[Rachel Cruze]

Medical. Okay.

[Caller]

They have, I have about 15,000 in.

Student loans and I know that doesn't.

Go away with bankruptcy, but we have 16,000 in car loans and are those.

[Rachel Cruze]

Two separate cars, Martha?

[Caller]

No, it's just one, one car. We have one car that's paid off.

[Rachel Cruze]

Okay, wonderful. Okay, keep going.

[Caller]

And then we have our mortgage.

And our mortgage is about probably 70%.

[Rachel Cruze]

Of our income per your payment. Your mortgage payment is taking 70%. Okay. And for the house, how much is the house worth?

[Caller]

It's right about 285,000.

[Rachel Cruze]

Okay. And how much do you have left on the mortgage of that?

[Caller]

277,000.

[Rachel Cruze]

Okay. So it's basically a wash. Yeah.

[Caller]

My husband, we haven't, we haven't.

We haven't lived here not even a year yet.

[Rachel Cruze]

I got. Okay, and how much?

[Caller]

We tried.

We were talking about, you know, selling the house, but then we looked at.

Our contract and since it was a.

USDA loan, we can't sell the house until we lived here. A year? Yep. Yep.

[Rachel Cruze]

And when will a year hit? What month?

[Caller]

December.

[Rachel Cruze]

Okay, coming up, you can put on.

[Dr. John Deloney]

The market right now and put a 30 or 60 day contingency. You can't afford a house if it's 70%.

[Caller]

Like, yeah, I absolutely 100 agree with you. And my husband is just like completely not interested in selling the house.

Well, he was. Wants to like get rid of all of our other debt and then keep the house.

[Rachel Cruze]

Okay, so those are two separate conversations. Yes, we need to get rid of the debt regardless of the house payment. But if your house payment for sure is more than 50% of your income, but we even say 25% of your income, so no, you have too much house. So your husband needs to understand the math of you can't live your life with 30% of your income. Like that's what it ends up being. So. Yeah, no, you guys have too much house. You bought too much house. How much do you guys make a year?

[Caller]

I currently, you know, do doordash and uber, you know, because I am a full time student and. But I am also starting a job in January.

[Rachel Cruze]

Okay, but how much will you be making a year in the job in January?

[Caller]

It really depends.

It's a tipped workers wage, so it really just depends. I worked there, you know, a few years ago and I was making up around 30,000 a year.

[Rachel Cruze]

Okay, and how much does your husband make?

[Caller]

He makes 56,000 and he works two jobs.

[Dave Ramsey]

What?

[Dr. John Deloney]

Hold on, you're going to school? What are you studying?

[Caller]

I'm going for social work.

[Dr. John Deloney]

And so you're going to get a degree that you've paid a bunch of money for, but you're going to go back and make the same exact money you made two years ago without that degree?

[Caller]

No, I just, I, I don't have my degree yet, so I'm still going to school for it.

[Dr. John Deloney]

I know, but when you go. Okay, so you're taking another job in January. That's Going to hold over until make it.

[Caller]

Yeah.

[Dr. John Deloney]

Okay.

[Rachel Cruze]

Okay. And then when you graduate in May, Martha, and you start a position, what on average do you think you'll probably make if you are using your degree in IT for social work?

[Caller]

I, I looked in. The average in, in my state is about 50,000. Yeah. A year.

[Rachel Cruze]

Okay, well you're not bankrupt. You guys have a massive mess on your hands.

[Dr. John Deloney]

Do not file bankruptcy.

[Rachel Cruze]

Yeah, no, is going to. It's going to take some significant sacrifice of time and energy for you guys to clean this up. So it is very doable. And so what I want to start with is there's a couple of highlights if the car. Do you know if you Kelly Blue Book, the sixteen thousand dollar car, how much you could sell it for?

[Caller]

I have Kelly Blue Book says it's about $3,000.

[Rachel Cruze]

It's $3,000.

[Caller]

Yeah.

[Rachel Cruze]

When did you, did you guys roll over bad equity from another car into this loan?

[Caller]

I did not. I bought out.

I, you know, bought it, you know.

I had a clean slate when I bought the car about three years ago.

[Rachel Cruze]

For how much? How much did you buy it for?

[Caller]

I got it for about 18,000. My interest rate is pretty high.

[Rachel Cruze]

What is it?

[Caller]

I think it's about 18%.

[Dr. John Deloney]

Did you buy it at one of those corner market?

[Caller]

No, I bought it through CarMax.

Yeah.

[Rachel Cruze]

Okay. Martha, did you, when you looked on Kelly, did you look @kellybluebook.com?

[Caller]

Yes.

[Rachel Cruze]

And did you do dealer trade in or did you do like an individual selling to an individual?

[Caller]

I did individual.

[Rachel Cruze]

There's no way it's $3,000. What kind of car is it?

[Caller]

It's a 2013 Nissan Pathfinder. But it has a lot of miles.

On it because when I bought it.

It had about 80,000 and in three years we've gotten it up to 150. My husband, you know, he works out of town and he also.

[Rachel Cruze]

I just don't think it's part time. Yeah, I don't know. Okay, well I would do some homework digging there because if you can do, gosh, if you could sell it for even, I don't know, 8, 9. I mean I don't know, it may be a wash, you may be stuck with it. The medical, the collections from the medical debt, have you contacted them at all?

[Caller]

I did contact them to get you know, how much I owe, like everything I owe but I haven't set up like any payment plans with them yet. But you know, it's almost to the point where you know they are contacting me. They're you Know.

[Rachel Cruze]

Yeah, yeah. Most bad debts, credit card debt, for sure. And sometimes medical debt, you can actually talk them down significantly. Sometimes pennies on the dollar, depending on what it is. What's it through? Is it a collections agenc has it right now.

[Caller]

Yes.

[Rachel Cruze]

Okay. So, yeah, I would tell them, like, hey, I have no money. I cannot pay this, you know, $15,000. And they may settle it with you, Martha, for 5,000. I mean, I don't know.

[Dr. John Deloney]

Usually you have to have cash.

[Rachel Cruze]

I would work. Yeah, you would. You would. But I'm just saying, like, you want to be able to get to a position where that is at least the one debt. That and the car were the ones I was trying to kind of finagle for you to see what we could figure out to. To get out of this. But usually debts and collections, you're able to negotiate. So remember that. So that 15,000 hope can get significantly down. And if you actually get them to a place where they will take that payment and you've negotiated, get it in writing. But that's what I would do. So I would just start, honestly, Martha, with the baby steps. And you guys. I mean, your income isn't, you know, terrible. I mean, if you're making 30 starting in January, 86,000. But the house is a pain point. You. You have, which on said put it on the market. You have to, like, there's no way you guys can afford this house.

[Dr. John Deloney]

And, Martha, I've done this. I bought a house, and we had it sold within 10 months because I got into it. And that plus my student loans, plus my car note. It was overwhelming, and it was a hard conversation. My wife cried when I said, we have to sell this house. I moved us into a residence hall apartment. I mean, it was. It was. I was. And I was the associate dean of the university, and I was. I was embarrassed for myself, but that's what we had to do because we had a math problem. And underneath your math problem, you have a relationship issue, which is you. You need to be able to tell your husband, I'm not safe here. I don't feel good. I don't feel safe in this house. We owe too much money. I'm getting buried by this thing. And if he looks at you and says, I don't care, then y' all need to address that issue because you're gonna. It's gonna take both of y' all pulling in the same direction to get out of this mess.

[Caller]

Absolutely.

[Rachel Cruze]

Yeah. So getting. Getting the household, which I know is a feat that's going to Be, you know, hopefully. I think we're seeing on average it's about 60 days on the market. But I mean I'm praying for you guys by February, hopefully you have an offer on the house, you have a new job and you're like, you guys are starting this process. And then Martha, I would just start working my way down the debt snowball and I would be paying off the personal loan, the student loans, and then going to the car and then to the credit cards. But don't be digging yourself into a hole while trying to get out. So you guys need to stop the debt. You got to, you got to cut up the credit cards. You got to be done. But I would look into that car and then I would be saving some cash to see if I can settle on the medical debt. Cuz I really think you can.

[Dave Ramsey]

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[Rachel Cruze]

Welcome back to the Ramsey show in the Fairwinds Credit Union studio. We are taking your calls at 888. 825. 5225. Up next, we have Christopher on the line and Christopher is in Florida. Hi Christopher. Welcome to the show.

[Caller]

Thank you for having me.

[Rachel Cruze]

Absolutely. How can we help today?

[Caller]

My question is, I have $10,000 worth of credit card debt. I'm wondering if I should use money from an old retirement account, a 403 to pay off that credit card debt.

[Dr. John Deloney]

No, no.

[Rachel Cruze]

What have you done with that 403, the old one? Have you rolled it into another fund or an ira or is it still there with your old company?

[Caller]

It's still there with my old company. And I just moved in July, so I'm settling into the new company right now.

[Rachel Cruze]

Gotcha.

[Caller]

But if I can explain. A year ago, I was at $32,000 of credit card debt and I paid it all off. Yeah. I paid it all off before I moved in July.

[Rachel Cruze]

Okay.

[Caller]

It basically came on because I had a car repairs I needed to make $12,000 of disaster anyway.

[Rachel Cruze]

Okay.

[Caller]

But then I paid it all off. I took a second job. I paid it all off. I moved to Florida, and then I had $10,000 in repairs for my house.

[Rachel Cruze]

Okay.

[Caller]

And. And I had to put that back on the credit card.

[Rachel Cruze]

Okay.

[Caller]

Because I didn't have a savings. I didn't have a savings yet because I just paid it off.

[Rachel Cruze]

Yep.

[Caller]

So I'm sick and tired of being sick and tired.

[Rachel Cruze]

Yeah. Going back. I hear you. Totally. Totally. How much money do you make a year?

[Caller]

I'm at 100 grand in salary.

[Rachel Cruze]

Okay, Perfect.

[Dr. John Deloney]

Okay. Can I challenge you on one thing, Chris? And this is going to be key to you getting through this. I want you to say the words not, I had to do this stuff with this house. I want you to use the words. I chose to because that.

[Caller]

No, I had to. It was repairs, damage to a sewer. I could not do anything with the house, rent it out, sell it, or anything unless I made this repair.

[Rachel Cruze]

Right. But to John's point, you could have. You could have paused, taken on a second job, saved up 10,000 over two to three months, and then gone back and done the repair.

[Dr. John Deloney]

See, I'm saying, like, it's. It's just.

[Rachel Cruze]

I mean, you could have, though, like that, like, yeah, but I'm not beating.

[Caller]

Up in the moment because it was. It was sewage backing up. I was in a desperate situation.

[Dr. John Deloney]

Totally.

[Rachel Cruze]

I hear you.

[Caller]

I needed to get this.

[Dr. John Deloney]

Totally get that. But the key to. I think the. The you and I both. We both. And Rachel, we live in a culture that says everybody else has to come rescue us and everybody else is the cause of our challenges. And. And I want us just to sit in the driver's seat of our own lives and say, I had an emergency. I didn't have any money. I chose to deal with this right away. I had sewage backing up in my house. And when they dug in, it was a wild, wildly bigger deal than I thought. And I went and borrowed $10,000. Just shift. It's not about blame. It's not about being evicted. It's none of that. It's just about you saying, I did these things instead of these things happened to me. And so I had to go, it's just that tiny little shift because then, then you're in the driver's seat of your own life about what you're going to do next. And 80 year old you, would you go borrow $10,000 at 30%, 35% to pay off this credit card?

[Caller]

No, I wouldn't.

[Dr. John Deloney]

Okay, so if you cash out this 403B, you're borrowing that money at 20% taxes or 30% taxes plus the penalty, you're borrowing that money at 30 something percent.

[Caller]

Okay. Because so in my mind I was thinking that money is making me 10% return every year and the credit card is at 15%. So like you're, you're actually flipping it on me, which I'm grateful for because I was thinking I'd be saving 5%.

[Dr. John Deloney]

You'll be borrowing, you'll be pulling that money. How much is in that 4.3B account?

[Caller]

It's 42,000.

[Dr. John Deloney]

Okay, so you'll probably get what, 30. No, you wouldn't get that much. You get 25, 28.

[Caller]

Probably. Yes. Yep.

[Dr. John Deloney]

And so just do the math on how long it would take you to earn that back.

[Rachel Cruze]

Yeah.

[Caller]

In the account. Yep.

[Rachel Cruze]

Yeah. So what I would do, I would meet with one of our smartvestor pros in your area and figure out a way to take, get that 403 out. Because not keeping retirement, this is True for a 401k. When you leave a job, you want to just roll it over to an IRA so that you have full. And it's out, it's out of the company that used to be at. So I want you to roll that over. But to John's point, not touching it. It's not worth the taxes and the penalties. And then, and then getting yourself in a position where you not only pay off this credit card debt, but then you bump up that to that emergency fund as soon as possible. And that urgency is what causes the second job. The urgency is what cuts the lifestyle and all of it. And you know, not to belabor this point, Christopher, but it's just a good example. Just to say out loud again is we get so many calls on the show with exactly what you were saying at the beginning of like, I had to do this and what we force people to do. And again, it's either, well, my car broke down, I had to go get a car payment because I have to have a car, or I was going to college, I didn't have any money saved, so I had to take out a student loan, you know, whatever the cause is that causes us to go into debt. We hear one line of thinking, meaning that there's no options. And when you feel like there's only one singular option, this is the only thing I can do. Debt is going to be the route that's just right there and available. And so what we want to push people to. Not just you, Christopher, but people listening, is when you get backed in a corner of a situation and thinking, this is the only way I can do this. The only way is with debt. That's it. That's the only way. I'm going to push you for options A, B, C, and D, because there's always other options. But when you feel like there's only one option, we usually don't make a great financial decision.

[Dr. John Deloney]

And can we, Can I just call this out, Chris? This is the worst. You busted it for a year to pay off 30 grand.

[Caller]

Grand.

[Dr. John Deloney]

Like, and you got to be tired, right?

[Rachel Cruze]

Yeah. Yeah. You're so frustrated.

[Caller]

And I mean, I, I, I was working in a, in a ministry job and then took a job waiting tables at night.

[Rachel Cruze]

Yeah, right.

[Dr. John Deloney]

Which, which, by the way, you shouldn't have to do that. You're serving people all day long. And to pay your bills, you got to go to another job. Like, that stinks, man. Like, we'll sit here with you on that.

[Caller]

Well, the good thing is, two good things is this change in job really boosted my income.

[Dr. John Deloney]

Excellent.

[Caller]

It made me move across the country. And then I do have a renter that's coming into the, into the house the first of the month. And it's actually one of those situations where I feel like I'm also helping her out to get on her feet.

[Dr. John Deloney]

Cool.

[Caller]

And so I know that everything is working out, but it's, you know, looking at the options of. Do I go and find another serving job?

[Dr. John Deloney]

Yes. Do I go for three months? Drive for rideshare for three months? It's going to be miserable. And then just make a plan. Right now. We're talking to you right before Halloween weekend. Make a plan that February 1st, you owe nobody anything ever again.

[Rachel Cruze]

Yeah. Christopher, with your new job, how much are you single?

[Caller]

I'm single.

[Rachel Cruze]

Okay.

[Caller]

And the job boosted my income.

[Rachel Cruze]

I'm so glad. So every. Have you done a written budget?

[Caller]

Much more.

[Rachel Cruze]

Okay. Have you done a budget?

[Caller]

Yep.

[Rachel Cruze]

Okay. How much extra?

[Caller]

And I have.

[Rachel Cruze]

Wonderful. How much extra?

[Caller]

And I did. I mean, I changed my lifestyle to, you know, I shop at Aldi. I don't go out to eat.

[Dr. John Deloney]

No. It's perfect. You're crushing It.

[Rachel Cruze]

So how much extra do you have per month with just your normal job? Just the new one.

[Caller]

2, 800.

[Rachel Cruze]

2,800. Okay. So that's what's crazy about the math is I'm like, oh my gosh. You know, if you go and you make an extra, let's just say 2200amonth, you know, you're at, you're at 5000, you'll have this paid off in two months.

[Caller]

Months.

[Rachel Cruze]

So which is the holidays, which sucks, but maybe you get better tips because of it. But November, December, and then like what John's saying, and then keep doing it for two more months, rack up another 10 grand to set aside for your emergency fund, and then you can actually start saying, okay, now I feel good.

[Dr. John Deloney]

Four months for the rest of your.

[Rachel Cruze]

Life, I go back to my normal job, but I'm going to keep my income limited to get that three months back on and then you just pick back up. But yes, within five months. Months, Christopher, your life could look different.

[Dave Ramsey]

Hey, quick reality check.

[Rachel Cruze]

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[Dr. John Deloney]

And Silicon Valley tech bros anymore. It's the new weapon of choice for.

[Dave Ramsey]

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[Dr. John Deloney]

Identity thieves could be using AI right.

[Dave Ramsey]

Now to steal your info in ways that would have sounded impossible just five years ago.

[Dr. John Deloney]

We're talking voice cloning, deepfake videos, filing.

[Dave Ramsey]

Bogus tax returns, draining your bank and retirement accounts, and even home title fraud.

[Dr. John Deloney]

And it can happen fast, so most.

[Dave Ramsey]

People don't find out until it's too late.

[Dr. John Deloney]

So as someone who has had his.

[Dave Ramsey]

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[Rachel Cruze]

It keeps up with today's threat threats.

[Dave Ramsey]

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[Dr. John Deloney]

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[Dave Ramsey]

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[Dr. John Deloney]

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[Dave Ramsey]

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[Dr. John Deloney]

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[Dave Ramsey]

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[Dr. John Deloney]

And get yourself protected today.

[Rachel Cruze]

One of the best ways to spread the word about this show, to be able to help your friends and family and other people even around the world, is just sharing it. Whether it's on your social, maybe you subscribe, you comment, whatever you can do to help spread the word. That is so, so helpful and even on some platforms, even like YouTube, if you are commenting or subscribing, it helps the algorithm to get to the show in front of more people. And so you are our best way to spread the word, honestly. So we are so grateful for you all that listen and watch, and we're praying that this show helps you. It's why we do it every single day. Hoping to give somewhat good advice. Right, John? Somewhat. And to be able to help when it comes to your life and your relationships, your career. And so just continue to help us do that by liking subscribing and sharing the show. We appreciate you. All right, let's go to Kristen in Arkansas. Hi, Kristen. Welcome to the show.

[Caller]

Hey, how are y'? All?

[Rachel Cruze]

We're doing great. How can we help?

[Caller]

Yeah. So me and my husband have been working really hard to get some of our debt pay off. We, you know, work a bunch of side jobs. And I'm just trying to figure out what the best way it is to deal with our friends if they, like, they get upset if we're busy or if we. We don't say we're not going to spend the money on a weekend trip or something like that because we're too busy, you know, working to try and get out of debt.

[Rachel Cruze]

Yeah. And when you say that they're upset, what does that mean? That they miss you guys and they're like, oh, man, we hate that you can't come. Or is it like, come on, y', all, Y' all are being crazy.

[Caller]

A little bit of both, probably. It's kind of like, you know, one of our friends has said, like, hey, I'm just trying to figure out how free time again so that we can hang out. And it's like, they get it, but they're also like this. They're quality time people. And so they just want to also just spend time with us.

[Dr. John Deloney]

How old are you, you guys?

[Caller]

I'm 30 and my husband is 27.

[Dr. John Deloney]

Okay. So this is going to be the question, the answer to the question beneath your question, and that is this. You're at an age and it stinks. It's the worst when the friendships that served you really well in your twenties start to thin out and really change.

[Caller]

Yeah.

[Dr. John Deloney]

And it comes. Somebody's going to have a baby and you're going to find out they're like a weird little league parent, or someone's going to get like a doodle and call themselves a pet parent. Parent. Or you're gonna get, like, you're gonna be the weird cult people that, like, start Paying off your debts. It's just like when you just start, the values you have begin to emerge in a weird new way. And the people that were by your side in your 20s, there might be 10 of them. You'll suddenly look up in 30 at 35 and there'll be two. And it just stinks. It's just hard because here's the deal. I had buddies when me and my wife started doing this. And they, they a, of course they made fun of me. That's what friends do. But they also were my chief supporters in whatever weird thing me and my wife wanted to do. You know what I mean? And so if you find friends that are getting on to you because you want to have peace in your life and have freedom in your life and they want to make your journey about them, then they may not be your friends down the road. Or if you just have some buddies that are like, do we miss you? Can we come hang out? Here's what my buddies did. They would grab whatever was in their fridge and we'd come over once a week and we would just hang out at my house and have dinner. We wouldn't, didn't go out. They'd someone bring over a half bottle of wine they had left, a half eaten casserole. We'd make tacos. And it cost no money. But it was just a way for us to all hang out because for a season me and my wife couldn't go on vacations and we couldn't do weekend stuff or we'd go camping. We did do some camping together because it was so inexpensive. But it's just about being honest about your values and, and maybe it's, it's, it's they're saying with their actions like we're not, we may not be friends long term.

[Rachel Cruze]

Yeah. And Kristen, this isn't forever either. I mean, how much longer do you guys have?

[Caller]

Oh, gosh, probably a couple years.

[Rachel Cruze]

Okay, how much debt do you guys have?

[Caller]

Let's see, we have. Do you want mortgage or just. No, no. 162,000 non mortgage.

[Rachel Cruze]

Okay. Is that student loans? What is that?

[Caller]

That? That is credit cards, some medical debt, student loans. We have a rental property and a land loan.

[Rachel Cruze]

Okay, how much do you guys make a year?

[Caller]

Our tax loans every month is 4900.

[Rachel Cruze]

Okay. Yeah. So when you guys map this out, what, what's it, what are you, what are you finding from a timeline perspective?

[Caller]

So we're even working like side jobs and we probably bring home an extra like three to four thousand dollars a month. Doing that.

That.

And so y' all are gonna have.

[Dr. John Deloney]

To sell some stuff.

[Rachel Cruze]

The. What's the rental property? How much is that?

[Caller]

It's 40,000. It has probably about 5,000. It's been in remodel, and it's probably got about $5,000 left to finish it.

[Rachel Cruze]

And then how much you're gonna sell it? Okay, how much could you sell it for?

[Caller]

Well, we're either gonna rent it out.

[Rachel Cruze]

No, you need to sell it. Y' all can't. Y' all can't afford it.

[Dr. John Deloney]

Yeah, you're not in a place to be landlord.

[Rachel Cruze]

Yeah, you don't need to be a landlord. So. So how much? Once you. When. Once it's finished, how much could you sell it for?

[Caller]

Probably 70, 80,000 maybe.

[Dr. John Deloney]

Done.

[Caller]

Is the hope okay?

[Rachel Cruze]

Yeah. Yeah. Because that's going to. That's going to give you money then to turn around and throw at this debt, too. So. No, I would. I would get rid of that.

[Dr. John Deloney]

What about this land loan? Are y' all living on this land or do y' all just buy your dream property?

[Caller]

Pretty much bought our dream property. We want to build on it eventually sell that, too.

[Rachel Cruze]

How much is. How much is that?

[Caller]

That? It is 75,000. It's a 15 year loan.

[Rachel Cruze]

Okay. Yeah. Y' all need to. Yeah. Y' all need to unload some of this stuff.

[Caller]

Yeah, yeah.

[Rachel Cruze]

So I.

[Dr. John Deloney]

If you sold 75,000 and then you sold 40,000, that's what, 110? Plus you got another 40 from your. From the equity in the home that you just fixed up.

[Caller]

Yeah, I mean. I mean.

Yeah, you're free.

Yeah. We're hoping to have our. All of our cards paid off at the beginning of the year and then. And start putting the extra to the rental house to get it finished and either, you know, to get it sold and give us a lot more breathing room.

[Rachel Cruze]

Yeah.

[Caller]

And my husband's also supposed to get an increase in pay.

[Rachel Cruze]

That's great. Y' all have just done a couple of things out of order. The things y' all have done are not necessarily bad. You know, buying a rental property, buying a piece of land that's just out of order. You guys have student loans, you got medical debt. You're having to work extra jobs to keep all of this. It's not worth it. It's not worth it. Cause you can do all of that again, Kristen. That's the other. Think about in 10 years, when you're 40. 40, you're still young and fun and great, and you can do those kind of things, you know, What I'm saying, like, it's not like it's a now or never thing. And so you guys in your late twenties being thirty just get some margin financially, and that's what I would be chasing, as John always has. What do you say? It's about solving for peace.

[Dr. John Deloney]

And listen, I want lands. Yeah. My quote made such a difference in Rachel's life, she couldn't even remember remember it. But I'm always solving for a piece. Here's the thing. I want land so bad. So bad. Like, not healthy bad. And I can't afford it right now. And we're saving like bananas for it, but, like, I don't have the money for it right now. And what I don't want to do is mortgage my anxiety. I don't want to mortgage my stress in my house. I don't want to mortgage my time away. I want to just exhale and say, I really want this thing. And I got a target for how much I want to save up. And I'm just going to keep doing that till I get.

[Dave Ramsey]

Got it.

[Dr. John Deloney]

And sometimes, like, for you, it's a side hustle. For me, that's an extra speaking gig on the road, or it's me taking some more. Whatever. But, like, I. We're in the same boat. I really want this. I don't. I don't. I can afford it right this second. And that's okay. It's totally okay. But you need to hear if you sold that land.

[Rachel Cruze]

That's what I'm trying to figure out. Yes.

[Dr. John Deloney]

Y' all are free. Y' all are free. If you sell this land and sell this house and you pay off these cars, y' all are free.

[Rachel Cruze]

Because your credit card debt is, what, 4,5060?

[Caller]

It's 6. It's 16,500.

[Rachel Cruze]

16,000. Okay. How much is the medical debt?

[Caller]

Like, 1500. It's not much.

[Rachel Cruze]

Okay, so that. Yeah, that can be cleaned up. Yes. You guys, technically, if you think about it, once this house sells and the land sells, you guys have $16,000 of credit card debt to clean up. And then you could do that, Golly, in, you know, six months or something. If.

[Dr. John Deloney]

No, you're making extra 4,000 bucks a month. You can do it in four months. Three months.

[Caller]

Right. Well, that's.

That's the goal is, like, we're with how much extra we're making our. With our side of job. The goal is to have.

[Rachel Cruze]

I know, Kristin, but that was. Okay, let me just. I do want to just. Because I love you, so I'm like, it was not your goal because you guys were like, well, we may rent it out. Oh, no, my husband, you know, we bought our land. Like, these weren't options at the beginning of the call, but John and I just freed you guys. Freed you up.

[Caller]

Yeah.

[Rachel Cruze]

So you have to make some decisions of what or you're gonna be like, you're gonna be doing this for so many years, and it's not worth it. It's not worth it.

[Dr. John Deloney]

You're gonna wind up pregnant. One of y' all is gonna wind up needing to go back to the hospital. Hospital. One of your parents is going to get like, it's just. Life is going to happen.

[Rachel Cruze]

Yes. So, again, these things are not bad.

[Dr. John Deloney]

I want you to have land. I really do. I just want it to be yours, not a bank's.

[Rachel Cruze]

Exactly. So get an emergency fund in place. You guys start investing after you pay this off, then start saving some money on the side and. Yeah. And find some land. And, I mean, it may be five or six years, but that's okay.

[Dr. John Deloney]

It's great.

[Rachel Cruze]

That's okay. But just do it slowly and with cash. Cash, Kristen. So I know you called about your friends, but we're your friends, too, so we just gave.

[Dr. John Deloney]

Your friends are right on this one.

[Dave Ramsey]

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[Dr. John Deloney]

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[Rachel Cruze]

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[Dr. John Deloney]

All right. My husband and I are 45 and 43 years old. We've been married for one year, and following your suggestions, we combined our money to get together. This was uncomfortable at first because both of us had financial trauma in our previous relationships. Good for you guys. Not for having trauma, but for feeling that and then go and do the next right thing. It's amazing. However, we trust each other, and it's been great. We feel closer together because we are making shared decisions around money. Awesome. We make around $250,000 a year combined, and we have over a million dollars in assets. Amazing. We own previous homes, which we are using as rental properties, and we have opened an investment account to together. Our question is we're both recovering from alcoholism. Seven years sober for me and eight for him, and we're both still active in aa. Should we do anything to protect ourselves if the other person relapses? It sounds like y' all are doing those things right now, which are. We're talking about hard things. We're putting past traumas on the table, and we're acknowledging them, and then we're choosing to go do the next right thing. Y' all are staying in aa, which means you have sponsors. You've got people that are walking in life with you. It sounds like y' all are doing those things. And so if you were sitting. If this couple sitting with me, Rachel, if Lindsay was sitting with me and her husband, I would ask. Usually this question comes up when something's starting to feel wobbly.

[Rachel Cruze]

Yeah.

[Dr. John Deloney]

And so I'd want to know what's the basis behind this question. But as far as two people who have. Have traumatic trauma in your past who have struggled with substance abuse in the past, y' all are doing all of the right things. And I'm. Man, I'm like. I would hug both of them if they were sitting here. I'm proud of them.

[Rachel Cruze]

Incredible.

[Dr. John Deloney]

And so I guess the next question I would ask is, what are you trying to do to protect yourselves? The only other thing I could think of is if you have somebody that meets with y' all every year that goes over your finances with you, that would Serve like a. A buddy or a financial advisor. Starting to get some professionals in your corner. Because now y' all are stacking up some serious money. And anytime somebody's been in recovery or someone's in recovery and you start getting this kind of money, I always want, like, make sure you get somebody else that's walking alongside you just because it gives you so much more resources to get yourself in trouble again. But sounds like these guys are doing awesome.

[Rachel Cruze]

Yeah. Because I. There was a book I read, and they talked about this, how in recovery, specifically, if you get too comfortable, you start to feel like we're good, and money can do that. So to your point, you start to stack up a level of financial.

[Dr. John Deloney]

It wallpapers over comfort.

[Rachel Cruze]

And you're like, oh, we're good. Like, I feel safe and good. And then you stop doing the things that got you.

[Dr. John Deloney]

That's it.

[Rachel Cruze]

To be in recovery. So.

[Dr. John Deloney]

Yeah, but the fact that they're still in aa, this would have been my first recommendation. If y' all said, we've been sober for seven or eight years, I would say go. Go back. Start going back to meetings. Right. And go together. Go together and maybe share a sponsor or what? Like, whatever. I don't think you can share sponsors, but, Lindsay, I'm. I'm blown away.

[Rachel Cruze]

Well done, y'.

[Dr. John Deloney]

All.

[Rachel Cruze]

The work y' all are doing so great. So great.

[Dr. John Deloney]

Good for you.

[Rachel Cruze]

All right, let's go to Justin in North Carolina. Hi, Justin. Welcome to the show.

[Caller]

Hey, how are y' all doing today?

[Rachel Cruze]

We're doing great. How can we help?

[Caller]

So, long story short, I'm on baby step three. I think I'm about to hop right into baby step four.

[Dr. John Deloney]

Congratulations.

[Caller]

That's good.

So what I'm wanting to know is how aggressive should I be on paying off my mortgage versus investment towards retirement at this moment?

[Dr. John Deloney]

Oh, you hate that house payment now, don't you?

[Caller]

I do.

[Dr. John Deloney]

How big is it? How much do you owe?

[Caller]

Well, right now, I owe around two kids. 10.

[Rachel Cruze]

Okay.

[Dr. John Deloney]

How much do you make a year?

[Caller]

Okay, so I do have a salary, and I also make VA disability, so. Right. Right around there. I'm around 90,000.

[Rachel Cruze]

Okay, perfect. Are you married, Justin?

[Caller]

I'm married.

[Rachel Cruze]

You are? Okay. Does your wife work.

[Dr. John Deloney]

Right now?

[Caller]

I've been able to drop her down to about two days a week. To stay with the little one?

[Rachel Cruze]

Yeah.

[Caller]

Great.

[Rachel Cruze]

Yeah. How many kids do you got, guys have?

[Dave Ramsey]

Just one.

[Caller]

One little girl.

[Rachel Cruze]

Oh, sweet. Okay, well, we always say when you're moving past baby step three, you're going from one to three. Which is intense. I mean, you are full on. I mean, it is sacrifice, going, going, going. And then baby steps 4, 5, and 6, we move into intentionality, meaning you want to fund 15% of your income into retirement. So you guys start, you know, opening up, you know, two Roth IRAs, if you haven't already. If you're. If your work offers a 401k, so start some of that investing 15% of the income. And then I would open up a 529 for the little one and put some money in. You don't have to be too aggressive with that right now, because I know you guys want, you know, you're filling this house payment. So baby step six is the house payment. And so I would get with your wife, because my guess is she may not be as motivated to pay this off as quickly as you are if.

[Dr. John Deloney]

She has guns on the agreement.

[Caller]

Well, actually, I thought, I had this thought to her about a week ago, and I think she's on board.

[Rachel Cruze]

Okay, well, if she's on board, that's great. I mean, you guys are both adults, so you can make a decision to say, yes, we're going to throw everything else at the house, and we're still going to just go, go, go. We just don't want you to burn out. Because when you pay off your mortgage, that is a, That's a long game. Most consumer debt can be paid off to two to three years, where the mortgage on average is anywhere from eight to nine years. So it's just a longer game. And we want you to be able to enjoy your life during that too. Right? You've worked hard. You, you are not being irresponsible by, you know, upgrading a car if you need to, going on a trip. So I do want you guys to enjoy this life. But again, you both together, if you both agree, hey, we're still going to buckle down and throw this at the house. You can. I mean, George Camel did that. John, I feel like you were that.

[Dr. John Deloney]

But I would say if it's. If it's going to go beyond two years, like if, if it's beyond possible. How old your. Your baby girl?

[Caller]

She'll be two in December.

[Dr. John Deloney]

Okay, here's what I would hate. I would hate for you to wake up and she's seven and you've worked seven days a week. And you missed some of the magic moments. You missed all the magic moments, right? And if you told me, hey, between my salary and my wife's salary, we could have this house if we just sucked it up for 24 more months and we could just blow through this thing. Months, I would say, in my house. That's what we did. If you're telling me it's actually, we could just.

[Rachel Cruze]

Four to five years.

[Dr. John Deloney]

Yeah. Go full steam ahead. It's going to take five years. I would tell you, man, slow down. You've done an amazing job. Y amazing job. And enjoy a little bit of your life. A little bit and still. And be a little. Be. Double up on your payments or pay an extra two a year or an extra three a year and shave off big chunks of that mortgage. But, man, there's something about.

[Rachel Cruze]

About enjoying life.

[Dr. John Deloney]

Yeah. Dads been there on Saturday mornings when they can at soccer games.

[Caller]

Yeah.

[Rachel Cruze]

And it's one thing when it's freaking credit cards and car loans and all of this, you know, but your mortgage, like, it's. It's your home. And so. And it's obviously a much larger debt usually. And so it is going to take that time. So I would say just be realistic about where you guys are, because how much consumer debt did y' all pay off in baby step two?

[Caller]

Oh, Lord.

Y' all to yell at me about a.

[Rachel Cruze]

About a year. No, we wouldn't.

[Dr. John Deloney]

No, dude, I promise it's not worth worse than most of us.

[Caller]

You. You would have yelled at me in a good way.

[Dr. John Deloney]

What is it? Oh, how much you pay off?

[Caller]

So I pretty much lived it up in my 20s. I turned 30 this year. I've had boats, cambers, trucks, you name it.

[Dr. John Deloney]

Excellent.

[Caller]

And it just got to the point. It just got to the point where it was fun.

[Rachel Cruze]

Yeah.

[Dr. John Deloney]

How much did you pay off?

[Caller]

I realized I'd say about 70 grand.

[Dr. John Deloney]

That's amazing. I'm proud of you.

[Rachel Cruze]

That's incredible, Justin.

[Dr. John Deloney]

I'm proud of you.

[Rachel Cruze]

Yeah. So my point is, is that you guys have done an incredible feat of paying off $70,000 of consumer debt. You have your baby. Your baby. Step three, you have a fully funded emergency fund. Like, what you guys are doing is incredible beyond what the average American is doing. So if you are. If you've done those things, check that off. Be proud of yourselves. Be funding some retirement on the side. Be thinking about college, and then throw some extra at the house. That's great. But again, like John said, please don't go and work 80 hours a week just to get this thing paid off. Just slow down, be intentional. I want you guys to have a plan, and you can have more of an aggressive plan and even the mortgage calculator if you go to ramseysolutions.com, plugging in some of those numbers. I'm like, you can see how quickly this can get paid off by just throwing a few extra payments a year. Like, it's crazy how quickly it fast forwards the process. So do some math around it. Take a breath. Celebrate.

[Dr. John Deloney]

I want to celebrate you, brother.

[Dave Ramsey]

You did.

[Dr. John Deloney]

You've done well done.

[Rachel Cruze]

Well done.

[Caller]

Sam.

[Rachel Cruze]

The All New EveryDollar is here. And it is way more than just the incredible budgeting app that it was. It is still a budgeting app, but now it has so many more advanced features to help you make progress with your money. The average person finds thousands of dollars in margin in just the first 15 minutes. So everydollar now, you guys, it's looking over your entire financial picture. There's recommendations, there's coaching involved. I mean, there's so much now in this app to help you with your money journey. So get started today for free and you can download it in the App store or Google Play. Up next, we have Isabel in Illinois. Hi, Isabel. Welcome to the show. Hi.

[Caller]

Thank you so much for taking my call.

[Rachel Cruze]

You're so welcome. How can we help today?

[Caller]

So I was. My question is, how do you. How do I find a margin within my very small income with about 6, $7,000 in debt, which I know may not sound like a lot, but again, it's more so my very low income.

[Rachel Cruze]

Sure, yeah. How much are you making a year?

[Caller]

I'm making about 27 to 30 thousand dollars a year.

[Rachel Cruze]

Okay. And what are you doing?

[Caller]

I work for a small company. Roughly, paycheck wise, I get about $2,066 a month. And again, it's just kind of paying down my debts to get to where I want to be financially as well as securing a home down the line and everything of that sort.

[Rachel Cruze]

So, Isabelle, what are you said you're working for a small company. What are you doing? Are you doing sales admin? What's the.

[Caller]

Basically a receptionist for a countertop company which does. Okay, but again, it's not.

[Rachel Cruze]

Sure.

[Caller]

Not corporate money?

[Rachel Cruze]

No, for sure. Do you. Are you married? Do you have kids?

[Caller]

I do. I. I'm not married, but I do have a partner.

[Rachel Cruze]

Okay, so no kids though?

[Caller]

Yes, kids. I have a toddler and one on the way.

[Rachel Cruze]

Okay. Oh, congratulations.

[Caller]

Thank you.

[Rachel Cruze]

And toddler goes to daycare. What does toddler do during the day? Okay, so that's probably a chunk too. How much are you paying in that?

[Caller]

I'm paying roughly $800 a month for daycare.

[Rachel Cruze]

Okay. And how much is your rent?

[Caller]

That's Another issue, our rent went up significantly last year going into this year. So we ended up. I could not budget my inc. Rent. Rent was about nineteen hundred dollars a month for a one bedroom and I did not find that feasible with my income plus my partner's income. So we ended up moving in with my parents to kind of lower all of our costs down. Okay, so that's where it's at. Now I do pay bills in within my. My parents household, which roughly around with my bills. Roughly sums up to $800 a month in bills.

[Rachel Cruze]

And is the partner paying is.

[Caller]

Well, not at the moment. So what really took a toll on us financially regarding rent and why we had to move in was because he has his own business. Unfortunately with the business, he's a mechanic. I'm really not sure, but more of a performance. He fixes engines, motors, transmissions, all of that stuff.

[Dr. John Deloney]

Is he making any money, Isabella?

[Caller]

No.

[Dr. John Deloney]

Okay.

[Caller]

So what had happened was.

[Dr. John Deloney]

Hold on, hold on, let me stop. Yeah, like what you need right now, like what happened is important, but not right this second. And so let me, let me say it like this. You, y' all two were in a boat and the boat hit something, Something broke. An old weld popped loose, somebody shot a hole in it. Right now y' all are drowning, Drowning.

[Rachel Cruze]

And you're the only one with a bucket.

[Dr. John Deloney]

And it doesn't matter what happened to that boat. What matters is y' all need to swim to shore. Okay, so he had a business. Whatever happened didn't happen. Doesn't matter. He's got to get up today and go knock on doors. And every single mechanic shop I walk by has a sign outside that says we're looking for ASC certified mechanics. Everybody, every single shop looking for mechanics. He's got to go get a job. Two jobs.

[Caller]

He's pushing. Yes, he does do that. He has a part time job right now. But most of that income is going to repay all of the loans that he got for the business itself because we don't want to bring that into. If we ended up buying, purchasing a home, getting married, all of that stuff. What happened with his business really did put a lot of financial burden on us.

[Dr. John Deloney]

Yeah.

[Rachel Cruze]

Yeah.

[Dr. John Deloney]

How much does he owe?

[Caller]

His business owes roughly $8,000, $9,000 from what we've been able to pay down, that completely drained our savings.

[Rachel Cruze]

But he only owes $9,000. Is that right, Isabel?

[Caller]

Right.

[Dr. John Deloney]

Okay. That's not a ton of money.

[Rachel Cruze]

Yeah, he can go earn that. He can go drive Uber eats and make 2 to 3,000. Do you understand? He could have this cleaned up. So you have a. If I were you and I don't want to paint this picture but Isabelle, like this is if I had a toddler one on the way and the guy I'm doing life with had a major financial thing that wiped out, you said our savings. So I don't know if you put money towards it. There's a lot of. There's zero security, there's not a lot of safety and all of this. And so a part of me. You guys have co. Mingled so much with kids living together and all of it and money. Isabel, just for you and just to make this as clean as possible, I would be separating everything and he needs to go and do doordash and be a at night and be a mechanic during the day. To John's point. And I know that the business, that whole thing, I'm sure his self esteem, I'm sure everything is just terrible. Like I bet he does feel a lot of guilt, shops shame, who knows. But he has to continue to provide for kids that he has. Do you know what I'm saying? You know, in a girlfriend, a fiance, whatever it is. So he needs to go do all of that. You then Isabelle. Yeah, I would be for your sake, in your debt. It's not a lot either. I know it probably feels very overwhelming like what you're saying with your salary. I'm thankful that you have a place to land when you have family in town. That's such a gift being, you know, having two kids and you're doing this. So I would be looking Isabel, at. From a salary perspective to up your salary because man, I mean you're. You're at the cusp with. With two kids on poverty level. So I would be. I would be looking for something like, you know, 36,000, you know, something that you can do that's going to be bringing in more money. And ideally it's a primary income position. And so I would be thinking through family, friends, people that you know, anything that you can start to do to. Yeah. Open some doors. I'll send you Ken's book Find the Work that yout're Wired to Do. Because he has a great assessment in there. And so Jenna will pick up. We'll send that copy to you. And I want you to really start dreaming and thinking through is about like, what do I want my life to look like not just in the next nine months, but what do I want it to look like in the next nine years? You know, what do I want to do with my life And I'm hoping together, I mean, I pray that you guys get married and you guys, you know, flourish and do all the things because you guys have built a life together. But my hope is that you're in a position where you feel good about that.

[Dr. John Deloney]

Yeah, you're not going to feel good until he starts acting like somebody you can anchor into.

[Caller]

Right.

[Dr. John Deloney]

And here's what this looks like. Is this his baby on the way?

[Caller]

Yes.

[Dr. John Deloney]

Okay.

[Caller]

Both of them are his.

[Dr. John Deloney]

Okay, then this is what this looks like right now. He got knocked down. His business fell out from under him. He wasn't good at it. Whatever, it doesn't matter. It looks like him waking up at 4am every day and ubering people to and from the airport until he starts work at 8 o'.

[Rachel Cruze]

Clock.

[Dr. John Deloney]

And he is a mechanic from 8 to 5. And then he gets off and he has dinner with you and the young one. And then he goes back out into the world world and does door dash until midnight. This, this is all of human history. Men have had to go work like crazy to provide for their family. And $9,000, he can have that cleaned up in no time. But he's got to say, my two kids and my future wife are worth it. One year, two years of just working myself until I weigh nothing. I'm costing myself. Sleep, all that. He has a major priority. And like Rachel said, man, you also have to begin to visualize a world where he doesn't do that. Which means you're gonna have to go earn some more money and you're gonna have to put yourself out on the market, which is gonna feel weird. You got a baby coming. It's gonna be hard. People are gonna judge you. All that, who cares? None of that matters. You have a real math problem. But underneath that, you.

[Dave Ramsey]

How many times do you end up with too much month at the end of the money? Even if you can cover the bills, there's nothing left over. You work your butt off and you still feel broken. Broke. That's normal for most people. But you do not have to live that way. You can completely transform your money and your life with every dollar. Our world class budgeting app is better than ever now. Everydollar coaches you to find extra margin every month so you can make real progress and change your family tree. The Average person finds $3015 in just the first first 15 minutes. That's extra money you could use to beat debt, to build wealth, to finally breathe again. Don't settle for living normal with money. Start every dollar for free by downloading the app.

[Rachel Cruze]

Welcome back to the Ramsey show in the Fair Winds Credit Union studio. I'm Rachel Cruz with John Deloney and we're answering your questions. So you can give us a call at 888-255-225. Next in Wisconsin, we have Olivia. Hi, Olivia, welcome to the show.

[Caller]

Hi. Thanks for having me.

[Rachel Cruze]

Absolutely. How can we help?

[Caller]

So my question is, what is the best way to manage or organize a single 529 plan that would cover multiple children?

[Rachel Cruze]

Yes. Okay. Was this being. Was this passed down to you or how did you receive it?

[Caller]

Yeah, it was the 529 plan that my parents set up for me and then I didn't use all of it, so they just said that it is. They're using it towards grandkids when they're ready.

[Rachel Cruze]

Nice. Okay, very cool question. Do you remember how much you had left in it when you finished college? And I go, I don't need that. And how much it is today?

[Caller]

Today it's about $100,000 and the kids are 15 months and the next one's due in January.

[Rachel Cruze]

Oh, well, congratulations. How long have you been out of school?

[Caller]

About five years.

[Rachel Cruze]

Five years. Okay. How much was left in that 529? I guess it's only had five years of growth, so probably. How much was that?

[Caller]

I don't know exactly how much was when I, I use the rest of it.

[Rachel Cruze]

Oh yeah. Well, that's one of the great benefits of the 529 is it can be passed down through family for educational funds. So what I would probably do, Olivia, is get hooked up with one of our smartvestor pros in your area and you can't open a 529 until second baby is born. So I probably would just wait. So you could do it all in one meeting so you don't have to go back and do two meetings. But yeah, you can go and set two up under your both girls names and then that smartvestor Pro will be able to help you. You bring the funds down from your name and you can. Yep. Disperse it within family members so they'll be able to take that and fund it and you'll be able to see, you know, how much you may obviously probably put a little bit more in the first kid versus the second because the second will have a few more years to be able to have some growth. But that should be plenty. I mean, honestly, you could probably just check that off. I mean, talk to, talk to your Smartvestor Pro. Ours we set with ours and we do every January and he ran out the calculations of tuition as it continues. And you're like, oh God. So do some numbers, some projecting. But that's what's great about having a investment professional in your corners. They do all of that. They're able to look out and project not even from like a market perspective, you know, with average rates of return, but also what tuition is going to do to make sure that you guys have enough. But you have a massive head start, which is wonderful. So, yeah, I would just get with an investment professional and they can help transfer those funds. All right, let's go to Ashley O in Key West, Florida. So nice. Hi, Ashley.

[Caller]

Hello.

[Rachel Cruze]

Welcome to the show. How can we help?

[Caller]

My situation is kind of unique. My husband is active duty military and we have find our found ourselves in a very unique situation. We were up in Pensacola, the panhandle of Florida. We owned a home there and we got orders to come to Key west. And the cost of living down here is astronomical. Our house has been on the market since April and we're now going into November.

[Rachel Cruze]

The house on the panhandle?

[Caller]

Correct. We've had no movement at all on it. It's being shown three to four times a week, but we've had zero offers. We've lowered the price twice. We've done updates, incentives for buy. It's just nothing is happening. And between our mortgage and our rent here in Key west, we're paying out over eight grand a month.

[Rachel Cruze]

Oh my gosh.

[Caller]

Between the two things and because I'm still having to pay someone to maintain my pool on the home, the yard, the lights and the water is still on, so. And then everything combined is actually like 79, 80 something.

[Dr. John Deloney]

What's your real estate professional tell you?

[Caller]

Well, he told us about a couple months ago to put it up for rent also. So we did that. And we've also had no movement on it being rented. We actually made our mortgage on the house is 3,000. Well, when we originally bought it was 2,100 and it went up to 29 because of property taxes in that area. We have not a very ideal rate because we bought it in 2023 when.

[Dr. John Deloney]

The rate, the average time on market right now is, is two months. 60, 60, 62 days. What is your real estate professional saying is the challenge? Because it sounds like it's being shown, people are looking at it and they're interested in it.

[Caller]

That's what's interesting.

[Rachel Cruze]

Have you run comps in the area to see is it overpriced?

[Caller]

It is actually low than the Comps in the area. It's just for whatever reason, in that Pensacola area, no one is buying and no one is selling. Yeah, but my other issue is, you know, we both. We also have credit card debt, and we have two car payments, and we make good money just going out on payments.

[Rachel Cruze]

Correct. Okay. How much do you guys bring in a month?

[Caller]

Month? Oh, gosh, I didn't write down the monthly. I did. I did it by year for you.

[Rachel Cruze]

You can go ahead. Yeah.

[Caller]

So together we both make 135 a year.

[Rachel Cruze]

Is that before tax?

[Caller]

That is before tax.

[Rachel Cruze]

Okay. And the apartment that you guys are in now, how much are you guys paying per month?

[Caller]

So we're actually on base. So it's taking my husband's basic housing allowance. It's like an allotment that comes out of his paycheck.

[Rachel Cruze]

So you aren't having pay for rent right now? I thought you said that rent's astronomical.

[Caller]

It is. So our. Our rent. So the Navy subcontracts out their property management, so they are taking $4,568 per month for us to live here.

[Rachel Cruze]

$4,000 on base?

[Caller]

Yes, that's correct. 4,568.

[Dr. John Deloney]

Gosh. So could y'.

[Caller]

All.

[Rachel Cruze]

Could you move somewhere else or did.

[Dr. John Deloney]

You get a one bedroom apartment? Take your loan?

[Caller]

I said there are no apartment complexes down here. That is the issue with Key west and service members coming down here. There are no barracks. There are no places for military members to live. I did actually Google this morning. I went on Zulu so that I could get some examples for you guys. An average three two is between 6500 to 8000.

[Rachel Cruze]

Yeah, that's a three two. What's a one?

[Dr. John Deloney]

What's a one bedroom?

[Caller]

Like a survival four?

3500 to four for a one bedroom apartment. Correct. And I mean, like, this is, you know.

[Rachel Cruze]

Yeah, totally. No, I hear you. Okay, so the cars. Tell me about the cars. How much do you owe on each of those?

[Caller]

So on my armada, I owe 20,000. My monthly payment is 550. My husband's f. 150. He owns. He owes 18 and his payment is 575.

Yep.

[Rachel Cruze]

Yeah, I mean, that's over $1,000 going out and just that and just car payments.

[Caller]

And then we have $30,000 worth of credit card debt.

[Rachel Cruze]

Okay.

[Caller]

And then we actually, last week, as crazy as it sounds, had to take out a Coast guard mutual assistance loan in the amount of 2,500 because my transmission. Something failed on my transmission. Now that that loan is 0% interest because it Comes from.

[Rachel Cruze]

Yeah. So Ashley, what I would say is I would look at seeing if you guys can sell these cars and get two $5,000 cars even if you have to take a small loan for the difference just to get this thousand dollars freed up because that's going to help you a ton. Cut up the credit cards and you guys have to draw a hard line in the sand and say no more debt, no more debt. And it's going to take a little while to dig out, but I'd be working extra. Doing what you can and get a.

[Dr. John Deloney]

New real estate professional. Go to ramseysolutions.com realestate.

[Rachel Cruze]

Hey guys, it's Rachel Cruze and I've got great news for you. The Ramsey Christmas cash giveaway is here. We are giving away $500 every week plus a grand prize of $5,000 dollars in cash. Listen, you can enter daily to boost your chances of winning and there's no purchase necessary. Just go to ramseysolutions.comgiveaway. that's ramseysolutions.comgiveaway. good luck, you guys.

[Dr. John Deloney]

Hey, real quick, we were just talking about this off air. Rachel, if, if you went and bought a ton of house during the, like, not during the pandemic but after the pandemic, right. Or if you went and followed your neighbor who does really well or followed somebody at your local church, whatever, and they bought a property, property like a beach house like this last caller. Or they bought a lake house, whatever, in 2023, 2024. And you're like, yeah, I wanna do that too. Somebody's gonna pay the piper on that deal, man.

[Rachel Cruze]

Yes.

[Dr. John Deloney]

And it's one of those things that we keep. I don't know, man. Dave's been beating this drum forever and now we're picking up the, the, the drumsticks and beating it too. But it's like, it's not a statement on the greater economy if a whole bunch of people went and bought two and three million dollar houses or bought this and then this and stuck position. My heart breaks for that last caller who got, got new orders, had to move and now they can't sell a house here. But, but people flock to these places and they bought a second and a third and a fourth house and they mortgaged it here and they, man, it's a mess people are finding themselves in.

[Rachel Cruze]

Yes. Yeah. Keeping your life financially simple, you guys, it's boring, it's not exciting, but it brings peace because you're not trying to play this game where you're juggling this and then we're going to pull it out of here. And this and this. We've just heard so many stories. We're recently kind of of that happening, and people are hitting the wall is what it feels like.

[Dr. John Deloney]

And I'm heartbroken for this. This military family who just got moved and that house won't sell.

[Rachel Cruze]

Yeah.

[Dr. John Deloney]

Everyone in the neighborhood bought their third house.

[Rachel Cruze]

I don't know.

[Dr. John Deloney]

It's just. I hate it. I hate it. Y Boring is not flashy, but boring is peaceful. Yes, boring is peaceful.

[Rachel Cruze]

And the same is true just with investing. When we talk about, like, boring, it's boring. Invest 15% of your income into 401ks and Roth IRAs. Everyone's like, Let me go do something.

[Dr. John Deloney]

Buy real estate with cash.

[Caller]

Boring.

[Rachel Cruze]

Yeah, but, man, I'm telling you, yes, it takes some patience for sure in this, but you're doing it the right way. You're not building a house on sand. Right. Like, it is strong and the structure's there because it's real money. You're being wise about it. So everyone slow down and feel it out. All right, well, everyone also needs insurance, and it can be hard trying to find pros. Great transition who aren't looking to make a buck and agents who know their stuff. And with Ramsey trusted insurance insurance pros, you will never find a sleazy business or slimy salespeople because they're all interviewed, they are vetted, and they are coached by our team to make sure they are market experts and have your best interest at heart. So go to ramseysolutions.com coverage to find the type of insurance that you are looking for and connect with a Ramsey trusted agent or click the link in the description if you are listening on YouTube or podcast. All right, up next, let's go to Susan in Florida. We've had a lot of Florida calls. Hi, Susan. Welcome to to the show.

[Caller]

Thank you so much for taking my call.

[Rachel Cruze]

You are so welcome. How can we help today?

[Caller]

I have been a caregiver for three handicapped family members for 28 years.

Wow.

I have dumped all my retirement into taking care of them, which was over half a million dollars. And I need to know how I go about rebuilding my financial life as I have none right now. I have no credit. I owe no one anything. But I need to know how to build my stockpile of funds so I can have some kind of retirement because I know I will have no one to take care of me.

[Dr. John Deloney]

Yikes. Are these three family members still living?

[Caller]

Yes, they're here now in the house with me. I Have two mentally handicapped brothers, one who now is crippled, one who is going through prostate cancer. And I have my 90 year old mom who has severe dementia.

[Rachel Cruze]

Oh, wow, Susan, that's a lot.

[Dr. John Deloney]

Do you have support?

[Caller]

Yeah. And I had a wonderful life before this.

I worked for one of the richest.

Men in the world. I had my own corporate jet. I was making great money. My dad passed away and I stepped in and I had left home when I was 14.

[Dr. John Deloney]

Well, you're. You're a saint. Do. Do you have. I mean, have you explored things like.

[Caller]

Excuse me, I haven't done anything. Truthfully.

[Rachel Cruze]

How old are you yet?

[Caller]

I am 66.

[Rachel Cruze]

You're 66. Okay.

[Dr. John Deloney]

I want you to explore SSI benefits for your brothers.

[Caller]

Yes, we do have benefits coming in. I have them on a program called CDC Plus.

[Dr. John Deloney]

Okay.

[Caller]

So I am now. They kept telling me, get paid as the caregiver because I was a family member, but I found this program through another woman who had a handicapped daughter. And I'm getting paid, but I'm only been getting paid now for like seven years.

[Dr. John Deloney]

Okay, what about for your mom? Is she on Medicaid?

[Caller]

She's on Medicare only they kicked her off of Medicaid for some reason, so that's where part of my money went to paying her medical bills as she got older.

[Dr. John Deloney]

Well, here's what I'm worried. I'm worried that because of your wild and amazing generosity, you're gonna find yourself in a hole and unable to take care of yourself, much less take care of them.

[Caller]

Right. Because I'm at. I'm gonna say the truth at this point. I'm at burnout mode. And everybody has always called me superwoman, and, and they say, my God, you. You run on rocket fuel, you know? And I'm getting to the point where I not only can't do it, I don't want to do it.

[Rachel Cruze]

Yeah.

[Dr. John Deloney]

And that's okay. That's okay. And I, I. Rachel and I are right there with you. We get that. Totally get that. But the greatest thing you can do for them, the greatest thing you can do for them right now is make sure you've got a plan for yourself.

[Caller]

Right?

[Dr. John Deloney]

And you've heard this.

[Caller]

Hired a part time caregiver to come in and help me.

[Rachel Cruze]

Are you okay? Good. Yes. Are you. Is there any income, Susan, from that, from whether it's the caregiving position or anything else that you're doing that you're bringing in money?

[Caller]

I am making very good money. I have available to me $170,000 a year.

[Rachel Cruze]

Okay.

[Caller]

That I can take for myself. But at this point, like I said, I'm on burnout and I need to hire people and I'm paying $30 an hour for caregiver.

[Dr. John Deloney]

Okay.

[Rachel Cruze]

Yeah.

[Caller]

So what, I do have money available to me.

[Rachel Cruze]

And is that. Is that 170, like a retirement package that will be ongoing or what. What happens?

[Caller]

No, that money, I get paid from the program to take care of them.

[Rachel Cruze]

Okay, I hear you. Okay.

[Caller]

So take care of only, too.

[Rachel Cruze]

Okay.

[Caller]

Mom doesn't get anything, so I'm still paying all her costs.

[Dr. John Deloney]

Okay, well, 170 grand a year is a chunk of money if you have no bills.

[Rachel Cruze]

Is your house paid off?

[Caller]

My what?

[Rachel Cruze]

Your house?

[Caller]

No, it's not my house. It's my. It's in my mom's name, but I'm paying the mortgage.

[Rachel Cruze]

Okay.

[Caller]

And I have $80,000 left on the mortgage.

[Rachel Cruze]

80,000.

[Dr. John Deloney]

Is it left to you? A will? When she passes, will it become yours?

[Caller]

It's in trust. She put it in a trust?

[Rachel Cruze]

Yeah.

[Dr. John Deloney]

Okay.

[Rachel Cruze]

For. Oh, for the three. You and the two brothers.

[Caller]

Yes. Because.

[Rachel Cruze]

Okay, well, the ones that are the mentally handicapped.

[Caller]

Financial.

[Rachel Cruze]

Yes. Okay. Yep. Okay. Well, I would probably sit down with a lawyer because. Because they're going to need even like a special needs type of trust or. I mean, there's some ways to go about this estate planning to make sure. Sure that. Because they're living with you. Making sure, obviously, that I'm not trying to write them out of the estate or anything like that or her will. But to be wise about how to divvy all this up realistically, do you see yourself ongoing, Susan, to be with your two brothers, or are you hoping maybe to find someone?

[Caller]

I will never, ever give up on them. Never.

[Rachel Cruze]

Yes. So you're going to plan on living with them and then just maybe supplementing some help throughout the day. Okay. You know, I honestly, Susan would probably sit down with an attorney as your mom. Mom, I know you said she has cancer. Is she. She had dementia. Oh, it's your brother.

[Caller]

I can't make any decisions.

[Rachel Cruze]

Okay.

[Caller]

The trust was made before she declined.

[Rachel Cruze]

Okay.

[Caller]

So thank God for that.

[Dr. John Deloney]

Yes. Good, good, good.

[Rachel Cruze]

Do you have a good estate attorney? Do you guys.

[Caller]

Never been to an estate attorney?

[Rachel Cruze]

Okay. You know, I may. I may reach out to someone in your area. Honestly, Susan, because I would have them look at not only the income that's coming. Coming in, but some things that you can do around to help your brothers. And there might be some way to shuffle some money that's actually going to be Good for their best interest that you're going to be able to help them. And then with the real estate and everything on top of that, what that looks like. Because if you can prove that you've been paying a certain level of mortgage, you know, there might be something that you guys can do in that. I just want you to be set up like what you're saying really well. But 170,000 a year is wonderful. I would just budget really specifically how many hours a week you can supplement some help with that, the mortgage payment and all of it to make sure you don't run out of that money.

[Dave Ramsey]

You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options so you never have to invest in anything you don't understand. Head to ramseysolutions.com smartvestor to get connected.

[Dr. John Deloney]

Ramsey Solutions is a paid non client promoter of participating pros. Learn [e-mail] SmartVestor.

[Rachel Cruze]

Well, in the lobby of Ramsey Solutions on the debt free stage, we have Rebecca here. Hi, Rebecca.

[Caller]

Hi.

[Rachel Cruze]

How are you doing?

[Caller]

It's so amazing to be here.

[Rachel Cruze]

Oh, we're so glad that you're here. We love a debt free scream. We are so glad. So where are you from?

[Caller]

Wake Forest, North Carolina.

[Rachel Cruze]

North Carolina, Okay.

[Dr. John Deloney]

Beautiful part of the country.

[Caller]

It's amazing.

[Rachel Cruze]

Amazing. Okay, how much debt have you paid off?

[Caller]

$207,000.

[Rachel Cruze]

Oh my gosh. Making what kind of money?

[Caller]

100 to 130.

[Rachel Cruze]

Okay, and what was the or what amount of time? How fast did you do that?

[Caller]

91 months.

[Rachel Cruze]

91 months.

[Dr. John Deloney]

Not that you counted exactly.

[Caller]

I love it.

Wow.

[Rachel Cruze]

Okay, what was the $207,000?

[Caller]

The house.

[Rachel Cruze]

Oh my gosh. You did it.

[Caller]

I did.

[Rachel Cruze]

You paid off the house. Congratulations.

[Dr. John Deloney]

Wait, did anyone else help you? No, but hold on. I've been reading the news a lot and single people can't do what you've done. So clearly you've made all of this up, right?

[Caller]

No, never.

[Dr. John Deloney]

Single people can't work really hard and grind and scratch and cross claw and do this.

[Caller]

Oh, they can if they truly want it.

[Rachel Cruze]

Golly, dude. Unbelievable. Unbelievable.

[Dr. John Deloney]

Funruner.com that's amazing.

[Rachel Cruze]

Okay, so tell me this. How much is the House worth.

[Caller]

I think the last estimate I saw was like 390.

[Rachel Cruze]

390. Okay, good for you, Rebecca. Okay, so what happened was that eight years ish, right?

[Caller]

Seven and a half.

[Rachel Cruze]

Seven and a half K, I'll give you that. Tell me what happened seven and a half years ago that you were like, I want to.

[Caller]

I was a first time home buyer, so longtime listeners might remember that back in 2016, my siblings and I were at your old studio doing our debt free screams all on the same day.

[Rachel Cruze]

Oh my. I do remember your family. I'm not kidding. Because y' all all did it. Uh huh.

[Caller]

So like that was me. I was debt free at that point.

[Rachel Cruze]

Okay.

[Caller]

And I followed the baby steps, did my 3, my 3B. And by the time I was ready to start the qualifying process for my mom mortgage and buy the house, I wasn't quite at the like FICO score disappeared. So I was in this weird limbo of they wanted to pull it, but then like stuff was falling off so it didn't look good. So then they had to do the manual underwriting and I had saved up my 10% down payment and, and my emergency fund within 14 months.

[Rachel Cruze]

Oh my gosh.

[Caller]

And by 16 months I had signed the paperwork buying the house.

[Rachel Cruze]

Oh my gosh. It just started happening.

[Caller]

Yes, it just started happening. And then once I signed the paperwork for the house, I had done my budget before I even bought the house of what can I afford? How much extra could I put on it? The bank obviously qualifies you for way more than you really probably want or need or should have. And it was so great. I worked with an ELP that I had worked with previous realtors. I thought I had wanted a historic house because my grandmother had a Victorian. I thought that's what I wanted. There were two realtors that just completely shut me down. Didn't even want to show me historic homes. And the realtor I work with, who was an elp.

[Rachel Cruze]

Yeah. One of our Ramsey trusted pro.

[Caller]

One of the Ramsey pros, Rob Parton, he was so great and he showed me historic houses so that I could see what I was getting into. To be like, maybe that's not what I wanted as my first home.

[Rachel Cruze]

Yes, yes. There's some work to be done.

[Caller]

There is some work to be done. Done or what previous owners might have done to change the house. That it's not really then what you want because it's not what you were expecting.

[Rachel Cruze]

Interesting. Yeah. It looks one way and then you go in and you're like, yeah, this.

[Caller]

Isn'T And I got him to understand that if you showed me the floor plan first, that might just shut it down right there. We don't even need to go see them. So finally I got off. I didn't want the historic house anymore. He showed me the house I ended up buying. And it's been amazing so far. But it is so important to have the emergency fund in place first, because three years into the house, there was a mouse on the first floor. And I saw him come up through the floor vent from the H Vac system.

[Rachel Cruze]

Oh, no.

[Caller]

So that led to me calling an H Vac person to go in the crawl space. And there was work that needed to be done on the H Vac. And then while he was down there, he's like, hey, do you know your water heater's leaking?

[Rachel Cruze]

And then you got to get that fixed.

[Caller]

And then you have to get that fixed.

[Rachel Cruze]

And you're a homeowner. So I'm paying for all this.

[Caller]

It's coming out of your pocket. You're the maintenance person. You have to pay for that. But I had the emergency fund in place, and I still had enough room in my budget that I was able to replace the emergency of fund, like, within the next few paychecks.

[Rachel Cruze]

Oh, my gosh.

[Caller]

After those things came up. And it's, you know, it's just so nice.

[Rachel Cruze]

It's such a good point. Because people want to rush into home ownership, which we want that a part of people's plan. Obviously, like, it's wonderful. But when you have no money and you have payments and debt and everything, and then you go buy a house on top of that, it just magnifies so much. So you're. You're like, yeah, you doing the steps perfectly, did exactly what it was supposed to do. Where it's supposed to be more of an inconvenience when things come up in this total crisis.

[Caller]

Yeah. And when I first started, I was doing 12 hour night shifts, and I.

[Rachel Cruze]

Was, are you a nerd? What do you do?

[Caller]

At the time, I was working on the manufacturing floor for a pharmaceutical company.

[Rachel Cruze]

Okay.

[Caller]

And I was confusing some of my coworkers because they didn't know which rotation I was on because I was doing overtime. Okay. And then in Covid happened, and that kind of burnt me out, because as an essential employee, you had to work no matter what. And then if other people were out because of the COVID protocol, you know, other people had to fill in or there was extra work that you had to get done on your shift. And so finally in 2022, I got off of night shift and I got off of the floor. So now I'm an eight hour Monday through Friday person, which I never thought I would like, but I do.

[Rachel Cruze]

Yes. Good quality of life there. Yes.

[Caller]

And my salary did drop a little bit when that happened because I lost the shift premium and overtime and the built in overtime that I could get. But it has been such a nice change.

[Rachel Cruze]

Yes. And so glad.

[Caller]

And there were other compensations of my. My bonus compensation went up, my stock compensation went up.

[Rachel Cruze]

So.

[Caller]

And that was one of the things I did was the company gave us stock as part of our compensation. And some of my co workers would look at me like I was crazy every time I cashed it out when it vested.

[Rachel Cruze]

Yeah.

[Caller]

And they're like, what are you doing? And I was like, I have other things I'd rather spend that money on.

[Rachel Cruze]

Than hope that so smart.

[Caller]

It goes up.

Yes.

[Rachel Cruze]

Oh my gosh. Okay, so what was the hardest part during these eight years? Because that's a long time.

[Caller]

It was a long time. And I think the hardest, hardest part was learning the intensity versus intentional.

[Rachel Cruze]

Yes.

[Caller]

Because coming out of baby step two, doing the 3B going into this, I was still on the intense.

[Rachel Cruze]

Uhhuh.

[Caller]

And I was like, I don't need to start enjoying some of this and making it worth it. And so then finally in like 2023, 2024, I was like, okay, I can see the light at the end of the tunnel. I can slow down a little bit. I was definitely a nerd and had my amps schedule in a spreadsheet.

[Rachel Cruze]

I believe it. And I talking to you for about two minutes. I'm like, rebecca, she knows. She. And oh, look there.

[Caller]

Oh yeah, there it is. So I actually. That's like the pretty cleaned up version of it. As I was doing it, I had it broken down by like years of like, if I put this much extra on it, I would be done by this year. This year. This year. This year. That's amazing.

[Dr. John Deloney]

Okay, let me jump in. If there is a single person listening, listening to the news and. And here's the reality. Buying homes is expensive.

[Caller]

It is.

[Dr. John Deloney]

It's hard. It's a mad house. What would you tell that person who just feels hopeless?

[Caller]

There is hope. You just have to want it bad enough, like I said, to find the way to make it work. Don't buy more than you can afford. Sometimes you have to go further out than you want to go for your commute. Sometimes you might need to start in a smaller house than you Might originally want and work your way up. I was lucky enough that this was back when the market was a little bit better. A little bit better. And I have a good salary that, you know, my starter house is actually the house I just want to stay in. I don't want to move. But there were other properties available that were smaller, more reasonable, that I could have, you know, started as a starter home instead.

[Dr. John Deloney]

Well, dude, this is. You're amazing.

[Rachel Cruze]

Incredible. Rebecca. So proud. Proud of you. Good to see you again after all these years. How fun. I bet your family's so proud.

[Caller]

They are. Yeah. My dad kept saying, like, has it been paid off yet? I need to brag. I need to brag, honestly. And my dad was so great, too, that there were things that I wanted to do project wise in the house. And he's a mechanical engineer and very handy, so he would come help and with some sweat equity.

[Rachel Cruze]

Okay, well, let's do it because it's well worth it. The screamer is well worth it. Okay, so we have Rebecca from North Carolina, paid off $207,000, which is the mortgage, making 100 to 130,000, and did this in seven and a half years. All right, girl, count it down.

[Caller]

Three, two, one.

[Rachel Cruze]

I'm debt free.

[Dr. John Deloney]

Dude, it's amazing.

[Rachel Cruze]

So good. So good.

[Dave Ramsey]

Great.

[Rachel Cruze]

Rebecca, man. That's it. That's the story. That's what you do. You know, seven and a half years later, you got no. No payments in the world.

[Dr. John Deloney]

Nothing.

[Rachel Cruze]

Well done, Rebecca. I know your parents are proud, and we're proud of you too.

[Caller]

Sam.

[Rachel Cruze]

Our scripture of the day comes from Philippians 3:17. Join together and following my example, brothers and sisters. And just as you have us a model, keep your eyes on those who live as we do. Alice Cooper said, drinking beer is easy, trashing your hotel room is easy. But being a Christian, that's a tough call. That is rebellion.

[Dr. John Deloney]

Yeah. James.

[Rachel Cruze]

Alice Cooper.

[Dr. John Deloney]

James, stop trashing hotel rooms. Act like a Christian. It's harder.

[Rachel Cruze]

He was a metal. Metal. What did you say he was?

[Dr. John Deloney]

He's one of the. He's one of the legendary metal singers of all time.

[Rachel Cruze]

Is it part of a group?

[Dr. John Deloney]

Alice Cooper? That was the name of the band. Oh, that's his. His name, too.

[Rachel Cruze]

I listen to Taylor Swift.

[Dr. John Deloney]

So running through my dude, Al Scooper. I'm sure I've heard his song Rules, dude. Same as. Same as Taylor Swift. Just same.

[Rachel Cruze]

Just all in the same. In the same genre. I'll take it. All right, let's go to. I think at all. People are just shaking Their heads at me. It's fine.

[Dr. John Deloney]

It's like, I don't know what world you live in sometimes. And it's so. I think we live in the same world.

[Rachel Cruze]

I have no music world.

[Dr. John Deloney]

We sip each other.

[Rachel Cruze]

I have no music. Genuinely.

[Caller]

It's like.

[Dr. John Deloney]

It's like Taylor Swift and Backstreet Boys. That's it.

[Rachel Cruze]

I'm going back in February. What? Give me, like, pop 20 2003, and I am in my prime. Or give me. Give me that.

[Dr. John Deloney]

Okay.

[Caller]

All right.

[Rachel Cruze]

All right. Let's go to Sarah in Washington, D.C. hi, Sarah. Welcome to the show.

[Caller]

Hi. I will try to cut to the chase. My ultimate question is, should we rent or by. My husband's active duty. Active duty army. We move a lot, but it's never been overseas. We just found out we have an opportunity that. A sliver of a chance that we might need to go overseas. It would be in Belgium. It would be for NATO. So usually in that case, we would consider living on post, but there is no post there. It would be. We would have to live in the community. We. We have rented houses. We've been married since 2020, so about five years. We have moved eight times in that course of action.

[Rachel Cruze]

Wow, that's a lot.

[Caller]

We've been spooked a couple of times. The first house we rented, we were in Missouri. We were paying rent on time, never late. We got an eviction notice in the mailbox one day. The homeowner. Yeah. Was not paying the mortgage. We were paying them rent, and they.

Weren'T paying the mortgage.

[Rachel Cruze]

So.

[Caller]

Jeez.

That was the first time. And then the. We've moved a couple times since then while we were in North Carolina. We liked the house we were in. I was pregnant with our daughter, our second child, and we signed the lease to stay in the house. And then two months later into the lease, the owner decided to sell. So we are a little.

[Rachel Cruze]

Yeah, you've been burned. That's what it feels like. Yeah.

[Dr. John Deloney]

We took a call earlier from. From a veteran's wife who they had bought a house, and they were settled in, and then they got transferred to another part of the state, and they've been sitting on that house for months.

[Rachel Cruze]

And paying two more, paying rent, a crazy rent and a mortgage. So as much as y' all have been burned in the past, which I hate, it's still the. It's still the better financial move for you guys, especially if you're going to be overseas and you're not going to, you know, be there long term, probably, right?

[Caller]

Yeah. He has seven years before he's up for retirement.

[Rachel Cruze]

Yeah.

[Caller]

The 20 year mark.

[Rachel Cruze]

And you guys still have been moving multiple times. I mean.

[Caller]

Yeah, yeah.

[Rachel Cruze]

So I would not, Sarah, just because. And especially overseas, I would just rent because, you know, number one, you don't know when you guys would be, you know, transferred out. And also, you don't even know what part of the city is she would even want to be in because. Do you guys have. Do you guys have kids? Little kids?

[Caller]

Yeah, four and two.

[Rachel Cruze]

Okay. Yeah. So I would even want from a. I mean, and I would tell you this, if you're moving to a new city, let alone another country, to know like, okay, this is like the area I want to be for grocery shopping and for the kids and school and I don't know, all the things that life is, you know, you could get stuck in a really crappy situation, a crappy side of town that you're like, no, we do all of our life over here and we moved over here, we didn't know. So from a location perspective, I wouldn't buy. And then also from the investment side, because again, it's so short term and you need, I mean, at least four to five years for a house to be able to kind of run its mark, you know, after all the closing costs, all the stuff that you pay and whatever the market's doing at the time just to actually gain some equity to make it somewhat smart financially. So, no, Sarah, if I were you, I would definitely rent. But thank you guys so much for your service. That is a dedication of how much you guys have been moving and sacrificing. So thanks. Thank you to both of you.

[Dr. John Deloney]

Well, and like, I think it's an important thing. We talk a lot about how grateful we are for the servicemen and women who are enlisted, but for every service person who's enlisted, not for everyone, but for many of them, there's also a spouse. This has to pack up and move. And there's little kids that have to pack up and move at a moment's notice, often at great cost, financial cost. And so it's. It's an honor to talk to everybody. What I do have to found in this situation when somebody's getting moved a lot is the temptation to make a decision that feels like I'm putting roots in the ground of some sort. And like you mentioned, it wouldn't be wise to go buy a house in a country you don't know anything about. And you know how long you're going to be there. And so what we want to do is to create. Where can we create roots in an alternative way other than in a mortgage? And so, so coming up with concrete family rituals is often a thing you can do. We never deviate from Monday mornings or from Sunday nights or from an evening meal together, whatever. But we're going to create home in these regular practices that we never deviate from. And we can carry those to all these different rent houses. And across the country this becomes home for us until we can anchor into a geographical location. Yeah, but it's, it's, it's not as, it's not as rooted as a home. Like this is our land. But, but it is something gives you some anchor point.

[Rachel Cruze]

No, it's a good point. Just the consistency to feel nor to have the normal.

[Dr. John Deloney]

Yeah, the normal.

[Rachel Cruze]

Same. All right, let's go to Katie in Washington state. Hi, Katie. Welcome to the show.

[Caller]

Hi. Thank you.

[Rachel Cruze]

Yes, absolutely. How can we help?

[Caller]

I. My husband and I are in disagreement. We're in baby step two and we have a daughter that just started college and he kind of thinks we should focus on getting out of debt ourselves before we help her. But I just, I'm terrified for her to even touch debt at this point. So I don't want her to take out any student loans. I'd rather cash flow it and then, but I know that would kind of slow down our debt free journey.

[Rachel Cruze]

Yeah.

[Dr. John Deloney]

So you're missing, you're missing option three.

[Dave Ramsey]

All right.

[Dr. John Deloney]

And you're not going to like it, but can I tell it to you anyway?

[Caller]

Of course.

[Dr. John Deloney]

All right, here's, here's the umbrella principle. Whenever you feel like you're forced into an either or decision, that's when people make bad choices or choices that I don't say bad, but they're not helpful. It's when people get themselves in trouble. And so whenever I feel like I have an either, either or decision to make, then I always want to force myself into a practice of putting four or five imaginary variables on the table that prove to me that I don't have to do this one or this one. So you've backed yourself into a corner, which is either our daughter takes out debt and falls right into the same trap we're trying to get out of or we continue treading water so that she can go to college. Option three is you all sit down and have a honest, direct, loving conversation. That is, we are not in any way going to support you taking on debt. Look at us. We are living the, we're living that reality right now. And we don't have the money. And so we're going to be in Washington State and we're going to. I'm making this up. I don't know if they got it. But you're going to participate at least in your freshman year.

[Rachel Cruze]

Free community college.

[Dr. John Deloney]

In the free community college. Community college. Or you've got to start right now applying for every single solitary scholarship possible.

[Rachel Cruze]

And maybe. Katie, how much do you guys, how much debt do you guys have left?

[Caller]

We have about 150,000 of consumer debtors.

[Rachel Cruze]

That include the mortgage.

[Caller]

That's just consumer debt.

[Rachel Cruze]

Okay.

[Caller]

Yeah.

[Rachel Cruze]

Well, yeah, so, I mean, I'm a little bit more on your husband's team that you guys.

[Dr. John Deloney]

Yeah, totally.

[Rachel Cruze]

And for her sake, like you said, still talking to her and having that conversation. But where can she go to school that's really inexpensive? Which may mean changing. Right. She may be in the middle of a semester somewhere.

[Dr. John Deloney]

But is she in school or she a senior?

[Caller]

She's currently in school. She's a freshman college this year. We paid for her first semester and we're getting ready to pay for the second one.

[Dr. John Deloney]

Okay. So. So I, I've worked in colleges for years. Every semester parents had this converse hard conversation with their kids which was, we can't afford this past this year and we're sorry and we're heartbroken. Here's the truth.

[Rachel Cruze]

We're going to change it. Yes. And that's some big. That's some big time decisions and takes a lot of maturity, but it's the wisest path. Katie. All right, John, great show. Always fun hosting with you. Everyone in the booth. Thank you. And remember, there's ultimately only one way to financial peace and that's to walk daily with the prince of peace in Christ Jesus.