"We're In $580k Of Debt At This Point"

Summary

The Ramsey Show – Episode Summary

Episode: "We're In $580k Of Debt At This Point"
Date: January 15, 2026
Hosts: Rachel Cruze & Ken Coleman (for Dave Ramsey/Ramsey Network)

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Overview

This episode of The Ramsey Show dives deeply into callers’ real-life financial emergencies, focusing on practical and emotional advice to help listeners get out of debt, make wise spending decisions, and transform their financial lives. The hosts, Rachel Cruze and Ken Coleman, field a wide range of calls from people dealing with overwhelming business debt, marital infidelity intersecting with money management, fear of risk in investing, elder financial abuse, and more. The typical Ramsey blend of firm, direct advice and empathetic encouragement is on full display.

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Key Segments & Discussion Points

1. Caller: Jimmy in Los Angeles – $580K in Business Debt

[00:47–09:01]

• Situation: Jimmy, a retired military veteran, started an auto detailing business and quickly accrued $580k in debt after trying to scale rapidly, taking on expensive SBA loans and racking up credit cards.
• Key Details:
  • Took $220k loss in first year; followed by a 35% net loss the next year.
  • Using his $5,500/month military retirement and wife’s $4,500/month income, totaling $10k/month.
  • Business still running at a loss; using personal resources to plug gaps.
  • $165k in credit cards; remainder is SBA loans and line of credit. Only $50k in equipment (possible collateral for loans).
  • Considering bankruptcy, conflicted over shutting down vs. persevering.

Insights & Advice:

• Ken draws parallel to gambling:
  "At some point you just got to go, this ain't it. I'd rather pack it up now versus try to... It's like a gambler where they lost a bunch of money in Vegas and they go back to win even bigger to get out of this mess." (02:45)
• Rachel: "A 35% loss. I mean, this is just a very expensive hobby at this point. This isn't a business." (04:15)
• Rachel challenges the couple’s “united front” attitude:
  "You guys aren't living in reality. Like, she should be kind of flipping out. You're feeling supported and doing something that's continually getting you guys deeper and deeper into a problem." (05:52)
• Ken emphasizes personal responsibility for business debt:
  "Look who signed it. It’s you. It’s not Car Detailer LLC. They’re all going to come for you." (07:45)
• Sell equipment, do not add further debt even in false hopes of “breaking even”, possibly seek other income.

Memorable Moment:
Jimmy, candidly self-aware: "I have a PhD in being a bozo." (05:05)

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2. Caller: Caroline in Detroit – Financial/Emotional Infidelity

[10:24–20:12]

• Situation: Caroline discovers her husband has been secretly spending fun money for years communicating with a prison pen pal (a woman he did not know previously). She feels betrayed both emotionally and financially.
• Key Issues:
  • Secret lasted three years, discovered via suspicious phone numbers/phone bills.
  • Husband used his discretionary “fun money”, draining it with nothing to show.
  • Trust is deeply broken; marriage is shaky.
  • They’re in counseling; discussing repair but also physical home challenges (tree fell on their house).

Advice:

• Rachel advocates for full financial transparency/separation until healing/trust can authentically begin:
  "Until you know the marriage is going to survive this, I almost would just have my own checking account, Carolyn." (18:14)
• Ken’s practical tactic:
  "Pull his credit report... and freeze his credit on top of that. Transaction alerts—every time a cent comes out, you get a text message." (16:56)
• Both hosts reinforce the need for individual therapy and “full disclosure”.

Memorable Exchange:
Ken: "He wasn’t trapped. He was willfully doing this on his own volition." (12:07)
Rachel: "Some visible evidence for trust to be rebuilt... That’s not you being overcontrolling. This was broken trust." (17:29)

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3. Caller: William in Athens, GA – Investing Hesitation with $400k Savings

[21:39–25:46]

• Situation: William, 63, debt-free, has $400k sitting in checking/savings, nervous to invest because of a poor upbringing and fear of risk.
• Key Points:
  • Pension plus wife’s income covers all living expenses.
  • Has never invested outside of tithing.
  • Offered CDs and annuities at the bank but is cautious due to loss of liquidity.

Advice:

• Ken: "There’s actually more risk with it just sitting in checking; inflation has been eating up that $400k for years." (23:51)
• Rachel: "You have a long life to live. You could easily be living another 30 years... Be very much considering investing." (26:16)
• Directs him to connect with an investment professional.

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4. Caller: Phil in Salt Lake City – Elder Financial Abuse by Brother

[44:08–52:14]

• Situation: Phil discovers his older brother has been fraudulently taking out loans/credit cards in their nearly 70-year-old parents’ name, adding more than $100k in debt (plus mortgage). Brother is potentially abusing drugs and evading family/police.
• Key Issues:
  • Parents enabling behavior (mother signs documents unwittingly, father disengaged).
  • Phil not legally empowered (no financial POA); can only urge action.
  • Unclear if family will pursue elder abuse/fraud charges.

Advice:

• Ken: "First I would freeze their credit yesterday... Contact every lender... file police reports for elder abuse/fraud." (45:53)
• Rachel: "You're going to have a wonderful, logical game plan... The problem is if they choose not to move forward, that's their fault. That's their decision—not yours." (48:15)

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5. Segment: Trump Floats 10% Credit Card Interest Rate Cap

[65:20–74:07]

• Overview: Discussion of Trump proposing a 10% cap on credit card interest.
• Analysis/Reality Check:
  • Hosts highlight the policy is not practical/legal via presidential power, only Congress could legislate this.
  • Even if passed, banks would likely raise fees or tighten lending criteria, hurting those who need credit most.
  • Rachel: "Don't get your financial advice from presidents or banks." (73:36)
  • Ken: "The only way to make this better is to pay off the debt, like we preach." (69:57)
• Memorable Analogy: Ken compares the proposal to a knee brace for a torn meniscus: "It’s helpful, but doesn’t solve the underlying problem."

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6. Debt, Real Estate, Investing & Wealth-Building Q&A Highlights

Throughout Episode

• Debt Payoff: Hosts repeatedly stress root-cause behavior change: shifting debt, not addressing underlying spending/saving, or expecting outside fixes (lower interest, government programs) will never solve personal finance problems.
• Investing: Wait for clear, wisdom-based progress—don’t let fear of markets or of "missing out" paralyze wise action.
• Big Wins:
  • Samantha: Married couple in late 20s, already paid-off house, $30k in savings, evaluating next step—get a second home or scale up investing/giving. (95:50–102:05)
  • Kurt: Canadian caller, net worth $2 million by age 45 ("Live on less than you make. Make it, use it up, do without.") (107:43–115:16)
• Practicality vs. Ego:
  • George: "Sell the truck and camper tomorrow—get yourself a beater. You just gave yourself a $2,300 monthly raise." (124:20)
  • Rachel: "You called the show, and the show is far from normal. We are all about getting out of debt, making deep, deep sacrifices." (126:43)

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Notable Quotes & Timestamps

• Ken Coleman (On Sunk Cost Business):
  "At some point you just got to go, this ain't it. I'd rather pack it up now versus try to... It's like a gambler..." (02:45)

• Rachel Cruze (On Enabling vs. Support):
  "You guys aren't living in reality. Like, she should be kind of flipping out..." (05:52)

• Jimmy (Self-Deprecating):
  "I have a PhD in being a bozo." (05:05)

• Ken (On Financial Infidelity):
  "He wasn’t trapped. He was willfully doing this on his own volition." (12:07)

• Rachel (Radical Transparency):
  "There has to be a level of knowledge for you to keep moving forward in this marriage when it comes to building trust." (17:29)

• Ken (On Rate Caps):
  "Lowering your interest rate doesn't solve the problem. How many times do we get a call, should I move my debt around? So for that reason, this feels like politics to me." (67:38)

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Guidance Patterns & Overarching Themes

• Personal Responsibility: Personal change—behavior, mindset, and choices—not external fixes, are key to financial turnaround.
• Direct Tough Love: Compassion for emotional pain, but bluntly calling out denial, enabling, and dangerous hope in windfalls.
• Clarity Over Convenience: Be honest about your situation (even if ugly), stop hiding or rationalizing losses or problems.
• Speed of Cash, Not Debt: For business growth or personal purchases, avoid debt—it’s a recipe for fragility and stress.
• Beware Escalation of Commitment: Don’t double down on failing ventures hoping to recover losses; “stop loss” discipline is vital.
• Marriage & Money: Financial secrets are almost always marital/relational problems first—trust and transparency must be rebuilt hand in hand.
• Legacy and Wealth Building: Building wealth is about slow, steady, boring habits, not moonshots.
• Policy Skepticism: Don't count on political promises or outside intervention to save you from financial messes.

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Wrap-Up

The episode brings a sobering, occasionally humorous, and ultimately hopeful message: No matter how bad the mess—or how “normal” your current struggle seems—there’s a clear way out: own your reality, stop digging, change your behaviors, and chart a wise, disciplined course forward. The Ramsey perspective remains unyielding: anyone can build wealth and regain control, one intentional decision at a time.

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Navigation / Timestamps

• $580k Business Debt Call: [00:47–09:01]
• Emotional/Financial Infidelity: [10:24–20:12]
• Investing Hesitation: [21:39–25:46]
• Elder Financial Abuse: [44:08–52:14]
• 10% CC Rate Cap Segment: [65:20–74:07]
• Millionaire Interview (Kurt, Calgary): [107:43–115:16]
• Practical Q&As: Sprinkled throughout; e.g., debt payoff (104:46–105:31), newlyweds & housing/debt (83:01–85:34), etc.

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For anyone facing overwhelming debt, confused about investment, or worrying about family money battles, this episode provides both a wake-up call and a pathway forward—with clarity, candor, and hope.

Transcript

[Dave Ramsey]

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

[Rachel Cruze]

Normal is broke, and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit union studio, this is the Ramsey show, and I'm Rachel Cruz hosting this hour with my good friend and co host of Smart Money Happy Hour, George Camel. And we'll be answering your calls. So give us a call at 888. 825. 5225. And we'll be talking about your life and your money. First up, we have Jimmy in Los Angeles. Hi, Jimmy. Welcome to the show.

[Jimmy]

Hey, Rachel. Hey, George. Big fan of Yalls. Thank you so much for what you do. I really appreciate everything that you guys do, and I've gained a lot of knowledge these past few weeks learning more about what you guys do and how to, like, financially plan my future. But I've kind of gotten myself into a sticky situation, and I'm just trying to see if I can, like, maybe get some guidance on trying to find a way out.

[Rachel Cruze]

Sure. So what's going on?

[Jimmy]

So late 2024, you know, I retired from the military, served for 22 years, and earlier that year, I decided to open up, like, a kind of like a shop and where we just do, like, detail services, paint protection, film wraps, and things like that. And, yeah, it actually cost me a lot of money throughout that year, I'm sure. How much to the point? Well, we're at a point now where we're, like. Like $580,000 in debt at this point.

[Rachel Cruze]

Okay.

[Jimmy]

That first year, we took, like, a $220,000 loss. Admittedly, I think I hired too many people full time, kind of went in too fast and too hard on that, and it kind of really hurt me. So I had to take, like, an SBA loan to kind of get caught up and used a bunch of credit cards. And then the year after, we netted. So just last year, we netted about 35% net loss. So we had another net loss, but it was a better net loss.

[Rachel Cruze]

And you're still throwing money at this thing.

[Jimmy]

I'm still throwing money at this thing. I mean, it seems like you're. Oh, it seems like we're. We're kind of, like, making a way out of that.

[Ken Coleman]

And, I mean, what's. What's the stop loss here? A million dollars in debt, and then we'll call it quits. I mean, at some point, you just got to go, this ain't it. I Would rather pack it up now versus try to. It's like a gambler where they lost a bunch of money in Vegas and they go back to go like, well, now I got to win even bigger to get out of this mess.

[Jimmy]

Right. That's what I was afraid of. And, you know, through this process, I kind of been, you know, free labor, so I haven't been getting paid by my business.

[Ken Coleman]

On top of that, you're. How are you paying your bills? Through more debt. Do you have retirement through military?

[Jimmy]

I do.

[Ken Coleman]

Okay. What's that per month?

[Jimmy]

My wife. My wife works too.

[Ken Coleman]

Okay.

[Jimmy]

I pull in about 5,500 take home per month from my military retirement. And then what she makes about. She makes about like, take home 4500ish per month.

[Ken Coleman]

So 10 grand a month is what we're taking home. And that's, that's the hard truth is that's the number we need to actually pay down this over half million dollars in debt.

[Caller]

Right.

[Ken Coleman]

What does the trajectory look like for revenue?

[Jimmy]

It's, it's, it's looking positive because, you know, last year, like I said, even though we had a net loss, it was a smaller net loss. And I think this year we'll be in the positive. But I'm struggling because, like, I've been working for free for two years, essentially, in this business.

[Rachel Cruze]

Well, and digging deeper in debt. I mean, 35% loss. I mean, this is just a very expensive hobby at this point. This isn't a business.

[Ken Coleman]

Even if it breaks even, this isn't worth it now, right?

[Rachel Cruze]

Yeah. Jimmy, when you project out, what do you. With all these loans, how much is the. Is it half a million now or how much debt in general? I'm just trying to. I'm trying to project out, like, what by, I don't know, in the next, like, month or two, like, how much total debt are you guys in?

[Jimmy]

So I've written everything down. So as it stands right now on the business side, we're at $580,000 in debt.

[Ken Coleman]

I know.

[Jimmy]

I have a PhD in being a bozo.

[Rachel Cruze]

How much of that is credit card? How much of that is small business loans?

[Jimmy]

So $165,000 of that is credit, and then the rest is split up between SBA working capital and a line of credit.

[Rachel Cruze]

Okay. Because I'm just thinking the credit cards, you know, if you get behind those, will be easier to settle than some of these loans directly the SBA loan from the bank.

[Ken Coleman]

What does your wife think about this? What does she think you should do?

[Jimmy]

She's not very happy with it, but she's been very supportive and very understanding throughout the process. So an absolute blessing to me. Definitely not an added stressor. She's been an anchor for me for sure.

[Caller]

Yeah.

[Rachel Cruze]

I mean, a little bit, Jimmy, But a part of me also is like, you guys aren't living in reality. Like, she should be kind of flipping out. Do you know what I mean? I'm like, I mean, I understand the anchor of feeling supported, but you're feeling supported and doing something that's continually getting you guys deeper and deeper into a problem versus saying, stop, stop where we are and we're done. Because we can't just keep doing this. And the problem, too, is that the guesswork is for what you're possibly going to do this year. I mean, you know what I mean? It's like, you can't. You can't predict it. And, and so you guys either have to say, we're going to try to stick this out for a year with no more debt. No more debt. And if that means we have to close up parts of the business in order to do that. Okay. To see if we can get some revenue in here. But you guys can't just keep digging yourselves in a hole and expect just to come out the other side.

[Caller]

Right, Right.

[Rachel Cruze]

So I would sit down and you guys, I mean, you either need to make a decision if you were to stop this completely. Guys have things that you can sell off in the business. Like, is there any way that you could gain any of this money back if you were to close shop today from, like, a real estate perspective or, like, you know what I mean?

[Ken Coleman]

Equipment you have in the business?

[Jimmy]

Yeah, I have about $50,000 worth of equipment, but I. I think that's tied up in the SBA loan. They. They would have to, you know, I'd have to get permission to. To sell that off to pay that loan down.

[Rachel Cruze]

Yeah.

[Jimmy]

And that's why I was like, worst.

[Caller]

Case.

[Jimmy]

I really want to avoid bankruptcy. It's definitely not my first choice. And I even thought about getting a job so I can just get some sort of income and then using that job to pay down this debt. But since it's a business, I don't really want to create murky waters with me paying off business debt with my own personal income.

[Rachel Cruze]

It's all tied to you anyways. Jimmy.

[Ken Coleman]

Go back to the papers. Look who signed it.

[Rachel Cruze]

It's you. Yeah. Ye. I mean, it's all. They're all going to come for you.

[Ken Coleman]

It's not like car detailer llc. Well, they owe the money, not Jimmy.

[Caller]

Right.

[Ken Coleman]

It's guaranteed by you. And so that's the. Yeah, that's the hard news is you have to now picture this like it's just consumer debt that you took on. And so you're going to begin the business of cleaning it up. And I hope that you can find a new job that can create a better income that will allow you to clean this up faster. But if you just even sell the 50 grand worth of equipment that's 10% of your debt you just knocked out. And so you got to start making progress. I would not sink more money into this thing just to be 600,000 in debt. 650. And hope we have less of a net loss. Oh, I'm heartbroken for you, man. Thank you for your service too. 22 years, that's. That's incredible. I hope you guys can climb out of this.

[Dave Ramsey]

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[Ken Coleman]

This is a paid advertisement in MLS ID 1591 nmlsconsumerexas.org/equal housing lender.

[Rachel Cruze]

Up next, we have Caroline in Detroit. Hi, Caroline, welcome to the show.

[Caller]

Hi. Thank you for taking my call.

[Rachel Cruze]

Absolutely. How can we help today?

[Caller]

Well, so I recently found out that my husband's been misusing his fund money to pay for communicating with a prison pen pal and.

[Ken Coleman]

Sorry, did you say prison pen pal?

[Rachel Cruze]

Yes, like, is that a lady in prison?

[Caller]

Exactly.

[Rachel Cruze]

Did he know her before she was in prison?

[Caller]

No. I guess it was like some ads that popped up, he said on a site. So he got in this cycle and he stopped. But I'm wondering, how do I move on from this Financial and emotional infidelity now and trust.

[Rachel Cruze]

Yeah.

[Ken Coleman]

Did he come forward with it, or did you catch him? Like, where is he at with this?

[Caller]

So I. I caught him because I found some suspicious numbers on. On our phone bill. And so he had been, like, broke all the time, like, just waiting for, you know, couldn't wait for that next, like, fun money to come, but had nothing to show for it, so I. I couldn't figure things out.

But though those.

Yeah, I get. I guess it's. It's a thing that people do, and. And he was kind of, like, trapped in it because I didn't know, so he couldn't tell me. He couldn't, you know, do his phone number. I mean, he just.

[Ken Coleman]

No, he wasn't trapped. He was willfully doing this on his own volition.

[Caller]

Yeah, you're. You're right. You're right.

[Ken Coleman]

Nobody, like, was forcing him to continue this weird prison pen pal.

[Rachel Cruze]

How long was the relationship for?

[Caller]

I'm embarrassed to say I didn't figure it out for three years.

[Rachel Cruze]

Okay. And it was the same woman.

[Ken Coleman]

Is this a scam or is this a real thing? Because it feels like a scam.

[Caller]

So it actually is a real thing that people are doing. Like, I guess the purpose of it is to get people to get out and communicate, you know?

[Ken Coleman]

So who's making the money paying?

[Caller]

Exactly. So then they're. They're. So they. They use the money to put on their records or to buy things in their commissary or. Or who knows what else. Like, I'm not really sure, but it kind of, like, funds their money while.

[Ken Coleman]

They'Re in commissary money.

[Caller]

Yeah.

[Ken Coleman]

That is wild.

[Rachel Cruze]

Okay.

[Caller]

Yeah.

[Rachel Cruze]

Well, that. Yes. Okay. So, I mean, from the financial standpoint. Caroline, are you guys. Well, sorry, let me just back up for a second. When you found out, when did you confront him about this? How long ago was it?

[Caller]

It's been probably in the past. I would say four months.

[Rachel Cruze]

Okay. Are you guys working on your marriage actively right now? Are you seeing someone? Are you, you know, going to therapy? What are you guys doing?

[Caller]

So I was. I was going to therapy, and we also had the complication that we had a tree fall on our house. So we were dealing with a hole in our mar. A hole in our house. So even if we wanted to, like, get divorced, sell the house, we couldn't, because we're in. We have this massive hole.

[Rachel Cruze]

Right.

[Caller]

You know, going on. I was talking to somebody in counseling, and he did. I just. I was ready to get divorced, and I just said, hey, would you be interested in going, like, to church with me, you know, sometime? And it was only because of his reaction of, like, how excited he. He was to, like, try to go to church and know that I was. Maybe there was a way that I was willing to, like, directly.

[Rachel Cruze]

Is he doing work on his own, individually.

[Caller]

Just, like, through the church? And I know we're gonna do a marriage retreat soon. He, like, I talked to him about counseling. He's willing, but he's just like, it's just so dark.

It's just.

And I told him, like, I need this in order to.

[Rachel Cruze]

He said, it's just so dark. Is that what you said?

[Caller]

Sorry.

[Rachel Cruze]

He said, what was his response when you said that he needs to go to counseling?

[Caller]

Oh, it like the out. He's like, it won't be good. It's just so dark, his story.

[Rachel Cruze]

Like, what. What's in his head?

[Caller]

Like, all of that, I think just maybe of, like, the whole truth coming out. Like, I maybe only know a portion of it because I wanted to know, like, what did this person go to prison for in my face? How long were they in prison for?

[Ken Coleman]

You know, if you guys are going to move forward, everything needs to come into the light.

[Rachel Cruze]

Yes.

[Caller]

Yeah, yeah, yeah.

[Rachel Cruze]

It's a feeling full. It's a full disclosure situation that you guys need to sit down with a counselor to even move forward. There's no way you. You can move forward with half the truth with your marriage. And George and I are not marriage experts. If Dr. John DeLoney were here, I think he would completely agree with us on that. So. Yeah, so this is a. This is a rebuilding because of how deeply cut the trust has been in the marriage. Right. I mean, for. For three years and any given period of time, Right. When a spouse steps outside the marriage, like, that is. That is painful. And. Yeah, something to really, really be working on for both of you and the individual work for both of you. You having to learn to trust yourself again. For him to face some of his demons and to understand what work he needs to be doing. I mean, yeah, there's a lot of repair that has to happen regardless of if the marriage survives. So I'm just saying, individually, to be two healthy people, that's what you guys need. And then moving forward out of that, if you get the whole truth and you still decide, yes, I want to be in this marriage, then, yes, then there's all the repair work within the marriage, but from an emotional side, it's definitely gonna take some individual work. And then I would say from the financial. I would definitely have. Have a. I would be separating finances. Does he work and do you work? Do you both bring in a paycheck?

[Caller]

Yes.

[Rachel Cruze]

Okay. And did we all sharing an account at the time when this happened?

[Caller]

We were, but because we were working the baby steps, he was doing it with his fun money.

[Rachel Cruze]

So he just was going, where was the. But the fun money Is it. Is the fun money in Yalls checking account?

[Caller]

Well, we would take it out cash.

[Rachel Cruze]

Okay. Okay.

[Caller]

So right now we're at the point that I'm like. In order for me to trust.

[Rachel Cruze]

Yeah.

[Caller]

Your fund money is going to have to be tracked.

[Rachel Cruze]

Tracked 100%. Yes. Oh, I think that's totally fair.

[Ken Coleman]

I would also pull his credit report and then freeze his credit on top of that. So we want to pull the credit report to make sure there's no outstanding debts that maybe you don't know about and to get a clear picture of what's out there and then freeze his credit so he can't open any new accounts. And that's just one stopgap to make sure that there's no more financial infidelity outside of what's even in your checking account.

[Caller]

Okay.

[Ken Coleman]

But I would have transaction alerts set up. So you get a text message. Every time Ascent comes out of that bank account, you get a transaction alert. Even if it's just his account Right now. If you separate.

[Caller]

Yeah.

[Rachel Cruze]

Because there has to be some steps, some visible evidence for trust to be rebuilt in the situation. Caroline. So that's not you being over controlling or like being his mom. Right. Some. Some marriages can function so dysfunctionally with money where like person just has all the control and has to give everything and the other one doesn't know any passwords. All that. I'm not talking about that. This is. There was a. There was broken trust within the marriage. Money was involved in it, as it usually is. And because of that, in order to rebuild trust, I have to know exactly where the money's going. I need every account. Just like his phone records. I need every account of your phone records. Like, there has to be a level of. Of knowledge for you to keep moving forward in this marriage when it comes to building trust.

[Caller]

Okay.

[Rachel Cruze]

And I know I'm really tempted. I know he didn't. You know, I know he didn't steal money from you guys and all of that, but. Because it was allocated to him. But I mean, there's almost a part of me. Until you know that the marriage is going to survive this, I almost would just have my own checking Account, Carolyn. But he has to be showing you his transactions out of his. But I'm just scared that something else is gonna come up, and you're gonna find whether there's more on the infidelity side with the relationship or even more financially uncovering some stuff.

[Ken Coleman]

Cause you caught him, and he still is not telling you the whole truth. And that's the scary part, is we just don't know how much more damage there is. And so because of that, I would just be on the cautious defensive side right now. To protect yourself.

[Caller]

Okay.

[Ken Coleman]

And then action plus time plus counseling plus God, that's gonna be the only solution to rebuild this trust and restore this marriage.

[Caller]

Okay.

[Rachel Cruze]

Yeah. I'm so sorry, Caroline. That is like. It's so heartbreaking. So heartbreaking. And what's wild are these calls, George, we get. We get pretty consistently whether it's a marriage that, you know, one of the two have, you know, made poor choices. But even from the financial infidelity side of taking money and doing things that the spouse didn't know about, it's becoming more and more common. So, again, yeah, the best line of defense, Caroline, is you work on you. He needs to work on him. And you guys moving forward with all the truth out, decide, what are we going to do?

[Ken Coleman]

Tax season is coming up fast, which means a lot of you are paying more attention to your money and maybe realizing the holiday damage. So if you're trying to clean up the budget and start the year strong, cutting your phone bill is an easy win. With Boost Mobile, keep the phone you love and pay just 25 bucks a month for unlimited data. Talk and text forever. No contracts, no traps, just predictable savings that help you stay in control. Switch [e-mail] Ramsey restrictions apply. See website for details.

[Rachel Cruze]

Are you sick and tired of working so hard but having nothing to show for it? Well, that's normal. But also normal's broke, so you don't have to live that way. Our EveryDollar budgeting app helps you find extra money every single month and helps you build a personalized planned plan so that you can get out of debt and start building wealth. It just takes 15 minutes and you'll find thousands of dollars in hidden margin. You're gonna feel like you got a raise, so don't be normal when it comes to your money. Live like no one else, so later you can live and give like no one else. Start every dollar for free in the App Store or Google Play. All right, let's head to William in Athens, Georgia. Hi, William. Welcome to the Show.

[Caller]

How are you doing today?

[Rachel Cruze]

Hi, we're doing great. How can we help?

[Caller]

Okay, I am 63 year old. I'm retired. I am debt free on my own home. And then of course, my wife, she's got about 20 acres that we own. You know, we don't owe for anything.

[Rachel Cruze]

Good for you guys.

[Caller]

And I have, and I have a large sum of money. I have never invested in anything all my life except my 10% to the Lord. So I don't know what to do with this money I got. It's just sitting in a plain old savings account.

[Rachel Cruze]

Okay, how much money is it, William?

[Caller]

It's a little over 400,000.

[Rachel Cruze]

400,000. Okay. And is that what you're living off of month to month or do you guys have good retirement or Social Security?

[Caller]

No, I have a pension that comes in every month.

[Rachel Cruze]

Okay.

[Caller]

Which covers pretty much all my expenses, which my wife still works and, you know, she makes a good salary.

[Rachel Cruze]

So you guys are living off of what's coming in. You're not having to touch this 400,000.

[Caller]

That's right. It's just been sitting there year after year after year after year, which now my pension check is going into my savings and it's been doing that for like four years and I've never touched it. So that's why it just keeps building and building and building and I don't know what to do with it.

[Ken Coleman]

Are you calling us because you're ready to invest now? It seems like there was maybe a fear or a hesitance to do that in the past.

[Caller]

Well, you know, when you come up poor, you know, you just always scared about taking big risks. So. But I had talked to the bank about, you know, maybe, you know, doing a cd and then they talked about, well, maybe you can go another way and put it in an annuity.

[Ken Coleman]

You know, I wouldn't do that. That's just a more expensive product that gives them more commissions in their pocket. That's the truth.

[Caller]

Right, right, that, and that was kind of my concern because that ties it up for three years.

[Ken Coleman]

Yeah.

[Caller]

You know, so.

[Ken Coleman]

Well, there's a way you can invest this money and have it grow for you. Because the truth is there is more risk of it just sitting in a checking. There is if it's invested wisely. Because right now inflation has been eating up that 400 grand for years now.

[Rachel Cruze]

Yeah, you're probably having kept up with inflation with the savings account because you're. What you're making on that is what, less than 1% sometimes in some savings Accounts.

[Caller]

Yeah.

[Rachel Cruze]

Yeah. So it's not even keeping up with them. So your money's actually kind of technically in value has gone down. Yeah, it's gone down in a sense. So. Yeah. So investing. I understand, William. Yeah, it feels, it feels risky. And I think there's ways that you can invest that is risky and then there's ways that are very wise and. Yeah. And that the risk is just not there. Right. So if you're talking about like single stocks, if you're talking about something like cryptocurrency or whatever. Right. There's some more definitely risky type ways that you can put this money. But also there's a lot that is, is actually very safe because you can look at the, the history of the fund and be able to somewhat predict, okay, if the US Economy continues to do well. And again, some years is down, some years is up, but it's not this like, drastic change over time. And you can kind of, you know, you really can look at the pattern over time and say, okay, this one feels right. And if the US Economy all crashes and burns and you lose all the money, I think there's probably more problems that we're going to have than just thinking about. Right. That. That money in the account.

[Ken Coleman]

So, William, the first thing I would do is talk to an investment professional because what they can do is educate you and guide you, and you can do that. @ramseysolutions.com Click on Start Investing on our website and that will connect you with someone who can help you manage this money wisely. You ever read the Parable of the Talents?

[Caller]

And what is that in the Bible?

[Ken Coleman]

The Parable of the Talents. It's a great read. I highly recommend it. Go check it out after this. And I hope it encourages you to steward this money in a way that helps it to grow so that you can retire with dignity, leave a legacy, and even create generational wealth. Because if you just leave this money in an average mutual fund or index fund, it would double in seven years. So on your 70th birthday, there's 800 grand sitting there. And you did diddly. You didn't touch the money, you just left it.

[Rachel Cruze]

And William, I'll say this too. You know, we talked to some, you know, we talked to a lady, this was a few months ago, she was in her 90s and she was just scared to death to invest her money. I mean, it would keep her up at night. And I'm like, you know what? You're old. Solve for peace. If that stresses you out, you're fine. You know what I mean? But you're 63, William. You got a long life to live. You could easily be living another 30 years. So I would, yes, be very much considering investing and go talk to someone that has the heart of a teacher, one of our smartvestor pros. Because genuinely, you and I want you to feel comfortable with it. Okay. But I do want you to learn something new for how this money can actually, like George said, double in size, continue to grow so that you can leave an even bigger legacy versus living in this fear of the unknown. All right, let's go to. Is it Esmeralda? Beautiful name. Sacramento. Welcome to the show.

[Caller]

Hi. Thank you so much for having me.

[Rachel Cruze]

You're so welcome. How can we help?

[Caller]

So I am a first time mom. My daughter is going to be turning one on February 23rd, and I am planning to go to Miami for her birthday celebration because all my family lives there and my husband, he doesn't have family over here in California. It's just us. So I figured why don't we go to Miami to celebrate since my family out there haven't really had time to spend with her.

[Rachel Cruze]

Mm.

[Caller]

The only thing I'm kind of wondering now is, is it too much money? Is it even worth it with how much money we're making and how much money we have saved and would it be too late to cancel?

[Rachel Cruze]

Okay, how much, how much is the trip going to be total?

[Caller]

So for the flight, I'm looking. We already paid for the flight, but we did get refundable tickets and that came out to a total of 6, 37 and 92 cents.

[Rachel Cruze]

Okay, and where are you guys at financially?

[Caller]

I have. I mean, we have $7,700 saved. And right now in my checking account, in our checking account, we have 1,300.

[Rachel Cruze]

Okay, how much debt do you guys have.

[Caller]

Right now? It's only $200. It's from a T mobile payment that. My. That my friend at the time opened the account under my name and we don't talk anymore, but it's just that Bill 200. We took care of the credit card debt when my husband started listening to Dave Ramsey. And.

[Rachel Cruze]

Good. Yeah.

[Ken Coleman]

So no, no car loan, no lease, no student loan, none of that?

[Caller]

No, I didn't go to college. Neither did he. And he paid his car off with cash.

[Rachel Cruze]

Good for you guys. How much you guys make a year?

[Caller]

A year? Let me see.

[Ken Coleman]

Just ballpark.

[Caller]

45, 000.

[Rachel Cruze]

45000 a year. Okay. And is it. Is he just working? Are you home?

[Caller]

Yeah, I'M a stay at home mom and he's working.

[Rachel Cruze]

Okay. Esmeralda.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

I mean, it doesn't bother. No, I mean, because that's all you guys are praise. You're basically doing flights. You're going to stay with family, Right. You're not going to have hotel costs or anything.

[Caller]

No, we're seeing a family.

[Rachel Cruze]

Yeah.

[Ken Coleman]

What is the birthday consist of?

[Caller]

Right now we're paying like a car rental.

[Rachel Cruze]

Okay.

[Caller]

And I was going to purchase her mini bounce house for her with the ball pit and cars parking. So when we drive to the airport, we can leave the car parked there because we don't have family out here that could drive us.

[Rachel Cruze]

Sure, sure. Yeah. I mean, I would match him up.

[Caller]

To a thousand dollars.

[Rachel Cruze]

Okay. So I would, I would, I would put this in the umbrella of like we're gonna go see family versus making it a first birthday kind of thing. Because that almost is going to add more expenses from the emotional planet.

[Ken Coleman]

You could easily climb to two grand out of just, well, let's just have fun and let's get the bounce out.

[Rachel Cruze]

I would just say we want to visit our family. So either you can do that now with these plane tickets, you've bought them already. And so go enjoy yourselves, stay on a strict budget or just say let's pause and maybe go this summer when we feel like we have more savings in the bank.

[Dave Ramsey]

This is Dave Ramsey. We all want to know that the money we give to charity is doing something that matters, that it's making a real change, giving someone lasting hope. And here's one way to make sure of that. Give to preborn. They're the real deal. Proven transparent and changing lives every day. I trust preborn, and you can too. They're on the front lines of the battle for life, partnering with clinics to offer free ultrasounds to mothers in crisis. Because when a mom sees her baby on that screen, something changes. It's not just a decision anymore. It's a person. And 80% of the time, when a mom sees that ultrasound, she chooses life. Your $28 gift provides one of those ultrasounds, just 28 bucks to the reason someone chooses life. And at every clinic, the gospel is shared. Giving moms the chance to choose life and find real hope in Christ. $28. One ultrasound, one heartbeat. One mom who realizes she's not alone. That's the kind of life changing impact your giving makes through preborn. Go now to preborn.comramsey or call 855-601-2229. That's preborn.com Rams Ramsey.

[Rachel Cruze]

The Ramsey Show Question of the day is sponsored by why Refi if defaulted private student loans have taken over your life, why Refi can help you breathe again with a low fixed rate plan that fits your budget. Visit yrefi.com Ramsey that's the letter y r e f y.com Ramsey not available in all states.

[Ken Coleman]

Today's question comes from Kathy in Utah. I'm 70 years old and considering buying a house with a 15 year loan. If I pass away before the term of the loan is completed, what happens to the debt? I'm not married and don't have kids. Why shouldn't I borrow $500,000 knowing I may die before it's paid off? That's the spirit, Kathy. I mean one just integrity, I guess that's a good start. Character. But the point of your question, if I pass away before the term's completed, what happens to the debt? Well, your estate would pay for it, which is any assets that you own. The lender would go after those first to try to pay down the debt as much as they could and then I guess they would just take on the debt.

[Rachel Cruze]

And yeah, they just move on because that is the understanding that when you die, your debt does not necessarily die with you. To a point it does, but they will. Yes, factor in all the assets you have. So if you did die with credit card debt, car loan, you know, all the things, then you technically have owed that money. So if you have any money to your name or any assets, yes, they are going to deplete those in order to pay the debt. And then whatever's remaining will go to family of your estate. But again, the bank owns the house.

[Ken Coleman]

So they'll sell the house for what they can get for it, use that money to pay off the mortgage. And so, yeah, that's what they would do. The bank just got us a free house, so I think they might have got the better end of the deal.

[Rachel Cruze]

But yeah, but also, Kathy, what if you, what if you keep living, you.

[Ken Coleman]

Know, I mean, you're renting at 70. I don't know anything else about your financial situation. Do you have a million dollars in cash? Are you broke? We have no idea. But buying a house knowing that you could live another 20 or 30 years is a good bet. And so if you are in a financial spot to do it, I would do it.

[Rachel Cruze]

All right, let's head to Dorothy in Manchester, New Hampshire. Hi, Dorothy.

[Caller]

Hi, how are you?

[Rachel Cruze]

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

[Caller]

I need to know if it, if I Should do an additional $20,000 on a HELOC. You pay off my car, which is at 12%, and I owe 23,000. And I have one credit card at $1,800 at 18%, but my HELOC is currently. I have $20,000 out on it because I had to have an emergency furnace, and it's only 6%. But long story short, I went through a bad divorce, was homeless.

[Rachel Cruze]

Oh, my gosh, I'm sorry.

[Caller]

Lost everything. My ex stole all of our joint bank account, left me with $3, and I worked for the government for 20 years. And I had to retire, move out of town. But the new job that I have is lower pay. But since 2019, I've been trying to rebuild. And like I said, I got a house. Well, I bought a condo before the housing market. I have $100,000 in equity. I bought it for 162. It's worth now over 252.

[Rachel Cruze]

How much are you making now, Dorothy, with your job?

[Caller]

What, $27 an hour.

[Rachel Cruze]

Okay, and what does that come. What does that come out to, like, per month? What are you bringing home?

[Caller]

Only, like 4200.

[Rachel Cruze]

Okay, 4200.

[George Kamel]

Okay.

[Caller]

Yep, yep.

[Ken Coleman]

That's enough to cover all your bills and cover the minimum debt payments.

[Caller]

Well, what I have is My loan is 1223. My HOA is 300. My car payment is 464. Insurance is 250. My lights are 100. He 100. TV, Internet, 128.

[Rachel Cruze]

Yes.

[Caller]

My phone is 45.

[Rachel Cruze]

So what. What margin do you have left after all of that?

[Caller]

I've been making all my payments, and I've been also making my $157 HELOC, and I've been putting $30 a week toward my principal of my mortgage every week. Because 30 bucks is, you know, cup of coffee or whatever, and that's all that I have is just that credit card and my car payment.

[Rachel Cruze]

Okay, so what I would say, Dorothy, that the secret of getting out of debt is not moving debt around and trying to get a better interest rate. The secret is you. So honestly, you kind of getting into this next gear, which you've already made incredible progress. Like the story you told us at the beginning of the call of, you know, being homeless. I mean, like, man, the fact that.

[Ken Coleman]

You'Re still standing with shelter is a miracle.

[Rachel Cruze]

You have made huge strides. So. No, I would not.

[Caller]

I was driving four hours to work and back.

[Rachel Cruze]

Yeah. Yeah. That's a long time. So what I would say is the magic of getting out of debt. If there is quote unquote, it's you. So you deciding, hey, I'm going to cut where I can. I may even take on an extra job. You have the work ethic and I'm going to clean this debt up when you move it around interest rate wise, over the long term, if you had this for 15, 16 years, then, yeah, we could probably talk about it. But you can actually, you know, the short term life of this debt because you're going to pay it off so quickly. I wouldn't fool with it. I wouldn't fool moving it around. And I think it kind of gives this false sense of security of, oh, gosh, it just feels better that all my debt's in one place or that it's a better, you know, interest rate here and there. But again, that's not going to solve you getting out of debt. It's going to be you.

[Ken Coleman]

It didn't change any of the behavior. We just moved it around and put it in a different junk closet. And the other thing is, you're moving from unsecured debt to a secured debt. That home is collateral. And so it puts you at even further risk. And so like Rachel said, the solution is you. And that means we got to get on a written plan, we got to get on a budget. We're going to save up $1,000 starter emergency fund to stop those ankle biter emergencies. You have that in place? Do you have any other savings?

[Caller]

No.

[Ken Coleman]

Okay. What is the car worth? You owe 23 on it.

[Caller]

It's brand new. It's a 2025.

[Dave Ramsey]

Wow.

[Ken Coleman]

Well, that might be something you could sell for a pretty penny. Could you sell it for almost what you got for it?

[Caller]

I actually, I got it three months ago, so yeah, I probably could.

[Ken Coleman]

Because what I'm seeing is that clears your debt journey in half.

[Caller]

Yeah. Because see, then I could put everything of that car, pavement and that's right. You know, so forth toward the, the emergency of the HELOC for my furnace and stuff. But I mean, you'll still need another.

[Ken Coleman]

Car to drive, so you'll need to save up a little bit of money.

[Caller]

Job that I have. Yeah. Then the new job that I have, I don't. I live two minutes away versus four hours because like I said, I was driving from Vermont to Portland, Maine every single day, working my eight hours and going back to back home.

[Rachel Cruze]

Gosh, well, that's not a sustainable life. So I'm so glad that it's close.

[Ken Coleman]

Are you saying you could go without A car for, for a short season.

[Caller]

I could actually go with. I don't even fill my car maybe once a month, maybe once and a half.

[Rachel Cruze]

I'm just curious, Dorothy, what caused you, what caused you to buy it?

[Caller]

Because the fact just I wanted to have a forever car where I pay this off and that would be it.

[Rachel Cruze]

Gotcha.

[Caller]

I don't believe in leasing or anything like that. And you know where I only had just my credit card, but then that was it, the furnace.

[Rachel Cruze]

Well, let me tell you, an 8 year old, 10 year old Honda Civic, that'll last you another 10 years while you save on the side and then you got a real forever car. I wouldn't put the pressure on your next car to be a forever car. I really wouldn't. I think that that causes this debt and this $500 payment a month.

[Ken Coleman]

It's easy to justify when you go, well I'm going to pay it off and I'll have it forever. That's how we make bad decisions financially.

[Rachel Cruze]

And then when you're in the tactical side of your month and you're like, oh crap, look at all this money going and look at how much debt now I've accumulated. So, so yeah, I would try to get out of this car, Dorothy, for sure. And it's bumping up against. We have a rule that, you know, you should. Your cars should not be more than half of your annual take home pay. And it's. And yours is there.

[George Kamel]

Yeah.

[Ken Coleman]

$25,000 car making 50 grand.

[Rachel Cruze]

Yeah, you're tight, right on that edge. So if I were you, I would, yep. I'd get rid of it. Go buy something new used if you need it, but maybe for a season like you said, if you really can go without it for a few months, save that car payment three or five.

[Ken Coleman]

Hundred bucks, throw another thousand on top of that, you'll be debt free in 18 months.

[Rachel Cruze]

100% sense. Yeah, yeah. There's some, there's some moves you can make here, Dorothy, to really change it, but I wouldn't move the dead around in the heloc. I would make some big changes like what you're talking about. And I know you can because you have in your life and you're incredible. So we are cheering you on.

[Dave Ramsey]

You know, every year I hear the same excuses for why people don't get the life insurance they need to protect their families. So this year let's clear the air and look at the facts. Having 10 to 12 times your income on a 15 or 20 year plan is in many cases just plain cheap. That amount of coverage lets your family keep the lights on and keep food on the table while they're grieving. Second, life insurance through your work is not enough, especially since these plans go away if you change jobs. You need to have your own policy so you're not without protection when your family really needs it. Third, stay at home parents need life insurance, especially those with young kids. People don't realize how quickly the costs add up without someone at home taking care of things. So no more excuses, folks. Get the protection your family needs. Go to Zander.com or call 800-356-4282. They've been my choice for all my insurance for over 25 years and are the only people I trust.

[Rachel Cruze]

Welcome back to the Ramsey show in the Fairwinds Credit Union studio. I'm Rachel Cruz hosting this hour with bestselling author and my co host of Smart Money Happy Hour, George Camel.

[Ken Coleman]

Honored to be here.

[Rachel Cruze]

We are here to take your calls. It's a little different than Smart Money Happy Hour.

[Ken Coleman]

Different vibe.

[Rachel Cruze]

Yeah.

[Ken Coleman]

We don't take calls on Smart Money so the vibe is generally a little more positive and upbeat because people aren't going through crisis.

[Rachel Cruze]

I know, but we are. That's why we're here, though, for this show, to help you with your problems, to celebrate the victories. So give us a call at 888-25-5225. All right. To kick us off this hour in Salt Lake City, we have Phil. Hi, Phil. Welcome to the show.

[Caller]

Hi. Thanks for having me.

[Rachel Cruze]

Absolutely. How can we help today?

[Caller]

Well, it's recently come to my attention that my oldest brother has been stealing money from my parents. What started off as borrowing gas money has turned into lying his way into a massive car loan in my mom's name, stealing credit cards without my parents knowledge. And so my parents have more than $100,000 in debt now and that's not even including their mortgage. They're both almost in their 70s. My mom's on disability. My dad has 40,000 in his 401k. And they think that's a lot. And I'm just, I just don't see a way that he's ever going to be able to retire. And I understand that me and my wife are not financially responsible for them, but I'm trying to walk through this with them, but I'm no expert. And every time I learn more about their financial situation, I see less and less of a sol other than bankruptcy. And so what should I tell him to do?

[Rachel Cruze]

Yeah. So two different paths. I mean if you're going to go, like, full on.

[Ken Coleman]

He.

[Rachel Cruze]

He has stolen. Did he. Did he forge signatures, like, for the car loan? How did that happen?

[Caller]

So from what I could gather, it seems like he's lying to my mom on what she is signing and then gets her to sign something without her reading what it actually is.

[Rachel Cruze]

Well, crap, because I was going to.

[Ken Coleman]

Say this to court, they'd be like, ma', am, that's your signature. Right? And she's like, yeah, but I just.

[Rachel Cruze]

Didn'T read the document. And that's her fault. I mean, to a degree. I mean, do you know what I'm saying? Like, there's a level of responsibility that she did not take.

[Ken Coleman]

I mean, it's really. Elder abuse is what this is. That's probably your best case, is fraud and elder abuse.

[Rachel Cruze]

Yeah. If they would. Yeah. If they would take legal action, that's what it would be. But I'm scared for. I don't know.

[Dave Ramsey]

Yeah.

[Ken Coleman]

I mean, first I would freeze their credit yesterday so that no more accounts can be out. I would also contact every lender on that credit report and say, hey, this was fraud, elder abuse. This guy took out all of these loans without the permission. You know, he basically coaxed them into it. And so then we go from there. I mean, do they still have contact with this brother? Do they know about this?

[Caller]

They know about it. My mom just had a stroke last week, so this is all adding to it, so.

Oh, my God, Phil.

[Ken Coleman]

This dude is like the scumburger of all scumbgers to this. To his own parents. Yeah.

[Kurt]

Yeah.

[Caller]

And we're trying to find him right now. He's been on crystal meth before, so I'm not shocked that this is having that involved again. So we're trying to find him and figure that out because he has the truck. He has. There's also an RV that has $250,000 on it that I think is in his dad's name. It's. It's a whole ordeal. So I just. And I'm worried that my parents aren't going to file any kind of charges.

[Rachel Cruze]

Yeah, they may not.

[Caller]

Hard to.

[Rachel Cruze]

Yeah.

[Caller]

How do you do that to your firstborn son? You know, I get that, so.

[Ken Coleman]

Well, I think they need to understand if they don't pursue this, then they might just be on the hook with us for the rest of their life. Yeah, that's the scary part.

[Caller]

And so.

[Rachel Cruze]

And it's a loan, Phil. Right. So the problem is, too, if. Yeah. So if he stops paying and that truck gets repoed and all that's in your mom's name. I mean, it'll all be on her. They're going to come after her for it.

[Ken Coleman]

Is he even making the payments?

[Caller]

He's not made a single payment, no.

[Ken Coleman]

So, I mean, are there. Have they repoed this? I guess. You don't even know.

[Caller]

He. He does still. He does still have the truck.

[Rachel Cruze]

Not for, actually.

[Caller]

I mean, yeah, I don't know. I don't know how long he's gonna have it for, but, like, I call.

[Ken Coleman]

The repo man myself on it.

[Rachel Cruze]

Yeah, if you can find him. So he's disappeared?

[Caller]

Well, yeah. He turned off all of his location services once he figured out that I.

[Rachel Cruze]

Knew you were on to him.

[Ken Coleman]

Have you found a police report?

[Caller]

I believe I told my mom that she needs to. I don't know that she has yet. I actually found his location this morning through his daughter. And so I'm trying to. I'm trying to figure out what I.

[Rachel Cruze]

Need to do, but yep. Okay. So the hard position you're in, and correct me if I'm wrong, it sounds like you are doing all the proactive work in this situation. You're worrying about your parents trying to find your brother. You're telling your parents what they should do. Like you're kind of the one heading up all of this and none of this is your issue. I understand. It's your parents and you love them. So, like, I'm just saying, from a top tier perspective, the hard place that's going to happen for you, Phil, is you're going to have a wonderful, logical game plan because you're a smart, reasonable person and you're going to say, mom and dad, you need to do A, B, C and D. Brother, they're coming after you for these. Charge and this and this and this is going to happen. And you know, you're going to have a plan laid out of what. What should be happening and in any common sense scenario. And the problem is if they choose not to move forward, that's their fault. You know that. That. That's their decision, it's not yours. And you can't make them do something or even convince them to change their mind. So I think it's going to be a discouraging situation for you, Phil, here in the next few months. Because I think you're going to realize my parents are probably naive because you're. He's been on drugs and still they're signing papers for him. Right? I mean, like, I would be going through A, to going through like, oh my. Gosh so detailed if. If that was me.

[Ken Coleman]

But they need to be as angry.

[Rachel Cruze]

As we are, and they're not.

[Ken Coleman]

And they're just like. Well, I guess it is what it is. Like, what is their response right now? What's their attitude?

[Caller]

Well, I mean, my mom feels horrible that she didn't see this coming sort of thing, but she doesn't really have the health to take this on. And my dad has not done anything financial in the. Their entire marriage. He just doesn't know anything about it. He doesn't want to know anything about it. And I'm like. Like, I. I know that I'm gonna have to, you know, that eventually. Most of the time, they sign off their finances to their children to take care of them, but I'm like, they haven't done that for me yet, so I can't. I can't do anything about it.

[Jimmy]

So.

[Rachel Cruze]

So your dad is just sitting there. Well, all this is being. I don't know.

[Caller]

I don't know that my dad even knows to the extent of what. How much debt he has. He just goes to work, makes the paycheck, and comes home. That's all he ever does.

[Rachel Cruze]

Yeah. Yeah.

[Caller]

My mom has always handled the finances, and now she's. She's learned about some of this stuff in the past and hasn't told my dad about it, and now it's blown up to way more than I thought it would ever be.

[Rachel Cruze]

Yeah. How much debt are they in personally, besides all the stuff that your brother brought in?

[Caller]

I would say not including their mortgage, they probably have anywhere from like 15 to 20,000.

[Rachel Cruze]

Okay.

[Caller]

And that's a car loan and various credit cards.

[Rachel Cruze]

Okay. And how much are they making a year?

[Dave Ramsey]

Year?

[Caller]

I don't know exactly.

[Rachel Cruze]

Yeah.

[Caller]

But my guess would be anywhere from like 60 to 70,000, because it's just my dad and my mom is on disability. Doesn't get much from that.

[Rachel Cruze]

Yeah. Wow.

[Ken Coleman]

If you're going to be involved, you're going to have to get financial power of attorney to actually make any moves. And that might be wise based on how things have been going with your dad not being involved. Mom had the stroke. I think now's the time to have some really hard conversations about the future.

[Rachel Cruze]

Yeah. So I think. Think, Phil. I mean, because I feel that burden, right, in the sense of, like, you see what's going on and they don't. So I almost would just have a meeting, sit them both down and tell them, hey, this is exactly what the situation is. I need to know numbers. I want to be able to help you and let's make a game plan. And then it would be up to them to be the ones executing it, unless they want your help in doing so. But I mean, I would give a latch, you know, a last ditch effort to try to do what I can to help them see and know what's going on. But unless they give you the power to do something, they're going to have to be the ones that, you know, make those decisions. And I, I don't know if they will. And that's hard. It's very.

[George Kamel]

Very.

[Dave Ramsey]

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

[Rachel Cruze]

All right, let's head to Dave in Charlotte, North Carolina. Hi Dave, welcome to the show.

[Caller]

Hi. Thanks for taking my call.

[Rachel Cruze]

Yes, absolutely. How can we help today? So my wife and I are planning.

[Caller]

On to retiring between three and five years.

[Kurt]

And I just feel with our total.

[Caller]

Portfolio that we're house heavy. We always had planned on downsizing once we retired, but I'm wondering if you think we should do that now and then invest that extra money.

[Rachel Cruze]

Okay. Yeah. How much, how much is the house worth?

[Caller]

650.

[Rachel Cruze]

Okay. And how much mortgage do you have left on it?

[Caller]

It's paid off.

[Rachel Cruze]

It's paid off. Okay. And how much you guys have in retirement?

[Caller]

About 650 right now.

[Rachel Cruze]

650. Okay. And how old will you guys be in five years.

[Caller]

I will be 67, she'll be 65.

[Ken Coleman]

Okay, what's your game plan currently to retire? Because the house obviously is not going to produce income in retirement. It's great to have it paid off, and I'm proud of you guys for doing that. But what's your current game plan? Regardless of what happens with the house.

[Kurt]

Where we're going to get our funds from?

[Caller]

Yeah, well, from the 650, which will grow, plus I have a small pension and then our Social Security.

[Ken Coleman]

Okay, so between pension, Social Security, and then on top of that, you'll dip whatever else you need, you can dip into that retirement nest egg.

[Caller]

Right.

[Ken Coleman]

Okay. And you're saying, do you have too much tied up in the house? Are you guys wanting to downsize anyways?

[Caller]

Yeah, we always planned on downsizing. And then maybe we could clear 600 on this. And I know I can find something for 400, so that gives us 200,000.

[Rachel Cruze]

To throw in there.

[Ken Coleman]

That would. That would give me some.

[Rachel Cruze]

Yeah.

[Ken Coleman]

You know, some cushion. And so I would be doing that. If you're going, hey, I don't know that we can make it for the rest of our life with this nest egg, plus the pension and Social Security. I think it would be wise to use any profits to invest to then create a little mini nest egg on its own.

[Caller]

Do it now versus wait until we retire.

[Ken Coleman]

I mean, you can wait. You'll, you know, either way, the house is appreciating.

[Caller]

Right.

[Ken Coleman]

As time goes on, your. Your nest eggs appreciating. And so it's okay to wait. This is not. I wouldn't say this is on fire, but the sooner you do it, the more. The less variables you'll have. You'll kind of have more on paper to know when you can retire.

[Kurt]

Higher.

[Caller]

Sure. Okay, great.

[Kurt]

That makes sense.

[Rachel Cruze]

Yeah. Dave, how much will you guys be getting in a month with your pension and Social Security?

[Caller]

At that point, 4 5, 26 to about 7,000.

[Rachel Cruze]

Okay. And how much do you guys need to live off of per month?

[Caller]

I think we figured 84, so that would be about that.

[Rachel Cruze]

Okay. Yeah. Yeah. Well, that's great. Yeah. I was going to say, because, you know, when you do, when you do just the quick math, let's say you added 200,000 to that. That would be $850,000. And you just think every seven years it doubles if you don't touch it. Which you guys will be retiring in five years, so it's a little less than that. But, I mean, you'll have Upwards over a million for sure. By the time you guys hit retirement age. And that in a payoff, if you're.

[Ken Coleman]

Taking out, you know, your 18 grand a year to float the difference, you're talking 1%.

[Rachel Cruze]

Yep.

[Ken Coleman]

Of your nest egg. And so it's going to grow in perpetuity. You know, the balance will continue to grow.

[Rachel Cruze]

So you guys will be good.

[Ken Coleman]

I'm not concerned about that at all. At the current, with your current plan.

[Caller]

Right.

[Ken Coleman]

And if you love the house, you could probably stay in it and still make this work. There just might be a few sacrifices down the line, but I think you guys will, will figure that out. The pension and Social Security, that's. That's awesome.

[Rachel Cruze]

For sure. Absolutely. Thanks, Dave, for the call. And well done. Well done. I mean, yeah, right there. Baby steps. Millionaires, you know, they did it.

[Ken Coleman]

You can retire.

[Rachel Cruze]

It's awesome.

[Ken Coleman]

With a paid for house and some money in the bank, so.

[Rachel Cruze]

Great. All right, let's head to Isabel in Spokane, Washington. Hi, Isabel.

[Caller]

Hi, guys.

[Rachel Cruze]

Hello. How can we help today?

[Caller]

My question for you guys is that I'm on baby step number two, and I have about $6,900 in credit card debt and on my car loan. And I'm wondering if I should take all of my investments in stocks, which total to be about $6,800, and pay off my credit card knowing that I don't have any retirement at this moment.

[Rachel Cruze]

What are the stocks? Are they in? Are they in like a 401k or your Roth or is just single stocks out there? The 6800.

[Caller]

Just single stocks that total up to 6800.

[Ken Coleman]

Okay.

[Rachel Cruze]

Yes, I would, I would cash those out because. How old are you?

[Caller]

I'm 25.

[Rachel Cruze]

Okay. Yeah. You have plenty of time for retirement and the $6,800 is going to be better spent value wise by getting you out of a hole financially and helping pay off this debt. And then you'll be building up an emergency fund. And then, Isabelle, you'll start investing 15% of your income, which I think you're going to be able to do here in the next, you know, 18 months. Months. Two years.

[Ken Coleman]

What's left on the car loan?

[Caller]

Just under 9,000.

[Ken Coleman]

Okay.

[Rachel Cruze]

What do you make?

[Caller]

I make 60. Roughly 63,000 a year.

[Rachel Cruze]

Amazing. Yeah. So after you cash it out, you'll have to pay some taxes on some of it. But, you know, let's say you, you know, could pay it off and you're around 10 grand. You know, you could make it a goal to pay it, pay off that 10 grand in golly, leave five months. Yeah, you know, four months. Get aggressive, get an extra job, pay it off. Then build up an emergency fund of if. If you're. Are you single?

[Caller]

I am.

[George Kamel]

Okay.

[Rachel Cruze]

Yeah. So I would just do a three month emergency fund. Whatever your expenses are, just multiply it by three and just say, yep, that's my emergency fund. And then when you start investing, Isabelle, if you start investing by the time you're 27, 28, it's going to be unbelievable. Let's say. Let's say pretend that. Yeah, George is getting his calculator for us. So let's just say you stayed at 60, $63,000 a year, Isabel. Which you won't. Your income will grow over time. So you're making an amazing income right now. That's going to be. What is it?

[Ken Coleman]

6,9400 a year. 787 per month is what you would be investing, let's say by. By Christmas. If you can get through this plan, get rid of all the debt, get the emergency fund, then you can begin investing you retirement. Right?

[Caller]

Correct.

[Rachel Cruze]

All right, get ready for this.

[Ken Coleman]

Let's go. Should we go 26 to 60? When do you turn 26?

[Caller]

In August.

[Ken Coleman]

Perfect. Okay, so be 26. So 26 to 66, you would have $5 million. And that's based on a 10% return, which is what we've seen in the stock market for the last several decades.

[Caller]

Okay.

[Rachel Cruze]

Yep. So you'll have 5. 5 million bucks, Isabel. You'll. You'll be great.

[Ken Coleman]

And if you wanted it, if you want to retire 62, you'll have 3.3 million million.

[Caller]

Okay.

[Rachel Cruze]

And that's if your income doesn't go up.

[Ken Coleman]

That's if you never get a raise. Your whole life.

[Rachel Cruze]

Crazy. Like that's so wild. And then you're gonna, you know, maybe meet someone. You're gonna double the income. You know what I mean? You just keep it going as life goes.

[Ken Coleman]

Get a house. Get the house paid off. Invest even more. So you're gonna be multi millionaire. If you stop playing the. The game of a broken financial system. Which is I gotta get a credit card to get a credit score. Whoops. I carried a credit card balance. Well, I guess I need a nice car. I have a big girl job now. I got a payment to. If you can just put blinders on and not care what anyone else thinks about your financial plan, you will be unbelievably wealthy.

[Caller]

Awesome. Well, thank you, guys.

[Rachel Cruze]

Absolutely. Well done. Yeah, it's always an encouraging call when you get someone in their early 20s.

[Ken Coleman]

And you're like, look, you still have so much time.

[Rachel Cruze]

You have so much time. I mean seriously, like it is wild. And not that you know, those of you in your 60s and 70s, like start now, right, if you've not started, like there's always the point to start. But especially young people out there in your 20s, man, the, the idea of compound interest is insane. Like the amount of money that actually went to principal. Does it say that? George?

[Ken Coleman]

It shows you how much she contributed. So yeah, we'll go with our example. 26 to 66. So a 40 year period of you investing, that's 787amonth. In that she would contribute 377,000. That's how much of her own dollars went in there. And the growth was 4.6 million on top of that.

[Rachel Cruze]

So that's what's crazy. So, so the earlier you start, I mean honestly, it is wild, but it does.

[Ken Coleman]

Over 90% of that nest egg was her just investing and leaving it alone.

[Rachel Cruze]

Yes. And George, you know what? It's the consistency month after month. Regardless, we are doing this, we're not letting up. It is just a rhythm of life now. When you get to that point, it's just part of it, you don't stop and that, you know, you don't get caught up. I don't think in all the lifestyle creep and all the things, you know what I mean? Like there's so many things can take you off this plan that look shiny and fun and exciting and you can still have a great life while doing this. But it's just having the maturity to say, you know what, I'm going to put some things in place to assure that when I AM in my 60s, I'm taken care of and by me, not by the government or waiting on something else, that you do it. And you have the power, everyone out there, you have the power to do it.

[Dave Ramsey]

The calendar might have flipped, but the way to win with money hasn't changed. Living on a budget, staying out of debt and building wealth intentionally. Now here's the deal. Most banks, banks make their money. When you don't do that, they're fine if you stay broke and frustrated. And that's why I recommend Fairwinds Credit Union. They actually want you to win with money. Their smart bundle gives you a no fee checking account, a high yield savings account, and the new Ramsey Be weird debit card that says debt is normal. Be weird right on the front. It's not just a card, it's a statement. Because every time you use it, it says use. You control your money. Your money doesn't control you. So this year, stick to your plan. Don't chase gimmicks or points, and partner with a credit union that helps you make progress in the baby steps. Visit Fairwinds.org Ramsey to take control of your money and stay weird.

[Ken Coleman]

Fairwinds is federally insured by the ncua.

[Rachel Cruze]

The fun of doing a live show is your co host may spontaneously jump in the control room and make faces and all of it. And then you say, you know what, actually get in the studio.

[George Kamel]

Ken Coleman, welcome to My Secret.

[Ken Coleman]

Welcome our special guest and correspondent to.

[Rachel Cruze]

Be here for this segment. And it's actually a perfect segment for you because something hit the news.

[George Kamel]

Oh, boy.

[Rachel Cruze]

Recently that we were going to talk about in the news. Yes, CBS news.com reports that Trump has floated a 10% credit card interest rate cap. So here's what this could mean for consumers. So Trump came out and basically was.

[Ken Coleman]

Like on Truth Social. So this was not like an executive order. This is just him on social media making banks.

[Rachel Cruze]

Credit card companies should just make max their interest rates at 10% because now we can go, I mean, as high as 36%. Right. So it's in the 20s.

[Ken Coleman]

I mean, like the average is 25% APR right now.

[Rachel Cruze]

Yeah. So it is pretty wild where it is.

[Ken Coleman]

All right, so here, here's the what this could do. Vanderbilt research found that a 10% cap would save Americans $100 billion a year in interest. I mean, think about that. We're the nation is $1.2 trillion in credit cards debt. That's wild. So 10% means the credit card companies will only make $120 million off consumers this year from the interest alone.

[Rachel Cruze]

Yeah.

[Ken Coleman]

That's not swipe fees. That's not annual fees. So let's do the math. You got a $5,000 balance. You'd pay about $42 a month in interest at 10%, but at 24%, which is close to the average $100 a month. So that really would help a lot of Americans who are struggling with this credit card debt.

[Rachel Cruze]

Yeah, but the reality is.

[Ken Coleman]

Let's go to reality.

[Rachel Cruze]

But reality. He can't do that.

[Ken Coleman]

You can't just truth it into existence.

[George Kamel]

Nor should he. This is when presidents decide in free market economies to start doing things like this, messing with things, forcing free markets to do things. You get Venezuela, you get Cuba. So everybody just needs to understand this all sounds good until you look at the constitutionality of it. Is it A free market policy. That's first point. But I'll tell you what came to mind when I first saw this. As you guys know, I play a lot of pickleball. Play for three hours tonight. Thankfully, my knees are in good shape. But the knee analogy came to mind when I heard this. If someone has a torn meniscus, you can get away with not having surgery and you might put a knee brace on. And the knee brace is somewhat helpful. So, George, you just laid out beautifully how 10% at a cap would be very helpful. I don't want to gloss over people that are hurting right now. I don't want to be insensitive.

[Rachel Cruze]

Yeah.

[George Kamel]

So it's like a knee brace. But here's the thing. The meniscus isn't going to heal. The knee brace just helps a little bit. It doesn't solve the problem. And this doesn't solve the problem, which is Americans have a taste for debt and it's not going to solve the problems. The debt snowball solves the problem. The baby steps solve the problem. Lowering your interest rate, it doesn't solve the problem. How many times do we get a call, should I move my debt around? So for that reason, this feels like politics to me. And he has every right to tweet or truth or whatever he wants to do. I think it's posturing. And I did this when Biden was president. I don't care who the party is. I'm gonna call strikes, I'm gonna call balls. And this isn't going to solve the credit debt problem.

[Ken Coleman]

Yeah. Well, it's a good reminder. This is for one year. So this cat for one year.

[George Kamel]

So then what?

[Ken Coleman]

It's not law. It's not even executive order. He can't. It would have to be Congress rewriting federal law. There have to be a bill in place. Everyone has to agree, which I'm for.

[George Kamel]

That if Congress does it, and we're.

[Rachel Cruze]

Talking about banks which make billions and billions dollars, they're going to find a way to get their money.

[Ken Coleman]

Well, what they'll do is raise annual fee. They will fee you to death.

[Rachel Cruze]

Yes.

[Ken Coleman]

And they'll make their money elsewhere.

[Rachel Cruze]

Not like, oh, you're right.

[Caller]

You know what?

[Rachel Cruze]

That would help people 10%. We didn't even think. We didn't even think about that. Thank you, Trump.

[George Kamel]

You're so right, Rachel.

[Rachel Cruze]

You know, they have.

[George Kamel]

They have lobbyists. They have the best lobbyists in the world. Do you think that legislation is going to pay pass?

[Dave Ramsey]

No.

[Ken Coleman]

And of course, here's the best part. JP Morgan cfo, of course. Saying this is going to hurt people. Guys, we can't do this. It's going to hurt people who need credit the most. Cuz what this means is tighter lending. These credit card companies aren't going to lend to the subprime borrowers. And so he's saying it's going to actually hurt everyone.

[George Kamel]

Oh, you two are going to love this one. You're going to love this one. I saw this on Twitter.

[Rachel Cruze]

Yeah.

[George Kamel]

By the way, I refuse to call it X.

[Rachel Cruze]

Thank you.

[George Kamel]

Somebody came out the day that this was. This came out. I saw this. They were like, well, what people don't realize is, is if they lower that interest rate, how. Where do you think all the points come from? It comes. Which is right, by the way.

[Rachel Cruze]

Yes.

[George Kamel]

The point system is.

[Rachel Cruze]

And the airline miles, all of it.

[George Kamel]

Who aren't paying their debt off. And every month they're paying 22%. And that's where the miles and the.

[Ken Coleman]

So what's going to happen? They're going to slash rewards, devalue your points. Guys, the banks are smarter than you.

[George Kamel]

There's no free lunch. Have you ever heard that phrase?

[Ken Coleman]

Yep.

[Rachel Cruze]

Yes.

[George Kamel]

There's no free lunch. The only way to make this better is to pay off the debt, like.

[Rachel Cruze]

We preach, is to get rid of it.

[Ken Coleman]

It's so true. Here's a fun fact. Credit card rates are protected under federal law. It's called National Bank Act. It's locked in by a Supreme court ruling from 1978. And what this does. The ruling. This is crazy. It lets banks charge whatever rate is allowed in the state they're based in. So guess where credit card companies go. Delaware and South Dakota where there are no rate cap caps.

[Rachel Cruze]

So they can just go.

[Ken Coleman]

It's like a loophole where they go. We can charge 36%.

[George Kamel]

So Delaware and South Dakota are the only two states in the country where there are no caps.

[Ken Coleman]

No rate caps.

[George Kamel]

And that's where all the credit cards.

[Ken Coleman]

Can'T override that without Congress rewriting federal law. And so there's no bill right now. Which means.

[Rachel Cruze]

And the reason that passed in the, in the 70s was what to give the free market and the banks to be able to. To have a free market. Economy. Economy.

[George Kamel]

I do know what you mean. The reason I'm pausing is I don't want to misspeak.

[Rachel Cruze]

Yeah. Yeah.

[George Kamel]

Because I'd have to see.

[Ken Coleman]

We'll have to look at versus first.

[Rachel Cruze]

Of all, I always assume Ken honestly has any answer to any history legislation.

[George Kamel]

I'm like, well, I can in Theory, I can say that this is where lobbying comes in and the big banks convinced Congress. And, you know, I mean, that's why we call.

[Rachel Cruze]

Here's another dumb question. If there, if that is just platforming, if Trump really cannot do that, that by law, to go in and do what causes him to come into the headlines and to. To throw it out there, just to stir the pot.

[George Kamel]

Same thing when he says. And winks, winks and says he might run for a third term. Says whatever he wants to say.

[Rachel Cruze]

Well, I know, but he's a showman.

[Ken Coleman]

And so that's part of it.

[Rachel Cruze]

But I'm just saying. Was there something else stirring that he's like, yeah, yeah. The midterms gonna be. Gonna be.

[George Kamel]

Okay. Let me tell you this. The number one buzzword in politics in America today, you guys noticed it is.

[Rachel Cruze]

Tell us, Ken.

[George Kamel]

Affordability.

[Rachel Cruze]

Oh, yeah.

[George Kamel]

Both sides of the aisle. It is going to be the issue in the midterms.

[Ken Coleman]

And.

[George Kamel]

And so presidents do this. I don't begrudge him for it, but that's why he did it.

[Rachel Cruze]

Sure.

[George Kamel]

By the way, it was probably three in the morning. He probably just had a filet o fish sandwich, you know, brought to him by Secret Service. The guy never sleeps.

[Ken Coleman]

Yeah. You know what I mean?

[George Kamel]

And so he just gets on Truth and he's like, oh, this is a good idea.

[Ken Coleman]

Let's stir some things up.

[Rachel Cruze]

Let's just see what happens.

[George Kamel]

What should be. Anyway, this sounds good.

[Rachel Cruze]

Yeah. And you know, and I will say from my seat, the banks do screw people. But also, we have chosen as a country, as a consumer base, to get into this amount of debt. Right. Nobody.

[George Kamel]

That's right.

[Rachel Cruze]

Nobody tortures you and forces you to sign for the car loan or the credit card or whatever. Right. We, as adults, if you're over 18, have chosen to put your signature on something.

[Ken Coleman]

That's true.

[Rachel Cruze]

To borrow.

[George Kamel]

I don't begrudge the banks. You know why? The banks are just like the guy in the kiosk in the mall where I'm walking by with my wife.

[Rachel Cruze]

He's like, hey, hey, try this, try this.

[Ken Coleman]

And you have every right to just pass by.

[George Kamel]

I can ignore him or I can stop and get sucked into it. And then the whole. Let the whole spiel sell me on whatever.

[Ken Coleman]

Now Ken's got a new face lotion all of a sudden. There you go.

[George Kamel]

I want to say this. I'm with you.

[Rachel Cruze]

A new keychain.

[George Kamel]

But like you, I'm validating your point.

[Rachel Cruze]

Yeah.

[George Kamel]

Banks aren't bad. Banks are in the business of making money.

[Rachel Cruze]

Yeah. But they do pry on people. They know, they know the tactics.

[Dave Ramsey]

I agree.

[Ken Coleman]

But I'm saying we.

[George Kamel]

Let's get some personal responsibility.

[Rachel Cruze]

Right, Right. Which is. Yeah. What I was saying by the way.

[George Kamel]

Trump threw out the 50 year mortgage too. So he's just throwing stuff out there.

[Ken Coleman]

Just to see what's.

[Rachel Cruze]

What was the math on that one that you did? It would be like, it'd be like a million dollars in interest or something. What was it?

[Ken Coleman]

Yeah, well, you essentially never pay it off. The principal doesn't go down until you're 41 years into the mortgage. That's when more is going to principal and interest. 41 years into a 50 year mortgage.

[Rachel Cruze]

It's crazy wild. So yeah folks, I would say don't get your financial advice from presidents and or the banks take away.

[Ken Coleman]

I would, I would pay my credit cards off today and cut them up versus waiting and hoping that maybe the rates will go down and so I'll hang on the banks, they don't care about your financial piece. No. And that's fine. The they're not going to solve your debt problem. And the system is designed to keep you dependent on lenders and on lawmakers. So the best part is you don't have to be dependent. You can break free from the system and just say I'm going to use my own money.

[George Kamel]

What's in your wallet, George?

[Ken Coleman]

A debit card.

[George Kamel]

I thought you were going to say cash in cash.

[Ken Coleman]

It won't fit.

[Rachel Cruze]

Ken, thanks for jumping in last minute.

[George Kamel]

You guys are the best.

[Rachel Cruze]

Thanks. If you missed open enrollment, don't panic. Most health plans lock you out for the year if you didn't sign up by December. But Christian Healthcare Ministries lets you join anytime. CHM offers a simple, flexible and budget friendly alternative to health insurance. Insurance. And you can join anytime. That's right. No open enrollment deadlines. CHM is perfect if you're self employed, starting a business or in between jobs because it gives you options without those out of control COBRA costs. And CHM isn't insurance. It's a community of believers coming together to share medical bills and pray for one another. That's real peace of mind. You're not just sharing costs, you are sharing community. And families have trusted CHM since 1981 with billions of dollars in medical bills shared. You can see any doctor or hospital you want with no network restrictions. And members say that they often save hundreds of dollars a month compared to traditional insurance. So make a change that fits your budget and your values. Check out chministries.orgbudget to learn more, more. That's chministries.orgbudget. Buying or selling your home is a big deal and you want an expert in your corner fighting for you to find the best deal for the right price. And the Ramsey trusted program is the only way to find a top agent you can trust who will help, help, help. Just a little, my little expert.

[Ken Coleman]

If you're that desperate, they'll help you.

[Rachel Cruze]

Comes in there, help make your home a blessing, not a burden. It's easy. You just can compare agent profiles, which I love, so you can, like, look at different ones, see what people are saying, look at their. Look at their profiles, interview them and then check. Choose the right one to work with. To find a Ramsey trusted real estate pro for free, go to ramseysolutions.com agent or click the link in the description. If you're watching on YouTube or listening.

[Ken Coleman]

On podcast, little Sharon Ramsey snuck out there.

[Rachel Cruze]

Help you, Rachel? Yes, I'll help. Oh, you know, can't. You can take the accent out of the girl. You just can't take. Well, or the girl.

[Ken Coleman]

Whatever they say.

[Rachel Cruze]

Yeah, whatever that that saying is. All right, all right, let's head to. Is it Ali? Would you go Ali Or Ali? Or Ali In New York? New York, yes. Hi, Ali. Welcome to the show.

[Caller]

Thank you. Thank you for taking my call.

[Rachel Cruze]

Absolutely. How can we help today?

[Caller]

I just have a simple question. I run a limousine company here in New York and I have a lot of independent contractors. They work with me. They have their own vehicles. So I have right now only one driver that drives my car, which, you know, lowers my expenses. But the question I wanted to ask is if it's okay for me to buy another vehicle and hire another driver, which is gonna obviously, you know, add another car payment and the insurance and the driver's pay on my payroll. So that's the question I want to ask is should I keep using the independent contractors or. Or, you know, buy another vehicle and hire my own driver?

[Rachel Cruze]

Yeah, well, if you're going to go through the avenue of debt. Oh, yeah, I would say. Yeah, no, I would say you're not financially ready to do that. Because from a financial perspective, even with small business, we always say move at the speed of cash if you have the cash in order to do it, if you have enough revenue, profits coming in that, you know, okay, yes, I have the ability to pay someone full time, save up for a car. Like all of this is going to be streamlined then. Yes, I would. Until then, I would not. But I, But I think that could be a great, you know, next milestone for you. Because I do know, you know, the car service, you know, world in New York. I know it's, there's a lot of need out there. Right. There's a lot of people that use car services. So I do think that your ability to make money is there. And I just wonder if you make it more of a goal than like an urgent implementing something quickly.

[Caller]

Yeah, I mean, because I was doing the math. It's going to add at least, you know, 10 grand on my, you know, monthly, including the, you know, driver's pay and the car payment and the insurance. So $10,000 monthly is going to add.

[Ken Coleman]

That's the expense for you for one.

[Caller]

Adding. Yeah, because the vehicles we use is a Cadillac Escalade suv. We drive a lot of high end business executives and we did around 1.1 million last year.

[Rachel Cruze]

Is that top line gross?

[Caller]

Yeah, that was the top.

[Ken Coleman]

What do you take home from the business?

[Caller]

Approximately 350 to 400.

[Ken Coleman]

Oh, amazing. Okay, Ollie, hit me straight. Couldn't you save up and buy one of these in cash? Maybe buy one used, get a deal and then it's pure cash flow.

[Caller]

Yeah, I mean the one thing I think the only option I'm going to have to go to, as you just said, maybe I have to save money to buy the car because we, if I buy a used vehicle, what's going to happen is they won't give us the Warranty, which is 150,000 mile warranty we normally get when we get a new vehicle. So because you know, we run these cars for a long time, we put a lot of mileage on it. So if I buy a used one, it's not going to have that warranty.

[Ken Coleman]

Sure, but you could self insure at this point with the business, I mean you can create your own warranty fund and put 500 bucks a month into a pot and go, all right, we're going to cover maintenance and repairs with this month money instead of paying the, the fees for the warranty. Cuz what you're doing is you're destroying these vehicles by using them for business, which means you're likely underwater on that car pretty quickly. You owe 60 grand, the car is now worth 40 because you already have 100,000 miles on it, whatever it is. And so it's actually putting you at more risk by buying those cars with a loan. And so I would encourage you get a deal, buy one used. They're still nice cool cars. Yeah, even a five year old Escalade is I'm not going to go, well, it's not a 2025, so I'm not going to ride in this vehicle. You know, it's about the service you provide.

[Rachel Cruze]

Clean smells good, right? I mean, it's all that.

[Ken Coleman]

And so if you run this, do you have any debt tied to the business right now?

[Caller]

Yeah, right now the only debt I have is, you know, we have brand new to two brand new vehicles. It's close to 130,000.

[Ken Coleman]

Okay. How quickly could you pay that off?

[Caller]

I can pay that off. I would say within six or eight months.

[Ken Coleman]

Cool.

[Rachel Cruze]

Amazing.

[Ken Coleman]

Think about that, though. If you got rid of all the debt and then you begin to cash flow, any future vehicles, run the numbers on that. And not only will. I think you're going to go, oh, my gosh, this is amazing. Yes, it's going to take a little bit of delayed gratification right now and sacrifice, but the long term is you survive in this business 10 years from now because everyone else is over leverage, leveraged underwater on their car loans, and you're going, sweet. I got six Escalades paid for in cash.

[Rachel Cruze]

Yeah. And what's crazy Ali is George and I, we were in New York city, March of 2020, literally the day they were shutting down Broadway, all of it. Because we were there for a media thing right when Covid hit. So my thing is too, you know, whether it's, you know, something like that. I mean, who knows what could happen where everything just stops. Right. Business for you guys in 2020 through 21 probably just ended. Right. I mean, it just was done. And so there's still a level. Yeah, a level of risk that you carry when you carry debt. And especially since yours is so dependent upon, you know, other people and even, you know, I don't know if it's just execs that you guys, you know, do this car service for or other people, but there's something to be said that if for some reason, business just stops when you don't have debt, you have a lot of peace. A lot of peace. Thanks for the call, Ollie. I hope that helps. All right, let's head to Ethan in Columbia, South Carolina. Hi, Ethan. Welcome to the show.

[Caller]

Hi, guys. How's it going?

[Rachel Cruze]

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

[Caller]

Well, it's kind of a compound question, but I'll keep it brief. My fiance and I are going to get married in June.

[Rachel Cruze]

Yay. Congratulations.

[Caller]

Thank you. Thank you. It's been a long time coming about a two year engagement.

[Rachel Cruze]

Oh, good.

[Ken Coleman]

Yeah.

[Caller]

So we have Our honeymoon paid for, we have our wedding paid for. Just a couple of expenses here and there. But we're wondering, should we rent first, should we buy first? We have an opportunity to live with family. But I'll explain more of that in a bit.

[Rachel Cruze]

Okay. Yeah, my, my kind of go to answer usually, Ethan, is if you guys are not if one, neither of you are homeowners right now. Is that right?

[Caller]

Correct.

[Rachel Cruze]

Okay. So yeah, starting off like that, I would definitely just rent. Rent for a year, get settled, get an apartment, like just kind of just, you know, have that, save some money. And then when you look up and say, okay, we do have enough to put a down payment, you know, which is 5% for first time home buyers is what we Recommend On a 15 year fixed rate and mortgage. You know, it may take you longer than a year to save depending on where you guys are financially, you know, what you guys can put away. So I would not buy a home until you have that so you're financially ready. So in the meantime, I would be renting. But even if you were financially ready, there is still part of me, George, that I'm like, you know, still wise. Yeah, just rent for a year.

[Ken Coleman]

I'm curious, Ethan. I see the word debt on my screen. How much debt do you guys have?

[Caller]

We have, I did the math while I was on hold. It's spread out $89,000. I didn't realize 36 of that is student loans for me, 30 is student loans for her, and then 23,000 on a vehicle I use.

[Ken Coleman]

Okay, what's, what's going to be your household income once you guys are married?

[Caller]

Per month or two.

Total.

[Ken Coleman]

Total. Per year.

[Caller]

Total per year. I currently bring homes around 70 or 70. She's about to graduate from nursing school, so it's kind of hard to guess, but I'd say probably around 60 to 70.

[Ken Coleman]

Okay.

[Rachel Cruze]

We all make it a good income. Yep.

[Ken Coleman]

So that you have a great goal while you're renting, which is clean up the mess.

[Rachel Cruze]

Yes.

[Ken Coleman]

And aggressively pay off your consumer debt. Which means we're not going to do any investing. We're not going to live the like crazy newlywed life and go get a bunch of stuff and go on all these crazy tr.

[Rachel Cruze]

No, we're living on $40,000 a year. Tell yourself that. And then throw that, throw that 100 at this debt and get it paid off. You know, I mean you guys could clean this up in one year. Ethan. Which is so amazing. And then beyond that, built, you know, building up an emergency funds and then saving up for that down payment, which again, you guys have a great income, so you're going to be able to do that.

[Ken Coleman]

Don't get tempted because everyone goes, well, you're married now. You need a house. You need a house, Go buy a house. They don't pay your bills. They don't, they don't know your stress levels. And it's going to add anxiety and stress to a newlywed's life if you do it before you're ready.

[Rachel Cruze]

Welcome back to the Ramsey show in the Fair Winds Credit Union Studio. I am Rachel Cruze hosting this hour with my good friend, bestselling author George Camel. And we co host a another podcast, Ramsey Network show called Smart Money Happy Hour. So make sure to check it out. Out. All right, give us a call at 888, 825-5225. And we're here to answer your money questions and any questions about life. You know, sometimes money definitely is integrated into our relationships and our jobs and careers and all the things. So we are here for you. All right, let's go to the phones. And we're going to go to Chicago starting us off. And Brooke is on the line. Hi, Brooke.

[Caller]

Hi.

Thank you so much for taking my call.

[Rachel Cruze]

Absolutely. How can we help you today?

[Caller]

So my husband and I found ourselves in sort of a unique situation last year. He had just graduated from dental school and we moved to a small town in South Carolina where he worked as an associate dentist at a practice that essentially was committing insurance fraud, drilling on things that didn't need to be done. So after about a month or two there, we reassessed our options and realized the best bet was to move back to Chicago, where I'm from, to live with my parents while we finished out our lease on our top home there. So the original goal when moving here was to try to pay off as much as our student loans as possible. I'm a physical therapist. He's a dentist. We both combined have about 600,000 in student loans.

[Rachel Cruze]

Wow. Oh, my gosh. Okay. Okay.

[Caller]

Over the past year, we were able to pay off, I think moving here, I think I had approximately 140,000 in student loans. We were able to kind of wipe that out. So now it's been a year living here. We've been with my parents. He still has his 420,000 in student loans. And so I guess the next step, like I'm just calling in to get some wisdom on, you know, we've stayed. We're still in a good relationship with my parents, but should we continue to live with them saving up for potentially a down payment on a home? Should we be looking more into renting for the time being.

[Rachel Cruze]

How much are you guys. How much are you guys making a year?

[Caller]

So his. He's a percentage of production. So his is approximately. I would say probably 100 to 40,000.

[Rachel Cruze]

140.

[Caller]

Since he's an associate dentist. Yeah.

[Rachel Cruze]

Okay. And what about you?

[Caller]

And I make approximately 90.

[Rachel Cruze]

Okay. And do you think.

[Caller]

Oh, sorry.

[Rachel Cruze]

Well, yeah. So. So you guys living with your parents? You basically, if you lived on nothing, then you should be able to pay off this in two years. Years.

[Caller]

Correct. With his. You mean for. For his student loans?

[Rachel Cruze]

Well, yeah. You guys are. Yeah. I mean, at 250, if you guys each live. If you lived on 50,000 a year, which is plenty, because you don't have rent or you're not paying utilities and stuff, I'm assuming you got $200,000.

[Ken Coleman]

Do you still have debt on top of his 420?

[Caller]

So next month we will have paid off my student loans.

[Rachel Cruze]

Okay, so yours is done. So the 420 is left. Yeah. So if you guys had two years where you put $200,000 a year, that's 400,000. And then, you know, you're working a side gig or whatever, you guys are making 20,000 extra between in those two years, you guys could have paid off.

[Ken Coleman]

I would be busting it. I would make it my goal to get out of there as soon as possible. I'll say it that way. Don't let this be a hammock. Where you go, well, we're comfortable. Let's go on a vacation. Let's get a nice car. We have no expenses. Great. No, you see where I'm going with this? Because that's the real situations we hear from when people go, I'm living with. This really happened. They. They were living with parents to pay off for. They're $10,000 in debt. I asked them, how much debt do you have now? $40,000 in debt. They went into debt while living with family because they got comfortable.

[Caller]

And Mike, I guess we're trying to move out, I guess, as soon as possible. So we're looking maybe in the next few months here to try to move out. So.

[Ken Coleman]

And what is rent in your area?

[Caller]

About 3,000amonth.

[Rachel Cruze]

Okay. So you'll be, you know, 40,000.

[Ken Coleman]

It will slow you down by, you know, 36 grand a year. Essentially.

[Caller]

It would. And he accumulates about 2,500 to 3,000amonth in interest on his loans.

[Ken Coleman]

As well, that's your rent right there.

[Caller]

That's worth noting.

[Rachel Cruze]

Yeah, yeah, yeah.

[Ken Coleman]

I would be busting it to make $300,000 this year and throw every penny at the debt. And maybe you guys get on a game plan with. With your family and go, hey, here's our timeline. Here's what we're doing. Keep us accountable.

[Rachel Cruze]

Check in with us. And I. There's a part of me, Brooke, too, that I, you know, for the good of just you guys in general, I do think there's a gift in living with them right now while you're paying it off, But I think having an end date, that kind of makes you uncomfortable and forces you guys out. So, I mean, this sounds crazy, but what if you did November of this year, right? And you got pretty much a good calendar year and you're throwing so much at the debt, but then you're saying, you know what, a year from now, we're going to be living in our own place. We're gonna finish paying off this debt. It may take us an extra couple of months because we're living on our own, but there's something about that growing up and being out on your own as a married couple that I don't know. I think it's good. There's something about having an end date for me would be really helpful so it's not this ongoing idea that you're living there. And I would. And again, I think I would. And I would shorten the timeline, in a sense, just to get you guys out. Right? You're both adults. You both are smart people. You're a physical therapist. He's a dentist. Right. Like, you are capable of adults and you'll be able to pay this off. And there's something about two capable adults not living at home that's good for you guys, but for a season, I think it's okay. Right now I just have an end date. Does that make sense?

[Caller]

Yeah. So if we set the end date, let's say of November, do you think it's important to. Because what we've been doing for the past year is like, putting all our money towards my student loans. We knocked them out. That's great. But now we have, like, nothing to for it other than. Than, like, no debt on my part. Is it smart to kind of be saving money on the side as well? Just so that way if by November we're looking to buy a home like.

[Ken Coleman]

Brooke, I need you to put the idea of buying a home on hard pause. Right now. We have a huge mountain in front of us, you guys will be homeowners and you will retire multimillionaires. But right now, for the next probably two or three or four years, you.

[Rachel Cruze]

Have a mortgage right now creating a foundation. $220,000.

[Ken Coleman]

The amount of interest you pay is more than most people's mortgage.

[Rachel Cruze]

Yeah.

[Ken Coleman]

So let's focus on knocking out all debt.

[Rachel Cruze]

Yes. All focused on that.

[Ken Coleman]

Then you get an emergency fund of six months. Then we begin saving up the down payment. And so you might crunch the numbers and go, okay, in Chicago, that's a $700,000 home. We might need to downgrade to a townhome. That's 600,000 in the suburbs. Whatever. You guys can figure out the plan. But do not let this home get in the way of this financial foundation that you building.

[Rachel Cruze]

Yeah. How old are you guys, Brooke?

[Caller]

27.

[Rachel Cruze]

27, okay. Yeah. So, I mean, if you guys are Debt free by 30, you do some saving and you guys are, you know, homeowners by 32. That's a great plan. So. And you have plenty of time. You guys have time and you make an incredible income. Like, you're going to be able to make some big strides. And that's if all of your income stays the same for the next five years, which it's not. It's going to go up over 10 time. So it's going to fast forward your plan. I think you're going to get to all of these things faster, but you have to do it in the right order, which is the baby step. So you want a thousand dollar emergency fund, go ahead and get out of all your consumer debt, build up that emergency fund, and then be saving up for that down payment. Have you guys. Have you guys read the Total Money Makeover?

[Caller]

My husband has. He's having me reading it right now.

[Rachel Cruze]

Oh, well, there you go. I was going to give you a copy, but you don't need. Let me give you George's. George is fun. Breaking free of brew.

[Ken Coleman]

There's more jokes in there I think you'll enjoy.

[Rachel Cruze]

Yeah, yeah, it's a. It's a great one.

[Ken Coleman]

And read the student loans chapter. It'll light a fire.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

And it just kind of solidifies Brooke, like, just the way our generation does money. It kind of just like pokes a hole in all these, you know, industries to show you that you don't have to be normal. You don't have to be normal. So I wanted to solidify where you guys are. I don't want you going backwards in your progress. Continue to move forward. You have A great income. You guys are smart. But get rid of this $420,000 loan in two years. Do it. Make a crazy goal and do it.

[Dave Ramsey]

When you're tired of feeling stuck with money, there's just one solution. To get different results. You have to do something different. No one accidentally wins with money. You have to have a game plan. And that begins with our get started assessment. Go to ramseysolutions.com start. Answer some questions, and we'll show you what steps to take next. Don't stay stuck. Take control of your money. Starting Today, go with ramseysolutions.com start.

[Rachel Cruze]

Up next, we have Samantha in Phoenix, Arizona. Hi, Samantha. Welcome to the show.

[Caller]

Hi. Thank you for taking the time to speak with me.

[Rachel Cruze]

Yes, absolutely. How can we help?

[Caller]

So my husband and I are on baby step seven, and we're trying to figure out what to do next. So we are out of debt. We've got 3,000 in savings. We're contributing to our 401k in our Roth IRA. And so we're just. And we own a home.

[Ken Coleman]

That's amazing. What's your house worth?

[Caller]

When we bought it, we bought it for 150. And right now it's worth about 400.

[Rachel Cruze]

Oh, my gosh.

[Caller]

Yeah, we. We pay it off.

[Ken Coleman]

How old are you guys?

[Caller]

28 and 29.

[Rachel Cruze]

Oh, my gosh. Samantha, who raised you?

[Ken Coleman]

This is crazy.

[Caller]

I grew up listening to Dave Ramsey on the car ride home.

[Ken Coleman]

Financial peace, baby. And you guys were like, all right, let's just live this out. So you guys got married. You were debt free or close to it. You were able to get a house faster and pay it off fast.

[Rachel Cruze]

What do you guys make a year?

[Caller]

Between the two of us, we make about 200 before taxes.

[Rachel Cruze]

Okay, good for you guys.

[Ken Coleman]

You said you had how much in savings?

[Caller]

30,000.

[Ken Coleman]

30,000. Okay, awesome. And you're asking what's next?

[Caller]

Yeah. I also have a secondary question that might play into this. I have a house I inherited as well, on top of this. And so we're debating selling it and investing in another house to kind of be like, our, you know, rent our current house and invest in a nicer house to live in versus sell it, sit on the money, put it into, like, stocks or something. Like, we're not really sure what to do with it at this point.

[Rachel Cruze]

Yeah. When do you guys want to upgrade houses? Do you know?

[Caller]

We're looking to do it sooner than later. We are putting that home on the market because it's not making us anything and we're unable to Rent it comfortably due to the location and manage it well.

[Rachel Cruze]

Okay.

[Caller]

So we want to have a rental in the same city that we're in, so we can manage it.

[Ken Coleman]

What do you think you would net from that?

[Caller]

Probably 400,000 as well.

[Ken Coleman]

Wow, that's incredible. So you would take that 400,000 and get a different house in cash, and then you would keep your current one and rent it?

[Caller]

Yes.

[Ken Coleman]

Is that feasible?

[Caller]

Yeah.

[Ken Coleman]

You can get the house you want for that 400 in your account area.

[Caller]

Our dream house would probably be a little more. So we'd have a mortgage about 200, and then we pay that off in about a year to two years is our goal.

[Ken Coleman]

Okay.

[Rachel Cruze]

Yeah. Well, I think that's. Yeah. So you ask what's next? I think that would be the next step. Right. So for. Probably for the next two to three years, when it comes from everything from selling the houses, closing, finding the new and all that, you know, so I'd say you guys have, like, a house goal here for the next three years of buying something. And if you take a small mortgage, paying it off quickly, all of it. So that would be.

[Ken Coleman]

You'll be back in baby step six for a bit and then back to seven, and then you reassess your goals. And that's really when the world's your oyster and you guys get to dream. Do we want to get another home? Do we want to get into real estate? Do we want to give more? Go on these trips? It just sort of scales up everything. It scales up your spending, it scales up your giving, and it scales up your investing.

[Rachel Cruze]

Yeah. So to George's point, too, you know, doing all of those things is going to be really important. Samantha, you know, when you guys are in baby step seven and you're going to be settled there for a while, once you have this new home and it's paid off, is to up your giving and find some things that you guys are excited about. And I think, you know, this is one area that Winston and I really kind of had on autopilot for. For a few years. And probably because we were having babies and all of. I don't know, we were. So we were giving and doing, you know, mathematically what we were saying. Supposed to, but it just kind of didn't get as exciting. And so we've switched up even how we give. And it's. It is so fun. Like, it has brought the joy back for me in the last, like, year or two of, like, oh, my gosh. So get creative in your giving. Find things that you really are passionate about do some fun stuff with that money. I mean genuinely, that is, it is some of the most, the most fun you can have with money. And we say it all the time, but it really is true. And then be saving, continuing to invest and, and even maybe, you know, have some big savings goals for things that maybe you want and then enjoy some of it. And so doing the giving, saving, spending, formula, all three things need to be happening. And yeah, and that's what's kind of crazy is like there's not a lot of people say this when they finish the baby steps.

[Ken Coleman]

They're like, they want like baby step eight. Okay, what's that?

[Rachel Cruze]

Yeah, like what do I keep doing?

[Ken Coleman]

You know, so I'm like, you tell me. I don't get to decide your life for you.

[Caller]

Yeah, yeah. We've done some travel and we've done some things so I, we could have more saved, but I mean, we've been kind of enjoying life a little.

[Ken Coleman]

And you guys have kids?

[Caller]

No, we don't.

Okay.

We want a bigger place before we do that.

[Ken Coleman]

Okay, cool. Well, here's what I'll tell you.

[Rachel Cruze]

No go now. Samantha, kids. Yeah, don't wait for the big house. What I want to tell you, babies are small.

[Ken Coleman]

It's okay for your dreams to change. You may go, you know what? I want to stay home and you guys have the flexibility to do that without it being, you know, adding any financial stress to your life. And so I would, I would sit down to a dream date with your husband. Husband this weekend and go, hey, let's both put a, a goal for each category on paper of what we want to do next year. Here's my giving goal, here's my investing saving goal. Here's my spending thing. I want to do.

[Rachel Cruze]

Rachel's vote is have babies earlier and.

[Ken Coleman]

We'Re having kids next year. It's going to be awesome.

[Rachel Cruze]

You never regret, you never regret it.

[Caller]

We do. One of us is going to be a stay at home with the kids. So we want to be comfortable with that. Like one income.

[Rachel Cruze]

Yeah. I think you guys are great, right? I mean, you have no idea.

[Dave Ramsey]

Debt.

[Rachel Cruze]

You're choosing the house thing. I'll say that. If the, if the getting into this.

[Ken Coleman]

New house, that's the caveat is does that put a damper on your plan for one of you to stay home? I don't want you to like. Well, once that house is paid off, then maybe we'll start thinking about having kids. I would put the kids as the priority before upgrading the home. The child will survive in this home that you have now.

[Caller]

That's true. Okay, and then if we were to say sell like this house in the next month and then, and we, we decide not to buy a home, would you guys let that money sit in a high yield interest account or would you invest or how much of that would you say?

[Ken Coleman]

I would go high yield because you're talking about like a one or two year goal, right? This money's not going to sit there for more than one or two years. And that's where I go, hey, the market, it's been great the last few years. Who knows what 20, 26 or 27 is going to bring if it's negative 20%. And now you're on the cusp of trying to buy the this home. And so the high yield savings account just gives you some stability. It'll grow at, you know, three and a half percent right now. But that's, that's kind of more guaranteed than the market which is going to fluctuate more drastically. So if I had a one or two year goal, I'm going to park it in high yield savings. And if you want a great option, you can check out Fairwinds. You can go to fairwinds.org Ramsey. They have an awesome smart bundle for you.

[Rachel Cruze]

Up next, we have James in Ohio. Hi, James.

[Caller]

Hi guys. Thank you for taking my call.

[Rachel Cruze]

Absolutely. Hi, can we help?

[Caller]

So my wife and I just last year purchased our first home and it's a little bit of a fixer upper, well within what we can afford. But I did jump the gun a little bit. And looking back in hindsight, I kind of regret it just because we still have a little bit of debt. Just a little under 20,000 total.

[Rachel Cruze]

Okay.

[Caller]

12,000 of that is on my wife's car.

[Rachel Cruze]

Okay.

[Caller]

5,000 in a student loan of hers and just under two grand of credit card debt.

[Rachel Cruze]

Okay. How much do you guys make a year?

[Caller]

Last year I grossed about 80 and she her about 20.

[Rachel Cruze]

Okay, perfect. All right, well, why don't you all just, you know, pay this off in five months.

[Caller]

That's the goal ultimately. So. But essentially my question was is I'm driving a car that I bought for $5,000 cash and we still owe about 12 on hers. And I know it's well under 50% of my income, wheels and motors. But what I wanted to do was sell the car and get another cheap car just to pay that debt off because I'm so tired of making that payment, which she disagrees with. She thinks we should just keep it and pay it off.

[Ken Coleman]

What's the cost car worth?

[Caller]

Probably about 1 or 2 less than I owe on it.

[Ken Coleman]

And how much do you have in savings?

[Caller]

So I paused on the baby steps because my house is in desperate need of a roof. So I have 10,000 in savings earmarked for that. Now I think that my dad and I, because I'm gonna do it myself, can probably do it for about six. I don't know what's, what we're gonna uncover when we rip the shingles off. You know, open Pandora's boss box and wow. I don't wood's gonna need replaced or anything.

[Ken Coleman]

So I'm not looking to sell her car right now.

[Rachel Cruze]

I know we're on her team.

[Ken Coleman]

I think you guys will pay it off. If you can pay it off in five months, it's not worth selling because now you got to turn around and use savings to buy a $5,000 car or $3,000 car which could lead to more issues.

[Rachel Cruze]

So you're gonna upgrade sooner anyways. So. No. Yeah, I think it's, I think it's doable.

[Ken Coleman]

It's not that desperate.

[Rachel Cruze]

Yeah. And I think you guys need to tighten this up. James, I mean you guys have kind of. I understand that the whole house situation is kind of put you guys in a, in a different position, but I mean get back on track and you guys can, can get all this cleaned up really fast. Really, really fast. Just be on the same team with it. But no, we would probably not sell your wife's car.

[Dave Ramsey]

Foreign.

[Ken Coleman]

Hey, good folks. Dr. John Deloney here. Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you.

[George Kamel]

Do and where you do it.

[Ken Coleman]

So guess what?

[George Kamel]

Ramsey Solutions is hiring.

[Ken Coleman]

If you're ready to join an amazing team that's all about changing lives and spreading hope, we want to see your application. Right now we're hiring for technology, sales, marketing, writing, copy editing and creative roles. Check out all our job [e-mail] careers. That's ramseysolutions.com careers.

[Rachel Cruze]

If you ever hear a money question and you want some guidance like you would on the show, then we have a spot for you. So, I mean, I feel like this show, George, is sometimes hard to get on the line. It's always. All the lines are usually always booked up. So if you're like, man, I really wanted to ask this question. Well, we've got a free tool for you.

[Ken Coleman]

Here's your chance.

[Rachel Cruze]

Yes. If you go on our website, you can ask your Money question and get an answer to your situation 24 7. It's pretty crazy. So I love it, Hate it. Well, we're using it for our advantage. So we actually, our Ramsey team went and like did all their magic. And the Ramsey AI is here.

[Ken Coleman]

It's built on the Ramsey principles, custom built so it stays in the guardrails.

[Rachel Cruze]

It's not random financial advice. It really is through Ramsey Solutions and what we teach. So you can ask your [e-mail] or if you're watching on YouTube or podcast, you can click the link in the description. So you guys check that out.

[Ken Coleman]

I dare you all to go test it out right now and see how close it is to what we would say on the show. That'll be a fun experiment.

[Rachel Cruze]

That's great. Yeah, we're trying to help as many people as possible. Not, you know, if you can't get on the show or slide into our DMs with your question, we don't get back to you. Whatever. The thing is, like you have the ability to ask a question about your money and we want to help you do that. All right, let's go to Kurt in Calgary in Canada.

[Ken Coleman]

Hey, Kurt, how's it fun? Hello.

[Rachel Cruze]

Hello. Welcome to the show. We love to bring on people who have absolutely killed it when it comes to money, just to hear their story and honestly to kind of set up the idea like this can happen. Like you can actually.

[Ken Coleman]

It's possible.

[Rachel Cruze]

Yes. And build a positive net worth and one over a million dollars. So Kurt, thank you again for coming on. And what is your net worth?

[Kurt]

Just north of 2 million Canadian.

[Ken Coleman]

Wow. And how old are you?

[Kurt]

I just turned 45 not too long ago.

[Ken Coleman]

Well, that's wild. Are you married?

[Kurt]

I am.

[Ken Coleman]

Fantastic. Okay, tell us the mix of this 2 million. Break it down for us.

[Caller]

Oh, goodness.

[Kurt]

Probably a quarter of it is retirement. 10% is my kids college fund. I've got about a quarter of it in corporate assets for the businesses that my wife and I run.

[Ken Coleman]

And.

[Kurt]

Some cash on hand. Some, you know, probably a third of it is my house. Our house. Yeah, just a couple of places.

[Ken Coleman]

I love it. And you guys have been following this plan for how long now?

[Kurt]

So you'll have to forgive me, I didn't know Ramsey and the baby steps existed until maybe four or five years ago.

[Ken Coleman]

You were smart before you found us.

[Rachel Cruze]

Did great.

[Ken Coleman]

That's impressive.

[Kurt]

Well, smart and stupid, I won't lie. We took on what I would call a soul crushing amount of debt. But we worked our way most of the way through it. And all we have left is the mortgage.

[Ken Coleman]

Wow. What's your household income?

[Kurt]

Just right around 200,000.

[Ken Coleman]

Okay, what was your best year and worst year of income during this journey?

[Kurt]

Well, the worst year would have been when we first got married. I was still a university student and my wife made 33,000. But once I graduated, our household income sort of started around 70 or 80,000. We kind of averaged around 100, 110 most of the time. Only in the last few years has it really moved upward.

[Ken Coleman]

That's awesome. And did you guys inherit any of this? 2 million?

[Kurt]

You know, my wife's mother gave her part of her. When my wife's grandmother passed away, my mother in law gave us 5,000 doll to go on a trip for fun.

[Ken Coleman]

So safe to say it did not mathematically cause you to become millionaires. No, because that's a big myth we hear all the time. Well, you got to inherit money to be a millionaire. Must be nice. That's not at all. And what are your careers?

[Kurt]

So my wife is a bookkeeper and I'm an engineer.

[Rachel Cruze]

Fantastic. Which that's about right up the alley of our study on millionaires.

[Ken Coleman]

Number one career choice in the millionaire study, over 10,000 of them, was engineer. What do you attribute that to, Kurt? Is that you're a process driven guy and you just went, okay, I'll just follow the process.

[Kurt]

Well, I attribute it to my wife, as any sane man should. No, it was always, we live within our means and apart from a few decisions along the way, you don't buy something if you can't pay for it for it.

[Rachel Cruze]

Okay, so y' all have always been very averse to debt, you would say?

[Kurt]

Well, yes and no. My, my mentor retired earlier than planned and he sold the business to myself and my. One of my. My business. Current business partner. And we weren't quite ready to. To purchase that outright and so we had to finance the purchase of the company.

[Rachel Cruze]

Oh, that's right, that part. But consumer debt when it comes to clothes and vacation cars, credit cards, cars.

[Kurt]

We financed one and it just. I hated it. Yeah. After about two years, I just couldn't stomach it anymore. And so we got rid of that as soon as we could.

[Ken Coleman]

Wow. What are you guys driving today as real life millionaires? Give me a year. Make, Model.

[Kurt]

My car is a 2013 Volvo C30, just a little hatchback back with over a hundred thousand miles on it. My wife, she gets the new car. We bought her a new car just a couple years ago. The tree fell on our Last one, but.

[Ken Coleman]

Oh my goodness.

[Kurt]

Yeah, it was just unfortunate timing. But no. She has a 20, 23 Volkswagen Tiguan.

[Caller]

Nice.

[Rachel Cruze]

Very great.

[Ken Coleman]

And paid for in cash.

[Kurt]

Paid for. No, nothing.

[Ken Coleman]

That's amazing. So she's got a three year old car, you've got a 12 year old car.

[Dave Ramsey]

Car.

[Ken Coleman]

And that's we found in the millionaire study. The average millionaire drives a four year old car with 41,000 miles on it. And the top brands were Toyota and Honda.

[Rachel Cruze]

Yeah.

[Ken Coleman]

Which is pretty wild. So you guys are square in the middle of that and you guys have four year degrees, Both of you or more?

[Kurt]

Both of us, Yep.

[Ken Coleman]

Okay, Were you guys super smart? What were your GPAs, do you remember?

[Kurt]

I'll just say I finished my. Finished my degree with a GPA of around 3.37. My wife's was higher. She's a smart cookie.

[Ken Coleman]

This is impressive.

[Rachel Cruze]

I know. That is impressive. That's amazing. Well, Kurt, what would you say to someone that's listening? Maybe it's a newlywed couple when I'm still in school. Maybe they're starting off just like you and your wife did. You know, how would you say, what are the principles that you would tell people? This is what you have to do if you want to start building real wealth.

[Kurt]

Live on less than you make. Make it, do, use it up, do without. Those were the guiding Princip principles that we live by.

[Rachel Cruze]

Wait, say it again. Use it up. What'd you say?

[Caller]

Use it up.

[Kurt]

Use it up. So if you've got something, use it.

[Ken Coleman]

Don't waste.

[Kurt]

Yeah, don't be wasteful. Do without. Meaning that if it's not absolutely necessary, don't do it.

[Dave Ramsey]

And.

[Kurt]

Yeah, what is it? Use it up, do without and make it.

[Ken Coleman]

Do.

[Kurt]

So, repair as needed and make what you have last. Take care of what you have so that you don't have to keep going and buying new things.

[Rachel Cruze]

Yes.

[Ken Coleman]

That's old school. That's definitely like a grandma and grandpa principle right there. You know, coming out of like a great depression. Like, we're not going to get new stuff. That's crazy. This works just fine. We'll fix it up.

[Rachel Cruze]

Well, I love it because you can get in the habit if something just kind of is off a little bit. Like, yeah, we'll just get a new one.

[Ken Coleman]

We'll just get a new one on Amazon. It'll be here in two hours.

[Rachel Cruze]

Yeah. And you end up. You do. You end up spending so much doing that. Okay, so Kurt, would you say now where you guys are? Do you. Are you enjoying your Money. Do you feel like you guys are having fun?

[Kurt]

Not yet, because we still have a mortgage and so that, you know, the fun is, is coming when that's, when that's done and gone.

[George Kamel]

Y.

[Kurt]

But, you know, right now we're still, we're still working the process and but for me it's the, it's the piece that comes from, you know, it's like we've got six months of an emergency fund. So that if, you know, because we're both, we're both self employed, if our income is variable, it's like, you know what, that's okay. We've got, we've got comfort and peace.

[Rachel Cruze]

Yes, absolutely. Yeah, that, that padding is very real between you and life. I mean, there is something that does give a lot of. Oh, you can sleep at night. The stress is down because if something happens, we're going to be okay. We have this, this money set aside. So how much longer till the house is paid off?

[Kurt]

Five years.

[Rachel Cruze]

Okay. Yeah.

[Kurt]

The goal, the goal is debt free.

[Ken Coleman]

By 50, the ripe age of 50, and by then you'll probably be worth closer to 3 million. Maybe closer to 3.5.

[Kurt]

Things keep, I think things keep, keep trending the way they are. Yeah, maybe. Yeah, I could see that happening.

[Rachel Cruze]

Well done, Kurt.

[Ken Coleman]

Well, thanks for the inspiration.

[Rachel Cruze]

Yeah, you guys are awesome. Thanks for calling in Always your stories. Yeah, definitely kind of give a boost to people out there to see real life, people doing real life stuff. So thanks.

[Dave Ramsey]

How many times have you started January saying this is the year I'm finally going to get my money under control. But then months go by and you still feel broke. You work too hard to keep living like that. Look, there's only one way to move the needle on your finances this year. You've got to have a plan. So start by downloading every dollar. Every dollar is way more than our world class budgeting app. In 15 minutes, we'll build you a personalized plan to free up extra margin in your budget and use it to beat debt and build wealth. You'll find thousands of dollars on average just the first day. And you'll get new steps and new lessons every day that help you stay on track and create unstoppable, unstoppable momentum. Don't waste one more day feeling broke and stressed. Get your plan in just 15 minutes by downloading every dollar for free today.

[Rachel Cruze]

Our scripture of the day is from first Timothy 6, 5, 7. This is one of my favorites, George. But godliness with contentment is great gain. For we have brought nothing into the world, and we can take nothing out of it.

[Caller]

Beautiful.

[Rachel Cruze]

Bob Marley said, spend life with who makes you happy, not who you want to have to impress.

[Dave Ramsey]

Oh.

[Ken Coleman]

Oh.

[Rachel Cruze]

It's pretty good. But, yeah, the godliness with contentment is great. Gain. That is. That's big. You brought nothing into the world. You can't. I saw someone. I couldn't. I couldn't quite live with this philosophy because it's a little bit too YOLO for me, but it was, like, on Instagram was a meme, and it was this woman. She was, like, at the beach, like, had a drink or something, and she was like, you know, no one. Basically, like, in the graveyard. You're not going to. You don't care if you're the Tannis or the. The have the best, skinniest, biggest bank account. Like, she listed all these things that we worry about. She's like, go, enjoy your life. Like, eat the pizza. Take the trip. Do the thing. And I thought, you know, it's a little bit of that.

[Ken Coleman]

And you are very. Experiences over things person.

[Rachel Cruze]

Yes.

[Ken Coleman]

Which is wise. The data bears this out. That's one of the best ways to spend money, is on experiences with people you love. You love.

[Rachel Cruze]

Yes, we've heard that. Arthur Brooks talks about that a lot. And there is something to it.

[Ken Coleman]

Rachel's using that to justify every next trip. She's like, winston, it's science. We have to go.

[Rachel Cruze]

We have to go. This is where we should spend our money. I'm telling you, it's what everyone remembers. It's the fun, big meal. It's the whole. You know, at my house, we had all the personalities and their spouses, and.

[Ken Coleman]

We had the best time. You guys were so generous.

[Rachel Cruze]

We have a great dinner. I don't know all of it. There's something about. Yeah. Living a little bit.

[Ken Coleman]

You could have bought a purse, but instead you said, you know what? Let's have a great meal with friends.

[Rachel Cruze]

And I can't take the purse with me into the next life, but I'm okay. You could, but I'll take the memories.

[Ken Coleman]

You could be in your Costco casket, and they're with you. But what good's that gonna do?

[Rachel Cruze]

It's not gonna do good for anyone. So I love it. Yep. Godliness with contentment. Great gain. You didn't bring anything to the world. You can't take anything out. All right, let's go to the phones, and we're gonna go to Hunter in Fresno, California. Hi, Hunter.

[Caller]

Hi.

[Rachel Cruze]

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

[Caller]

So my Wife and I, we are a little bit of. We just got married about a year ago. We, we started off really good. Financially. We're making a little over 100,000. Well, we kind of added, racked up some debt. We bought a new truck. So now we're have about $50,000 on that. And then we also.

[Rachel Cruze]

That's a nice, nice truck.

[Caller]

It is a nice truck. But we also got a camper.

[Rachel Cruze]

How much is that?

[Caller]

About 20,000. 20,000 is what we still owe on it.

[Rachel Cruze]

Okay.

[Ken Coleman]

What other debt?

[Caller]

So other than that, the only other debt is we just bought a house about a month ago. And so now we added that 2,800 payment onto our monthly payment. Payments.

[Ken Coleman]

And what's your monthly take home pay?

[Caller]

Monthly take home pay. It kind of ranges. It ranges anywhere from. It can be anywhere from 5,000 to roughly about, I would say about nine, 10,000.

[Ken Coleman]

Whoa. Okay. Well, that would be more than 100,000 if you're. If you're fairly consistently getting, you know, eight, nine grand a month take home.

[Caller]

Well, yeah, I mean, this past two months, we've only been taking in about 5,000. But a couple months prior, we were.

[Rachel Cruze]

How are you guys. How are you guys surviving?

[Ken Coleman]

Yeah. Your mortgage is over half your take.

[Rachel Cruze]

Home pay, and you got a camper loan or pay.

[Caller]

So the Truck payment is 1300.

[Ken Coleman]

Oh, my gosh. And what's the camper payment?

[Caller]

A thousand.

[Ken Coleman]

So you got 2,300 going to Toys that are going down in value every day.

[Caller]

Yep.

[Rachel Cruze]

So. Okay. But my thing is if you make 5,000amonth, that's $5,100 just in payments. How are you guys making your light bill and food? Like, do you guys have savings?

[Caller]

We do. We have. We have roughly about. So we have roughly about 20,000 in our savings account.

[Rachel Cruze]

Okay. And you're just going to be draining that a little bit at a time to live off of.

[Caller]

Right. Well, so that's. Right now, the reason that fluctuates is I'm currently in school, and so with my construction business, you know, there's sometimes, you know, I'll get a job and I can work around school, and I do great. And then there's other times it's, you know, school gets caught up and I don't have as much time to work.

[Rachel Cruze]

Yeah, but you bought a case.

[Ken Coleman]

Yeah. It feels like a bad time to buy a $50,000 truck and a camper. A camper that you probably don't have time to use.

[Rachel Cruze]

Hunter, do you just feel crazy? Like, do you feel like, what did.

[Caller]

We Do I. I. Yeah.

[Ken Coleman]

What does your wife think about all this?

[Rachel Cruze]

Let's make it. Yeah.

[Ken Coleman]

Is she like, hey, we got to get out of this situation? Or she like, it's fine. He's got it under control?

[Caller]

Both, I guess.

[Kurt]

She.

[Caller]

So she. I mean, you could tell she gets nervous or frustrated every now and then from it. But she's also. She realizes that we're not. I guess we're not. We're not at the end of the road yet. We. We can still come out of this. And so she's a little bit more comfortable with that.

[Ken Coleman]

Okay.

[Caller]

So, yeah, we're definitely.

[Rachel Cruze]

I mean, you're, like, probably nine to ten months. Months away of having nothing, though. You know what I mean? Like, I think y' all don't. It doesn't feel this. I don't feel an urgency necessarily. And so that 20,000 is gonna go really quick. Cause the months you do make the 5,000, you're already $100 underwater, right? So you take that hundred, and then you gotta. You know, you guys are probably going out to eat. You're stressed with school, so you're. You know, you're doing this. And, I mean, you guys probably are not on a very strict budget, are you.

[Caller]

Right now? We actually. Past couple months, we have gone to a strict budget. We don't really eat out maybe once every couple months.

[Rachel Cruze]

Oh, Hunter, we have not been really.

[Ken Coleman]

If I looked at your bank account.

[Rachel Cruze]

Statement, overnight, over two months. Over 60 days, you don't eat out except for once out of 60 days.

[Caller]

Yes, ma'. Am. Yes, ma'.

Am.

[Rachel Cruze]

All right, I'm going to take your word for it, Hunter, like, you're an honest man.

[Ken Coleman]

I will tell you what I would do if I was in your shoes.

[Rachel Cruze]

I just feel like a Starbucks run is probably in there somewhere.

[Ken Coleman]

Maybe for her, at least.

[Rachel Cruze]

Chick fil A nugget.

[Ken Coleman]

You know, you guys need some vices right now. This is crazy. Okay, okay.

[Rachel Cruze]

Let's make a plan. Make a plan for Hunter.

[Caller]

Luckily, Chick fil a is, like, 30 minutes away from me, so that's fine.

[Ken Coleman]

So I'm Hunter. I'm a newlywed. Been married a year. I have a cool, great income.

[Rachel Cruze]

What are you going to do, George?

[Ken Coleman]

I am selling the truck and camper tomorrow. Like, I'm taking pictures tonight. I'm listing it tomorrow.

[Rachel Cruze]

And your construction ego just plummets.

[Ken Coleman]

And any amount you're underwater on, you're going to use that $20,000 in savings to cover it and get yourself a beater car.

[Rachel Cruze]

Oh, okay. It's working. Now and then what's freed up, George? How much money you got? You got.

[Ken Coleman]

You just got a $2,300 a month raise, my man.

[Rachel Cruze]

So those $5,000 months turned in to 7,200.

[Ken Coleman]

Now we can breathe.

[Rachel Cruze]

Oh my gosh, George, what a plan.

[Ken Coleman]

All right, this is great. This is a solvable problem.

[Rachel Cruze]

Then what are we going to do?

[Ken Coleman]

Then we need an emergency fund. Cuz you likely will deplete that 20k to cover the underwater difference. Y plus getting you a beater car. And so. So now our job is to really build some financial stability once we don't have debt to get three to six months of expenses.

[Rachel Cruze]

How does that sound? Hunter.

[Caller]

You'Ll make it sound a lot easier than what it is.

[Ken Coleman]

I feel like you're not willing to sell this truck or the camper. Tell me why the camper?

[Caller]

I'm actually the camper. I would get rid of it in a heartbeat. But I heard this, my wife about selling it. What was that?

[Rachel Cruze]

Yeah, I said and they can be tough to. To sell.

[Caller]

Well, they're tough to sell. And it actually came from her parents. And so she's. She's a little bit more stuck to it than I am.

[Rachel Cruze]

Don't have, don't have like attachments to campers. We got to get attachments to healthy financial foundations. That's what we're looking for here. Or Hunter, you guys can. Here's the deal. You know, you called the show. I feel like we're giving a little tough love. But the truth is you can stay in this cycle. You guys can stay with campers and trucks and you can live in a.

[Ken Coleman]

Truck and a camp house, which will be your future.

[Rachel Cruze]

No, but they. This is. No but like this is normal, Hunter. This is normal. And you guys could go on for years and years and years. And then what's going to happen is you're going to have a baby. Something's going to happen. One of you is going to want to stay home. You guys are going to be in your early 30s, the roof's going to be leaking and you have no money. And you look back and think, what have we been doing? We've been working our butts off for seven years and we can't even do what we want with our life. Why? Because in our early 20s, we just, you know, our mid-20s, we didn't make decisions. These are, these aren't hard decisions. It's hard for the ego. The ego hates it. But I'm telling you that you guys can stay normal. But you called the show, and the show is far from normal. We are all about getting out of debt, making deep, deep sacrifices. Hunter in order for you guys to get ahead in the future, you guys can get a great truck and a camper, but when you can afford it, you can't afford it. You can't.

[Ken Coleman]

You.

[Rachel Cruze]

You don't have the money for this stuff, and then you run into a house and all of it.

[Ken Coleman]

So say it out loud, own it, and go, hey, babe, I'm sorry. I screwed up.

[Rachel Cruze]

Yep. All right. What a great show, you guys. Thanks to everyone in the booth. Thank you, George. And remember, there's ultimately one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.