You Can Still Escape the Debt Spiral Before It’s Too Late

Summary

Podcast Summary: The Ramsey Show
Episode: You Can Still Escape the Debt Spiral Before It’s Too Late
Release Date: April 9, 2025
Host/Author: Ramsey Network
Description: The Ramsey Show empowers listeners to build wealth and regain control of their financial lives, addressing common money mistakes and providing actionable advice from Dave Ramsey and his team of experts.

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Introduction

In this episode of The Ramsey Show, host Ken Coleman teams up with Dr. John DeLoney to address listeners' pressing financial and relationship concerns. The primary focus revolves around escaping debt spirals, managing inherited properties, and making strategic financial decisions during challenging life events.

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Caller: Mikayla from Raleigh, North Carolina

Timestamp: [00:44] - [08:35]

Situation:
Mikayla faces a complex dilemma following the death of her father-in-law, who managed the finances of a rental property that was left to her mother-in-law. The property, intended as her mother-in-law’s income source, has accumulated significant maintenance issues, unpaid taxes, lack of insurance, and high HOA fees. Upon evaluating the numbers, Mikayla and her husband concluded that the property is unsustainable and considered selling it to secure a more reliable income source for her mother-in-law. However, her mother-in-law is resistant, fearing that her income will be stripped away.

Key Points & Advice:

• Emotional Timing:
  Dr. DeLoney advises waiting six months to a year before making significant financial decisions regarding the property ([02:57]). This period allows for emotional healing and rebuilding trust.

• Transparent Communication:
  Ken emphasizes the importance of explaining the financial situation to her mother-in-law in simple terms, akin to explaining to a fourth grader ([05:07]). This includes detailing all expenses and the unsustainability of the current income.

• Building Trust:
  Dr. DeLoney highlights that Mikayla and her husband need to consistently demonstrate their reliability over time to alleviate her mother-in-law’s fears ([03:09]-[03:55]).

Notable Quotes:

• Dr. John DeLoney:
  “Every decision that you make relationally is going to be seen through a pair of glasses that are just covered in hurt right now. Hurt and fear.” ([02:58])

• Ken Coleman:
  “Explain it to her as though she's a fourth grader... Here's the math.” ([05:04])

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Caller: Travis from Washington, D.C.

Timestamp: [10:22] - [19:53]

Situation:
Travis is contemplating leaving a well-paying job with a total compensation of $150K to pursue a full-time MBA at a top 20 business school, which offers a full scholarship. He and his wife currently earn a combined $210K and are debt-free. However, Travis anticipates reducing their income significantly for two years, relying on his wife's income during the MBA program.

Key Points & Advice:

• Evaluate Long-Term Benefits:
  Dr. DeLoney urges Travis to assess what the MBA will concretely offer in terms of career advancement and salary increases, questioning if it will significantly boost his earning potential ([16:20]-[16:40]).

• Network and Real-World Insights:
  Ken recommends that Travis engage with professionals who have achieved his desired career goals to gain realistic perspectives beyond what business schools present ([18:16]-[19:07]).

• Commitment and Sacrifice:
  Both Dr. DeLoney and Ken emphasize the necessity of being “all in” with the sacrifices required, including cutting unnecessary expenses and maintaining financial discipline during the MBA years ([19:45]-[19:53]).

Notable Quotes:

• Dr. John DeLoney:
  “Your long term potential is higher... there are jobs that still have that [MBA requirement].” ([16:28])

• Ken Coleman:
  “Proximity Principle... get close to those who are where you want to be.” ([18:16])

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Caller: Alexis from Salt Lake City

Timestamp: [24:30] - [34:56]

Situation:
Alexis has faced significant personal hardships, including caretaking for her grandparents through multiple illnesses, leading to accumulated credit card debt of $42,000. With ongoing health issues such as rheumatoid arthritis and potential lupus, she is unable to work and relies on credit to cover expenses.

Key Points & Advice:

• Financial Stability First:
  Ken advises Alexis to prioritize her basic needs by possibly taking on part-time work or alternative income streams, emphasizing that her emergency fund should remain untouched ([26:21]-[27:04]).

• Emotional Well-Being:
  Dr. DeLoney underscores the importance of self-care amidst caretaking responsibilities, suggesting that maintaining personal health is crucial to sustaining her ability to care for others ([28:35]-[30:52]).

• Debt Management:
  Both experts recommend against bankruptcy and urge Alexis to focus on debt repayment strategies, such as the debt snowball method, to regain financial control ([31:08]-[33:20]).

Notable Quotes:

• Dr. John DeLoney:
  “The greatest gift you could give as a caretaker is to make sure you're okay.” ([29:01])

• Ken Coleman:
  “Emergency fund is for emergencies only... don't touch retirement accounts.” ([12:02]-[12:04])

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Caller: Daniel from New York

Timestamp: [36:48] - [43:25]

Situation:
At 23 years old, Daniel is burdened with $100,000 in student debt, $13,000 car debt, and $8,000 in credit card debt. With an upcoming income increase to $75K (pre-tax), he seeks advice on accelerating debt repayment and optimizing his financial strategy.

Key Points & Advice:

• Debt Snowball Strategy:
  Ken outlines the importance of paying off the smallest debts first to build momentum, encouraging Daniel to tackle the $8K credit card debt within a few months before moving on to larger debts ([37:55]-[40:42]).

• Avoid Debt Consolidation:
  Dr. DeLoney strongly advises against consolidating multiple loans, emphasizing that it doesn’t solve the root problem and can lead to further financial strain ([39:43]-[40:09]).

• Lifestyle Adjustments:
  Both experts stress the need for significant lifestyle changes to free up funds for debt repayment, urging Daniel to minimize discretionary spending and potentially take on additional work to expedite the process ([41:10]-[43:25]).

Notable Quotes:

• Ken Coleman:
  “Once you pay off the 8K, take that $200 and add it to everything else to knock out the car.” ([38:49])

• Dr. John DeLoney:
  “Follow the plan and work like you have never worked before.” ([41:10])

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Caller: Jack in Sacramento, California

Timestamp: [64:54] - [83:22]

Situation:
Jack seeks advice on whether to secure a consolidation loan for his father, who has $50,000 in debt, including $35,000 in credit cards, $10,000 in a personal loan, and $5,000 on a car. His father, a real estate agent earning approximately $40,000 annually, is struggling to make payments but is hesitant to change his financial habits.

Key Points & Advice:

• No Consolidation Loans:
  Ken categorically advises against obtaining a consolidation loan for Jack’s father, highlighting the risks and potential strain on their relationship ([65:27]-[66:15]).

• Honest Communication:
  Dr. DeLoney encourages Jack to have an open and honest conversation with his father about the financial situation, emphasizing the importance of addressing overspending and seeking proactive solutions ([66:24]-[70:40]).

• Debt Snowball and Budgeting:
  Both experts recommend utilizing the debt snowball method and helping Jack’s father create a stringent budget to manage and eliminate debt effectively ([70:03]-[83:22]).

Notable Quotes:

• Dr. John DeLoney:
  “Co-signing a loan between parent and child sets up your relationship for failure.” ([73:12])

• Ken Coleman:
  “The greatest gift you can give him is a son who's always in his corner.” ([73:17])

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Caller: Kristen from Phoenix

Timestamp: [58:36] - [84:19]

Situation:
Kristen, a 30-year-old, lost her job four months ago and is now reliant on EBT and state insurance while accumulating $42,000 in debt. She also plans to start a nonprofit and is contemplating whether to use a $5,000 gift to cover her basic needs or to invest it in her nonprofit venture.

Key Points & Advice:

• Survival First:
  Ken advises Kristen to prioritize immediate financial stability over pursuing dreams, recommending she take on additional jobs to cover expenses and repay debt before investing in her nonprofit ([60:11]-[63:05]).

• Debt Repayment Strategy:
  Both Ken and Dr. DeLoney emphasize aggressively tackling current debts using the debt snowball method, even if it requires significant lifestyle sacrifices ([62:03]-[63:05]).

• Delayed Pursuit of Dreams:
  Dr. DeLoney advises postponing the nonprofit project until after achieving financial stability, ensuring that pursuing passions does not compromise her ability to recover from debt ([62:27]-[63:22]).

Notable Quotes:

• Ken Coleman:
  “This is about fighting to survive... start making progress.” ([60:24]-[62:19])

• Dr. John DeLoney:
  “Things with wheels should not cost more than 50% of your income.” ([80:42])

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Caller: Rebecca in Chattanooga

Timestamp: [54:38] - [57:09]

Situation:
Rebecca, now a millionaire following Baby Step Seven, plans to purchase a new vehicle and is wary of prepaid service packages offered by dealerships. She seeks confirmation on whether such packages are beneficial or merely profit-driven traps.

Key Points & Advice:

• Avoid Extended Warranties and Prepaid Plans:
  Both Ken and Dr. DeLoney strongly discourage purchasing prepaid service packages, labeling them as unnecessary and financially exploitative ([55:03]-[57:01]).

• Use Cash and Savings for Maintenance:
  They recommend using personal funds to handle vehicle maintenance, emphasizing financial independence and rejecting additional costs ([57:01]-[57:09]).

Notable Quotes:

• Ken Coleman:
  “Your gut is right. Pass.” ([55:56])

• Dr. John DeLoney:
  “If you're already telling me right now that the engine's gonna fail, I'm going to walk right.” ([57:01])

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Caller: Kristen from Phoenix (Second Segment)

Timestamp: [82:39] - [84:19]

Situation:
Kristen discusses expensing a high-end Kia Stinger with a $1,200 monthly car note while managing $2,000 in child support and attempting to pay off debts. She seeks advice on overcoming negative equity and eliminating costly obligations.

Key Points & Advice:

• Accelerated Debt Repayment:
  Ken and Dr. DeLoney advise Kristen to aggressively pay down her car loan by allocating extra funds each month, potentially sacrificing other expenses to expedite the payoff ([78:35]-[84:19]).

• Sell the High-Priced Vehicle:
  They recommend selling the Kia Stinger to eliminate the negative equity and reduce monthly financial burdens, suggesting a more economical and reliable vehicle ([79:43]-[84:19]).

Notable Quotes:

• Dr. John DeLoney:
  “Things with wheels should not cost more than 50% of your income.” ([80:42])

• Ken Coleman:
  “You got to be super intense to do that. Three grand a month. You got this.” ([83:54])

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Closing Remarks

Ken and Dr. John emphasize the importance of adhering to the Baby Steps program, maintaining financial discipline, and making informed, strategic decisions to escape debt and achieve financial peace. They encourage listeners to utilize available resources, such as Financial Peace University and trusted financial services, to bolster their financial journeys.

Notable Quotes:

• Ken Coleman:
  “Trust us, we have a method to our madness. And this is why you hold long term.” ([35:20])

• Dr. John DeLoney:
  “Your mental and emotional health are just as important as your physical health.” ([19:51])

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Resources Mentioned

• DeleteMe Service:
  Protect your personal information from data brokers. Access a 20% discount at www.joindelete.me/ramsey.

• NetSuite by Oracle:
  AI-powered tools for small businesses. Download the CFO's guide to AI and machine learning at netsuite.com Ramsey.

• Zander Insurance:
  Trusted term life insurance options. Visit zander.com or call 800-356-4282.

• Financial Peace University:
  Educational courses on financial management. Available through show notes.

• Ramsey SmartTax:
  User-friendly tax filing software. Available at ramseysolutions.com/smarttax.

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Conclusion:
This episode of The Ramsey Show offers comprehensive advice on navigating debt, making informed financial decisions during emotional times, and prioritizing financial stability. Ken Coleman and Dr. John DeLoney provide actionable steps tailored to each caller's unique situation, reinforcing the show's core message of achieving financial peace through disciplined strategies and informed choices.

Transcript

[Mikayla]

Foreign.

[Ken Coleman]

This is the Ramsey show where America hangs out to have a conversation about life, specifically your money, your profession and your relationships. 888-255-2225 is the phone number to jump in. We'd love to hear from you. 888-2. Joining me today is Dr. John DeLoney. I'm Ken Coleman. We're excited to be together to help you out. Let's get it going with Mikayla in Raleigh, North Carolina. Mikayla, how can we help today?

[Mikayla]

Good afternoon. Thank you so much for allowing me to receive your wisdom today.

[Ken Coleman]

Oh boy. Well, don't thank us too soon.

[Dr. John DeLoney]

That is you.

[Ken Coleman]

We haven't even dispensed of it yet, but I like how optimistic you are. What's going on?

[Mikayla]

So I have both a money and a relationship question all in one. In January, my father in law sadly passed away and left behind my mother in law. They were married 52 years and he handled all of the finances. So on his deathbed my father in law asked my husband to take care of his mom and take care of the rental property which is going to be basically her income going forward. All great. We didn't realize until a couple months in that the property was left very poorly maintained. There were some bag taxes on it. There's been no insurance on the property. HOA is very high. So after we looked at all the numbers we realized this is never going to be a truly income producing property where she can actually receive income from it. And the only reason it has been lately is because it was not maintained well. So it's been a point of contention because it makes sense to sell it and get her something else that's more income producing for her. But she doesn't understand all of that and she's very scared right now and my husband just wants to leave everything as is. And she thinks that we're kind of stealing her money right now, which is not the case. We're just trying to back pay ourselves from all the expense we had to put into the rental property. So my question is, because the death is still so recent, do we just leave everything alone for right now or should we pursue selling it and buying something that would actually be income producing for her for her to live off of? And if so, at what time does that make sense to do that?

[Ken Coleman]

Well, do you guys have the actual authority to sell the house on her behalf?

[Mikayla]

We do. It's been changed over to our names.

[Dr. John DeLoney]

How old is she?

[Mikayla]

She's 74.

[Dr. John DeLoney]

Okay. And how recent was the passing?

[Mikayla]

It was in January two months ago.

[Dr. John DeLoney]

Is anything on fire right now? No, I, I would wait. I would wait six months to a year if nothing's on fire.

[Mikayla]

Okay.

[Dr. John DeLoney]

Because you're right. Every decision that you make relationally is going to be seen through a pair of glasses that are just covered in hurt right now. Hurt and fear.

[Mikayla]

Okay.

[Dr. John DeLoney]

And it's gonna. I. You can hop. Tell me if I'm wrong. It's going to be a, A series of. Think of it this way. She has leaned on a pillar for her entire married life, and that pillar's gone. And the person, she may love him, trust him, think he's a good man, but she wiped your husband's booty, right? That's in her mind. And so there's going to be a level of trust establishment made through a bunch of teeny tiny consistent showing up over the next six months, over the next year. Very transparent, by the way. Data is going to help, but it's not going to solve the fear problem. Right now. Right now it's just all. She lost a lung and a leg and two chambers of her heart. Right. And so she's going to have to slowly realize that she can lean on him.

[Ken Coleman]

Now, my question is, let's go back. You said you guys are trying to get back what you put into it. I'm paraphrasing what I heard. Explain what we're talking about. Did you guys personally put money into this to try to fix this property up, your money?

[Mikayla]

We had to. When we got it, it was about to be put on auction because the taxes hadn't been paid on it in two years. And we didn't know that.

[Ken Coleman]

No, I understand you had to. I'm not questioning that. I'm saying how much. I wanted to know if it was your money. So you answered that. How much did you put into it?

[Mikayla]

So we've put in about 3,400 for taxes. We've put in another almost 3,400 for an insurance policy. We spent 800 on a home warranty. The HOA has been about 450amonth. There was some extra HOA that we had to pay on that that was unpaid. We've had to fix two broken windows, change out the washing machine. And the H VAC unit needed some work as well, which amounted to about fifteen hundred dollars. So it's.

[Ken Coleman]

So I got you guys approaching what, 10 or 15,000. I got you at around 12 grand. Is that roughly. Is that about right?

[Mikayla]

Definitely been over. It's definitely been over 10,000. Yeah.

[Ken Coleman]

Okay, so the other question then with John What John asked is right. I think he's right and I agree with your partner on that. That the wait to sell the house. Do you, is that 15? Let's just say it's 15. Let's say 12 to 15 is what you guys personally put in. Do you need that right away? Are you guys okay not getting that right away?

[Mikayla]

Well, we're okay, but that was my question is like my husband wants everything to be run by books. So like pull the money from the rental income but then nothing's going to my mother in law and she doesn't understand all the expense associated with it. So that's where we're having a point of contention is like how do move forward with this on the money aspect of things.

[Ken Coleman]

No, no, I get it. And that's why I'm bringing us to this point. And I think it comes back to John's advice. Would you also put that in the same bucket? Because right now she, they do need to explain it to her.

[Dr. John DeLoney]

Absolutely.

[Ken Coleman]

And you need to explain it to her as if she's a fourth grader. So there's some responsibility on you all. And by the way, this is not you, your husband. There's the relationship you want to maintain, the sweet daughter in law relationship. So hubs has got to step up, sit with mom and I'll defer to John on the appropriate timeline. But it needs to be explained to her as though she's a fourth grader and say mom, this is all about you. We put our money into this so that you have this. We have two options going forward. It's not going to generate enough income and you've got to explain it to her and show it to her at the appropriate time.

[Dr. John DeLoney]

That, that's right now that's, I think that's okay too.

[Ken Coleman]

But I didn't know what you were going to say.

[Dr. John DeLoney]

That's, that's math, right?

[Ken Coleman]

Yeah.

[Dr. John DeLoney]

And I would like as, as close to writing it down with a crayon as you can. And this is, this is funny. I was on the phone with a 50 year old earlier today who's entering into.

[Ken Coleman]

Slow down, this is getting personal here. I don't know where you're going, but here's the thing.

[Dr. John DeLoney]

This 50 year old's heading in to buy a house. It's not, it's not an age thing but heading in to buy a house. And I gave that exact wisdom. I said, listen, don't feel ashamed to ask the, the mortgage company to explain this to you as though you're a high school student. That's the exact language I used. And so a 74 year old, he may have said, for the last 30 years, I got it. I'm taking care of it. Sitting down and saying, okay, mom, let me just show you this. There were two windows that had to be broke. I mean, it had to be fixed. Here's the exact cost. This house was about to be taken. Dad was sick and he didn't realize the taxes. We're not going to ever pin him as though he's a bad guy because immediately then she's got to defend him. We're not going to get into that. Hey, we had to pay these back taxes. They were $3,500 and here's the receipt for it. And she might go, no, none of that's right, Mom. It's right. It's right. And if you think in that conversation she can get to. Oh, well, then we just need to pull this out of this rental income. Great. If you don't, and you've got 15 grand and it's not going to burn a hole through your family, pay the 15 grand and we'll figure this thing out in six months or a year when the smoke lifts on this deal.

[Mikayla]

Okay? Yeah.

[Ken Coleman]

Because what you're building towards, Michaela, if I heard you correct, is that you and your husband believe this thing needs to be sold. Correct. It's the best move for her. That's what I heard.

[Mikayla]

We do. We've had a lot of difficulties working with the HOA company, and that's never going to go away. So I think if we could get a different property, that's going to.

[Ken Coleman]

No, no, we get that.

[Mikayla]

Long term. We get it.

[Ken Coleman]

What we're saying is. What we're saying is, is explain the math. Now. Don't talk about selling the house six months to a year is what John is saying. But we're going to build to that. We got to build trust with her in explaining. And I would even show her receipts on the windows.

[Dr. John DeLoney]

Absolutely.

[Ken Coleman]

Just walk her through. Go, mom. We did this. We'll settle it later. We just want to grieve with you. I like that approach. But then when the time is right, you got to cast vision the same way you did on this numbers thing. Thanks for the call. So sorry for your loss. This is the Ramsey Show. Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so we can get you the package you didn't order? Yes, I have, George. Sketchy.

[Mikayla]

And never trust them.

[Ken Coleman]

And that's why we recommend delete me. They help with that.

[Mikayla]

Yeah, they do. Delete Me actually goes in and removes your information from data broker websites. And it is an incredible service that everyone needs.

[Ken Coleman]

And there's a lot of shady companies out there that solely exist to sell your personal data to bad guys. And that means your info, like your email address, your home address, your kids names, your name, everything is just out there for scammers and spammers to find.

[Mikayla]

That's right. And then once they remove your information, then they're going to send you a detailed report telling you where they found your information, when they removed it, how many hours they've saved you. I mean, it is incredible. So detailed and it's beautiful.

[Ken Coleman]

I love these reports so far. Get this. They've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites, and saved me 77 hours of time. It's incredible.

[Mikayla]

Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it.

[Ken Coleman]

I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindelete me.com/ramsey. That comes out to less than nine bucks a month. Super affordable.

[Dr. John DeLoney]

It's amazing.

[Mikayla]

So again, that's joindelete me.com Ramsey. Make sure to check it out, you guys.

[Ken Coleman]

All right, let's go to Travis, who's joining US in Washington, D.C. travis, how can we help today?

[Mikayla]

Hey, how you doing? Thanks for taking my call.

[Ken Coleman]

Sure. What's going on?

[Mikayla]

I have a question. Education, education and career call. Basically, I was offered a job for about 150k total comp. I was also offered a full scholarship to a top 20, top 25 business school. So my question is, should I quit my job to go to business school?

[Ken Coleman]

What would be the reason for going to business school? What's on the other side of that?

[Mikayla]

So I want to do a transition from account management to probably product management. And all the roles that I've seen and all the roles I'm looking for are requiring that. That the MBA.

[Ken Coleman]

Okay. And you're currently in account management making 150. Did I understand that correct?

[Mikayla]

Total comp. Yes.

[Ken Coleman]

Say that again.

[Mikayla]

Total comp is 150.

[Ken Coleman]

Oh, your total comp. What does that include?

[Mikayla]

So 114 at the base, and then the remainder would be your comp paid out over rsu.

[Ken Coleman]

Okay. All right. So how are we paying for business school?

[Mikayla]

With a full scholarship.

[Ken Coleman]

Full scholarship. Are you going to be able to work and maintain your current job? While you're going to business school or is this an all in? I'm, I'm absolutely quitting and I. Because I have to.

[Mikayla]

Yeah, it's a full time program, so I would have to quit.

[Ken Coleman]

How are you paying the bills?

[Mikayla]

Unfortunately, it's me, my wife, so she will continue working. So, I mean, we've talked about how the finances will look. It'll be a lot less, of course, because I wouldn't have the income. But the main trade off that we're considering is the salary after business.

[Ken Coleman]

Sure. All right, let's talk about the current situation first. Do you guys have any debt?

[Mikayla]

No, no consumer debt.

[Ken Coleman]

And what's her income? You're going to go from combined income of what to what combined 210.

[Mikayla]

Anyone? To about 98.

[Ken Coleman]

Okay, you've crunched these numbers and you guys are not going to be struggling just a little bit tighter. True or false.

[Mikayla]

We will be struggling. We'll be tighter. We do have our, our, our funds already that we have secured and we also have some money that we have available in investments that we're willing to move around if necessary throughout the, throughout the semester.

[Ken Coleman]

Okay, so a couple of things here. I'm hearing we don't want you using the emergency fund just to pad the income. Emergency fund is for emergencies only. And then I get nervous when I hear you talking about moving around investments. What's it, what does that mean?

[Mikayla]

Well, we, so for what we did, we said we will be able to afford this, this change in income based on our expenses.

[Dr. John DeLoney]

Travis, Travis, let me recontextualize this. When you call the Ramsey show and say you're struggling, people, they call us. They, they don't know how they're going to pay rent or they don't have food.

[Mikayla]

Got you.

[Dr. John DeLoney]

So when you say you're struggling, does that mean you don't know how you're gonna pay your light bill and you may have to sell some stock to pay your light bill, or are you saying we're not going to be able to go out to eat for two years while you knock out business school?

[Mikayla]

Well, no, I didn't, I didn't say that.

[Ken Coleman]

I was struggling. He said they won't struggle. He said it would be tight.

[Dr. John DeLoney]

Ah, okay. He was going to struggle too. Okay, okay.

[Ken Coleman]

No.

[Dr. John DeLoney]

All right.

[Ken Coleman]

If I heard you right, Travis, you didn't say you guys will be struggling to make it paycheck to paycheck. Correct?

[Mikayla]

Correct. I don't, don't foresee us being struggling based on what we've, we've Calculated, but it will be tight because we're cutting our income by half.

[Ken Coleman]

All right, well that's okay. I mean that again, I calculated a move like this. It doesn't scare me. I just don't want you touching retirement accounts. If these are, if these investments are non retirement and it's supplemental, then that's the only scenario by which we would be okay with that. But really we want you to cut, cut, cut and not be struggling where you go backwards financially.

[Dr. John DeLoney]

What do you think? What do you think? And not let me, let me change the way. I just asked that. Not what do you think and not what do you hope when you have sat down with some people in your field or you've sat down with one of the executives at the company where you work. And it's a rare thing because MBA programs, especially executive MBA programs, but two year laser focused MBA programs are cash cows for universities. Yeah, they used to be big time. And it's leveled off for you to get a full scholarship to a top 20 MBA program tells me you've got some kind of special, you've got something going for you that is unique because that's just, they just don't hand those out. I know some hot shot people making good money that went to NBA programs and they had to pay full freight. So something special has happened for you. So when you sit down and talk to somebody on the other end of this thing, what do you think you're gonna make? What is this gonna, what leverage is this gonna give you besides just a job? Because I promise you in 10 years, I promise you in 10 years, the we are gonna be in a place culturally and economically where the. You have to have crossed this particular, you have to have checked this box to come work for us. Nobody's gonna care. But I do. I do know and I trust you and I know this to be true. There are jobs that still have that. We won't even interview you unless you've checked this box. So fair. What are you going to be making on the other end of this deal?

[Mikayla]

Maybe from just like a value add outside of salary or.

[Ken Coleman]

No, just what are you going to make?

[Dr. John DeLoney]

You make 125 now, 150 now. When you walk across the stage with an MBA from a top 20 program and you circle back to do, to be a project manager at some of these firms that you're working at now. Are they going to pay you 300? They can pay you 450. Like what's, what's the, what's the ceiling for you then that wouldn't be out the gate.

[Mikayla]

So what I'm anticipating is when I first, like my first roll out of MBA program would be about the same salary I'm making now.

[Dr. John DeLoney]

Okay.

[Mikayla]

But what, what I'm confident about is that my earning potential will be higher. Right now I don't have that MBA or that master's program, so the role that I'm at is shorter at my next.

[Dr. John DeLoney]

Where does that confidence come from?

[Mikayla]

The confidence for the, the that your.

[Ken Coleman]

Your long term potential is higher?

[Dr. John DeLoney]

Because I've talked to a lot of students on the front end of grad school, man, they're like, no, no, when I get out, I'm going to make 140,000. And then I say just go look at the market. And they're like, oh man, 75. So what makes you confident?

[Mikayla]

Well, in the, in the, in the, the first year out that's been just based off just the school stats and what I've seen, what I've researched from the entry, not the entry jobs, but the job that they have recruiting for, they're looking at around 150 is the average. So it could be less, it could be more when I first get out. So there's a chance that I would have less of a salary when I first get out of business school, but I'm looking at that three to five years afterwards and being able to earn the income potential to get a more senior role, which I'll be more qualified for and also being able to transition industries a little bit.

[Dr. John DeLoney]

Sure.

[Ken Coleman]

So, so how long is the program?

[Mikayla]

Two years.

[Ken Coleman]

Okay. Yeah. You know, look, here I challenge the process naturally when I hear someone say I have to have an mba. But I think John addressed it correctly. There are, in fact, I believe that you've done research and that some of the jobs that you want to be able to get into are requiring or certainly recommending that. So I'm not going to dispute it. But I really, John just touched on something that I wanted to jump on. I'd like to see you get less information online and put in your head that this is going to pay off. And I want you talking to people that are where you want to be five years from now. I'd really prefer that I wrote an entire book on that, the proximity principle. And I think having lunch or coffee with some men or women that are where you want to be down the line and getting their opinion to me far more important than what any business school puts on their website.

[Dr. John DeLoney]

Because here's, here's what the, what the That's a marketing tool that a school is going to put on their website. Here's a couple of things they can factor in. Not always, but sometimes. One, they may give you the average salary of those people who got jobs. And they don't address the folks who didn't get jobs. The other thing they may do is say here's the average salary. What that doesn't, what that doesn't paint is. I could right now put on a piece of paper. The average graduates from my PhD program make X. But because I work not as a day to day therapist, but because I'm working where I work now and I've got two bestselling books under my belt, I would drag that average way out of whack. And so it would say, man, the average graduate makes this much money, holy smokes, I need to go do that. And that would not be representative of what makes most people make. That's number one. Here's number two. I heard a little inkling of this. If you're bored at your job or you just done where you work before you take two years off. And by the way, I'm, I'm as pro higher ed as anybody in this building, right? I'm as pro. Go get a free mba. If you can get that, that's a great credential. But if you're just bored at your job, you're done with it. If you're already pulling 125, 150, I think you've got the skills to go be a project manager somewhere right now. And so that's worth at least having one or two conversations with real people out in the field, my brother. But yeah, all things considered, if y'all can float it for two years, go get that free credential from a top 20 school.

[Ken Coleman]

This is the key. You guys got to be all in on the sacrifice. And you said it was a sacrifice be all in on it.

[Dr. John DeLoney]

No concerts, no restaurants. This show is sponsored by BetterHelp. All right, you've heard me say it a thousand times and I'm going to keep saying it. You're worth being well. And listen, therapy can help. I see a therapist and let's be honest, a lot of you should too. But let's be real. Taking that first step to see a therapist can feel overwhelming. Maybe it's the time. Maybe you have some preconceived notions about therapy. Maybe it's the cost. But we spend money on gym memberships, organic groceries, essential oils, Little league practices, tracker watches. But for some reason, when it comes to our mental and emotional well being, we hesitate. Listen, your mental and emotional health are just as important as your physical health. And the good news, Better help makes therapy more affordable and convenient than ever. Since it's online, you can talk with your therapist when it works for your schedule. No waiting rooms, no long commutes and no six month waiting lists. Just fill out a short online survey to get matched with the licensed therapist and if it's not the right fit, you can switch at any time for no extra cost. Listen, your well being is worth it. Visit betterhelp.com DeLoney to get started. That's BetterHelp H lp.com DeLoney hey guys.

[Ken Coleman]

I'm super excited to announce that two of the goats of sticking to a budget have finally teamed up. That's right. Ramsay and Aldi are partnering together because well, groceries cost a lot of money and besides that, most stores are designed to trap you in a maze. A sad expensive maze. But Aldi is different. Aldi gives you simpler, better food choices that save you money and get you in and out so you can focus on what really matters. From affordable high quality must haves to grass fed meat, organic produce and yes, even name brands, Aldi has what you need at prices that won't steal your joy. So stop paying more and start shopping smarter at Aldi. Find a store near you today at Aldi US that's a L D I US well, Dave Ramsey and Dr. John Deloney, my co host today are going to be heading out on the road several cities. We Got Louisville on April 21, Durham April 23, Atlanta April 25, Phoenix, May 5, Fort Worth, May 7, Kansas City on May 9. It's the money and Relationships Tour. Dave and John are going to be out there taking your questions a little bit different format. John, give us a little bit of a preview of this event.

[Dr. John DeLoney]

The best way I would, I would suggest it. It's going to be stuff people haven't heard before. Principles will be the same but the, the stories will be different, the interactions will be different. If you ever wonder, man, what do these guys talk about when the microphones are off and what our fearless leader James edits out of the show that will be live. It will. Like I said, I've said a few times with Dave, I don't usually get nervous on these big events. I just think they're fun. I'm, I'm kind of puckered up about this one. This one's going to be fun and we're going to throw it out to the audience. So we'll have the big screens and these beautiful theaters across the. We'll have a number of topics that the audience can vote on in real time and say, we want to get your take on this. We want to get your take on what's happening here. And in a very polished world where AI is just synthesizing everything and making everything clickbaity, this will be a way to interact with Dave, with me, in a way that most people don't ever get the opportunity to do that. So. And it will all be live. And I like having fun at Dave's expense sometimes on stage. And so we're gonna have a blast.

[Ken Coleman]

Boy, that might be interesting. Yes, he does. He likes control.

[Dr. John DeLoney]

He does. So he signs my paychecks. It's gonna be fun.

[Ken Coleman]

And you are out of control. So this is going to be a great combination.

[Dr. John DeLoney]

Yeah, I'm looking forward to.

[Ken Coleman]

By the way, no matter how many times the audience asks, please don't tell them what hair product I use. I'd like to keep that.

[Dr. John DeLoney]

That's. That's a secret.

[Ken Coleman]

I appreciate that.

[Dr. John DeLoney]

George, on the other hand, has his hair product tattooed on his chest. So I'll share that.

[Ken Coleman]

It's true. It's absolutely.

[Dr. John DeLoney]

And Dave doesn't need hair.

[Ken Coleman]

George is like my grandmother. You get his hair done once every three months. It just stays that way.

[Dr. John DeLoney]

That's exactly right. He has that little. That little helmet that comes over.

[Ken Coleman]

Yeah, yeah, yeah.

[Dr. John DeLoney]

And Dave, his hair product is largely an Armor all product.

[Ken Coleman]

And so we'll talk about that. Man. If you want to get your ticket, go to ramseysolutions.com tour. That's Ramsey Solutions.com tour. If you're tuning in via YouTube or podcast, the link to get the tickets to the money a relationship tour with Dr. John and Dave are in the show notes, which, by the way, so many other great things are in the show notes. Everything we mentioned here on the show are in the show notes. James, our producer, likes to call him a treasure trove. The show notes. All right, 888-825-5225. Alexis is joining us now in Salt Lake City. Alexis, how can we help?

[Mikayla]

Hi. Thank you so much for taking my call. First of all, I'm in not a bit of a pickle. A big pickle. In 2022, I had to go on short term disability for some kidney illnesses and so on. I was on that for three to six months and had to. And in that time frame, my grandfather ended up getting a blood cancer.

[Ken Coleman]

Oh, no.

[Mikayla]

I ended up moving. I know. So I Ended up moving from California to Utah to help take care of him. He did. He did beat it. He's in remission, so that's great. And. Yeah, and then he actually got colon cancer, but he's in remission from that now, too. But in. I know. And in that time frame, my grandmother ended up getting sick and I had to become her full time caretaker and she went through hospice, unfortunately passed away.

[Ken Coleman]

Oh, my. You have been through it, haven't you?

[Mikayla]

Sorry if I break down a little bit.

[Dr. John DeLoney]

No, you're okay. You're okay. Okay.

[Ken Coleman]

That's tough stuff.

[Dr. John DeLoney]

This is a lot. All in a row.

[Ken Coleman]

That's right.

[Dr. John DeLoney]

Can I ask you. Can I ask you a question? Can I circle out a little bit?

[Mikayla]

Yes, for sure.

[Dr. John DeLoney]

Who told you that you were the one person who had to take all of this on by yourself?

[Mikayla]

I didn't take it on all by myself. I had. My. My grandparents are basically my parents. My parents are not helpful. They have their own problems with drugs and alcohol. So that's not been a helpful situation. My uncle, who I lived with and have had a great relationship, has stepped in, and that's my uncle, that's his father, who is my grandfather. So they've helped out financially and so on, but I was the main person who moved here and was with them 247 and things like that. So how have you eaten and paid.

[Dr. John DeLoney]

Your bills since then?

[Mikayla]

Credit cards.

[Dr. John DeLoney]

Okay.

[Ken Coleman]

How much have you racked up?

[Mikayla]

I racked about 42,000, so.

[Ken Coleman]

42,000?

[Mikayla]

Yeah. $42,000.

[Ken Coleman]

Do you have any other debt?

[Mikayla]

No, it's just some credit cards.

[Ken Coleman]

Okay.

[Mikayla]

And.

[Ken Coleman]

And are you working right now?

[Mikayla]

No, I'm not.

[Ken Coleman]

What about your kidney disease? What's the status of your health and your ability to work? Because if I understood you correctly, you stopped working because of the kidney issues, correct?

[Mikayla]

Yes. So I'm in the midst of getting diagnosed with lupus, so they're trying to figure out that. And I also have rheumatoid arthritis and there's a couple other autoimmune disease that I'm trying to figure out.

[Ken Coleman]

Are you able to.

[Mikayla]

Not at this current time, no. I'm in the midst of going to.

[Ken Coleman]

Doctor'S appointments myself, so we've already got 43,000 in debt. Doesn't sound like we have any kind of diagnosis or treatment plan in place right now. What do you anticipate the timeline being that you get some type of diagnosis plus treatment and any sense of when you might be able to go to work and how are you going to stay Alive financially. What do you know?

[Mikayla]

So I'm hoping in the next six months I can get treatment for the diagnosis. I have been diagnosed with rheumatoid arthritis. I have tested positive for lupus, but it's a symptom based disease. So they're trying to limit, you know, what is and what's not.

[Ken Coleman]

Any sense from your doctors as to when you would be able to work?

[Mikayla]

Not. No, not really. The waiting time to get into specialists is pretty hard. I've been on waiting list to get into neurologists and different rheumatologists, different VPs.

[Ken Coleman]

So what's the plan? What's the plan as of right now to be able to fund your life?

[Mikayla]

As of right now, what I'm looking at is trying different things. I'm trying to see if I can do some part time marketing. I'm also looking to see if I can do some part time dog watching or dog sitting just to bring in some type of money. I'm hoping in the next six months I can get a diagnosis and get some semblance of my life back.

[Dr. John DeLoney]

Well, the diagnosis, it's not going to be a. It's not, it's going to be a confirmation, but it won't be a magic wand.

[Mikayla]

No, I know that, but I think part of. I think an answer would help.

[Dr. John DeLoney]

Absolutely. Like not knowing. Not not being able to trust your own body is a terrifying proposition, no question. And so is it okay if Ken and I love you in a way that we tell you the truth that probably nobody has? Is that okay?

[Mikayla]

Please.

[Dr. John DeLoney]

Okay. When it was about caring for you, somewhere along the way you got the story that you're not worth caring about. But when it came to caring for other people, you packed up and moved across the country and you made it happen because that's who you are. You're way, way stronger and way tougher than you, than your body allows you to believe you are. And the stories you've been told by people all around you your whole life. And so here's me and Ken telling you, or I won't speak for you, Ken, here's me telling you I love you. The greatest gift you could give as a caretaker for somebody else is to make sure you're okay. And right now your body is revolting for a number of different reasons. But I'm going to suggest that one of the main reasons is it knows you're not safe because it doesn't have groceries, it doesn't have a roof, it doesn't have a friend that you can Go laugh with or weep with. And so this is going to sound counterintuitive but not kind of hoping, I would really love you to see for nobody else but just Alexis, you to find two part time jobs that you can do, even if it's uncomfortable, even it's a little bit painful and begin to show your body. I can. And that goes counter to everything. And I don't want to minimize your pain. I know you're in a ton of pain. And like you said, that not knowing there's no name to this dragon that keeps burning down how you feel every day, like, man, that is haunting. I get that. And it may be that when you get these diagnostics, you can go file for SSI and go through that whole complex place, but I don't see a path forward. But without, without, yeah, you got to make some money.

[Ken Coleman]

I agree with you, John, wholeheartedly. Alexis, real quick here. What we've got to do is, is you've got to come up with a baseline of what I need to make to be able to just survive, take care of myself. And then I know the 43044 seems insurmountable. It's actually not.

[Dr. John DeLoney]

It's not. Don't file for bankruptcy, please don't sign up with one of these dumb credit things.

[Ken Coleman]

Just get yourself above water by working the two jobs or whatever. I couldn't agree more with you, John.

[Dr. John DeLoney]

And that means care about you as much as you care about, you've got other people in your life.

[Ken Coleman]

You got what it takes, Alexis, but you got to fight right now or this is going to get way worse. So fight. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind, scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip offs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options and they've been around for over 95 years, so you know they'll be there when you need them. Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I trust them and you can, too. Visit Zander.com for instant online quotes or for a more personal touch, give them a call at 800-356-4282. All right, folks, are you staying on track with the baby steps? If you'd like, you should take a quiz to check your progress and receive a personalized plan just for you. All you got to do is head to the show notes. Click on the link titled are you on track with baby steps? Complete the quiz. This is a great tool just to see where you stand, kind of. It shows you the mile markers, if you will. And it's really encouraging. Not discouraging, but it'll create a customized plan, as I said, to kind of give you that momentum that you need to make it through. So do check that out.

[Dr. John DeLoney]

Can I. Can I. You and I were talking off air. If you are watching the news right now and it feels like the world economy is melting down and people are playing roulette with your retirement funds and you're this and you're that, you literally, you can send a note to your congressman, you can call, you can write an email, but you, you can't participate in what's happening at that level. What you can do is look in the freaking mirror and say, as for me and my house, how are we doing?

[Ken Coleman]

Right?

[Dr. John DeLoney]

And if you don't know where you and your house are, this little tool, staying on track with the baby steps and receiving a plan, that's a thing you can channel all of this excess energy, anger, rage, celebration, whatever you're feeling right now, walking around your house, walk around the neighborhood. And this is the pot talking to the kettle here, man. Walking around, just being exasperated literally helps nobody helps nothing. And it just assures you that you're going to have a stroke or an aneurysm by clicking on something as simple as. All right, as for me and my house, how's our money right now? What's the honest truth? Where are we? And channeling into things you can actually do something about, you can actually control. And getting off the. The social media tray. This is actually a thing, a Xanax for a family. You know what? It's not a Xanax. It's not a way to numb out. It is a. It's a recipe for what do you do next when it feels like everything's on fire around you?

[Mikayla]

You.

[Dr. John DeLoney]

Right? Get on. Go check this out. Go in the show notes, click on the link. Are you on track with baby steps? And give yourself something to do with all of this excess going on in our houses right now.

[Ken Coleman]

Well, speaking of what's going on right now, just go back to last week when we saw the volatility in the stock market or any time over the last few decades that you've listened or watched the show. We have a lot of new people, John, that are coming all the time. So for the newbies, had you talked to us or called us last week and said, what do I do with my 401k? I'm watching it plummet because of the stock market, we would have said, what, John?

[Dr. John DeLoney]

Nothing.

[Ken Coleman]

We would have said, sit. You can only get hurt if you try to get off the roller coaster in the middle of the ride. Ride the roller coaster. Enjoy it. You're going to end up.

[Dr. John DeLoney]

And then we came back Monday and went down even further.

[Ken Coleman]

And then it came down Tuesday.

[Dr. John DeLoney]

It's all coming down.

[Ken Coleman]

And as I look at it right this moment, as I look at his rugged, handsome face, it's up 2400 points. The biggest rally in five years.

[Dr. John DeLoney]

So we had the. What was it? The biggest, biggest fall off one of.

[Ken Coleman]

The top five all time. And now here we go. So just the point here is, trust us, we have a method to our madness. And this is why you hold long term. Oh, by the way, and if you don't agree with us, there's this guy named Warren Buffett who says the same thing. So point made here. Don't ever let the headlines dictate your financial decisions. But.

[Dr. John DeLoney]

But I do want to acknowledge. I'm feeling it. I'm feeling the chaos. And it was. It was our mutual friend, our manager that we share out here, like, who was like, man, I know a guy, and he said, you should just control. You can control. And I looked at him, was like, well played, dude.

[Mikayla]

Right?

[Dr. John DeLoney]

He just reading my own book back to me, it's like, you're right. I can't think about that. I can make sure me and my family are on track, and that's what I can control right now.

[Ken Coleman]

So here we go. Here we go. On the roller coaster. Today it's up, you know, tomorrow. Yeah. Who knows? Who knows? All right, let's go to Daniel, who's waiting on us in New York. Daniel, how can we help?

[Mikayla]

Hey, thank you so much for taking my call.

[Ken Coleman]

Sure. What's going on?

[Mikayla]

I have a lot of different areas of debt. And honestly, I'm a young, young guy. I'm 23 years old, I'm graduating with a master's. I'm over $100,000 in student debt. I have a car that has $13,000 in debt and I have about $8,000 in credit card debt. And I'm just trying to figure out the fastest way to get out of the debt. I'm ON BABY STEP 2 and I think I could pull it off in less than five years. But I just wanted to hear your advice.

[Ken Coleman]

Yeah, well, first of all, glad that you acknowledged the baby steps and that you're on baby step two. And that's the answer to the question the fastest way to get out of debt based on millions and millions and millions and millions and millions of dollars by a lot of people using the Ramsey plan. That's the best way to do it. So you're already in baby step two. What have you accomplished so far? What have you paid off so far? Or are you just now beginning baby step two with the first target being the $8,000?

[Mikayla]

I'm gonna start making about 75,000 come May. That's pre tax. So I figured be like 60,000 after taxes and I'd have no rent and very minimal like cost of living.

[Ken Coleman]

Okay, so my point is you have not. My question was, have you started already or is this brand new? Soon as you start getting brand new. Okay, so we're going to start with the 8,000. That's the smallest debt that you have, correct?

[Mikayla]

Yes.

[Ken Coleman]

Okay, so your minimum payment on those credit cards, we're going to, we're going to go minimum payments on everything else, but we're going to go above and beyond the minimum payment on the 8k. So the car and the 100,000 student loan were just minimum payments on those. Okay, but you're going to put every extra nickel that you have towards the 8k. What do you anticipate the payoff of the 8000. How long will it take you to pay off the credit cards?

[Mikayla]

Two months, three months.

[Ken Coleman]

That's huge. What's your combined payments on those credit cards? Minimum?

[Mikayla]

Probably like $200.

[Ken Coleman]

Okay, great. So we take. So once you watch, you're walking through this debt snowball. So once you pay off the 8K, you're going to take that $200 and you're adding that to everything extra that you've been pouring in. And so now we're going after the car. And so that's how you do it. Every extra cent you've got above and beyond that car payment, plus the 200 that you've been Making in minimum payments, and you're going to knock that car out. And then that's. The big boy is the only one left. And that's going to take some time.

[Dr. John DeLoney]

Let me ask you a question about. You can do it. That 100k, is that. Did you consolidate it all into one big lump or is that 10 different loans, one at 901 at $62,000?

[Mikayla]

Right now there are five different loans.

[Dr. John DeLoney]

Ah, okay. So here's what we're going to do. We're going to take all of those loans, and we're going to look at them individually.

[Ken Coleman]

Yep.

[Dr. John DeLoney]

And whatever is the smallest, you're going to pay that one off first.

[Mikayla]

Would you recommend consolidating them?

[Dr. John DeLoney]

Please, God, don't do. No, no, no.

[Ken Coleman]

What are your amounts right now?

[Mikayla]

There's one that's like. There's two that are 20,000, one that's 50,000, and another one that's 30,000. And then there's a really small one.

[Ken Coleman]

What's the really small one?

[Mikayla]

It's probably like $2,000.

[Ken Coleman]

Okay, so we're gonna reverse what I. We're gonna re. Excuse.

[Dr. John DeLoney]

We're just gonna put that one at the bottom.

[Ken Coleman]

We're gonna amend what I said. The very first debt you're going to pay off is the $2,000 small student loan. Then we move to the 8K. And I guess I should ask the same question there. I'm glad you did that, John. Is the 8K the total of credit cards or is it just one credit card for 8,000?

[Mikayla]

One credit card.

[Ken Coleman]

Okay, great. So that's the. That's the line. $2,000 student loan, the 8,000 on the credit cards, then the 13 on the car, and then we've got a 20, a 20, a 30, and a 50.

[Dr. John DeLoney]

Hey, how old are you, Daniel?

[Mikayla]

23.

[Dr. John DeLoney]

23. What are you gonna be doing? Making 75, 000.

[Mikayla]

Building skyscrapers.

[Dr. John DeLoney]

Building what?

[Mikayla]

Skyscrapers.

[Dr. John DeLoney]

Oh, geez.

[Ken Coleman]

Oh, see, I misunderstood that question. I was like, he's not gonna be doing anything. No living.

[Dr. John DeLoney]

All right, here's my challenge to you. Do you have kids?

[Ken Coleman]

No.

[Dr. John DeLoney]

Are you married?

[Mikayla]

No.

[Dr. John DeLoney]

Find two other jobs to do in addition to building skyscrapers and two or.

[Ken Coleman]

Three other guys to live with to minimize any kind of living expenses.

[Dr. John DeLoney]

And if you're living at home, just sit down with your mom and dad and make a plan. I'm going to get out of here at 25, and I'm going to have knocked out X, Y, and Z of all this stuff. But sit down with a plan. Otherwise, you're still going to be treated like you're a middle schooler. But here's the deal. You're. You're in your early 20s. You have no responsibilities. I don't want you to have a life. No comedy shows, no going out to eat, no coffee that you're buying, you're using. You're drinking that free swill on site. You are, every nickel. And after two years, I don't want you just to have paid off this one loan in the 8,000 bucks. I want you to be through the car, too. Just go berserker mode, dude. You've got nothing holding you back. Okay? And Mo. And last thing, if you get online and you look at Instagram, they're going to tell you to take the highest interest rate. That's a recipe for disaster. You're going to get $2,000 into this 50 grand, and you're just going to quit. Just follow the plan. Follow the plan and work like you have never worked before. My man.

[Ken Coleman]

You got this, Daniel, that you started off the call. How do I do it? Well, you're already planning to do it, so now just walk those steps out. You'll get there faster than you possibly imagine because of one fabulous word. Momentum. Good hour. Dr. John Deloney. I'm Ken Coleman. This is the Ramsey Show. Let's be honest. Shopping for health insurance can be confusing with high costs, complicated terms, and customer service that doesn't really serve you. Most folks just pick a plan and hope for the best. See, insurance companies don't work for you. They work for themselves, Meaning they love it when you overpay. So you need a guide on your team to help you make the best choices. Health Trust Financial works for you. They're not salespeople. They help you find the health insurance option that makes sense and saves you money. The fact is, health insurance is one of the biggest expenses in your budget. But most people who work with Health Trust Financial end up saving $500 a month. Imagine putting that kind of money toward the baby steps. My team has worked with them for over 20 years, and they've served thousands of people just like you. They're the only health insurance broker that's Ramsey, trusted to help you. So stop throwing money away and get the health insurance that's right for you. @healthtrustfinancial.com that's healthtrustfinancial.com this is the Ramsey show, where America hangs out to talk about their money, their profession, and their relationships. Alongside Dr. John Maloney, I'm Ken Coleman. We're so excited that you've joined us. 888-25-5225 is the phone number 888-255-2225. We'll kick it off with Tim in Orlando. Tim, how can we help today?

[Mikayla]

Good afternoon. Thank you for taking my call.

[Ken Coleman]

Sure.

[Mikayla]

I just had a question I wanted some help in determining. How do you figure out if you're a candidate for long term health care?

[Ken Coleman]

Hmm, let me flip that on you. What are you thinking when a return, when you're, when you're thinking about calling us on long term healthcare. What's your position? What are you thinking? Circumstances?

[Mikayla]

Well, my wife and I just retired this past June and we're not sure what point do you, are you comfortable with or would we be comfortable with being self sufficient? As far as self insuring?

[Ken Coleman]

That's the answer.

[Mikayla]

And then. Oh, I'm sorry, I didn't hear you.

[Ken Coleman]

Yeah, that's it, that is the, that's the factor. So I was curious, I didn't know if you were going to give me some kind of health situation or some health history. But the bottom line is, is that if, if, if you can self insure because of your investment portfolio, your retirement position, then you wouldn't need it. It would be a general answer. All right, so what's your situation? Explain it to us.

[Mikayla]

Well, as far as health, we're both very healthy. Healthy? I am 60, my wife is 57 and we live a pretty active life. And as far as financing and stuff, we probably have about $1.7 million in stocks and bonds and stuff like that, not including our house, which is probably valued at about $300,000. And you know, we probably have about $50,000 in cash just in the local bank. We are debt free. We don't own, we don't owe anything on anything.

[Ken Coleman]

Yeah, John, I, I, in that situation, I mean, I don't think you have a huge, I mean your net worth is going to continue to grow. You said you're 60?

[Mikayla]

Yes.

[Ken Coleman]

And you have how much in retirement accounts?

[Mikayla]

About 1.7 million.

[Ken Coleman]

Excuse me. I don't know what happened. I just all of a sudden like got choked.

[Dr. John DeLoney]

So, so the federal government, again, it's. Take that. That may just disqualify what I'm about to say. But their estimation is about three and a quarter that the average American needs about 325,000 bucks after retirement.

[Mikayla]

Okay.

[Dr. John DeLoney]

And so, and I say not after retirement, but to, to handle a crisis. Most people, about 80% of people won't live in A long term care facility beyond five years and about 20% will okay. And so I'll tell you, my dad was a policeman, my mom was a, was a teacher and then a professor. And they're not wealthy. About 10 years ago, they're in the early, they're in their mid-70s now. About 10 years ago for Christmas they bought the kids, they got long term care insurance for themselves. And that was one of the greatest gifts they've ever given us. But they didn't have $1.7 million sitting in a retirement account. And at the time they didn't have a paid for $300,000 house.

[Ken Coleman]

Yeah.

[Dr. John DeLoney]

And so if, if push comes to shove, I love the idea that y'all are healthy. You, you go get checked up with doctors. I mean that all that presents that well for Ken and I, our whole life is, our whole job depends on everything was going just great and then the wheels fell off. Right. And so I want to always hold that, that y'all doing everything right and life happens, it happens to all of us. And man, you guys are in a pretty good position. And assuming that we can get through the next few weeks, months, years, decades with, with the last 80 to 100 years being similar to the next 10 to 20 years, you can expect ish that, that 1.7 becomes 3.4 by the time you're 67 and then that 3.4 becomes 6.8 by the time you're 75. Ish. 74 ish.

[Ken Coleman]

That I agree, Tim. I think you can self insure but you know, run the numbers on it and it comes down to your tolerance for risk. For risk. But based on the numbers you've given us and the amount of time you spend and all that, I think you guys would be fine. I don't think it's a must for you. But I also would say in your financial position you can afford it too.

[Dr. John DeLoney]

Right. And that's like for me, the thing I might, I, I'm just trying to project myself If I got $1.7 million in retirement accounts and a paid for house and I'm 60, I would probably let health insurance expire at 65 or 67, like whatever age you have that set to expire. But if you have an extra off top of my head, I'm making up a number and you may roll your eyes. I don't know how much monthly long term care insurance costs, whether it's $300 or $800. But if that's a, if that's a payment you can stomach for the next decade. And it's just going to let you have a little more peace in retirement. Man, I'd throw that out the window. You might spend that on fishing gear and coffee in retirement, right?

[Ken Coleman]

That's right.

[Mikayla]

Okay. Yeah. And as far as like our health insurance, I'm a retired teacher, so our health insurance, we pay about 300, $350, maybe a month to cover my wife and I for the rest of our life.

[Ken Coleman]

So that's phenomenal.

[Dr. John DeLoney]

Hold on, can we double click on that? You're a teacher. What's your. What did your wife do?

[Mikayla]

She was in property management. And so, yeah, I taught elementary and she was in property management management.

[Ken Coleman]

So what's the most you guys ever made combined income?

[Mikayla]

Probably, probably around, oh, maybe about 170.

[Ken Coleman]

Yeah.

[Dr. John DeLoney]

Very good for you. Congratulations, guys.

[Ken Coleman]

Yeah. What's your.

[Mikayla]

Yeah, and I mean, we just got to the point where, you know, we doubled down on our house payment. We bought, when we bought our last house. We did a very short mortgage and we just doubled up on everything.

[Dr. John DeLoney]

Congrats.

[Ken Coleman]

So when you called us and started this call, which way were you leaning? Were you going to buy it or were you leaning against not getting it?

[Mikayla]

Well, we weren't, weren't really sure. We had just started to check into it probably the last two weeks. We talked like one of our financial advisors, she gave us some options to go. And I guess one of the questions that I wanted to ask you guys is some of the people that we talked to had recommended like a life insurance policy with the rider. And then some of them were like strictly life insurance. And when we got thinking about it, some of the policies basically, like if you didn't use them for long term health care, you had no money at the end of the policy, you basically paid into it, but you have nothing.

[Ken Coleman]

Yeah, you're talking about whole life. You're talking about whole life.

[Mikayla]

Yes.

[Ken Coleman]

Yeah, we're very anti that. So run from that.

[Mikayla]

Okay. And that's what I wanted to ask you because one of them, one of the policies. Policies worked like you could either pay, you know, like a chunk. Chunk of like $50,000 right up front.

[Dr. John DeLoney]

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

[Ken Coleman]

No, you already know the answer to that. You shot it in the foot as soon as you were telling us. You were like, I get nothing out of it at the end.

[Dr. John DeLoney]

Yeah, don't do that.

[Ken Coleman]

So my last question for me is, did you run some numbers on the cost because I think John brought it up and I think it's a fun exercise. What would it cost you to get the long term health care emergency care service? I mean insurance. Excuse me.

[Mikayla]

We have not run the numbers. I mean we just, like I said, we just started to look into it and we've had a couple people quote us different numbers. One of them, you know, was about five grand a year and then again one of them said, you know, you could pay a lump sum of fifty grand and never pay again in the rest of your life. But then they tried to tell us advantage to that was no, Tim, we keep going back.

[Ken Coleman]

Tim, Tim, stop talking about that. We already told you. I'm talking about long term care insurance. Look into it. See what the cost is. You and your wife sit down and talk about it. Let me say this.

[Dr. John DeLoney]

This is not a retirement vehicle.

[Ken Coleman]

Yeah.

[Dr. John DeLoney]

This is you hedging risk. You don't want a check back if you don't use this at the end. This is you putting this on the table just in case this happens. Go to Ramsey Solutions and go to Ramsey Trusted Page and you can talk to our friends at Xander about long term care insurance and they're going to tell you the truth and they're going to be honest with you. It's who I trust with my family. You can trust them too.

[Ken Coleman]

As an investor and a person of.

[Dr. John DeLoney]

Faith, when your mutual funds and ETFs.

[Ken Coleman]

Put your money into the dark side.

[Dr. John DeLoney]

You might feel a disturbance.

[Ken Coleman]

Well, good news. Timothy Plan offers investments for people who want to be intentional about where their money goes.

[Dr. John DeLoney]

As the pioneering force in biblically responsible.

[Ken Coleman]

Investing, Timothy Plan entered the investment space.

[Dr. John DeLoney]

To offer clean alternatives to secular funds.

[Ken Coleman]

That invest in stuff you'd never willingly expose your family to. And for more than 30 years, Timothy Plan has offered mutual funds and ETFs that won't contradict your values or sabotage your faith.

[Dr. John DeLoney]

So if you're serious about investing with a clear conscience, Timothy Plan could be.

[Ken Coleman]

Just what you're searching for. Contact your financial advisor today to see if Timothy Plan is right for you.

[Dr. John DeLoney]

Or visit timothyplan.com for more information.

[Ken Coleman]

Investing includes risk, including possible loss of principal. Before investing, carefully consider a fund's investment objective. Risks, charges and expenses contained in the Prospectus. [e-mail] Read carefully before investing.

[Dr. John DeLoney]

Mutual funds distributed by Timothy Partners Limited and ETFs distributed by 4 Side Fund Services, LLC.

[Ken Coleman]

You know what's crazy to me? Two things. One, that we're already down to the wire on the tax deadline and Two, statistically speaking, most people haven't filed yet. And if that's you, I'm not trying to shame you or anything, but just know that taxes don't have to be stressful. Ramsey SmartTax is a 100% accurate software that makes filing simple and easy and doesn't make your wallet cry. So don't be the person pulling your hair out because you're trying to file at 10 o'clock at night on April 15th. Get this party started and over with by going to ramseysolutions.com smarttax that's ramseysolutions.com smarttax.

[Dr. John DeLoney]

Hey, please, please, please take two seconds and hit the subscribe button. Hit that little heart button or the thumbs up button, whatever you got to do to tell the algorithms that you're in on this show, it makes a huge difference. And if you're watching your friends and your family and your neighbors losing their mind over what to do economically and you keep thinking, I've got a, I've got a plan. Just simply go in and leave a five star review. Hitting the subscribe button, it kicks the show up in the algorithm for the technocratic overlords and it tells the computers that more people want to consume the show and it puts out in front of more people. It's a way to help your community. It costs nothing to do this. So take a second, subscribe, leave reviews, share an episode with a buddy. It makes such a difference for everybody. Thank you so much.

[Ken Coleman]

All right, let's go to Rebecca in Chattanooga. Rebecca, how can we help today?

[Mikayla]

Hi, thank you so much for taking my call today. So I am in baby step seven and thanks to your program, I'm a baby steps millionaire.

[Ken Coleman]

Nice.

[Mikayla]

And I'm about. Thank you. What's your network about to perk? Well, depending on the market, about 2 million.

[Ken Coleman]

Good for.

[Dr. John DeLoney]

Depending on the market. Yeah, it was 1.1 yesterday, 2.1 today.

[Mikayla]

Looked in about six weeks.

[Ken Coleman]

Well, it's back in big time today.

[Dr. John DeLoney]

Continue that trend.

[Mikayla]

It has a lot of ground to gain.

[Ken Coleman]

That's right.

[Dr. John DeLoney]

My buddy who's my smartvestor pro texted me and he said, hey, just don't look. And that's good for me.

[Mikayla]

No, I'm not looking. I've got eight to eight to 13 more years of work.

[Dr. John DeLoney]

So I'm outstanding.

[Mikayla]

The reason I'm calling today is that I'm about to purchase a new vehicle.

[Ken Coleman]

Congrats.

[Mikayla]

I'm allowed to do as a millionaire.

[Ken Coleman]

Yes, you are.

[Mikayla]

And, and I'm going to write a check for It. And of course, now they're offering me a prepaid service package. And I know how we feel about extended warranties, and I definitely would not get one of those. But then when they talked about this prepaid service package, I thought, of course my antenna goes up. And I immediately think, this is how they're going to try to make their money off of me. But I just wanted to get your take on that.

[Ken Coleman]

Your gut is right. Pass.

[Dr. John DeLoney]

They're not your friend.

[Ken Coleman]

Hard pass. I'd say, no, thanks, guys. I'm all right. And just talk to them about how much money you have in the bank and that you'll take care of your issues with the car when it arises. Here's what they'll say very much.

[Dr. John DeLoney]

They will make you feel so dumb, like you're the dumbest person who ever lived. You're. You're a multimillionaire, and they're going to make you feel like you're dumber than a box of hair. And they're going to tell you, but you got to get the oil changed anyway. And you can just do it now, and you can do it for $9.

[Ken Coleman]

Yeah, that's why I told her to flex.

[Mikayla]

With your last caller and the prepaid life insurance, I thought, hmm, that's probably a lot like a prepaid service plan.

[Ken Coleman]

Listen, here's the deal. I have a. I love these kinds of things, and I, I think you take a really strong stance because John's right. They're going to try to talk you into it, but if you lead out with the flexibility. You know what? I've worked really hard to be a multi millionaire, and I'm good. So I don't need the service plan. I just take care of things as they come because I've got cash. But I do appreciate that your leaders want you to give me this option.

[Dr. John DeLoney]

Just call it all out on the table.

[Ken Coleman]

And that's my little pitch there is how I would do that. And by the way, that they immediately go, oh, Rebecca is not to be played. Well played with.

[Dr. John DeLoney]

Here's this. Here's a similar one. I bought a new car, I think, two years ago. And the person said, hey, here's. He handed me a piece of paper and it said, hey, here's the estimated repair costs over the next X number of years. You want to buy one of these prepaid warranties? And I looked up and I said, oh, man, my bad. If you're already telling me that this car that you're selling me new is going to be broken in two years, I'm going to go ahead and walk right? And he was like, no, no, hold on. If you're telling me right now that the engine's gonna fail and that you think this is gonna, like, I need to know that now because I thought. I thought I'd buy a new car from a reputable place. And, dude, it ended. Well played immediately.

[Ken Coleman]

I like that.

[Dr. John DeLoney]

Yeah.

[Ken Coleman]

If you go, Rebecca, you got. You got some options there. But the answer is hard pass.

[Dr. John DeLoney]

And for everyone listening, here's the honest truth for Rebecca. She's got eight years left. She's a multimillionaire. She clearly knows what she's doing. And if you. Let's just be honest about the math. If you every three months went to the local dealership and you prepaid, you gave them 2,000 bucks and you got lifetime free oil changes, and you're assuming. And they. They amateurize that out over eight years, like, if you come here, it's going to pay for itself 10 times a. The. The chance that you still have that car in eight years, that somebody in your life hasn't had something that you got to hop up and move that you like. There's so many factors over the next eight years that it's just not worth playing the gamble. Especially got 2 million bucks to say, man, I'll. I want to get my old chains where I want, when I want, and I'm going to move on. Thank you.

[Ken Coleman]

Love it. Let's go to Kristen, who is joining us in Phoenix. Kristen, how can we help?

[Mikayla]

Hi. Thank you so much for taking my call. So my current situation is I recently turned 30. I lost my job four months ago, and right now I'm living with friends on EBT and have state insurance. Oh, goodness. And I'm also in $42,000 a day. And so I've been actively on the hunt for a job, but I just haven't had any luck. So obviously, it's just been, like, a really dark and heavy place to be, because at 30, I literally lost everything, and I have nothing going for me.

[Dr. John DeLoney]

Not true, not true, not true. I'll call that one out. The other ones are true, but I'll call that one out.

[Mikayla]

Okay, thank you. Well, in the meantime, I've kind of revisited this dream that I've had on my heart for seven years, which is to start a nonprofit. And so I was like, well, the market's so bad. Let me just maybe go after my dreams. And so as I've been looking for work, I've also been taking steps towards the nonprofit And I've just been getting green light after green light and after green light, which doesn't make sense because I always thought when I started this nonprofit, I would be stable and 100% out of debt. Well, this is kind of where I'm at right now. My dilemma, which is why I'm calling you, is I have a chance to receive $5,000 from someone who believes in me. And I could take that $5,000, and it could cover my basic needs for about three months. And so do I use that $5,000 to go into creation mode and pursue this dream, or do I stay in, like, survival mode and wait until I'm out of debt?

[Ken Coleman]

How much is the debt?

[Mikayla]

Days.

[Ken Coleman]

How much is the debt?

[Mikayla]

42,000.

[Ken Coleman]

Yeah, couple things. I understand that you're down. We have limited time here, so I'm gonna. I'm gonna do less emotional loving on you, and I'm gonna do some financial loving on you, if that's okay. All right? So, number one, I understand that you have not had the luck that you feel like you would like to have had getting a job. But you. There are plenty of jobs, plural, that you can go get. And it starts today when you hang up. I don't care if you're walking dogs, you are delivering pizzas, you are stocking shelves at a big box store.

[Dr. John DeLoney]

This is.

[Ken Coleman]

At this point right now, this is not about passion or dreams, the career or the passion, the dreams. This is fighting to survive. And I don't know how you've been surviving. And so today, we start fighting. So it's two, three jobs, and we start getting some momentum while we're looking for some stability. And we keep working. The fact. I'm going to give you a copy of my book, the Proximity Principle, and I want you to read it. We'll give you whatever format you want, but you've got to start making progress. So we work any job that we can take. Three jobs, and we begin to work the debt snowball. We're also going to get you. Let's see. Let's do total money makeover. We'll give you that, too, as well.

[Dr. John DeLoney]

Financial Peace University.

[Ken Coleman]

Financial Peace University. University. We're going to load you up. Christian, Just give her everything she needs. All right?

[Dr. John DeLoney]

Is.

[Ken Coleman]

You need momentum now. Here's the deal, okay? I would not take the $5,000, because that $5,000, you just say, hold that. There's a. There's a day. There's a day in the future where I'm going to be able to take this gift and put it towards the actual launch of the organization. This is not $5,000 to keep you afloat for three months. That is horrible, horrible idea.

[Mikayla]

Okay?

[Ken Coleman]

And that's the Christian, by the way, that John checked at the start of the phone call. I want to give it to John really quick here to kind of give you kind of a pep talk. But right now, that's what you need to do. Now, John will tell you about what you need to feel. What you need to do is don't even think about this non profit right now.

[Dr. John DeLoney]

Exactly. Listen, you've backed yourself into a corner. The way you phrased it is do I just keep surviving or do I go follow my passion and dreams?

[Ken Coleman]

Yeah.

[Dr. John DeLoney]

That's a false dichotomy. Okay? We're not just gonna hunker down and look at the floor and walk around. And we're not. And it's not that or sunshine and rainbows. Non profits are really, really tough. Okay?

[Mikayla]

Yeah.

[Dr. John DeLoney]

So here's what we're gonna do. Like what Ken said. We're gonna go get a bunch of tiny wins and we're gonna make 13 an hour, 11 an hour, and we're gonna keep showing up. And then four months later, you're gonna stand six inches taller. You've got this cr. Kristen, you got this. And don't ever say again that you don't have anything to contribute. Not true.

[Ken Coleman]

Hey, technology has changed a lot in the last 30 years. Now, the hot topic is AI. And I understand that it might seem intimidating, but if you use AI the right way, it's just another tool to help you work smarter and faster, like a calculator or a cordless drill. So if you run a business, you'd better get on board with it before you get left behind. And NetSuite by Oracle offers AI powered tools that help small businesses improve efficiency and make smarter decisions by bringing all their major business processes into one platform. That way, there's one source of truth for the real time data you need to take advantage of opportunities. Then you can forecast better, scale more efficiently, and streamline those manual tasks that take too long. So join the more than 41,000 businesses, including Ramsey Solutions, that rely on NetSuite to help tackle some of their biggest challenges. And right now, you can download the CFO's guide to AI and machine learning at netsuite.com Ramsey. That's [e-mail] Are you sick and tired of being sick and tired? You can take control of your money and your relationships. And it starts with just one night join me and Dr. John DeLoney live in a city near you on the Money and Relationships tour. We're covering the real life stuff that matters so you can break the cycles that have left you stuck. It's coming up fast, so get your tickets for Louisville, Durham, Atlanta, Phoenix, Fort Worth, or Kansas [e-mail] tour today. Let's go to Jack in Sacramento, California. Jack, how can we help you?

[Mikayla]

Hey, guys, thanks for taking my call. I really appreciate it. So I was wondering if I should get a consolidation loan for my father. He's, he has about 50,000 in debt. It's probably about 35,000 in credit cards, about 10,000 in a personal loan, and probably five on a car. He's making the minimum payments on all of his stuff, and he's just barely making it by.

[Ken Coleman]

So, Jack, number one, if your dad called us and asked us if he should do a consolidation loan, we would say no. So we would definitely tell you not to get involved in any kind of consolidation loan or helping your own father out on his loans. This is a no, no, no, no, no with exclamation points.

[Dr. John DeLoney]

And I want to say, man, you're a good son. What's happened to bring you to this point?

[Mikayla]

Well, I'm kind of almost worrying about myself because he's getting, he's getting older, he's about to turn 65. And I'm worried that when he gets to the point where he can't work anymore, like, he's gonna just, you know, barely be able to cover his own payments and I'm gonna have to start paying for his. The. Where he lives and all that type of stuff.

[Dr. John DeLoney]

I get that worry. That's a legitimate. That's a legitimate concern. A legitimate. You looking into the crystal ball if things are going to continue as they have been in the past. Right. That a trope that gets thrown around is the best predict. Prediction of future behavior is past behavior. Right. You see this, this slow moving train coming right at you, right?

[Mikayla]

Yep.

[Dr. John DeLoney]

So let me ask you this. Has your dad ever listened to you?

[Mikayla]

Well, I mean, I'm a pretty new listener.

[Dr. John DeLoney]

No, no. Has your dad, has your dad ever listened to you?

[Mikayla]

Yeah, I would say yeah, he thinks. I think he definitely respects my opinion.

[Dr. John DeLoney]

Okay, so if you sat down and said, dad, I love you, here's what I see coming in your life. You've got to get a job or you got to get a second job, like, we've got to make some changes here. What would he say to you?

[Mikayla]

I mean, that would definitely Be, be tough just, you know, him being an older, older guy.

[Dr. John DeLoney]

It is. But hey, if we're playing big boy money, if you're ready to put $50,000 down or you're ready to co sign on a loan with a guy that has a, like a history of not paying stuff back, like, then you're ready to do big boy stuff. What stops you from having that what I would call a more honest. Because here, here's what you know, and I know this, but you especially know this. You're going to get this consolidation loan. You're going to co sign your life away to it, and he's going to continue. Nothing will have changed in his life.

[Mikayla]

Yeah. Except for how much he would have to. To pay. At least that's what I think.

[Dr. John DeLoney]

Oh, the amount of money he's going to have to pay is still going to be there.

[Mikayla]

Well, yeah, so I have kind of talked to him about it, about all this, all this stuff. And we've, we've talked with each other about how we could try and figure it out. And you know, he knows he needs to make a liar lifestyle change. He's definitely living above his means.

[Ken Coleman]

Yeah, let's pause there also. Hold on, let's pause. No, no, no, no, no. I'm jumping in here because you're still trying to talk us into this and that's not going to happen. And I get what you're trying to do. I think John's right. You got a great heart. But you called and said, what should we do here? You just said dad's living above his means, so he's clearly spending more than he's bringing in. What income is he bringing in and in what form? How much?

[Mikayla]

So he's a real estate agent. He probably makes about 40,000 a year. And he took his Social Security early, which ended up backfiring a little bit because then after he took that, he made too much income. To where now they're basically taking those Social Security payments back. They're not paying him.

[Ken Coleman]

What's his total debt burden again?

[Mikayla]

50,000.

[Ken Coleman]

Okay, so a real estate agent. And he's been doing it long enough to know how to sell houses. True or false?

[Mikayla]

True.

[Ken Coleman]

All right, so dad needs urgency, and I'll leave it to my colleague here as to what you can and can do when it comes to that. And I don't think it's much, but I do agree with John that you've got to have an honest conversation with dad, but it's in the form of truth serum to say $50,000 in debt, dad, in the grand scheme of things, is not a lot for somebody who can sell some houses and knock that out pretty quick. But there's something going on with him for a lack of urgency. The fact that he's being irresponsible. Again, not your problems to fix. But I think this has got to be a real honest but very respectful conversation. And if he will listen to you, you can show him our plan and say, hey, I've just started listening to these Ramsey folks and here's the debt snowball. And I'll help you with the budget. I'll lean in every way I can, Pop. But you got to make these changes or else I'm going to get stuck with this. And I don't want to get stuck with this.

[Dr. John DeLoney]

Here's what we're going to give you, Jack. I'm going to hook you up with two. Two different codes so that you can watch all nine of the Financial Peace University lessons digitally. And you can send him one. He can watch it on his own. Okay, I'm gonna send you that. But here's something important that I want you to hear me say. What you are trying to do is respectable and loving. You've got ulterior motives, like we all do. You don't want to get stuck with this down the road. Right. But you also. You've been watching your dad hurt for a while. Fair?

[Mikayla]

Fair.

[Dr. John DeLoney]

Okay. This will end with the destruction of your relationship with your father.

[Ken Coleman]

Yep.

[Dr. John DeLoney]

And here's why. When you co sign on a loan with your dad, it's the same thing I tell parents to not co sign on student loans. If you can't afford it, you can't afford it. But what you end up doing is you put a transaction between two people that should be ride or die together. A father and a son. And there's gonna come a moment when he doesn't come through in a certain month, and he can't make that payment. And you're gonna get the bill. And here's what's gonna happen. You're going to get enraged, as you should, and then you're going to begin to resent him. And that's not his fault. You signed the loan. And so the greatest gift you can give him is a son who's always in his corner. And by putting a bank between the two of you, you're setting up your relationship for failure. So saying, dad, I love you. I just ran into these guys. This thing's amazing because here's what your dad needs to do. If he's only making 40 grand as a real estate agent. He's got to go to Walmart and start throwing boxes. He has got to go sit in a drive through from 8pm until 2am serving like coffee or takeout or whatever. He's got to go make some more money. And by the way, he can do that doing quote unquote less sophisticated tasks, whatever crap that is. He can go make more than 40000 bucks. But he's just got to get on the horn.

[Ken Coleman]

Yeah. He does not have to sell a lot of houses to make 40 grand. Pay off this $50,000 in debt and the 40 grand he's barely doing anything at all. So this is.

[Dr. John DeLoney]

He may have to sell a car or two. He may have to sell a house and move down to a condo. He's got to make some grown up dad decisions. But dude, I want to honor your heart man. And I know you see this thing coming and you're already doing the math being like dude, I'm have to pay for this but I get it. It's tough, tough, tough.

[Ken Coleman]

I want to get to our Ramsey show question of the day, which is brought to you by why Refi? Why Refi offers a different approach to paying off your default to private student loans. They do it with a low fixed rate for less stress. Go to yrefi.com Ramsey that's the letter Y R F y.com Ramsey it may not be available in all states.

[Dr. John DeLoney]

Today's question comes from Madison in Kansas. Madison writes, I'm married. I love my husband, but we have made bad decisions over the last 20 years. We're looking at $125,000 in debt, not including our mortgage. Together we earn 150 a year. He's not interested in looking at our financial situation, but at least he let me handle our finances. Francis. Oh my gosh. Yeah, yeah. I don't want to talk about it, but I'll let you carry this anchor around all by yourself. Is it possible to become debt free without your spouse being on board? Like here we go. I feel like a gazelle with an anchor.

[Ken Coleman]

Well, that's clothed in a financial question. But John, I'll keep it with you because that is a marriage question. Tough one there.

[Dr. John DeLoney]

Mathematically, theoretically, I guess if he just quits spending money. So that's just me being honest.

[Ken Coleman]

If he assume, if he truly does let her do.

[Dr. John DeLoney]

If he stops, stopped spending one penny and you took full control, theoretically, mathematically, yes. It'll burn your marriage to the ground. I think this is a situation Madison, where you set your husband? Y'all sit down for dinner, you sit down for breakfast somewhere. You sit down for lunch somewhere. Not when you're fighting about money. Not when it's time to do a budget. And you say, I am scared to death. People give me a hard time on, on air, I mean on, on the Internet about saying this line I'm about to say, but I think it applies here. Husband, I can't breathe. I don't feel safe in this house when it comes to our money. And I can't keep carrying all this by myself. Will you look at this with me? And if he looks at you and says, nope, don't care, then Madison, you got bigger issues in your, in your marriage. Because it's not about money. It's about your husband saying, I don't care how safe you feel or not, it's on you.

[Ken Coleman]

Alright, business owners, last call. The pre sale for the brand new book build a business You Love ends April 15th. Pre order now and get over $350 worth of free bonus items to help you hire smarter, lead stronger and grow faster. This is not theory. It's the system I use to grow my company from nothing and the same framework we've coached thousands of business owners through. You can only get the [e-mail] store, so don't wait. Pre order now. If you have a very simple tax situation, like you haven't had any major life changes or big investments, we want you to check out Ramsey Smart tax. This is the tax software that Dave is in full approval of. It's what the Ramsey team uses because we trust to help us get every penny we're owed. It's 100% accurate tax software that saves you up to 80% compared to other popular softwares in the industry. It's powered by tax layer. I'm sure you've heard of tax layer. Been in the tax industry for 50 years and we doctored it up. The Ramsey way to help you file, right? So better get on it. Filing early means getting the best deals and getting tax stress off your shoulders. Go to ramseysolutions.com Smart Tax. That's ramseysolutions.com Smart Tax. Terence is up, up in Atlanta. Terrence, how can we help today?

[Mikayla]

How you doing, sir? I have a 1200 car note.

[Ken Coleman]

Oh my goodness. Where's my thumbs?

[Dr. John DeLoney]

What is it?

[Mikayla]

It's a. It's a G2 Kia Stinger.

[Ken Coleman]

A what.

[Dr. John DeLoney]

Did you say?

[Ken Coleman]

A Kia Stinger. Stinger Kia, Yeah.

[Mikayla]

The, the twin turbo. The, the sports car Kia.

[Ken Coleman]

Wow. I've not heard of this model. Terence, how much did that set you?

[Mikayla]

It was around like 60,000, but I had. I had three. I had another car to add on to.

[Dr. John DeLoney]

No, you didn't.

[Mikayla]

Did you?

[Dr. John DeLoney]

Real negative equity into it.

[Mikayla]

Yes. And I needed something reliable because I traveled back and forth to Tennessee to see my kids.

[Dr. John DeLoney]

Bro, you did not. 10,000 camera. You bought a Stinger, dude.

[Ken Coleman]

Yeah.

[Mikayla]

Yes. Yes, I bought a Stinger. It was a bad decision.

[Ken Coleman]

We love you.

[Dr. John DeLoney]

We're just having fun with you.

[Mikayla]

I know the bad. By listening to the show. I knew it was a bad decision.

[Ken Coleman]

So how can we help?

[Mikayla]

Well, I have that, and I also have $2,000 a month child support. I was trying to figure out how can I get rid of the Stinger.

[Dr. John DeLoney]

So. So every. The first of every month, you open your eyes and you're already 3200 down.

[Mikayla]

Yes, I made. I make $10,000 a month. $125,000 a year without overtime.

[Ken Coleman]

Is that the only debt you have, is the car?

[Mikayla]

Yes, I paid off. I started literally today, Ramsey, a couple of years ago. Then last October, I paid off all my credit cards.

[Ken Coleman]

Okay, so how much?

[Dr. John DeLoney]

Let's walk through this.

[Ken Coleman]

Okay, Go ahead.

[Mikayla]

You have one credit card that I. That I would use only to go on the Sky Club and get a rental card. And that was another question that I had to ask y about that, too. What do you do about when you need a rental car? Do I just use my debit card?

[Ken Coleman]

Yeah, that's what John and I do.

[Dr. John DeLoney]

That's what I use.

[Ken Coleman]

That's what John and I do is we use a debit card. You don't need the credit card. So cut the credit card up because it's going to remove the temptation. But let's dive into this car real quick. Okay, let's. Cuz we got negative equity. So what? What? You owe a total of how much?

[Mikayla]

Oh, like 57,000 now.

[Ken Coleman]

So 57,000. And what is the Stinger worth if you sold it private seller today?

[Mikayla]

Probably 30,000.

[Ken Coleman]

30,000. Oh, boy.

[Dr. John DeLoney]

That's a bath. That hurts.

[Ken Coleman]

That is a bath right there. Yeah.

[Mikayla]

Because the thing was, I didn't mind. I don't mind paying for it, but by the time I, you know, get around to paying bills and I see that 1200 note, I'm like, no, I get that.

[Ken Coleman]

Listen, I have indigestion and it's not even my payment.

[Dr. John DeLoney]

I've got hemorrhoids now. Our bodies are falling apart. On your behalf, Terrence.

[Ken Coleman]

Oh, boy. I Could explain the first one. I can't explain the second one.

[Dr. John DeLoney]

I can't either. I don't know how that works. Just my insides one out.

[Ken Coleman]

Okay, so let's walking through this here, John. So see the 57k also involves the negative equity, correct?

[Mikayla]

I think I'm done with the negative equity part of it.

[Ken Coleman]

All right, so we owe 57.

[Mikayla]

Yes.

[Ken Coleman]

All right, so I had the car.

[Mikayla]

For two years now.

[Dr. John DeLoney]

All right, how much? So you, you make, you have $2,000 a month in child support. You bring home $10,000 after tax.

[Mikayla]

No, that's before taxes.

[Ken Coleman]

All right, so what's your actual bring, what's your bring home?

[Mikayla]

I bring home like, like 50, 50 $200. 60 taxes and child support.

[Dr. John DeLoney]

Oh, after. Okay, 52, the child support.

[Mikayla]

5200 after child support.

[Ken Coleman]

Oh, okay, good.

[Dr. John DeLoney]

All right.

[Ken Coleman]

So what I'm trying to get at is how much, John, I want to get to quickly. How much could you, how much could you. If you just pay the bills, just your basic bills and your child support and this car payment, how much money left over do you have that we could put towards saving to get a. I'm thinking about a ten thousand dollar car, something that's dependable. Maybe 7,500 if I find myself a higher mile. Honda or Toyota. That'll get you back and forth to Tennessee. How much money could you put away each month?

[Mikayla]

Right now I could probably pull away probably fourteen hundred dollars a month. Okay, because like after, because after each check I'm. I'm rolling around 1300 after everything.

[Ken Coleman]

Okay. So I, what I'd like to see him do, John, is I'd like to see him save as much money. Let's get a 5, 6, $7000 car and let's sell this stinger. And now we're, we're at least, you know, we're now working on 30,000, 27,000 roughly is what we're working on.

[Dr. John DeLoney]

Or here's, here's the other side of that. If you take that twelve hundred dollars a month payment, you take that thirteen hundred dollars extra and you go through your budget with a magnifying glass and you stop going out for a season and let's say you can scrounge up 3000 bucks, that includes this 1200 dollars, you can pay this thing off.

[Mikayla]

Okay, that's one way of doing it. Completely became a cheapo. Well, I became a cheapskate.

[Dr. John DeLoney]

Okay.

[Mikayla]

So I. Chicken salad sandwiches. Like I really just tried to, I really cut back just to see, to figure out was it me or was it just a lifestyle or anything. And everybody been looking at me crazy like, hey, you want to go? I'm like, nope.

[Dr. John DeLoney]

Good, good, good.

[Mikayla]

Can't go nowhere when I got this. Okay.

[Dr. John DeLoney]

You know, so I think a principle that we live by here is things with wheels should not cost more than 50% of your income. And so you're right there on the bubble here. So if you want to just to suck it up for 20 months and throw $3,000 a month at this, you could. Or like Ken said, you're gonna throw, you're gonna suck it up for 10 months, throw $3,000 a month, get that 30 down to where it's just bottoming out, and then you can try to sell it on the market.

[Ken Coleman]

Yeah, that's another option. I, I gave you what I would do. I like what John's saying.

[Dr. John DeLoney]

I'm doing what Ken would do. I, I would get rid of this thing out of my life.

[Mikayla]

Yeah, I want to get rid of it, man. Because before I got the Stinger, I was driving a 2012 Buick Lacrosse, which I didn't have. No problem.

[Dr. John DeLoney]

That's a car.

[Ken Coleman]

Listen, Terence, I, I think very few guys could pull off a Buick Lacrosse like you could. I just got a sense you got enough that car. Well, get you another one.

[Mikayla]

I got hit in a high speed chase and they told him.

[Ken Coleman]

It tell me that you weren't being chased.

[Mikayla]

No, no, no. I was sitting in traffic and got hit by a police officer.

[Ken Coleman]

What's a decent Buick Lacrosse gonna set.

[Mikayla]

You back probably now? Well, I bought that one in 2018 for ten grand. When I went to looking after the red, they went up to like 16,000.

[Dr. John DeLoney]

Yeah, they're pretty.

[Ken Coleman]

Yeah. Listen, I'm gonna challenge you to get a. Somewhere. Try 7500. I. I think you get something dependable. You know, a car that, a car maker that's very dependable that just. They're going to run forever. I'd take my chances on that. I'd do less cash right now because you got to get out of this deal.

[Dr. John DeLoney]

Here's the words we use. Terence, this isn't an accusation. This is us having some fun. But you're going to pay about $30,000 in stupid tax.

[Mikayla]

Okay.

[Dr. John DeLoney]

And if you, if you just know that every time you send that check, it's just, I'm paying stupid tax. Write it in the little thing on the bottom of the check. Stupid tax. Or when you're making online payment, just put, put stupid tax. And by the time this 10 months is up and you've thrown $3,000 a month and you haven't been on a date. You haven't been to a restaurant, you haven't seen a concert. You're gonna be. You will never do this again.

[Mikayla]

Never. I'm one of the ones that learn real fast.

[Dr. John DeLoney]

Well, you were kind of with us last time, and then you borrowed money again. Are we done? Done?

[Mikayla]

I'm done.

[Dr. John DeLoney]

Good. That's amazing.

[Mikayla]

I'm done because I gotta. I got a daughter's about to go to college, so I out. I want to put. I want to have the money. I have the nest egg. I did the baby steps, so I cut the credit cards off.

[Dr. John DeLoney]

I love it.

[Ken Coleman]

Well, this is super intense. You got to be super intense to do that. Three grand a month. You can do it. You got overtime options. What? You let that slip out. You let that slip out. So I'd be getting overtime. I'd be working weekends. And to John's point, if we can sock 3000 at a minimum away towards this, the 27. Get yourself another Buick, my man.

[Dr. John DeLoney]

And people are going to watch you work like crazy over the next 10 months to a year, and they're going to think you're going to roll in there with a G3 or a G wagon. Listen, you're going to roll in with a. With a Buick, let them know I'm opting out of the game. And I solve for peace, not for a cool, shiny, depreciating asset.

[Ken Coleman]

But, I mean, he likes it. He likes that lacrosse. I think he can find himself a nice little dude.

[Dr. John DeLoney]

A guy who is in on a Buick Lacrosse. That's marriage material, right there.

[Ken Coleman]

It is.