You Can't Build Wealth While Buried In Payments

Summary

Podcast Summary: The Ramsey Show – "You Can't Build Wealth While Buried In Payments"

Release Date: August 8, 2025
Host: Dave Ramsey, Rachel Cruze, and George Camel
Episode Focus: Navigating debt, co-signing loans, marital financial conflicts, and effective budgeting strategies to build wealth despite financial burdens.

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1. Caller: Emily from Missouri – Navigating Co-signing and Marital Tensions

Timestamp: [00:46] – [07:14]

Situation:
Emily seeks advice on helping her mother retire by purchasing her a house. She initially considers withdrawing funds from her 401(k) to place into her mother's trust and buy the house. However, her husband opposes this plan, citing financial selfishness and refusal to accommodate her mother living with them or in another family home.

Dave Ramsey’s Advice:

• Avoid Early 401(k) Withdrawals: Pulling money from a 401(k) in her early 50s incurs a 10% penalty plus taxes, equating to a 35% interest rate—inefficient and costly ([02:12]).
• Understand Husband’s Boundaries: Recognizes that her husband’s refusal may stem from boundary-setting rather than selfishness ([03:19]).
• Alternative Solutions: Suggests her mother could downsize her own home to free up equity (estimate sale price: $280,000 - $300,000 against an $80,000 mortgage).

Notable Quote:
Dave Ramsey [02:12]: “You're gonna pay a 10% penalty plus your tax rate. So it's gonna be like borrowing money at 35% interest. No, that would be stupid.”

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2. Caller: Hunter from Michigan – Dealing with a Co-signed Loan Gone Wrong

Timestamp: [10:43] – [52:00]

Situation:
Hunter discusses the fallout from co-signing a car loan for his mother when he was 18. The car was repossessed, and the remaining debt of approximately $10,000 adversely affected his credit. Now, his mother is unemployed and struggling financially, exacerbating his predicament.

Dave Ramsey’s Advice:

• Set Boundaries with Collectors: Encourage honesty with debt collectors, emphasizing settlement over retaliation or deception ([13:05] – [17:14]).
• Negotiate Settlements Aggressively: Suggests offering a lump-sum payment (e.g., $1,000 to $2,000) to settle the debt, ensuring agreements are in writing and avoiding direct access to bank accounts ([14:29] – [16:33]).
• Protect Financial Future: Emphasizes preventing future financial abuse by maintaining strict boundaries and avoiding further co-signing ([17:14] – [52:00]).

Notable Quote:
Dave Ramsey [12:24]: “The only thing we can do is limit the damage by settling your portion of the deficit.”

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3. Caller: Joy from Pittsburgh – Managing Marital Finances Amidst Addiction Recovery

Timestamp: [07:14] – [31:06]

Situation:
Joy is married to a husband currently in inpatient rehab for alcoholism. She seeks guidance on restructuring their marital finances to support his recovery and ensure financial stability once he returns home.

Dave Ramsey’s Advice:

• Restrict Financial Access: Keeps finances separate, restricting her husband’s access to funds until he achieves sobriety ([24:42] – [28:23]).
• Involve Support Systems: Recommends participating in Al-Anon and involving counselors to rebuild trust and financial responsibility ([24:33] – [28:23]).
• Gradual Trust Rebuilding: Advocates for reintroducing financial responsibilities as trust and sobriety are reestablished ([28:23] onward).

Notable Quote:
Dave Ramsey [25:28]: “As long as he is dealing with an addiction, he's a manipulative liar. … he can't handle money.”

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4. Caller: Michael from Phoenix – Protecting a Special Needs Individual from Financial Exploitation

Timestamp: [44:50] – [52:00]

Situation:
Michael seeks help for a church member who co-signed a loan due to his friend's girlfriend’s (possibly his wife’s) poor credit. The co-signed loan has led to financial strain and potential credit damage for the co-signer, who may have limited capacity to manage finances.

Dave Ramsey’s Advice:

• Legal Intervention: Suggests obtaining a police injunction to prevent further financial exploitation ([46:38] – [51:21]).
• Debt Settlement Strategies: Recommends aggressive negotiation tactics with collectors, including settling debts quickly and protecting personal accounts ([51:07] – [52:00]).
• Awareness and Protection: Emphasizes the importance of recognizing predatory lending practices and taking swift action to protect vulnerable individuals.

Notable Quote:
Dave Ramsey [51:08]: “You didn't help your daughter. You hurt your daughter. You put her in a situation where she can't afford a car.”

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5. Caller: Susie from Michigan – Setting Boundaries with Sibling Expectations

Timestamp: [33:45] – [36:43]

Situation:
Susie and her husband have become debt-free, including their mortgage. However, their siblings have begun encouraging their children to ask for financial support (e.g., trips, purchases), assuming Susie and her husband will host and fund these desires.

Dave Ramsey’s Advice:

• Establish Clear Boundaries: Recommend communicating directly with siblings about financial boundaries and expectations ([34:53] – [36:43]).
• Teach Respectful Interactions: Encourage addressing the behavior without involving children in financial demands ([35:07] – [36:43]).
• Delegate Responsibilities: Suggest assigning responsibilities or setting conditions for hosting family gatherings to prevent financial strain.

Notable Quote:
Dave Ramsey [34:50]: “If you’re a teacher to stop sending your kids to do your dirty work. … You don't have to send your four-year-old in.”

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6. Caller: Will from Kentucky – Addressing a Friend’s Financial Mismanagement through Co-signing

Timestamp: [37:21] – [52:00]

Situation:
Will is helping a church member who co-signed a loan, leading to financial distress as the primary borrower fails to repay. He seeks strategies to remove himself from the co-signed loan without harming the borrower.

Dave Ramsey’s Advice:

• Aggressive Settlement Tactics: Encourage negotiating settlements by offering low lump-sum payments and demanding written agreements ([14:29] – [16:33]).
• Restrict Access: Advise shutting down personal accounts to prevent further exploitation ([52:00]).
• Legal Assistance: Suggest involving an attorney to declare the co-signed individual as having diminished capacity, thereby releasing Will from liability ([50:31]).

Notable Quote:
Dave Ramsey [50:49]: “You’re going to be on the other end, but I'm asking you to do something that's over your pay grade.”

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7. Caller: Jeff from Buffalo, NY – Balancing Debt Repayment and Financial Goals

Timestamp: [55:09] – [59:30]

Situation:
Jeff has paid down his mortgage to under $100,000 and holds $200,000 in a brokerage account alongside retirement accounts. He contemplates cashing out his brokerage funds to eliminate student loan debt and further reduce his mortgage.

Dave Ramsey’s Advice:

• Prioritize Debt Repayment: Advises paying off student loans immediately to achieve financial freedom ([56:37] – [58:44]).
• Maintain an Emergency Fund: Recommends establishing a fully funded emergency fund before aggressively attacking other debts ([58:23] – [58:57]).
• Systematic Debt Elimination: Encourages continuing Jelly’s baby steps to systematically eliminate the mortgage after settling higher-interest debts ([58:57] – [59:30]).

Notable Quote:
Dave Ramsey [59:00]: “Now the house is down to 100 a quarter. And here we go. Game on, baby.”

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8. Caller: Jeremy from Atlanta – Investing Fears and Building Confidence

Timestamp: [60:51] – [85:12]

Situation:
Jeremy has accumulated $483,000 in high-yield savings and CDs but lacks retirement investments due to fear and uncertainty about investing.

Dave Ramsey’s Advice:

• Educate to Overcome Fear: Suggests adding knowledge to alleviate fear by consulting with a Ramsey Smartvestor Pro to learn about long-term investing ([61:22] – [62:44]).
• Leverage Existing Investments: Encourages understanding mutual funds' historical performance to build confidence ([62:11] – [62:44]).
• Structured Investment Planning: Recommends a guided approach to transitioning savings into retirement accounts for sustained growth ([62:44] onward).

Notable Quote:
Dave Ramsey [61:20]: “Scared scared when you don't know how to do something is what is wisdom? You know, you get behind a car … you should be scared.”

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9. Caller: Maddie from Orange County, CA – Tackling Substantial Debt with Variable Income

Timestamp: [65:23] – [100:00]

Situation:
Maddie and her husband have accumulated over $100,000 in debt, including credit cards, car loans, personal loans, and medical debt, while earning a combined annual income of $250,000. They’re debating whether to continue minimum payments or allocate all funds to eliminate one debt category at a time.

Dave Ramsey’s Advice:

• Maintain Minimum Payments: Emphasizes paying minimums on all debts while aggressively targeting the smallest debt first to prevent fees and credit damage ([66:14] – [69:20]).
• Utilize Budgeting Tools: Recommends using the EveryDollar app to track and prioritize debt repayment effectively ([66:31] – [100:00]).
• Discipline and Accountability: Encourages building disciplined spending habits and regular budget monitoring to sustain debt elimination efforts.

Notable Quote:
Dave Ramsey [66:30]: “And yeah, I'm not worried about your credit. I'm not trying to build credit. But on the other hand, I'm not trying to destroy it either.”

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10. Caller: Tanya from Arkansas – Advising Against Excessive Classroom Spending

Timestamp: [113:13] – [119:43]

Situation:
Tanya, a teacher, has been spending thousands annually on classroom expenses without adequate budget planning, seeking advice on managing and reducing these costs.

Dave Ramsey’s Advice:

• Reject Personal Financial Burden: Advises not to allocate personal funds for classroom supplies, emphasizing that it’s the school’s responsibility or should be supported by other means ([117:02] – [119:43]).
• Seek External Support: Suggests involving parents, church groups, or local communities to provide necessary classroom resources instead of personal spending ([115:42] – [119:43]).
• Implement Practical Solutions: Encourages realistic budgeting and leveraging available school resources to minimize personal financial strain.

Notable Quote:
Dave Ramsey [114:12]: “I think it is blatantly unfair for a teacher to have to pay for this. I just think it is.”

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11. Caller: Courageous Dave Ramsey’s Final Advice and Wrap-Up

Timestamp: [120:49] – [125:11]

Situation:
The episode continues with callers addressing various financial dilemmas, including divorce-related financial management and classroom budgeting. Dave Ramsey provides tailored advice, emphasizing debt prioritization, budgeting discipline, and setting clear financial boundaries.

Conclusion:
Dave Ramsey reinforces the importance of structured financial planning through his “baby steps” methodology, ensuring listeners understand that disciplined budgeting and debt elimination are pivotal to building lasting wealth and financial peace.

Notable Quote:
Dave Ramsey [77:00]: “You have to build processes and systems into your life that cause both of you to be accountable.”

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Key Takeaways:

• Avoid High-Penalty Financial Moves: Refrain from withdrawing from retirement accounts prematurely due to substantial penalties.
• Set and Maintain Financial Boundaries: Whether dealing with family obligations or debt collectors, establishing clear financial boundaries is crucial.
• Prioritize Debt Repayment Strategically: Focus on eliminating high-interest and smaller debts first while maintaining minimum payments on all obligations.
• Educate to Overcome Financial Fears: Building financial knowledge can alleviate fears surrounding investments and empower better financial decisions.
• Utilize Structured Budgeting Tools: Tools like the EveryDollar app can aid in tracking expenses, prioritizing debts, and maintaining financial discipline.
• Seek External Support for Financial Burdens: In scenarios like excessive classroom spending or financial exploitation, leverage community resources and professional advice to mitigate personal financial strain.

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Final Note:
This episode of The Ramsey Show delves into real-life financial challenges faced by listeners, providing actionable advice grounded in Dave Ramsey’s proven financial principles. From co-signing loans to managing marital finances amidst addiction recovery, the show emphasizes disciplined budgeting, strategic debt repayment, and the importance of setting clear financial boundaries to build and maintain wealth.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today. Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. Rachel Cruze, number one best selling author, host of the Rachel Cruze show on the Ramsey Networks, personality and my daughter, she's my co host. Today. Open phones at Triple 882-55-5225. Emily is in Missouri. Hi, Emily, how are you?

[Rachel Cruze]

Hi, how are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Rachel Cruze]

Okay, well, here's my situation. I started my job at 19 and I invested in the 401k that the company has and I married my husband when I was in my late 30s. My. And now I'm in my early 50s, wants to downsize. But she, I want to buy her a house so she could free up the equity in her house and be able to retire because she's in her mid-70s. And my husband, I want to do it to where I want to pull it out of my 401k and buy this. But I also want to not stir up problems with my current husband, you know, because he's financially selfish. He likes to spend the money. He doesn't. I asked if she can move in with him with us. He said no. I said, let's go find another house big enough for all of us. He said no. I said, then fine, I'm going to buy a house for. He said no. And I really want to do this for her so she can retire with her. She could, she could retire. I don't want her have to work for the rest of her life. So I want to know how I can do this. If I can pull money from my 401k, put it into her trust and then buy the house through her trust so it's protected because I would hate for something to happen to me and then him kick her out of a home that I purchased for.

[Dave Ramsey]

You know how dysfunctional this sounds?

[Rachel Cruze]

It's so dysfunctional. He has so many red flags and I can't do anything because I'm in love with his children because I don't have any children. I'm in love with his children and his grandchildren. So. So that's where we're at.

[Dave Ramsey]

All right. Well, I think what you're trying to accomplish is noble. How you're trying to accomplish it is whacked.

[Rachel Cruze]

Yeah, I know.

[Dave Ramsey]

Okay, so number one, if you pull money out of your 401k and you're in your 50s, you're gonna pay a 10% penalty plus your tax rate. So it's gonna be like borrowing money at 35% interest. No, that would be stupid. We're not doing that. Not borrowing money. You wouldn't get a mortgage at 35% interest for. To buy your mom a house. That's dumb.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

Okay, so you're not doing that. That's.

[Rachel Cruze]

That's okay.

[Dave Ramsey]

Your husband's smart. That's not being selfish. It is possible that he doesn't want to her to live with you because he doesn't like her.

[Rachel Cruze]

Yeah. Oh, that's true.

[Dave Ramsey]

That's not necessarily being selfish. It's just having good boundaries.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

I mean, I like Winston Cruz, Rachel's husband, a lot, but I don't think he would let me live with them.

[Rachel Cruze]

Yeah. I would let his dad live with us.

[George Camel]

Yeah.

[Rachel Cruze]

No, I get it.

[Dave Ramsey]

I mean, that's okay. That's not. It doesn't make your husband easy.

[George Camel]

Selfish. Right, right.

[Dave Ramsey]

Right off the bat, there's a possible. Other scenarios. And the other thing you don't want to do is you don't want to be deceptive with your spouse. That's not ever going to lead to a positive situation. Right. That's going to end up. And that's going to end up in ashes, particularly on a huge purchase. Okay. Yeah. So her home is worth what.

[Rachel Cruze]

She could probably sell it for? I don't know, 280, maybe 300.

[Dave Ramsey]

And it's paid for.

[Rachel Cruze]

No, it's not. She. Yeah.

[Dave Ramsey]

What does she owes?

[Rachel Cruze]

80,000.

[Dave Ramsey]

Okay. So she could get a couple of hundred grand to go do something with if she downsized. Instead, you were wanting her to invest that to live on. How old is your mom?

[Rachel Cruze]

72.

[Dave Ramsey]

Okay. Is she still working?

[Rachel Cruze]

Yes.

[Dave Ramsey]

Okay. And she's taking Social Security? Probably.

[Rachel Cruze]

Yes. Not much, though. My dad, they own businesses my entire life, and so he didn't think to pay in for her, but he made sure to pay in for himself.

[Dave Ramsey]

Okay.

[George Camel]

Man, Emily, I don't know. I'm a little speechless. I'm not gonna lie.

[Rachel Cruze]

It is.

[George Camel]

Well. And I just were. I'm like, I. I'm just concerned for the health of obviously your marriage, but just your just. Just your enjoyment of life. I'm like, you know, when you're in a situation that you feel it sounds like you're staying in because of his kids, and you love his kids, even though you could still have a relationship with them even if this marriage, you know, didn't work. I don't want. I don't want you to divorce him. But I do want to see that part of your life healed.

[Dave Ramsey]

The proper answer now, the way you presented it was he said no. He said no. He said no. That's not a proper answer.

[Rachel Cruze]

Well, he doesn't even want to mow her yard. He'll go and mow his 90 year old father's lawn, but he won't mow hers.

[Dave Ramsey]

So she, that's irrelevant to this discussion. Okay, I might not want to mow her yard either. She might bitch at me about it.

[Rachel Cruze]

That's true.

[Dave Ramsey]

You know, there may be legitimate reasons for that too. But aside from that, it's possible that he's looking at and saying, okay, moving in. He may have not done a good job explaining why he said no or you're not giving us that information. One of the two. But he may have said no. I don't want her to live with us. I don't think that that's going to go well relationally. She and I don't get along very well. That's a good reason for a no. No, I don't think you ought to buy her a house coming out of your 401k. And by the way, Emily, I just told okay, I told you why, but also told you no. And so, you know, I could be painted with the same brush after this call. So, you know, I'm going to go back to what Rachel said. I'm going to go back to. Let's start solving this within the framework of a positive relationship and a marriage. A positive way to approach the relationship in the marriage. Honey, this really means a lot to me. I understand you don't want to live with us. I understand that. Okay, that's fair. I understand you don't want me to take the money out of the 401k. And Dave explained to me that it's a huge cost. And so now I understand why you don't want to do that. But this is very important to me and I do have some money here and, you know, help me figure out a way to do this. And instead of like, I'm going to hide this from him and I'm going to put it in a trust where he can't do something about it later. And if you're going to do all that crap, you should be divorced.

[George Camel]

Yeah, well, you're just, I mean, you're enemies at that point. I mean, there's nothing about, you're working together. It's just, I don't know. And my question would be too. I mean, they may not even have the money to Go. Yeah, they may not be able to do it. The only way you're able to is to cash out your poor.

[Dave Ramsey]

That's a possibility, too. I mean, Sharon may want to do something. Winston may. You may want to do something. And Winston looks at you and says, no, we don't have to. We don't have the money.

[George Camel]

Yes.

[Dave Ramsey]

Without cashing in a 401, that's not someone being selfish. And no, I don't want Dave living with us. And you know that. That's okay. I mean, these are good. That. That's. That' all fair.

[George Camel]

That's a little bit of what I'm like. I'm trying to discern to help Emily, because she's obviously, when that called, who wanted it, But I feel like everything that was said.

[Dave Ramsey]

His answers may have.

[George Camel]

Been leaning more to him of like, yeah, there's something here. Now, granted, we want to help. Help your parents. I mean, there's a level of honoring them that is wonderful. So I want to get to the root of why their relationship is so terrible. Right. If Winston and mom had a terrible relationship, you know, there's something.

[Dave Ramsey]

You're gonna have a hard time talking to Winston and giving money then. Yeah.

[George Camel]

Right. So I don't know. Yeah. I would not do your plan, Emily. I'll say that much.

[Dave Ramsey]

I didn't hear a way for you to do this. I can't help you with this. What I will tell you is, if I were in your shoes, I would work on working with your husband and finding a way to do it by him. Understanding this is very important to.

[George Camel]

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[Rachel Cruze]

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[Dave Ramsey]

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[Rachel Cruze]

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[George Camel]

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[Rachel Cruze]

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[George Camel]

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[Rachel Cruze]

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[George Camel]

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[Rachel Cruze]

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[George Camel]

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[Rachel Cruze]

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[George Camel]

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[Dave Ramsey]

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[Rachel Cruze]

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[George Camel]

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[Rachel Cruze]

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[Rachel Cruze]

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[Dave Ramsey]

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[George Camel]

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[George Camel]

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[Rachel Cruze]

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[Dave Ramsey]

Hunter is in Michigan. Hi, Hunter, how are you?

[Rachel Cruze]

I'm doing good. How are you, Dave?

[Dave Ramsey]

Better than I deserve. What's up?

[Rachel Cruze]

So I got some debt and also I got specifically one debt. I have a question about when I was younger. I'm only 21 now, but when I turned 18, fresh 18, my mom kind of had me co sign on a loan for her for a car.

[Dave Ramsey]

Good.

[Rachel Cruze]

Crazy up the car because she has terrible credit.

[Dave Ramsey]

You didn't have any. You were 18.

[Rachel Cruze]

Yeah, I know. I didn't, I didn't have no credit and I didn't know anything about finances at all back then. But she had me co sign on the loan and then the car got repoed and now the loan is on my credit as well. And I don't really know. I don't know if I should just pay it or if I should or if there's any other way to kind of get out of it.

[Dave Ramsey]

Wow, Hunter, that's financial abuse by your parent. I'm sorry. Completely immoral. So do you have any information on how much the deficit amount is that they're trying to collect after the repo?

[Rachel Cruze]

It's about 10,000 is how much is left. But the, but it's been like a year or two since it got taken. So it's been the collections by now. So I don't really know what to do there because I know you, your.

[Dave Ramsey]

Damage to your credit report is going to stay there. The only thing we can do is limit the damage by settling your portion of the deficit. Okay.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

And so what amounts to is after you finish what I'm going to tell you to do and it's going to take you a little bit of effort, but after you finish this, it will show that you have been repoed because you have and that you settled the deficit. So it's like a bad debt that you settled. Right. Which is better than just a bad debt. Like way better. Okay. As far as your credit bureau goes, all right, not that worried about your credit. I don't want you doing this kind of stuff again. And hopefully you Stay away from your mother when it comes to financial transactions.

[Rachel Cruze]

Yeah, I've definitely learned my lesson.

[Dave Ramsey]

Yeah. So do you have any contact with the company that is trying to collect the deficit?

[Rachel Cruze]

They sent me some letters, but other.

[Dave Ramsey]

Than that now perfect. Okay. Pull that letter out. It's got a phone number on it. Call them. Okay. Let me give you some real clear information. All right? Their job is a game. Their job is to screw with you when you get on the phone. Okay? Your job is first, you give them no information except that phone number which you could block if you need to later. Okay. And then you tell them the truth. Okay. I was 18 years old. My mother asked me to co sign this. I had no idea I was doing it. And your company let me to be taken advantage of. I'm considering suing you.

[Rachel Cruze]

Okay.

[Dave Ramsey]

In other words, we're going to start with the offense instead of a defense. But I think I'm not going to. I think it would be cheaper if as a 21 year old who's broke and you can't get anything from me because I don't have anything. It might be cheaper for both of us if we just settled my portion of this. You can chase her for whatever you want to chase her for, but I want to settle my portion of the $10,000. I have $1,000. I'll give you for that.

[Rachel Cruze]

Gotcha.

[Dave Ramsey]

Okay. You're probably going to be able to pull that off at about six conversations putting abusive moronic individuals on the other end of the phone. And you'll probably be able to negotiate that for $2,000 or less. My portion of this settled. Remember this phrase, settled in full. And I've A, got to have that in writing. B, you will not have electronic access to my personal checking account. I will wire you the money or send you a prepaid or $1,000 debit card. Okay?

[Rachel Cruze]

Okay.

[Dave Ramsey]

Because if they have access to your checking account, they're scum. They'll clean you out. They lie. The collections business is filthy. All right? So you and they lie. So you have to have it in writing. An email is fine. Okay? Do not give them your Social Security number. Do not give them their place of employment. Do not give them anything that will make it easier for them to collect this debt. And every time they start being abusive, say, ok, you have five seconds to stop that or you're going to get a dial tone. You want to hear a click? Stop that click and just hang up on them and call them back the next day. Last moron I talked to over there Started abuse. Don't try that or I'll give you the click instead. Let's have a conversation. And you just got to have this aggressive, abrasive approach. You don't have to be mean or nasty or customer. Yell at them. It doesn't do any good. They're going to try that with you because they know if they can get you afraid or angry, you will be irrational and give them money. So their goal is to try to get your pulse rate up when they got you on the phone. You following this? It's a game. It's a game and you're going to be cool like you're playing a hand of Texas hold'. Em. Okay? Just chill. And if you feel your pulse rate going up, just hang up. Do it another day.

[Rachel Cruze]

Okay?

[Dave Ramsey]

Take two breaths. Don't. Don't drink two cups of coffee before you call them. You know what I'm saying? This is. This is a real. You've got to play this all the way through. 21 years old and you've been screwed. And I'm trying to help you walk through this. All right?

[George Camel]

Hunter, do you have money? Do you have anything safe?

[Rachel Cruze]

I don't. I just started a new job as a truck driver. I just got my cdl. I'm like within. I'm in my first week of being by myself as a truck driver.

[Dave Ramsey]

You'll have a thousand dollars pretty quick then.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

So you can offer them $1,000 by the end of the month.

[George Camel]

What percentage of a cosign though is his?

[Dave Ramsey]

Technically, it's what's called joint serval. He's technically liable for the whole thing, right?

[George Camel]

That's what I was assuming.

[Rachel Cruze]

But.

[Dave Ramsey]

But if they. If they think they can still get some out of her, they'll take less from. From him. You know that. That's the point. And besides that, I kind of want to turn them loose on her for doing this.

[George Camel]

Do you have relationship with her, Hunter? Do you know where she is?

[Rachel Cruze]

Yeah, I talk to her all the time. I just don't give her money or anything like that anymore. Yeah.

[Dave Ramsey]

And there's no chance she's gonna get this settled and get it off your house.

[George Camel]

That's what I'm wondering if like where she is in this process at all.

[Dave Ramsey]

She's broken out of control and has been for a long.

[Rachel Cruze]

Yeah, she. She works at a fast food restaurant and she's behind on her rent and all sorts of stuff. She don't have money at all.

[George Camel]

Oh, man. I'm so sorry, Hunter.

[Dave Ramsey]

Yeah. But I'm asking You to do something that's over your pay grade. But I think you can do it. I think you're sharp.

[Rachel Cruze]

All right.

[Dave Ramsey]

And listen what you do, Go back and listen to this episode and write this stuff down in writing. No information, be tough, hang up. No access to your checking account. Okay. And that's the process you deal with. So you're stonewalling, you're building a wall around you and then you're just throwing offers over the wall. And until they pick one of them up, you just keep throwing offers.

[George Camel]

Well, and the positive thing is that it's been in collections for what, two years? He said so at this point.

[Dave Ramsey]

And if they look down and saw your age, they think they've got zero probability of collecting this. Because statistically they do. Yeah, statistically the chances.

[George Camel]

Well, and he has no money right now. So the truth is, yeah, there is none.

[Dave Ramsey]

But I don't want them starting. I don't want him to be hassling the truck driving company, him lose his jobs because they found out where he works.

[George Camel]

Right.

[Dave Ramsey]

And they'll do that. It's illegal, but they do it all the time. So you know, you've got to just set up these walls. And the reason I know these people are scum in this case is because they took the co signature of an 18 year old for his mother who was broken, didn't pay bills. This is how you know this company is scum.

[George Camel]

But is it that company still though?

[Dave Ramsey]

Even if it isn't, they bought that paper and they know what they bought.

[George Camel]

They know what it is, they know.

[Dave Ramsey]

Exactly what they bought. They know what kind of paper they got into. And so, you know, not all collectors are scum. All credit card collectors are 100% of them. But, and you know, all subprime people misbehave and break federal law pretty regularly. There's like a hometown collections company in your small town that's trying to collect medical bills or something. They're probably okay. Most of them don't violate the law every day. But there's the federal Fair Debt Collections Practices act that gives clear understanding what you're allowed to do. Not allowed to do. None of that has entered into this conversation yet. Right, but he's walking into, he's walking into a haunted house and stuff's going to jump out around every corner. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind, scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip offs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options and they've been around for over 95 years so you know they'll be there when you need them. Zander is the real deal and that's why they've handled all my personal insurance for over 25 years. I trust them and you can too. Visit Zander.com for instant online quotes or for a more personal touch, give them a call at 800-356-4282. If you're tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free every dollar trainings. There's new trainings every week this month and they're all hosted by one of the Ramsey personalities, either George Camel, Jade Washaw or Rachel Cruz. Rachel, when are you doing the next one?

[George Camel]

I'll have to look at my schedule. I'm only looking a day at a time. Right now it's back to school week, so my mind is mush. Probably next week though. Yeah, usually once a week or every other week we all kind of switch off.

[Dave Ramsey]

Yeah, that's about right because there's three of you.

[George Camel]

I could have made it up, but I'm being honest.

[Dave Ramsey]

Yeah, well, it's okay. It's gonna be soon. There it is. One of you will be on there every time we do it. So they show you how to stick to a budget and find an average of $9,560 of new money margin laying around to throw at this stuff. There's just, it's kind of like cleaning out the corners. There's stuff in there.

[George Camel]

Well, and what's great about it is the digital coaching part with the new everydollar what you're signing up for and going through this process, they're able to see, I mean via the digital world, which is amazing. It's like, oh hey, here's this, this, this, this like and it lists it out for you.

[Dave Ramsey]

If you'll do those five things, you got 9,000 bucks.

[George Camel]

It's up to 16 recommendations. Like, it's incredible. And then you get to adjust it and say, okay, if I take this recommendation, how much am I willing to put, you know, how much am I really willing to do within it? And all of it. And it calculates it for you and shows you your progress. I mean, it really is phenomenal. They've done a great job.

[Dave Ramsey]

Here's 16 things you can do to ratchet your way through the baby's trainer.

[George Camel]

I mean, seriously. Yeah, it's incredible.

[Dave Ramsey]

Now, ask us any question. Also during the live Q and A, sign up for free. For the free every dollar training, it's free. Did I mention [e-mail] webinar, Joy's in Pittsburgh. Hey, Joy, what's up?

[Rachel Cruze]

Hi. I'm doing good. How about you?

[Dave Ramsey]

Better than I deserve. How can we help?

[Rachel Cruze]

That's great. I am calling because I'm a newlywed. My husband and I were married in January. However, unfortunately, recently we've been having some marital trouble. He's currently in inpatient rehab. I discovered his alcoholism back in June. And so right now, I don't know when he's coming home. My biggest hope and my heart's desire is he gets his head on straight and he does everything he needs to do. But I was curious to get your advice on how to change our philosophy for our marital finances when that time does come, that he does come home. I would normally take that perspective. I know you often advocate that. What's his design? What's mine is his.

[Dave Ramsey]

No, you don't do it in this case. You don't do it in this case.

[Rachel Cruze]

Yeah, that's what I anticipate.

[Dave Ramsey]

Not for a while.

[Rachel Cruze]

Recovery.

[Dave Ramsey]

Not for a while. Are you doing Al Anon?

[Rachel Cruze]

I am, yeah.

[Dave Ramsey]

Okay. And so you got somebody in your corner talking to you about dealing with an addict in your home. And so what. What you've got to do in the overall picture, and I'm not a coach or I'm not a PhD in counseling like Dr. John Deloney, but for 30 years, we've helped people with financial problems, and 100% of addicts have financial problems. So I've worked with a lot of it. Okay. A lot more than I've learned, more than I wanted to learn. So here's a couple things that people in that world say all the time. As long as he is dealing with an addiction, he's a manipulative liar.

[Rachel Cruze]

Yes, he is.

[Dave Ramsey]

Okay. And until we get the addiction in the rear view mirror or the bulk of it in the rearview mirror, depending on your view of addictions, he can't be trusted. And so he can't handle money. He doesn't get to handle any of the money. Okay, but he does get the information. He does get the dignity of speaking into it. You go over it with him. You show him what you're doing. You say, this is what our money came in and here's what we're doing with our money. Here's the budget. He can participate in that, but he doesn't have access to the money, period. Because for his sake, because it's. Because if he has no money, it's going to be harder to buy alcohol. Okay? He doesn't get any money. He's. You're taking care of him, but you have, you know, he can, he can see that. What the balances. He can look at the. Everything with you, help you make the decisions. And then as trust is rebuilt, then obviously he rebuilds in several areas of your lives. He can be trusted over time. And trust is earned with time. There's a direct correlation. And so I came home from rehab and she doesn't trust me. She shouldn't. It was six years ago. I came home from rehab and I've been dry. She should. You see the difference? And so, yeah, he's been, you know, you get your 10 year coin, your five year coin, whatever, then yeah, and game on. So we want to walk with him and help him, but also we want to cut off the supply. And that means he just doesn't have access to money in the near term. But he again does have the full dignity as a partner in your marriage of speaking into it, having an opinion. None of that's invalid unless he's drunk. His brain still works. Okay? And so it just gets drunk sometimes. So. But, but if he's sober, sitting at your kitchen table and y' all are looking at this and he has an opinion about what we ought to do with our money, that's valid. But as far, I'm just talking about physical access to any funds. You know, take him off checking account, okay? It all goes into your name and you handle it until we get some comfort here. All right? And, and you can, guys can establish some. You can talk about it with the counselors, you can talk about it with Al Anon. He can talk about it with his sponsor, he can talk about it with his counselor, he can talk about it with whatever follow up he's got with rehab on when is appropriate to begin to, you know, let him back in and rejoin in More of a. More of a healed marriage, money situation. Does that all sound fair?

[Rachel Cruze]

Yeah, that completely makes sense to me, particularly right now. He's been in a pivot career wise, so it's. Even the last few months, I've been the only income, so that's definitely where a lot of tension has been for us.

[Dave Ramsey]

How long did y' all date before you got married?

[Rachel Cruze]

We were dating for a couple years, but I'm pretty sure that he just. I. 90% of the drinking was when I was asleep or know about it, so I. Wow.

[Dave Ramsey]

Complete closet.

[Rachel Cruze]

Really good at hiding that. Yeah, he's very closet guy. So I'm pretty sure I don't know a sober version of my husband because I don't know, you know, how's he been doing?

[George Camel]

How's he been doing in rehab?

[Rachel Cruze]

It sounds like he's improved. There was a bunch of drama a couple of weeks ago with him trying to leave, but he. He ended up going back. So I think now that he went back, he's. He. It sounds like he's more focused, but it's. It's early to know. It's, you know, it's.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

What kind of.

[Dave Ramsey]

You sound very solid.

[Rachel Cruze]

Counseling.

[Dave Ramsey]

You sound very solid and confident in how to process this and where the boundaries go. You sound pretty strong.

[Rachel Cruze]

Yeah, we're going to do. I've talked to them with the boundaries. I'm like, we'll do marriage counseling, but it's going to be when he gets 90 days, 100 days sober or whatever it is, because they have a really good family programming at the rehab we're at. So they. They've talked through the boundaries and empowered us a lot on that side, but.

[George Camel]

Yeah. Well, as strong as we are in our messaging with married couples, that you're one and you work together, you both have a say all the things. There's always the asterisk of addiction, abuse. You know, we always have an asterisk. And this is it, Joy. This is the perfect example of it. And so there is, yeah, a higher responsibility for you to protect yourself in it. Right. And if. And if sadly, you know, it doesn't come to fruition and he doesn't choose a path of sobriety, and. And you have to make a harder call. Right. You. You will have more of the means and ability to be able to do that, too. So there is this level of protecting your current state and then also the unknown of the future. That's really. I mean, I'm assuming it's kind of left up to what he's Choosing for his future right is going to impact if you move forward or not, which is just so heartbreaking. I'm really sorry you're in this and I pray for him and that heal and I know there's some incredible facilities and we've talked to countless people who have overcome addiction and are sober and it's. And it's beautiful. And they end up coming on the other side even stronger. And so that's my, my prayer for you guys.

[Dave Ramsey]

Two family members with a 10 year coin, you know, not, not immediate family, but yeah, but. And real proud of them. They're heroes. That's, that's a hard run.

[George Camel]

I was talking to an author that wrote a book about 12 step and he said those 12 step meetings are more like church than church sometimes. So it's powerful.

[Dave Ramsey]

Hey Joy, I'll tell you what, speaking of that, Henry Cloud has a great book that will help y' all look up this and order it on Amazon right now. It's called Trust by Henry Cloud. How to lose it, how to re establish it, and what are the steps? It's really, really good. It's a great book on trust. Henry CL.

[George Camel]

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[Dave Ramsey]

Today's question of the day is brought to you by why Refi? If your private student loans are independent, default and you feel stuck, you're not out of options. Why Refi specializes in helping Borrowers like you find real solution solutions with low fixed rate financing. Go to y refi.com Ramsey that's the letter y r e f y.com Ramsey not available in all states.

[George Camel]

My or this. Today's question comes from Susie in Michigan. My husband and I have recently become debt free, including our house. My siblings know this and have started coaching their toddlers to college us big money. They encourage their children to say things like, hey, big money, we want to go to Disney. So you can go and pay for. So can you go and pay for us? We thought it was a joke at first, but now it happens all the time. We've told them that we prefer to be called aunt and uncle, but nothing changes. For family gatherings, it's assumed that we will host the celebrations at our house with no offers to contribute. I don't mind having people over, but I feel like this behavior is disrespectful. How do we approach this? Some of my siblings are very frugal.

[Dave Ramsey]

Fragile.

[George Camel]

Fragile, thank you. I was gonna say frugal, emotionally wise and blow things out of proportion. They're fragile. Oh, I wish they were frugal. I wish the other word was true, but it's not.

[Dave Ramsey]

If you're fragile and you send your kids in to say stupid things to adults, you better be expect to have your little fragile broken.

[George Camel]

Okay, we're probably gonna have different approaches to this situation.

[Dave Ramsey]

Yeah, it's not the kid's fault, but yeah, I'm probably gonna sit down with sis and go, hey, your kid's being a brat. Stop it. Seriously.

[George Camel]

Yeah, it's gonna probably be our different approach.

[Dave Ramsey]

Okay, Rachel, what's the nice version?

[George Camel]

Yeah, I mean, I would sit down and say, hey, y', all, I know this is funny and, you know, you think it's cute and all of it, but also, I don't want this to become a pattern of who we are in their lives. And it has been. And so we would love for them to stop calling us big money. Asking for trips, all the things. We just want to be aunt and uncle and. Okay, that. That would be the conversation point with the kids and then the other things, family gatherings and stuff. I would, I would. I don't feel like there needs to be a conversation around that. I think you just put up your own boundaries and say, sorry, we can't host this time, you know, and you just.

[Dave Ramsey]

It's not convenient.

[George Camel]

You just say no some of the times and. And if not, say, okay, yes, we'll do this, but we need.

[Dave Ramsey]

Need you to do this. This and these.

[George Camel]

Yeah.

[Dave Ramsey]

You need to bring dessert and you need to bring the meat.

[George Camel]

I need. Yeah. I need to delegate some of the responsibilities and I don't know, I think that's fine. But the whole kid thing. Yeah. I mean, I would. I would not call. I would not call my niece and nephew Bratz to my in laws or to my sister and.

[Dave Ramsey]

Yeah.

[George Camel]

Bill, her husband. I wouldn't be like you're. But you wouldn't either. You kind of act tough, but you would not call your.

[Dave Ramsey]

Yeah, I'm gonna go. You know, they need to stop that. That's Brad. I might at least say they're bratty. That's being bratty. And you're teaching them this and you shouldn't, you know. Yeah. I'm gonna call it out. I mean, that's really ridiculous.

[George Camel]

Yeah.

[Dave Ramsey]

And it's really not funny.

[George Camel]

Well, it's not. And Susie, it's.

[Dave Ramsey]

The parents are being butts and. What?

[George Camel]

It's passive and a little jealous.

[Dave Ramsey]

What ticks me off is they're sending their kids to do their dirty work. They want to make this point and they're too cowardly to do it themselves, so they got their little brat kid doing it. I'm serious. That's the thing that's just. That's parents being wusses and it's the parents. I'm like, this is. This is not fair. You know, And I just. It's just wrong. So. Yeah. I mean, and so don't send your kids to do your dirty work. You know, do, if you want to say something, make a statement. But you don't have to send your four year old in. It's just silly and it's not funny. It's passive aggressive. All right. Will's in Kentucky. Hey, Will, what's up?

[Rachel Cruze]

Hey, guys. I appreciate you taking my call.

[Dave Ramsey]

Sure. How can I help?

[Rachel Cruze]

So basically I'm 22 years old and I'm doing pretty decent for myself. And a couple of my really good friends are starting to get out of college and I was wondering if it would be a good idea to allow them to move in to the next house I purchase with me without paying rent just to help them to save up for a down payment.

[Dave Ramsey]

Probably not.

[Rachel Cruze]

Okay.

[Dave Ramsey]

You know, I think. I think you're a very nice guy. I probably wouldn't do that. I don't think it's going to end well for you or them. The only way I would do it would be say something like, okay, here's how much the rent is. And for the first three months you get free rent. Rent. And you know, I want you to put that towards your down payment. Okay. Or something like that. But this just. You live here free and there's no set structure to it. This could go on a really long time and it could turn the friendship sour.

[Rachel Cruze]

Okay. So my original thoughts were to just have a set limit and basically ask for help around the house and then like the set time frame of how long they could stay there. So. So again, you don't think that's a good idea?

[Dave Ramsey]

I would have some money in the process because I think it was good for them and I don't think it keeps them from getting a house. Being a roommate is the cheapest way to live, even if you're paying for it. Okay, so for them, for them it's still a bargain.

[George Camel]

Yeah, it'd be a deal for them just to live in the house and pay, you know, a low rent versus getting their own apartment.

[Dave Ramsey]

Right.

[George Camel]

I mean, it would be cheaper to live with you even if they paid rent. But if you got. I split the mortgage right by four or something that's probably end up being way cheaper than them going getting a one bedroom somewhere. So you're kind of giving them a deal for the circumstance, if that makes sense.

[Dave Ramsey]

Yeah. And if you want to, like I said, if you want to give them the first three months or something, I'd do that. But I just think it sets a tone that you're probably not going to end this. Well, okay. You know, we had a. I bought an investment property. My son moved into it when he came out of college and was one of my tenants. It was a, you know, multiple bedrooms. And so we moved some of his friends in with him that we knew. They were family friends, good guys. Matter of fact, a couple of them ended up coming to work here and we moved them all in. But they all paid rent. They all paid rent and we didn't charge them, overcharge them and we didn't, you know, it wasn't free, but they got a good deal and. But it was just good to keep the relationship lines really, really clear. It doesn't get blurred. And you're a very generous guy and I appreciate your heart on that. I want you to keep that heart. I don't want to destroy that. That's not what's wrong with the picture. What's wrong with the picture is I don't think. I mean, my opinion is there's some unforeseen, unintended consequences of straight up free that maybe you're not seeing that I think are going to go sideways on you. That's what I'm. That's why I'm bringing this up. But I really want you to keep that heart of generosity. It's pretty incredible. Brad's in Arkansas. Hi, Brad. How are you?

[Rachel Cruze]

I'm all right about you, Dave.

[Dave Ramsey]

Better than I deserve. What's up?

[Rachel Cruze]

So I have a kind of unique question. I have about $40,000 in unsecured and credit card and personal loans. But my. So my, my dad passed away. And before my dad passed away, he gave. I'm an only child. He gave his house to his older brother. And his other older brother wants me to now take over the house, but I have to take the remaining debt and pay him off because he completely paid it off from the mortgage company whenever my dad died, but he now wants me to take that over.

[Dave Ramsey]

Sounds like you're broke.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

You're taking over a house doesn't sound like a good idea.

[Rachel Cruze]

Okay, well, like I said, I didn't know if I took the, the equity from the house because the house is just. The house itself is probably half a million dollars, but I don't even know.

[Dave Ramsey]

He'S gonna give you a half a million dollar house.

[Rachel Cruze]

Well, it was my dad's and.

[Dave Ramsey]

No, I'm saying he's not anymore. It's your brother. Dad's brother, your uncle owns the house?

[Rachel Cruze]

Yes.

[Dave Ramsey]

Okay. And you're. He's gonna give you a half a million dollar house?

[Rachel Cruze]

Yes.

[Dave Ramsey]

How much is owed on. How much is owed on it?

[Rachel Cruze]

90,000.

[Dave Ramsey]

Okay, well, if you took it and put it on the market the next day and never moved into it, that's okay.

[Rachel Cruze]

Well, that's. The condition is I can't, I have to take.

[Dave Ramsey]

You can't afford it. You're broke.

[Rachel Cruze]

You won't give it to me.

[George Camel]

Would he give you this deal in 12 months if you got yourself in a position?

[Rachel Cruze]

Potentially. But he's, I mean, he's very well off financially, but I think he's trying to expedite the deal because he removed the home insurance on the house because he said he doesn't really need to add to what he owes on it. So.

[Dave Ramsey]

Okay, honey, you, you're, you don't, you don't need to take the house over right now. You got $40,000 in debt and no money. It's not a good deal for you today. If you can do the deal later after you get yourself cleaned up, it'll be okay. But he's not really thinking about you. He's thinking about with the lowest prices of any national grocery store. Shoppers save big at Aldi. Aldi believes in making shopping straightforward and stress free. Whether you're firing up the grill for a family dinner or hosting a backyard barbecue, Aldi is there to help. They've got a great selection of fresh USDA choice meats and organic produce at prices that won't bust your budget. And no messing around with apps, coupons, loyalty cards or membership fees to get low prices on award winning products every day. So stop overpaying and start shopping at Aldi. Find a store near you today@aldi us. That's a L D I.us savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability and the market. Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. Relationships. Rachel Cruz, Ramsey personality number one best selling author, co host of the Smart Money Happy Hour hit on the Ramsey Networks. And my daughter, she's my co host today. Phone Number here is, triple 882-55-5225. Michael is in Phoenix. Hi Michael, welcome to the Ramsey Show.

[Rachel Cruze]

How are you doing today sir?

[Dave Ramsey]

Better than I deserve. How can I help?

[Rachel Cruze]

Wonderful. I have a gentleman in my church. About a year ago he co signed for a car for a friend of his girlfriend and I didn't know about it but two weeks ago he came to me because they asked him because they were behind on their rent to take out a cash loan on the car at a cash one place and so he gave them that cash and they're not paying on it and so it's coming out of his account and so, so just trying to figure out the best way. I've helped him to break off contact with them because they were using him obviously. But I just don't know the best way to get him out and away from them with the co signing of the loan, whether to get it repoed or just let it go dormant. I don't know how to break up that relationship.

[Dave Ramsey]

How did, how come he's not able to emotionally handle that he's special needs.

[Rachel Cruze]

Oh, so they're taking advantage of him.

[George Camel]

Oh my gosh.

[Dave Ramsey]

Wow. That's horrible. Now are they, did you say they are? That he's in your church? Did you say they are too?

[Rachel Cruze]

No, they are not. I didn't know about this. He's been attending for almost a year but I didn't know about this till two weeks ago until they started to get try and get cash from him.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

Wow.

[George Camel]

How does he know them? What's the relationship with him?

[Rachel Cruze]

He was. He. He met the guy like three years ago and everything was fine. I believe he's also a little bit autistic, and so they were good friends. But a year ago, the gentleman got married, and when he did that, he. The girlfriend asked if he could co. Sign for a car because I don't. I don't know the whole situation in there, but he did. And so he co. Signed for her car and.

[Dave Ramsey]

And then for the friend's wife's car. Not his wife.

[Rachel Cruze]

Yes.

[Dave Ramsey]

Okay. Yes. All right. So. Oh, my. These guys are. Well, I. Yeah.

[Rachel Cruze]

So there's about six.

[Dave Ramsey]

Is there anyone else? The guy you're. The guy you're trying to help. Is there anyone else in his life?

[Rachel Cruze]

There's parents, but I don't know. He doesn't really. He hasn't told them. I told him to tell them. Yeah, but he doesn't want to tell him to worry them.

[Dave Ramsey]

Yeah, no, he's ashamed. That's not worried about worrying him a bit. Yeah. Somehow the biggest thing that you can do is to stop the bleeding, so to speak. And that's make sure and make him promise you too, that he won't do anything else with them without first talking to you.

[Rachel Cruze]

He did. Yeah.

[Dave Ramsey]

And then hold him to that. I mean, you need to circle back on that periodically because he may not.

[Rachel Cruze]

Well, we're actually. Because they're trying to come after him. We actually are working on getting a police injunction so that they can't be around him.

[Dave Ramsey]

Him. Yeah.

[Rachel Cruze]

Because he's a very nice guy. Yeah, exactly. Because if they hang around him, it will happen again. Because he's a nice guy.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

So.

[Dave Ramsey]

Wow. Okay. He just doesn't have the capacity to say no. Yeah, that's different. That's different than being nice.

[Rachel Cruze]

Right.

[Dave Ramsey]

The. All right. And so he's got a co signature on this car. And what is the car being paid or do we notice?

[Rachel Cruze]

He. I spoke with the. With the girlfriend, and she said if I did not allow them to continue communicating with him and him to give him more money, they would quit paying on it. They've already quit paying on the. They did not make the first payment on the cash loan that they had said that they were going to pay off for him. And so that came out of his account. And so he's struggling financially.

[Dave Ramsey]

He's got to shut his. He needs to shut his account down so nothing else can come out of it.

[Rachel Cruze]

Okay. Shut as a countdown.

[Dave Ramsey]

Do Is.

[George Camel]

You keep saying girlfriend. Is it his wife?

[Dave Ramsey]

It's the girlfriend of the friend.

[George Camel]

Yeah, but the friend got married. I thought he said.

[Rachel Cruze]

I'm sorry, I'm not 100% sure. I think. I think it's his wife, but it might be his girlfriend. I'm not sure.

[Dave Ramsey]

There's a couple of con artists on the other side of this equation. Yeah. So we're putting a restraining order in place and you're going to shut down his account. The only other thing I think I might do is if you have an attorney in the church that will help pro bono. I think I would go to both of these companies, the cash company and the car loan company, and say this guy is of diminished capacity and you had him sign something. He's not legally bound to it and you need to release him or I'm going to make you the poster child of people who abuse special needs people and let the attorney get him off of these two loans. And then I don't care if the car gets repoed, the cash is gone. He's not going to be able to do anything about that. And he needs to set up his account where they can't get into it anymore. But the attorney needs to get in touch with both of them and say, listen, this guy goes to church with us, he's diminished capacity, he doesn't have the ability to sign this stuff. He can't be held legally liable. And if you guys don't let him loose, I'm going to them make you wish I would let you loose. That's the attorney's. That's the attorney script. Okay? And pretty simple, because people that bottom feed on stuff like this, they're generally pretty cowardly if someone knowledgeable comes at them.

[George Camel]

Is he severely autistic, Michael?

[Rachel Cruze]

No.

[George Camel]

I'm just wondering how easy it is functioning.

[Rachel Cruze]

But. Yeah, emotion, emotionally, you know, But I.

[George Camel]

Just wonder how hard it is legally to get that.

[Dave Ramsey]

It doesn't matter. I'm not doing it. I'm just threatening it.

[George Camel]

Okay.

[Dave Ramsey]

We'Re not going to go to court. We're not going to go to court and have him declaimed, declared incompetent over a couple of little baby loans. We're not bothering with that. But we are going to let these guys know that they are morally bankrupt, ethically bankrupt, and we're going to make them wish they hadn't done this if they don't let this guy go. Yeah. So this is called a threat, right? Yeah.

[Rachel Cruze]

So worst case scenario, just ignore it. Just.

[Dave Ramsey]

Just ignore it. And if it screws up his credit good. He can't do it again.

[Rachel Cruze]

Right, right. So just don't make any payments on it.

[Dave Ramsey]

Let it code and then let it all, let it all implode. And by the way, if the repo man ever gets in touch with you, tell them where the car is, tell them to go get it.

[Rachel Cruze]

Right, exactly right.

[Dave Ramsey]

I'll give you the address. I sure hope you don't go to 1234 Main Street. That's where the car is. I sure hope you don't go over there.

[Rachel Cruze]

Right. Okay.

[George Camel]

Please don't go to this city.

[Rachel Cruze]

Yeah, right.

[Dave Ramsey]

I don't think I know where it is, but the last time I saw it is over there. I sure hope you don't find it. Yeah, right, right. It was there at 10 o' clock this morning. Here's a picture.

[George Camel]

How much is it all, Michael? Total with the, with both loans, with the, with the cosine of the car and the amount of cash that they got, like what did it all total?

[Rachel Cruze]

There's still 16, just under 16,000 on the car.

[George Camel]

Okay.

[Rachel Cruze]

And then $2,000 in cash.

[Dave Ramsey]

The car has a value though, so that's not gonna be the deficit after the repo. The bad news is this guy's got his credit dinged up. The good news is he won't be able to do it again because his credit's dinged up.

[Rachel Cruze]

Right.

[Dave Ramsey]

So it's.

[George Camel]

He won't be able to co sign.

[Dave Ramsey]

Yeah. It'll work out to his favor, I hope. And hopefully we can start to. You're. You're being.

[George Camel]

You're very kind, Michael, of helping, that's what I'm saying.

[Dave Ramsey]

To be discipling him and helping him through this, number one. But also giving him some tools for discernment that are not readily available to him. And if you can help him with that, it'll. It'll also help him to build boundaries. Hey, you know, even all of us that are not special needs, we need those tools. And sometimes we have to build those tools. So that's not that unusual. Hold on, folks. Don't panic. Buying a home in today's market doesn't have to be complicated. But it does take more than 100 and a quick Internet search to get the right home. One that will be a blessing and not a burden. You need a trusted mortgage partner who will listen and serve you, not push more debt. You need the professionals at Churchill Mortgage. I've personally recommended Churchill for over 30 years and they're the only mortgage company that's Ramsey Trusted Churchill stands out because they operate the Ramsey way with transparency, integrity and a commitment to doing what's right, right for the customer, not what's profitable for themselves. Churchill aligns with Ramsey's values by focusing on education, responsible mortgage lending and helping people make smart long term decisions that enable them to build lasting wealth. Go to ChurchillMortgage.com today to begin a better mortgage experience. Churchill Mortgage.com this is a paid advertisement in MLS ID 1591 in mlsconsumeraccess.org equal housing lending. Did you know that twice that 2/3 of Americans die without a will? Like 7 out of 10 when you die without a will, you're inviting the court, the lawyers and the public into the most personal part of your life. And they're going to tell you what to do. Well, they're gonna tell your family what to do. You'll be dead, but you need a will. Billionaire industrialist Howard Hughes, known as one of the richest men in the world, died in April of 1976. His estate with no will wasn't settled until 1983. 600 people claimed rights to it. 22 legal cousins finally split up the fortune it destroyed. Destroyed the whole thing because he didn't have a will. You need a will.

[George Camel]

Even if you don't have billions, even.

[Dave Ramsey]

If you don't have 2.5 billion, you need a will. If you just have kids, don't let the state tell you where your kids go. You know, make sure you're named a guardian. You have a will and you've set up, you know all this. So it's we want to challenge you to create your will in August in less than five minutes. You can find out if an online will works or if you need a full on attorney to do it. Ramseysolutions.com willquiz free. Click the link in the show notes and we'll get you set up. This is will month. Use the promo code and you can get an online will and get 25% off by doing all this. But go check out the will quiz real quick. And you need one by the way, if you're breathing and you're over 18. Jeff's in Buffalo, New York. Hi Jeff, how are you?

[Rachel Cruze]

Great. Thanks for having me on the show.

[Dave Ramsey]

Sure. How can we help?

[Rachel Cruze]

So my daughter's just graduated from college. We took some loans to get them through. We've got about 180 left on our mortgage and I have three retirement accounts plus a brokerage account and the brokerage account has about 200,000 in it and my wife And I are talking about. Should we just cash in the brokerage account, pay off the student loans and take the rest of it and pay it against the mortgage?

[Dave Ramsey]

How much student loan do we have card.

[Rachel Cruze]

Pardon me?

[Dave Ramsey]

How much student loan debt is there?

[Rachel Cruze]

It's about 125.

[George Camel]

Between how many kids? Just one.

[Rachel Cruze]

Two.

[George Camel]

Two.

[Dave Ramsey]

Okay. And these are like parent. Are these parent plus loans or are you.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

Oh, okay. So you've got student loan debt with 200k in the bank. Yeah. Pay that off by nightfall for sure. Yeah. By the, by the time you get off the phone, it should be paid.

[Rachel Cruze]

Okay.

[Dave Ramsey]

Right now? Yeah, absolutely. You and your wife are right. I would do what you suggested instantaneously and then I would make sure. Do you have any other accounts that are non retirement?

[Rachel Cruze]

No, we have the brokerage account and then we have our savings account.

[Dave Ramsey]

And the savings. How much is in the savings account? The Savings accounts, the 200. Now the brokerage was 200. How much is in the savings account?

[Rachel Cruze]

The savings account, it's about five or six thousand.

[Dave Ramsey]

Okay. You need three to six months of. Do you have any loans other than the student loans, not counting your mortgage?

[Rachel Cruze]

No. We have no credit card debt. We have no car loans. So.

[Dave Ramsey]

Okay. All right. So, Jeff, I'm walking through the system that we teach, that we've taught for 30 years. That works every time. It's called the baby steps. The first step is to be debt free other than your home. So 125,000 in student loans. That leaves 75 in the brokerage account. Okay. Now you're debt free. That's baby step two. Baby step three is a fully funded emergency fund which represents three to six months of household expenses. What's your household income, Sir?

[Rachel Cruze]

It's about 180.

[Dave Ramsey]

Cool. What do you think your monthly expenses? If you just had to write checks and stay open, what would it take to stay open?

[Rachel Cruze]

We're cash positive. I have a budget and we keep track of that every month.

[Dave Ramsey]

So what's it take? A month? Yeah.

[George Camel]

How much does it take to pay mortgage?

[Dave Ramsey]

What's it take to stay open each month? What's your burn rate?

[Rachel Cruze]

Oh, it's about five and a half. It's actually 5,600.

[Dave Ramsey]

Okay, so three to six months of that would be 20, $25,000?

[Rachel Cruze]

Yep.

[Dave Ramsey]

Okay, so with a 180 income, that's probably pretty cool. So let's call, if we call your emergency fund, 25,000. It's only got five in it. You need to put 20 in it. Now we've used another 20 of your 200.

[George Camel]

We're down to 55.

[Dave Ramsey]

We're down to 55 that you're going to throw at the mortgage. Baby step three is putting 15 or four is putting 15% of your income into retirement. If you're not, start putting that in the budget. Baby step number four is kids college. Oh, wait, we just finished that. Baby step six is pay off the house as fast as you can. And that's the 55 going towards the 180. And then whatever I can squeeze out of my budget going forward because you're cash positive instead of building up a brokerage account and paying off the mortgage as fast as I can can.

[Rachel Cruze]

Okay, that's.

[Dave Ramsey]

Now that's how we execute this while.

[George Camel]

Funding 15% of your income into retirement. So you are still investing while paying off the house.

[Dave Ramsey]

Okay, now that's the outline of what we do. I'll send you a copy of the book the Total Money Makeover, because you sound like you're open to actually doing it. That's pretty cool. So it'll show you how to do it. That's very cool, but. And the purpose of all that, Jeff, is what it does. It sets you up with no mortgage payments, payment making 180, no payments of any kind, your emergency funds covered. You're systematically investing. There's nothing left to do then but become very wealthy and outrageously generous. And we call all of that living like no one else so that later you can live and give like no one else. You've done a really good job. All we're doing is tweaking the flow of some of this cash and maximizing its potential. That's all we did in the last few minutes, so. Very cool. Yeah. Student loans are gone. Boom. $25,000. Emergency fund. Boom. 55 on the house. Or 20, 20. 25, but adding 20 to the emergency fund. 55 on the house. So now the house is down to 100 a quarter. And here we go. Game on, baby. Game on. And you'll knock that out. You'll probably knock it out in a year, man. And you walk through the backyard without your shoes on. The grass feels different, man. When you got no more mortgage, life changes. It's so freaking weird. Jeremy's in Atlanta. Hi, Jeremy. How are you?

[Rachel Cruze]

Better than I deserve.

[Dave Ramsey]

Good. How can I help?

[Rachel Cruze]

I've. I've kind of accrued a lump sum of money over the years and savings, and I've kind of put it into high yield savings, maybe bought a few CDs and stuff like that. But I don't have any retirement. But everything that I own is paid for good. And I don't really know what percentage to go.

[Dave Ramsey]

You're great at avoiding debt. You're great at saving. You're lousy at investing.

[Rachel Cruze]

Yes. Scared, Honestly.

[Dave Ramsey]

That's fair. That's fair. Well, you know what? Scare scared when you don't know how to do something is what is wisdom? You know, you get behind a car and you're 12 years old and they start the car and it's 400 horsepower. You should be scared.

[Rachel Cruze]

Well, I know money in my bank accounts.

[Dave Ramsey]

Good.

[Rachel Cruze]

It kind of scares me.

[Dave Ramsey]

Yeah, yeah.

[George Camel]

How old are you?

[Rachel Cruze]

Control. I'm 38.

[Dave Ramsey]

So here's the thing. There's two kinds of fear. And yours is a wise fear. An unwise fear is I'm just have this general paranoia and we call that false evidence appearing real. But your fear is I don't know what this is. And it's powerful and so it's scary. That's a good fear. So how do we overcome that? We add knowledge to the equation. So if I woke up in your shoes, how much have you gotten all these accounts, by the way?

[Rachel Cruze]

As of right now, about $483,000.

[Dave Ramsey]

Way to go, man.

[George Camel]

Well done.

[Dave Ramsey]

Way to go. Most people are broke and look at you. That's so good.

[Rachel Cruze]

Very, very broke.

[Dave Ramsey]

Yeah. It's gonna be so easy for you though. All you've got to have is some knowledge. So do you own a whole home?

[Rachel Cruze]

Yes.

[Dave Ramsey]

Okay. The home did not come with a FDIC guarantee that it would not go down in value, did it?

[Rachel Cruze]

No.

[Dave Ramsey]

But you were very comfortable buying that. You weren't scared investing in that piece of real estate. And I'm making that.

[Rachel Cruze]

I knew it was going to be worth more.

[Dave Ramsey]

Ah, historical data. Walking around since you're old enough that you've seen houses go up in value and you could believe they're going to continue to good analysis and that removed the fear. So I'll give you an example. I own a mutual fund that started in 1934. It has averaged almost 12% a year since 1934. It's only had 22 down years and in the last 25 years, it's only had three down years. I'm pretty comfortable with that. Like you're pretty comfortable buying a house. Follow me. But you got to add that knowledge to your bucket. So what I would tell you to do is sit down with a Rams Smart with a Ramsey Smartvestor Pro and click on ramseysolutions.com sit down with them. And they have the heart of a teacher. Tell them when you call them, I'm not ready to invest. I want to learn because I'm scared. And they will be gentle, kind, and teach. And they will teach you and teach you and teach you until you are ready to purchase, not when they're ready to sell. And then you'll be able to do some long term investing the same way you bought that house.

[George Camel]

Switching banks can be a hassle, and I totally get that. But when Winston and I opened up our Fairwinds account, we were shocked by how quick and easy it was. It just took a few minutes online. We didn't have to block off an entire afternoon or track down paperwork. And the next day we got a personal call from a Fairwind specialist just checking in. I couldn't believe it. When I answered my phone and I was talking to them, I was like, y' all are the nicest people. Now, if you're working hard to save money, get out of debt and build a future, you should have a bank that supports that, not fights it. That's why I recommend Fairwinds. They created the Smart Checking and Savings Bundle specifically for Ramsey Fair plus, they have a great app and you have access to over 33,000 fee free ATMs and more than 5,000 shared credit union branches across the country. So you can have access and withdraw your money just like you're used to. No matter where you live. Don't settle for a bank that slows down your progress. Make sure you choose one that helps build you up and helps you win with money. Visit Fairwinds.org Ramsey and open your smart bundle today day Fairwinds.org Ramsey Fairwinds.org Ramsey.

[Dave Ramsey]

FairWinds is federally insured by the NCUA. Maddie is in Orange County, California. Hi Matty.

[Rachel Cruze]

You. How are.

[Dave Ramsey]

How are you?

[Rachel Cruze]

Hi. Good. Thank you for taking my call.

[Dave Ramsey]

Sure. What's up?

[Rachel Cruze]

So my husband and I are in baby step two. We have about $100,000 in debt and our question is, do we continue to pay off our minimum payments on all of our debts while we're trying to hack off our debt, or do we pause on our minimum payments and use all of that money to knock out one debt at a time? Time.

[Dave Ramsey]

No. You make minimum payments and pay minimum payments on everything but the little one and attack the little one. What you can find beyond that, that does two things. One is it keeps them from chasing you and hassling you for being in default. And two is it keeps from destroying your credit.

[Rachel Cruze]

Okay.

[George Camel]

Yeah, just to stay current so you guys don't get behind on them if you just stopped paying them.

[Rachel Cruze]

Yeah, which we're able to pay all of them right now. We were just thinking, you know, if the thought process is, you know, that we don't need a credit score, then.

[Dave Ramsey]

Yeah, you don't, but you're going to get yourself into a bunch of late fees and maybe even some legal fees where they come after you.

[Rachel Cruze]

Yeah.

[George Camel]

What's all the debt in? What are the different types of debt?

[Rachel Cruze]

So we have 12,000 in student loans, 70,000 in car debt, which I just convinced my husband to sell the cars. So that's great there. 20,000 in credit card debt, 10,000 in personal debt, and then 35 in medical debt.

[Dave Ramsey]

Okay, good for you. Well, you're attacking this. And what's your household income?

[Rachel Cruze]

My husband makes 120 a year.

[Dave Ramsey]

Okay, all right. And yeah, you get rid of the cars, it's going to catapult you way forward in this and get, you know, just get some inexpensive cars for the time being and. Which don't fit in in Orange County. I understand. Whoopty doopty. But we're still gonna do it anyway.

[George Camel]

Was it just lifestyle creep, Maddie, all the credit card debt and everything? I'm sorry, was it pretty much lifestyle creep? Would you say all the credit card debt, or were you guys opening a business or what was causing all of that?

[Rachel Cruze]

No, it's. It's just not wise spending. Yeah, actually had. My husband had a lot of credit card debt before we got married, and so most of it is his.

[George Camel]

Gotcha. Gotcha.

[Dave Ramsey]

And you're now. And you're both attacking it, and we're talking about this a lot, and that's why you start asking questions like this. Good, good. That's a good sign. I think you're on track. But no, the answer to your question is I would continue to pay minimum payments because of the late fees, the legal fees, all the other stuff. And yeah, I'm not worried about your credit. I'm not trying to build credit. But on the other hand, I'm not trying to destroy it either. Well, let it be what it is and pay everything on time, be credit current, and then attack the smallest but getting. I mean, you've probably got, what, 12, $1,400 in car payments, right?

[Rachel Cruze]

Yeah, we have 12,000 in car payments, and then we have a little over 1,400 in. I'm sorry, 1,200 in car payments and 1,400 in other minimum payments.

[Dave Ramsey]

So half of Your payments are car payments and 70% of your debt is. So you'd only have 30. You'd only have $30,000 left in hit.

[George Camel]

Which is so great too, Maddie, because on the other end, always the math. You think you guys don't have $3,000 a month freed up.

[Dave Ramsey]

Right.

[George Camel]

That's not going to bank since, you know, your student loan debt and everything, it's going to be with you guys. So that's always the encouraging other end of the formula.

[Dave Ramsey]

Yeah, look at that. Look at how fun this is going to be off the back once you do all this crap that you got to go through to clean up the mess. But you're. Yeah, Rachel's got a good point there. Tanya's in Arkansas. Hey, Tanya. Welcome to the Ramsey Show. Hello.

[Rachel Cruze]

Hi.

[Dave Ramsey]

Hi. How can we help?

[Rachel Cruze]

I have a son who graduated high school this year and he's going to an expensive Christian college and he doesn't quite have enough money to cover it. And I'm wondering if I should be generous and help him out until he can get a job and get settled or if I should say, sorry, bud, you're on your. Your own.

[George Camel]

How much is the. How much is this college costing per semester? Per year?

[Rachel Cruze]

Let's see, he. He lacks about. I think it's about $7,000 per semester. The college itself was like 50,000, and he's gotten enough scholarships and stuff to cover most of it. But there's just a little bit lacking. Okay.

[Dave Ramsey]

The number one thing that causes student loan debt is not the fact that people want to get an education. It's the fact that they select a college they can't afford while there's colleges all over the place he could have afforded.

[Rachel Cruze]

Right. And he has said that after this first semester, if before getting a loan, that he would come back to our town.

[Dave Ramsey]

How's he gonna pay for it? He's short.

[Rachel Cruze]

Well, I was. I was going to help him.

[Dave Ramsey]

No, no, no, no, no, no. I mean, his plan is if after the first semester I have to get a loan. Well, he's gonna have to get a loan. He's guys short. What's his plan?

[Rachel Cruze]

Come back here to Conway to go to a state school, which would be. It would be covered.

[Dave Ramsey]

No, he's already gone to the other place for a semester and couldn't afford it. How did he pay for that?

[Rachel Cruze]

Oh, I am. I was going to help him with this first semester.

[Dave Ramsey]

So he knows that you've already made that commitment.

[George Camel]

And then going forward, he's expect. He's going to try to work.

[Dave Ramsey]

So seven. So if he's 7,000 short, mom's going to cover it, but he's going to come home. What?

[Rachel Cruze]

Well, he has had. Well, he. Let me say he's gotten a 529. He had about. Let me think how much he has. He has 4,000 in it. It's not very much and it doesn't completely cover this the first semester. And so he was just gonna go ahead and just use that and then go forward with what he's got. And I said, well, I'd like to help you. I'll do this much.

[Dave Ramsey]

If you don't pay for the school, you don't get to go. And he's short. So unless you give him the money, he's gonna take a loan.

[George Camel]

And what he's about to pay for one semester at this school probably could.

[Dave Ramsey]

Have gone through the whole thing in Arkansas.

[Rachel Cruze]

Right. Right.

[George Camel]

So the best gift you can give him, Tanya, honestly, is sitting him down and laying out the facts of the situation and the reality of what she's living in and make a wiser choice. Is he starting this fall, like coming up?

[Rachel Cruze]

Yeah, yeah. He's already set to go and pay for things this fall.

[Dave Ramsey]

Yeah. Cancel it.

[Rachel Cruze]

Okay.

[George Camel]

I mean, seriously.

[Dave Ramsey]

Stupid.

[George Camel]

It is stupid because I'll be honest, it is probably. I'm going to just say it. It's probably a school that no one's ever really heard of. It's going to do nothing for him in the job market. Right. Like, it's. There's nothing that is causing any. Any type of.

[Dave Ramsey]

And I'm not against Christian schools, but the idea that somehow that all the holy people go there and they don't go to the others is Hogwarts Wash. Some of the people at Christian schools ain't real Christian, honey. We all know that. Okay.

[George Camel]

And that may not have been his movie. I mean, it's just. It is, it's. There's no marketplace value for most of these degrees because the school doesn't carry any level of credibility because majority of people don't even know where you could get a. To get a degree at another college that no one's really ever heard of either. But it's an in college, but it's an in state school and you take in state tuition and he gets it paid for because he sounds smart.

[Dave Ramsey]

For what he's paying for this semester, he'd probably go all the way through Arkansas.

[Rachel Cruze]

Arkansas, yeah.

[Dave Ramsey]

He should cancel.

[George Camel]

So that's the gift you could give him, Tanya, honestly, to. To lay this out for him.

[Dave Ramsey]

So let me. Let me. How do I say this gently? Your job as mom is not to go along with someone's dream, which is actually a nightmare in the making. Your job as mom is to be stronger than that. That. And speak more directly into this with more wisdom and more force. I would beg you to be stronger with him. He is not equipped to make this decision. And we can tell because he's made a bad one. And he is not. Just because he's tall and taller than he was and his voice is deep and he has some hair on his back doesn't mean he makes good decisions. Okay? Just because he looks like a man doesn't mean he's ready to make this decision. So he needs. He needs his parent in his life to say, don't do this.

[George Camel]

Yes, Tanya, please, please be a voice. Be a voiceover. Yes, she.

[Dave Ramsey]

Please do it. You can do it. Yes, you can do it. Yes, I hope you do.

[George Camel]

And that's what's so hard about student loan debt. It's these 18 year olds that have no idea he's going to a fifty thousand dollar a year school. Right. Do you know what I mean?

[Dave Ramsey]

And there's no adult dumb idea.

[George Camel]

This is a stupid idea.

[Dave Ramsey]

Oh, man.

[George Camel]

Tanya, you can do this.

[Dave Ramsey]

This is how. This is how we have $1.7 trillion in student loan, ladies and gentlemen. You give free money and not to Harvard. You know what I mean?

[George Camel]

Like a big school. It's probably. I mean, it's doing nothing.

[Dave Ramsey]

Certainly not to Harvard.

[George Camel]

It's gonna do nothing.

[Dave Ramsey]

Who would go there now?

[George Camel]

Well, I. I'm just saying, a school that people actually have heard of, that's like. Wow, that's impressive. Yale. I don't know.

[Dave Ramsey]

Brett's in Lincoln, Nebraska. Hi, Brett. How are you?

[Rachel Cruze]

Good. How are you doing today?

[Dave Ramsey]

Better than I deserve. What's up?

[Rachel Cruze]

Well, thanks for taking my call. First off.

[Dave Ramsey]

Sure.

[Rachel Cruze]

My. My wife and I have a little over $100,000 in credit card debt.

[Dave Ramsey]

Wow.

[Rachel Cruze]

And I. And I'm in sales and have a quite large commission that's coming in at the end of this month that will basically wipe out all that debt. Praise God. Wow.

[George Camel]

That's lucky. I mean, you worked hard for it. I know, but that's great.

[Dave Ramsey]

Yeah. And then you're panicked that you might do it again, right?

[Rachel Cruze]

Yeah.

[Dave Ramsey]

Good.

[Rachel Cruze]

How do we. Yeah. My wife and I are both on the same page in that. So obviously a change in our spending habits and lifestyle. But I'm curious how we should be thinking about our behavior and our spending when it comes to not using a credit card and using more cash or a debit card and how we should approach that.

[Dave Ramsey]

Light two candles tonight after dinner or get all the credit cards out and have a plastic surgery party. A plastectomy.

[Rachel Cruze]

Sounds good.

[Dave Ramsey]

Chop every single one of them up and then close every one of the accounts when you pay them off. That's step one.

[George Camel]

Yeah. Cut it off at the source. Just be done. Be done with it. Do you guys know the why? Why? What caused the hundred thousand? Is it. Is it purely lifestyle? Is it that you guys just didn't have a budget? Like, what was the what? Because getting to the root of it and understanding the motivation and what caused it in the first place is going to help going forward if you can identify that.

[Rachel Cruze]

Yeah, I think it's a combination of both. Right. Like we had a budget, but we didn't really stick to it necessarily and monitor it on a weekly basis. And there were also some life style choices and trying to keep up with the Joneses and just wanting nicer things above and beyond our paycheck.

[Dave Ramsey]

Both of you, both of you can look at each other and say that in total, both of you are admitting this, right?

[Rachel Cruze]

Yeah.

[Dave Ramsey]

Okay.

[Rachel Cruze]

Yep. Absolutely.

[Dave Ramsey]

Good, good. How old are you guys?

[Rachel Cruze]

37 and 39.

[Dave Ramsey]

Perfect. And what's your household income, including your normal checks that you get?

[Rachel Cruze]

So it's variable depending upon the commissions every year.

[Dave Ramsey]

Sure. But I mean, what do you average? What's your normal income?

[Rachel Cruze]

My annual paycheck is 125,000 myself. My wife works part time at our church and makes about 23,000.

[Dave Ramsey]

Then how much do you usually get in these bonuses? I know this is an unusually large one.

[Rachel Cruze]

Yeah, I mean, it's variable anywhere collectively between I'd say like 300,000 to 600,000 depending upon the. Wow.

[Dave Ramsey]

All right, so here's what I tried to do for a long time. I was a little younger than you at the time when I figured it out about me was I'm an abundance person and I'm a really good salesperson. You're obviously a really good salesperson and I'm an abundance person. When I put those two things together, what I fell prey to was I always just thought, well, if we need some money, I'll just go get some more money. In other words, I thought I could out earn my disorganization and stupidity and overspending and it found out I couldn't. You can never make enough to beat that. And that's where you are today. You've discovered that I don't know if you fell prey to that exact emotion or not, but I always thought, I'll just go get some more money. I can out earn my stupidity. And sometimes someone that's very good at what you, like you, is like, I am. They fall prey to. So you can't. You have to build processes and systems into your life that causes both of you to be accountable. And that starts with a basic budget.

[George Camel]

Yeah. I mean, I'm gonna be honest with you, Brad. I'm a little bit shell shocked that I'm like, you guys went $100,000 in debt, making half a million dollars a year. Like, I mean, that's pretty.

[Dave Ramsey]

That's a lot of spending, of overspending.

[George Camel]

That's. That's a lot of spending. And I like to spend, but I'm like, oh, my gosh. So, I mean, if I. Yeah, if I were you guys, man, I mean, I would sit down and figure out, how can we. I mean, I would drive such deep contentment and discipline so hard in this first year and.

[Dave Ramsey]

And make it swing the pendulum the other way.

[George Camel]

Yes. Make it a year goal and live On, God forbid, 200,000. You know what I mean? Like, seriously, just to get to this idea of reality of like, okay, okay, we are. We are good, right? Like, we. We make great income. And. And if we, you know, choose 250.

[Dave Ramsey]

Or whatever, and you're in Lincoln, Nebraska.

[George Camel]

Not Manhattan, but honestly, to know that you, your wife, your marriage, your family, your friends, your life is good, like, you don't need all this stuff. And I know you feel that already, but there's something about actually living it out and making choices and being disciplined. To know we have money in the bank, but we're still choosing to live so below our means to really get in this. This process and this pattern and this. And actually live it out, and then you guys can start kind of loosening the reins more and more. But, I mean, if that's what I would do if I were you guys, and I'm a spender, but I would. Yeah, I would try to live on half the income and just be disciplined in that, because you guys have been so far the other way. Yeah, I hope y' all took great vacations and stuff. You know what I mean? Like, I hope there's, like, there's a.

[Dave Ramsey]

Tremendous, tremendous gun collection. Yeah.

[George Camel]

Or. I don't know. But good for you guys. I mean, obviously you're an incredible worker. I mean, that's a phenomenal income, which is so great. And you guys can use that in such wisdom and discipline and contentment.

[Dave Ramsey]

And here's the thing, you will like yourself better and each other better when you do that.

[George Camel]

Yes. Yes.

[Dave Ramsey]

Because you're more likeable than some out of control spending freak.

[George Camel]

It's going to feel really good. Yeah, it's going to. In a spiritual too. Discipline and at all. Like it's. Overall, I think it's going to be really, really healthy for you guys. So I'm excited for y', all, honestly, because it' it's the kind of people like you, honestly, Brett, that you can bless your family, you can do some really amazing things in life. Cause you have the tools to do it. And you're going to be able to be extremely generous and the blessings you're going to be able to give to people above and beyond is incredible. And then you think about your kids, kids and the legacy. I mean, you guys are just set up to have a really rich, not in numbers wise, but just fulfillment. And money can be a tool to help create that. But it is not the thing that's going to be the fulfilling factor. And you guys know this because it doesn't buy happiness. You're never going to find a level of satisfaction because you will keep spending and keep spending and spend beyond $500,000 a year.

[Dave Ramsey]

Yeah. There's a piece underlying this as she's talking about Godliness with contentment is great gain. Scripture says. And so it's that peace that. And when you're overspending, it's kind of frenetic and kind of crazy and kind of wild. And there's this adrenaline rush and this dopamine hit from hitting the submit button on the cart on Amazon and all that garbage. And those people, the people that do the marketing on that stuff understand that and take advantage of it. And so your anxiety level in the house is going to drop when you get control of this. Your relationships are going to improve when you get control of this. You're probably going to experience physically feeling more peaceful when you get control of this. So there's so much more to it than the simple arithmetic or the sickening sense of I'm out of control and overspending like some kind of freaking addict or something. And so, yeah, you're really asking great questions. You're in a great place. And the phenomenal news is you get one shot here to clean it all up at point one, once. Wow. Chop up those cards tonight. Get a debit card. You can go on the envelope system. I still carry cash in my pocket. I buy most things with cash. But I'm really old school. I mean, I've got a redneck emergency fund in my wallet. A thousand, thousand bucks. Right. All the time. Just. Just because I might need it. And I never do, but just because I might need it. And so yeah, it just. There's a different feeling when, when you're using money that you have and it's a sense of power, a sense of control over it. Telling your money what to do instead of wondering where it went. We're going to sign you up for the EveryDollar premium and get you involved in that and jump into one of these free webinars the Ramsey personalities like Rachel are doing, showing you how to set that thing up and get it running. It'll be valuable. You and your wife sit there and do it together and lay out every dollar before the month begins where it's going to go. Regardless of how big the commission check is. Every dollar needs a name. I don't care where it's going as long as you do it on purpose. Actually, I do care where it's going, but do it on purpose and that'll get you there and you'll see some real good movement in that. Wow, big numbers.

[George Camel]

Yeah, I know. Which I'm glad because they can get out of it. But also it magnifies.

[Dave Ramsey]

It magnifies the absurdity of what.

[George Camel]

Of what it is. Yeah, that's a great example. But Brett, we're cheering you guys on.

[Dave Ramsey]

Excited for y'.

[Rachel Cruze]

All.

[Dave Ramsey]

I'm proud of you. Get after it, dude. I was sick and tired of being sick and tired. Bankrupt with a toddler and a brand new baby at home. Scared doesn't even begin to cover it. But I got mad enough to change. I started using God's and grandma's ways of handling money. That journey became the total money makeover. A plan everyday people can use to take control of their money. Millions have changed their lives following the plan in this book and found hope. Start your makeover [e-mail] store. Live from the headquarters of Ramsey Solutions it's the Ramsey show where we help people build well, do work that they love and create actual amazing relationships. Rachel Cruz, number one best selling author Ramsey personality host of the Rachel Cruze show. My daughter is my co host today. Owen is with us in Canada. Hi Owen. How are you?

[Rachel Cruze]

Better than I deserve. How are you guys?

[Dave Ramsey]

Just the same. How can I help?

[Rachel Cruze]

So I'm wondering if I should sell my home home and rent for a little while and then like save up some more. Just to make it a little more affordable on the month to month on my end.

[Dave Ramsey]

Okay. What's not affordable?

[Rachel Cruze]

Well, after I started listening to you guys, I realized, like, my mortgage payment is over 25% of my monthly take home.

[Dave Ramsey]

What percentage is.

[Rachel Cruze]

It's, it's probably about like, well, 25 would be $850. And it's currently 12.50.

[Dave Ramsey]

Okay. All right. And how much other debt do you have? Huh?

[Rachel Cruze]

None.

[Dave Ramsey]

Okay. What's your household income?

[Rachel Cruze]

I clear three, four hundred a month.

[Dave Ramsey]

Okay. So.

[Rachel Cruze]

And then my.

[Dave Ramsey]

My, I don't know, Canadian tax rates. Off the top of my head, I'm guessing you make what, 60,000 bucks a year?

[Rachel Cruze]

Yeah. Yeah, that sounds right. Yeah.

[Dave Ramsey]

Okay. All right.

[George Camel]

And you bring home 3400 though, right?

[Rachel Cruze]

Yeah, that's right. That's like, that's like every. Yeah. Clear.

[Dave Ramsey]

Yeah. And you don't have any other debt and your house. So the last, the reason I'm hedging around and fumbling is the last thing I sell is the house. And I will sell the house if you can't afford it. I would tell you to do that because it's not a blessing to you. Yours is a little high, but it's borderline. And do you hate the house?

[Rachel Cruze]

I don't hate the house. I just, when I heard you guys say that a house should be a blessing.

[Dave Ramsey]

Yes.

[Rachel Cruze]

You know, not more an inconvenience. It feels like an inconvenience from times to time.

[Dave Ramsey]

Okay. Feels like it feels like it owns you sometimes. You don't own it.

[Rachel Cruze]

Yeah, yeah, yeah, yeah.

[Dave Ramsey]

What's the trajectory on your income? Is it going up fast?

[Rachel Cruze]

It goes up a little bit year by year.

[Dave Ramsey]

Slow. Okay.

[Rachel Cruze]

Yeah. Slow. Yeah.

[George Camel]

Is it just you, Owen, or are you married? Kids?

[Rachel Cruze]

Just me.

[George Camel]

Just you. Okay.

[Dave Ramsey]

I, I, I'm okay. If you want to hang out there and hang on to this thing and fight on through it, it's not enough that it's, that it's completely holding you back. It's not enough that you're drowning in is enough that it's uncomfortable. And it is more than I would sign you up for if we were talking from scratch. But selling a home, moving, all of that is a very emotionally and financially expensive thing to do. And so it's the last thing I tell people to do before I tell them, sell their car real quick. I tell them to sell, you know, other stuff so fast. I tell them take an extra job so fast, that kind of thing. And, you know, if you picked up some side hustle, to add to the equation, it probably would lighten this load a little bit.

[George Camel]

Yeah. Because it's a couple hundred bucks. You know what I mean? 6, 700 bucks a month that ideally, you know, you would have for March in your budget. But. Yeah, I'm with you.

[Dave Ramsey]

Rachel's in Sacramento. Hi, Rachel.

[Rachel Cruze]

Hello.

[Dave Ramsey]

How can we help?

[Rachel Cruze]

You know what? I made a big mistake. Yes, I've made many, but this is huge. Last September, and it was contingent upon her getting herself together, her FICO high, all that good stuff, and then putting it in her name. It's almost a year. She hasn't done that. She's getting fast track tickets. That's like a toll bridge thing. And her insur is not covered by anyone other than Mom. And I'm becoming inundated with this. And I feel like I'm ready to do something drastic just to pay off the car and just give it to her.

[Dave Ramsey]

How much is the car?

[Rachel Cruze]

27,000, approximately.

[George Camel]

Is it in your name, Rachel?

[Rachel Cruze]

Yes, ma', am, it is.

[George Camel]

And the loans in your name, Everything?

[Rachel Cruze]

Yes, ma'. Am. Dummy, me. Yeah.

[Dave Ramsey]

So let me ask. The agreement was that she was to arrange to get the car paid off and put it into her name. And she's done been unable to do that because of her irresponsibility. Is that what you told me?

[Rachel Cruze]

Absolutely. Pretty much.

[Dave Ramsey]

How long ago? And that was a year ago?

[Rachel Cruze]

Yes. And things have gotten a little bit haywire now because these tickets have come. Registration is going to be more than expected.

[Dave Ramsey]

Yeah.

[Rachel Cruze]

And.

[Dave Ramsey]

And you know, I would just call. She lives in your area, assume.

[Rachel Cruze]

Yes.

[Dave Ramsey]

Yeah, I think you need to sit down with her for a cup of coffee and say, honey, you know what? I love you and I'm so sorry. I thought I was doing something nice for you, and this is a curse to you. It has really messed up your life and I'm so sorry. Hey, we're gonna fix it. We're gonna sell that car.

[Rachel Cruze]

Well, she has three children. My grand. So she can have transportation.

[Dave Ramsey]

I don't care. I know she does not need a $27,000 car. And she's irresponsible and she didn't follow through on what she said. Are you a multimillionaire?

[Rachel Cruze]

Absolutely not. I'm going to start working for you guys and become one, though. How about that? That's another story.

[Dave Ramsey]

Okay. But yeah, you don't have the money. You don't have the money to throw around 20. You don't have $27,000. Do you know.

[Rachel Cruze]

But you know what? This is the crux of the question. I am 61. I'm going to get my Social Security early next year, even though that may not be the smartest thing to do. But I have a home, so I was either going to get a HE HELOC or take the lump sum from my employer. Just be done.

[Dave Ramsey]

Sweet girl. You made a mistake. Undo the mistake. Don't keep doing it. I know what you did was not a blessing to your daughter.

[Rachel Cruze]

To the grandchildren.

[Dave Ramsey]

You didn't help your daughter. You hurt your daughter. You put her in a situation where she can't afford a car.

[Rachel Cruze]

Well, actually, when I went to the.

[Dave Ramsey]

Honey, she can't afford to call car.

[Rachel Cruze]

No, she can't.

[Dave Ramsey]

She can't afford the tickets and the registration. You can't afford the car. Nobody can afford the car. The car needs to go away. It's not a blessing.

[Rachel Cruze]

She going to transport the children?

[Dave Ramsey]

Honey, we might get a $5,000 car.

[Rachel Cruze]

Yeah, she's a single parent.

[Dave Ramsey]

Honey, she can get a $5,000 car. Single parents do it all the time, so maybe. But you're not blessing her. You're not blessing those kids. You're putting those kids. Mom in a truck. Crap. And she can't swim. She's drowning because of you.

[Rachel Cruze]

Well, she does.

[Dave Ramsey]

Stop it. Stop it. Quit rationalizing it. It was a dumb butt idea. Quit doing it. Stop it. Love. Your daughter. Better sit down with her. Say I made a mistake. Honey, we're selling this car. And we're gonna figure out a way to get you a little $5,000 car to cart those little kids around and get yourself up on your feet. Keep, kiddo. Because guess what? That's what you did, right? You did the same thing. And nobody gave you a car you couldn't afford. Drowned you in it. You're like somebody swimming and you hand them an anchor.

[Rachel Cruze]

How do I sell a car that's being financed?

[Dave Ramsey]

You sell. Okay, now we're getting somewhere.

[George Camel]

Yeah, go on. Kelly, Blue book Rachel, okay? And put in all the information and see how much the car is worth. You owe 27. There's a good chance you're going to be underwater on this car. So the value of the car. Let's pretend it's at 24,000. That you can sell it for 24,000. That means you have. You're going to. You have $3,000 that you have to find. So what you could do is go down, get a $8000 loan from a credit union, give your daughter the 5000 if you want to get her the $5000 car. $3000 for the difference and be done with it.

[Dave Ramsey]

And you pay off the $8,000 for.

[George Camel]

Your mistake and then you pay off the 8,000 of that loan.

[Dave Ramsey]

But here's the thing. When you're trying to bless somebody and you do it wrong, you don't bless them. You curse them. And that's what you did. You didn't mean to, honey, but it's what you did. So you need to undo it. What's up, guys? George Camel here. If you've been thinking about making a real difference in your community, this is your moment. People are drowning in money stress right now and you can be the one who helps them by leading a Financial Peace University class. It's totally free for you and we hook you up with all the tools and support you need. So if you're ready to help people ditch debt, save money, and actually sleep at night, go to fpu.comlead to learn more. That's fpu.com lead. Thanks for joining us, America. Buying or selling real estate is a big deal in the middle of all the drama that we've got going on right now. And when you're facing drama, Dr. John Deloney has a good saying. He says facts are your friends. Facts can help you pierce through all the hyperbole and the overstatement and the crazy stuff you see on Tic Tac and on Instagram. Facts are good for you. If you want to know what the latest facts are about the US Housing market trends, we can help you do that. Go to ramseysolutions.com market. You'll be able to find there what the median house prices actually are and what they're trending up or down regardless of what someone told you that their neighbor sold their house for. Yeah, that's not good information. How many houses are actually on the market? What are the real interest rates today? We keep the website up to date and Ramseysolutions.com market or click the link in the show notes. Malik is with us in Boston. Hi, Malik. How are you?

[Rachel Cruze]

Hi. I'm doing well. How are you guys?

[Dave Ramsey]

Better than we deserve. What's up?

[Rachel Cruze]

Awesome. Thanks for taking my call today. So I make kind of a variable amount of money each month and trying to budget right now to kind of more aggressively pay off my student loans and just wanted some advice on that.

[George Camel]

What is the, the fluctuation usually? Like, what's a high high monthly low month?

[Rachel Cruze]

Yeah, so last year I made about 65,000 and that was anywhere between like 2,500amonth to like upwards of 9,000 okay, pretty good fluctuation.

[Dave Ramsey]

What do you do for a living?

[Rachel Cruze]

Yeah, I'm an acupuncturist. So I. A lot of my income, I mean, essentially my entire income is based on the number of people I see in a given week or month. And then I also do some side jobs as well to supplement that.

[George Camel]

Okay. So what I would do, because I, I'm on a. My income is up and down too, throughout the year, depending on work and everything too highly commission based. So what Winston and I do in our budget, we have it prioritized of what has to be paid and then we, what we just like and enjoy. And so for you, you gotta figure out, you know, food, shelter, utilities, transportation, your four walls have to be covered every single month. Right. We're not gonna get behind on those things.

[Dave Ramsey]

And what does it take to do that? If it takes 2,100 to do that, the first 2100 is gone before we even start talking.

[George Camel]

Yep. And then everything else after that. Prioritize different categories. So insurance would be one thing, you know, to make sure that that's paid. But just go down the list and if you download our EveryDollar Hour app, they give you a set number of categories. It's like up to 20 of, of different things that you probably spend money on throughout the month that you may even not realize. And so I, So we just prioritize that. And then when the money comes in and we realize, okay, we have enough, you know, obviously to pay the essentials, and then anything extra then starts dropping into these other categories. And then what I would do too, for you as you're starting all of this, is to have a, we call it the Peaks and Valleys fund. So have a separate kind of saving or savings line within your savings to put some extra money aside. So when you do have a low month, you can pull from that to create somewhat of a consistent lifestyle, if.

[Dave Ramsey]

That makes sense, to even it out a little bit.

[George Camel]

Yep. And then anything above and beyond that, because you do have debt, your expenses should be at a minimum. So you're going to be throwing anything extra you have at this debt to get it paid off.

[Dave Ramsey]

So a big month equals big debt payments. A small month equals we lease, lived and maybe paid some on the debt.

[Rachel Cruze]

Right? Okay. Yeah, that, that essentially it was kind of like, okay, I figured out how much my basic life requires and then however much on top of that, I need to be able to like keep some in order, like in case I have a low month.

[Dave Ramsey]

Exactly.

[George Camel]

That's right. Yeah.

[Rachel Cruze]

Just figuring out how much of that to put towards?

[Dave Ramsey]

Not as much as your emotions. For it won't take much. With what you're describing, if you had $1,000, $2,000 sitting over there, you'd even everything out.

[Rachel Cruze]

Right, right, right.

[Dave Ramsey]

It's not a lot of money. So, yeah, all of that does that. So if you've ever done, like, a time management thing where you said, okay, I have a to do list, and I'm gonna force rank it from the most important thing to the least important thing, and then I'm gonna do the to do list in the order of most important to least important. If you've ever done that on like a y, same concept, only you're just doing it with money.

[Rachel Cruze]

Yeah, Yeah, I like that. Okay.

[Dave Ramsey]

That's exactly how you get at it, man. Congratulations. Hey, thanks for calling in. We appreciate you being with us. Naomi's in New York. Hi, Naomi. What's up?

[Rachel Cruze]

Hi. Thank God we're doing well.

[Dave Ramsey]

Good.

[Rachel Cruze]

We've been away for the summer, and we took a job in a camp, my husband and I, and we had our basics taken care of, which was really nice, and we managed to save up a good chunk based on our job. We have 20,000 practically cash at this point and wondering where we need to be putting it towards.

[George Camel]

Do you guys have debt?

[Rachel Cruze]

We do.

[George Camel]

Okay, how much debt do you guys have?

[Rachel Cruze]

About 50,000. It's two cars and a. And a small personal loan that has no interest on it.

[George Camel]

Okay, how much is each car do you owe on each car?

[Rachel Cruze]

We have 15 and 27.

[George Camel]

15, 27. Okay. And the loan is 15 and 27.

[Rachel Cruze]

Like four? Yeah.

[George Camel]

Okay. And how much do you guys make a year?

[Rachel Cruze]

About 8k a month.

[George Camel]

Okay. Yeah. Well, for sure, the 20 or the 50 is going to be thrown to pay off, or the 20 that you guys have saved go to your smallest debt. Yep. So I throw. I throw it at the loan, and then the $15,000 car, and those will be paid off. And then you guys just work to pay off the $27,000 car loan.

[Rachel Cruze]

So theoretically, it makes sense to us, but we have. We have it right now sitting, like, at. In a high yield savings that we could easily access and wondering if we should leave any there for things that come up, like kids. I mean, we have three little ones.

[Dave Ramsey]

You should be doing a budget that includes line items for things that come up with kids.

[George Camel]

So I'd leave $1,000 in there and then throw everything else at the debt.

[Dave Ramsey]

Yeah, but don't let kids surprises be called an emergency. Kids Equal surprises. And so you need to have budget line items that include kids, suddenly they lost their tennis shoe, suddenly they forgot to pay. Tell me about the field trip. And it's always suddenly when they're seven. And so, yeah, you just anticipate that as a wise parent. And you have some of that budgeted in your monthly budget. We don't have an emergency fund. And call an unannounced field trip an emergency. It's not. It was just a bad communication from a 7 year old. Lost the paper on the way home thing. Yeah. So yeah, that, that's what we're going to do there. But it sounds a lot like Naomi, that you guys don't have many hardcore processes or systems and systematizing this stuff with a good budget. It sounds very nervous, but it's also very powerful. It will give you a sense of power over this money. And when you're running loose and hanging by the thread, you feel very, very vulnerable all the time. When you're making every dollar behave using the every dollar budget, you don't feel that way anymore. You feel power again. Even if you're trying to struggle through something, you're at least powerful. Because we know we got the lights paid, we know the kids got food, we know we're not going to get evicted. So we've got certain things we know. So a lot of those things that are, when they're circling in your head with no system, they all equal some level of stress and anxiety. When you put them all down on paper and you go, oh, I got that, then that's released. And so your stress level goes way down as the chaos of disorganization goes down. And that's not just nerd speak, it's actually the real thing. It's really what happens. Yeah.

[George Camel]

So instead of just random randomly saving money and just not really knowing, you know, what to do with it, everything has a plan.

[Dave Ramsey]

Yeah.

[George Camel]

Everything has a purpose.

[Dave Ramsey]

Everything has an execution on it as it has a name associated with it. So when you get money from your paycheck, it's kind of boring because you'd already spent it on paper. You just have to dole it out according to the plan. There's no emotion left to it. There's no sense of, oh God, this is a problem. If you, you already had that back when you did the budget, so you got it all out of the way now. So you do the budget before the money comes in every single month. And let's get that $27,000 car paid off. That thing's A boss. You may even want to get rid of it.

[Rachel Cruze]

Foreign.

[Dave Ramsey]

Hey George Camel here. So you're thinking about buying or selling your home? It's exciting, but there's a lot to think about and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculated start to finish guides, a podcast, and even an in depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramseysolutions.com realestate that's ramseysolutions.com realestate Annie's in Los Angeles. Hi Annie, how are you? Are you better than I deserve? How can we help?

[Rachel Cruze]

I appreciate you taking my call. So here's my question. I am currently actively on baby step two, quickly approaching and eagerly approaching baby step three. How? However, I have a daughter who is eight years old when she gets, you know, money for Christmas, for birthdays, different events and things like that. We have placed all of that money into her little savers account.

[Dave Ramsey]

Good.

[Rachel Cruze]

Now typically what I would do is I would put it into like a six or nine month CD and then potentially roll it over. CD to cd.

[Dave Ramsey]

Yeah, that are a high, that are a high yield. I mean how much is minute?

[Rachel Cruze]

So she has accumulated just over $10,000.

[Dave Ramsey]

Good. Good for her. Okay.

[Rachel Cruze]

Yeah. So what I what my right.

[George Camel]

Doing better than most adults out there.

[Rachel Cruze]

Exactly. So I just wanted to make sure that I'm doing the best for her money. And I've heard a lot of things and I don't necessarily want to take advice from people who are not well versed on, on like college funds and things like that. If you were in my shoes, what would you do with that? Would you keep it in the high yield or you know, CDs high yield savings accounts or would you look at alternative investment opportunities for her?

[Dave Ramsey]

It depends on what you plan to use the money for and that that will answer your question. So I can tell you what we did. All right. We had a savings account in mutual funds for the kids college that we were putting money into that was their kids college fund and we were funding that the miscellaneous savings account like you're talking about. We earmarked that for the kids to spend and to learn to spend wisely. And we told the kids when they were 8 and 6 and whatever that they need to put money in that account because that was their buy a car account. And I'm not buying you a car. You have to buy your own car. I did however, agree to match it. We had four. Dave, you got a lot of money in this account. You may not want to match this one. But you know, Rachel saved up, I think 5,000 or $8,000. 8,000 and I matched it and she got a little $16,000 Beamer, a little used beamer and it was a cute little card and it took her all the way through college, if I remember. But she paid for half of it with her miscellaneous account. So she threw babysitting money in there, dog sitting money in there, whatever book sales she made at the back table, selling Ramsey books at an event when she 14 years old, all of that went in there. And anything she put in there was going to be doubled for her car. So it was kind of her car fund. And that's the way we brainwash the kids, that that's what it's for. If you're going to do that, a high yield savings is fine. If you're going to send her to college with it. If you're going to make her pay part of her college with this money, you may want to put it in a mutual fund in a 523 or 529.

[Rachel Cruze]

529. Okay.

[Dave Ramsey]

Yeah. It just depends on what do you want the money to be for. And, and here's the thing, the money really doesn't matter. It's a lot for an eight year old. But what matters is the lesson that the kid gets out of this. What muscle are they building in the financial world? Are they learning to save? Are they learning to work and save to hit a goal like buying a car? Are they learning to work and save to hit a goal like going to college? And I'm going to pay part of it. So I actually freaking go to class because I paid for it instead of championing in beer pong. Right. It changes the equation when you got skin in the game in these things. And the lesson is what's important, not the dollar amounts. Because the dollar amounts aren't going to matter. They're not enough to matter if she learns the smart stuff. She becomes a millionaire off the smart stuff, not the $10,000.

[Rachel Cruze]

Yeah, exactly. And the savings part and contributing towards it, it is an activity that she enjoys.

[Dave Ramsey]

Yeah, there you go.

[Rachel Cruze]

And you know, it's great right now, her focus. And if I was to tell her, hey, this is going to be for your first car. It, you know, that wouldn't really have much impact to her at her state of where she is at 8.

[Dave Ramsey]

No, we told them real clearly, listen, it's very important. And we would show them cars at 8 years old and go, this is what this car costs. Because if you don't start saving, you're going to have a nice buy. Like.

[George Camel]

Yeah, but I hear what you're also saying, Annie, that, I mean, is there anything in the near future that maybe she wants to save up and pay for? Right. I mean, and, and, and I do think that that's what I mean. I have an 8 year old and that is one thing that we do is, hey, what is something you want? Caroline, literally right now is saving for a mini trampoline because we're not buying a trampoline. So she's going to buy a little mini exercise trampoline. It's $40 on Amazon. And she's working, working to save for that. So. Because. So she's in it. So she's feeding June. She's taking our dog out. I mean, like she's got her little chores and it's motivated her. And so that. So I hear what you're saying, Annie, that yes, a car can feel. It feels so far for an eight year old. But that conversation, that conversation information I.

[Dave Ramsey]

Learned on the radio is.

[George Camel]

Yep. But the car conversation really, really amps.

[Dave Ramsey]

Up in about, in about 20 more minutes when they're.

[George Camel]

Well, it's gonna be quick. Yeah, But I mean, 11, 20, 12, 13, 14, 15. I mean, they're. Yeah, they're heading that way for sure.

[Dave Ramsey]

For those of you out there listening, do put a limit on this. I wasn't smart enough to do that. Rachel saved 8,000. Her little brother had a head start on this because he had watched his two sisters do it. And he's a savings maniac and he about broke me. So with the doubling thing. So you do need to put a limit on it. And I had to have a conversation. We're not buying a new Ferrari. Okay, so he didn't have that. I know, but I'm saying I had to have a conversation. We're not spending that on a car.

[George Camel]

It was unfair.

[Dave Ramsey]

She was 16 years old to a degree.

[George Camel]

Cause you started this plan all of a sudden at the same time. So Denise got the short end of the stick, so she.

[Dave Ramsey]

Yeah, she started when she was seven. It was rough for her.

[George Camel]

No, it was. No, she was older than that. And then I had two years on her and Then Daniel had four years, so he had six years more of savings than Denise did.

[Dave Ramsey]

The three of you were so abused.

[George Camel]

I'm just saying.

[Dave Ramsey]

Hey, hang on. We're gonna send you a copy of the first bestseller, best selling book Rachel Cruz ever did with her dad. It's called Smart Money, Smart Kids. And it's about teaching parents how to teach kids. And so we'll send you a copy of that as our gift. We appreciate you calling in. Christopher's in Palm Springs.

[George Camel]

Do that right now.

[Dave Ramsey]

Right now. Do what?

[George Camel]

Okay, yeah, about 10 seconds.

[Dave Ramsey]

No, we got about four minutes. Christopher's in Palm Springs. Hi, Christopher, how are you?

[George Camel]

Oh, we do.

[Rachel Cruze]

Hi, Dave and Rachel. I am very excited to speak with you today. I'm a teacher here in California and just wanted to get your thoughts on how much we should be spending maybe monthly or yearly on our classroom.

[Dave Ramsey]

I have an unpopular stance on that. And you're a great guy and you're a wonderful teacher and so you're not going to go with my stance? I wouldn't spend a dime on it. It's not your job as. As much. It's the school's job to furnish you the stuff to boo your classroom. And the parents ought to get together and furnish whatever you need.

[George Camel]

Do you have an Amazon wish list, Christopher, that goes out to the parents?

[Rachel Cruze]

You know I do not.

[Dave Ramsey]

Are you in an underserved community?

[Rachel Cruze]

Yes.

[Dave Ramsey]

Okay. So it won't matter. The parents aren't gonna be able. Able or probably willing to help. So I mean, you've gotta be real careful with this. Cause you're doing this out of your love for the kids and you and your love of teaching. But you can break yourself with that budget, can't you?

[Rachel Cruze]

Definitely. I've found myself spending thousands a year on it.

[Dave Ramsey]

And really that's the school board's job is to furnish you the stuff to teach the kids and. Or what parents can come around and assist you on it and. Or contact a local church in the area and let them know you're in an underserved area and see if some. See if one of the Sunday school classes or one of the small groups will adopt your classroom or something.

[Rachel Cruze]

Okay.

[Dave Ramsey]

The Ramsey Family foundation adopted the school, the elementary school for four years that I went to when I was a kid and now it's in an underserved area. And so we adopted it and even our team goes over there and works and helps and then we put money into the classrooms and all that. It was really fun because it's nostalgic for me, because it's really where I went to. Where I went to the first grade and all that. So it's kind of cool. But, you know, maybe you can find somebody like that to help at some degree. Maybe not the whole school, but somebody help your classroom. And it's just. I think it's blatantly unfair for a teacher to have to pay for this. I just think it is. And you guys have got such wonderful hearts and you're so giving to those kids, and thank you for that. But be real careful with that.

[George Camel]

It's a slippery slope. Slope. It can continue. Yeah.

[Dave Ramsey]

You don't. You do not have a moral obligation at all to do that. Our scripture of the day, First Corinthians 2, 9. It is right written what no eye has seen, what no ear has heard, and what no human mind has conceived, the things God has prepared for those who love him. Warren Buffett said, someone's sitting in the shade today because someone planted a tree a long time ago. Adam's in Charleston, South Carolina. Hi, Adam. Welcome to the show.

[Rachel Cruze]

Hey. Hey, Dave. How you doing? Thank you.

[Dave Ramsey]

Sure. How are you doing? Can we help?

[Rachel Cruze]

Yeah. So first, I appreciate you taking the call. Means a lot. So I'm calling today because I'm in a very tight financial spot currently trying to navigate it the best I can. Basically where I'm at is I don't think I have an income problem. I do. Okay. I'm active duty maybe. So it is a state. Six.

[Dave Ramsey]

You know, what do you make, really?

[Rachel Cruze]

But 72.

[Dave Ramsey]

Okay. Your wife work about.

[Rachel Cruze]

No.

[Dave Ramsey]

Okay. How many kids you got?

[Rachel Cruze]

Two kids.

[Dave Ramsey]

Okay.

[Rachel Cruze]

Two little girls.

[Dave Ramsey]

All right. Seven. 72,000. Two little girls in Charleston, South Carolina. Gotcha.

[Rachel Cruze]

Yes, sir. Yeah. Part. You know, a part of that is. Is I'm going through a divorce, but I'm trying to basically budget for myself and budget for them and set them up for success. So like I said, it's kind of tight right now, but I'm trying to make it work. A lot of that, I would say about 4,000 of that is going out the door immediately. So. Her. Her. So with what I'm left over, I work with, and it. It pays the bills, it does what it needs to do, but for, like, child support.

[Dave Ramsey]

No, he's just. He's trying to support both households.

[Rachel Cruze]

Correct.

[Dave Ramsey]

That's not sustainable.

[Rachel Cruze]

Yeah.

[George Camel]

I mean, because you're probably only bringing home 5,500amonth. Right.

[Dave Ramsey]

You're not going to be able to do that long term.

[George Camel]

Yeah, yeah. This isn't.

[Rachel Cruze]

Yeah, yeah.

[George Camel]

Mathematically doable.

[Dave Ramsey]

Yeah, it's a sweet, it's a sweet sentiment, but it's not going to work.

[Rachel Cruze]

Right.

[Dave Ramsey]

Okay, so your, your ex wife is going to be working.

[Rachel Cruze]

That's the hope.

[Dave Ramsey]

No, no, it's not an option. She's not going to be able to eat if she doesn't.

[Rachel Cruze]

Right.

[Dave Ramsey]

You don't make enough to support two households. Indefinite, definitely. Nor is that wise. That's what divorce brings to your ex wife's life, a new job, regardless of who asked for it or who caused it. So you'll be paying child support, which is a percentage of your income according to South Carolina law. And you will do that because you're a good dad. And in addition to child support, you'll do some things here and there because you're a good dad and you love your daughters, but you cannot support two households, sir, that's not sustainable.

[George Camel]

Is that the expectation, Adam, what have you guys talked about?

[Rachel Cruze]

Well, yeah, I say unfortunately, but not really. Like, obviously child support will never be an issue. No problem doing that. But being in. When you're active duty, there is. Is a construction in place to protect service member and you know, any spouse, there is a set limit in place that you have to abide by, which again, no problem. But it is a percentage of what I make. So regardless of if she works or not, that's what has.

[Dave Ramsey]

That's fine, but it's not, it's not 60% of what you make. It's a kin. It's akin to child support.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

We work with military for 30 years. The military does not take 60% of a dad's pay for his kids when there's a divorce. That's not true. You've gotten some bad information.

[Rachel Cruze]

Okay. Yeah. How do I go about this? I guess if I, if I'm being told like by the military as a whole. This is what I mean. I guess. How do I navigate that?

[Dave Ramsey]

You're being told by the military that they're going to take 4,000 of your 5,000 and give it to your kids.

[Rachel Cruze]

Yeah, that's. That's what I've been doing for the last eight months.

[Dave Ramsey]

I understand you've been doing it, but you're saying someone at the military told you that.

[Rachel Cruze]

Correct.

[Dave Ramsey]

Okay, you need to go see your senior officer and have some discussions. You got to learn.

[George Camel]

Is there a lawyers in place, Adam? Like, is it. Where are you guys that in the divorce?

[Rachel Cruze]

It's so there's no official, you know, paperwork or anything yet. It's just, it's a separation Period. And we're getting to that point here in the next couple weeks.

[George Camel]

Okay. Because a lawyer would know all the divorce law and everything, too.

[Dave Ramsey]

So they'll be able to sit down with Jack and they can walk you through it, too. But I'm going to my senior officer and find out. You need to learn about what's going on here. Because I've been working in the military for 35 years. I. I've never heard this in my life. Now, they do require that you take care of your kids. I don't have any problem with that. But the child support numbers I've seen are more akin to what the state levies and what the state requires in most cases. And you've got to do other things to make sure that, for instance, if you've got a security clearance that's based on your credit, you got to keep your bills paid and those kinds of things. That kind of stuff will come up in this situation. But you may want to sit down at the JAG office. You for sure want to sit down at your senior officer. And I think you need to learn something about this, because this. I'm. I might be wrong. I. Sometimes I gave out some wrong information last week on the show, but I don't think I'm wrong here. So I just. I'm not wrong about this. I've never seen it, and I've worked with military stuff for 30 years, so. And we love the military and we work. Thank you for your service, by the way, and. But now. All right, Jennifer's in New Jersey. Hey, Jennifer. What's up?

[Rachel Cruze]

Hi. Thank you for taking my call.

[Dave Ramsey]

Sure. How can we help?

[Rachel Cruze]

I was wondering about the baby steps. We're trying to pay off some small debts. You know, 10,000 here, 20. I think they add up to like 50 or 60,000 in various small car loans and personal loans. But my husband and I have a disagreement. I think we should just pay off our work on paying off our mortgage for the next few months, because I think that we can. And that would open up.

[Dave Ramsey]

How much is your mortgage payoff?

[Rachel Cruze]

It's like 69,000. And the monthly payment is 3,700. So I feel like if we paid that off, we would have. It would open up all this money to be able to pay off all these other little debts.

[Dave Ramsey]

So 109,000. You're 100% debt free, house and everything.

[Rachel Cruze]

109,000? Oh, yes, yes.

[George Camel]

How much you guys make a year?

[Rachel Cruze]

So my husband makes 190, and I make 100.

[George Camel]

Oh, nice.

[Dave Ramsey]

So you should Pay off all of this in a year.

[Rachel Cruze]

Yes.

[Dave Ramsey]

If you're, if you're making $250,300,000. Yeah, you should pay off 109,000 in one year. In which case this argument doesn't matter.

[Rachel Cruze]

I saw that.

[Dave Ramsey]

It's, it's, it doesn't matter because you're not going to be doing it long enough that the math matters. And you're argument do it in one year. $8,000 a month.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

Why can you not do that? You make three hundred and something thousand dollars.

[Rachel Cruze]

I don't know.

[Dave Ramsey]

I don't either.

[Rachel Cruze]

Need to do the ever. I need to do the every dollar app because yeah, I think it's pretty common. Like you just don't know where all your money goes.

[Dave Ramsey]

I mean if you, but if I, if I look at it and I go okay, you make 300. I don't know what it was at 15,320. 320. Okay. And we take 109 from that. That only leaves you 200,000 to live on.

[Rachel Cruze]

Yeah, yeah.

[Dave Ramsey]

How in the world.

[George Camel]

And you're in New Jersey so you got a lot of taxes but then that's still going to be. Yeah, you know, 120.

[Dave Ramsey]

You ain't going on vacation that year.

[Rachel Cruze]

Right.

[Dave Ramsey]

And you're not going to eat out every night.

[Rachel Cruze]

Right.

[Dave Ramsey]

There's not going to be a thousand dollar bottles of wine on the equipment equation. But yeah, you're actually going to get out of debt. So yeah, you do need to get on the every dollar budget because 300 and something thousand minus 109 equals 200 and something thousand to live on. Wah. Go do it. Right. Seriously, bust it. Bust it girl. And if you, the point to being if you're going to do this in one year, you could do the mortgage first. I don't care because you're going to do the whole stinking thing in one year. Okay. And then the 3,500amonth being freed up, it only matters for about three months. So it doesn't matter because it changes the whole equation. If you're going to drag this sucker out for four years then we could talk about your equation because it does kind of start to make sense then. Not sure I would do it but it starts to make sense. It's a fun argument at that point. But for one year.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

Knock it out. That puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.