You Can’t Hack Your Way Out of Debt

Summary

The Ramsey Show – Episode Summary

Episode Title: "You Can’t Hack Your Way Out of Debt"
Date: September 11, 2025
Hosts: Dave Ramsey & Dr. John Delony
Main Theme:
This episode drives home the bedrock Ramsey principle: there are no shortcuts to financial stability or wealth—discipline, communication, and perseverance are your only “hacks”. The hosts field a varied set of tough financial questions and real-life scenarios, focusing on debt, relationships, career, and emotional struggles behind financial decisions. The show is peppered with candid, sometimes tough-love discussions about marriage, communication, generational planning, and the dangers of trying to take shortcuts in either money or life.

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Key Call-In Topics and Insights

1. Marital Spending & Communication Breakdown

[00:44–08:33] Joan in Florida

• Joan and her husband, married 45 years, are facing a crisis over unilateral spending—her husband has spent $40,000 from their savings on a boat, truck, and bikes without joint agreement.
• Dave and John highlight the real issue is poor communication and lack of unity, not simply the spending.
  • “You all suck at communication.” — Dave Ramsey [04:01]
• Dr. Deloney references the Gottmans’ “Four Horsemen” and warns contempt is a marriage killer.
• Solution: Marriage counseling, combining finances (“ours, not mine or his”), and learning assertive “I” statement communication.
• Quote:

  “If you sit down and say, ‘You went out and did this again,’ you’ve declared war. Start with ‘I’ statements—‘I’m hurt, I’m scared.’” – Dr. John Delony [08:06]

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2. Early-Career Single Mom Trapped by Low Wages & Childcare

[10:37–20:01] Brooke in Pennsylvania

• A 27-year-old single mom with a computer science degree and working on an MBA is stuck at a $20/hr customer service job due to needing remote work.
• Dave bluntly explains that relying on online applications doesn’t land jobs; you have to “know someone”.
  • “Applying for jobs never works. You can’t get jobs that way.” — Dave Ramsey [13:46]
• Suggests getting out of the comfort zone, choosing either better income with child care or accept current limitations, and shifting focus to networking as main job search method.
• Offers Brooke Ken Coleman's books and advises brutal prioritization (“what are you willing to give up to get there?”).

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3. Company Car to Stipend Transition

[22:04–26:54] David in Pennsylvania

• Company replacing car program with stipends & mileage.
• Dave notes this is always a net pay cut for employees.
• Advice: Pay cash for a 5-year-old car, pocket the stipend/mileage, do not lease or finance a car, and don’t get comfortable budgeting the stipend as permanent.
• Dr. Delony predicts the stipend program will be phased out.
• Quote:

  “If something happens … you still got a car payment.” – Dave Ramsey [24:57]

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4. Life Insurance for Parents’ Debts

[27:06–32:34] Mary in Louisiana

• Mary is paying life insurance on her mother to “protect herself” from her parents’ debts.
• Dave clarifies there’s no generational debt: debts die with the estate unless she wants the house.
• Makes clear: Do not feel obligated to pay parents’ debts—“Just send them a death certificate.”

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5. Dilemma Over Building Home Equity

[34:12–39:56] John in Arizona

• Family finishing a $1.6M home, debating whether to use all proceeds from selling the old house to pay off new mortgage versus balance investments.
• Dave recommends paying off the house, even if it makes net worth “top heavy” in real estate—that’s natural at lower net worth levels.
• Philosophical takeaway: As you build wealth, personal assets (home, cars) become a smaller part of net worth.

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6. Trucking Business on the Brink

[40:28–44:39] Victoria in Columbus, OH

• Family-run trucking company is $400k in debt due to failed drivers; contemplating bankruptcy.
• Dave recommends selling everything (trucks, real estate), as in a bankruptcy, and assigns a Ramsey coach for her.
• Reassures that emotionally, things aren’t as hopeless as they feel: “You’re not bankrupt, but you’re going to have to turn loose of some things.”

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7. Should I Cash Out Retirement to Build a Cabin?

[44:48–52:04] Todd in Texas

• Nearing 59½, wants to cash out Roth IRA to build a cabin.
• Dave is firm: Not enough retirement savings; a cabin means being broke in retirement.
• “That’s not how compound interest works. ... You haven’t saved up enough money to buy a cabin.” – Dave Ramsey [45:57]

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8. Cohabitation, Prenups, and “Unsafe” Relationships

[54:46–63:25] Andrea in Ohio

• Has been with partner 25 years without marriage; he now wants a prenup before finally marrying.
• Andrea has no career and raised four children; he has become wealthy.
• Dave and Dr. Delony are outraged, characterizing the relationship as emotionally/financially abusive and a prime example of why cohabitation is dangerous for women.
• Takeaway: “If you’re 24 and your boyfriend wants to move in together, I hope you read this email and realize how stupid that is.” – Dave Ramsey [58:27]

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9. Older Divorcee with Limited Savings & High Rent

[66:17–74:36] Marie in Denver (73 years old)

• Living off savings and Social Security, rent is high, risk of outliving savings.
• Dave’s three-prong solution: Invest remaining money more aggressively, cut rent/expenses, and find part-time work while still able.

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10. Should I Cash Out Roth to Pay Debt?

[75:56–79:33] Blake in Minnesota

• Wants to pay off $30k personal loan with Roth IRA contributions.
• No, says Dave—incurs taxes/penalties and harms future self. Instead, follow a disciplined “scorched earth” budget to repay debt within 2 years.

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11. You Can’t Hack Your Way Out of Debt

[79:29–83:47] Main Theme Reinforced

• Dave and John riff on how younger generations’ “shortcut” mindset leads them to look for hacks in everything—including money.
• Real change is a result of “high reps over an extended period;” there are no apps or quick fixes—just sustained grind and discipline.
• Quote:

  “There’s no easy button… you gotta get in attack mode and knock it out.” — Dave Ramsey [78:39]

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12. Real Estate Questions & Paying Off Family Loans

• [96:45–104:35] Stephen in Michigan: Question about refinancing mortgage vs. paying off car and the impact on credit—Dave prioritizes paying off car for cashflow, then refinancing only if closing costs are justified.
• [67:21–71:16] Jordan in Oregon: Has money to pay off very low-interest “family” mortgage, but all advisors say don’t do it. Dave and John advise paying it off for peace and healthier relationships, not just for math.

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13. Farm Riches Dilemma

[107:05–114:44] Eric in Ohio

• Couple bought family farm for $7,700/acre now valued at $18,000/acre, but still owe $400k; also have a $235k house mortgage.
• Dave lays out options: (a) aggressively pay off home and farm, or (b) sell farm and invest proceeds elsewhere.
• Decision should be strategic, not emotional—the “why” of the investment matters.

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14. Current Events Tragedy

[115:19–125:06]

• News breaks during the show of the shooting death of Charlie Kirk at Utah Valley University.
• Dave and John process grief on air, calling for prayer and civility: “If you’ve got nonsense in your family, make the phone call today. It’s too short, man. Make amends.” – Dr. John Delony [124:35]

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Notable Quotes & Moments

• “You all suck at communication.” – Dave Ramsey [04:03], to Joan, after 45 years of marriage and continued conflict over spending
• “If you treat me like a child for 40 years, I’m going to act like a child.” – Dr. John Delony [07:20]
• “Applying for jobs never works. You can’t get jobs that way.” – Dave Ramsey [13:46]
• “That’s not how compound interest works.” – Dave Ramsey [45:57]
• “If you’re 24 and your boyfriend wants to move in together, I hope you read this email and realize how stupid that is.” – Dave Ramsey [58:27]
• “There’s no easy button… you gotta get in attack mode and knock it out.” – Dave Ramsey [78:39]
• “By the time you finish a master’s degree in IT, what you have learned will be irrelevant because the market moves that fast.” – Dave Ramsey [89:58]
• “If you borrow the money (for a car or cabin), it lets you be in denial that you don’t have the money.” – Dave Ramsey [51:01]
• “But you guys have chip-shotted one little thing at a time… all the way to $60k of debt making $100k and you can’t breathe.” – Dave Ramsey [77:23]

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Episode Takeaways

• You cannot “hack” your way out of debt. There are no magic bullets: real change takes work, patience, and a transformation of habits.
• Communication and unity are non-negotiable for couples' financial health. Surprises and contempt breed disaster.
• Networking is still king in job searching—application numbers mean nothing without real human connections.
• Do not borrow from your future to solve a present problem.
• Be wary of “debt justifications” – whether for family pressure, addiction to consumption, or emotional trauma.
• Relational abuse and codependence often play out in financial questions; never ignore the emotional health behind the numbers.
• Tragedies make clear: Life is short—focus on relationships, make amends, and support your family.

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Timestamped Segment Guide

| Time | Segment/Topic | |--------------|-------------------------------------------------------------------------------------------| | 00:44–08:33 | Joan & marital money conflict | | 10:37–20:01 | Brooke: Trapped by low income & single parenthood career pivot | | 22:04–26:54 | David: Company cars to stipend, how to respond | | 27:06–32:34 | Mary: Should children pay parents’ debts via life insurance? | | 34:12–39:56 | John: Balancing home equity & investments after big house purchase | | 40:28–44:39 | Victoria: Business on brink—debt, bankruptcy, assets | | 44:48–52:04 | Todd: Should he cash out retirement to build a cabin? | | 54:46–63:25 | Andrea: Cohabitation, prenup, decades of invisible marital risk and exposure | | 66:17–74:36 | Marie: Retired, recently divorced, limited savings, can she survive? | | 75:56–79:33 | Blake: Should he use Roth to pay off debt? | | 79:29–83:47 | Main Theme: Grinding it out, not hacking | | 96:45–104:35 | Stephen: Refinance or pay off car with cash? | | 107:05–114:44| Eric: Million-dollar farm dilemma—sell, pay off, or keep? | | 115:19–125:06| Breaking News: Reflection on shooting at Utah Valley University, family & civility appeal |

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Closing Thought

Dave and John repeatedly tie back every financial question to the show’s title theme: You can’t “hack” your way to wealth, peace, or strong relationships. There’s only the hard but rewarding path—unity, communication, tenacity, and grown-up decisions. The episode closes on a somber note, urging listeners to prioritize relationships, civility, and urgent reconciliation in light of an unexpected tragedy.

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For listeners new and old, this episode is a masterclass in Ramsey “tough love,” cutting through excuses and wishful thinking to reveal that the real “hack” is personal growth, not shortcuts.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm Dave Ramsey, your host, Dr. John DeLoney Ramsey personality number one best selling author and host of the Ramsey Network. Dr. John DeLoney show is my co host today. Open phones here at 888-255-2225. Joan is in Florida. Hi Joan, how are you?

[Caller]

I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

I have a question. I would like to know if it's okay if I lock my husband out of my savings account.

[Dave Ramsey]

Wow.

[Dr. John Deloney]

Tell me more.

[Dave Ramsey]

Sounds pretty dramatic.

[Caller]

Yeah, it is. We've been married for 45 years. Probably 20 some years ago we got into some credit card debt, a lot of credit card debt, to the point where we had to take out a second mortgage. I also borrowed against my 401k and it took probably 10 years to claw out of that debt. And I mean we were really good about budgeting and now we have our home paid off.

Off.

All our cars are paid off. We had absolutely no debt until probably the last year. I picked up a second job before to help, you know, get this debt out. Well, I've since left my second job and we are just spending. I say we. It's not really we, it's him. It's just spending way more than what we're bringing in on.

[Dave Ramsey]

What?

[Caller]

Oh, just. He is just. He bought a boat, he's bought a truck to pull the boat. He's bought road bikes, he's bought mountain bikes. He has gone through $40,000 in savings in the last year buying these things.

[Dave Ramsey]

What is your all's net worth?

[Caller]

Net worth? Our home is worth probably 650,000. I have 650. In my 401k. I had 50,000 in savings and now I have. I guess there's about eight in there now.

[Dr. John Deloney]

And you keep using the word I.

[Dave Ramsey]

How much does he have in his 401k?

[Caller]

Nothing.

[Dave Ramsey]

Okay, so you have a net worth of a million and a half dollars, give or take. And your household income is what?

[Caller]

It's 82. Between the two of us it's 82,000.

[Dave Ramsey]

And you guys are in your 60s.

[Caller]

Yes.

[Dave Ramsey]

Okay. And so what kind of midlife crisis is this dude having at 60?

[Caller]

He is. He's saying that he wants to get all these things bought before he retires and he plans on Retiring next year. So he wants to enjoy his life. We sort of had a significant event happen in our family. We had a family member of ours who just worked himself to death and died in his 40s and didn't enjoy life at all. Didn't enjoy any of the money that he. So my husband was like, well, he's not going to do that. He's not going to be like that.

[Dr. John Deloney]

It doesn't sound like the problem is the boat or the truck. It sounds like you come home from working your second job and all of a sudden there's a new boat in the driveway.

[Caller]

Oh, I hate it. I look out there and I see it and I hate it.

[Dave Ramsey]

No, no, no, no, no. Him doing crap without you guys without an agreement in it, that's the problem.

[Caller]

I agree.

[Dave Ramsey]

You didn't, you didn't know this? You didn't go along with these purchases? They just occurred?

[Caller]

No, well, I did go along with the boat, but I didn't realize he was going to spend as much as he did on it. And I didn't realize that he. I mean, he just keeps putting more money into it.

[Dave Ramsey]

People that have been married 45 years, you all suck at communication.

[Dr. John Deloney]

Yeah, not good.

[Caller]

Yeah, I agree. I agree.

[Dr. John Deloney]

Or did he just change it on you? Have y' all been communicating well for a decade and then all of a sudden this went sideways?

[Caller]

No.

Okay.

No, this isn't, this isn't new. We've never really agreed on finances. You know, I'm, I'm more of, let's save, let's put it aside. And he's more of, let's enjoy it. It's just gotten, it's just gotten bad in the probably last year.

[Dave Ramsey]

Joan, I appreciate your frustration and, and even your anger, and those are justified, all right? But the problem is not the savings account. That's the symptom.

[Caller]

Okay?

[Dave Ramsey]

The problem is you all are not aligned.

[Caller]

I agree 100%.

[Dave Ramsey]

You're not unified. And so I don't think I'm hearing you say. Because you said I went along with the boat, I don't think I'm hearing you say that you're opposed to enjoying some of the money. What I do hear you say is you don't like being surprised and people running roughshod over your hard work while you're working two jobs. Yes, and that's fair.

[Caller]

Second job.

[Dave Ramsey]

Yeah, that's fair.

[Caller]

I gave up the second job.

[Dave Ramsey]

Yeah, but to compare your all's life in any stretch of the imagination to the 40 year old workaholic he's not even on the same planet. So you can't use that as a justification to do something stupid and lie to your wife.

[Dr. John Deloney]

It's the dishonesty.

[Caller]

Yeah, yeah, yeah.

[Dave Ramsey]

So you really do. For the sake of. I mean, if you're in your 60s and you guys are healthy, you may have to be fighting with this old man for another 30 years. Y' all need to really work on this and get on the same stinking page because I agree. Yeah. Sharon and I make more money and have more money and I don't buy any boats without Sharon knowing what the boat costs. And we make the decision together beforehand. And if the boat involved a truck to butt. Pull the boat, we would be talking about that too. We don't just make this up as we go. When I come home and go see what I did, honey. And we've been married 43 years and I'm 65 years old. So we're right in the same camp with you, kiddo.

[Caller]

Okay.

[Dr. John Deloney]

And here's the other side of it. He's not on the phone. So just. You are.

[Caller]

Yes.

[Dr. John Deloney]

The Gottmans are the kind of the goats when it comes to marriage research. Okay.

[Dave Ramsey]

Okay.

[Dr. John Deloney]

And they created this thing called the Four Horsemen of the Relationship Apocalypse. They can tell with 90 plus percent accuracy after watching a couple communicate just for a little bit whether they're going to make it or not. And the. The relational dynamic of contempt where one person thinks they are better than the other person is the number one predictor that this thing's not gonna. It's gonna fall apart. And listening to your language. This is mine. I put this in my account. He has nothing. I'm wondering if there's not a dynamic in your marriage that has established itself over the years of you're the good one and he's the bad one.

[Caller]

Yeah.

[Dr. John Deloney]

You're the. You're the. You're the smart one. You're the one who saves. And he's the child. And these dynamics have a way of self reinforcing themselves. It doesn't give a pass. It doesn't give an excuse for his dishonesty, his line to his wife, his.

[Dave Ramsey]

His impulsiveness.

[Dr. John Deloney]

Yeah. Acting like a child. But it creates a context for where. If you're going to treat me like a child for 40 years, I'm acting like a child, then excuse it. And if he was on the phone with me, Dave, and I'd be letting him have it. But you have to say this is a dynamic that we have co created for 40 years where I think I'm better than him because I make more money or I had a second job or I have retirement again.

[Dave Ramsey]

The quality of his soul would be greatly increased if the two of you could mutually respect each other, dignify each other with being in agreement before we make major decisions. There you go.

[Dr. John Deloney]

And that usually starts.

[Dave Ramsey]

And that also includes combining ownership of everything. So you don't have a 401k. We have a 401. You don't have a house. We have a house. We have an income. We are doing this. This is what we have a boat now. And that kind of stuff.

[Dr. John Deloney]

When you sit down to have conversations about feeling dishonest, whatever. If you sit down and say you went out and did this again and you did this, he's going to fight you. He has to. You've declared war. If you sit down and say, hey, I'm hurt, I'm scared, I feel this way. Start the conversation with I statements and that can be an invitation. And then if he continues to act like a child, then we're gonna have to respond in some different ways. But you gotta reset this whole communication pattern.

[Dave Ramsey]

Yeah, you guys gotta work on your skills. That's it. Your skills are low. And that may mean sitting down with a marriage counselor who's not. Who's teaching you how to develop these skill.

[Dr. John Deloney]

Foreign.

[Caller]

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[Dave Ramsey]

All.

[Caller]

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[Dave Ramsey]

Brooke is in Pennsylvania. Hi Brooke, how are you?

[Caller]

I'm okay. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Hi, Dave. I appreciate you taking my call.

[Dave Ramsey]

Sure.

[Caller]

So, just a little backstory. I'm 27 years old. I'm a single mom finishing my MBA. I work full time, and I raise my 3 year old son mainly on my own. I live with my nana, but I would like to move out sooner rather than later due to differences and just wanting to move forward in life.

[Dave Ramsey]

Okay.

[Caller]

I do have some student loans and a little credit card debt, but I feel like I'm in a constant cycle of just, you know, just trying to keep up because my income is not very high.

[Dave Ramsey]

What's your income?

[Caller]

Honestly? Not right now. I make $20.19 an hour.

[Dave Ramsey]

Okay. And you're finishing an MBA when?

[Caller]

March 2026.

[Dave Ramsey]

So six or eight months. Okay.

[Caller]

Yeah. And I do currently have my bachelor's in computer science.

[Dave Ramsey]

Why are you making 20 bucks an hour then?

[Caller]

Because I only work as a customer service representative.

[Dave Ramsey]

Why?

[Caller]

Having you have a.

[Dave Ramsey]

You have a four year degree in computer science.

[Caller]

Oh.

I mean, I know I apply to jobs constantly and I graduated in August of 2024, so I've been out of school for quite some time.

[Dave Ramsey]

Yeah. Okay. So your career search process is not working. Thus you have a horrible income compared to your education. Your MBA is not going to make this any better. Yeah. If we don't fix the career search process. Agreed.

[Caller]

I definitely agree.

[Dave Ramsey]

Yeah. Let me, let me promise you that they're not going to suddenly start calling you just because you got an mba.

[Dr. John Deloney]

And there's a weird moment where the NBA might be a liability because they don't want to pay somebody an MBA salary who doesn't have the experience that that NBA salary would require. Does that make sense? You might find yourself. You might find yourself in a leadership gap.

[Dave Ramsey]

Yeah. So, yeah, we got to get. We got to get your career moving, kiddo. That's the issue.

[Dr. John Deloney]

What challenges have you had?

[Caller]

I think the main challenge is just that my. I have to work from home because I have no help with my son. Oh, and that's what's a major?

[Dave Ramsey]

Yeah. That's an issue. Yeah.

[Dr. John Deloney]

What about child care? Is that not something you want to do?

[Caller]

It's not something I necessarily want to do. I did recently try it. My son had a hard time adjusting. Plus, it's just so expensive.

[Dave Ramsey]

Yeah.

[Caller]

And with just my income, it's just hard to make it.

[Dave Ramsey]

Yeah. I mean, if you suddenly start making $80,000 a year and you put him in daycare, this whole thing changes and he's going to adjust.

[Caller]

Right, right.

[Dave Ramsey]

Kids do every day.

[Dr. John Deloney]

And there will be a tough adjustment period. He's been with you every day since he was born and there will be a tough adjustment period.

[Dave Ramsey]

But yeah, I think, I think the.

[Caller]

Problem is I'm not sure where to go from here because I, I probably have applied to 3,000 jobs. I'm being honest.

[Dave Ramsey]

Yeah, that's what I was thinking. Yeah. So here's the thing. Applying for jobs never works. You can't get jobs that way. And I'm going to walk you through what to do and we're going to give you some help on that part. But part of the problem was, is you demanded to work from home and be a full time mom while people were paying you for working and they didn't want to do that. And I'm not shocked by that. I wouldn't hire you either under those circumstances. Okay. Because I know what you're doing. You're changing diapers, you're not working. That's the employer's viewpoint. Okay? Work from home. Productivity sucks. Corporate America and people that hire people know that, including me. Okay? And so this idea that you get a full day's work out of somebody when they work from home, no one is under the illusion that's happening. And it's all in the name of work, life balance and I want to be with my child. All of that's great. You just got to decide some options here. So if you want to work from home, you are limiting the quality and the number of positions you can get. Making 70, 80, $100,000 a year by 90%. Okay? So you can't. This is not an option for you in this situation. You have too many competing goals. I want to be home full time with the kid and I want to make a lot of money. These are competing goals. And so I don't blame you for that. Those are all legitimate feelings and legitimate goals. But as you said, I'm a single mom and so I'm boxed in this corner. So there's a period of time here that we're going to pay a price to get this family, this little tiny two person family, stabilized and sustainable. Now back to the other thing. The practical parts of looking for a job. The we have, we hired at Ramsey with 1100 team members. Last year we hired just under 200 people. Okay? We had 15,000 applications. That's what you, that's what you're putting your name in. It's known as a needle in a haystack. Okay? So you don't get through to good positions simply by filling out things on LinkedIn and on whatever other automated resume posting process you're using is to get 3,000 applications in. 3,000 applications tells me you had absolutely no contact. You just filled out the stuff and went. And it went right in there. And no one, it's one of the 15,000 that came in here and we only hired 200.

[Dr. John Deloney]

But I'll also tell you, every person, when I've called HR and said, I know this person, Steve, or I know this person, Susan, and she's applying for a job here, 100% of them have gotten an interview.

[Dave Ramsey]

Not all of them get hired.

[Dr. John Deloney]

They don't all get hired, but they, at least they put them through the stack.

[Dave Ramsey]

So you got to know someone or know someone that knows someone that knows someone, that says, hey, my friend's friend Brooke is solid. She's finishing up her mba. She put in an app over there the other day. Would you guys at least give her a look? And you got to work the phones that way, you got to work the emails that way. And it could be somebody down the street, it'd be somebody your granny plays bridge with. Their grandkid works over there. I don't care. But some connection. And doesn't have to necessarily be a professional connection. It's just, you know, my wife, the other day, a lady that she was playing bridge with a lady, the grandkid applied here at Ramsey. So then the grandkid gets a look. I don't think we hired that one, but they get a look. And they wouldn't have got a look otherwise. And you're not getting a look. That's the problem. So Ken Coleman calls this the proximity principle. To get in proximity of the people doing what you want to do. What field are you wanting to go into other than it?

[Caller]

I mean, I mainly look at positions for software developers, but again, it's.

[Dave Ramsey]

Are you, are you, are you. You have the ability to write code?

[Caller]

Yeah, yeah, I do.

[Dave Ramsey]

Current code.

[Caller]

Maybe not up to date. I mean I definitely could learn it if it was something that they would, you know, give me the ability to do.

[Dave Ramsey]

Yeah. Okay. All right. Well, your information systems, your four year degree would give you the ability to do more than just write code and your code. If you're going to be, if you're going to simp, crunch code, you're going to have to really be cutting edge on that to get that position. So anyway, I'm going to put you on hold. We're going to send you Ken Coleman's Book proximity principle. I'm also going to send you a book called finding the work you're wired to do. But my advice to you would be to decide what it is that's most important and become comfortable with the discomfort of that decision. Okay, if it's most important that I go make 80 to $100,000 a year moving towards my MBA, otherwise, there's no point in getting this MBA. You're just collecting degrees. You're not a thermometer. Okay? So you just keep going along, going along, going along. And so decide where it is I'm going to go, and then what I've got. Earl Nightingale used to say that the impediments to success are not what you're willing to do to get there, it's what you're willing to give up to get there. And so if I'm going to be out in my own apartment and we're going to have a sustainable income, it's not making $20 at Target to grow our life together with this baby. It's gonna involve some daycare and it's gonna involve being at the workplace or.

[Dr. John Deloney]

The other trade off is you're gonna be.

[Dave Ramsey]

You're gonna be at Nana's.

[Dr. John Deloney]

I'm at Nana's for seven more months until this little one goes to preschool, and then I'll make that move. But it's all gonna come with a choice. And I think, Dave, the challenge that people in her demographic, they went and got the degree everybody told them to get. And they said at the college, you're gonna make this much money when you graduate. And people thought a, that means I can live wherever I want to have this stuff. All right? When I walk out the door. And you've got a third challenge, which is you're a single mom.

[Dave Ramsey]

I want to be at home.

[Dr. John Deloney]

And so you're going to have to make some sacrifices short term and really get on the phone. Start calling everybody you know and every friend of everyone you know. And that's going to be your way in the door right now.

[Dave Ramsey]

And their friends. Yeah. And get, get somebody to pull your application out of that needle in a haystack. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 42,000 businesses have future proofed themselves with Netsuite by Oracle, the number one AI cloud enterprise resource planning system. Ramsey Solutions uses NetSuite and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities with one unified business management suite. There's one source of truth for the visibility and control you need to make quick decisions. NetSuite's real time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you spend less time looking backward and more time focusing on what's next. And speaking of what's Next, download the CFO's guide to AI and machine learning at netsuite.com Ramsey it's free at netsuite.com Ramsey David is in Pennsylvania. Hi David, how are you?

[Caller]

Good afternoon. Fine. How are you guys?

[Dave Ramsey]

Better than I deserve. How can we help?

[Caller]

Hey, just wanted to call in. A company is switching a little bit of staffing model. Currently we have company cars and company paid gas cards affiliated with that. We're going to switch that over and I have to turn that in by the end of the calendar year here. We're going to get a tax free stipend and mileage pay from the company going forward into next year. So I just wanted to talk through that with you guys and see what some of the best ideas would be. Some of the guys I work with are talking about leasing or getting something brand new. My wife and I, we've been on your program for a while, so we know where you stand with taking loans out on cars. We haven't had a car payment since 2018.

[Dave Ramsey]

Good.

[Caller]

So we're in there. I just feel a little.

[Dave Ramsey]

Number one. It's obvious and we'll just say it out loud to make sure everyone knows the reason the company is doing this is it saves them money. Translation is going to cost you money. Okay. The net, net net effect of this whole thing is you're gonna. It's a pay cut. Okay? So because by the time you operate a vehicle, the stipend doesn't cover it. They know that or they wouldn't be doing this. And so there's no other reason to do this. And that's why they're doing it. But that's, that's neither here nor there. It's still happening and that's where we are. Does the. How many miles a year do you drive?

[Caller]

I'm pretty fortunate, you know. I would say 15,000.

[Dave Ramsey]

Oh, so you're not, you're not, you're not a road warrior then? Okay, good.

[Caller]

No.

[Dave Ramsey]

So they're going to give you the stipend whether you have a car payment or not, right?

[Caller]

Yes.

[Dave Ramsey]

Do they have guidelines on the, on the age of the vehicle or anything?

[Caller]

Yes, it can, it cannot be, it's got to be less than eight years old.

[Dave Ramsey]

Okay, cool. All right. Do you have any money?

[Caller]

Yes.

[Dave Ramsey]

Okay, so go buy a car. Wait a minute. Oh, you don't have a car because you're only running. You don't have a second car now, right? You already.

[Caller]

We, we do. We have two other cars, but the one my wife uses to run around with the kids. The other car I have is 12 years old. And.

[Dave Ramsey]

Okay, take some money in the 12 year old car and upgrade to a 5 year old car with cash and then take the stipend.

[Caller]

Okay. No, no payments, just pay, just pay myself back. I love the stipend then.

[Dave Ramsey]

Yeah, yeah. Because here's the thing. If something happens, God forbid, and the company goes broke or they lay you off or fire you, or you decide that they're unethical and you have to walk out one day, you still got a car payment.

[Caller]

Yeah.

[Dr. John Deloney]

Or here's what's going to happen. They start by not letting people go and they get rid of this pro. They get rid of the, everyone gets a car program to a stipend program. The next cut they make, they're going to couch it as. We didn't have to lay anybody off, but we had to make some sacrifices and it's going to be the removal of the car stipend. That's what's going to happen.

[Dave Ramsey]

But you're, but you got the car payment independent of whatever they do. And so you don't take a car payment. No. And you know, I think you probably upgrade your car a little bit anyway. If you got the cash to do it, put a little bit with a 12 year old car and get a 5 year old or car or whatever and then collect that money, put it in your pocket, get your mileage, put it in your pocket and know that the good news is with you because you're not driving any miles, you're just driving back forth to work. I mean, 15,000 is nothing. So a little bit more than that. But I mean that's not like high miles. Road warriors are putting 40, 50,000 miles on a car. So the good news is with you, I might be wrong. You might actually net out on this.

[Dr. John Deloney]

It could be, yeah.

[Dave Ramsey]

The more miles you put on it, the worse this is going to be for the other people in the company. They're going to lose their butts.

[Dr. John Deloney]

I give this program 18 months. I'm willing to bet that this is a phase out of we're taking care of our employees vehicles and this is a way they're going to phase this.

[Dave Ramsey]

Out even if it's not a planned phase out. You know, 36 months from now you got a new CFO and they're looking at the whole thing again. We're trying to beat stock price and whatever the thing is, whatever it is, I don't know, we can let go. It doesn't have to necessarily be with malice or forethought or evil, but it's just corporate America. They're gonna look out for one thing and it ain't you. But either way, yeah. Take the stipend and put the money in your pocket and upgrade with cash.

[Dr. John Deloney]

And don't count on it. Don't start budgeting it. I mean, I mean, I mean budget it, but don't start pretending it's forever.

[Dave Ramsey]

And which is what people do when they take a car payment.

[Dr. John Deloney]

Exactly.

[Dave Ramsey]

Right. Well, come to gives me 4, $500 and that means I need to go get a $550 car payment, right? Nope, that's not what it means. Mary's in Louisiana. Hi, Mary.

[Caller]

Hi. Thank you for taking my call.

[Dave Ramsey]

Sure. How can we help?

[Caller]

I am wondering if it is a wise decision to be paying for life.

Insurance on my mom to protect myself.

Financially from my parents financial irresponsibility when she passes away.

[Dave Ramsey]

You're not responsible for their irresponsibility when she passes away.

[Caller]

Right. And. And that is what my husband is recently been trying to.

[Dave Ramsey]

Not only morally but legally or not.

[Caller]

Okay.

[Dave Ramsey]

So if your mom, your mom, if your mom. Tell me about your mom's situation. How much, how much debt does she have?

[Caller]

It's got to be over $100,000.

[Dave Ramsey]

Okay. Do they own anything?

[Caller]

Not outright, no.

[Dave Ramsey]

But I mean do they like have a house?

[Caller]

Yes.

[Dave Ramsey]

They have cars with car payments.

[Caller]

They still, they have no car payments. They still owe on their house.

My mom is 66, my dad is 61.

[Dave Ramsey]

So if you were to guess, if you added up all of their debts, do they even have own enough to cover their debts? No.

[Caller]

No.

[Dave Ramsey]

Okay. That's called a negative net worth. Right?

[Caller]

Yeah.

[Dave Ramsey]

And so what happens when someone passes away? When you die, what you own stands good for what you owe.

[Caller]

Okay.

[Dave Ramsey]

There's no generational debt in America.

[Caller]

It doesn't get passed down to me.

[Dave Ramsey]

Zero.

[Caller]

The other half of the reason on why I did it is because.

My.

If my dad passes away first, my mom is going to be okay. And then I guess with what you just explained, I wouldn't inherit any of the debt. I would just have to clean up.

The mess and close it out.

[Dave Ramsey]

Oh, yeah, you just send them all a death certificate with a letter that.

[Caller]

Says you're screwed, and they'll go away. Okay.

[Dr. John Deloney]

They may have to sell this home. If you had your eyes on this house.

[Dave Ramsey]

Yeah. You don't get to keep anything of theirs.

[Dr. John Deloney]

They're going to sell the house.

[Caller]

I'm not expecting anything at this point.

[Dave Ramsey]

Okay. But if you wanted to keep the house, now you got to go clean up the mess because the house is standing good for the debt, even if it's not a direct lien on the house. What you own down one column versus what you owe down the other column. Assets minus liabilities. That's how it stacks out. And you have to sell all the assets to pay all the liabilities. If there's anything left, it's called an inheritance. If there's nothing left, then it's in the whole. The bank is screwed. They shouldn't loan these people money. They get what they deserve.

[Dr. John Deloney]

Mary, I'm going to ask Dave a question on your behalf. Okay, so, Dave, let's say there's a house worth 350 grand. It's got 100,000 bucks left on the. On the mortgage. So it's 250 in equity. And this family owes $270,000 in 401k loans and whatever. Who is responsible for selling the house? And you have to. Would she as the. As the trustee or the beneficiary or the person, the executive of the will, Would she have to sell the. And then disperse the equity of that house, or does she just hand the keys over and say, merry Christmas, y'? All, Duke it out.

[Dave Ramsey]

You could do either one. Even if you're the executor, you could do either one. You could just say, I choose not to invest a year of my life to get you people all paid, and I get nothing.

[Dr. John Deloney]

So the credit card companies and the car dealerships would have to sue. They would have mortgage company, or they'd.

[Dave Ramsey]

Have to put liens on the house. And then after the foreclosure, if there was anything left on the house, then they would get that. But yeah, it just depends on how much trouble you want to go to. Okay. And how much of your life you want to invest in. Quote, sweeping up the mess after the garage sale, but you're not obligated to. So a simple one Is I had one the other day that was a friend of a friend and the guy died with like 14 credit cards and he was in an apartment and he had nothing. So that's a simple one. Right. You really did just send them a copy of the death certificate and a note that says you're screwed. And those credit card companies got what they deserve, which is nothing because they shouldn't have been loaning that guy money. Right. He's a pauper. And so they, you know, that, that's an easy one to clean up, doesn't take much time and you know, don't call me.

[Dr. John Deloney]

And they're probably going to try to chase down their money, call you, threaten.

[Dave Ramsey]

You, whatever, just jump in the creek. I don't know you anything. Yeah, yeah, I didn't. You ain't got my signature, buddy. Yeah. So that's the deal and that's that. But, but much better thing would be if you could get mom and dad to actually work on this. I know you probably tried, hun. Wow, that's so sad. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something.

[Dr. John Deloney]

Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

[Dave Ramsey]

That's a gut punch.

[Dr. John Deloney]

And. Oh, you're telling me. And for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them.

[Dave Ramsey]

Me too.

[Dr. John Deloney]

They don't know what to do next.

[Dave Ramsey]

Me too. I mean, you're gonna have a crisis here and you know, you got two options. While you're sitting and talking to a young widow, she's concerned about how she's gonna invest all this money properly and not mess this up. Or she's concerned how she's gonna eat tomorrow.

[Dr. John Deloney]

That's exactly.

[Dave Ramsey]

These are the two options. And turn your dadgum family.

[Dr. John Deloney]

Term life insurance can replace income, pay off debts, cover funeral expenses. So your family can actually have the opportunity to just be sad. Yeah, to just miss you.

[Dave Ramsey]

That's exactly what it's supposed to be. It's saying I love you to your family. Term life insurance, Jeff Zander and the team at Zander makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Xander.com or call 800-356-4282. If you died tomorrow, how would your family keep up with a mortgage and pay groceries and feed the kiddos? And if anyone in your life depends on your income, you need life insurance. That's just basic adult responsibility. How do you choose from all the options out there? Well, we have told people for 30 plus years the only thing to do is just buy term life insurance. It's very inexpensive, 15 to 20 year level term, 10 to 12 times your income. So if you make $50,000 a year, you need 500 to 600,000. That's simple. And it's really not that expensive. If you're in your 20s and 30s, it's about the cost of a pizza and so you got to take care of your family. If you want to know more about this, just go to the Term Life Insurance Guide. It's free. You can get [e-mail] term lifeguide or click the link in the description and we'll take you straight there. John is in Arizona. Hey, John, how are you?

[Caller]

Hey, John.

Or hey, sorry.

Hey, Dr. John and Dave.

[Dr. John Deloney]

Oh, you can call me John. That's what my mama calls me. That's perfect. What's up?

[Caller]

Thanks for taking some time.

Hey. So we just a family. We just finished building a home. We moved in last month. During the construction, we were able to cash flow a good amount. And the remaining mortgage is $600,000. We're still working to sell our old home. It's paid for. We should be getting around $500,000 from that sale. We have about $880,000 between investments and retirement and 100,000 in cash that has our emergency fund and some inmark funds to landscape our new home. The question is, with the 500,000 from the sale of the old home, I'm kind of wrestling with not wanting my network to be so top heavy with home equity versus investments, which is what it would be if I put it all towards that mortgage. Just wanted to get your advice.

[Dave Ramsey]

What's your household income?

[Caller]

It's right around between 300 and 400, depending on the year.

[Dave Ramsey]

Okay, good. Way to go. And what's your, what's the new home worth?

[Caller]

Total? We cash flow at about a million, so It'd be about 1.6.

[Dave Ramsey]

Okay. All right. Yeah. You know, your house is a high percentage of your net worth and you're not going to get away from that. You made that decision when you decided to build a $1.6 million house.

[Caller]

Kind of got away from us there.

[Dave Ramsey]

Yeah, that doesn't change. Scope creep is what got you. It wasn't the, it really isn't. The, the net worth situation doesn't change if you just. Cause you're high. You can't hide from it now by not paying off the mortgage. It doesn't accomplish what you're trying to accomplish. So what I would do is, you know, I'd get that mortgage paid off as quick as I could. You got 500 to throw at 600 when the other house sells. And then I'm going to take a chunk of my other money and knock out that last hundred. Might use some of that emergency fund instead of putting the bushes in for right now, let's get the stinking thing paid off and I'm going to get it paid and then I'm going to start moving in that direction. So what we've discovered, to answer your overall question philosophically, so to speak, not really philosophically, but practically. That's your tactical answer that I just gave you. Now strategically, your answer is this, that's a better way of saying this. As we were working with wealthy people, what we find is the larger their net worth, the smaller the percentage of their net worth is on personal things. Home, cars, vacation homes, toys, whatever. The smaller your net worth, the higher the percentage is on your home. So for instance, if your net worth is a half a million dollars and you had 300,000 of the half a million in a paid for house, that's not disturbing. That would be fairly normal. But that's about your ratios. And you're sitting there with about a four million dollar net worth. Three and a half. Right. And you got half your net worth right now sitting in your house. So that's starting to be disturbing. It's not anything to panic about. But we're not buying any more personal crap on the net worth column side for a while. You just did it. You're house poor. Not technically house poor, but you see what I'm saying? You need to get the balance back, rebalance your net worth. Because by dumping everything into other investments that are non personal investments over the next whatever number of years to where when we look up in a few years, you have a $10 million net worth and of that the house has doubled and it's 3 million now, that starts to be pretty comfortable. But like I talked to a guy the other day that, you know, we were looking at his numbers, he's got $100 million net worth and a $10 million house. So his house, only 10% of his net worth at that. And yours is over 50%. So that's the. But again, that follows with the line of thinking of the higher your net worth, the smaller the percentage of your net worth is going to be in personal home, cars, vacation homes, toys, so on. And so, you know, you take a billionaire and They've got an $8 million jet and the billionaire has a couple of homes, they still, it doesn't add up to even 6% of their net worth in personal consumption. And so that again, validates the concept of the higher the net worth, the smaller the percentage. But yours is as high as your net worth is. I don't disagree with you, John. It's a little bit unnerving to be there, but being in debt doesn't change it.

[Dr. John Deloney]

Well, and you called it out. This call should have happened before we decided what size house we were going to build. You've already committed it.

[Dave Ramsey]

Cows out of the barn.

[Dr. John Deloney]

I want to, but I want to take that risk off of my risk profile and pay that sucker off.

[Dave Ramsey]

Yeah, that, that helps. It helps situation.

[Dr. John Deloney]

It does.

[Dave Ramsey]

Helps the sleep at night factor.

[Caller]

Right?

[Dave Ramsey]

That's right. Just get it paid off and then let's just. Okay. We have made our personal consumption pledge for the next six years.

[Dr. John Deloney]

That's it.

[Dave Ramsey]

And we're sleeping in it.

[Dr. John Deloney]

And in reality, that means we're going to be aggressive. We're going to put 15 in these mutual funds. Are we going to up a little bit?

[Dave Ramsey]

Yeah, we're going to up it because everything's paid off here. Baby step seven. So we're going to start doing investments out here big time. And there's not gonna be more, much more personal. So if you go to the beach and your friend has a nice condo at the beach, you can't have one.

[Caller]

Right.

[Dr. John Deloney]

Because you instead of buying a $700,000 house and a beach condo. Beach condo, your beach.

[Dave Ramsey]

Put some sand in the bedroom. Yeah, I mean, that's, that's what we're doing here. This is, that's where you are now. So you just. Little beach there in the set in the master. In the second master suite of the 1.6 million. Yeah. So. Yeah, that, that's. No, no more mama, you know, Mama wants a Bentley. No, mama ain't getting a Bentley. It's not happening here.

[Dr. John Deloney]

We got a 12 million dollar house. And here's the beautiful thing. You make 300, $400,000, you clean it up real fast.

[Dave Ramsey]

This is two or three years it's more of a. It's more of a. It's not a you're stupid discussion or you've done something extremely dumb discussion. It's just like, I'm with you, John. I'm a little nervous about it. And I would, based on that, start making the moves to not be nervous. First one, pay off the debt. Second one, redistribute most of your investing away from personal issues for the next five, six years. And then you'll get it balanced back again. You'll be okay. Cool. Victoria is in Columbus, Ohio. Hi, Victoria. How are you?

[Caller]

Hi, guys. I've had better years.

[Dave Ramsey]

Oh, how can we help?

[Caller]

I'm calling because. Sorry, I promised myself I wasn't going to get them all, but. But I feel like my life at the stake.

[Dave Ramsey]

It's okay, Dawn.

[Caller]

I really don't know. I really don't know what to do. We have a business. It's. It's a trucking company. My husband is one of the drivers, and we currently have another one.

[Dave Ramsey]

Two trucks. You're running in the trucking company?

[Caller]

Correct.

[Dave Ramsey]

Okay.

[Caller]

We had more, but we've had really bad luck with drivers that really did some bad things for us. So we are selling some things to try and liquidate the assets, pay off some of the debt. But essentially, we're probably about $400,000 in debt.

[Dave Ramsey]

How much of that is the two trucks?

[Caller]

One of the trucks we own outright. The other truck we still owe probably about $75,000 on.

[Dave Ramsey]

And what is the truck, the truck you own outright worth?

[Caller]

It's probably worth about 100,000.

[Dave Ramsey]

And what about the other one that you owe 75 on?

[Caller]

It's probably worth about 40.

[Dave Ramsey]

Okay, so that's 140 of the 400 in debt if you sold both those and went and got a job.

[Caller]

Correct.

[Dave Ramsey]

Okay, I'm just catching up. All right. Now what do you own? A home?

[Caller]

We. We actually own three. So we have three mortgages and all three of them are rented.

[Dave Ramsey]

Do they. Any of them have any equity?

[Caller]

One of them has equity. How much we owe? We owe 267 on it, and it's probably worth about 450,000.

[Dr. John Deloney]

Charlotte Today put it up on the market today.

[Caller]

Okay.

[Dave Ramsey]

So. Okay, I'm a little short on time. I'm a little short on time. I'm going to give you a Ramsey coach as my gift to sit down with you. Okay. But you call me up emotional and thinking you're bankrupt, and when I sell everything, which is what's going to happen in a bankruptcy I don't think you're bankrupt, but you're going to have to turn loose to some things. You can't hold on. You can't be the monkey with the hand in the bottle holding on to the jelly beans because you can't get away from the bottle. You got to let go of the jelly beans, pull your hand out of the bottle and that's how it works. I think you can get out though. I wish I had more time with you. I'm sorry. Hang on. We'll get you some help though, kiddo. If you ever googled yourself, here's the two worst things you can photo evidence of your worst haircut and your personal data floating around on some sketchy website. I mean the bangs were regrettable, but your info being bought, sold and reposted all over the world wide web even worse. And trust me, it happens all the time. And that's why I use Delete me. You guys, over 20 billion records have been leaked in recent years and that info gets pulled into these people search sites. So stuff like your name, number, address, even your kids names is out there for anyone to see. But if you're trying to clean up your personal data yourself, good luck. It can be a part time job just submitting these opt out requests. So if you don't want your personal info out there, you should be using Delete me too. Delete Me has real people who track down your data, remove it from these shady sites and make sure it stays removed. Plus you get a report from Deleteme showing exactly what was found and what's been deleted. So take back your privacy with Delete Me right now. Ramsey listeners get 20% [e-mail] Ramsey with code Ramsey at checkout. So do that today. Joindeleteme.com Ramsey CodyRamsey welcome back to the Ramsey Show. In the Fair Winds credit union studio. Dr. John Deloney Ramsey, personality number one, best selling author, PhD in counseling is my co host today. Todd is with us in Texas. Hey Todd, how are you?

[Caller]

Hey guys. I had a question about. I'm gonna be 59 and a half in about six more months. I just had a birthday and my Roth IRA at my work. I'll be able to cash that out without any kind of penalties. And it's the one where you pay your taxes in advance so I'll be able to get the whole amount out.

[Dave Ramsey]

Yeah, I know about.

[Caller]

And we own a small. Yeah, we want us. We want a build a small, excuse me, a cabin. And it looks like I'm Going to have about $140,000 to work with. And we've talked to a couple of builders and we can get about 900 to 1,000 square foot place built for that. My question is, would it be more prudent to pull that cash out because it will take all of it and go ahead and build the cabin and be debt free as far as any kind of a mortgage, or would it be more prudent to borrow the money and leave that in there? Because I think it's getting to the point where the compound interest is really starting to build over the years.

[Dave Ramsey]

Honey, that's not how compound interest works.

[Caller]

Is it not?

[Dave Ramsey]

No. Compound interest does not, like, get a running start. You just make interest on whatever's there. And over time, you make interest on whatever's there. And whatever is there is larger over time, but it's not. It doesn't mathematically get a running start. So do you have any other money?

[Caller]

I have. I have a little bit. I have about 8,000 in my savings account.

[Dave Ramsey]

What about your wife? Are you married?

[Caller]

Yes, and my wife probably has four or five. And then we have a household account that we have about. Probably another four or five.

[Dave Ramsey]

Because you're 59. You quit work, you're gonna retire.

[Caller]

Oh, no, no.

[Dave Ramsey]

And you're gonna be broke.

[Caller]

I'm not going to retire.

[Dave Ramsey]

You can't take your money out of a 401k unless you were. Unless you don't work there anymore.

[Caller]

That's not what they told me. This is a tsp and I work for the federal government.

[Dave Ramsey]

All right?

[Caller]

And now they told me.

[Dave Ramsey]

Okay, let me tell you what you just did. You have absolutely no investments now.

[Caller]

No, I would not. But I was. We would both still be working.

[Dave Ramsey]

Yeah. How's that make it smart?

[Caller]

Well, I mean, that's why I'm calling you, buddy. That's why I'm looking for an answer, my friend.

[Dave Ramsey]

The answer. You're not gonna do my answer. Okay. My answer is you can't afford a cabin.

[Caller]

Oh, really?

[Dave Ramsey]

You don't have enough money.

[Caller]

So you.

[Dave Ramsey]

Told you weren't gonna do it.

[Caller]

Now, that's not my only. You know, I do have. You know, I'll have the Social Security, and I have a Fers retirement account with the government.

[Dave Ramsey]

I know.

[Caller]

Are you familiar with those?

[Dave Ramsey]

Yeah, I am very. Yeah, the. But. But I mean, dude, you have no money and a cabin.

[Caller]

Yeah.

[Dave Ramsey]

That's just. There's no way that this makes sense.

[Caller]

The reason I'm. If. See, here's the thing. If I wait until I'm 70 years old to when I can retire and then I build a cabin. What good is a cabin gonna do me? I'm gonna be 70 years old.

[Dave Ramsey]

Well, you won't have to eat the logs.

[Caller]

Well, my, my thought was go ahead and you know, we have a home. We'll, we'll build the cabin and in a year or so, if it's looking like it's not working out, I could either sell our home, our primary residence, and move to the cabin, or I could sell the cabin. You know, I guess what I'm saying is.

[Dr. John Deloney]

What'S the thing beneath the thing?

[Dave Ramsey]

You've wanted a cabin a long, long time and you haven't saved up enough money to buy a cabin.

[Caller]

Well, it would be in the TSP account.

[Dave Ramsey]

I know you haven't saved up enough money to buy a cabin because you're going to have to retire broke with a cabin. And that just doesn't, I can't tell you to do that. I like you too much to tell you to do something that's going to bring you harm. So, and this is harmful to you, you're, you've, in your mind, you're not worried about having no money and a cabin. I'm really worried about you having too.

[Dr. John Deloney]

Many calls from 65 and 68 and 72 year olds.

[Dave Ramsey]

And so, you know, if you want to go stay in a cabin, rent one for the weekend and keep your money in your investments and you know, you have not saved enough money, you've not done a good enough job with your investments to be able to afford to have a second home. And you just don't have the money. I mean, it's like call me up and going, dave, I want to buy a $2 million yacht and I've always wanted one. Well, you don't have the money. I'm sorry if you always wanted one and it breaks my heart, you can't get your two million dollar yacht, but you don't have two million dollars to buy a yacht. It's the same thing. You don't have the money to do this. You think you've got the money, but when you go do this and you use up all your money, you're going to be living on social insecurity. Broke with a cabin. And that's just, I'm sorry, I can't tell you to do that because I like you too much. I think you're a good guy. You're gonna do it anyway because you've got it all figured out. But I can't stop You. But you did call and ask. And so I'm duty bound to tell you the truth, because I care about you.

[Dr. John Deloney]

I. I'm kind of speechless, Dave. And that's a rare moment for me. Well, I get really rarely wanting something. But the thought of relying on the government 20 years from now, like, nah, they'll get. They'll take care of me. They'll write that check. That seems infinitely more foolish than. I don't know. Yeah. I can't wrap my head around it. Doesn't make any sense to me.

[Dave Ramsey]

Yeah. And here's an interesting thing, folks. Everybody. Everyone falls for this. And I have in the past, too, and some of you do are doing it right now that if you borrow the money, it's as if there's no. Like, I haven't. Like, that doesn't count.

[Dr. John Deloney]

I still got my money in my account.

[Dave Ramsey]

I still got my money. Right. Because I borrowed the money. It's like, it allows you to be in denial.

[Dr. John Deloney]

Yes.

[Dave Ramsey]

You're participating in denial when you borrow money because you're not admitting that you don't have the money when you borrow money.

[Caller]

There you go.

[Dave Ramsey]

Okay. I bought this car that I didn't have the money to buy. I didn't have the money to buy the car, but I bought the car anyway because I'm in denial about the fact that I don't have the money. And I wanted the car anyway. And so. And I work really hard.

[Dr. John Deloney]

There's that old saying. Whatever you go looking for in the world, you're going to find it. If you really want a cabin, you're going to figure out a way that this somehow makes sense to you, which is why it's good to have wise counsel. But wise counsel doesn't do you any good if you don't listen to wise counsel. So I guess my promise to you, brother, is buy the cabin. I'll be here in 10 years, and you can call me when you're trying to figure out what you got to sell. And I'll help you with that. But we'll be talking again. Yeah, I just. I can't wrap my head around that. And by the way, I really, really want a hunting place with a big cabin on it. I really do. With all my heart, I want that. I just don't have the money for it right now and.

[Dave Ramsey]

No, you really do. Personally. You're not kidding.

[Dr. John Deloney]

I personally, really, really want that.

[Dave Ramsey]

So if he. If he builds it and gets in trouble, would you buy it from him?

[Dr. John Deloney]

It depends on what county it's in. How Many deer it's got on it. But yeah, I'm happy to.

[Dave Ramsey]

I got a feeling there's some deer around it. He's in Texas. Oh man. The proverb says that the wise seize trouble and takes refuge. The simple moves forward anyway and is punished for it. If your phone bill is more than $25 a month, either you're okay setting money on fire or you're just not paying attention. That's because the big three mobile providers have hidden fees and so called customer service that ignores you when things go wrong. Boost Mobile is different. Boost gives you unlimited talk, text and data for just $25 a month. That's it. No games, no junk fees, no oops, your price just went up. And they've got a 30 day money back guarantee just in case you decide you love paying way more somewhere else. So switch [e-mail] Ramsey restrictions apply. See boostmobile.com Ramsey for details. The Ramsey show question of the day is brought to you by WireFi. You may think no one can help with your defense defaulted private student loans, but why refi is different. They work with borrowers in tough spots without judgment. Check them [e-mail] Ramsey that's the letter y r e f y.com Ramsey not in all states.

[Dr. John Deloney]

Today's question comes from Andrea in Ohio. Andrea writes, my partner and I have been together for over 25 years and we have four children together. I've been asking him to marry me since we had our first child. He recently stated that we can get married if I sign a prenup. He had nothing at the start of our relationship and his business has grown significantly. He has over 300 employees and his net worth is in the millions. I gave up my career 20 years ago to raise our children. We are financially well off and he has taken very good care of the children and me. Dave is so sick. I don't want to finish this. Is he wrong to ask for a prenup? I love him but wonder if I should just let go the idea of marriage. I don't really, I don't really know how I can help you. I think you let go of the idea of marriage 25 years ago and you start having kids.

[Dave Ramsey]

And Andrea, you made a really terrible bargain.

[Dr. John Deloney]

Yeah.

[Dave Ramsey]

You gave up everything and he gave up nothing. He raised his kids and help him build a business and he owns it. You made a terrible bargain 25 years ago.

[Dr. John Deloney]

This breaks my heart, man.

[Dave Ramsey]

And you know, the, the, the ship has sailed. I mean there's I, you know, by the way he. Here's another. I mean, I'd call his bluff, but I don't think you will because I think this guy's a jerk. Yeah.

[Dr. John Deloney]

And I think the reality that you feel very, very exposed, you felt exposed for 25 years.

[Dave Ramsey]

It's because you've been exposed.

[Dr. John Deloney]

You've been exposed. I also think if this was to go to court, I think you would have some claim to a lot of this stuff. But it's going to be a mess.

[Dave Ramsey]

An absolute idea what Ohio law is on this kind of stuff. You certainly got child support coming out your ears.

[Dr. John Deloney]

The thing beneath the thing here.

[Dave Ramsey]

You're not gonna do anything. I can tell. No, you're so codependent, it's unbelievable.

[Dr. John Deloney]

And he's such a jerk. He wouldn't. He's such a man who lacks any sort of integrity in any way, shape, form, or fashion that the thought of even taking care of his common law wife of a quarter decade and the mother of his four kids, he's thinking of his net worth protecting.

[Dave Ramsey]

His answer is, all this money I made while I was sleeping with you, it's all mine.

[Dr. John Deloney]

It's mine. I mean, I wouldn't want to be in the same room with that guy personally.

[Dave Ramsey]

Yeah, he's slimy.

[Dr. John Deloney]

Yeah, he's a terrible human being. But here we are. My guess is you've got Dave. My guess is she's got bigger issues, and she's either unsafe. He either has people on the side. She is recognizing how completely exposed she is, and I think she needs to go see a professional counselor. But she also probably needs to sit down with an attorney, because I think this type of question tells me this is just. Just what's right above the waterline tip of the ice. There's a big mess underneath this.

[Dave Ramsey]

Yeah, that's true. This is so. So you know what it is, though? I can't help Andrea. But you know what we can do? We can read that. We can read the email. And here's. Here's the point, all right? You're 24 years old and your boyfriend wants to move in together. I hope you read this email and realize how stupid that is. I mean, that's just.

[Dr. John Deloney]

Just how unsafe it is, how unsafe.

[Dave Ramsey]

It is and how exposed you are. It's just straight up stupid. And I hope some of you get pissed off about me saying this. I hope you say, I'll never listen to Dave Ramsey again, because some of the most smart things I ever did in my life is when somebody made me mad. And I'm Trying to make some of you mad right now because this is. If you're 24 and you have a 24 year old daughter and her boyfriend wants to move in with her, you need to grab both of them up and box her stupid butt little ears. Because this is what it sets up. That's what it sets up. And we've got all the data, not just the feelings and the research to go with it. Here's some data for you. If you're 35 and you're married, your net worth is somewhere around 10x. If you're shacked up and you're 35, married men live seven to nine years longer than shacked up men. Hello, cancer survivors. A much higher percentage of people survive cancer than are married than those who are shacked up in a toxic soup bowl like this woman's in.

[Dr. John Deloney]

And we talk about this all the time, Dave.

[Dave Ramsey]

What if this woman gets cancer?

[Dr. John Deloney]

Exactly.

[Dave Ramsey]

This 300 million dollar business, he may.

[Dr. John Deloney]

Or may not want to help you out. And here's the thing, we talk about this a lot, Dave. Success and money makes you more of who you are. And if you're dating somebody who's a jerk to you and maybe you accidentally wind up pregnant and you say, okay, well, maybe down the road if this is, this is how this plays out, somebody becomes very successful. They were a jerk before they had anything. They were a jerk when you gave up your entire career and your safety.

[Dave Ramsey]

Why?

[Dr. John Deloney]

And then they become worth millions on your back and they stay. They get an extra humongous jerk.

[Dave Ramsey]

Yeah.

[Dr. John Deloney]

This is a mess.

[Dave Ramsey]

Love involves serving each other. Yeah. There's no love in this whole equation right here. This just burns my belly.

[Dr. John Deloney]

Yeah. It breaks my heart for, for Andrew. I'm sorry, man.

[Dave Ramsey]

You're just. You, you have made some really bad choices 25 years ago and now you are sitting in the poop. Poop. It's unbelievable. And yeah, I mean you, you don't have any options. Your option are stay in the poop or demand that we get married with no prenup or I'm leaving and taking the kids. Which is actually about the only healthy thing to do in this situation. Load up and leave.

[Dr. John Deloney]

You are with somebody who is more.

[Dave Ramsey]

Concerned about them than they are. You are the kids. And it hasn't been for days. For decades. For years. Yeah, for decades. If he was, he would have committed to you and you'd be taking care of you right now and you would have been taking care of him. You gave up. Wow. But, okay, so. But the point is this Sometimes some of you in your decision making frameworks, you think about Friday. Thank God it's Friday. How's it feel in the moment? Well, that's what a child does. Adults devise and plan and have a plan. Children do what feels good. Children move in together at 24. And it starts then. If you extrapolate that decision making paradigm, if you use your decision framework and say, okay, how's this going to work out 25 years from now? Well, Andrea just told you. And then that tells you if it's a good decision or not. It might be an okay decision by Friday. You might get away with stupidity between now and Friday. But when you extrapolate your decision making out with a long term decision, Horizon, Vision, horizon, then you end up with Andrea and you could tell the decision is a bad idea.

[Dr. John Deloney]

But this, I mean, this isn't just about the money and the kids. I guarantee, I guarantee this is an abusive relationship.

[Dave Ramsey]

Oh, I promise you this. It is abusive.

[Dr. John Deloney]

Just with what we financial, what we know.

[Dave Ramsey]

It's already abusive, but there's got to be more to it, right? Like you said, tip of the iceberg.

[Dr. John Deloney]

So, yeah, this guy Andrew, hear from us, man. You're not crazy.

[Dave Ramsey]

You're not crazy. I will bet you dollars to donuts he's got a couple on the side.

[Dr. John Deloney]

That's what I mean. At some point you got to go sit down with an attorney and walk through and figure out this mess.

[Dave Ramsey]

Yeah, but she's not going to. No, I love him.

[Dr. John Deloney]

Well, but also, I mean, also I want to.

[Dave Ramsey]

I mean, I don't be in an.

[Dr. John Deloney]

Abusive relationship, man, you can get trapped and it's, it's a scary proposition. Quarter century being told you're useless, you're worthless, you're nothing. Seeps into your, into your nervous system over time. And maybe this is her first reaching out saying, am I nuts?

[Dave Ramsey]

The answer is no, you're not nuts. You've done some stuff that's really damaging to yourself by allowing this to go on way too long. And our encouragement would be to stop it now.

[Dr. John Deloney]

Stop it now. You're worth more than this.

[Dave Ramsey]

I was gonna say, you know, tell him the only way you're sticking around is if you marry him. I don't think you marry him. I think you just let him go.

[Caller]

Go?

[Dave Ramsey]

Yeah, and take and take half his money.

[Dr. John Deloney]

I don't want to be married to a man who treats, who does this, a wife and, and I mean a woman and kids like this.

[Dave Ramsey]

I don't either, period. And I don't want you I don't. I. We like you and we don't want you to do that. We love you. We want you to win. So, yeah, I think, I think you're done. That's. But you're not going to do. We've told you for years, debt is dumb, cash is king and the borrower is slave to the lender. So when we find a bank that actually gets that, we shout it from the rooftops. That's why we've partnered with Fair Winds Credit Union. These guys aren't pushing credit cards or auto loans like your current bank is. Fairwinds is on your side. And now they've taken it to the next level. They worked with us to create a high yield savings account that gives you a great rate without the junk. No bait and switch rates, no credit score games. Just a simple, powerful way to help you build your emergency fund fast. It's part of what Fairwinds calls the smart bundle, made for Ramsey fans. You get high yield savings, a no fee checking account and zero gimmicks. Just common sense banking that works with the baby steps, not against them. And coming soon, they're launching a brand new Ramsey debit card. It says debt is normal. Be weird right on the front of it. That's not just a card. That's a daily reminder that you do money differently. So check them [e-mail] Ramsey Fairwinds is.

[Dr. John Deloney]

Federally insured by the NCUA.

[Dave Ramsey]

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. They're hosted by one of the Ramsey personalities and we're doing one every week. We're going to show you how to stick to a budget, find thousands of dollars worth of margin to get out of debt and start building wealth. Plus, you can ask us any question during the live Q and A. Sign up for [e-mail] webinar. Marie is in Denver. Hi Marie, how are you?

[Caller]

Hi. I am going to tell you my story. I am recently divorced. I'm 73 years old and I'm debt free and I have a total of $100,000 in a money market and I have to withdraw 1,000 or two each month for living expenses because my Social Security pays all but $100 for my one bedroom apartment and I do have a trustworthy car and it's fine, it's paid for and I don't, I haven't worked in a while but you know, maybe I can Get a part time job at some point. But my question is if I'm doing the right thing by just keeping all the money. I.

[Dr. John Deloney]

Oh, we just lost you, hon.

[Dave Ramsey]

Oh, no, I'm sorry, she just dropped. Yeah, Kelly, see if you can get her back and we'll catch back up because that lady needs some help. Yeah. Jordan is in Oregon. Hey, Jordan. How are you?

[Caller]

Good, Dave. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Thanks for taking my call.

[Dave Ramsey]

Sure.

[Caller]

Okay. My question is, we did a family deal mortgage before we found you. My wife and I are huge fans. We've been paying it like a 15. We have five years left. It was all done by a lawyer, so it's legit. But the interest is only 1%. I would like to pay it off early, but everyone around me saying, don't do that. It's stupid, you know, because the money's making more just sitting in High Yield Savings.

[Dave Ramsey]

You don't have the money in High Yield Savings.

[Caller]

We do.

[Dave Ramsey]

Oh, you have the money to pay it off?

[Caller]

We do.

[Dave Ramsey]

Oh, okay.

[Caller]

Yeah.

[Dave Ramsey]

Well, who cares what everyone says? Everyone's broke.

[Caller]

Well, I know. That's why.

[Dave Ramsey]

That's why I'm calling, you know, but everyone's broke. Don't take financial advice from broke people, man.

[Caller]

Yeah, no, I know.

[Dr. John Deloney]

Or indebted people.

[Caller]

Well, our CPA is even saying not to do it.

[Dave Ramsey]

Fire him. Yeah, he can't add.

[Caller]

Yeah.

[Dr. John Deloney]

Who's. Who's the family member that owns this loan?

[Caller]

It was my grandpa. And that's part of kind of the funny equation is that he recently passed away. So his wife, who's not my grandmother, is now the bank. And everything is still okay, but something in my gut just wants to pay her off.

[Dr. John Deloney]

Your gut is correct.

[Dave Ramsey]

You have a good gut. So here's the. Here's the thing. Okay? The borrower is slave to the lender.

[Caller]

Absolutely.

[Dave Ramsey]

Period. No exceptions.

[Caller]

Correct.

[Dave Ramsey]

100% of the time that you loan money to someone, you change the relationship. 100% of the time you borrow money from someone, you change the relationship. It is impossible for your step grandmother to treat you the same as if you didn't borrow her, owe her money. It is impossible for you to treat your step grandmother with the exact same honor or dignity as the former wife of your grandfather when you owe her money. Because we now have this transaction involved. And the way we say it around here, it doesn't apply to this situation. Probably. But Thanksgiving dinner tastes different when you eat with your master.

[Caller]

Right.

[Dave Ramsey]

The borrower, slave to the lender. And if you're a slave. You have by definition a master. Even if it's a sweet, kind, little white haired master, you still have a master.

[Caller]

Correct.

[Dr. John Deloney]

And you probably have her kids. How many kids does she have?

[Caller]

Yeah, she's got three. And one of them is fairly involved now with her since my graph has passed. And so.

[Dr. John Deloney]

And that's where you start getting this idea that, well, that's actually they would be better siblings than most if one, if not several of them don't think, well, that's our money, or we want to get our money settled, etc.

[Caller]

Yeah, absolutely.

[Dr. John Deloney]

So you're asking what Dave and I would do.

[Dave Ramsey]

Both of us paid off by the end of the day today.

[Caller]

Yeah.

[Dave Ramsey]

You know, but you know what's going to happen? You're gonna, you're gonna feel like you took a good shower, you're gonna feel clean.

[Caller]

Yeah, yeah.

[Dr. John Deloney]

Not to mention you won't have a house payment forever.

[Caller]

Yeah, yeah, exactly.

[Dr. John Deloney]

And there is like there is a financial calculation and you're right. No, well, there's a math problem to be made. No, you can.

[Dave Ramsey]

No, not when you adjust for risk. Not when you adjust for relationship damage.

[Dr. John Deloney]

Well, that's what I'm saying.

[Dave Ramsey]

When you are just for the actual realities of what actually happens.

[Dr. John Deloney]

That's true.

[Dave Ramsey]

Because these people who say, oh, you're making 4% and they're only charging you 1%, so you're making a net 3. This is the most naive financial formula on the planet.

[Dr. John Deloney]

I'm with you.

[Dave Ramsey]

You're leaving out risk, you're leaving out the strain on your body, you're leaving out the strain on your relationships. And all of those have an actual dollar cost to them over time that no one has ever been able to calculate accurately. Except God says the borrower is slave to the lender and he meant it.

[Dr. John Deloney]

There you go.

[Dave Ramsey]

And obviously he knows I do math better than your broke friends. And so that's it. That's what it comes down to. To me, I quit borrowing money, period. And the last time I'm going to loan anybody I love money happened about 40 years ago. So if I, if there's somebody that needs money that I've got in my family or friends and I've got the money and I decide they need my money, I'm going to give it to them. There will not be a loan that simple. All right. We were talking with Marie. I think we got her back. 73. She's got $100,000. She's trying to live on her Social Security, but it barely pays her One bedroom worth of rent in Denver, Colorado. Marie, why are you in.

[Caller]

I moved there from the south and I have a daughter and grandson there. And I've been there for like 17, 18 years. And it's hard to go back to the south.

[Dave Ramsey]

Yeah, I wasn't trying to get you to go back to the South. It's just a very expensive real estate market.

[Caller]

Well, it is, and I'm really north of there, but that's the main area.

[Dave Ramsey]

Yeah.

[Caller]

You know, where are your.

[Dave Ramsey]

Are you like up in Aurora or.

[Caller]

No, in Windsor.

[Dave Ramsey]

Okay. And so how close to your kids are you physically?

[Caller]

Oh, real. I'm close to my daughter. Real close to my daughter and grandson.

[Dave Ramsey]

Can you move a little bit further away and get a much cheaper apartment?

[Caller]

Well, it's 1390 and that includes. They started charging for water and all that. And that's. That's battery cheap. I even saw when I was looking.

[Dave Ramsey]

Yeah, I know, but I'm just asking because you can't afford the apartment. Yeah, that's what's killing me here. So. Okay, I don't know, because here, if you burn a thousand dollars a month and you don't make anything on the hundred, then you would burn it up in 100 months, correct?

[Caller]

Yep.

[Dave Ramsey]

And so you're 80, right? 81.

[Dr. John Deloney]

81 at that point, with no assets, no nothing.

[Dave Ramsey]

And now you're homeless. Okay, we don't want. That's not a plan. If we invest the hundred and we made 10% on it, that'd be $10,000 a year, $833 a month, that'd help. But you then have to live within that. Otherwise you're going to burn it up still.

[Caller]

Yep.

[Dave Ramsey]

Okay.

[Caller]

I can make enough working.

[Dave Ramsey]

Yeah. So you're going to have to add something to it and you're going to have to manage your expenses, and that includes the investigation of cheaper rents somewhere somehow.

[Caller]

Okay.

[Dave Ramsey]

And I don't know what that is. I don't have a magic wand to wave. I just know that Denver is very expensive. It's a beautiful city, it's very expensive. And so do you move 30 miles out in the country somewhere and, you know, rent a little garage apartment from some little couple. That's sweet. And I don't know. I don't know, but you're close enough to family, but you cut your costs in half. You need to get with a smartvestor [e-mail] and get the majority of the hundred thousand dollars invested, so that starts making something. Making 4% versus 10% is a deal. Breaker for you. So you've got to get up there making, get the money in some mutual funds to get it, get to making some money.

[Dr. John Deloney]

And this is a heartbreaking thing to say. It's one of the hardest things I ever have to say on this show. For a 73 year old, recently divorced woman, that tells me you've been through a lot, but you might have to go get a part time job.

[Dave Ramsey]

She said that?

[Dr. John Deloney]

Yeah. Get some money coming in somehow.

[Dave Ramsey]

So I would do three. I would twist three knobs on this and try to get it to where it runs sustainable because the math you're giving me is not sustainable. It's going to burn up. Knob number one, get the money invested so it makes some more money. Knob number two, get your expenses down by considering different rent. And knob number three, create some income by doing some kind of work while you can. And let's try to get this where you create a thing where you're not burning through the money and, you know, end up up in a really horrible situation. Blake is in Minnesota. Hey, Blake, how are you?

[Caller]

Hey, Dave, how you doing?

[Dave Ramsey]

Better than I deserve. How can I help?

[Caller]

All right, so I'm 39 years old. The only debt I have right now is a personal loan for $30,000. It's a 10.9% interest rate. I have about 140 in my Roth IRA. Over 50 of that is what I put in. I'm just curious if it's worth taking the money out to pay off the personal loan to free up some cash.

[Dave Ramsey]

How old did you say you are?

[Caller]

39.

[Dave Ramsey]

Oh, no, no, no, no, you can't do that. No, you're going to get hit with a penalty of 10% plus your tax rate. And so you're going to get hit with like a 35% or 40% hit. So it's like saying, dave, I want to borrow money at 40% interest to pay off the loan. No, no, we're not doing that.

[Caller]

Oh, okay. I thought, I thought what I put in I could take out on your Roth.

[Dave Ramsey]

You can, but I wouldn't, I wouldn't, I wouldn't unplug your Roth. What's your household income, sir?

[Caller]

Between me and my wife, almost 100.

[Dave Ramsey]

Okay, and how much do you owe on your cars?

[Caller]

My wife's car, she has about 12,000 left and I have 14,000 left.

[Dave Ramsey]

Is that the 30?

[Caller]

No, the 30 was about a year ago. We consolidated all of our credit cards and everything into one.

[Dave Ramsey]

Okay. Okay.

[Dr. John Deloney]

So you actually owe 60?

[Caller]

Yes. Besides, with the cars in the Personal loan.

[Dave Ramsey]

Yeah. All right, so now what. What we'll have you to do. And you've got two years of pretty extreme discomfort coming. You're gonna live on beans and rice. Rice and beans. You're not gonna see the inside of a restaurant unless you're working there as your extra job. And you're not going on vacation. Scorched earth on your lifestyle. Get on a detailed written budget on the everydollar app. Lay out your budget and live on nothing. And with your extra income that you create and the stuff you sell around the house and the tight budget, you pay off $30,000 a year for two years, and you're 100% debt free except your home. Now, you got your life back, but you guys have chip shotted one little thing at a time, one little thing at a time, one little thing at a time. And then bought a car and then one little thing at a time. And then bought a car and then one little thing at a time. All the way into 60,000 dol dollars worth of debt. Making 100 and you can't breathe.

[Caller]

Yeah, I mean, we're not struggling by any means.

[Dave Ramsey]

Yeah, you are.

[Caller]

But I just figured such a young age.

[Dave Ramsey]

Yeah, you're broke.

[Dr. John Deloney]

Yeah, bro, I've been there. Both of us have.

[Dave Ramsey]

This is not fun. I mean, you're not bankrupt, but you got no wiggle room in your budget. It's no fun. That's why you're trying to do something about it. It's just. It's uncomfortable.

[Caller]

Yeah, yeah, yeah.

[Dave Ramsey]

But there's no hack. The hack is hack through it as fast as you can by living on nothing for a short period of time. You and your wife sit down and say, what would it feel like if we had no payments? What would it feel like? How fast could we build some wealth? What kind of generosity could we do? How would we change our whole family tree if we had no freaking payments? And then you get in attack mode and knock it out. I don't know if you're ready to do that or not. Because you called me looking for an easy way out. You're not quite ready to be disgusted yet. But the people that change their lives, sir, are the ones that say, I'm sick and tired of being sick and tired. I've had it. And you kind of got to get that thing going in your voice when you do that. Well, now you're going to start to see some things move and that. That'll work. So.

[Dr. John Deloney]

But don't rob future you because you.

[Dave Ramsey]

Can'T quit consumption right Last time you tried to borrow your way out, by the way, borrow your way out of debt, it didn't work. Had credit card debt, went and got a consolidation loan. Now we're going to cash out. We're trying to find, always trying to find an easy pill. There's no easy button on this. You got to get it, and that's a hard thing. So, John, I was being interviewed on one of the podcasts the other day, one of these famous guys, and he was asking me, because we've got so many Gen Z's and so many millennials here, and I kind of had a thought, I thought I'd run it by you. Kind of came to me. Came to me in the middle of that. Well, I often get asked because I'm such a proponent of Gen Z and millennials. I love those two generations.

[Dr. John Deloney]

Huge fan.

[Dave Ramsey]

Yeah, I've got 600, 700 of them on my payroll that work here, and I love them. They're incredible team members. They do a great job. And the guy was going, why is that? And he goes, you got the good ones. Yeah, there's some bad ones, there's some good ones. There isn't every generation. But why is it? It's because they grew up with this magic wand in their hand. And so anything is possible because if I push a button or download an app, anything's possible. I push a button, stuff shows up on my porch. I push a button, I can answer any question, I push a button, AI will write my paper for me. I push a button. I mean, everything is possible. So they're possibility thinkers. Their abundance mentality is unbelievable. The toxic version of that, when it goes too far, is its entitlement.

[Dr. John Deloney]

Correct.

[Dave Ramsey]

But the other thing I thought he said, well, what's the main thing we could teach them? I was actually speaking at a college too recently with a bunch of young Z ers, and he said, what's the first thing you would tell this generation? I said, well, what comes with this instantaneous abundance, not only is the positive of it, is you get this thing of anything's possible. And so you really think positively rather than negatively, where, like some of my generations, it's around with their lips stuck.

[Dr. John Deloney]

My granddaughter straightened nails, right?

[Dave Ramsey]

The world's coming to an end and everything's so bad. And, you know, everybody's got a bunch of whiners in their generation, but our generations were like negative thinkers, and we had to teach them them with Zig Ziglar, how to be a positive thinker. Right. But these guys all think positive Already what they don't have is the patience. And that comes out, that lack of patience. When a boomer or somebody's looking in from the outside, they call that entitlement. I don't think it's really entitlement. I think it's. I'm used to getting something quickly, and when it doesn't come quickly, I don't know how to act.

[Dr. John Deloney]

It's an expectation. It's not even entitlement. It's just the way it's always been.

[Dave Ramsey]

It's the way it's been. Right?

[Caller]

Right.

[Dave Ramsey]

Every time I push a button, something happens, and then I pushed a button, and nothing happened.

[Dr. John Deloney]

And it's a.

[Dave Ramsey]

It.

[Dr. John Deloney]

You have to be able to. To distance food apps from developing a great relationship with somebody. It takes time or. Or getting strong.

[Dave Ramsey]

Paying off $60,000 worth of debt.

[Dr. John Deloney]

Paying off debt. Right. There's things that just take time.

[Dave Ramsey]

Years of grind, right? Oh, you mean I can't push a button? Yeah, no, it's two years of grind. You mean I can't. No, it's two years of grind. But, no, no, no. There's not an app, there's not a hack, there's not a shortcut. TikTok ain't gonna help you. It's two years of grind, and then you'll be free forever, because you will be changed, not just your money.

[Dr. John Deloney]

And the hardest sell for me is people realizing you're gonna be out of debt, but you're not even gonna recognize yourself. You'll have muscles you didn't understand, you'll have strength you didn't understand. And you take that level of discipline and strength and ability to grind, and then put that on top of or underneath this endless possibility mindset, and literally, the world is yours.

[Dave Ramsey]

But that only comes from high reps over an extended period of time.

[Dr. John Deloney]

That's it.

[Dave Ramsey]

This is not. This is not. I lift two pushes on the bench press. This is high reps, low weight.

[Dr. John Deloney]

Every day, for years.

[Dave Ramsey]

Every day. And then you are transformed.

[Dr. John Deloney]

You're transformed.

[Dave Ramsey]

And then the money is transformed, too. But that's just the. That's. Like you said, it's not the best part. The best part is you are changed.

[Dr. John Deloney]

You're different.

[Dave Ramsey]

When Sharon and I went through the crucible of losing everything and then having to claw our way back out with our fingernails, it isn't that we went through that.

[Caller]

That.

[Dave Ramsey]

It's that we went through that. Right? I mean, it's. It. We are so freaking permanently changed from that in such a good way that, you know, it makes the strain worth it. And so if I could inject with a needle a big syringe into a generation that is fabulous, the ability to persevere over an extended period of time, add that to their incredible abundance, thinking and possibility, thinking unstoppable. It's going to be the biggest, baddest, coolest generation in history of man ever.

[Dr. John Deloney]

And that means whereas I remember my granddad, my grandmother, they got a sack of oranges for Christmas one year.

[Dave Ramsey]

Yeah.

[Dr. John Deloney]

Because there wasn't oranges everywhere.

[Caller]

Right.

[Dr. John Deloney]

And that was a big deal to get oranges in December.

[Dave Ramsey]

Right.

[Dr. John Deloney]

That was huge.

[Dave Ramsey]

Well, you knew somebody in Florida that.

[Dr. John Deloney]

You knew somebody who knew somebody who got a sack of oranges. That was a cool thing. They had to enjoy, inject, go manufacture, go work at optimism. This group has to everything is possible, but it can detach you from reality. So you have to inject hard, regular practices on a day in and day out basis.

[Dave Ramsey]

You have to learn to cook in the micro, in the crock, in the.

[Dr. John Deloney]

Crock microwave and wait and you have to learn to be bored and not scroll in a Walmart line. You have to learn to pay off your stuff over time. You have to learn to exercise on a regular basis. And you will be stunned at who you become on the back end of that journey. Hey, what's up? Dr. John Deloney here. The new dates have dropped for the money and marriage getaway over Valentine's day weekend in 2026. This is your chance to hit pause on everything in your life and reconnect with your spouse over a long weekend in Nashville, Tennessee. Me and my friend Rachel Cruz will be digging into topics like sex, money, communication and more. This weekend is happening on February 12th through the 14th and early bird. Prices start at $749 per couple, but the prices will be going up soon. Get your tickets today at ramseysolutions.com/events.

[Dave Ramsey]

Welcome back to the Ramsey show in the Fair Winds Credit Union studios. I'm Dave Ramsey, your host. Thank you for being with us. Dr. John DeLoney, Ramsey personality, is my co host today. The phone number is 888-255-2225. Michael is in Arizona. Hey, Michael, how are you?

[Caller]

I'm doing well, Dave, how are you?

[Dave Ramsey]

Better than I deserve.

[Caller]

What's Dave? I'm married. I'm 25 years old. I have a toddler and another baby on the way. Fun and bit of a pickle financially. My job hours are really inconsistent and so we're about $13,000 in debt. Most of it is medical or dental and I'm barely working enough to cover the essentials. Some weeks. Some weeks I'm making overtime. Up until now, I haven't made the best financial choices, but I decided to start school, so I'm going to school for it. I just don't know if I should try to focus on getting out of debt or try to focus on school to get a better job and then try to work from there.

[Dave Ramsey]

What do you do now, sir?

[Caller]

Now, I drive a cement mixer.

[Dave Ramsey]

Okay. And they pay you what when you're driving?

[Caller]

I'm on track to make about 65,000 gross this year.

[Dave Ramsey]

Okay. And you can't live on that.

[Caller]

If. On that I. I could barely live there. There would not be much extra for much of anything.

[Dave Ramsey]

With $13,000 worth of debt, you can't live on $65,000.

[Caller]

Well, I. I haven't made the best financial.

[Dave Ramsey]

Okay, we don't have a system. We don't have a system, so we don't know. Okay, That I believe. That I believe. All right, that makes sense.

[Caller]

I. I need to change my ways, and I'm.

[Dave Ramsey]

So you and your. You and your pretty wife sit down tonight and open up the EveryDollar app. I'm going to give you the upgrade version of it for free and start laying out a detailed budget of what it takes to live each month. And your income is not as volatile as your behavior.

[Caller]

Okay.

[Dave Ramsey]

So when you. When you get that system down, that's going to help you a lot because more, you know and I don't. If you want to change careers from cement truck driver to it, I'm perfectly fine with that. So what are you spending on the it?

[Caller]

I'm not spending anything. Between scholarships and federal aid, it's all paid for.

[Dave Ramsey]

That's awesomeness. And what are you studying? A certification program.

[Caller]

It's a accelerated bachelor's and master's program for a bachelor's in IT and a master's in IT management.

[Dave Ramsey]

Okay.

[Caller]

My biggest. Oh, sorry.

[Dr. John Deloney]

Are you able to do this, like, in the evenings? What, after you get done driving?

[Caller]

Yes, I've been working on it. Each day when I get done, the biggest problem that I'm having is my hours are so inconsistent, and with the way the market's been, they've been cutting our hours. So I'm. I'm making less and less money, and that could continue to go down. I may not make.

[Dave Ramsey]

All right, let's.

[Caller]

5,000 this year.

[Dave Ramsey]

Let me reset you for a second. Okay. To be making $200,000 a year, you do not need a four year degree or a master's degree in it. You need to have certifications and you need to know how it works. But you can get all of that a whole lot faster than you can do an online bachelor's, online master's, even if they're accelerated. What you've signed up for is complete overkill for your goal. I've got tons of tech people, like 500 of them working in the building, and I don't know of any of them that have a master's in it. One or two have four year degrees. Most of them have industry certifications, they've got Microsoft certs, they've gone to code school, they've learned to code, they've learned some of the cybersecurity moves that need to be done, they've learned platform technologies, but they are not. They don't have a master's degree in it. By the time you finish a master's degree in it, what you have learned will be irrelevant because the market moves that fast. So I'm going to ask you not to do what you're doing. I know that's very hard, but if you were my son, I would say yes, it is a great path for you. The good news is you can get a couple of certifications within six or eight weeks and go get a job in that field making $60,000. Be a lot more steady. Oh, and by the way, they'll probably pay from that point forward. Once you're working for a technology company or a company that embraces technology and digital technologies like Ramsey does, they'll prob pay for you to continue to study and get more certifications. We do that here. We teach people new languages, we pay for their certs, we pay for them to go through because we want better and better technology people on the team every day. But you know, a master's degree is 1000% not necessary to move into that field. I'm the hiring person, I can tell you that. I mean, I'm your employer, so I'm sure I know what I'm talking about.

[Dr. John Deloney]

And Michael, tell me about the jump from cement mixing to it. Is that something you want to do? Are you just listening and hearing what people say is the next good job? You're just going to try to do that?

[Caller]

When I was in high school, I took a certification and I really enjoyed it, but I just never did anything with it.

[Dr. John Deloney]

Okay.

[Caller]

And then when I got married again, and then we had our first baby, I was already in the construction field and I kind of just stuck with it because it's what I knew.

[Dave Ramsey]

Well, you got a job and you were trying to feed your family.

[Dr. John Deloney]

Yeah. Good for you. You're a noble man. I'm proud of you.

[Dave Ramsey]

That's a good thing. So what I'm saying is that, number one, I might reset how I'm trying to enter the IT field. And with that, let's go ahead and get a different job today. We don't have to stay in the cement business until we get cement driving business, until we get to a master's degree completed. That's not necessary to do this. So you could get a job very quickly in the IT world and be in the proximity of the people that you're going to be working with anyway. They'll give you better advice on how to get tools in your belt, how to get educated to move up through the ranks in the IT section of a company. And a lot of times they'll pay for it.

[Caller]

It.

[Dave Ramsey]

And so it solves several things at once. It shortens the time between you and the cement mixer and the it. And it fixes the fact that cement mixer hours are going down now because we're going to start moving into IT now. And that's what I would tell you to do across the board on this because you're a good guy, you a noble person, you're willing to work hard, you're willing to do whatever it takes to feed your family. You just hadn't had a good, good a track to run on, and you got to develop a track and you reached out and got a track. I'm just thinking there's a better one than the one you grabbed a hold of.

[Dr. John Deloney]

I'd also recommend sitting down with someone.

[Dave Ramsey]

You got a degree? You got a PhD in higher ed. Does this guy need a master's in it?

[Dr. John Deloney]

I mean, I don't know enough to know about it. I don't know any of the guys that work on the stuff that I'm working on that have master's degrees in.

[Dave Ramsey]

Nashville, that were in. In the building here, that work.

[Dr. John Deloney]

You know more than I do about that.

[Dave Ramsey]

I mean, stuff. Do you know any of them that have.

[Dr. John Deloney]

I don't know any of them.

[Dave Ramsey]

Yeah, I don't have a single PhD.

[Dr. John Deloney]

Yeah.

[Dave Ramsey]

No, not a one.

[Dr. John Deloney]

You'd get a PhD in it if you want to teach it.

[Dave Ramsey]

That'd be it, right?

[Dr. John Deloney]

That'd be it.

[Dave Ramsey]

Teach people things that we don't use anymore.

[Dr. John Deloney]

I would love to see you go sit down with somebody not in the university setting, but somebody who's working in IT in your local area and ask.

[Dave Ramsey]

What do I need to do?

[Dr. John Deloney]

What I need to do to get into.

[Dave Ramsey]

Right.

[Dr. John Deloney]

And they might say, why don't you just come work here right now? We have a $40,000 job but we'll train you in X, Y and Z and you and your wife could take a six month hit and you're back on. You're back at the road. But go sit down and have coffee with somebody in your area right now. That'd be the path.

[Dave Ramsey]

Yeah.

[Dr. John Deloney]

And don't wait till the cement mixer job just dwindles to nothing.

[Dave Ramsey]

It's going to.

[Dr. John Deloney]

The boat has a hole in it. Go ahead and get off the boat if you can.

[Dave Ramsey]

Yeah, yeah. Hang on. We're going to send you a copy of Proximity Principle from Ken Coleman and help you get going.

[Caller]

Foreign.

[Dave Ramsey]

We've all done dumb things with money. I've done them with zeros on the end. One of the biggest mistakes I see people make with money is not having a plan for it. You got to have a plan. You got to be intentional. And you need to get a budget. You have to tell your money where to go so you're not wondering where it went. Our budgeting app, EveryDollar helps you do just that. It's the easiest and fastest way to make a monthly plan. For every dollar you've got coming in and going out, now's the best time to get started before the ridiculous holiday spending season gets here and sucks you in because you didn't have a plan. Don't let that happen. You're done making that mistake. Go download everydollar for free in the App store or Google Play today.

[Caller]

Foreign.

[Dave Ramsey]

Smart way to do a real estate transaction, especially in a world like we live in today. Have a high quality, high octane, high protein Ramsey trusted agent that you can trust. Make your home a blessing, not a burden in your corner. You can compare agent profiles. You can interview them, choose the right one to work with with all at Ramsey Trusted. So find a local Ramsey Trusted real estate pro for free Ramsey Solutions.com agent or click the link in the show notes. Stephen is in Michigan. Hey Stephen, how are you doing?

[Caller]

Good day. How are you doing?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So I got a question that I think I know the answer to, but I'm gonna see what you're gonna say about it. So bought a house last year and my interest rate is 7.375 and my mortgage was sold and the new mortgage lender is saying, hey, we can save you some money if you refinance now we're on the back half of baby step two. My wife and I and I have the money to pay off our car, approximately 6,600. And the mortgage lender says I would strike now while rates are a little lower because if you pay that car off, off, that's the last piece of debt in my name. You said your credit is going to start to drop off and that'll start to hurt you. So I guess my question is, do I pay off the car or do I refinance and then pay off the car? What should I do?

[Dave Ramsey]

Yeah, well, your mortgage lender only makes a commission when they sell you a mortgage.

[Caller]

Right.

[Dave Ramsey]

So we know their advice is tainted in this case. Scott's pitching pretty hard.

[Caller]

He is. They, they are pretty aggressive with the calls.

[Dave Ramsey]

Yeah, yeah. So that, that right there tells you that something's up. Right. And so, yeah, I'm paying off the car and I'll get around to the mortgage later. Why did you take such a high interest rate loan?

[Caller]

Well, we were, we were living in.

[Dave Ramsey]

I know, but that's above market. What did you have bad credit?

[Caller]

No. Credit score is upper seven.

[Dave Ramsey]

Yeah, 737 is ridiculous. I mean the market for a year has been at 6. That's weird.

[Caller]

Yeah. So I don't know a whole lot about finance. I've recently started learning everything and going through the financial piece and the baby steps. So I am making up for lost time.

[Dave Ramsey]

All right, let's, let's do two things. Let's answer your question in two parts. And so we get the whole thing and that'll help you and it'll help some people that are listening to. Okay, number one, if the only choice is between paying off your car or refinancing, we'll pay off your car. Okay. So that, that, that parts answered. And the number two, the mortgage lender being aggressive is your hint that he's self serving, not you serving. Okay. That's why they're calling back all the time and trying to make a commission. And so number three, here's how you calculate when you refinance a mortgage. Your break even. You do a break even analysis. All right, let's use an example. All right, let's pretend that you had 737 and you could get 6, 3, 7. That's a spread of one. If you refinanced. Right. And your loan balance is currently what.

[Caller]

380,000.

[Dave Ramsey]

Okay. So 1% is 3,800 bucks a year.

[Caller]

Correct.

[Dave Ramsey]

That is your savings. Okay. So if it costs you $15,000 to refinance and you recoup at the rate of 3,800, it's going to take five years to get your money back. You follow that? That's called a break even analysis. How long before I break even with a savings of 3,800 versus a cost of 15,000? If your cost was 7,600, you break even in two years and everything after two years, you're putting 3,800 in your pocket. That one starts to make sense. But 15 years doesn't make sense. And so what we've got to do is we have to figure out the closing costs and divide the annual interest rate savings into the closing costs. And that number should be two, maximum of three years. Two to three years or less. And so what that ends up telling us is the lower the closing costs and the greater the difference in interest rates when you refinance, the more likely you are going to be to do it mathematically because the faster you're going to break even.

[Caller]

I agree.

[Dave Ramsey]

Okay. And so if these rates drop on down, if we see some continued movement, and we've seen a little bit of movement in the last few weeks, where the 15 year right now is 5.86 on a 15 year, okay, is 5.95, you know, so it's only a tenth of a point. It's just barely moving. It's just hanging around. But there's all this discussion around the Fed and all these other things right now. There seems to be some downward pressure. So I disagree with your guy that now is the time. I probably would wait a little bit. But if you could save 2% right now and you can make your money back in two years, I'd refinance it right now, but not with your car money.

[Caller]

Okay? Yeah.

[Dave Ramsey]

So the way you do the analysis is divide your interest rate dollars saved interest dollars saved into your closing cost dollars, and that's your number of years to break even. And that number of years needs to be two to three years maximum. And so just to throw a few more stats at you guys listening out there and hearing this, the average home in America for the past 25 years has sold every 6.5 years. And the average mortgage only lasts 5.5 years. And so if you have a seven year break even on your refinance, you got screwed. Because on average, you're not gonna be there that long. Oh, it's my forever. Oh, shut up. I'm giving you the averages. I don't hear about your forever nothing. Okay, so the deal is that your Refinance needs to break even in two years, maybe three. But as we see these rates slide down and some of you are sitting in some 6, even some 7% interest rates and we see them slide down towards 5 again. You're going to see that 2% margin and that 2% margin is going to take a whole bunch of you make this formula work to refinance.

[Dr. John Deloney]

Why would I. I'm asking for a friend. Why would I pay off that car with that 6,000 bucks versus pay this thing off and lower that rate substantially?

[Dave Ramsey]

Because we've got to clear the cash first. The cash flow on the car payment is much greater than the 3, 800, which.

[Dr. John Deloney]

Good call. So I'm probably paying 5, 600 bucks a month on that car.

[Dave Ramsey]

7 average is 780 right now.

[Dr. John Deloney]

Then the 3,800 bucks divided by 12. Okay.

[Dave Ramsey]

And the mortgage is going to be sitting there and the car. It's like a, an impediment in this whole thing. It's like the, it's like the fly in the ointment.

[Dr. John Deloney]

I love that.

[Dave Ramsey]

And the mortgage is sitting there. I got to clean up the mess so I can go work on and fine tune the stuff that's not as big a mess. Yeah. Okay. We don't mess with the fine tuning while we still got baseballs being thrown through the window.

[Dr. John Deloney]

So if somebody clears the cars and they've got $35,000 in student loans debt.

[Dave Ramsey]

They need to clear the student loans.

[Dr. John Deloney]

Before you go refinance your.

[Dave Ramsey]

Yeah. Unless if you want to roll your refinance costs into the mortgage, you could do that. Okay. But you don't need to drain cash to do it. Okay. Because again. But only if you're breaking even right then because you now owe more on the house by $7,000. But you're going to save 3,800amonth or 3,800 a year so that you'll be.

[Dr. John Deloney]

Back for two years.

[Dave Ramsey]

Two years. You come out ahead on doing that even though you owe more but you'll owe less. Gotcha. When you're done. So all that works out mathematically. But wow. A little bit of a barrel of fish hooks. But yeah, that's guys and gals. How you work your refinance calculator. And Churchill Mortgage can help you with all that. We've endorsed them through all the ups and downs of interest rates over all these 30 something years. They've been on the air with Ramsey and they can help you whether. And they'll tell you the truth. They're not going to do what this mortgage lender is doing to Steven and just hound you to buy something you don't need.

[Dr. John Deloney]

I'll tell you my favorite thing. When I called Churchill and said, Mrs. Several years ago and refinance my house, house. And the first thing the guy said to me was, I need you to hear me say it. I'm not gonna take your money unless this works out for you in the end. And so let me run the math on it and I'll holler back at you. And then he called back and said, oh, yeah, this is a great deal. X, Y or Z. But that was the first thing is I'm not gonna just make a sale on, on your back. I'm not gonna take your money if this isn't going to work out for you and your family. And I, man, I was like, man, I'm all in. I appreciate that.

[Dave Ramsey]

And just a little inside, inside baseball guys. Mortgage companies have been dying for the last three years because they existed for the previous 10 years. 20 years on refinances and refinances have disappeared as some of you are sitting on 2 and 2.37 and you're not going to refinance at a 5.8. You'd be dumb to do that. And so the refinance market has dried up and they were living off of refinances. So a lot of mortgage companies go gone broke. And so that's where some of this pressure is coming from. And then you got people like Rocket. You spend hours researching before making a major purchase like a home or car. But it's also a good idea to put in the work searching for the right insurance coverage to protect your biggest assets. I recommend using Ramsey Trusted Pros. Whether you're looking for car, home or any other type of insurance. Ramsey Trusted providers have been coached and vetted to serve you like we would. Find what you [e-mail] insurance. Are you on track with the baby steps? You can take a quick quiz to check your progress and receive a personalized plan just for you. Simply head to the Show Notes, click the link titled Are youe On Track with the Baby Steps? And complete the free quick quiz. Eric's in Ohio. Hi, Eric. Hey, Dave.

[Caller]

How are you doing?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Well, I'm looking for maybe some advice and a sounding board. So I'm 37 years old, married, and I have four young daughters. My oldest is in second grade. My wife and I both have very good jobs. Combined income growth before retirement taxes is about 310, 315.

[Dave Ramsey]

Wow.

[Caller]

So we're doing well, right? So about seven, eight years ago, we had the opportunity to buy from my uncle's estate the family farm that's been in the family for 150, 60 some years. And it's appreciated more than we would ever thought in that amount of time. So we bought it for 7700 bucks an acre. You know, the neighbors just sold for like over 18,000 an acre. So we're like, I know, great. Those things don't happen. That's what I'm saying. Like, these are. This is. This isn't real life. You know, should we just get out now? So we still have a note on the farm. We didn't buy it in cash. We didn't have that kind of cash. But it's relatively cheap money because that was back in 2019. Then we refinanced. It's about a 4 and 4.125 is what we have on it. So 80 acres, you know, it would probably, you know, 1.4 ish. It's hard to say, you know, it's worth what somebody will pay for it. And you owe what, like about 400? Just shy 400, I think 395.

[Dave Ramsey]

All right. And you have a mortgage on your home?

[Caller]

We do have a mortgage on our home, yeah.

[Dave Ramsey]

What do you owe on your home?

[Caller]

235.

[Dave Ramsey]

Okay. And you make. 315. Do you have any other debts?

[Caller]

No, none.

[Dave Ramsey]

How much in your nest egg and retirement and so forth?

[Caller]

So I was just looking this afternoon. I think mine has 205, and my wife, she started a little bit later. She has about 100, 105 somewhere in there.

[Dave Ramsey]

So how old are you guys?

[Caller]

I'm 30. We're both 37.

[Dave Ramsey]

Okay. Wow. Well, if you hadn't called us, what normal people would do would be just continue to service the 400 and let this thing continue to skyrocket in value.

[Caller]

Right.

[Dave Ramsey]

I'm not as happy with the 400,000 as most people would be in debt. You got a million dollars equity laying there. And so I start asking myself if I'm you, and I've got a million dollars piled in the middle of the table, and I don't own this farm. Would I go buy this farm or would I do something else with a million dollars?

[Caller]

Right.

[Dave Ramsey]

And you would only buy the farm if you thought it was going to continue to go up in value pretty rapidly. Right. As an investment is why you would buy it. Well, in this case, it's actually got Another added element. It's been in the family for 150 years. So that, that's, that's emotional.

[Caller]

It has been in the family for a while, but, you know, at the time nobody else wanted it. And so my wife and I were like, I mean, we had some money, we were able to make the payment. We kind penciled out and all that. And it worked out. Knowing that it's a good.

[Dave Ramsey]

Do you have any money that's not in retirement, any cash or investments that are not in retirement?

[Caller]

Yeah, I mean, we have some savings. We also have like a brokerage account. The brokerage account has like 80 some thousand, you know, just savings at the, you know, at our bank, it's about 50,000.

[Dave Ramsey]

Okay, so what, what? Here's two options, and either one is fine with me. All right, Right. Option one is. You said how much is in the brokerage again? 80.

[Caller]

No, no, no, 80. 85.

[Dave Ramsey]

85, 85, and you make 315, and then you got 50 in your emergency fund. Any other money that's not retirement?

[Caller]

No, not really. I mean, some checking account, but that's maybe 20 some thousand, so I guess that counts. But I don't look at that as.

[Dave Ramsey]

No, it's not a lot. I mean, you're making 315,000, so that's not. That's a month. And so what I'm going to do is look at our budget, you and your wife, and say, all right, I want to pay off our house really fast. I'm going to throw 85 at the house. That leaves 150, and we make 315. And so we're going to pay off the house in the next 24 months while paying minimum payments on the farm and keep the farm. That's option one. Option two, sell the farm and pay off the house and invest the money somewhere. Okay. I mean, either one's fine. So the question becomes, where do I want to invest a million dollars?

[Caller]

Right?

[Dave Ramsey]

Do I want to invest a million dollars in wonderful dirt in wonderful Ohio or. Which is not, obviously not a bad investment. It's done really well. Yeah, it's not a bad investment. One of the guys we studied in the millionaire study had $24 million worth of dirt. And it was just dirt. I mean, Kansas. Dirt farmer in Kansas. I mean, just straight up, man. I mean, soybeans and corn, baby, hello. You know, and what it is, 24 freaking million dollars. All right? So it's just, you know, so don't talk. It's good. There's nothing wrong with. I'm not mad about dirt at all. So. But you just need to ask yourself, the reason you bought this was not because you woke up one morning and said, I want to systematically invest in dirt. No, it was presented to you because of the family connection and that kind of woke you up and you went, well, that might be cool, let's go do it. So you almost kind of backed into it, definitely. But it wasn't the implementation of a strategic thought.

[Caller]

That's true.

[Dave Ramsey]

Okay. And so now what I'm saying is I'd back up and look at this through strategic eyes and say, all right, I can keep it. It's no sin. But what I'm doing is I'm investing a million dollars into dirt. If I'm going to do that, then I'm going to get my house paid off pretty quick and then we're going to turn our attention to getting the 400 knocked out and be sitting here debt free with by then a piece of ground that's worth 2 million and a house that's worth what? What's it worth today, your house?

[Caller]

House that's 350 ish. Probably 375.

[Dave Ramsey]

Yeah. So it's going to be 400, 500, 600,000 by then. So I mean you're going to have a $2 million worth of dirt, $600,000 worth of house, and then you're going to be loading up your mutual funds in your retirement and you're going to be looking at 5, 6, $7 million net worth in about a 4 to 5 year period of time. By leaning into these things and thinking about it strategically, if you keep the farm, if you don't, then you pay off the house, you take the money, you do the exact same thing, but you do it with different investment vehicles. So either one of those is fine, but if you keep it, it comes with the pledge with the two of you to not beans and rice, but to be intentional and systematic about clearing the house pretty quick and then clearing the farm pretty quick. After that, no more debt.

[Dr. John Deloney]

If you're looking up in five years.

[Dave Ramsey]

All this paid for, have a couple.

[Dr. John Deloney]

Million dollars worth of real estate, which.

[Dave Ramsey]

Is not more like three or four million worth real estate in five years. Yeah, yeah, that's where we're headed. And that's if you keep it. And it's obviously gone.

[Dr. John Deloney]

I mean, I, I thought it's been a minute, but I thought I read that tech companies are looking at some of these places in the north that were old rust belt places where they can go in and buy dirt cheap and put out big ecosystems of whatever.

[Dave Ramsey]

Could just be the farmlands doing that.

[Dr. John Deloney]

And it might just be good dirt for farmland. Who knows?

[Dave Ramsey]

I mean, Ohio, it's, you know, so I don't know, but I, I, I do not have personal knowledge of that marketplace.

[Dr. John Deloney]

I don't either, but.

[Dave Ramsey]

So it's just interesting. I'm so happy for you that you made all that money on it and that you have this problem. It's awful.

[Dr. John Deloney]

I have a strange attachment to dirt, so my answers are never rational.

[Dave Ramsey]

Yeah, mine too. Brett is in Wisconsin. Hey, Brett. What's up?

[Caller]

Hey, Dave. Really great to talk to you. Thanks for chatting with me.

[Dave Ramsey]

Sure.

[Caller]

So I've got. I kind of came late to the baby steps. I don't think I've been terribly irresponsible with money, but, you know, was running out at the end of each month and thinking I make too much money to be broke, as you say. And so I've kind of started doing your program. We've gotten on a budget. Have you really? Credit card.

[Dave Ramsey]

So you. Every dollar's written down before the month and your wife and you agree on it?

[Caller]

Yes.

[Dave Ramsey]

Wow. How'd that feel?

[Caller]

So we. Well, it felt better for me than for her, I think. But, you know, knowing that there's money left over at the end of each month has been great for my peace of mind. I know that.

[Dave Ramsey]

Yeah.

[Caller]

So we've, we've stopped using credit cards. We never carried credit card balances, but, you know, everything came in, went right to them. Right. So where I'm at right now is I've got a lot of retirement savings, but. And, you know, my only debt is probably car loan and home loan, and I'm trying to get on the pass. Is it really okay to stop saving for retirement completely?

[Dave Ramsey]

Yeah, for a short period of time. And knock that car out? Absolutely.

[Dr. John Deloney]

Absolutely.

[Dave Ramsey]

That's what we teach people. And it works. You're not talking about doing it long? Five, six months. And you're clear, you don't have a car payment anymore? No more credit card debt. We now have a plan. Me and my wife are in agreement. Sounds like her vote needs to count a little bit more in this budgeting. Like, you kind of crammed it down her throat a little bit, but, yeah, other than that, sounds like you kind of got it going. It takes a little while to get, get the momentum moving off of this, though. Our scripture today, John 8 and 12. Jesus said, I am the light of the world. Whoever follows me will never walk in darkness, but will have the light of the world, Jordan Peterson said. It is my firm belief that the best way to fix the world, a handyman's dream, if there ever was one, is to fix yourself. So most of you are aware that we record the show or do the show live on the glass here at Ramsey from 1 to 4 Central Time Monday through Friday on the lobby in the lobby of Ramsey Solutions and then various platforms. Pick up what I'm saying right now. Hours from now, by the time you hear that, it will be old news. But moments ago, Charlie Kirk was shot and killed at, in Utah at Utah Valley University. And don't know a lot of the details at this point other than apparently it was a long, long distance shot and not super long couple hundred yards, but it wasn't up close and personal and but in the days and weeks to come, I'm sure all the sordid issues of mental illness that are associated with a shooter will come out and all those kinds of things. It just takes my breath. I mean, I knew Charlie and I had spoken at some of his events and he's brilliant and a firebrand for sure, a lightning rod and brilliant in debate. 31 years old, two little girls. I mean they're like four years old and under and same as my little grandkids, same age as them. And many, many, many of the people that we speak with in leadership events and pastors across the country.

[Caller]

A lot.

[Dave Ramsey]

Of us run in the same circle and we've been, you know, again, I've been at his events with pastor friends of mine and leadership friends of mine that teach and so forth in that. And so I had many, many, many conversations with him. And this is just sickening. I can't breathe. I mean, it's just, I can't think of anything except about a little wife that's 30 years old and a couple of little kids because somebody has decided that their political views are more important than anything else and decide to put a bullet in somebody. And it's just simultaneously angry and sad and rage inside my chest right now. And I'm just, I feel just sick. I think I want to throw up. But yeah, certainly we will be praying for his family and we will also be in touch with all of them. And like everybody else in America, we'll be trying to help them out and do anything for them that we can to try to just deal with the results of some animals that is some mentally deranged moron that's out of control. And this is just the result of people have lost the ability to have a good argument without losing their minds. You can't argue your political point. You can't argue a point of view. You can't say that someone's right or someone's wrong without somebody losing their dadgum mind in this culture right now. And it's just plain danger, and it's not going to end well if. If. If we don't get some of these folks under control. Yeah, I'm just.

[Dr. John Deloney]

I just can get home and hug my daughter. Yeah, my daughter's. I got a little girl home.

[Dave Ramsey]

Yep.

[Dr. John Deloney]

And, yeah, that's all I'm gonna say.

[Dave Ramsey]

Yeah. You just. You can't have enough security to offset this level of crazy. Yeah, it's impossible. I mean, we're careful with our appearances, places, and, you know, do what we can to have reasonable wisdom about the exposure you take when you step into public and have an opinion. But. And obviously, he's. A lot. Was a lot more controversial than us, where we stir up enough controversy and people hate us, but nothing like he had. It was. The stuff he got was over the top and. But it just. He's sitting there in the middle of a bunch of college students having a discussion.

[Dr. John Deloney]

Well, it goes back to.

[Dave Ramsey]

It. Willing to engage today's societal events and. And, you know, cultural arguments.

[Dr. John Deloney]

It just goes back to what you're saying earlier, though, man. It's. It's. There's disagreements and there's vehement disagreements and there's anger and there's frustration. Then when you go home, there's a dad of two little girls, and if you can't make that separation, man, you need to go get some help, because it's a. It's a. I don't know. I. I got too much experience showing up to that and having to call that wife, and I. I don't have it.

[Dave Ramsey]

You've done enough. You've done enough trauma. Yeah.

[Dr. John Deloney]

I need to get home and hug my wife and hug my daughter and be really grateful that I've got that. That privilege today.

[Dave Ramsey]

Yeah. You know, it is interesting what you're talking about, that, you know, you go back to the number of relationships, families and otherwise, that were fractured by the argument over nuanced arguments about COVID And they still don't speak to each other, still don't see their grandkids, because one of them wanted a mask and one of them didn't. And so they made little things, the major things. And I can't speak to them because they voted for Trump or they didn't vote for Trump.

[Dr. John Deloney]

30% of the calls into my show are adult kids who were cut off by their parents or parents calling in, saying our adult kids have cut us off.

[Dave Ramsey]

Just divided. For whatever reason.

[Dr. John Deloney]

For whatever reason.

[Dave Ramsey]

Yeah. It's like cancel culture in inside homes. Yeah, yeah. Inside families. Yeah. And inside neighborhoods and inside whatever. So, yeah, you can't. You, you know, you can't seem to separate the level of importance between the father of two little kids and your little piss ant argument that you've got.

[Dr. John Deloney]

Or even a big argument. But it's. It's.

[Dave Ramsey]

That's not pissing in comparison to him being there for his kids.

[Dr. John Deloney]

That's right. That's right.

[Dave Ramsey]

You know, and weighing against that, there's not an argument you've got that weighs against that. Zero. No one.

[Dr. John Deloney]

No one.

[Dave Ramsey]

Yeah. I don't care about, you know, you can talk about whatever flag you want to fly. I don't care. But you can't. You know, that. That's just. It's just ridiculous because none of your little argument at the end of that trigger is actually valid at that point. It's. You've invalidated the whole thing.

[Dr. John Deloney]

Yeah, but I want to.

[Dave Ramsey]

It's a really, really sad thing.

[Dr. John Deloney]

I want to not talk about that guy. I want to talk about. Go home, hug your kids and go home and. And say a prayer for the Kirk family.

[Dave Ramsey]

Family. Yeah.

[Dr. John Deloney]

I don't care who you are. I don't care what you believe. I don't care what you vote for. Say a prayer for a family that just lost her dad and lost her husband. And if you've got nonsense in your family, make the phone call today. It's too short, man. It's too short.

[Dave Ramsey]

Yeah.

[Dr. John Deloney]

It's too short.

[Dave Ramsey]

Make amends.

[Dr. John Deloney]

Make the phone call, man.

[Dave Ramsey]

Yeah, I don't disagree. I don't disagree at all. There's some lessons you can take from this. It's. It's just a. Just here for a vapor. But, yeah, that was. Violence has struck out again. You know, there it is. And sometimes it's little children in a school, and sometimes it's other things, but in every case, it's somebody that's trying to take power into their own hands. And this is. It's really at a. At a really critical time.

[Dr. John Deloney]

It's scary. It's heartbreaking.

[Dave Ramsey]

This nation needs prayer, and we surely do. Oh, my gosh. Well, yeah, we'll pledge to you guys that we'll be in touch with them. And obviously, anything that we can do. There's nothing we can do, but anything we can do, we will and the thing we all can do is to try to be just a tiny bit better as a result of our hearts being broken and just back up about three steps and reconsider how, how, how to manifest some of these opinions without being so dad gum violent about it. It's pretty simple. Simple, civil. Civil discourse. Wow. What an idea. And, yeah, and, you know, let's just label somebody and then vilify them. And we don't have that kind of thing on this show very often because we don't cover current events. But Charlie was a friend of mine, so pretty much sucks. That puts this hour 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.