The Road to Financial Freedom Begins With Hard Choices

Summary

The Ramsey Show – Episode Summary: "The Road to Financial Freedom Begins With Hard Choices"

Release Date: January 16, 2025

In this compelling episode of The Ramsey Show, host Rachel Cruz and guest John Deloney delve into the challenging decisions individuals must make on their journey to financial freedom. Through a series of real-life caller scenarios, the episode highlights the intersection of personal relationships and financial responsibilities, emphasizing that achieving wealth and stability often requires making difficult sacrifices.

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1. Managing Pet Expenses Amidst Debt

Caller: Sierra from Cincinnati
Topic: Balancing high dog boarding fees with significant debt.

Sierra expresses concern over spending approximately $10,000 annually on her dogs, which exacerbates her $100,000 debt. With a stable income of $90,000–$95,000 and debts including a $20,000 car loan, a $105,000 credit card balance, and a $75,000 student loan, Sierra grapples with whether to keep her pets or reduce expenses to invest more.

Notable Quote:
John Deloney [03:04]: "But this isn't financial me. This is actually for the dog."

Advice Given:

• Rachel Cruz suggests exploring additional income streams, such as part-time work during off-peak months, to alleviate debt without sacrificing pet ownership.
• John Deloney emphasizes the temporary nature of debt and encourages evaluating if the cost of maintaining the pets is a worthwhile investment.

2. Planning for Retirement with Limited Savings

Caller: Lisa from Houston, Texas
Topic: Preparing for retirement while being clinically and legally blind.

Lisa and her husband, both in their late 50s, face the reality of having no retirement savings. Lisa, who has limited work experience due to her disability, relies on her husband's offshore job earning $101,000 annually. They also contend with substantial debts: an $85,000 SBA loan on their home, a $45,000 car loan, $25,000 in other debts, and $16,000 in student loans.

Notable Quote:
Rachel Cruz [15:00]: "I think you can do it faster. I would pick up an extra job."

Advice Given:

• Dash toward debt repayment: Both hosts advocate for prioritizing debt elimination using the debt snowball method, starting with the smallest debts first.
• Additional Income Streams: Encouraging Lisa to seek supplementary income, even in limited capacities, to expedite debt freedom.
• Long-term Planning: Once debts are cleared, focus shifts to building savings and planning for retirement to ensure financial stability.

3. Financing Dental School Without Traditional Loans

Caller: Ben from Kansas City
Topic: Exploring alternatives to traditional student loans for dental school.

Ben seeks advice on financing his daughter's dental school education, which costs approximately $400,000 over four years. Aware of the pitfalls of substantial student debt, he explores options beyond conventional loans.

Notable Quote:
John Deloney [24:47]: "I can't have a financial study. I have to implore you to please don't take out half a million dollars in debt."

Advice Given:

• Alternative Funding: Hosts suggest exploring scholarships, state dental schools with lower tuition, and potentially deferring enrollment to work and save funds.
• Creative Financing: Encouraging Ben to consider income-driven repayment plans, part-time work for his daughter, and leveraging the remaining $66,000 in existing 529 accounts.
• Long-term Implications: Highlighting the psychological and financial burdens of excessive debt on new professionals in high-stakes fields like dentistry.

4. Escaping High-Cost Living in California

Caller: Richard from Anaheim, California
Topic: Overcoming financial stagnation in a high-cost area.

Richard, a $137,000 earner with $8,300 monthly expenses, feels trapped in California's expensive housing market. Owning a home with $300,000 in equity, he contemplates moving to a more affordable state to reduce living costs and achieve financial traction.

Notable Quote:
John Deloney [39:10]: "That's what I do. And it was. Some things were really great. Some things are really tough."

Advice Given:

• Relocation as a Solution: Both hosts advocate for moving to lower-cost areas to significantly reduce expenses, thereby increasing savings and accelerating debt repayment.
• Emotional Considerations: Acknowledging the challenges of leaving family and familiar surroundings but emphasizing the long-term financial benefits.
• Practical Steps: Encouraging Richard to budget meticulously, quit his current home if unsustainable, and commit to making a decisive move towards financial freedom.

5. Building Retirement Without Employer-Sponsored Plans

Caller: Catherine from Bellevue, Washington
Topic: Initiating retirement savings without access to employer-sponsored 401(k) plans.

At 42 years old, Catherine seeks guidance on starting her retirement savings. With an annual income of $170,000 as a nanny and house manager, and no current employer-sponsored retirement plans, she is unsure where to begin amidst an abundance of often conflicting information.

Notable Quote:
John Deloney [70:03]: "You're doing great, Katherine. You've done an excellent job up until now, so that's awesome."

Advice Given:

• Roth IRA Strategies: Encouraging Catherine to utilize a Backdoor Roth IRA due to her income level exceeding standard Roth IRA contribution limits.
• Investment Allocation: Advising her to invest around 15% of her income into growth-oriented mutual funds or index funds to maximize retirement savings.
• Professional Guidance: Recommending consultation with a SmartVestor Pro to tailor a personalized investment strategy and ensure optimal financial planning.

6. Navigating Divorce and Financial Independence

Caller: Sarah from Indianapolis, Indiana
Topic: Managing finances during and after divorce while ensuring personal independence.

Sarah shares her tumultuous marital history, including a separation in 2012 and a subsequent remarriage in 2019 that has led to renewed financial strain with $100,000 in bank savings yet $250,000 in total debt. Facing another divorce, she seeks advice on maintaining financial independence and securing her assets.

Notable Quote:
John Deloney [81:00]: "If you get divorced, you have a hundred thousand dollars. And so I won't get into the investment side of it."

Advice Given:

• Immediate Financial Separation: Urging Sarah to create separate bank accounts and establish a strict budget to manage her living expenses independently.
• Debt Management: Advising prioritization of debt repayment to prevent financial entanglements during divorce proceedings.
• Investment Strategy: Recommending the preservation and intelligent investment of her $100,000 to ensure long-term financial security post-divorce.

7. Balancing Business Ventures with Financial Stability

Caller: Jessica from Los Angeles, California
Topic: Deciding between selling a home to eliminate debt or continuing to grow a struggling business.

Jessica and her spouse, burdened with $250,000 in debt from starting a wellness center and med spa in 2020, are torn between selling their home to alleviate debt or pushing forward with their business despite currently generating a meager $3,000 monthly net.

Notable Quote:
John Deloney [60:33]: "You're about to get sued and they're about to start collecting on you. You owe $10,000 a month."

Advice Given:

• Prioritizing Debt Repayment: Both hosts strongly advise against selling the home prematurely, emphasizing the importance of eliminating debt before reinvesting in the business.
• Diversifying Income Streams: Recommending that Jessica and her husband secure additional employment to stabilize finances while working towards making the business profitable.
• Critical Financial Assessment: Highlighting the unsustainable nature of their current financial situation and the urgent need to restructure their debt repayment strategy.

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Conclusion: Embracing Hard Choices for Financial Freedom

Throughout the episode, Rachel Cruz and John Deloney underscore the fundamental principle that achieving financial freedom often necessitates making tough decisions, such as reducing expenses, increasing income, and prioritizing debt repayment over non-essential expenditures. The recurring theme emphasizes that while personal and emotional attachments—whether to pets, homes, or businesses—are significant, they must be balanced against the imperative of financial health and stability.

By sharing these real-life scenarios and providing actionable advice, The Ramsey Show reinforces its belief that with disciplined decision-making and strategic planning, individuals can overcome financial hurdles and pave their path to wealth and security.

Notable Collective Insight:
"Financial freedom begins with the willingness to make hard choices today for a more secure tomorrow."

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Disclaimer: The advice provided in this summary is based on the conversations from the podcast episode and should not be construed as professional financial advice. Listeners are encouraged to consult with a certified financial planner for personalized guidance.

Transcript

[Sierra]

Foreign.

[Rachel Cruz]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create amazing relationships. I am Rachel Cruz hosting this hour with my good friend and host of the Dr. John DeLoney show as well as best selling author John Deloney. And so we are here to answer your questions. Life, money, career, relationships, anything and everything. So give us a call at Triple 882-55-5225. Up first we have Sierra in Cincinnati. Hey Sierra, welcome to the show.

[Sierra]

Hi.

[Rachel Cruz]

Hello. Hello. How can we help?

[Sierra]

Oh yes, I was just calling to inquire. I've been, you know, recently addicted to listening to the show and so I'm wanting to pay down Deb into a position to invest more. So I had a question in regards to if I should possibly re home my dog even though I don't want to to get out of dog boarding fees when I'm traveling for work.

[Rachel Cruz]

Oh, no. Okay.

[John Deloney]

How often Most people listening like their dog more than any people in their life.

[Rachel Cruz]

Sierra, how often are you traveling? How often are you traveling?

[Sierra]

So with my new job I travel a little less than I did before. So probably it just goes with the storms potentially like five to six months out of the year. And I'm usually gone from like 10 to 14 days at a time.

[Rachel Cruz]

Okay, and what's the, what's the boarding situation? Are you going to like an actual border? Do you have someone come and and pet sit?

[Sierra]

So I have a sitter now that's pretty consistent and looking my bank did like a overview of all my spending and for my dogs I spent about $10,000 last year.

[Rachel Cruz]

Oh wow.

[John Deloney]

Yeah. If you're going half the year, I mean how long have you had or.

[Sierra]

Should I like maybe talk to my sitter to try to see if we can negotiate something?

[Rachel Cruz]

That's what I was wondering. Or, or is there some. I just wonder if there's other options. I always hate just like this is my only option.

[John Deloney]

I would say get rid of the dog.

[Rachel Cruz]

Oh my.

[John Deloney]

I know, I know. Half America just hung up on like they just are going to send mean cards and letters to Chase.

[Rachel Cruz]

How much are you making a year?

[Sierra]

So my base is around 79,000 and what my additional pay when I'm traveling I usually like last year I think my growth is about 87.

[Rachel Cruz]

Okay.

[John Deloney]

But this isn't, this isn't financial me. This is actually for the dog.

[Sierra]

But I just also got a raise too. So this year my gross would probably be around 90 to 95,000.

[Rachel Cruz]

Amazing. Okay, how Much debt do you have?

[Sierra]

So a lot. So I have $20,000 for my car and then I have a credit card with 105 on it.

[Rachel Cruz]

Okay.

[Sierra]

And then suit and Rollins, 70,000 plus 5,000 of interest, so 75k.

[Rachel Cruz]

Okay, so you're right at 100 grand of debt, making 95. Spending 10 grand on the dog per year might be going down because you have a new job. And how long have you had the dog?

[Sierra]

There are five and six.

[Rachel Cruz]

You have two.

[John Deloney]

Five and six. Okay, but it's like for the dog's sake, they only get to see you half the year, right?

[Sierra]

Yes, but they're excited when they see me when I come back.

[Rachel Cruz]

Sierra, all dogs are excited. Five minutes. No, I. Okay, here's what I would do. Sierra, I just wonder if there's anyone in your life who wants a dog as well and you can like co parent this dog.

[John Deloney]

You're out of your mind.

[Rachel Cruz]

And for like six months out of the year, this dog goes and lives with your friend who's like great with a dog and loves it and you guys.

[Sierra]

So it's not like a consistent. Like it's like a storm could happen today or a storm can happen a couple months from now. It's not like consistent. Like right now I'm in down season, but like storm season.

[Rachel Cruz]

I understand. Yeah. I'm just saying, I mean, there's no friend like that. Rachel joking. Like the co parenting. No, she could. You could totally have a friend that's like, oh, I love dogs. And they're in Sierra's. Like, I'm just. I. I can't. And they're like some of the greatest planet.

[John Deloney]

I don't know. Any friend that'd be like anytime, day or night, drop your dog off for six months, that'd be awesome. I don't know that person. Maybe, maybe. I think, I think, I think you're right. I think you're right. What brought you to this question, even that you're considering it? Do you think it's the right move?

[Sierra]

No, I don't. I don't know if I track my expenses and just cut everything out. I'm looking at like including like $200 a month towards the dollars when I'm not traveling just to like build up an expense. Like right now I'm at like 2,800 in expenses a month.

[Rachel Cruz]

Okay.

[Sierra]

My last job used to give me per diem. So the per diem helped out with the dog cost.

[Rachel Cruz]

Sure, yeah, yeah, totally. I mean, because here's my thing. I'm like, Sierra, you'll be out of debt in what, probably two and a half years. Like, if you really.

[Sierra]

When I ran, it was like three, like, almost four years with the student loans, I think.

[Rachel Cruz]

Yeah, I think you can do it faster. I would pick up an extra job. I mean, I would do things because.

[John Deloney]

Especially during the slow season. Can you work right now?

[Sierra]

I've been trying to think of options. I'm not in an area where there's like uber doordash or anything in that nature.

[John Deloney]

Okay.

[Rachel Cruz]

Yeah, I would get. I would get creative on the income side and be able to pay off your debt faster. Because here's the thing, the debt is so temporary, you could be out of debt in, let's just say, two and a half years. And then, you know, your dogs are.

[John Deloney]

Dogs are forever.

[Rachel Cruz]

You'll have like another two years.

[John Deloney]

Yeah, maybe that's the question. Do you want to go get during your off time? If you're home for a month or two without a big storm, do you want to work on those days that you're home, work, put in eight, 10 hours a day, just bust it. Go throw boxes at Walmart, go pick up a shift at McDonald's or whatever. Work really hard on those days, and over the course of a year, you'll probably earn about an extra ten grand. If those dogs are worth that investment, then you've answered your question.

[Rachel Cruz]

That's a good way of. Yeah, that's a good way of framing it that if you had to work extra and make 800amonth to cover the.

[John Deloney]

Cost of those dogs, is that. Is that investment, Is that worth it for you?

[Sierra]

Yeah, I possibly could. It's just like, they'd be in the house more if I work more.

[John Deloney]

Okay, but I think you have to just make that call for yourself.

[Rachel Cruz]

Yeah.

[Sierra]

Okay.

[Rachel Cruz]

Yeah. And there, I mean, there's a lifestyle question for sure of the happiness of the dogs, Right. I'm like, yeah, if you are gone happ too.

[Sierra]

So.

[John Deloney]

Yeah, but we spoil our dogs. Not for them, but we spoil them for us, right? I spoil mine, too. The dogs don't care, Right. My son found a couple of, like, old cow bones in this old field and he brought them home. The dogs are the happiest they've ever been with, like, these, you know, old cow, like, they don't care. We spoil them for us, right?

[Sierra]

Yes.

[Rachel Cruz]

All right.

[John Deloney]

If you need a. If you need an anchor when you come home, you've been gone for a month. You need anchor to get home to, like. So you don't come home to empty apartment I totally get that. I totally get that.

[Sierra]

Okay.

[John Deloney]

But I think you just. The math, the sucky part here is math doesn't care about any of this. The math is you, you owe a hundred thousand dollars and you make 90. And how quickly can we get that debt paid off?

[Rachel Cruz]

Yes, I think that's it. I think it's just, it's the sacrificial question. And is it, is that sacrifice worth it? Getting rid of them to gain an extra 20 grand over two years? And how quickly does that help you become debt free? Faster? And if that's not worth that sacrifice, like, no, I will be in debt six months longer in order to keep the dogs or whatever, you know, it ends up being for you, then that's great too. So. No, I, I, I can't sit here in good faith and say, yes, you need to sell these dogs.

[John Deloney]

But I can, I can't say if it was, if it was me, I probably, I probably would, I wouldn't sell them. They're not for sale. And I like my dogs mo more than almost every person I know. And so, like, I'm a dog guy.

[Rachel Cruz]

But yeah, that's a hard one. Sierra.

[John Deloney]

20,000.

[Rachel Cruz]

I would find option C, see if there's a good friend who will take that.

[John Deloney]

Friend does not exist.

[Rachel Cruz]

I believe, I believe that friend is out there. Sierra. This is the Ramsay Show.

[Sierra]

Hey, George Camel here with a not so fun fact. Every American Social Security number, including our children's, has been hacked and is now on the dark web. And this is not a scare tactic. This isn't fear mongering. It's a reality that could turn into a nightmare for a lot of people. And believe me, I've been a victim of identity theft and I would prefer it never happen again. Because once the bad guys have your social, it's the lifeblood for all of their activity. Think of all the places you use your social, your banking, your employer, government offices, utilities, cell phone companies everywhere. And once they've got it, thieves can open new accounts, drain existing ones, steal payroll, and wreak havoc all in your name. Not cool. And to be real, it's not a matter of if, but when. So you've got to protect yourself with Xander's ID theft protection. Xander has all the cyber tools to help, including home title monitoring, full recovery services if you do become a victim, and stolen funds protection. Not to mention, it's the best value on the market. They've been protecting my family for over a decade and I trust them to protect yours too. So get enrolled today by calling 800-356-4282 or just visit zander.com that's z a n d e r dot com.

[Rachel Cruz]

Welcome back to the Ramsey Show. If you are a listener of the show and you've been listening for a while, we actually have a survey that is out and it is live.

[John Deloney]

Oh, great. The segment after I told this poor woman to sell her dogs.

[Rachel Cruz]

What?

[John Deloney]

We're going to do a Ramsey survey.

[Rachel Cruz]

Oh, everybody's been like, what? Do we not want to hear John telling people to sell their dogs?

[John Deloney]

By the way, George Campbell, the guy who loves his two dogs more than any human. It's absurd. They.

[Rachel Cruz]

He didn't hear the whole call, though.

[John Deloney]

I know, but he was with me.

[Rachel Cruz]

He walked by and said, sell the dogs. Sell the dogs. But he didn't have all the context.

[John Deloney]

I think George would give both of his feet and one of his hands for both of his hands for his.

[Rachel Cruz]

For Olive and Blue. Oh, yeah.

[John Deloney]

What are their names? Olive, the fact that you. Her. His friend know the names of his.

[Rachel Cruz]

We talk about these dogs all the time on Smart Money Happy Hour. They get brought up more than. More than Mia, his daughter. That's how much you know. He. They have to wipe their butts.

[John Deloney]

They wipe their.

[Rachel Cruz]

Do you know that?

[John Deloney]

Oh, I do. That's what I told George. I put George on friendship probation.

[Rachel Cruz]

Have to do that. I was like, you don't have a dog at that.

[John Deloney]

You know why? Cuz God didn't make that dog.

[Rachel Cruz]

And then the dogs have to sleep. And then the dogs have to sleep in the bed. Oh, it's a whole thing. Anyways, if you want to hear more about George's dog, make sure to check out this survey. But for real, we want to know your favorite parts of this show. What you like, what you don't like, what you want to hear more of. I mean, just everything. We want to know your thoughts around the show to make the show better because we do this for you guys. And so there's really two ways that you can participate. One, you can text the word survey to 33789, or you can visit ramseysolutions.com survey or if you're listening on podcast or you're watching or listening on YouTube, we'll put the link in the description. But we're giving away a 500 gift card to someone that fills out the survey. But again, go fill that out. It's very, very helpful to us. Again, ramseysolutions.com survey all right, going to the phones, we have Lisa in Houston, Texas.

[John Deloney]

Htone. What's up, Lisa?

[Rachel Cruz]

Hey, Lisa.

[Sierra]

Hello. Hi. How are y'all?

[Rachel Cruz]

We're doing great. How can we help?

[Sierra]

Good question. My husband and I are both in our late 50s. We have nothing saved for retirement. What can I do? Well, I should say that for myself, I'm clinically and legally blind, and he works offshore, so he's not home a lot. So I'm just trying to figure out what can we do?

[John Deloney]

Who helps with your caretaking while he's gone?

[Sierra]

Nobody. I'm here alone. Oh, good grief. Oh, yeah. I can maneuver pretty well, thank God.

[John Deloney]

My goodness. So you'll have no pension? No.

[Rachel Cruz]

Are you getting any security disability at all?

[Sierra]

No, no. In my life. We've been married for almost 37 years. I've only worked maybe four years, if you connect all the days together. So I don't have anything like that.

[John Deloney]

Does he, though?

[Sierra]

Yes, I'm sure he does. He's been working forever, but yes.

[John Deloney]

Okay, y'all need to combine your money because y'all are going to be retired together.

[Sierra]

Okay, well, that's what I'm saying. I don't have any money. I don't. Like I said, I haven't worked in years.

[John Deloney]

I know. I don't think you're hearing what I'm saying.

[Sierra]

Oh, no, I'm pausing that. Go ahead.

[John Deloney]

No, it's okay. Like, you haven't worked, but you've kept that household up while he's gone, right?

[Sierra]

Oh, right, yes, yes.

[John Deloney]

And so his money has the money that he's earned and the money. And it's Yalls money is what I'm trying to say.

[Sierra]

Right, right. It is. It is.

[John Deloney]

So we don't.

[Sierra]

We share a bank account and everything.

[John Deloney]

Perfect. So does he have a retirement with his company or does he have mutual funds or a 401 or Social Security?

[Sierra]

Social Security, I believe he would have that. As far as 401k, the companies with his. This company bought out two years ago, so I think they just started the 401k, but he hasn't gotten yet. He's been at this company for two years.

[Rachel Cruz]

Okay. Lisa, how much does he make a year?

[Sierra]

About 101,000.

[Rachel Cruz]

Okay, 100,000. And what kind of debt do you guys have?

[Sierra]

Well, I have a SBA loan on my home car debt. Do you even know the amounts or what?

[Rachel Cruz]

Yes, I would love to.

[Sierra]

Okay.

[Rachel Cruz]

Okay.

[Sierra]

The house, 85,000.

[Rachel Cruz]

Okay.

[Sierra]

The car, 45,000. Credit card debt, we have maybe three cars. All other, it's about 25,000. Student loans, 16,000.

[John Deloney]

And what you said there's an SBA. That can't be the right one. What loan do you have on your house?

[Sierra]

Yes, it's sba. What happened is we paid off the house back in 2014, but when Harvey hit and my husband's company folded back then, went bankruptcy, we had to live off of whatever money we had in his 401k, and he didn't get another job offshore until a year later.

[John Deloney]

So how did y'all get an SBA loan? Had he taken it out with his company? Y'all just took that money and used it for your expenses?

[Sierra]

It was for the. It was because of Harvey. The flood?

[John Deloney]

Uh huh.

[Sierra]

Yeah. We were flooded out, our whole city.

[John Deloney]

So, yeah, I was in Houston. I remember that.

[Sierra]

Yeah.

[John Deloney]

Yeah.

[Sierra]

Okay. Yeah. We didn't have house insurance at that time because he had lost his job a year before. And so therefore we took out the.

[Rachel Cruz]

85,000 to fix the home and to live off of. Okay.

[Sierra]

Yes, yes.

[Rachel Cruz]

Okay. And nothing saved you? Yeah. Do you any cash?

[Sierra]

Well, I do have 9,000 cash, but that's. I'm saving to get a roof. I'm gonna need a roof before August.

[Rachel Cruz]

A roof on the home?

[Sierra]

Yes.

[Rachel Cruz]

Okay. So, yeah, I mean, this is, this is a tough one, Lisa, just because of the reality of these numbers and where to get you guys in order to start looking into retirement. I mean, he probably will not be retiring anytime soon. Is his health. Is his health okay?

[Sierra]

It's okay.

[Rachel Cruz]

Okay. Yeah. So I think that you guys just need a game plan. I think you've, and to a degree of kind of just been floating and, you know, using debts to. To fix issues also, you know, kind of patch up things in life. And there's not really been a plan. So what I would do is I would sit down with you guys together tonight, and you both really need to be on the same page, like in a really deep way. John was mentioning that earlier, but like, the. What you're going to have to do here in the next seven, eight, nine, ten years is. I mean, it's, it's a decade of saying, hey, we're going to, we're going to have to do something completely different the way we've been doing money, and you both have to be bought into that. And so what it's going to look like, Lisa, is to be paying off the smallest debt first. So you're going to work on the student loans, the 16,000. You're going to next cut up the credit cards, start paying those off, smallest to largest. And if there's three of those. So the goal here is to write down all of your debt separately. So if you have two student loans, write them as two different loans, three credit cards, write them as three different. Because the goal here is to write out every piece of debt you have and you're going to pay off the smallest one first and you're going to work your way through. But I mean, this is without, with, without any extra income and just him. Yeah, it's gonna, it's gonna take you guys probably three to four years to get out of this. And so my, my challenge to you, Lisa, is, you know, we've talked to a lot of people on this show with a lot of different situations and a lot of obstacles in life. And we've talked to people that have been legally blind and that they, that they haven't gotten disability or they haven't been able to apply for government assistance or anything like that. But they, you know, they've done things creatively to think through. Hey, how in any way can I bring in an extra? So like even you, Lisa, being able to bring in $400, $500 extra a month, I mean, just something. Because the more that you guys sacrifice lifestyle, don't live on anything, and you throw as much as you can at that, that, that's, that's really the only way to get out of this. I wish there was a magic wand just to wave and change the whole situation. But your steps are gonna be, Lisa, to get out of debt first and then beyond that, save some cash and then start looking into retirement. That's why I'm saying it's going to probably be a good decade. And then I would start lowering my expenses. Because when you guys get to the point of retirement, I want you to be able to, yes, use Social Security, but also be able to cash flow your lifestyle at that point from the decisions you're making today.

[Sierra]

Okay.

[John Deloney]

And if you, if you were my mom, I, I don't want to over sensationalize this, but I have a couple of buddies that worked offshore out in the Gulf. And your husband's time out there is, is short. And you know that, right? I can't keep doing that late into his 50s. That's hard work. That's a young man's game. So y'all are making a six figure income. I would get maniacal about paying this stuff off. There's no reason to have a 45,000depreciating asset car in a driveway when you can't drive because of your vision. And he's gone a month or two or three at a time, right? That's a, that's a used Camry house. You don't need a big old fancy nice car on the driveway. You sell that ASAP and knock that dead off. But y'all just gonna have to get radical. And I hope he'll be there with you. I think the words I would start with are I'm very, very scared about our situation. Would you be willing to make a radical shift with me? Because, I mean, Harvey was in 14, it flooded, it was a zoo. Is 10 years, that's 11 years ago. And y'all are still haven't messed with those debts. So let's get on it. This show is sponsored by BetterHelp. Hey, folks, we all have stories. The family and cultural stories that we were born into. The stories of the things that have happened to us, both good and bad. And the stories that we constantly tell ourselves. And while we can't go back and change any of our old stories, the world is waiting to see what you and I are going to write next. As we enter 2025, I want to encourage you to examine your old stories and be intentional about the new ones you're writing. And I'm not talking about goals that are going to be long gone by February. I'm talking about writing new stories that will change your life forever for the better. And if you're like me, therapy can be a great place to explore the old stories, even heal from them and, and begin to write new ones. And if you're thinking about starting therapy, I want you to consider my friends at Better Help. BetterHelp is 100% online therapy and you can talk with a licensed therapist when it works for your schedule, you just fill out a short online survey to get matched with the licensed therapist and you can switch therapists at any time for no extra cost. So start writing a new story this month with better help. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H-E-L-P.com DeLoney.

[Rachel Cruz]

So we are really excited to announce that there is going to be a two night virtual event talking about investing. This is a subject that I know can be very complicated. In a way, it can be intimidating. And so being able to break it down kind of put the cookies on the bottom shelf, talk about investing in a way that makes sense. Sense. And then above that to be like, okay, how do we really build wealth? And so there's this event with Dave Ramsey and George Camel. And it's called Investing Essentials. And it's going to be absolutely fantastic. It's a virtual event. Again. They're going to walk through how to maximize your 401k and mutual funds. Get the most out of your money and invest with confidence. Plus, it's really the only place that Dave talks about his personal playbook when it comes to real estate investing and explaining how Dave has made hundreds of millions of dollars on property investments. Now you can get clarity and confidence when it comes to the subject of investing and building wealth long term. So make sure to check out Investing Essentials. It's happening on March 4th and 5th, and again, it's virtual. You can just watch it from your home. And Tickets start at 1 99, $199. You can get [e-mail] events or if you are listening on podcast or YouTube, click click the link in the description. This was one of our biggest events last year. Virtual events. People loved it.

[John Deloney]

Dave opens up his actual portfolio. Like, y'all want to know how I do it? Here's how I do it.

[Rachel Cruz]

Talks about it.

[John Deloney]

Yeah, awesome.

[Rachel Cruz]

It's really, really great. So everything again from investing into the market and real estate is that event. Ramseysolutions.com events. All right, going to the phones, we have Ben in Kansas City. Hey, Ben, welcome to the show.

[Sierra]

Good afternoon. I have a longtime listener. Really believe in your systems. I'm in a situation. I'm, last of my three kids is graduating from college in May and she is entering dental school. And over the years, I've heard you and Dave and all talk about the fact that be careful about taking student loans. And her dental school is going to be approximately $400,000 over the four years. And I'm trying to find out what solution or what ideas you might have to finance that so we don't have to take out the traditional school loans.

[John Deloney]

You're not going to like our answer.

[Sierra]

Okay.

[John Deloney]

I, I spent my whole career in higher ed. That's my, that's been my whole world until just a few years ago. And as my son says, I became a YouTuber and I also studied the mental health of attorneys, physicians, health professionals, and at the very top of that list is dentists. And I believe, personally, I don't, I didn't do a financial study. I believe it's because they get out of school with three or four hundred thousand dollars in debt and then they immediately go in and are told they have to buy a practice or buy into a practice or just to start Open up their own shingle. They got to take out another million dollar business loan to get this thing going. And then they find themselves on a 50 year treadmill that they will never be able to get off of. And so the thing I would implore you to do is please don't take out half a million dollars in debt. And I know it's your daughter's dream. I love dentists. I love good dentists. That's. I've got, I've bought many a dentist a nice car with the work that I've had done. But it's such a crushing burden and I've just had the blessing. Yet the heartbreak of sitting behind closed doors with Dennis, man, when their worlds are falling apart because they owe so much money.

[Sierra]

Yeah.

[John Deloney]

So there's not, there's not an easy thing I could tell you. I wish I was man, but I'm sorry, it's become so insanely cost prohibitive. And I do know I'm not one of these end of timers. Like if med school is expensive because you know you have to hire, you have to hire a surgeon who knows how to take a heart out of somebody and put another one in there. You got to hire that person out of the marketplace to go teach at a college, right? That's expensive. So med school's gonna be expensive. Dental school is going to be expensive. I want dental school to be done right and done great, all that. So I'm all about it. But I can't. Having seen the psychological toll of owing half a million dollars on day one of your brand new job, I can't. Good conscience say you just, just go find a student loan and go knock that out.

[Sierra]

So are there alternatives that we could look at as far as financing it? Can I help finance it? What other options are out there other than student loans?

[Rachel Cruz]

Well, with these types of schools, law. I mean, I put law school in this. You know, if you're getting your md, Dental school, you know, there's, there are situations where we've talked to people that have done it debt free, but they're very creative, they're very unique. It's a very kind of a small sliver of whether it's, you know, these types of working for the school, internships, like there's like different types of ways that you can do it, different programs, specifically when you're looking at law, specifically when you're looking at medical and even dental. And again, I, I'm, I don't even know where to direct you in that. But we have had people call and we've had someone, we had someone just a few months ago on debt free stage and they were, they went and I think it was their law degree they got, and they got it completely paid for. So again, there's like these creative alternatives, Ben, that you can look into that are out there. Again, they're very, they're, they're slim. It's there. What's, what's your finances been? Where, where are you and your wife?

[Sierra]

Well, I'm 64. My wife is 60. So approaching retirement, still working full time. We're completely debt free. So you know, we're, we, and we had a 529 account for each of our kids and that helped them through their undergraduate. And they all got scholarships as well. So that helped a lot. And we haven't even applied for scholarships yet for dental school. We're going to be starting that process.

[Rachel Cruz]

But is there anything left in any of the 529s from the other kids that have already completed school and are not going to go back?

[Sierra]

There is the, the total amount at this point in time is about $66,000.

[Rachel Cruz]

With all the 529s in your kids names, not just hers.

[Sierra]

Yes.

[Rachel Cruz]

Okay.

[Sierra]

Yes.

[Rachel Cruz]

Okay.

[John Deloney]

So I guess the creative adventure dude would be. And like I say, this is me spitballing. There's not an easy solution here. Until graduate programs decide we're going to intentionally and I think it's going to have to be a university and a public partnership and you know how I feel about partnering with a government on anything. But we all need doctors, we need good attorneys, we need good dentists, but we also need doctors and attorneys and a dentist and dentists that can breathe at night so they can sleep, so they can show up for the least of these and they can't with this kind of money. So if you, if you immediately walk in and so now you've got, you're down to 344 because you got 66,000. And if your daughter can punt her entrance for one year and get a job and make $50,000 and live with you guys and you can now you're down to 300. Right. So I would tell you to try to figure out a way to cash flow it. And then if you get some, get some scholarships down to a certain, I mean that's okay to figure it out. And if you have to postpone a year or two, they'll, they'll punt your admission for a year, they'll defer it for a year and you can figure it out that way. But again, it's a long shot. It's just hard.

[Rachel Cruz]

Yeah. And I would say for her, Ben, to go down that road, what John is saying, because I've. I know two people that are dentists and they had to buy a practice and, or pay into one. I mean like it was. There was so much debt on top of their school. Yes. Like there's. And you know, kind of unlike a doctor that just kind of plugs into a hospital. Right.

[John Deloney]

Unlike an attorney who can, could literally practice law from their house. You have to go buy dentist chairs and tools.

[Rachel Cruz]

Yeah, yeah. It's a, it's a different, it's. Yeah, it's a, it's a different road. And so I would implore her to go on this discovery and go and enter. Seriously go and ask and talk to two or three. Yeah. Dennis. And just ask because we did a documentary, Ben. And we'll put the link in the show notes here on the show called Borrowed Future. And one of the guys that we interviewed, he was a dentist. A million dollars in debt. A million dollars in debt.

[John Deloney]

Hey Ben, let me ask you this. How many schools has she applied to?

[Sierra]

Three different schools.

[John Deloney]

And so she got into just one or all of them are about 400, 000.

[Sierra]

She just got into one.

[John Deloney]

Okay. Is it a private school? Is it a for profit school? Is it a reputable school?

[Sierra]

It's a reputable school, but it is a private school.

[John Deloney]

Okay.

[Rachel Cruz]

Which is going to turn.

[John Deloney]

Yeah, maybe it is going back to the public schools that she didn't get admitted to and either asking the admissions counselor I know with the law school admissions folks I worked with, they were remarkable about telling candidates here's how your candidacy could have improved when they would, when they would circle back and ask. And maybe it's applying to more and more public schools across the country and just giving it a shot, especially if you defer enrollment for a year. But private is going to be your most expensive option. My hope would be you could find a great state dental school for a couple hundred grand and that's, that is what it's going to call cost. And I don't have any. I don't blink an eye about that. But then that would give your family a chance to rally around her and to do this without borrowing money.

[Sierra]

People tell me about their experiences with big banks all the time. Bad service fees that nickel and dime them to death and predatory lending that tries to catch them in never ending cycles of debt. So if you're ready for a bank that puts people over profits. Check out Fairwinds Credit Union. I recommend Fairwinds because they share our Ramsey values of helping people get out of debt and live generously. If you go to fairwinds.org Ramsey you'll see the combined checking and savings account bundle they created just for Ramsay fans. This account bundle is designed to help you take control of your finances and stay out of debt. And Fairwinds also has a great mobile app that's safe and secure so you can manage your transactions with peace of mind. Fairwinds has been helping people avoid big bank traps for 75 years, so go to Fairwinds.org Ramsey to learn more. It's easy to join no matter where you live. That's F A I R W I n d s.org/ramsey.

[Rachel Cruz]

The Ramsey Show Question of the Day is brought to you by why Refi? Student loan debt is a swamp of thousands of people that find it hard to escape from so you don't have to be another statistic in the student loan swamp. For distressed private student loans, there is why Refi and we trust Y Refi because they help you with a low fixed rate that you couldn't get anywhere else to help you really stick to your budget and get out of debt. So learn [e-mail] Ramsey that's the letter y r e f y.com Ramsey may not be available in all states.

[John Deloney]

Today's question comes from Jessica in Nevada. Jessica writes, my partner and I have been together for four years. Both of us went through horrific divorces. We live together and have part time custody of our young children from those marriages. We are about to have a baby together but do not want to get married even though we are in a committed loving relationship. How can we provide security and protection for each other and our baby in case something happens to one or both of us? My partner has a very well paying job. I'm a teacher and once we have a baby I'll probably work part time or stay at home for a while. So how can we provide security and protection for each other and our baby in case something happens to one or both of us? You're not like my answer, but get married and give your kid a legal foundation for which good gosh what a mess. I mean that's. I mean that's what you need to do. I mean are you go sit down with the wills and estates attorney. I don't know the state of Nevada. They may have some specific some different legal things but the greatest gift you could give your kid is to process and heal from the horrific divorces. And both of y'all go to the therapy that you need and get the care that you all need, and then don't throw the baby out with the bathwater. And so y'all had a. Like, you went through a really tough car wreck. That doesn't mean we never drive again, but that means we do need to get over the anxiety of getting in a car again. We got to practice driving. We got to get a new car, but we're gonna have to get back out on the road sometime. And so the safest thing you can do is give your. Is get married, and then if one of you dies, then this. There's legal protections across the board there. But I'd go talk to an estate attorney if y'all aren't going to do that. I don't have an answer for you other than that.

[Rachel Cruz]

Yeah. Because I do feel like some people, it's. It's like this avoidance of, like, I don't want marriage because it hurt last time, so we're gonna just not deal with it and do it our own way.

[John Deloney]

Exactly.

[Rachel Cruz]

And because of that, what you miss so many opportunities to probably heal from those traumatic divorces of what you're saying, and it actually causes you to face this fear of. Yeah. Of like, I don't want to do this again. I'm so scared. But yet we basically are married from, like, an emotion.

[Sierra]

Right.

[Rachel Cruz]

We're living together. Like, there's a playing house. Yeah, yeah, yeah.

[John Deloney]

But we think we've avoided a potential hurt because we don't have this.

[Rachel Cruz]

This legal standing.

[John Deloney]

Right.

[Rachel Cruz]

Yeah.

[John Deloney]

And what it's like. It's like, actually, a better analogy is we were driving in a car, and we got in a wreck, and we got hurt by our seat belt. And so we're gonna drive again, but we're never wearing a seatbelt again. And what that means is if you get another wreck, it's gonna be way bigger mess, and the likelihood you're gonna get hurt is way worse than what it was. And so you chose to get back into a romantic relationship. You chose to both share a house together, have a baby together. Both chose to make a human together. So the only thing you're not doing is protecting yourself with the. With the legal protection of a licensed marriage.

[Rachel Cruz]

Yeah.

[John Deloney]

And, dude, I've been getting this. I've been getting this question more and more and more like, I don't want to get the government involved. If you have a kid, the government's involved because they have. You made it one of their citizens. You've done that already, right? If you buy a property with somebody, you've got the government involved. So it's cool to be like, I don't want to move up. They're involved, so move on.

[Rachel Cruz]

Is there a site. What's the psychological like play here when you're not married and doing all of this? Right. Living together, having a baby together. And then from. Not just from a legal standpoint, but what does that do emotionally, psychologically? To say, like, oh, well, we've entered a marriage, is. Does something shift in that it can.

[John Deloney]

And if it's. You've got, you know, if, if they did go through horrific divorces, which I believe, then, yeah. If you have trauma surrounding an old behavior and you re. Engage in that new behavior, you're gonna have to deal with it, right?

[Rachel Cruz]

Yeah, yeah, yeah. But is there a level of commitment? Like, is there something about the seriousness?

[Sierra]

There's something about that.

[John Deloney]

It does. Yes. You. You have to be all in. I wish there was another way to say it, but if you're not all in, then when things get rocky, which they will, you so much easier to leave.

[Rachel Cruz]

Yeah, you hop so much easier to leave.

[John Deloney]

And so what you're. What you're almost guaranteeing is any bumps in the road in the future, it's just going to be messier. Except, quite honestly, Jessica, and she's in a worse spot. I'm gonna over gender this, but this, you're in the bad spot here because if his name is on this house and you don't have a job and you become just baby mama or living girlfriend and y'all break up, you're in a mess. Right. Having to re. Enter the workforce. So in a weird way, a marriage may protect you more right now. And so again, meet with an estate attorney in Nevada and work that stuff out individually. But yeah, man, I, I hate this for you because y'all are. Y'all are in a mess. You're trying to. You're avoid a real. You're trying to go swimming without getting wet, and you're already in the pool, man. You're in the pool.

[Rachel Cruz]

All right, let's go to Richard in Anaheim, California. Hi, Richard. Welcome to the show.

[Sierra]

Hey, guys. Thank you for taking the call. Really appreciate it.

[Rachel Cruz]

Absolutely. I know you're kind of south of everything going on there, but you guys good north?

[Sierra]

We're very safe.

[Rachel Cruz]

Is that Anaheim south of. It's south of Santa Monica, right?

[Sierra]

Yeah, we're Orange County. Yeah.

[Rachel Cruz]

Yeah.

[John Deloney]

Okay. Sorry. I used to be a geography teacher.

[Rachel Cruz]

John doesn't know his California geography. Yeah, how can we help?

[Sierra]

So here's what I'm asking. I'm going to be, I'm 50 years old basically with three children, you know, all toddlers under the age of 10. And you know, I'm tired of just the day to day rat race. My job, you know, pays for our bills, but I don't ever have anything saved. My wife is a stay at home mother taking care of the kids and we homeschool. Okay. It's very, very important to us. We're very religious when it comes to that. So that's a non negotiable for getting a job. But you know, I'm, I'm, I own my home. I have 300 grand in equity. You know, I had been on the job a long time and I'm just, you know, I'm just staying above water. Cost of living is just so expensive here in California. You know, my monthly nut that I have to pay, pardon my French, is you know, $8,300 a month. You know, my mortgage is 49, $4,900. I have, you know, one debt which is my car payment. You know, I owe like 17,000. My wife's car's paid off, you know, so I'm just. Hey, Richard, just at the point.

[Rachel Cruz]

Yeah. You feel like you're just running, running and there's no traction.

[John Deloney]

You should move.

[Sierra]

I want to move to another state.

[John Deloney]

And move to another state considering I.

[Sierra]

Did it and pay cash.

[John Deloney]

I did it. And it was. Some things were really great. Some things are really tough. And the good thing is that we got a chance to start over and make a new life. And the bad thing is is I went with me. So any of my old stuff that I didn't like about myself or my parenting or how I was as a husband, it came with me. So I had to deal with it here. But you should move.

[Rachel Cruz]

What's your wife say, Richard?

[Sierra]

My wife's open to it. It's just all her family is all within 20 mile radius within here in Southern California. So it's a little bit of a challenge.

[John Deloney]

That's what I do.

[Sierra]

Older.

[John Deloney]

It's not good. Yeah, yeah, it's hard.

[Sierra]

Yeah. And that's. It is hard. And you know, it just. I could go and pay cash for a house in another state, not have any debt. My income is going to stay the same in the next 10, 10 years. It's not going to fluctuate that, that much going up. And I make 137,000 a year.

[Rachel Cruz]

What do you do for a living?

[Sierra]

I do a national accounting.

[Rachel Cruz]

Okay. Okay. Yeah.

[Sierra]

Travel. I travel a lot, and I thought I was getting a second job on the weekends, but then I'll never see the kids because I'm. I travel.

[John Deloney]

Hey, Richard, Richard, Richard. Yeah, I can hear it.

[Sierra]

You.

[John Deloney]

You travel. And every minute you're traveling, you're thinking, I should be moving. And when you're at night and the kids are in bed, you're looking up other real estate in other states. Here's what you're doing. You're slowly making yourself crazy. Just move. And here's the beautiful part. If you hate it, y'all can move back. But right now, I think. I think you need to go ask your wife. Can we do. Can we do 24 months? Can we commit to a new town and a new. A new area? There's gonna be a lot of grieving. Family's not gonna like you. They're gonna get mad at you. I went through that. Doing holidays is gonna be weird. And so you may need to budget a little bit more for travel over the holidays. We'd have to do that, too. And then get out of there, man. Go do something else. And this has nothing to do with California. It just has to do with. You're done in this area and you want a little bit more, and you're.

[Rachel Cruz]

Trying to justify it any other way of, like, coming out. Yeah.

[John Deloney]

Stop being angry about it. Just make your next move, man. It's not worth. It's not worth your soul and just being angry. And.

[Rachel Cruz]

And there's no and that's the thing is, like, there's not a light at the end of the tunnel. It's this. It's just gonna be the same life.

[John Deloney]

Over and over to do something different.

[Rachel Cruz]

Yep. So change it. And you can always go back.

[John Deloney]

You can always go back.

[Rachel Cruz]

Yep. Well, thanks so much, the guys in the booth. Thank you, John. Always being a great host. And thank you, America. We'll be back.

[Sierra]

Mortgage rates have dropped, so if you're thinking about buying a home in the next year, contact your local Churchill mortgage team right now. If you wait, more people will be in the market competing for the same homes and potentially driving up prices. Churchill will help you do the math to be sure your budget is correct, making your home a blessing and helping you build lasting wealth. Learn more@churchill mortgage.com Churchill mortgage.com this is a paid advertisement in MLS ID 1591.

[Rachel Cruz]

In mlsconsumeraccess.org Equal Housing Lender, 1749 Mallory Lane, Suite 1.

[John Deloney]

Hundred, Brentwood, TN 37027.

[Rachel Cruz]

Live from Ramsey Solutions, it's the Ramsey show where we help people build wealth.work that they love and create amazing relationships. I am Rachel Cruz hosting this hour with my good friend and bestselling author Dr. John Del.

[Sierra]

What up?

[Rachel Cruz]

So we are answering your calls on life, money, relationships, career, anything and everything. Give us a call at 888-825-5225. And if you're listening live. Yeah, we, we are here for the next two hours. So we'll be, we'll be here by the phone.

[John Deloney]

So the last hour, I'm not gonna lie, was a, was a heavy one.

[Rachel Cruz]

It was a sad hour.

[John Deloney]

It was all my dogs. James Child cut his beard. It was a whole thing. It was a heavy, heavy hour. So we're gonna lighten it up a little bit on this one.

[Rachel Cruz]

It's gonna be great. And our board is full of calls from all around the country. So let's dive in. Let's have Michael start us off this hour.

[John Deloney]

And what's up?

[Rachel Cruz]

Michael in Chicago. Hey, Michael.

[Sierra]

Hi, guys. Thank you for having me and thank you for taking my question.

[John Deloney]

What's up, man?

[Sierra]

So my parents asked me for 40 to 50k for a down payment for a second home.

[John Deloney]

Oh God, no, don't do that.

[Rachel Cruz]

Okay, can my question.

[John Deloney]

Okay, go ahead.

[Sierra]

So they currently live about 10 hours away from the rest of us siblings and they don't have the down payment for that home. The reason for them not being able to move and be closer to us is my father is waiting to finish five more years at his job to collect a pension and they're wanting to have the flexibility to be closer but to have their own Place. I'm 25 years old, just got out.

[John Deloney]

Of my own debt.

[Sierra]

I'm really unsure what to do.

[John Deloney]

Yeah, I would say no.

[Rachel Cruz]

Why are they coming to you, Michael, and not another sibling?

[Sierra]

I'm the most financially secure right now. My other three siblings are living paycheck to paycheck or just getting out of their own student loans.

[John Deloney]

Okay, so what they're asking you is a couple of things. They've created a set of principles for their life. We're going to stay here for five more years. We don't want to be uncomfortable when we travel. We want to have our own place. Problem is they're grown adults but they can't afford these principles they've put into motion. So they come to their 25 year old child and said, you make our dreams that we can't Afford you make our principles concrete because we can't.

[Sierra]

Right.

[John Deloney]

And you. That just. It's not your job, by the way. This will mess up your relationship. I would tell you there's a financial reason to not do this, but the main thing is, dude, it will mess up your relationship with your dad.

[Sierra]

Worried about.

[John Deloney]

Yeah. So I don't. Do you have $25,000 in cash you can just hand them?

[Sierra]

Yeah, yeah. I, I'm debt free now. Quite a bit in a savings account right now that he's aware of. Obviously he helps me look at my financials. He's the only one I talk to my financials about.

[John Deloney]

You need to stop doing that, by the way. Yeah, he's violated that trust and so you need to get a smartvestor pro and have that person do that. I love my dad more than life itself. And him and I don't go through the, the intimate details of our finance, my, of our finances together. I have a person and he's got a person and that helps preserve our relationship.

[Sierra]

Right.

[John Deloney]

I hate this for you, man.

[Rachel Cruz]

How do you do? Can you predict at all, Michael, just from the pattern of who they are? Is it more your dad wanting this, you think, or your mom?

[Sierra]

So it's obviously a complex situation. All of us kids were all over the country when they decided to move down south away from us. And now my two of my siblings are getting married in the next few months and you know, wanting to have children obviously pretty quickly. So I think a lot of it has to do with them wanting to be closer to us during those times. Obviously being stuck at that place that they're at right now due to the. Their current position.

[Rachel Cruz]

Yeah, well, they wouldn't be able to come up a ton anyways because he's working still. Right. I mean, how often would they be able to come up realistically?

[Sierra]

Yeah, that's a good question too. And I, I don't, I don't know.

[Rachel Cruz]

And honestly, Michael, for them I'm like, I mean, just do an Airbnb for two weeks. Like if they're coming up, I mean, for them financially, that makes more sense instead of having an asset. You know, we had some friends and their in laws. Yeah, we're out of state. They weren't asking them for money, but they were considering buying a condo. And after they ran all the numbers, like, well, we're really probably realistically only going to be here a total of maybe six weeks throughout the year. Like if you put it all together, your kids are here, you can stay with them or Get a hotel. I don't know. It just from a financial standpoint, it doesn't make sense if you can't pay cash for a second home for it. Just to be there for your own leisure, but you're paying a mortgage on something that's literally just sitting there. It's not good. I don't, I wouldn't even suggest that to them. If they called us and we're like, hey, I want to take out a loan on a second home. Here's the situation. I would probably tell them, no, I wouldn't do that anyways. Let alone borrow the down payment from your son.

[Sierra]

Yeah, I'm, I'm planning to talk with them in a few months about it to the both of them and just let them know. But obviously, and you know, you know, wanted some advice.

[John Deloney]

I would, I would. The language I would use is thank you all so much for reaching out. And that means a lot to me that y'all have noticed how I've turned my things around. That's pretty cool. I've got some pretty clear financial goals that I'm trying to hit. And so I don't, I'm not, I'm, I'm not in a place where I can loan money to family members.

[Sierra]

Right.

[John Deloney]

And just any, any response they have is they've got to own it, man.

[Sierra]

Right. I think, I think the biggest thing for me is my parents have allowed me to be as, you know, in this position. And, and obviously I feel.

[John Deloney]

What does that mean? What does that mean?

[Sierra]

They really pushed and, you know, so how I got successful is just, I got lucky doing what I do for a job and lean on my parents a lot and they had to take out some loans to get me, you know, to the point where I'm at now. More specifically, it has to do with obviously just the job that I have now. And you know, I thought about changing my careers at one point and I'm glad I stayed with it because it's, it's been very, very successful.

[Rachel Cruz]

Yeah. And I hear that. And I think we can give. I mean, my parents paid for my college. Right. I mean, like there, there are things that our parents do to give us a leg up. That is 100% being aware of that and saying that and the gratitude in that. I mean that I'm not ignoring that at all. But also, Michael, you're a 25 year old man who made decisions with his income where you could have gotten a second home, two cars, and you could be living paycheck to paycheck, even Though you make a lot of money, you can make other decisions, but you haven't. You've chosen to do things to get out of debt and to save. And you've done those, Michael, they didn't do those for you. And your siblings are example of like your parents, I'm sure help them in certain ways as well. But they've chosen a different path. So like I give yourself credit. Do you know what I mean? Like you, you've. Yes, our parents have helped us and we will always have that gratitude and acknowledgements always. But also there's a point that we become adults and we get to make our own decisions. And from there is.

[John Deloney]

And this isn't even at that level. Here's what I know for certain. If Dave Ramsey and Sharon Ramsey, I don't know how this happened. They fell on hard times and they had nowhere to go. They have three amazing kids, one of them sitting next to me that would say, y'all come stay at the house. Right? We'll help you out, we'll help you get on your feet. This is not that situation.

[Sierra]

Sure.

[John Deloney]

And so your sense of. You're thinking of your parents investment in you as some sort of 401 that they put forward. And if they put that on you, shame on them. Parents don't pay for their kids college as some sort of vehicle, investment vehicle so that they get a demand, a return so that when they want a different color car, you have to be their bank.

[Sierra]

Right.

[John Deloney]

Your parents aren't destitute. They've made a series of choices starting a few years ago. And like, screw this, we're moving out of here. We want to move far away. And they did.

[Rachel Cruz]

Yeah, that's a great point. It's a second home.

[John Deloney]

This is second home.

[Rachel Cruz]

It's a, it's a luxury.

[John Deloney]

Yeah, you're right.

[Sierra]

Yeah.

[John Deloney]

So this, this isn't. If, if they, if you're dating for food, then I'm all about it.

[Rachel Cruz]

Yeah.

[John Deloney]

Like, we're gonna help out mom and dad. We're gonna honor our father. Mother, I'm all about that. But dude, if it's to like pay for their, their second, like loan of money for the second, I'm just, I'm gonna say no, man.

[Rachel Cruz]

And, and I'll say this to Michael. Knowing my parents with the grandkids, they're very emotional right now with this dream of, oh my gosh, our whole family's about to. There's my babies. Like, their emotions are probably driving this as well. And so for five years they're going to be okay.

[John Deloney]

Yeah.

[Rachel Cruz]

They're going to be okay.

[John Deloney]

They're going to be all right.

[Rachel Cruz]

Thank you.

[John Deloney]

Mom can come stay with you anytime she wants.

[Rachel Cruz]

That's right. Thanks for the call, Michael. Hope that helps.

[Sierra]

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[Rachel Cruz]

Welcome back to the Ramsey Show. I'm Rachel Cruz with Dr. John DeLoney and we are answering your calls about life, money, relationships, anything and everything. So give us a call at 888-255-225. Up next, we are going to Los Angeles and talking to Jessica. Hey, Jessica. Welcome to the show.

[Sierra]

Hello. Thank you very much.

[Rachel Cruz]

Absolutely.

[John Deloney]

How you guys doing?

[Sierra]

We're doing good. We're doing okay. We're, we're actually about an hour out from la, so we are not near the fires.

[Rachel Cruz]

Oh, good. Oh, so sorry.

[John Deloney]

Thinking about you guys. Man, what a mess. Mess. Mess.

[Sierra]

Yes, yes. Prayers to everybody who's going through losing their house. And yes, we've been praying for everybody for sure.

[Rachel Cruz]

How can we help?

[Sierra]

So our question is we, we did Financial Peace University probably about eight years ago. So our house bills are beautiful. I heard the guy earlier say that just his mortgage alone is $5,000. Our house bills all together come out to about 6,000 per month.

[Rachel Cruz]

Oh, good. Okay.

[Sierra]

But we, we started a business in 2020 and we got ourselves into $250,000 in debt, which is credit cards and personal loans.

[John Deloney]

Jessica, a hundred thousand.

[Sierra]

I know, I know. A hundred thousand of that is under the business. And then the other is we used our personal credit card, me and my husband. We actually did go through some turmoil after 2020 and we were not on the same page. So that is part of what happened with the debt. So now we started going to church, we're going to counseling. And there is major potential in the business, but we also have, in our home, we do have, I don't know, after, you know, closing costs and things like that. But we have some equity in our house. We owe 400,000 and we could potentially sell it for 650 to 7. So the question is, do we look into selling the house and getting the debt off of our shoulders and then growing the business, or do we grow the business and try to pay off the debt while staying in our home?

[Rachel Cruz]

I would do the latter. I wouldn't sacrifice the house for this because to a degree, the business is still a dream. Right. I mean, it's not. You don't have multiple years of it absolutely killing it. Right. I know it has potential, but I would not sell my house on potential. No. What. Give me, give me some numbers around the business. Like, what kind of business is it and where are you guys at in it?

[Sierra]

Okay, so it is a wellness center and med spa all in one. And the biz bills, the business bills, including paying ourselves, is 17,000 and we make on average about 20.

[Rachel Cruz]

Okay. Is that, Is this your only stream of income when you're paying yourself out of the business, or do you guys have other jobs? This is it. Like you both are full time in this?

[Sierra]

We both are full time in this, yes.

[Rachel Cruz]

Okay, so it's making 3,000amonth net, Is that what you're telling me?

[Sierra]

Yes.

[Rachel Cruz]

Okay.

[Sierra]

And that's if something doesn't come up unexpected in the business.

[Rachel Cruz]

Sure. So what's, so what's. What are you seeing in the business that's causing you to think there's going to be this upward trajectory versus it just continuing to be this. And you make three grand a month.

[Sierra]

Like I said earlier, my husband and I, we were not working together on the business, so I was doing it by myself.

[Rachel Cruz]

Okay.

[Sierra]

For the first three years. And just recently for a year, we've been working together. But we, like I said, started going to church and counseling, and now, as of now, we are on the same page and we're actually fasting right now for it. So we're looking for answers as far as if we. If we work together and we kill it in the business.

[Rachel Cruz]

Okay. Yeah, so I hear all of that. So not to. I don't mean to keep being devil's advocate here, because everything you've just laid out is incredible. I mean, I think from a spiritual perspective that you guys are united in that. You're Working on your marriage with a professional. I mean, like, you're doing so many incredible things. So is your thought process. Because we are becoming more of a united team within our marriage. How is that going to correlate to bringing in more business? Just, like, just because you guys. Just because you guys are just a great team? Is that what you're thinking? Like, we're just in a healthier spot, so it's going to show up in the business?

[Sierra]

Yes.

[Rachel Cruz]

Okay. Yes. Okay. Yeah. So I.

[John Deloney]

Please don't do that.

[Rachel Cruz]

I. I would. Yeah. I. I'm gonna need more evidence, Business evidence, not relational evidence that this business is really taken off. Because my hope is. Is that it will. But I think you need to see numbers, Jessica, first and foremost, in order to. To make this proclamation that, like. Yes. It's incredible. Right? So giving it another, you know, 12 months. Because you guys. How much are you guys making a year off of it? How much are you paying yourselves? Like, how much will you make this year?

[Sierra]

We are paying ourselves. And with those numbers that was paint ourselves the 6,000.

[Rachel Cruz]

6,000 total.

[Sierra]

I'm sorry, A month.

[Rachel Cruz]

A month between the both of you, total or each individually?

[Sierra]

6,000 between the both of us, total.

[John Deloney]

Your bills are 6,000.

[Rachel Cruz]

Yeah. How are you. How are you paying your bills? How are you guys eating?

[Sierra]

So that the. What we're paying ourselves with what we're paying ourselves, like, we're just barely, Barely, barely getting by.

[Rachel Cruz]

Okay.

[Sierra]

Yeah.

[Rachel Cruz]

Okay. So what I would do, I'm trying. If I woke up in your shoes and you have this belief, because you've put so much sweat equity into this business and. And like, you said, like, okay, relationally, like, we're killing it. And I think it's gonna help in the business. Like, give it a try. Like, I think. I think continuing to try. But you guys have to make more money, and it's not gonna come from the business because you're only pocketing three grand a month. I mean, like, you know, from a net standpoint, you're only netting three grand a month. And so you're barely above water in this. And so you guys are gonna have to find other streams of income. You're gonna have to get another job. Until this. Until this business. Yes. Surpasses. And then you guys can go full time back into it where that's your only job. But you guys, I mean, I would not recommend living on that tight of a tightrope. Right. You're walking a tightrope, basically, financially. So if I were you, I think I would feel more Comfortable. Yeah. Having a completely. Another stream of income and maybe that's him going and, you know, getting another. I mean, I know you want to work together in the business, but I don't know if you guys can afford that right now.

[Sierra]

Yeah.

[Rachel Cruz]

And so. Yeah, so I would. I would. And. And again, my prayer is that this does take off completely. And it. And it might. I mean. Yeah. I mean, med spouse in la. It's great. I mean, a great market for it. I mean, it really is. So, like, I. I really pray that it does. And then I pray that's killing it. And you're like, oh, my gosh, husband, I need you back here. Because I am overwhelmed with work. There is so much, you know, you know, so much happening. I need you back and you're gonna make more. You know what I mean? Like, when it starts making sense for both of you to be there, that's what I would do. And then I would not.

[Sierra]

For him to get another job. Yeah, to get another job.

[Rachel Cruz]

I would.

[Sierra]

Yes, I need to do that also.

[Rachel Cruz]

Do.

[Sierra]

I would I need to do that also, like a per diem. I'm a registered nurse, so if. Would I do that also?

[Rachel Cruz]

I would. To start knocking out some of this debt. Yes. Yeah.

[Sierra]

Okay. And then in the meantime. So is it pretty much doing financial university again? And then. Because what do we do with the people who are calling right now?

[Rachel Cruz]

The.

[Sierra]

The debtors.

[Rachel Cruz]

Are you guys starting to call? Are you guys behind on bills?

[Sierra]

Yeah, so remember we said that. Oh, so these. The numbers that I was giving you.

[Rachel Cruz]

Yeah.

[Sierra]

Was without what we owe the credit cards. So monthly we owe 10,000 in credit cards.

[Rachel Cruz]

And that's not getting paid?

[Sierra]

No. For the past couple months, we stopped.

[John Deloney]

Oh, God, sister. Yeah, lead with that next time you got to close your med spa. You can't afford it. You got to go get. Be a full time nurse and then work all nights and weekends too.

[Sierra]

Yeah.

[John Deloney]

You're about to get sued and they're about to start collecting on you. You owe $10,000 a month. How much credit card debt do you own?

[Sierra]

Do you owe that. That number at the beginning?

[Rachel Cruz]

We. 250,000.

[Sierra]

Yeah.

[John Deloney]

Yeah. Y'all. Y'all. Y'all are in a big. This is not a time to be make. Starting a business that nets a profit of $36,000 a year. Like, y'all need to go make a whole bunch of money right now. And I guess the. The good news for you is you've got a golden ticket in your pocket, which is you're a registered nurse.

[Rachel Cruz]

Yeah.

[John Deloney]

Work all you want. Make a bunch of money.

[Sierra]

Yeah.

[Rachel Cruz]

I mean, you guys can't. You can't afford your bills right now. And that's. That's the, that's the reality. And I'm so sorry that that's what it's come down to, but I mean, you can't get behind on these credit cards that you already have for another couple of months. So, yeah, you're. Yeah, both of you have to get full time jobs outside the med spa, and. And then maybe this dream can come back into fruition down. Down the road, but it can't. It's not a reality today. You can't do it. I'm so sorry.

[Sierra]

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[Rachel Cruz]

Welcome back to the Ramsey Show. When it comes to getting your money in order for the new year, there's really one foundational place, principle that you have to have when it comes to getting control of your money, and that is is a budget. And so when it comes to budgeting, when it comes to everything else, of getting yourself in control of your money. We're going to talk about all of that on our live stream on January 23. It is a free live stream called Take Control of youf Money. It's hosted by Dave Ramsey and Jade Warshaw. And it's this idea of paycheck to paycheck. Living is so such a reality for so many people. And to break that cycle to do something different, there are elements of budgeting. There's elements of getting out of debt. There's elements of looking towards the future and how you're going to build wealth. I mean, all of this is so, so key when it comes to winning with money. And so this live stream is for you and George Campbell and myself. We're going to be joining the live stream. A little bit into it, and we're gonna do some live Q and A. And so you'll be able to ask your questions and we can answer them right there. And when you sign up, you'll be entered to win our cash giveaway. So we're giving five people $4,000 each. So make sure you sign [e-mail] live stream or click the link in the description if you're listening on podcast or watching on YouTube. Again, that is January 23rd. It's our free live stream for the new year, kicking it off. And it's all about taking control of your money. All right, let's go to the phones and go to Catherine in Bellevue, Washington. Hey, Catherine. Welcome to the show.

[Sierra]

Hi. Thank you for taking my call.

[Rachel Cruz]

Yes, absolutely. How can we help?

[Sierra]

I am looking for a little advice on building my retirement starting at 42 years old.

[Rachel Cruz]

All right, so great. Okay, what are your questions around it?

[Sierra]

Basically, I just don't really know where to begin. There's so much information out there and where to get started. And I don't have any support at work as far as 401ks or Roth IRAs or anything like that.

[Rachel Cruz]

Okay, so your company does not offer a 401k.

[Sierra]

Correct, correct.

[Rachel Cruz]

Okay, so really? Yeah. The two. The two best streams. Do you own the business or you. You're an employee?

[Sierra]

I'm an employee. I'm a nanny and a house manager for celebrity up here.

[Rachel Cruz]

Oh, okay, that's great.

[Sierra]

Yeah.

[Rachel Cruz]

Okay. And how much are you making a year?

[Sierra]

170.

[Rachel Cruz]

170. Okay. Yeah. So for you, are you. Are you like a 10? Why am I blanking a 10? 4 10. 4, 1099. Thank you.

[Sierra]

I collect the W2 every year.

[Rachel Cruz]

Okay. Okay. So, yeah.

[John Deloney]

Do you have an llc? Like, would you apply for a separate. You're just a W2 employee going right into your.

[Sierra]

I'm a W2 employee. Yeah, it's a massive. They have a pretty massive network. So I'm one of probably 300 employees.

[John Deloney]

Okay.

[Rachel Cruz]

Okay. Okay. Yeah, I was gonna say, because if you were able to. Yep. Get around that in any way, you could do like a. Yeah. A self funded 401k or something for self employed, but I don't think that would work with the W2.

[John Deloney]

Does your employer offer 401?

[Sierra]

No.

[Rachel Cruz]

Okay. So, Catherine, if I were you, I would. Yeah, I would do the Roth IRA. You do? Yeah. Because I think it's 121,000 this year or I'm not sure in 2025. If you make above that, you'll have to do what's called a backdoor Roth ira. And so if you make above that income limit, which you do, you're going to have to. Yeah, just do what's called a backdoor Roth. And if you sit down with a. With a Smartvestor Pro, we can get you connected to one or at least look at options in your area after this call. But what you'll do is basically open up a traditional Roth and through all their fancy signages and all the things you kind of basically sign back over and you just basically turn it right into a Roth. Right there at that. Sitting. It just takes some signatures and it's completely legal, but it's just called the backdoor Roth ira. So that's an option that you can do. You can put up to $7,000 that. And then above that, I mean, from a tax perspective, there's not. There's not a ton you could do. I mean, I would be investing and so looking into Just some good growth stock mutual funds, and putting some money away. And so here, here's the key is 15% of your income is what you want to be investing. And so once you max out that Roth. And then I would look above that and say, okay, what's left of that 15%? And then I probably would. I would get. You know, you can do even an index fund or just a mutual fund, but when you sit down with a Smartvestor pro, they can really help you with that because the tax advantage is not great. You will pay taxes when you take that money out at retirement, which the Roth you won't. You'll be paying taxes before that. And so that's. Yeah, that's kind of the sucky part of it. But I don't. I. I mean, I don't know any other great option when it comes to that. That. That's what I would do, though. But I would continue to invest that 15%. And do you have any debt?

[Sierra]

I don't have any debt.

[Rachel Cruz]

Okay, that's great. Yeah. So our formula, just so you know, Katherine, kind of what we say is match beats Roth, beats traditional. So you always want to start with the match of like a 401k. You don't have that. So that means you'll just jump over to the Roth, max out the Roth, and then anything else, you'll just go to any type of, like, kind of traditional account. But there's not really great in the retirement lane for you that I can think of. But again, I would sit down with a Smartvestor pro and look at all of your options. But if I were you, I mean, even. Do you have a hsa?

[Sierra]

No, I don't.

[Rachel Cruz]

Okay.

[John Deloney]

Any health insurance at all?

[Sierra]

I do have health insurance, yes. I just don't have the savings account.

[Rachel Cruz]

Okay with it. Okay, yeah, because that's another option. You could put some money and let that grow and cash flow some medical expenses. That would be another avenue. Um, but.

[Sierra]

Yeah, okay.

[Rachel Cruz]

Yeah, that. That's what I would do if I were you.

[Sierra]

The combination of those two things, the backdoor roth and the 15%, will get me to the finish line in retirement.

[Rachel Cruz]

Yeah, absolutely it should. Again, I want you to run your numbers. I don't have. Right here. 42.

[Sierra]

I'm 42.

[John Deloney]

How do you think you're going to make 170 grand?

[Sierra]

There's lots of money to be made up here, so as long as I'm healthy and strong, I can do it.

[Rachel Cruz]

And you're single? Catherine, did you say yes? Okay, perfect. Yeah. If you go to ramseysolutions.com and just google Ramsey Solutions investment calculator and put that in, put in your numbers, it's actually very encouraging. Compound interest will shock you more.

[John Deloney]

I'll do it for you right now. What's your name right now? I mean, I'm sorry, what's your age right now?

[Rachel Cruz]

42.

[John Deloney]

42.

[Sierra]

42.

[John Deloney]

All right, let's pretend you worked until 67. How much do you have in investments right now?

[Sierra]

Nothing. I'm starting at zero right now.

[John Deloney]

Starting at zero. Okay, so what's Rachel, what is 15?

[Rachel Cruz]

Yeah, you'll get about 30.

[John Deloney]

About 30 a year you put away.

[Sierra]

Yeah.

[John Deloney]

Okay, so if you put away 30,000 and your annual return, let's just say 10% there.

[Rachel Cruz]

Put zero at that red.

[John Deloney]

Oh, yeah, yeah, yeah. All right, so I'm doing this for you with the Ramsey investment calculator. Good gosh. If you put away. Is that right? $30,000 between now and 67 and your annual term is about 10.

[Rachel Cruz]

It may be. Well, I guess 30 would be on 200,000. So put, sorry, put 25.

[John Deloney]

I'll put 20. Just for fun. You'll have. If you'll put $20,000 a year and you make 10% return on that from 42.

[Rachel Cruz]

Monthly. Is that monthly?

[John Deloney]

Oh, monthly. Yeah.

[Rachel Cruz]

I was like, oh, my gosh, we're all going to be.

[John Deloney]

Yeah, you'll have, you'll have two and a half million dollars.

[Sierra]

Oh, wow. Okay.

[John Deloney]

Yeah, so that's, that's a few points.

[Rachel Cruz]

And that's pretty conservative.

[John Deloney]

That's very conservative. You put $2,000 a month in retirement.

[Sierra]

Okay.

[John Deloney]

And you put that away and making 170 with no debt, you can put more than that. And if you feel comfortable doing a little catch up, we're okay with that, too. I would be a little bit paranoid being 42 with nothing. Right. So I'd want to see that quicker. So I might. If I have no bills and no expenses and I'm 170, plus a house manager, which means some of my meals might get covered. That means some of my bills might get covered. I might take that money and roll it over. But hopefully you hear the main thing here is intentionality with every penny you got.

[Rachel Cruz]

Yeah, for sure. And Catherine, I, I would really encourage you to sit down with the smartvestor pro. I do this once a year. My husband and I do, to look at retirement, run these numbers. And again, they, I give them so much credit because I swear every time we go, there's some new thing that they're like teaching me and they're like, oh, yeah, this, with this tax, you know, thing here. And you can do this with your giving. I mean, they're just, they, they, they live and breathe this stuff and they can be so, so helpful and just give you the confidence to know, okay, this is my plan. It doesn't have to be too complicated. It actually, you know, I can kind of set something up and I'm going to be great. So. You're doing great, Katherine. You've done an excellent job up until now, so that's awesome. If you stay on the line, Katherine, I'll have Christian pick up. And just make sure you get that website to our smartvestor pros and interview a couple there in that Seattle area and find one that you trust and that you love and start investing. Excited for you, Katherine. This is the Ramsey show.

[Sierra]

Hey, guys, I've got a big announcement. George Camel and I are bringing back investing essentials, our two nights virtual event deep diving into investing and real estate. Learn step by step how to get the most out of your 401k mutual funds and real estate investments. Because there's no better time to get the clarity you need to invest with confidence. Watch live on March 4th and 5th. Get tickets today at ramseysolutions.com events.

[Rachel Cruz]

Welcome back to the Ramsey Show. We're taking a call now from our Ramsey network app and this question comes from Cassie.

[John Deloney]

All right, let's hear from Cassie. I was listening to an older episode recently and it sparked a question. The caller was a young man with a family, well on the journey to financial freedom. The host congratulated him for doing so well and encouraged him to stay the course. And he said he had. He couldn't wait to plan a wonderful vacation in the future. Shouldn't there be some room for fun and joyful living while on the journey? Seems like most of your callers are so focused on the goal they forget to have fun.

[Rachel Cruz]

Oh, Cassie.

[John Deloney]

Well, that actually Ramsey in Latin means fun ruiner.

[Rachel Cruz]

We hate fun here. We don't want you to have any fun. So I think it'd be your definition of fun. I've just become such a huge fan of Arthur Brooks recently. I keep the best. He's just the best. And he talks about like in the latter part of your life, the second half of your life, the people that really do have the most joy is when their wants become smaller and smaller. That it's actually, it's not like, what's my next thing to get? It's actually, oh, yeah, I just don't need as much as I thought I did. Like the joy in that. So what I would say, Cassie, is like, during a time of sacrifice, of getting out of debt, it's not forever. On average, 18 to 24 months could be longer, right? Three years of your life, maybe. Your joy and what you consider fun looks different in America today. Fun is getting a new car, going on a trip. Like, you know what I mean? Like, there's a level of fun that I think we all are just like, oh, yeah, fun, fun, fun. But what if fun is different? What if fun is having friends over, which we're doing tomorrow night on a Friday night, order some pizzas, game nights, kids watch a movie after adults hang out and you're at a house, you're not paying 100 plus at a restaurant to take everyone out. You just. You switch things up. So I don't think it's paying for.

[John Deloney]

A big fancy date. My wife and I, when we were like, we'd go for long, long hikes.

[Rachel Cruz]

Yeah.

[John Deloney]

And we had hard conversations and we had fun conversations and we laughed a lot.

[Rachel Cruz]

Yeah.

[John Deloney]

And so, yeah, it just looks different. I think. I think Cassie here, underneath this question, what it sounds like is, hey, it looks like getting out of debt when you go scorched earth is really hard. And the answer to that is yes. And we will all tell you, yeah. If you owe a bank, if a bank is running your marriage and a bank is running your life, and a car dealership is running your work life because you have an abusive boss. But you can't quit because you already have that car that you promised the. The car company you'd pay back that I don't care how much, like, little sparkly vacations you're going on. You're not having fun. Your body is in fight or flight. It's trying to survive. And so, yes, for two years, for three years, sometimes. Jade's case, seven years. Right?

[Rachel Cruz]

Yeah. Right, Right.

[John Deloney]

Yes, it is scorched earth. The goal is to get to safety. Then you get to safety, man. Yeah, of course. I don't. I don't know. I mean, I don't know that you'll find a group of people that have more fun than we do. We're pretty off the rails. And fun looks different for everybody. I'm in the woods. Y'all are going on trips. Jaden, I mean, everybody's doing stuff. George is wiping his dog's butts because that's George does. But, like, we are all. Dave's in Cabo, right? Like, we're all over the place having so much fun, but our fun's not having us.

[Rachel Cruz]

When you have the fun, that's. Yeah. Being all loans. Right. And owed by, you know, all these banks and stuff. Yeah. To John. I think that's a great point, John. That's not. That's not fun.

[John Deloney]

It's not fun.

[Rachel Cruz]

And again, I want to expand our. Our viewpoint of fun. Like, I just think we get such. In this, like, rat in a wheel, new purse, new thing. I don't know. Like, it's all this stuff. They're like, oh, that's fun. That's fine. I'm like, is it really, though?

[John Deloney]

Yeah.

[Rachel Cruz]

Is it really. Is it really life giving? Because the life giving stuff probably isn't going to cost you a ton.

[John Deloney]

And we know this research says that. No, when you had. There's, there's. There's so only so many purses you can have. That's right now. Except for guitars and really fancy hunting rifles.

[Rachel Cruz]

Yeah. Then those.

[John Deloney]

Adding those do bring extra joy to your life.

[Rachel Cruz]

So much.

[John Deloney]

And that's, that's just. That's science. Just.

[Rachel Cruz]

Hashtag science in the brain.

[John Deloney]

All right, let's go to Indianapolis and talk to Sarah with an H. What's up, Sarah?

[Rachel Cruz]

Hey, Sarah.

[Sierra]

Yes, hello. How are you guys doing?

[John Deloney]

We're doing all right. How about you?

[Sierra]

Okay. Now, until 48 hours ago, I felt okay about my situation. Then I started watching your program on YouTube and now I'm kind of freaking out, so I want to, like, get some feedback here.

[Rachel Cruz]

Okay?

[John Deloney]

Hold on, hold on. We. Do me a huge favor.

[Sierra]

Excuse me?

[John Deloney]

Do me a huge favor. Take a humongous deep breath. As deep as you can.

[Sierra]

Okay? Hold it.

[John Deloney]

5, 4, 3, 2. Let it out.

[Sierra]

Okay.

[John Deloney]

All right. We're on your team. We're on your team. All right. What's. What's keeping you up at night?

[Sierra]

Okay. Now, I've been in a difficult marriage since day one. And in 2012, I filed for divorce. And then to get a peaceful divorce without really any problems, I had to, like, give up me. Like, mainly everything. All I got was a car, $10,000, and I had child support. I had to give up everything else. My father helped me, and I was able to get a house and everything moved on. Okay. But under pressure, we kind of got back together. We stayed together for like, maybe four years or so. Things were going. So we decided to get married.

[Rachel Cruz]

Remarry.

[Sierra]

That period. Excuse me.

[Rachel Cruz]

Remarried? Is this. Are you talking about your ex or a different guy?

[Sierra]

No, not. Not a different guy.

[Rachel Cruz]

Okay.

[John Deloney]

I Got remarried.

[Rachel Cruz]

Get remarried in what? 2020.

[Sierra]

Okay. Around 2019. Yeah, 2018. 2019.

[Rachel Cruz]

Okay.

[Sierra]

And then during that time, my husband was paying the bills on his house because he did not sell his house. And I was paying all the bills on this house I'm living in now. When he sold his house, he started paying the bills on this house.

[Rachel Cruz]

Okay.

[Sierra]

Now, after we got married, things got worse again, like, and it's not working out. So I'm going to file for divorce again. And my kids now graduated. They have their own lives. So I see it's going to be easier to get a divorce. The same thing here. He says, if you go to court, I'm going to fight you over the house because it's in my name and I'm going to make everything difficult. So I decided, guess what? Let's just get a divorce. I don't want anything from you and I'll just keep my stuff. I forgot to say something. When we got back together, our finances stayed separate. Like, we're no longer have the same bank account or anything. We're totally separate.

[John Deloney]

But what house is he going to fight you over? The one that you and your father purchased together?

[Sierra]

Yes.

[John Deloney]

Why? Is his name on that, on that home?

[Sierra]

No, his name is not on the home.

[John Deloney]

Okay. Yeah. So what's your, what's your question? We're coming up against the clock. What's your question now?

[Sierra]

Now? My question is now, my plan was, now I'm going to keep the house.

[John Deloney]

Okay.

[Sierra]

And I have $100,000 in the bank.

[John Deloney]

Okay.

[Sierra]

So I had it in a cd, but I got some advice from the bank and they said you can invest it in the market and it can get you like, money and stuff. So I was wondering whether I will be able to kind of be independent on my own because he's the one who brings most of the money, not me.

[John Deloney]

Yes. If you, if you get divorced, you have a hundred thousand dollars. And so I won't get into the investment side of it. You have a hundred thousand bucks. If you get divorced, the first thing you need to do is to create your own checking account and your own budget.

[Sierra]

I do.

[John Deloney]

And ask where is money coming from that I'm going to use to survive, pay my bills. Do you have a job?

[Sierra]

Okay. Yes, I'm a teacher. I have a master's degree. I'm a teacher.

[John Deloney]

Amazing. Amazing. My wife's lifelong teacher is amazing. So what you're going to have to do is to create a world where that what you make as a teacher funds your life, pays Your house note, whatever your remaining mortgage is, pays your light bill, your electric bill, your food, and any travel you're gonna see to go see your grandkids whenever your kids have babies. And the $100,000 should be invested. And I want you to get with a smartvestor pro. If you hang on the line, we'll get you, we'll get you connected there. Okay?

[Sierra]

Should I cut on everything as long as I have a mortgage or can I spend money? For example, go get my hair done. Get my.

[John Deloney]

It's gonna all depend on you sitting down and doing a budget.

[Rachel Cruz]

Yeah. So, Sarah, what I would live off of, I would. I would keep this hundred thousand. I would take some of it out of the market for an emergency fund. I would get 6 months of your 4ish months of your expenses. So you have to do a budget with John saying. And you have to say, okay, here's how much food costs, here's how much my mortgage is, here's how much the lights are going to be. Here is everything that I spend money on in the month. This is how long, this is how much it's going to take me to live. And you have to make sure that the salary you make, that your income every month can cover those bills. And ideally that you have margin and you're not living right up at that paycheck. And so having that margin is going to be really key. And so that, that's going to be step one. And then from there I would multiply that by four, whatever that number is, take some of that cash up from that hundred thousand, put it in a high yield savings account for a emergency fund, and then start thinking about investing above that.

[John Deloney]

Hang on the line here. So we'll get you hooked up with a smartvestor pro. And actually we're going to pay for you to have one session with one of our financial coaches and they'll walk you through the budgeting part of this. Hang on the line. We'll get you taken care.

[Rachel Cruz]

Hey, what's up, guys?

[Sierra]

Episode 2 of 90 Day Money Makeover is available right now on YouTube. This series follows real people as they take on the challenge of transforming their.

[Rachel Cruz]

Finances and their lives in just 90 days.

[Sierra]

In this episode, watch as they face new obstacles, celebrate wins, and push forward on their journey. And of course, I'll be walking alongside them every step of the way. Okay, now here's a little sneak peek of what the new episode is all about. Me and Dara, back in November, have a new son, a baby boy. We'd have $87,000 in debt. I've been in debt since I was, like, 18 years old.

[John Deloney]

I gave birth to him.

[Rachel Cruz]

I knew.

[Sierra]

I said, I cannot leave him with.

[Rachel Cruz]

Someone that I don't know. I don't care if we're eating rice and beanson.

[Sierra]

I told him there was no going back. When you guys called into the Ramsey show, it was like, I think that we should push them harder. Baby Jonathan being born is a wake up call for us to finally change.

[Rachel Cruz]

I can't go on another month.

[Sierra]

Wake up call, you know, the next 20 years.

[John Deloney]

This is important. You know, we gotta get this right.

[Sierra]

You want to pay off your debt? You want to get your time back? You want to get your home? Nothing. You search those three.